[Congressional Record Volume 140, Number 15 (Tuesday, February 22, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 22, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       BALANCED BUDGET AMENDMENT

  The PRESIDING OFFICER. The clerk will report the joint resolution.
  The legislative clerk read as follows:

       A joint resolution (S.J. Res. 41) proposing an amendment to 
     the Constitution of the United States to require a balanced 
     budget.

  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Madam President, if we can have some order here?
  The PRESIDING OFFICER. The Senator from Illinois is correct. The 
Senate is about to begin a debate on a constitutional amendment. It is 
a serious event, serious debate. We would like the Senate to be in 
order so we may hear the distinguished Senator from Illinois, a 
proponent of the amendment.
  Mr. SIMON. Madam President, ordinarily the chief sponsor speaks 
first, but my colleague and major cosponsor, Senator Hatch, has a 
schedule conflict. I am pleased to yield to him to speak first on the 
debate.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. HATCH. Madam President, I thank my colleague. Please charge this 
to my time on this debate this evening.
  The PRESIDING OFFICER. Does the Senator from Utah wish to speak as a 
proponent?
  Mr. HATCH. As a proponent. The time for proponents is divided 45 
minutes to Senator Simon, 45 minutes to me. I will do this on my time.
  Madam President, I want to personally thank my dear colleague from 
Illinois. He deserves so much credit for leading the fight to bring 
this amendment to the floor and for leading it throughout these last 
number of years. I have great affection for him and appreciate his 
leadership in this area. He has done this as a courtesy to me so I can 
meet the commitments that I made before this evening. So I am really 
very grateful to him. Ordinarily he should lead off and I appreciate 
him showing this kind of deference to me.
  Madam President, the Senate is once again considering a 
constitutional amendment to balance the budget, Senate Joint Resolution 
41, the Simon-Hatch consensus balanced budget amendment. I wish an 
amendment to the Constitution were not necessary. But it is. Statutory 
measures have been tried; but, for one reason or another, they have not 
worked.
  If we had passed the balanced budget amendment before now, we would 
not be spending precious time debating the ends, but rather the means 
of balancing the budget. But we have not heretofore been able to agree 
on the end of a balanced Federal budget requirement. Sadly, I believe 
we must get this amendment in place to ensure there will be an end to 
the long spending binge of Congress.
  Once a constitutional rule is in place, we will all be forced to be 
serious about getting the deficit under control within a definite 
period of time.
  Madam President, a national debt of over $4.5 trillion is slowly but 
surely killing businesses and individuals by soaking up capital that 
could be used to create jobs and wealth for Americans.
  Our national debt is now over $18,000 for each man, woman, and child 
in this country. Each man, woman, and child as of 1994 owes $18,000.
  So our fellow Utahn's, each one of you owes $18,000 because of the 
profligacy of Congress.
  In 1975 it was only $2,500. A year ago it was $1,300 less. In just 1 
year we have gone up 1,300 more dollars for every man, woman, and child 
in America, to be in debt.
  As I have said, the problem is getting worse exponentially. In 1975 
our per capita debt was $2,500. Now it is $18,000. Our debt has 
increased more than sevenfold in the last 19 years. In fact, the per 
capita debt when we introduced our balanced budget amendment last 
February was $16,700. That means every American's debt burden has 
increased $1,300 in just 1 year.
  This uncontrollable debt burden will be the legacy that this 
generation leaves our children and grandchildren.
  We are taxing the future of our children and grandchildren. This is 
the lifetime net tax burden per generation.
  Congress' uncontrolled spending is the real problem. Even after the 
1990 budget deal, record-setting tax hikes led to record deficits. Why? 
Because Congress spent $1.83 for every $1 raised. No amount of tax 
increases will reduce our debt as long as spending continues to 
increase faster.
  President Clinton's much touted deficit reduction plan only slows the 
increase in the national debt. Even the President's own most recent, 
rosy forecasts indicate that we will add over $200 billion to our debt 
this year. Congressional Budget Office estimates suggest that the 
President's deficit reduction plan, will add nearly $1 trillion to our 
national debt in the next 5 years. Our current deficit reduction 
efforts are wholly inadequate.

  I would like to say a few words about interest costs. Frankly on this 
chart, No. 3, this shows the deficit outlook through the year 2004. 
Yes, in 1994 we will come down because of the President's plan. They 
hope it will be only $171 billion deficit this next year, 1994. But 
actually as you can see it takes off and goes up to better than $359 
billion by 2004. So they are just slowing the increase in the national 
debt.
  As anyone who has borrowed money knows, compounding interest can eat 
up a budget and a person's options faster than any other type of 
expense. It is no different with the Federal Government. Interest on 
the Federal debt in 1993 amounted to nearly $293 billion. That is more 
than total Federal revenues in 1975. Interest alone cost us 26 percent 
of all Federal revenues and 57 percent of all individual income tax 
revenues.
  OMB projects that interest on the debt will rise substantially over 
the next 5 years. It will pass the $300 billion mark in 1995 and reach 
$373 billion in 1999. That is if their estimates are right. CBO's 
estimates are even higher, with $311 billion in interest in 1995 and 
$382 billion in 1999.
  Opponents of the balanced budget amendment have suggested we cannot 
afford to cut the deficit more than the Clinton plan does because 
decreased social spending will have severe, adverse effects. But think 
how much we could do in crime control, defense, disaster relief, or 
programs like Medicare and Medicaid if we had $300 billion more 
available every year?
  I do not understand the logic of continuing to waste over 20 percent 
of our entire budget on interest payments on the rationale that we 
cannot afford to cut spending. We simply cannot afford to continue to 
throw away one-fifth of our budget on interest payments. The biggest 
risk to any or all of the spending programs of the Federal Government 
is mounting debt and spiraling interest costs.
  Just by way of comparison, Madam President, in the 1993 budget, gross 
interest on the debt was more than the entire defense budget, $292.4 
billion; 97 percent of Social Security claimants, which is $302 
billion. Gross interest was 55 percent of all discretionary outlays 
which are $542.5 billion and 44 percent of all mandatory programs which 
are $667 billion. In fact, the nearly $293 billion cost of gross 
interest on the national debt could have covered our entire health 
spending, including Medicare and Medicaid which are $207.6 billion, all 
veterans' benefits and services which are $19.3 billion, unemployment 
compensation, $35.5 billion, our entire international discretionary 
spending, $21.6 billion and the costs of the earned income tax credit 
of $8.8 billion.
  Without the gross income on the debt, we would not even had a deficit 
last year. In fact, we would have run a budget surplus of $38 billion. 
Interest on the debt is wasted money. It is money we could have used 
but cannot. Over the next 5 years of ``deficit reduction,'' the Office 
of Management and Budget's own calculation is that interest on the 
public debt will total really about $1.7 trillion; that is, in the next 
5 years, interest will go up $1.7 trillion. That amount of money would 
fully fund the entire 1994 budget with money left over to take care of 
other things.
  We can only begin to get interest costs under control, after we get 
the budget deficits under control. That is why whether you want to 
spend more money on programs or save money for the taxpayer, you should 
support Senate Joint Resolution 41, the balanced budget amendment. It 
will give us the constitutional support we need to stop going deeper 
into debt.
  Deficit spending is the worst kind of spending, Madam President. It 
is easy. Members of Congress, special interest groups and constituents 
like spending increases, and they are certainly more popular than tax 
hikes. Our balanced budget amendment, Senate Joint Resolution 41, has a 
three-fifths majority requirement to make deficit spending more 
difficult. If you want to spend, then you are going to have to get 
three-fifths of a vote to do so beyond balancing the budget. And you 
are going to have to stand up and vote to do so, which we do not do 
now.
  This is an absolutely critical provision because it will require 60 
votes in the Senate to do what would otherwise be the easier and more 
popular course; that is, spending on the Government credit card.
  Senate Joint Resolution 41 also has a tax limitation provision. A 
constitutional majority rollcall vote is required to raise taxes. This 
is higher than the current requirements. A constitutional majority 
means at least no less than 51 votes in the Senate, rather than just a 
majority of the voting Senators. And those 51 Senators must go on 
record as voting for those tax hikes if they want to do that. We could 
vote anything through the Senate normally on a 26-to-25 vote because 51 
people would make a majority. In this case, if you want to raise taxes 
under this amendment, you are going to have to have at least 51. No 
longer can you have less than 51.
  We need the balanced budget amendment now to reverse the deficit 
trends that are cutting off the lifeblood of the United States economy. 
Perhaps more importantly, Senate Joint Resolution 41 will create an 
additional constitutional process that will bring back legislative 
accountability to the constitutional system. The balanced budget 
amendment process accomplishes this by making Federal deficit spending 
significantly more difficult.
  Under the proposed amendment, Congress will have to prioritize its 
legislative agenda to determine which spending measures are most 
important and fund only those that the people are willing to pay for. 
It would then be much harder to shift the economic costs of less 
justifiable spending projects to the whole Nation through legislation 
that is adverse to the good of our commonwealth. In other words, 
Congress will become again a deliberative assembly fulfilling its 
intended function with its encroaching appetite curtailed and liberty, 
as a consequence, furthered. We have to pass Senate Joint Resolution 
41, the Simon-Hatch-Thurmond-Craig balanced budget amendment. It is the 
right thing to do for the American economy, for the American 
constitutional system, and the right thing to do for our American 
families.
  Madam President, we are in trouble in this country. We have to do 
something. I heard all of these hysterical bits of testimony last week 
from the administration. Why, they act like you cannot do anything 
unless you continue to spend. Frankly, they act like you have to cut 
this budget in 1 year when, in fact, we are going to allow until 2001 
to actually get on this glide path to get our budget balanced.
  I am tired of the hysteria. I am tired of these people saying we 
ought to do it ourselves. We have not done it ourselves for 33 of the 
last 34 years, and we have not done it ourselves for most of the last 
56 years. So we need the discipline that this balanced budget amendment 
would bring to the Congress, that would force the Members of Congress 
to live within their means, to make priority choices among competing 
programs, and to do what is right for this country.
  Once again, Madam President, I want to thank my dear colleague from 
Illinois for giving me this opportunity to speak this evening. I will 
have more to say tomorrow.
  But it is important I make these remarks before I leave. I just want 
to thank him again for his kind courtesy to me and for his great 
leadership on this particular amendment. I thank him, and I yield the 
floor.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Madam President, I yield myself as much time as I may 
consume.
  The PRESIDING OFFICER. The Senator from Illinois may proceed.
  Mr. SIMON. Madam President, I thank the many people who have played a 
role in bringing this to this point. That includes my colleagues on 
both sides of the aisle, 54 cosponsors of this legislation, staff 
people who have worked very hard on this, and I am grateful to all of 
them, as well as to organizations and people around the country who 
have expressed their concern. This is one where the people around the 
country have to express an interest.
  Senator Byrd has been quoted as saying it is the most important vote 
in 40 years in the U.S. Senate. Our former colleague, Paul Tsongas, who 
testified in behalf of this legislation last week, said it is the most 
important vote in the 20 years that he has been observing Congress.
  The reason it is more important, for example, than the 1986 vote when 
this lost by 1 vote is then there was the probability the House would 
defeat it. Today, this body remains the stumbling block, if there is a 
stumbling block. It is going to be a close vote. We all know that. But 
the House is ready to pass it and it will pass the House very, very 
quickly. My sense is, from talking with Governors and others, is that 
it will be ratified by the States very quickly.
  I think a very fundamental question is: What is the purpose of a 
constitutional amendment? The purpose of a constitutional amendment is, 
No. 1, to express philosophy and, No. 2, to prevent Government abuse. 
We have had Government abuse in abundance. We are celebrating--I should 
not use the word celebrating--but this is the 25th anniversary of the 
United States Congress and our Presidents together spending more money 
than we take in. We celebrate various anniversaries. We have celebrated 
the 25th anniversary recently of the Peace Corps, and we celebrate 
various anniversaries. I doubt that there is anyone anywhere who is 
planning a celebration for the 25th anniversary of spending more money 
than we take in because we know it is hurting us. It is hurting these 
pages and their future. It is hurting all of us.
  The idea is not a new idea. Thomas Jefferson was not in the United 
States when the Constitution was written. He was over in France 
negotiating for us. When he came back, Thomas Jefferson said, ``If I 
could add one amendment to the Constitution, it would be to prohibit 
the Federal Government from borrowing money.''
  Now, we do not go as far as Thomas Jefferson wanted. He wanted an 
absolute prohibition. We believe that there are times when you should 
have a deficit--when you have a recession or if, for example, you have 
an earthquake in California or something else. There may be a time when 
you should spend money that you do not have in terms of revenue. So we 
permit with a 60-percent vote that you can have a deficit.
  The other point that was made by our Founding Fathers in the 
Federalist Papers was this:

       The eagerness to spend should be matched by the reluctance 
     to tax.

  And that historically has been where we have been, Madam President--
up until recently. In the past, during a war, yes, we went into debt. 
But after the war, we immediately paid for it and we went on a pay-as-
you-go basis.
  Right here, Madam President, on this chart is the history since 1946 
of where we have been, and you can see these red figures coming down. 
This is where we have been. If we were to add 1994, it would go up, and 
then as we go down the later years, the deficit grows and grows and 
grows ad infinitum, and that will continue unless we do something about 
it.
  There are those who say, well, this was just one letter Thomas 
Jefferson wrote. Thomas Jefferson expressed himself in this field a 
number of times. At one point Thomas Jefferson said:

       To preserve our independence we must not let our rulers 
     load us with perpetual debt.

  Another point. In 1813--this is after he was President. People say, 
well, once Thomas Jefferson became President he realized what was 
needed. In 1813 he wrote:

       Ought not then the right of each successive generation to 
     be guaranteed against the dissipations and corruptions of 
     those preceding by a fundamental provision in our 
     Constitution?

  And then a few years later he said:

       It is incumbent on every generation to pay its own debts as 
     it goes.

  He believed that it was. And again quoting Jefferson:

       It is of such importance--

  The principle of paying as you go:

       As to place it among the fundamental principles of 
     Government. We should consider ourselves unauthorized to 
     saddle posterity with our debts and morally bound to pay them 
     ourselves.

