Mr. Gregg: Mr. President, I want to rise to speak a little bit about the supplemental appropriations bill which is now pending. I want to begin by congratulating the Senator from Mississippi, Senator Cochran, for the extraordinary job he did in producing this bill. When it left the Senate, it was around $105 billion. It comes back to us from conference at $94.2 billion or $94.3 billion. I forget what the exact number is. That was not easy- to slim it down from the Senate position to what was acceptable to the President and to the House. And it was really a result of Senator Cochran simply saying we're going to do it. We're going to make these difficult decisions, and we're simply going to have a bill that meets the conditions that the President laid down for spending responsibility. And he deserves a great deal of congratulations for having accomplished that and a great deal of respect.

Within the bill, he has also included an issue which I'm interested in as Chairman of the Budget Committee, what's called the deeming resolution which essentially sets the amount of money that can be spent on the discretionary side of the budget for this coming year. Discretionary spending being those accounts which we appropriate, which we spend every year and which there's not an automatic expenditure for; things like education and some of the health care accounts and obviously national defense are some of the big ones. And homeland security, which I chair. And this resolution has set a number of $873 billion, which I think is a very responsible number. It's a number which the President sent up in his budget. It's a number which the House had in their budget. It was not the number that left the Senate when we passed our budget. In fact, I note that one of the Senators who spoke before me from the other side of the aisle was upset that the number that passed the Senate was not included as the deeming resolution, which is a fairly ironic position for anybody on the other side of the aisle to take, since they all voted against the budget as it left the Senate.

But in any event, the deeming resolution as it is in this budget, is the number which was agreed to between the Republican Leadership of the Senate and the House, and it was the number which the President felt was appropriate. It will be a difficult number to obtain. There's no question about that. It represents significant fiscal restraint. It's a clear marker that we are going to try to restrain the rate of growth of the discretionary side of the budget, which is very critical to putting in place fiscal responsibility.

I think it's important for people to note that, yes, we presently have a very large deficit. But that this deficit is coming down rather precipitously from where it was projected to be. Six months ago, I believe it was projected we would have a deficit well over $400 billion. We're now projecting that the deficit for this year will be in the $300 billion range. That's a very positive move in the right direction.

Part of that move is a function of the fact that we have started to control the rate of growth of the federal government independent of our needs relative to fighting the War on Terrorism and Katrina, which are events which we need to simply spend money on because of the catastrophe of Katrina and because of the need to have our troops in the field have what they need in order to be adequately supported.

Another reason the budget deficit has come down so precipitously in the last few months is because our revenues are growing significantly as a result of the President having put in place and this Republican Congress having supported him in the effort of economic policies which have energized the economy, dramatically energized the economy by putting in place a tax policy which is fair to people who are entrepreneurs and risk takers in this country. We have seen people go out and be willing to take risks. We have seen people taking action which has created taxable events. Specifically, they have created new companies. They have created new economic activity. They have created new jobs. As a result of those things, revenues are jumping dramatically. We've seen the largest revenue increase in the last 40 years, I believe, in this last year. And the year before that we saw an historic revenue increase. And we are now back to federal revenues being essentially what they were, in an historical context, being essentially what they were over the last 20 years as a percentage of GDP. Those revenues having dropped precipitously over the last about three years because of the bursting of the Internet bubble and the attack of 9/11 which caused a recession.

We have seen the economy come back. We have seen 5.3% growth, extraordinary growth. We are seeing a job situation where we have virtually full employment according to economists. When you get down to an unemployment below 5%, you're basically talking about full employment. We have seen as a result of this expansion of the economy which has now been going on for I think 39 straight months or something like that, we have seen a huge jump in revenues, as I said, an historic jump in revenues. The effective result of that is that the deficit is also coming down. In fact, if you were to take out the cost of fighting the War against Terrorism and the cost of paying for the Katrina tragedy, we would essentially be functioning on what would be almost a balanced budget. We would be at an historic low relative to the deficit as a percentage of GDP.

So we are moving in the right direction by putting in place this resolution, we're asserting that we're going to continue being aggressive in trying to control the rate of growth. That's all positive. That's all good. A large part of it comes about because we have very strong pressure on the Appropriations Committee through Chairman Cochran and his commitment to fiscal discipline.