  I see my colleague from Illinois standing and would be pleased to 
yield to her for a question.
  Ms. MOSELEY-BRAUN. Will the Senator yield for a question, yes.
  I say to the Senator, this morning I had the singular privilege of 
reading George Washington's Farewell Address which was delivered in 
1789, and I was taken in reading it by the fact that he makes 
reference, a very direct reference, frankly, to the amendment for the 
balanced budget.
  And if I may, just to quote, he says--and this speech, by the way, 
that George Washington delivered to our country, he never actually 
wrote. As a testament for his administration, it was written in concert 
with James Madison and Alexander Hamilton. And so it says on this very 
subject, and I quote:

       As a very important source of strength and security, 
     cherish public credit. One method of preserving it is to use 
     it as sparingly as possible, avoiding occasions of expense by 
     cultivating peace, but remembering, also, that timely 
     disbursements, to prepare for danger, frequently prevent much 
     greater disbursements to repel it; avoiding likewise the 
     accumulation of debt, not only by shunning occasions of 
     expense, but by vigorous exertions, in time of peace, to 
     discharge the debts which unavoidable wars may have 
     occasioned, not ungenerously throwing upon posterity the 
     burden which we ourselves ought to bear. The execution of 
     these maxims belongs to your representatives, but it is 
     necessary that public opinion should cooperate. To facilitate 
     to them the performance of their duty, it is essential that 
     you should practically bear in mind, that towards the payment 
     of debts there must be revenue; that to have revenue there 
     must be taxes; that no taxes can be devised which are not 
     more or less inconvenient and unpleasant; that the intrinsic 
     embarrassment inseparable from the selection of the proper 
     object . . . ought to be a decisive motive for a candid 
     construction of the conduct of the Government in making it, 
     and for a spirit of acquiescence in the measures for 
     obtaining revenue, which the public exigencies may at any 
     time dictate.

  So in Washington's Farewell Address, I wanted to bring to the 
Senator's attention, because he referenced Thomas Jefferson, the 
encouragement and exhortations that the Father of our Country gave in 
his farewell address on this very subject; that we have an obligation 
to keep the public credit and not pass on the burden to posterity.
  Mr. SIMON. I thank my colleague from Illinois for that observation. I 
wish I could say George Washington has endorsed my amendment. We cannot 
quite say that.
  Mr. GRAMM. If he were here, he would.
  Mr. SIMON. Certainly in principle what he said is accurate and is in 
line with this. I thank my colleague very much.
  I would also like to have printed in the Record a statement by 
Alexander Hamilton. Alexander Hamilton and Thomas Jefferson did not 
agree on much but this is one of the areas where they strongly agreed. 
I ask unanimous consent, Madam President, to have that printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                           Demagogy and Debt

(In the course of his research, Donald Stabile, professor of economics 
   at St. Mary's College of Maryland, came upon Alexander Hamilton's 
 ``Report on a Plan for the Further Support of Public Credit,'' dated 
                Jan. 16, 1795, from which this is taken)

       To extinguish a Debt which exists and to avoid contracting 
     more are ideas almost always favored by public feeling and 
     opinion; but to pay Taxes for the one or the other purpose, 
     which are the only means of avoiding the evil, is always more 
     or less unpopular. These contradictions are in human nature. 
     And the lot of a Country would be enviable indeed, in which 
     there were not always men ready to turn them to the account 
     of their own popularity or to make other sinister account.
       Hence it is no uncommon spectacle to see the same men 
     Clamouring for Occasions of expense, when they happen to be 
     in unison with the present humour of the community, whether 
     well or ill directed, declaiming against a Public Debt, and 
     for the reduction of it as an abstract thesis; yet vehement 
     against any plan of taxation which is proposed to discharge 
     old debts, or to avoid new by defraying the expense of 
     exigencies as they emerge.
       The consequence is, that the Public Debt swells 'til its 
     magnitude becomes enormous, and the Burthens of the people 
     gradually increase 'till their weight becomes intolerable. Of 
     such a state of things great disorders in the whole political 
     economy, convulsions & revolutions of Government are a 
     Natural offspring.
       [My previous report] suggests the Idea of ``incorporating 
     as a fundamental maximum in the System of Public Credit of 
     the United States, that the creation of Debt should always be 
     accompanied with the means of extinguishment--that this is 
     the true secret for rendering public credit immortal, and 
     that it is difficult to conceive a situation in which there 
     may not be an adherence to the Maxim'' and it expressed an 
     unfeigned solicitude that this may be attempted by the United 
     States.--Alexander Hamilton, Treasury Department, Scy. of the 
     Treasury.

  Mr. SIMON. It is interesting that even the lead witness in opposition 
to the balanced budget amendment last year, Prof. Laurence Tribe of 
Harvard--I do not want to mislead anyone. He is still opposed to the 
balanced budget amendment, but he said this:

       Despite the misgivings I expressed on this score a decade 
     ago, I no longer think that a balanced budget amendment is at 
     a conceptual level an unsuited kind of provision to include 
     in the Constitution. The Jeffersonian notion that today's 
     populace should not be able to burden future generations with 
     excessive debt does seem to be the kind of fundamental value 
     that is worthy of enshrinement in the Constitution. In a 
     sense, it represents a structural protection for the rights 
     of our children and grandchildren.

  Madam President, the last time we voted on this in the Senate after 
significant debate was 1986. It failed to carry the Senate by one vote. 
The argument used then was we can balance the budget without a 
constitutional amendment. It is very interesting that we are hearing 
the same arguments today. At that point we had, with the approval of a 
Republican President of the United States, taken some steps to reduce 
the deficit a little, and now we have taken steps to the great credit 
of President Clinton to reduce the deficit. But in 1986, the deficit 
was $2 trillion. Now the deficit is $4.5 trillion. And we are hearing 
the same arguments.
  This bill was reported out of the Judiciary Committee by a 15-to-3 
vote, the largest vote ever for a constitutional amendment for the 
balanced budget. But can we do it without a constitutional amendment?
  Well, let us take the Gramm-Rudman-Hollings provision that did have 
some effect. In theory Gramm-Rudman-Hollings was supposed to balance 
the budget by the year 1991. And look, here we are, 1991--$269 billion, 
the next largest line on this deficit chart.
  The reality is that statutory changes are too easily avoided. As soon 
as it becomes awkward, we change the statute.
  Then there are those who say, well, Congress just will not pay any 
attention to it. I do not believe that. I did not hear a single Member 
of the Senate get up in the Chamber and say let us not pay attention to 
Gramm-Rudman-Hollings. I did not hear a single Member of the Senate say 
let us not pay attention to the budgetary agreement we had.
  We just changed the law when it became too awkward.
  Each of us has taken an oath to uphold the Constitution. It is the 
one oath we take to protect that Constitution. I really believe the 
Members of this body take that oath seriously, and would not just 
ignore the Constitution.
  I might add, for those who say it is a gimmick, our House colleague, 
Representative Olympia Snowe, had a great line. She said, ``If it were 
just a gimmick, Congress would have passed it a long time ago.''
  I think there is some truth to that. And for those who say it is just 
a gimmick, that Congress will evade it, there is no word ``budget'' in 
the amendment. What we do to lock this in to make sure receipts and 
revenues match, we say, so you do not play games with off-budget, on-
budget, and that sort of thing, we say it takes a three-fifths majority 
to increase the national debt.
  We ought to be encouraging pay-as-you-go Government.
  It is very interesting that back some years ago, President 
Eisenhower, to his great credit, suggested an interstate highway 
system. It was the largest single public works project in the history 
of humanity, not just of our country. And President Eisenhower 
suggested that we issue bonds to pay for the interstate highway system. 
A Senator by the name of Albert Gore, Sr. said we should not issue 
bonds on this. We should pay for it on a pay-as-you-go basis. 
Fortunately he prevailed, and we have saved over $800 billion that 
would have gone for interest, and harm to the economy.
  This has flexibility. People say, well, you cannot have a capital 
budget. First of all, I do not know of any reason for having a capital 
budget at the Federal level. When people say, well, a home-owner has to 
have a mortgage, we ought to have the same flexibility, or a local 
school district. They do that because they have no option. If you have 
money in the bank, you do not borrow. We ought to be balancing things 
on a pay-as-you-go basis.
  The biggest single project we have, Madam President, in the Federal 
Government right now, is the nuclear carrier. We pay for that. We could 
pay for that over 6 years. The most we would pay for would be $1 
billion in 1 year. There is no reason for issuing bonds on that.
  And under this provision we could have some flexibility for something 
like the new judicial center that is near Union Station. Senator Pat 
Moynihan used some creative financing on that. I am not sure as a 
matter of precedent that it is wise. But for the new judicial center we 
have a 20-year lease. We pay each year, and at the end of 20 years the 
Federal Government will own it. I think most Members are not aware that 
is how that is financed.
  I do not recommend that. But that would be possible under this 
Constitution.
  Those who say that it has no flexibility are wrong. But it does not 
have complete flexibility.
  I had the experience about a year ago, a year and a half ago, of 
introducing a bill for long-term care with a half percent increase in 
Social Security to pay for it. Two of my colleagues in the Senate, who 
shall remain nameless, came to me, and said that they really liked my 
long-term care bill. If I would just drop the half percent increase in 
Social Security to pay for it, they would like to be cosponsors. We can 
do that now. We have a blank check.
  What we are saying here is we should not have a blank check; that if 
we want a long-term care bill, we have to have the taxes to pay for it. 
And if we do not have the courage to vote for the taxes, we cannot have 
the long-term care bill. That is the reality that we have to face.
  My colleague from Idaho, Senator Craig, who has been so helpful on 
this--we might differ on a long-term care bill, but we are in agreement 
that if we have a program we have to have the taxes and the revenue to 
pay for it, that you cannot simply constantly go into debt.
  The question of a recession has also been brought up. There is 
concern on this. I thought Fred Bergsten, former Assistant Secretary of 
the Treasury under Jimmy Carter, who testified, ``If you had asked me 5 
years ago, would I be for a balanced budget,'' he said, ``absolutely 
not.'' But he said, ``Now I think it is essential for the country.''
  He pointed out that a balanced budget amendment will give us greater 
flexibility if we do it wisely and build in a 1- or 2-percent surplus 
so that we have the flexibility if there is a recession to spend money 
for these kinds of needs. Now, because we are so strapped we cannot 
pass $11 billion for a jobs program in this recession.
  Professor David Calleo from your State of Maryland, Madam President, 
from Johns Hopkins University, recently wrote:

       Financially, the United States is fast growing into a giant 
     banana republic. Our national debt has risen from less than 
     $1 trillion in 1980 to over $4 trillion in 1993. High 
     interest payments squeeze out the Federal funds needed not 
     only for those humanitarian needs that make us a better and 
     happier society, but also for the educational and 
     infrastructural spending required to keep us competitive with 
     other nations.

  Why would a constitutional amendment work when Gramm-Rudman and other 
statutory attempts have failed? He goes into that, and then he says:

       Without some structural restraint on borrowing, the present 
     strong bias towards spending without revenues will continue, 
     and the Nation's balance sheet will fall deeper and deeper 
     into the red. Structural restraints on wayward power are 
     presumably what a Constitution is for.

  He is absolutely correct.
  Our former colleague, Senator Paul Tsongas, said in testimony last 
week in behalf of this, that we have a debt addiction. I think that is 
correct. Like a drug addiction or an alcohol addiction, to get rid of 
the addiction will require some pain. But it is infinitely better to 
get rid of the addiction than to keep the addiction.
  I would also like to put up another chart because we have heard a 
great deal about the deficits coming down. They are coming down for a 
variety of reasons, including the bill that we passed last August.
  Here you see them coming down. What is not said is that under CBO's 
calculations they start going up again. Here you have in the last year 
of CBO's estimate, a deficit of $365 billion, a record deficit. We can 
do much, much better than that.
  We are spending right now $800 million a day for interest. What do we 
get for that $800 million a day for interest? Nothing other than higher 
interest rates and deeper debt for our children.
  What harm is done with this huge deficit? All kinds of illustrations 
can be used. But it was interesting that last week there was a report 
on the front page of the New York Times about the homeless, an area 
that I know the Senator from Maryland is very interested in along with 
others of us. A major reason for the problems of homelessness is we 
have not built enough housing in our country. One of the major reasons 
for not building enough housing in our country is that interest rates 
are too high. That has discouraged the building of private housing.
  So when you do not have enough housing, who gets housing? Well, those 
of us who can afford it. Who gets squeezed out? Those who cannot afford 
it.
  We are hurting ourselves fiscally. The New York Federal Reserve Bank 
says that from 1978 to 1988 we lost 5-percent growth in GNP and 
national income because of the deficit.
  I cannot tell you what that means practically in terms of each of our 
States. CBO says 1 percent is 650,000 jobs.
  On that basis, that is 3.75 million jobs lost because of the deficit. 
How many of those are in Maryland, Idaho, or Illinois? I do not know. 
But there are a lot. The GAO says we are headed toward an economic 
catastrophe--that is their phrase, not mine--if we do not get ahold of 
this thing. We have to get ahold of this thing. They also say if we 
continue muddling along, we are going to hurt the people of our 
country. But if by the year 2001--and that is the date we have in our 
amendment--we balance the budget, by the year 2020, the average 
American will have an increase in standard of living of 36 percent.
  It is also interesting that the Concord coalition put together a 
statement and analysis of where we would be if we did not have this 
deficit, and they suggest, on the basis of history, that our 
productivity would have been significantly higher and that the average 
family in America today, instead of having an average family income of 
$35,000, would have an average family income of $50,000. Well, that is 
a huge, huge difference.
  What about the trade deficit? I asked CBO and the Congressional 
Research Service to provide me studies, and the studies varied from 37 
percent to 56 percent of the trade deficit is caused by the budget 
deficit.
  Then we have a distribution problem, a fiscal problem. In inflation-
adjusted terms, this is what happened between fiscal years 1981 and 
1993. Some of the items are down. For example, transportation, down 6 
percent; education, down 8 percent. Yes, we have increased the 
appropriations, but not as much as inflation. And then defense--and a 
lot of people think that is the big growth item--was 16 percent. 
Entitlements, because of health care and number growth, up 32 percent.
  What is the big growth item? This one here: interest. What do we get 
for it? Zero, nothing, other than harm to our economy. This is $293 
billion spent last year. Who pays that $293 billion? People of limited 
means. Who collects it? Those who are more fortunate in our society. 
What is happening is that this is squeezing out our ability to respond 
on education and health care and things that are important to our 
country.
  This past year we spent twice as much on interest as all the poverty 
programs combined, eight times as much on interest as on all of our 
education. The biggest welfare program we have in this country, my 
friends, is the interest program. It is welfare for the rich. We ought 
to change that. It is eating at the heart and soul of this country.
  A very interesting article appeared in the magazine called 
International Economy--and I confess I am not a regular reader of the 
magazine--by a writer named Richard Coo, and the heading on it really 
tells a story: ``America's Budget Deficits; They Redistribute Income To 
The Rich.'' That is what we are doing.
  Plus, one of the things that happens when we redistribute income to 
those who are more fortunate is we take away a stabilizing factor in 
our society. You see that people at the lower income level get money, 
and they will spend it, because they have no alternative. You give 
money to those who are more fortunate economically and a lot of them 
will save it, invest it in other countries, and do things like that.
  Some of you will remember Senator Paul Douglas. I have his seat in 
the U.S. Senate, and I am proud to have it. He was my political mentor. 
He was an economist. A lot of people do not know that. Some will 
remember the Cobb-Douglas theory of wages. The Douglas of that was Paul 
Douglas. Back in 1950, he warned against the dangers that we are moving 
down toward greater deficits, and he said with that will be higher 
interest rates. It is very interesting that that year the deficit was 
$3 billion, and the prime rate that year was 2 percent. What a great 
thing that would be if we were there today.
  But it is not only that we redistribute money to the wealthy; 17 
percent of what we redistribute through interest now goes to other 
countries. And the real figure is higher than 17 percent. The 17 
percent is the public figure, held by individuals and corporations and 
other countries. The reason the figure is higher is that some people, 
because of laws in their country, do not want it known. But the 17 
percent is a matter of some trouble.
  Let us just say that the distinguished Senator from Maryland was the 
president of the First National Bank in Carbondale, IL, and I came to 
him and I said, ``I would like to spend more money than I take in this 
year. Will you make me a loan?'' You look at my balance sheet and you 
would agree to do that for 1 year. And I came in a second year, and you 
would agree to do it a second year, and maybe the third year. But at 
some point, a prudent banker is going to say: I think I better put my 
money somewhere else. And at some point, some indefinable point, 
prudent international bankers are going to say the same.
  Lester Thurow, a very distinguished economist, has warned us that the 
question is not if foreign holdings are at some point going to be 
withdrawn; the question is when they are going to be withdrawn. The 
only way we can prevent that from happening, in my opinion, is with a 
balanced budget amendment.
  I serve as chairman of the subcommittee on Africa, and that troubled 
continent has major problems. One of the problems is, as the IMF and 
the World Bank will tell you, that their debt exceeds their national 
income. Their debt is 109 percent of their national income. But where 
are we headed? In 1980, our debt relative to national income was 24.9 
percent. Today, it is 70.5 percent. We are headed down the same road.
  The GAO, in June of 1992, made a report suggesting that we are headed 
toward major problems--again they use the term ``economic 
catastrophe''--and suggested that we are headed toward 20 percent of 
deficit relative to national income. That is modified because of the 
action taken last August, and I wish I had up-to-date figures. The 
initial indication is that figure may be down by about 3.7 percent.
  But the significant fact is that no nation, no industrial nation, has 
come anywhere near that figure without monetizing the debt, without 
just printing money to get around it, and without having 
hyperinflation. The closest example that we have near us is Mexico, 
who, in 1988, reached the point of a 12.5-percent deficit relative to 
their national income, and inflation there was 114 percent. That 114 
percent would mean just cutting in half their Social Security 
retirement fund; 114 percent inflation would mean cutting in half 
pension benefits of people; 114 percent means cutting family savings in 
half, and there are others that are much worse than that.