Another issue which I wanted to talk about and just sort of put the issue in the correct context so that people understand what's actually happening is the issue of border security because there's been a lot of confusion as to how much money we're really spending on border security, where we're spending it and what's being spent. I have the good fortune to Chair the Homeland Security Subcommittee on the Appropriations Committee, and as Chairman of that Committee, I suggested that we put in the supplemental--not as an emergency item, in fact, we paid for it-- $1.9 billion, the purpose of which would be to pay for capital items which were in dire need by the Customs, the Border Patrol and the Coast Guard primarily need. These are things like airplanes, Customs Department is flying P-3s, 20 or so that were all grounded about a month ago because they're 40 years over their useful life. They have serious structural issues which have to be checked all the time or the potential for serious structural issues. Things like new helicopters, because our helicopter fleet is about 20 years past its useful life. Things like new cars or recent cars that can be used on the border because Border Patrol go through vehicles rather rapidly because of the harshness of the terrain they have to use them in. Things like censors and unmanned vehicles. With the Coast Guard, fast boats that could be used to make sure that our shorelines are protected from people coming across who shouldn't be coming across and maybe wanting to do us harm. These are all capital items.

The reason I suggest that we do capital items was because I didn't want to create an out-year cost which we couldn't afford to pay for under the present budget system. But I did want to take off the table items which I knew we were going to have to spend money on if we were going to have an effective Border Patrol and an effective Customs agency and an effective Coast Guard.

The White House looked at that number and said, we didn't really want to do that. They shifted it over and said, let's do operational items. They decided to take, of that $1.9 billion about $800 million and put the National Guard on the border and the balance of the money they basically used to project the hiring of new people and the addition of beds for detention. Both of which I support, but both of which create certain issues.

That's what I wanted to talk about briefly, the issues that are created by this supplemental and by what will occur in the follow-up appropriations bills on homeland security. So everybody knows the playing field that's being defined here. The practical effect of this supplemental is that, yes, there will be money in place to hire an additional 1,000 agents. We already had money in the pipeline to hire an additional 1,500 agents this year. Now, it takes about 40,000 applications before you can get 1,000 agents. It's not easy to hire up. Then you have to train them. So you have to have the physical facility to train them, which we have in New Mexico. But that facility does not yet have the capacity to train 2,500 people a year, maybe 2,000, but not 2,500. And it is unlikely that you could hire an additional 1,000 agents before the end of this fiscal year, maybe 300 or 400, maybe even 500, but I will agree that by putting the money in now you accelerate what we'd planned to do next year, which is hire another 2,000 agents. So you're accelerating that event. If that was the goal.

Secondly, the proposal adds additional, or basically prefunds bed space, which should be funded, and creates an out-year cost as a result of that. And that does a series of other operational things and actually some capital items, which I totally agree with such as technology, investment and unmanned vehicle investment. The practical effect of doing it this way is that you create what's known as a budget tail or an expense in the out-year which you're going to have to pick up, and that's the point I wanted to make today, in as factual way as I can, because it's a very big issue which we'll have to deal with as a Congress, and that's this. The President sent up a budget request for the next year, the 2007 year, which was essentially $32 billion rounded off. That request had in it an assumption of 1,500 new agents. That would be paid for this year. Then an additional assumption of another 1,500 agents on top of that for the next year. It also had in it a commitment or a request that part of the money, the $32 billion be, paid for by raising the airline fee, which people pay for as a tax when they get on an airplane.

Basically in order to fund the increase in border security activity primarily with the Border Patrol agent expansion. That's $1.2 billion. Well, that proposal of $1.2 billion had been sent up here two years ago and it was rejected out of hand. Why? Because the Chairman of the authorizing committee in what I think is fairly legitimate view of the issue, said you shouldn't be raising the tax on people getting on airplanes for the purposes of protecting the borders. The airplane tax should go to TSA. and FAA and things which are used to make air transportation safer, but the airline transportation industry, specifically the passengers, shouldn't be funding the border activity.