  But let us just say you do not want to believe GAO on this. Let us 
take a look at OMB. Here we have what they say--this is from the budget 
documents, those four huge documents we got the other day--``Lifetime 
Net Tax Rates Under Alternative Policies.''
  Well, I was born in 1928. Here they had 130. You will see I will 
spend an average of 30 percent of my lifetime income on taxation.
  Let us get down here to the bottom where they say future generations. 
Future generations was, before we passed reconciliation, believe it or 
not, 93 percent; after that, 82 percent. And then they say with health 
care reform and with their economic assumptions--and their economic 
assumptions are not only that health care reform is going to save a lot 
of money; and I am a cosponsor of the Clinton health care plan; I am a 
believer in it--but they also assume you are going to have 10 years of 
steady economic progress.
  What about future generations? They say future generations will have 
66 to 75 percent of their net lifetime earnings going for taxes.
  Now that just is not going to happen, my friends. Do you know what we 
will do before we do that? We will start printing money. We will start 
the printing presses rolling. We will have funny money that is out 
there. That is the experience of a great many nations.
  I read a book recently about ancient Florence. That is what happened 
there.
  Adam Smith wrote ``The Wealth of Nations'' in 1776. He said:

       When national debts have once been accumulated to a certain 
     degree, there is scarce, I believe, a single instance of 
     their having been fairly and completely paid. The liberation 
     of the public revenue, if it has ever been brought about at 
     all, has always been brought about by a bankruptcy; sometimes 
     by an avowed one, but always by a real one, though frequently 
     by a pretended payment.

  So, by phony money.
  Again I want to commend President Clinton for his leadership on what 
he has done in the deficit.
  According to CBO, what we voted on last August has saved us $433 
billion. What CBO says we have to do between now and 2001 is save $600 
billion, roughly the same amount. And there are other factors that even 
suggest that the CBO figure is an underestimate in terms of the $433 
billion. We are talking about a gradual decline in deficit, less than 
the decline in the last 2 years. We are talking about something that is 
not impossible.
  It is interesting that the Wharton School last Thursday--and I have 
not had a chance to discuss this with my colleague from Idaho--the 
Wharton School last Thursday released a study saying that, yes, if we 
were to move on this deficit, it could cause a little pain. They were 
assuming across-the-board cuts, which I do not think we would provide. 
But they also said, 30-year bonds, if we pass this, they predict will 
drop from 6.5 percent to 2.5 percent.
  Well, do you know what would happen to the economy in this country if 
we dropped 30-year bonds from 6.5 percent to 2.5 percent, as they say 
we will if we pass this? Housing construction would boom; industrial 
investment would boom. It would be a great, great plus for this Nation.
  I ask unanimous consent to have printed in the Record a column by 
George Will and one by Michael Kinsley. George Will is a conservative 
writer. Michael Kinsley is a liberal writer. Both of them are saying 
why they are for the balanced budget amendment.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Apr. 30, 1992]

                         It Ought To Be A Crime

                          (By George F. Will)

       What House Speaker Tom Foley recently said would have sent 
     shivers down Washington's spine, if it had one. He predicted 
     the end of civilization, as Washington has known it. He 
     predicted Congress this year will pass a constitutional 
     amendment to require the federal government to balance its 
     budget.
       The unlikely Robespierre of this revolution is Illinois' 
     mild-mannered Sen. Paul Simon, who calls himself a ``pay-as-
     you-go'' Democrat. With the patience learned in nearly four 
     decades in politics, he has been visiting colleagues one at a 
     time, warning that the federal government's gross interest 
     costs, which were just $74 billion in fiscal 1980, are 
     projected to be $315 billion in fiscal 1993, when interest--
     the rental of money--will be the largest federal expenditure.
       Discerning conservatives know that huge deficits make big 
     government cheap for current consumers of its services, 
     thereby reducing resistance to the growth of government. 
     Sentient liberals recognize that huge deficits involve 
     regressive transfer payments: We are transferring $315 
     billion from taxpayers to buyers of Treasury bills--generally 
     rich individuals and institutions--in America and places like 
     Tokyo and Riyadh.
       These are among the reasons why in 1986 the Senate cast 66 
     votes--just one short of the two-thirds needed--for a 
     balanced budget amendment. And in 1990 the House fell just 
     seven votes short. Today Congress is battered by scandal, by 
     anti-incumbent fever and by the term-limits movement, and is 
     bracing to be the villain in President Bush's campaign 
     rhetoric. So a balanced budget amendment is indeed likely to 
     be sent to the states.
       Will the necessary three-fourths of the states ratify it? 
     Forty-nine of them--all but Vermont--operate under similar 
     requirements. And a vote against the amendment looks like a 
     vote for big government.
       A balanced budget amendment would serve Congress's 
     institutional interests by requiring the president to propose 
     a balanced budget, something neither Reagan nor Bush has come 
     close to doing. Thus the amendment would end the tiresome 
     presidential posturing--``Only Congress can spend money''--
     that places on Congress exclusive blame for deficits. In 
     fact, in states as well as in Washington, executive branches 
     generally determine the level of spending, and legislatures 
     merely modify--and not very much--spending patterns.
       Some people predict that a balanced budget amendment would 
     be used as an excuse for large tax increases. That is 
     possible but, given today's taxaphobia, not likely.
       Other people predict that an amendment would result in cuts 
     in program X, Y or Z. Such predictions are implicit 
     confessions that if Congress is forced to enforce priorities, 
     then X, Y or Z will be deemed dispensable. When $400 billion 
     deficits are permitted, marginal, even frivolous programs get 
     funded because costs can be shoved onto future generations.
       Anyway, it is wrong to make support for a constitutional 
     change contingent on guesses about particular short-term 
     policy consequences. A sufficient reason for a balanced 
     budget amendment is to impose, on both the legislative and 
     executive branches, a regime of constitutionally compelled 
     choices.
       Simon's amendment has a clause permitting escape from 
     restraint by vote of a super majority. Sixty percent of the 
     full membership of both Houses can vote an imbalanced budget 
     for, say, countercyclical purposes.
       An unsolved and perhaps ultimately insoluble problem for 
     any balanced budget amendment is enforcement. What will be 
     the penalties for noncompliance? An unenforceable amendment 
     is less a law than an expression of intention. No one, least 
     of all conservatives, can equably contemplate involving 
     courts in enforcement of such an amendment, and evasion of it 
     would deepen public cynicism.
       But at certain points, and this is one, the governed must 
     simply presuppose a sufficiency of honor among the governors. 
     Furthermore, elevating fiscal responsibility to the rank of a 
     constitutional duty will heighten public scrutiny of 
     budgeting behavior and will intensify public indignation 
     about any disregard of the duty.
       I have hitherto (July 25, 1982) argued against a balanced 
     budget amendment on the ground that it is wrong to 
     constitutionalize economic policy. Since then there have been 
     2.9 trillion reasons for reconsidering--the 2.9 trillion 
     dollars added to the nation's debt. My mistake was in 
     considering deficits merely economic rather than political 
     events. In fact, a balanced budget amendment will do 
     something of constitutional significance: It will protect 
     important rights of an unrepresented group, the unborn 
     generations that must bear the burden of the debts. The 
     amendment blocks a form of confiscation of property--taxation 
     without representation.
       The Constitution is fundamental law that should indeed deal 
     only with fundamental questions. But as the third president 
     said, ``The question whether one generation has the right to 
     bind another by the deficit it imposes is a question of such 
     consequence as to place it among the fundamental principles 
     of government. We should consider ourselves unauthorized to 
     saddle posterity with our debts, and morally bound to pay 
     them ourselves.'' Simon's amendment is, in Jefferson's 
     language, an emphatic withdrawal of an authorization 
     government has wrongly assumed.
                                  ____


                [From the Washington Post, May 14, 1992]

                The Liberal Case for a Budget Amendment

                          (By Michael Kinsley)

       ``It is the Congress that tells the executive how to spend 
     every dime,'' said President Bush, attacking ``the spending 
     habits of the Congress'' at a Bush-Quayle fund-raiser the 
     other day.
       To call this hoary Republican bluff is one reason I'm for 
     Sen. Paul Simon's balanced budget constitutional amendment. 
     Each year, it declares, ``the President shall transmit to the 
     Congress a proposed budget * * * in which total outlays do 
     not exceed total receipts.'' Neither Ronald Reagan nor George 
     Bush has ever come close.
       The amendment also would require Congress to enact a 
     deficit-free budget, unless a three-fifths majority in both 
     houses voted not to. Congress, terrified of the sour public 
     mood, is near-certain to pass some kind of balanced budget 
     amendment next month. But voting for a balanced budget 
     amendment is not just a desperate short-term political 
     expedient. For Democrats, it is good long-term politics.
       The voters are hypocrites about federal spending: hating it 
     in general, cherishing it in the particular. The deficit is 
     the concrete expression of this voter hypocrisy. Politicians 
     of both parties cater to it. But by and large, it is 
     Republicans who since 1980 have made this hypocrisy the 
     central feature of American politics and Republicans who have 
     benefited politically from it.
       A balanced budget amendment, if it worked, might lead to 
     lower spending or higher taxes or some combination. But at 
     least it would lead to an honest debate. That would not just 
     be hygienic. It would be helpful to the party that's been 
     losing the dishonest debate of the past decade.
       Of course, mere partisan advantage is not a good enough 
     reason to amend the Constitution. There are those who think 
     that the goal of a balanced budget is neither necessary nor 
     wise. And there are those who support the goal but doubt the 
     means.
       The argument against the desirability of a balanced budget 
     has many byways, but the main point is the traditional 
     Keynesian one that the stimulus of a deficit should be 
     available during recessions: The proper goal is balance over 
     the course of an economic cycle. Simon's three-fifths escape 
     clause is intended to allow for deficits during bad times. If 
     exercised promiscuously, this escape clause could make the 
     amendment worthless. But the medicine is there if needed.
       What's driven some liberals to support a balanced budget 
     amendment, however, is the realization that deficit spending 
     has become a medicine we Americans can't be trusted with. We 
     use it when we're sick, then when we're healthy we just 
     increase the dosage. When, inevitably, we get sick again, 
     even gargantuan doses don't have their usual therapeutic 
     effect. Even to use this drug properly in the future, we 
     first will have to clear it out of our system.
       The deficit also makes new forms of government activism 
     nearly impossible. If liberal politics is to be anything more 
     than a holding action (``reactionary liberalism,'' in Kevin 
     Phillips's devastating phrase), the nation's deficit 
     addiction must first be cured.
       As a general rule the Constitution ought to dictate the 
     procedures of democracy and the protection of individual 
     rights, not specific policy outcomes. As Justice Holmes 
     famously put it, ``a constitution is not intended to embody a 
     particular economic theory. * * * It is made for people of 
     fundamentally differing views.
       But have you read the Constitution lately? Many of its 
     clauses address concerns that now seem trivial. See the Third 
     Amendment, about quartering soldiers. We should only be so 
     lucky that fiscal responsibility seems a passe issue in 
     future years. And the balanced budget amendment, despite its 
     name, is arguably procedural, not substantive. It doesn't 
     mandate a balanced budget, but amends the legislative process 
     to counteract the current bias against one.
       Robert Reischauer, head of the Congressional Budget Office, 
     calls the balanced budget amendment a ``cruel hoax'' on the 
     public because--like Gramm-Rudman before it--it substitutes 
     procedure for substance. It allows politicians to pretend 
     they're addressing the deficit while actually putting off the 
     painful slicing for later. (The amendment takes effect two 
     years after ratification by the states, which also could take 
     years.)
       Reischauer is right that the amendment is a hoax on the 
     public, which is not being told what a balanced budget would 
     actually entail. But is it a cruel hoax? It would be if the 
     three-fifths escape clause became a routine exercise. But if 
     the amendment actually produced genuine fiscal discipline, 
     even four or five years down the road, it would be a kind 
     hoax, not a cruel one--sort of like enticing a beloved 
     relative into a drug treatment program.
       It is cowardly, to be sure, for today's politicians to 
     support a balanced budget amendment instead of actually 
     taking action toward a balanced budget. But that cowardice 
     will catch up with them one way or another. They'll either 
     have to face the music in four or five years or retire in 
     order to avoid it. In fact, the balanced budget amendment 
     could make that other constitutional cure-all--term limits--
     superfluous.