So when it was sent up again this year, it was basically dead on arrival, which the Administration knew it would be. This did not come as a surprise because they'd gone through that the year before. So actually what they sent up was a request for about $32 billion in spending, but funding for about $30.8 billion in spending. That means there was a $1.2 billion cap.

Now, that would be difficult to fill in and of itself were that the only problem, but in order to fill that, basically Senator Cochran, as Chairman of the full committee will have to take money from some other committee to give it to my subcommittee, the homeland security committee, to pick up that $1.2 billion if he is so generous to do that or if he feels that's the right policy. He does have to take it from somebody else. I can assure you whoever he takes it from is not going to be all that appreciative of having lost $1.2 billion. So that would be a major hurdle to begin with. Now you throw on top of that $1.2 billion shortfall, the fact in this bill they have forward funded 1,000 agents plus a lot of other operational expenses, and they have not funded the Coast Guard cost of what is called their fast boat or their expansion of their coastal protection efforts.

They've taken the $600 million we intended to use to do that and spent it on the National Guard. You've created approximately a -- well, the number fluctuates depending on what you deem to be capital and what you don't deem to be capital, but my guess is you're somewhere in the range of $1.4 billion which aren't funded for the year 2007. In addition, the Administration tells us, and I would agree with this if we can do it, in the 2008 budget they're going to ask for 3,500 new agents so that we can ramp up as quickly as possible to what the ultimate goal, which is 20,000 agents. It's possible that by the 2008 period we will have the training facilities at a position where we can hire 3,500 agents. It's also possible that you could get 100,000 applications or 120,000 applications or so or whatever it would take to get 3,500 people. So that's a possibility. But the implications of that are significant in the form of cost. What's this put at risk?

All these costs that have been put in the pipeline in are basically up fronting operational costs but not taking off the table capital needs. Well, the practical implications of the $1.2 billion, if it is not found by Senator Cochran, and I'm not asking him to. I think if the Administration is going to take this position, if they're going to make their bed, they ought to be asked to sleep in it. But if Senator Cochran can't find that $1.2 billion, the practical effect is that we could not maintain the funding for the thousand agents who have just been put in the supplemental. We could also not add the new 1,500 agents we would need in order to fund what we'd expected to do in the 2007 bill. We would have to reduce technology and science and sensor technology by about $100 million. We'd have to limit infrastructure construction, especially fence construction, by about $100 million, and we'd have to reduce detention expansion capability by about 6,700 beds. We'd have to reduce fugitive operations, where we try to find these people and get them out of the country, by about $60 million.

We would be unable to forward fund the effort to get the IDENT and IAFIS systems to interface with one another, which is an absolutely critical thing. This is where you come across the border and they're fingerprinting you now. They take two fingerprints of you, but by taking two fingerprints of you, they can't communicate with the FBI database, which has all the criminals in it because that database requires ten fingerprints. So essentially we are limiting our capacity to figure out who is coming across the border as it relates to the FBI database and there is a protocol where they try to get the worst people and make it work, but the fact is you've got tens of thousands of fingerprints that are not being able to be adequately vetted. That would have to be put off. The need to come up with a card that has biometrics attached to it so you can have a tamper-proof identification system would probably have to be put off because we couldn't pay for that. That's a big number.

These items would have to be put off, plus the Coast Guard, and this really frustrates me, the Coast Guard in order to build out the fleet that they need and they're functioning under old boats, a lot of old boats and they've got helicopters which aren't properly structured, most of them, the vast majority of them aren't armed, the Coast Guard build-out program to get things right and to get position correctly to protect our coastline, instead of being completed in 2015, which was our goal under our supplemental request will end up being completed in 2023 or 2024 and in addition it will cost more money to do it because of the spread out.

So what we're facing is a lot of very serious issues as to what we will be able to fund and how much we'll be able to fund under the present game plan or blueprint as it is set out for this year, next year and as a result of this supplemental. And I just thought it was important to come down here and try to lay out the specifics, because at some point we're going to have to face up to the reality of the fact that there is a disconnect between what is being proposed and what is being paid for. And it's not going to work. Mr. President, I yield the floor.