  Mr. SIMON. The Concord Coalition says that we have to move in this 
direction to get the kind of budget balance kind of help to our Nation 
that we need.
  I ask unanimous consent to have portions of this item printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  Concord Coalition Zero Deficit Plan


                              INTRODUCTION

                    Why Balance the Federal Budget?

       The Zero Deficit Plan is a plan for our economic future. 
     The goal is to assure a more secure, prosperous future for us 
     and our children.
       We are not seeking to balance the budget for its own sake. 
     Reducing government spending and increasing taxes means 
     short-term sacrifice. This can only be justified by the long-
     term economic benefits that will flow from putting our fiscal 
     house in order.
       Eliminating the deficit will help put the nation back on 
     the path to lasting prosperity and a rising standard of 
     living in the next century. That larger goal cannot be 
     achieved as long as the nation continues to run large, 
     chronic budget deficit.
       Balancing the budget and the nation's economic future are 
     directly linked. There is a tie between budget deficits today 
     and what we can enjoy tomorrow:
       Because there are only so many hours in each day, the 
     principal way Americans can increase their standard of living 
     is if each worker becomes more productive: produces more and 
     better goods and services for each hour worked.
       For workers to become more productive, investments must be 
     made in better-educated and better-trained workers; in 
     modernized plants, equipment, and productive techniques; in 
     new discoveries and innovations; and in transportation, 
     communications, and other infrastructure.
       To make these investments, there must be a pool of savings 
     that can be used for this purpose. Historically, the United 
     States has had a particularly low rate of private savings 
     but, what is worse, the federal government's deficit is 
     financed by soaking up most of the savings we manage to put 
     away. When the government spends more money that it has, it 
     borrows the rest. Most of the money borrowed comes from 
     private savings.
       Only if the government stops using up private savings will 
     the money be freed for investment. Balancing the federal 
     budget will mean that the nation's savings could be used to 
     increase our productivity, create good jobs, and raise the 
     standard of living.
       The declining trend in what Americans produce for each hour 
     worked illustrates how serious a problem this has become. 
     From 1946 to 1973, what Americans produced for each hour of 
     work increased 2.9 percent each year. From 1974 to 1993, the 
     increase was only 1 percent a year. If productivity had 
     improved as rapidly in the past two decades as it had in the 
     previous three, the median annual family income today would 
     be $50,500, instead of the $35,000 it is.
       That $15,500-a-year gap is related to our large federal 
     deficit. But because we never had the $15,500, we don't miss 
     it in the same way we would if we had first enjoyed the 
     income and then given it up. As long as incomes continue to 
     creep up even slightly from one year to the next, the 
     cumulative shortfall in income remains largely hidden from 
     public indignation.
       Solving the deficit problem does not automatically 
     guarantee a rosy economic future. Other developments are 
     needed to complement a balanced budget: reduced consumption, 
     increased savings and investment, improved productivity, 
     education, inflation and interest rates at desirable levels, 
     and a favorable worldwide economic climate. But unless we get 
     our deficit problem behind us, we will remain unable to take 
     advantage of these other necessary economic ingredients.
       We cannot ignore the consequences of deficits much longer. 
     Growing commitments from one generation to the next cannot be 
     honored on empty pocketbooks. A stagnant long-term economy 
     cannot support retirement payments, medical care, and all the 
     other benefits and services we would like. And it cannot 
     support economic opportunity for today's youth to live as 
     well as their parents did.
       Our massive federal budget deficits threaten our economy in 
     other ways as well. They increase the likelihood of 
     reigniting inflation by putting pressure on the government 
     simply to print more money to pay off its debt. The more 
     dollars are printed, the less each dollar in your wallet is 
     worth.
       As foreign ownership of our resources has grown, so has our 
     dependence on the actions of foreign investors and 
     governments. These entities have come to own more and more of 
     our productive capacity. In addition, foreign investors have 
     bought up almost 20 percent of our government's recently 
     issued debt. As foreign holding of U.S. debt grows, so will 
     U.S. interest payments to foreign nationals.
       Huge, continual deficits strangle the ability of even a 
     nation as rich as ours to respond when emergencies arise or 
     when new opportunities or problems emerge, including 
     recession. With our government deep in debt and continuing to 
     run huge deficits, we remain unable to shoulder new 
     responsibilities unless we shuck off existing ones.

    How Large are our Annual Deficits and Accumulated National Debt?

       In 1992, our government spent $290 billion more than it 
     raised in taxes. That deficit amounts to $1,150 for every 
     single American, or $4,600 for each family of four. That is 
     the sum your government borrowed on your behalf last year, 
     whether you wanted it to or not.
       The $290 billion deficit was equal to 21 percent to federal 
     spending. For every dollar the government spent, 21 cents was 
     borrowed.
       Our national debt, the net accumulation of all the annual 
     deficits we have run, stood at $4.4 trillion in August 1993. 
     That is $17,413 for every single American, or $69,651 for 
     each family of four.
       The $4.4 trillion debt is equal to 74 percent of our 
     national economic output in 1992 (called the gross domestic 
     product or GDP). If every American worked from January 1 to 
     September 20 and paid all of his or her earnings to the 
     federal government and spent nothing on food, clothing, 
     shelter, or anything else, the public debt would still not 
     quite be paid off.
       Some people say there is no line-item in the federal budget 
     labeled ``waste, fraud, and abuse.'' But there is. It is 
     called interest on the national debt, and last year it cost 
     our government $292 billion. That is more than we spent on 
     the entire U.S. military and almost as much as we spent on 
     Social Security. What did we get for it? Nothing--not a 
     single mile of highway, Social Security check, or military 
     aircraft--not even a single school lunch.
       Because annual interest payments on the debt are now as 
     large as the entire annual deficit, our government is 
     actually borrowing just to pay interest. It is as if we were 
     running up our MasterCard to pay off our debt to Visa, 
     knowing that next year we will have to borrow even more from 
     American Express to keep the game going.

           How Did We Accumulate a $4 Trillion National Debt?

       Our nation was born in debt, a consequence of the high cost 
     of fighting the Revolutionary War. Our first president, 
     George Washington, adopted the practice of running generally 
     balanced budgets. President Thomas Jefferson went one step 
     further, pledging the nation to the goal of paying off its 
     debt within one generation. All subsequent administrations 
     for more than the next century and a half followed the 
     founders' lead: running infrequent deficits during most wars 
     and deep recessions and building surpluses to pay down the 
     national debt in times of peace and relative prosperity.
       The Great Depression of the 1930s led to large deficits 
     when government revenues fell dramatically due to the high 
     number of people out of work and no longer paying income 
     taxes. Following on the heels of the depression, World War II 
     required still greater borrowing to mobilize 16 million 
     American troops to fight in Europe and Asia.
       In the early postwar period, the Truman and Eisenhower 
     administrations and the Congresses with which they worked 
     roughly balanced the budget. Each president presided over 
     three surpluses and five deficits. As the economy boomed, the 
     national debt fell as a percentage of GDP.
       However, during the 1960s and 1970s, the government began 
     to run deficits continuously. The debt grew slowly and 
     steadily and by 1980 it was almost $1 trillion. During the 
     past 12 years, it quadrupled to more than $4 trillion and is 
     projected to rise another $1 trillion by 1997. Since 1980, 
     our debt has grown far more quickly than our economy, so that 
     the debt is a much greater percentage of GDP than it has been 
     since the 1950s. The 1980s marked the first peace time 
     economic expansion during which the debt grew faster than the 
     economy.
       Who is to blame for amassing such debt in times of peace 
     and relative prosperity, a debt that would have shamed our 
     nation's founders? All of us. Republican Presidents Reagan 
     and Bush and the Democrats controlling Congress resisted the 
     spending cuts and tax increases needed to balance the 
     budget. And voters supported candidates of both parties 
     who kept telling us what we wanted to hear instead of what 
     we needed to hear.


                       two visions of the future

                   What Will Happen if We Do Nothing

       If we ignore our mounting debt, if we just wish it would go 
     away and so nothing about it, it will grow and grow like a 
     cancer that will eventually overwhelm our economy and our 
     society. The interest we owe on the debt will skyrocket. We 
     will continue our vicious cycle of having to raise taxes, cut 
     spending, and borrow more and more and more to pay interest 
     upon interest. Our productivity growth will remain stagnant; 
     more of our workers will have to settle for low-paying jobs; 
     and our economy will continue its anemic growth. America will 
     decline as a world power.
       Sometime early in the next century, we will have to 
     confront the fundamental truth that low productivity and slow 
     economic growth have failed to generate enough goods and 
     services to satisfy all of our demands. Working people will 
     be required to pay an ever-larger share of their earnings to 
     support a growing retired population and to pay the exploding 
     interest on the debt that the older generation accumulated. 
     Eventually, working people will refuse to submit to the 
     crushing burden forced upon them by their elders. They will 
     vote for leaders who will slash entitlement programs, even on 
     the truly needy, rather than raise taxes still further. 
     Millions of elderly who thought that they could count on 
     their retirement benefits will find that the resources are 
     not there to meet their needs. There will be a generational 
     conflict pitting American against American, child against 
     parent, in a way that our nation has not seen before.

           What Will Happen if Instead We Balance the Budget?

       We could, on the other hand do the right thing: we could 
     refuse to let our leaders continually borrow and spend and 
     borrow and spend: insist that they stop wasting our money and 
     our children's money on programs that do not work and on 
     entitlement payments for the well-off who do not need them; 
     insist that what spending is done is paid for now out of 
     current taxation. If we do this, our deficits will disappear; 
     our debt will shrink; our interest payments will become more 
     and more manageable; our businesses will invest; our economy 
     will renew its rapid growth of earlier years; and more of our 
     people will find employment in higher-paying jobs; our 
     society will continue to flourish; and the American Dream 
     will be restored to our children and to our children's 
     children.

                        Do We Have To Start Now?

       Yes. Every year we delay deficit elimination, the problem 
     gets worse. And every year we muddle through with halfway 
     measures, we slip deeper into debt. Even a smaller deficit 
     adds to our mounting national debt and pushes up interest 
     payments.
       Some argue that the economy is too weak right now to launch 
     a serious deficit elimination campaign, but the truth is that 
     the economy is weak largely because we have such a massive 
     national debt. Until we get control over our deficits and our 
     debt, we will not control our economic destiny.

         Why Have Other Attempts To Balance the Budget Failed?

       Before considering what sort of deficit elimination plan we 
     should adopt, we ought to consider why previous plans have 
     failed to eliminate the deficit. Several reasons can be 
     identified.
       Some did not even try to eliminate the deficit. They 
     settled for the lesser goal of reducing the deficit by only a 
     certain amount over a specified number of years.
       Most were highly partisan and kept large parts of the 
     budget off the table. They excluded entitlement spending 
     reductions or tax increases, and were calculated more for 
     political than for economic effect.
       Most plans employed gimmicks such as assuming 
     unrealistically high economic growth forecasts, pledging 
     savings in unspecified spending cuts, or using accounting 
     loopholes to claim savings where none existed. Deficits grew 
     larger when spectacular economic growth and cuts failed to 
     happen.
       Some plans actually started with spending increases and put 
     off deficit reduction until tomorrow. That ``tomorrow'' never 
     arrived.
       Some had too many conflicting priorities. They allowed less 
     important goals to supersede balancing the budget.
       Most did not have reliable enforcement provisions. Without 
     them, they escaped the discipline required for deficit 
     reduction.
       None of these efforts won adequate levels of grass-roots 
     support. Without the public behind them, the plans never 
     realized their potential because elected officials never felt 
     that hard choices were politically acceptable.
       To maximize the chances that our plan will succeed, we must 
     avoid these pitfalls.

 How Do Members of the Concord Coalition Think We Should Eliminate the 
                                Deficit?

       The Concord Coalition is a grass-roots organization with 
     members in every congressional district across the country. 
     To guide the formulation of The Zero Deficit Plan, The 
     Coalition surveyed its members, soliciting their views on the 
     deficit and how to reduce it. More than half responded.
       The following points summarize the member input obtained 
     through the survey:
       Virtually all Concord Coalition members are willing to 
     accept short-term sacrifice to enable long-term economic 
     growth and think that the budget should be balanced. A 
     majority want it balanced within five years.
       Large majorities favor employing tax increases, defense 
     reductions, entitlement reductions, and domestic 
     discretionary cuts in deficit elimination.
       A strong majority advocates more spending reductions than 
     tax increases. Almost all other responses advocate equal 
     spending cuts and tax hikes.
       If taxes must be increased, Concord Coalition members 
     strongly prefer higher alcohol and tobacco, luxury, and 
     energy taxes over increases in corporate, income, and sales 
     taxes.

  Mr. SIMON. Madam President, what we are talking about is something 
that is achievable.
  Some people come to me and say, ``Well, why don't you present a 
plan?''
  There are a half dozen plans out there; one of them by a group called 
Families First, which says if you exclude Social Security and you were 
to limit growth for this 5-year period to 2 percent, you would have 
$542 billion of the $600 billion needed.
  I am not wedded to any plan. What I am saying is we have to get here. 
But if our opposition says, ``Why don't you present a specific plan of 
getting there,'' and they say we can balance the budget without a 
constitutional amendment, I think we ought to hear from them. Where is 
their plan if they say we can do it without a balanced budget 
amendment?
  If this passes--and I think I speak for my colleagues who are 
cosponsors--we want to start to work right away putting something 
together.
  Social Security has been raised as an issue; that we are going to 
harm Social Security. First of all, politically, it will be the last 
thing we start cutting. But it is interesting, Madam President, that 
Robert Myers, who was the actuary for Social Security for 23 years, has 
written me a letter in which he says the only way to protect Social 
Security is through a balanced budget amendment.
  I ask unanimous consent that Robert Myers' letter be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                Silver Spring, MD,
                                                February 15, 1994.
     Hon. Paul Simon,
     U.S. Senate,
     Washington, DC.
       Dear Senator Simon: I am pleased to have this opportunity 
     to express my support for the Balanced Budget Amendment.
       For 37 years I worked for the Social Security 
     Administration, serving as Chief Actuary in 1947-70, and as 
     Deputy Commissioner in 1981-82. In 1982-83, I served as 
     Executive Director of the National Commission on Social 
     Security Reform. And I continue to do all that I can to 
     assure that Social Security continues to fulfill its 
     promises.
       The Social Security trust funds are one of the great social 
     successes of this century. The program is fully self-
     sustaining, and is currently running significant excesses of 
     income over outgo. The trust funds will continue to help the 
     elderly for generations to come--so long as the rest of the 
     federal government acts with fiscal prudence. Unfortunately, 
     that is a big ``if.''
       In my opinion, the most serious threat to Social Security 
     is the federal government's fiscal irresponsibility. If we 
     continue to run federal deficits year after year, and if 
     interest payments continue to rise at an alarming rate, we 
     will face two dangerous possibilities. Either we will raid 
     the trust funds to pay for our current profligacy, or we will 
     print money, dishonestly inflating our way out of 
     indebtedness. Both cases would devastate the value of the 
     Social Security trust funds.
       Regaining control of our fiscal affairs is the most 
     important step that we can take to protect the soundness of 
     the Social Security trust funds. I urge the Congress to make 
     that goal a reality--and to pass the Balanced Budget 
     Amendment without delay.
           Sincerely,
                                                  Robert J. Myers.

  Mr. SIMON. And then the argument, ``Well, doesn't the Federal 
Government have to issue bonds just to take care of things?''
  The GAO has made it very clear that would be an unwise policy.
  I ask unanimous consent to have printed in the Record a statement by 
the GAO on this.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                             GAO Statement

       * * * the creation of explicit categories for government 
     capital and investment expenditures should not be viewed as a 
     license to run deficits to finance those categories * * *. 
     The choice between spending for investment and spending for 
     consumption should be seen as setting of priorities within an 
     overall fiscal constraint, not as a reason for relaxing that 
     constraint and permitting a large deficit.--GAO, Prompt 
     Action Necessary to Avert Long Term Damage to the Economy.

  (Mrs. BOXER assumed the chair.)
  Mr. SIMON. Then people say, ``Well, with the balanced budget 
amendment, we can't have the kind of investment that we ought to 
have.''
  It is very interesting that in 1966 when we had a deficit of $3.7 
billion, we had long-term investments of 2.6 percent out of our budget. 
In 1991, with a $268 billion deficit, we had 1.8 percent. The deficit 
has not increased investment.
  What we need right now, finally, Madam President, is an outpouring of 
people contacting their Senators saying: ``We want pay-as-you-go 
Government.''
  We simply are not going to stop the abuses. You see what is happening 
in the future in terms of the deficit, even with what happened last 
year. We are going to have to get ahold of this thing. The American 
people have to let the Members of the U.S. Senate know that they want 
this.
  There is an old saw that there were so many heroes at the Alamo 
because there was no back door. We need something without a back door.
  Politicians do not like to do unpopular things. There is no popular 
way of balancing the budget. But we are going to have to do some 
unpopular things.
  Every generation of Americans, Madam President, has taken care of 
themselves and invested in the future, up until this generation. We 
have partially taken care of ourselves and borrowed from the future. 
That has to change.
  I mentioned at the caucus this noon--and you were at the Democratic 
caucus, Madam President--that while I have one grandchild now, this 
year I am going to have two more. And I am looking forward to becoming 
a grandfather twice more.
  What this amendment suggests is that I ought to take a little pain on 
myself, rather than borrow from those grandchildren who are not yet 
born.
  Am I willing to do that? Of course. Are the American people willing 
to do that? Of course. We are ready. We have to do the right thing. But 
we need the discipline of a constitutional amendment, and I hope we get 
it.
  Madam President, I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Madam President, once again let me compliment my colleague 
from Illinois for the tremendous work he has done over the last good 
number of months and years to ultimately bring this resolution to the 
floor of the U.S. Senate. I have served 14 years in the U.S. Congress. 
Ten of those years were in the House. From 1982 on, it became obvious 
to me that unless this kind of change, as proposed in Senate Joint 
Resolution 41, was brought to the American people that we would never 
gain control of the Federal budget.
  So, when I came to the U.S. Senate I was so privileged, I felt, to 
join Senator Simon, Senator Orrin Hatch who spoke just a few moments 
ago, Senator Strom Thurmond who, for over 30 years, has stood on the 
floor of the U.S. Senate and spoken to this issue, and of course 
Senator DeConcini of Arizona, another outstanding leader on this issue. 
So we are here this evening to begin what I believe is a momentous 
debate on legislation that this generation will not only feel the 
impact of, but generations to come will feel the tremendous benefit of.
  I would like to pause for a moment and do something that I very 
seldom do in the debate on legislation. I would like to read into the 
Record this very simple, straightforward and relatively brief amendment 
that we are proposing to send to the United States for its 
consideration and ratification. You will hear, in the course of this 
debate over the next days and possibly weeks, Senate Joint Resolution 
41 referred to. As my colleague from Illinois has mentioned, it now has 
54 cosponsors, both from the Democrat and Republican sides of this 
body. So let me read.
       Senate joint resolution 41, proposing an amendment to the 
     Constitution of the United States to require a balanced 
     budget.
       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, (two-thirds 
     of each House concurring therein), That the following article 
     is proposed as an amendment to the Constitution, which shall 
     be valid to all intents and purposes as part of the 
     Constitution when ratified by the legislatures of three-
     fourths of the several States within seven years after the 
     date of its submission to the States for ratification:

                              ``Article--

       ``Section 1. Total outlays for any fiscal year shall not 
     exceed total receipts for that fiscal year, unless three-
     fifths of the whole number of each House of Congress shall 
     provide by law for a specific excess of outlays over receipts 
     by a rollcall vote.
       ``Section 2. The limit on the debt of the United States 
     held by the public shall not be increased, unless three-
     fifths of the whole number of each House shall provide by law 
     for such an increase by a rollcall vote.
       ``Section 3. Prior to each fiscal year, the President shall 
     transmit to the Congress a proposed budget for the United 
     States Government for that fiscal year, in which total 
     outlays do not exceed total receipts.
       ``Section 4. No bill to increase revenue shall become law 
     unless approved by a majority of the whole number of each 
     House by a rollcall vote.
       ``Section 5. The Congress may waive the provisions of this 
     article for any fiscal year in which a declaration of war is 
     in effect. The provisions of this article may be waived for 
     any fiscal year in which the United States is engaged in 
     military conflict which causes an imminent and serious 
     military threat to national security and is so declared by a 
     joint resolution, adopted by a majority of the whole number 
     of each House, which becomes law.
       ``Section 6. The Congress shall enforce and implement this 
     article by appropriate legislation, which may rely on 
     estimates of outlays and receipts.
       ``Section 7. Total receipts shall include all receipts of 
     the United States Government except those derived from 
     borrowing. Total outlays shall include all outlays of the 
     United States Government except for those for repayment of 
     debt principal.
       ``Section 8. This article shall take effect beginning with 
     fiscal year 1999 or with the second fiscal year beginning 
     after its ratification, whichever is later.''.

  Eight very clear and very simple sections to what could easily become 
the 28th amendment of the Constitution of the United States.
  Madam President, I have read this amendment. You have heard it. And I 
do not see any portion of that amendment that threatens to dismantle 
the vital Government programs. I do not see any portion of this 
amendment that threatens to dismantle the military. I do not see 
anything in this that would disenfranchise our elderly, especially our 
children, and I do not see ruinous taxes or a downward spiral in the 
economy. In other words, and you have heard the amendment tonight, I 
think all can agree that there is not a ``sky is falling'' scenario 
wrapped within the words of the 28th amendment to the Constitution as 
it has been proposed by the 54 Senators that now cosponsor it. It is 
without question a clear and straightforward document of the nature 
that anyone would want to see placed within the Constitution of the 
United States that believes in a constitutional charge to this Congress 
for the purpose of remaining fiscally responsible.
  I see a restoration of that compact in which Government again begins 
to practice responsible stewardship of the people's economic resource. 
Far more than codifying a fiscal rule or an economic principle, this 
amendment would make the Government more responsive to and more 
representative of the people, and of course we know that is what the 
Constitution is all about.
  When I look at a balanced budget amendment I see a constitutional 
class resolution to a constitutional class crisis, and I see a 
constitutionally appropriate mechanism for restoring a part of the 
democratic process that has been broken beyond our ability to repair it 
for well over a decade. When I spoke to this amendment on the floor in 
recent weeks, I began to outline what I believe is the fundamental 
right that we seek to protect. That right is offered in this amendment. 
What is that right? It is the appropriate right that our Framers meant 
when they formed the Constitution, and that was to protect citizens 
from a large or growing government.
  So, first I want to reiterate the single compelling principle that I 
think leads us to Senate Joint Resolution 41 before the Senate now and 
for several days to come. And I believe that compelling principle is 
simply this: The ability of the Federal Government to borrow money from 
future generations involves decisions of such magnitude that they 
should not be left to the judgments of a transient majority. Let me 
repeat that. The ability of the Federal Government to borrow, borrow 
money from future generations, involves decisions of such great 
magnitude that they should not be left to the judgments of a transient 
majority.
  I believe that to be a fundamental constitutional principle. My 
colleague from Illinois spoke to it this evening in referencing Thomas 
Jefferson and his great fear that a government would grow beyond its 
ability to pay for itself and the political environment would allow 
that to happen.
  We are not coming to the floor to try to amend the Constitution 
merely because the Federal Government has been fiscally irresponsible, 
though. The stakes are much higher than that, Madam President. 
Sometimes we lose sight of the fact amid all of the deficit projections 
and the budget numbers and the economic models, we are coming to the 
floor tonight with Senate Joint Resolution 41 because at a systemic 
structural level, our system has become locked on a course of violating 
the fundamental right of our people: The right to be free from the 
harms caused by massive indebtedness from a profligate Government. We 
know that is a right, but we have not been willing to stand up and 
speak to it.
  Tonight, we are standing, speaking to that very principle and what I 
believe must become a constitutional right, as insightful thinkers like 
Thomas Jefferson to the chief sponsor of our resolution, Senator Simon, 
have pointed out. There is a moral imperative that the Government 
restrain itself or be restrained by the Constitution. He spoke of his 
grandchildren softly and kindly tonight. He speaks of the moral 
imperative that you and I and every Senator must face today and 
tomorrow and through the week of this very important debate. When we 
look at the provisions in the Constitution and the kind of rights 
protected and processes described, we see a balanced budget amendment 
would be constant alongside all of those provisions.
  First, we noted our Constitution generally protects the rights of all 
individuals by restraining the powers of Government, the very things I 
talked to this evening. The Government is restrained from infringing on 
the right of free speech and of the press, on the exercise of religion. 
It is restrained from taking life and liberty and property without due 
process of law and from taking private property without making just 
compensation. It is constrained from abridging the right to vote on the 
basis of race and sex. It may not impose excessive bail, fines or cruel 
and unusual punishment. It may not infringe upon the right of the 
people to keep and bear arms.
  Like these other provisions, I believes the balanced budget amendment 
would limit the power of Government. It prohibits Government from 
allowing its outlays to exceed its receipts, except in certain and very 
exceptional circumstances. It limits Government's ability to incur 
debt. Like so many other provisions of the Constitution, its central 
function is simply to prevent the Government from committing to very 
harmful excesses. Like those other provisions of the Constitution, a 
balanced budget amendment limits the power of Government for the 
purpose of protecting a fundamental right of the people. This right has 
both political and economic dimensions.
  In terms of the political process, Madam President, the balanced 
budget amendment goes right to the heart of how effective the 
democratic process actually works. In poll after poll, and election 
after election, the American people have shown that they want a 
balanced budget amendment because, after all, they want their 
Government to live within its means and they speak to us every year and 
every day through the means that they can focus on. The public has a 
general, if diffused, interest in Government that spends no more than 
they are willing to pay in taxes and restrain its appetite in growth 
and the intrusion upon the lives of the free citizen.
  On the other hand, though, the interests that want and benefit from 
much Federal spending are narrower and much better organized than the 
average citizen. They mobilize to fund, to promote and to reelect those 
who fund them and to defeat those who, for one reason or another, say 
no to them. In other words, very large and very powerful interest 
groups have grown up over the last 40 years who speak to the issue of 
Federal spending and defend what they believe is their right to gain 
accession to the largess of the public Treasury, while the average 
citizen who pays his or her taxes and goes along and only asks 
Government to stay out of their lives now begins to speak up because 
the recognize, as so many do, that Government, in its profligate 
spending, is beginning to take away their right, their freedom to live 
in the best way they can, based on their ability to earn.
  Saying no, Madam President, is never pleasant. That is simply human 
nature. But the Congress and the President found it easier to say no 
when it was necessary to do so because of a common view that the size 
and the scope of Government was strictly limited by the expressed, 
literal declaration of the powers in the Constitution and the ability 
to accommodate deficit spending was severely restricted by the monetary 
policy tethered by an anchor of gold. Well, then, during the Great 
Depression of the 1930's, the desperation of the American people and 
the willingness to experiment by elected officials changed America's 
view of its central Government.
  While deficits were expected to exist only in a temporary way, for 
the purpose of combating economic downturn, the role of Government 
became not only more expansive but also much less defined. It was 
assumed the Government would manage the economy--sort of, that is--
provide for a modest social safety net and eventually turn to the 
practice of balancing its budget once again. It did not happen. During 
the 1960's, the American people were told by a new generation of 
economists and politicians, courting various groups without having to 
worry about fiscal restraint, that deficits did not matter anymore. 
After all, we only owe this money to ourselves, a modern, enlightened, 
scientific view; well, if we work this altogether and somehow mix it 
up, we will balance the budget, someday, and anyway, it is just an old 
dogma. You know, we do really owe this money to ourselves.
  We know the rest of the story. After all, Government did not feel any 
need to go on a diet as long as they could borrow enough to buy newer 
and bigger suits of clothes for all Americans. As a result, the dynamic 
of spend and spend and borrow and borrow and elect and elect became 
ingrained in our political system at the Federal level. And you will 
hear hour after hour over the next few days the repetition of that 
dogma. Oh, it will come in different forms and it will be expressed 
with different styles, but the bottom line is that a Congress bound now 
to this appetite of spending and spending and borrowing and borrowing 
cannot get off it.
  The accumulation of these trends was ``stagflation'' of the 1970's. A 
new term; we had to create it. We did not understand where we were. 
Some of us did not understand how we got there, but we found out what 
the results were: Thousands of Americans out of work, a budget that was 
in runaway, and inflation that had to be grabbed and corralled with 
great severity on the economy and, therefore, the people of our 
country.
  But what happened, with all of those efforts, the deficit continued 
to grow and a sluggish economy resulted in the economy now of the 
1990's. In short, the old constraints that tended to balance the 
Government's appetite to grow with the people's appetite to have our 
Government grow was there. The people's view of their Government can 
change and this Nation can remain strong, but there needs to be some 
process to constrain the ability of our Government to spend, and we 
step forward tonight with the beginning of that process.
  Senate Joint Resolution 41 sets forth, as I have read to you, a very 
simple requirement that brings this Congress together, like it has 
never been brought together before, for us to make the tough decisions 
that will lead us to a balanced budget.
  We are not just talking about future dangers or present harms. The 
Senator from Illinois knows so well and pointed out at last week's 
Appropriations Committee hearing, the Federal debt that occurred in the 
1980's has already lowered our standard of living by 5 percent or more. 
If the national debt had been paid off during the prosperous times 
after World War II, if we had no Federal debt to serve today, the 
Government would actually be running a $286 billion surplus over the 
next 5 years. That is $286 billion that is not available for some to 
spend on their favorite social programs, if they wanted to. That is not 
$286 billion that would be available for national defense, if that is 
where we wanted to spend it. And that is not $286 billion that this 
Senator would be more inclined to give to his citizens of Idaho and to 
other Americans in the form of tax relief.
  Spending on interest not only crowds out our fiscal priorities, it is 
blatantly regressive. Interest payments represent a transfer of funds 
from the working middle class who pay the bulk of the Federal taxes to 
the large bankers, the corporations, the wealthy individuals who have 
the money to invest in U.S. Treasury securities.
  About 15 percent of these payments now go overseas. Already, at $201 
billion in fiscal 1994, net interest is the third largest item in 
Federal spending behind Social Security. A $298 billion gross interest 
is the second largest spending item in the Federal budget. We are now 
having to pay for all of that money we borrowed and spent over the last 
decades, and yet we have not even touched the principal. I am talking 
about interest and interest alone on the debt.
  Today, Federal budget deficits are the single largest threat to our 
economic security and therefore our national security. The Government 
has spent more than it has taken in for 56 out of the last 64 years. 
The budget was last balanced in 1969. The result is a Federal deficit 
totaling $4.5 trillion. As many of us stood on the lawn of the Capitol 
today in a press conference and showed the national debt clock running, 
that represents over $18,000 for every man, woman, and child in America 
that they now owe as a part of their citizenship in this country to the 
Federal debt. And that figure continues to grow. This Congress has 
demonstrated no ability to contain it.
  Americans are paying now not only with the debt burden they have but, 
with a sluggish economy, for Government's past debt addiction. We must 
stop that.
  ``Muddling through'' is the term that I think the CBO baseline 
represents today. We cannot talk about a dynamic economy that employs 
the unemployed. We can only talk about getting through, making ends 
barely meet. Muddling through should not be the economic policy of this 
country. But when we have an annual Federal deficit of the kind we 
have, without any means of showing its reduction, without any means of 
referencing to the American people that we are headed on a downhill 
slide toward a balanced budget in the positive and responsible sense, 
then muddling through is what we will get.
  After 1996, although there are glowing reports about the current 
budget, what is quietly being whispered by this administration is that 
the budget begins to balloon in the sense of a deficit, and by the year 
2020 that Federal deficit again hits the $500- to $600-billion-a-year 
mark. So for the moment, muddling through is a scenario of literally no 
action at what is most importantly a very critical time in our country.
  In the recent statements I have made, I have outlined what I believe 
is the essence of the balanced budget amendment to deal with what I 
think is a fundamental American right, a right of the citizen, a right 
of the people. The nature and importance of this right has made it the 
kind of right traditionally, and what we believe to be appropriately, 
protected in the Constitution because somehow, as much as we all 
believe in it, we have not yet in the history of this country been able 
to secure and then maintain that right for our free citizens. This 
right has been seriously and repeatedly violated. The American people 
have been harmed, and absent what we think is a fundamental structural 
change in our system, our children will be harmed even more.
  As the debate over the balanced budget amendment is now joined in 
earnest by all of our colleagues, I will demonstrate, as will others, 
what I believe to be the importance of this constitutional restraint; 
that it does not harm nor does it infringe, but in fact it begins to 
unleash the dynamics and the energy of the marvelous experiment known 
as America and our Republic.
  We will also see, through a proposed amendment, other ways of 
protecting that I do not believe will be valid. We will stand before 
you and say that no amendment is appropriate if it is to stray away 
from, to set aside, to move off budget any portion of the consideration 
of our Federal Government expenditures.
  I am even more eager to move this amendment to the many State 
legislatures which will ultimately debate it once the Congress has 
ratified it, because I think for the first time across America and in 
the chambers of every State legislature will be one of the most 
exciting debates in the history of our country, or since the 
ratification of the Constitution, or the debate on the Bill of Rights, 
or the first 10 amendments, because Americans will understand more than 
they ever have what our budget is all about and what we are talking 
about, and what they ought to expect of their Federal Government's 
budget and, more importantly, what they ought not expect because that 
will be the debate that will follow.
  While we will be engaged here but a few days or a week, this debate 
will go on for months in the 50 legislatures of this country. I think 
that to be in the end the most exciting proposition that brings us to 
changing the Constitution and adding the 28th amendment;
  So, Madam President, let the debate begin. It is historic and I 
believe fundamentally important to the future of our country.
  I retain the remainder of my time.
  The PRESIDING OFFICER. The Senator retains 5 minutes, the Senator 
from Illinois has 1 minute and 51 seconds remaining, and the Senator 
from West Virginia has 90 minutes.
  Mr. BYRD addressed the Chair.
  The PRESIDING OFFICER (Mr. Levin). The Senator from West Virginia.
  Mr. BYRD. Mr. President, this will undoubtedly be, in my estimation, 
the most important issue that will come before this Congress, and as 
far as I am personally concerned it will be one of the most, if not the 
most, important votes that I shall have cast in 41 years on Capitol 
Hill. This is my 41st year. I have cast in the Senate 13,381 votes as 
of this moment, and including my votes in the House of Representatives 
during 6 years there I have cast 13,812 votes--13,813, as a matter of 
fact.
  Now, why do I consider this vote to be of that importance?
  I shall, by and by, before the evening is over get back to that 
point. For the moment, let me begin by saying that I agree with my 
friends and colleagues, the distinguished Senator from Illinois [Mr. 
Simon], the distinguished Senator from Idaho [Mr. Craig], the 
distinguished Senator from Utah [Mr. Hatch], and all those who speak of 
the seriousness of the deficits and the seriousness of the debt.
  I agree that we have a mountain of debt. That debt has increased from 
a little under $1 trillion during the first 39 administrations and the 
first 182 years of our country's history, that debt has increased from 
a little under $1 trillion up to what it is today now, almost $4.5 
trillion. In other words, as I was going to say, it took 39 
administrations and 102 years in our Republic to reach just under $1 
trillion. And that meant that we went through several wars, panics, 
recessions, and depressions. But during the past 13 years, 12\1/2\, 13 
years, that debt has increased to four times--certainly increased by 
three times what it was--so that today it is $4.5 trillion. That is 
sufficient to cause anyone concern.
  So I do not disagree with my friends on that point at all. We are in 
agreement. We will stipulate that.
  I went to a budget summit in 1990. I voted for the budget deficit-
reduction package on that occasion. I voted for the budget deficit-
reduction package last year. So I am on record as having supported both 
those budget deficit-reduction packages. My friend from Illinois voted 
for the one last year, but he did not vote for the 1990 budget deficit-
reduction package.
  So I think we are on the right track insofar as the budget deficit-
reduction packages are concerned. So to begin with, as I say, we agree. 
There is no argument, no debate with respect to the seriousness of the 
debt, the deficits, and the interest we pay on the debt. That is not 
what we are debating. So we shake hands on that right at the beginning. 
But let us go from there.
  I do not hear my friends describing their amendment, explaining their 
amendment, debating the amendment. They have been debating only that we 
are in tougher times and we have to make headway with the debt and the 
deficit. Of course, that is true. Everybody out there will agree with 
that, everyone who is watching and listening to the proceedings here 
this evening.
  Now let me deal with a few of the points that have been suggested 
here this evening. My friend from Illinois, Mr. Simon, said that our 
Constitution serves two purposes. I am trying to paraphrase him. If I 
am in error, he is here on the floor, he will correct me, of course. 
But as I understood him, he said that the Constitution serves two 
purposes. One, it is an expression of philosophy, and, two, it prevents 
abuses. The Senator is nodding his head in the affirmative.
  Now, I do not agree that the Constitution is an expression of 
philosophy. I hope that we are not contending that this is not a 
republic but that it is a philosophocracy. A philosophocracy is a 
government by philosophers, a government by philosophy.
  Our Constitution is far from being an expression of philosophy. The 
fundamental purposes and principles that are written into our 
Constitution do these things: First, they create the branches of the 
government. The first article creates the legislative branch. The 
second article creates the executive branch. The third article creates 
the judiciary, and so on. So the Constitution creates the various 
branches of power, the branches of government.
  Then it distributes the powers. It distributes the powers between the 
Nation and the States. It also distributes the powers between and among 
the three branches of government, the legislative, the executive, and 
the judicial.
  Finally, it distributes the powers within the legislative branch 
itself, the powers between the two Houses. It gives the House certain 
powers. Revenue bills shall start in the House. The House has the power 
of impeaching a President. The Senate conducts the trial of a President 
or any other Government officer who is impeached. So it distributes the 
powers between the two Houses.
  What else does it do? It protects certain liberties and freedoms for 
the individual--life, liberty, property, the right of freedom of 
speech, the right of freedom of religion.
  So that basically is what this organic instrument does. It does not 
express philosophy. It sets up the various branches of government. It 
creates the structure of government. It distributes the powers between 
and among these various branches. And it delineates the rights of 
individuals. That is what it does. It is the basic organic law of our 
country.
  That Constitution does not set forth budget or fiscal policy. This 
amendment would place in the Constitution of our country an element 
that is foreign to it as of now, an element that was foreign to it when 
the Framers wrote that Constitution.
  What else does this amendment do to the Constitution? It violates the 
basic principle of the Constitution. And that principle is the basic 
undergirding element in a representative democracy, the element of 
majority rule. Take the element of majority rule away and this no 
longer is a democracy. It is no longer a representative 
democracy. Throughout that Constitution--except in five instances in 
that Constitution--we see that majoritarian principle pervasive; it 
pervades all four corners of the Constitution. That is fundamental. 
Take away that and this is no longer a republic.

  Thirdly, this amendment will prove to be illusory. It is an empty 
promise, and we are about to write into the Constitution a promise that 
cannot be kept in this way and will not be kept. And if it is kept, as 
I will discuss, it will prove very destructive to the constitutional 
system of checks and balances and separation of powers.
  Additionally, it may increase the deficit instead of reducing the 
deficit. Why do I say that? Because once this amendment is adopted in 
both Houses, God forbid, then it goes to the States for ratification. 
Then, contrary to what my friends here say, there will be a letdown in 
the vigor, the determination, and the serious efforts to balance the 
budget. And the people back home will think the problem is all taken 
care of. We have an amendment that says the budget will be balanced. So 
we will let down our efforts and, come 1999 or the year 2001, whichever 
is the later according to the amendment, we will find ourselves with 
greater deficits than we have now.
  There are other reasons why the deficits, I think, would probably be 
greater than they will be without this amendment, and I shall touch 
upon those later.
  Now, my friend Mr. Simon again refers to Thomas Jefferson. Well, 
Thomas Jefferson was one of my favorites, also. He was the town 
fiddler; he played the violin, and he was a great President. By my 
book, he is one of my favorite Presidents of all time, the sage of 
Monticello. But the Senator from Illinois continues to talk about Mr. 
Jefferson. I want to talk a little about Mr. Jefferson, also. Thomas 
Jefferson wrote a letter to John Taylor, who was a Senator from the 
State of Virginia. Jefferson wrote a letter to John Taylor on November 
26, 1798, in which Jefferson said:

       I wish it were possible to obtain a single amendment to our 
     Constitution. I mean an additional article taking from the 
     Federal Government the power of borrowing.

  And then in 1789, September, he wrote the celebrated ``The Earth 
Belongs To The Living'' letter to James Madison. In that letter, he 
argued that no generation can contract debts greater than may be paid 
during the course of its own existence. Jefferson calculated that 
period of about 19 years.
  So Jefferson's quotations have been made the underpinnings, to a very 
considerable extent, of the arguments that are propounded by my very 
able and lovable friend, Paul Simon, and others.
  Jefferson was not at the convention. He was in Paris during the 
convention in 1787, and I wish at this point to quote James Madison. 
Madison is generally recognized to be the ``Father of the 
Constitution.'' I do not know how many of my friends have read his 
notes from one end to the other. I have. James Madison, who is the 
father of the Constitution, believed differently on this subject.
  One question that I would ask rhetorically of my friends is: If 
Jefferson believed that a nation should not incur debt; if he said, as 
he did say, ``I wish it were possible to obtain a single amendment to 
our Constitution, taking from the Federal Government the power of 
borrowing,'' why did he not promote such an amendment to the 
Constitution? He was President from 1801 to 1809. Why did Jefferson not 
promote a constitutional amendment to carry out what he said in his 
letter to Senator John Taylor? Why did he not do it? He was President 
of the United States. He had the opportunity to press for such an 
amendment then.
  Well, Jefferson had the unique opportunity to add to the territory of 
this Nation the Louisiana territory, out of which all or part of 15 
States of this Nation eventually were formed. He hoped to purchase the 
Floridas, east and west Florida, and the Port of New Orleans. So he 
asked his Ambassador, Robert Livingston, to propose the purchase of the 
Floridas and New Orleans. Jefferson also sent James Monroe as an envoy 
to Paris to work with Livingston. Talleyrand suddenly, in essence, 
asked: How would you like to purchase all of the Louisiana territory, 
all of Louisiana? Well, our two envoys there were not sure that they 
were constitutionally authorized to do that. But they felt that the 
Congress and the President would certainly approve it, because this was 
a magnificent opportunity to add to the length and breadth of the 
United States.
  And so, there was an agreement that they pay $11\1/4\ million, plus 
assuming $3\3/4\ million of claims against France, making a total of 
$15 million. And so the Louisiana territory was purchased for $15 
million.
  Did Jefferson pay it cash on the barrel head? No. They went into debt 
for it. And the Congress authorized the borrowing of that money from 
English and Dutch banks. So here we are with this President, whom we 
all honor and would love to emulate, borrowing the money. So he went 
into debt. So he said one thing and did another. And I am glad that he 
did.
  Now, how big a debt was that $15 million? Well, in that day and time, 
the total Federal budget was $7.852 million. That was the total Federal 
budget, $7.852 million. That was the total Federal budget. But he went 
into debt $15 million, which was 1.9 times the Federal budget.
  Now, how would that budget and that debt equate as compared with 
today's budget and today's deficit?
  Well, $7.852 million being the total budgetary expenditures that year 
as compared with the budget of this year, which is $1.474 trillion. 
That is the total budget for this year.
  Well, how much would the additional deficit be to add to our mountain 
of debt if a similar purchase were made today?
  The purchase in that instance was 1.9 times the Federal budget. A 
like purchase today being 1.9 times the Federal budget of $1.474 
trillion would amount to $2.815 trillion.
  Now how would that be to suddenly add to the debt and to the deficit 
if this year in one transaction we added $2.815 trillion? That would be 
a whopper, would it not?
  Well, that is what Jefferson took on. He made a purchase. He went 
into debt for the territory, the purchase amounting to 1.9 times the 
total Federal budget. Well, that would perhaps lend a little 
perspective to the view.
  Well, let us see what Madison says about this business of going into 
debt. Madison, as Father of the Constitution, said: ``The improvements 
made by the dead form a charge against the living who take the benefit 
of them.'' Meaning the improvements made by the people of today form a 
charge against the living of the next generation or the next several 
generations--``form a charge against the living who take the benefit of 
them.'' The living, the future generations, take the benefit of the 
improvements made by the leaders and the people of today.
  Madison went on to say: ``Debts may be incurred for purposes which 
interest the unborn''--Jefferson must have thought that--``interest the 
unborn as well as the living.'' ``Debt may be incurred for purposes 
which interest the unborn as well as the living; such are debts for 
repelling a conquest, the evils of which may descend through many 
generations.''
  So we should give greater weight to Madison's view. Why? One, because 
he is recognized as the Father of the Constitution; and, two, because 
Jefferson did exactly what he said he did not believe we ought to do. 
So he said one thing and did another. And I am glad he did. And I am 
sure that he was glad that he did.
  So we should give greater weight to Madison's view that debts will be 
incurred principally for the principle of posterity. Jefferson's view 
was an abstract idea that was written in a letter from European shores.
  And particularly compelling is Madison's salient observation of the 
year of 1790 that ``the present debt of the United States . . . far 
exceeds any burden which the present generation could well apprehend 
for itself.''
  Now, Jefferson grappled with this contradiction. Elected in later 
years, he grappled with this contradiction. He referred to the 
question. He said, ``The question was easy of solution in principle but 
somewhat embarrassing in practice.''
  So Jefferson was embarrassed when he was confronted with this 
statement or these statements of his with reference to debt and saying 
that we should not go into debt beyond our own ability to pay and our 
own generation and all that. He was confronted with that statement and 
also in the light of his actions in purchasing the Louisiana territory 
and going into debt for that territory.
  So he suggested that the laws of necessity were sometimes higher than 
the written laws of Government and concluded that it would be absurd--
now this is Jefferson talking--he concluded that it would be absurd to 
sacrifice the end to the means.
  Well, so much for Jefferson on that point.
  Next, my friend from Illinois and his colleagues who are supporting 
the amendment state that statutory changes are too easily avoided; we 
change the statute.
  But, let me first, however, take a look at the amendment.
  So, let us read the amendment and then we will get back to this.
  Section 1 of the amendment, ``Total outlays''--here it is. Two pages. 
Two pages. Not very voluminous. But in this large print it reads:
  ``Section 1. Total outlays for any fiscal year shall not. . . .'' It 
does not say, ``may not.'' There is no room to wiggle. ``. . . shall 
not exceed total receipts for that fiscal year, unless three-fifths of 
the whole number of each House of Congress shall provide by law for a 
specific excess of outlays over receipts by a rollcall vote.''
  ``Section 2.''
  Mr. CRAIG. Mr. President, may I ask the Chairman a question before we 
leave that section?
  Mr. BYRD. I would like not right at this point. I will be glad to 
yield later.
  Mr. CRAIG. All right.
  Mr. BYRD. ``Section 2. The limit on the debt of the United States 
held by the public shall not be increased, unless three-fifths of the 
whole number of each House shall provide by law for such an increase by 
a rollcall vote.''
  So here we have the supermajority, another supermajority written into 
the Constitution. There are only 5 of those, only 5 supermajority votes 
written into the Constitution: One, the supermajority that 
is required to override Presidential veto; two, the supermajority that 
is required in article V to amend the Constitution, two-thirds of each 
House. And one, the supermajority required to approve the ratification 
of a treaty. One, the supermajority required to convict a President or 
other officer of the United States who has been impeached. And the 
other is the supermajority that is required in either body to expel a 
Member.
  Now, those are the 5 supermajorities. Those are the 5 
supermajorities. This amendment would add another, a requirement for a 
supermajority and, thus, it invades the basic principle of a democracy, 
majority rule.
  ``Section 3. Prior to each fiscal year, the President shall transmit 
to the Congress a proposed budget for the United States Government for 
that fiscal year, in which total outlays do not exceed total 
receipts.''
  Well, I will simply say in passing here that this section seriously 
impinges upon the powers of the President. The President is required in 
the Constitution to present a message on the State of the Union and to 
give an accounting from time to time. But this section would say to the 
President: You cannot present an honest budget for the U.S. Government 
for a particular fiscal year. If you believe that outlays exceed 
receipts, that is not the budget--that is not the budget you are to 
present. You are to present a balanced budget. So against his better 
judgment, depending upon the circumstances of the time, it may be 
during a recession--when the President would want to exercise 
countercyclical economic tools--he may feel that, indeed, the budget--
the outlays should exceed the receipts in order to keep the country 
from going from a recession into a depression. But he, nevertheless, is 
required by this section to present a balanced budget. That impinges 
not only on his powers, it impinges on his responsibility to present 
facts and to send an honest and realistic budget up to the Congress. 
And so we see that the executive branch will be impinged upon and 
damaged in this respect.
  ``Section 4. No bill to increase revenue shall become law unless 
approved by a majority of the whole number of each House by a rollcall 
vote.''
  At the present time a majority of Members present may enact 
legislation to increase revenue. But now, contrary to the Constitution 
which provides at the present time that bills may be passed by majority 
vote of those present, this section would say: No. There is required to 
be a majority of the whole number in each House in order to pass a 
revenue bill. That kind of a majority is not being required of any 
other legislation, only in the case of revenue bills.
  So this amendment would institute an imbalance into the Constitution. 
All other bills may be passed by a majority of the Members present but 
not so with revenue bills. Now, there is not any--there is no 
distinction in the Constitution between the number of votes required 
for revenue bills and those required for other bills.
  ``Section 6. The Congress shall enforce and implement this article by 
appropriate legislation, which may rely on estimates of outlays and 
receipts.''
  All right; let us take a look at section 1 again just for a moment.
  ``Section 1. Total outlays for any fiscal year shall not exceed total 
receipts for that fiscal year, unless three-fifths of the whole number 
of each House of Congress shall provide by law for a specific excess. . 
. .'' It does not say a general excess. It has to state precisely what 
excess is going to be needed for outlays over receipts.
  Now, when the people vote on this amendment that is what they are 
going to see. They are going to see that the budget is going to be 
balanced every year, and to the nickel. There is no wiggle room. Total 
outlays shall not exceed total receipts.
  Now, let us take a look at section 6. It says something different to 
what section 1 says.
  It says:

       The Congress shall enforce and implement this article by 
     appropriate legislation, which may rely on estimates of 
     outlays and receipts.

  So we have two directives in this one amendment: Outlays shall not 
exceed receipts in any year, unless this is waived by three-fifths 
majority.
  Section 6 says, ``Well, we do not really mean that. We do not really 
mean that the outlays shall not exceed receipts. What we mean is that 
the Congress shall enforce the article by legislation which may rely on 
estimates of outlays and receipts.''
  Now that is a horse of a far different color. So here in the same 
amendment that is going to be presented to the legislatures throughout 
this country, we are saying two different things: It must be balanced, 
it shall be balanced to the penny--that is what section 1 says, unless 
you can get three-fifths votes in both Houses, three-fifths of the 
whole membership of both Houses. So unless you can get three-fifths, 
you have to balance to the penny. Here it says, ``Well, we really do 
not mean that; Congress will enforce this article, and it may rely on 
estimates of outlays and receipts.''
  Let us see how dependable the estimates of outlays and receipts are.
  This chart to my left shows the differences between actual budget 
totals and first budget resolution estimates for the fiscal years 1980 
to 1993 in billions of dollars. It shows that during these years, if 
the revenues received had been exactly as they had been estimated, then 
it would be represented by a straight line. But in each of those years, 
the estimates were off and in most of the years, as the viewers can 
see, the revenues were under what they were estimated to be. In 1 year, 
1983, for example, revenues were $65 billion below what they were 
estimated to be. In the year 1992, they were $77.5 billion below what 
they were estimated to be. In the year 1989, they were $26.4 billion 
above what they were estimated to be.
  So the average for these years, 1980 to 1993, the average by which 
the revenues were off was $24.7 billion annually.
  The point is that the estimates not once were accurate.
  Let us take a look now at the outlays. This chart shows the 
differences between the actual budget totals and the first budget 
resolution estimates for fiscal years 1980 to 1993. Here, again, if the 
outlays had been exactly in accordance with what the estimates said 
they would be, then the straight line would represent that kind of 
accuracy, right on the dime. But, again, we see that in no year were 
the estimates accurate.
  In 1980, the outlays were $47.6 billion greater than was estimated. 
In the year 1990, the outlays were $85 billion more than they were 
estimated. In the year 1993, the outlays were $91.9 billion below what 
they were estimated to be.
  The charts show that we cannot depend on estimates of either outlays 
or receipts. So back to section 6.
  The two charts I have just talked about, the estimates with respect 
to outlays and the estimates with respect to receipts, demonstrate how 
foolhardy it is to say that we can depend on those estimates. But 
section 6 says, ``The Congress shall enforce and implement this article 
by appropriate legislation, which may rely on estimates of outlays and 
receipts.''
  What kind of a balanced budget is that going to be? In section 1 we 
say outlays shall not exceed receipts, and that is what the American 
people out there are going to understand. If there is anything about 
that amendment they will understand, they will understand that. They 
say, ``Boy, that's got 'em. That means business. That means they can't 
spend a nickel more than they take in.''
  But look at the fine print of section 6, how shall this be enforced? 
It says: The Congress shall enforce and implement it by appropriate 
legislation which may rely on estimates of outlays and receipts. Now 
what kind of reliance is that? The charts have shown how far off we can 
be in estimating our outlays and in estimating our receipts.
  So the American people are being taken for a ride right there and 
they ought to know it.
  Let us talk a little more about this section 6 that we just looked 
at. In the committee report which the Judiciary Committee sent to the 
floor along with the resolution--by the way, this resolution has been 
on the calendar since October 21 of last year. Now I understand they 
want to change the resolution. They want to change it. It has been on 
the calendar since October the 21st, I believe, of last year. Hearings 
were conducted on it in the Judiciary Committee. It was discussed in 
the committee, reported out by the committee and has been on the 
calendar since last October 21, and now I understand they want to 
change it. But anyhow, so much for that.
  What does the report say about section 6 of this amendment? The 
report says--here in this little report, with reference to section 6, 
what does section 6 mean--it says:

       This provision gives Congress an appropriate degree of 
     flexibility----

  Section 1 did not say anything about flexibility. It says outlays 
shall not exceed receipts. Shall not. But the report says:

       This provision gives Congress an appropriate degree of 
     flexibility in fashioning necessary implementing legislation. 
     For example, Congress could use estimates of receipts or 
     outlays at the beginning of the fiscal year----

  And we saw where that took us.

     to determine whether the balanced budget requirement of 
     section 1 would be satisfied, so long as the estimates were 
     reasonable and made in good faith.

  Who knows? Who knows whether they are reasonable? Who will know 
whether they were made in good faith? Only God. Only God will know 
whether they were made in good faith.

       In addition, Congress could decide that a deficit caused by 
     a temporary, self-correcting drop in receipts or increase in 
     outlays during the fiscal year would not violate the article.

  Who is going to determine what is meant by ``temporary,'' what is 
meant by ``self-correcting drop in receipts,'' what is meant by 
``temporary, self-correcting . . . increase in outlays during the 
fiscal year?''

       But Congress could decide that a deficit caused by a 
     temporary self-correcting drop in receipts or increase in 
     outlays during the fiscal year would not violate the article. 
     Similarly, Congress could state that very small or negligible 
     deviations from a balanced budget would not represent a 
     violation of section 1.

  There you have it. Congress can say that a violation is not a 
violation. Let us read it again:
       Similarly, Congress could state that very small or 
     negligible deviations from a balanced budget would not 
     represent a violation of section 1.

  Now, section 1 does not say anything about any deviation. Section 1 
does not say that, well, outlays do not really need to match receipts, 
or receipts do not have to match outlays. Section 1 says outlays shall 
not exceed receipts.
  But here we read in a committee report:

       Congress could state that very small or negligible 
     deviations from a balanced budget would not represent a 
     violation of section 1.

  How much is small? How much is negligible? Is $50 billion small? We 
are talking about a $1.474 trillion budget. What is small? Is $50 
billion small? Well, $50 billion would only represent about 3.3 percent 
of the total budget. The total budget is $1.474 trillion. So if you are 
off $50 billion, that is only 3.3 percent of the total budget. Is that 
small? Is that negligible? Well, Congress can state that it is very 
small and that it does not represent a violation.

       If an excess of outlays over receipts were to occur, 
     Congress can require that any shortfall must be made up 
     during the following fiscal year.

  Now, there you have it. There is the final wrinkle. If there is an 
excess of outlays over receipts, which the amendment in section 1 says 
there shall not be, well, you can just yawn and say it does not really 
mean what it says because Congress can require that any shortfall must 
be made up during the following fiscal year.
  Well, what if in the following fiscal year there is another 
shortfall? Then carrying over the initial shortfall will compound the 
problems in the subsequent year.
  I asked my friend, Senator Simon, during the hearings about this: 
What is small? How much is small? How small is small? He testified that 
a 2 percent budget deficit was small.
  That is not what the amendment says. The amendment says there will be 
no deficit. The budget must come into balance. Outlays shall not exceed 
receipts. The amendment does not say outlays shall not exceed receipts 
except when there is no greater than a 2 percent deficit in a given 
year. Up to 2 percent is OK. One percent is OK. Two percent is OK. The 
American people are not going to be told that when they vote on the 
amendment in their legislatures.
  What we see here, Mr. President, is a committee report which says 
that Congress may declare a violation is not a violation. What are the 
American people going to believe? What are they going to think? Are we 
not saying to them you cannot believe us?
  Section 1 says that outlays in any given year shall not exceed the 
receipts in that same year. But the report says they can if the excess 
is negligible or very small, or you could even roll it over until the 
next year.
  Are the proponents of the amendment anticipating that the deficits 
really will not be balanced in those years? The deficits really will 
not be balanced?
  And so in the report we are being told we can maneuver around these 
requirements. We can cut the corners; we can cut the edges a little. 
That is not being fair with the American people. That is not being 
straightforward with the American people.
  How much time do I have remaining, Mr. President?
  The PRESIDING OFFICER. Thirty-two and a half minutes.
  Mr. BYRD. I thank the Chair.
  The chief proponent of the amendment says we have to have this 
constitutional amendment. We simply have to force ourselves to balance 
this budget. We need something that will force us. We need something 
that will give Members of both bodies the courage to make hard choices.
  So this little piece of paper here is what we need to give us the 
courage, something that will force us to balance the budget.
  Now, why? Why? Why do we need that? Well, we will not be able to do 
it by statute because Senators get around statutes. They amend 
statutes. We saw that in the Gramm-Rudman years. We saw that under 
Gramm-Rudman. We set targets and then we amend those statutory targets 
with new ones. So we cannot depend on Senators to balance the budget 
unless we have a constitutional amendment that forces them to--forces 
them to.
  Do not depend upon them to pass statutes and balance that budget. 
They will amend those statutes. They will get around the statutes. But 
a constitutional amendment will force us.
  How does the constitutional amendment say that this mandate in 
section 1 will be enforced? Section 6 of the amendment says:

       Congress shall enforce----

  So the Congress is going to enforce it.

       Congress shall enforce and implement this article by 
     appropriate legislation.

  ``Appropriate legislation.'' So my friend, Senator Simon, is saying 
you have to have a constitutional amendment to force us to do these 
things. You cannot depend on our standing up and balancing the budget 
by statute because we will get around the statute. We pass a statute 
one year, and the next year we will amend it.
  So section 6 dumps it right back into the laps of those Senators who 
will amend the statutes and who will find a way around the statutes.
  So we have not gotten anywhere after all, have we? We say give us a 
constitutional amendment to make us pure, to make us balance the 
budget. And how are you going to enforce it? Well, it comes right back 
home, right back here to this Senate.

       The Congress shall enforce and implement this article by 
     appropriate legislation.

  So I say rhetorically, my friends, what makes you think that Senators 
whose feet are made of clay today and who get around statutes which 
they craft themselves and on tomorrow will amend the statutes that we 
craft today, what makes you believe that those same Senators will not 
have feet of clay when that constitutional amendment sends the matter 
right back here? And how do we do it? We implement it by legislation. 
So why do we have to have a constitutional amendment to put it in our 
laps? That is where it is now.
  I think we are kidding the American people. I do not hear these 
Senators talking about the sections of the amendment word for word. 
Surely, they must have seen these loopholes before I saw them.
  I did not see this monstrosity. I say that with all respect to my 
friends and in deference to them. I did not see it until it was on the 
Senate calendar. But somebody saw it before it got to the Senate 
calendar--members of the Judiciary. Surely they must have thought that 
was a loophole. But apparently not.
  So my friend, Senator Simon, says you cannot play games under this 
constitutional amendment. Why can you not play games? Oh, three-fifths 
of the majority can stop us from playing games--the three-fifths 
majority.
  Mr. President, this is a recipe for minority rule. It is a recipe for 
gridlock. The majority leader will tell you that it is easier to get 60 
votes for cloture in many instances than it is to get 51 votes to pass 
a law extending the debt limit. He will tell you that it is easier to 
get 60 votes for cloture than it is to get 50 votes for a bill that 
reduces the deficit over a 5-year period. If you do not believe that, 
look at last year.
  We had a deficit enforcement package here that reduced the deficit 
over the next 5 years by $500 billion--some say a few dollars less, 
some say a few dollars more. How many of the supporters of this 
amendment voted against that budget deficit reduction package? I will 
bet my friend from Idaho, Mr. Craig, voted against that budget deficit 
reduction package because it had an increase in taxes in it for one 
reason, an increase in taxes on the wealthy. Not one of my dear friends 
on that side of the aisle, not one, voted for that budget deficit 
reduction package last year.
  Do you know how close we came to not being able to pass it? We had to 
have the Vice President's vote. The vote was 50 to 50. And that was 
tough. Getting the 50 votes was tough. It was hard for the majority 
leader to get 50 votes. That is half the membership here, 50 votes. He 
could not get a majority of the whole membership here.
  So it was 50-50. We had to pull in the Vice President. He is not a 
Member of the Senate. So we finally got 51 percent of 101 votes. We 
only got 50 percent of 100 votes. That is how hard it is to get a 
majority on something that causes some pain on a budget deficit 
reduction package amounting to $500 billion over 5 years, and it 
includes some cuts in discretionary spending. Boy, it really cuts 
discretionary spending. We are operating under a freeze over the next 4 
years after this one. We are actually under a freeze this year.
  So discretionary spending has been cut, some entitlements have been 
cut, and some taxes have been increased on the wealthy. Not one of my 
friends on the other side of the aisle supported that package in this 
body or in the other body, and then come in here and say, well, we can 
waive this requirement in this amendment by three-fifths majority. That 
is the escape valve. You can waive it. All you have to do is get 60 
votes.
  And the same Senators--I could not say all the same Senators. That 
would be unfair to say that. But, generally speaking, the same Members 
who are supporting this amendment and who would not vote to give us the 
majority in the Senate last year on the budget deficit reduction 
package will not vote to give us three-fifths when we need it to raise 
the debt limit. If we do not raise the debt limit, what happens? The 
Social Security checks will not go out. Government stops. What happens 
to the stock markets and the bond markets? What happens to America's 
credibility overseas?
  This minority of two-fifths plus one in one body can put this country 
into gridlock. And they can exact anything they want from the majority 
when we have our backs to the wall.
  All right. The time has come when we have to raise the debt limit, 
and there is a recession on. Because there is a recession, we need to 
spend more money for unemployment compensation, food stamps, job 
training, and so on. Our receipts are down because a lot of people are 
out of work. So here we have the outlays exceeding receipts. And 
recession, it is just exactly the reverse of what we ought to do in a 
recession to keep it from becoming a depression. We will be required to 
raise taxes in a recession, and cut programs in a recession. As I say, 
it is just exactly counter to the countercyclical fiscal measures that 
we have been accustomed to using.
  Oh, do not worry about that. We have provided for that. That is where 
the three-fifths majority comes in. They did not step up to the plate 
and help us to get a bare majority in the Senate or in the House last 
year with that budget deficit reduction package. So it ``ain't'' that 
easy.
  Now, put that kind of a weapon into the hands of a minority. We would 
have minority rule--and minority rule is something that is pretty 
messy. We have not had a minority rule under this Republic ever. It has 
always been majority rule. That is minority rule.
  Oh, they say, well, you ought to be able to get three-fifths vote. 
Let us take a look at what the big States can do if they were of a mind 
to do it in the other body. Now in this body--this is the forum of the 
States where the Senator from Idaho represents a State that is equal to 
the State of Illinois, equal to the State of California, and my little 
State of West Virginia with three votes in the House. That is a little 
bit like putting my little dog, Billy, up against a big bulldog--my 
little dog, Billy.
  Well, my little State of West Virginia has three votes over there. 
Look at these six States. In the House, in order to waive this 
requirement in section I that outlays shall not exceed receipts in a 
given year, three-fifths of this body--if we could get 60 votes, they 
would all be equal. West Virginia's votes would be equal to 
California's, but not in the other body. In the other body, it would 
only take 175 votes to block the waiver of that section.
  So if we were in a recession, for example, or in circumstances in 
which we had, for the good of the Nation, to exceed receipts with the 
outlays, you go over in the other body and ask the Members to give you 
three-fifths so as to waive that requirement. Theoretically, six States 
in the Union could block that in the other body. 175 votes constitutes 
two-fifths plus one over there. But you have the States of California, 
with 52 votes over there; New York with 31; Texas with 30; Florida with 
23; Pennsylvania with 21, and Illinois with 20. Six States, with a 
total of 177 votes.
  Let us take a look at the six States. They are all seacoast States, 
either on the seacoast or the coast of the Great Lakes. California with 
52; Texas with 30; Florida with 23; New York with 31; Pennsylvania with 
21; and Illinois with 20. So you have 177 votes. We could exchange Ohio 
for Illinois and you would still have 176 votes. Theoretically, six 
votes could block the waiver. Well, I say that there are some interests 
that would be in common to all those States. Shipping interests would 
be in common. Suppose those six States got together and said: We will 
not give you a vote until you give us thus and so. So a minority can 
extract from the rest of the Congress--the minority in either body. Let 
us say the Senate voted 100 percent to waive section I and 206--well, 
all except 175 or 176 votes on the other side would vote to waive it. 
That puts a very potent tool, very potent power in the hands of a small 
minority. I do not think we want to do that. That is minority rule, and 
that is anticonstitutional. That is antidemocratic.
  Well, I shall close tonight by referring to this concern about our 
grandchildren. Before I do that, however, it has been called to my 
attention that President Eisenhower was mentioned a little earlier in 
connection with the building of our Interstate Highway System. I was in 
the House during the first Eisenhower administration, and it is with a 
sense of great pride that I refer to that legislation, the legislation 
that formed the foundation of the Interstate Highway System. President 
Eisenhower was our Chief Executive, and he led the way. It has been 
called to my attention that in the 1957-1958 recession--I was in the 
House--the Eisenhower administration purposefully switched from a $3 
billion surplus to a $9.9 billion deficit. In other words, $140 billion 
in today's economy. And this switch occurred in just four quarters. 
That was President Eisenhower. His administration purposefully switched 
and for good reason: We were in a serious recession. If they had not 
switched, that would have been another Great Depression. I lived in 
that Great Depression.
  I say this to my friend from Illinois. I believe he said the other 
day he was born in 1928. I was 11 years old in 1928. I remember the 
stock market crash. I remember President Hoover. President Hoover 
sought to balance the budget, even in the face of that depression. You 
see where that got us. The memories of that depression are forever 
etched upon the minds and hearts of millions of men and women in this 
country, and mine, too. The utter foolheartedness of attempting to 
balance the budget in that recession did not make sense; it was crazy. 
That is what this amendment is going to perpetrate on the American 
people today in our time. It is going to say that in a recession you 
have to balance the budget, unless you get a three-fifths vote, and we 
have gone over that already. We have talked about how difficult that 
would be.
  Finally, let me say to my friends--and they are my friends; we shake 
hands, we smile, talk with each other and try to help one another in 
many instances--I congratulate them on the tenacity with which they 
continue to press for this amendment. I do not believe that anything I 
have said or will say will change their minds one iota.
  James Russell Lowell said, ``Only the foolish and the dead never 
change their opinion.'' Well, neither of these Senators is foolish, and 
they are not dead. So James Russell Lowell would have to amend his 
statement slightly. They will not change their opinion; I am sure of 
it. And they will not discuss this amendment. They will not tell us 
where to cut. They will not tell us how much to cut, and they will not 
tell us what taxes will have to be increased.
  Regarding Senator Simon, I will have to take a little bit back 
immediately of what I just said. He will tell you he favors increasing 
taxes. I believe I heard him suggest it on television that he would 
increase the tax on gasoline.
  But how much would you cut Social Security? How much would you cut 
veterans' compensation? How much would you cut veterans' pensions? How 
many veterans hospitals would you close down?
  ``Oh,'' they say, ``it is a bugaboo, this business about cutting 
Social Security,'' and they cite Robert Myers. I was around when Robert 
Myers was an actuary--and he was a good one. He testified before my 
committee the other day.
  But, Robert Ball, who was the Social Security Commissioner under 
Kennedy, Johnson, and part of Nixon's administration, I believe, tells 
a different story, the former Commissioner of Social Security.
  Inasmuch as my friend, Mr. Simon, inserted in the Record a letter, I 
believe, that Senator Simon said had been written to him by Mr. Myers, 
I ask unanimous consent that the testimony by Mr. Ball before my 
Appropriations Committee on February 18 be printed in the Record.
  There being no objection, the testimony was ordered to be printed in 
the Record, as follows:

     Testimony by Robert M. Ball. Before the Senate Appropriations 
                      Committee, February 18, 1994

       Mr. Chairman and members of the Committee:
       My name is Robert Ball, I was Commissioner of Social 
     Security from 1962 to 1973. Prior to my appointment by 
     President Kennedy, I was the top civil servant at Social 
     Security for about ten years and had a total of some thirty 
     years of service at the Social Security Administration. Since 
     leaving the government, I have continued to write and speak 
     about Social Security, health insurance and related programs. 
     I was staff Director to an Advisory Council on Social 
     Security to the Senate Finance Committee in 1948, which 
     council recommended the major changes that became the 
     amendments of 1950.
       I was a member of the Statutory Advisory Councils in 1965, 
     1979, and 1991. I was also a member of the National 
     Commission on Social Security Reform in 1982-83, the 
     Greenspan Commission. This was the commission whose members 
     included Senators Moynihan, Dole, Armstrong, and Heinz and 
     whose recommendations served as the basis for the important 
     1983 Amendments. I am currently Chair of the Board at the 
     National Academy of Social Insurance.
       I am pleased to testify in strong opposition to the 
     Balanced Budget Amendment to the Constitution. On the other 
     hand, I fully support moving to an actual balanced budget in 
     the years ahead as the economy and other goals of our society 
     permit.
       Large deficits in good times are bad policy and have led to 
     the huge build-up in the debt, with its crushing load of 
     interest payments. Borrow and spend is much less responsible 
     than carefully choosing what we want to spend money on and 
     paying for it as we go; tax and spend if you will. We are at 
     last on the right road, only the out-of-control increases in 
     health care costs and our unwillingness to tax ourselves 
     enough to pay for the services we want stand in the way of 
     achieving our goal. But forcing cuts through the Constitution 
     would deprive the government of the flexibility it needs as 
     it continues progress toward a balanced budget. In my 
     opinion, it would force actions contrary to the best 
     interests of the nation.
       You have heard eloquent testimony on these general points 
     from many highly competent witnesses. Let me therefore 
     confine my testimony to the effect of the Amendment on Social 
     Security, a program, to which along with Medicare, I have 
     devoted most of my adult life.
       Simply put, Mr. Chairman, although I am not easily 
     frightened by the proposal, it puts at great risk the monthly 
     benefits of 42 million people currently receiving benefits 
     and the benefits of millions more who are working and 
     building credits for future benefits.
       In 1993 alone, 134 million earners worked under Social 
     Security. Practically every American family has a major stake 
     in Social Security. Hardly a special interest group. The 
     program today keeps 15 million people out of poverty and 
     millions more from falling into near poverty, but it is much 
     more than a poverty program. It is the only retirement system 
     for 6 out of 10 workers in private industry and the base on 
     which private pensions are built for the other 4 out of 10. 
     Social Security is family insurance as well as a retirement 
     plan. Life insurance protection under Social Security in 1992 
     was worth $11.2 trillion, $800 billion more than the $10.4 
     trillion for all private life insurance in force. It pays 
     nearly 3 million children each month. And, of course, there 
     is also protection against loss of income because of 
     disability.
       The protection of young families is very significant. A 
     family made up of a husband, 32, earning average wages, and a 
     wife, 28, with two children ages 3 and 5 has survivors 
     protection of $250,000. (It would be the same if the wife 
     were the wage earner or the same if both earned average 
     wages.) Disability protection for the same family amounts to 
     $221,000. All of this protection, retirement, survivors, and 
     disability insurance, would be put at risk by a 
     Constitutional Amendment forcing a balanced budget. The 
     Amendment provides a great opportunity for those who favor 
     cutting Social Security and radically restructuring it. The 
     Concord Coalition with its proposal to means-test Social 
     Security would have a heyday.
       And the Concord Coalition representatives are speaking and 
     organizing all over the country today. They are a threat even 
     now. With this Amendment, they would be much more of a 
     threat. Social Security is self-financed and responsibly 
     financed. It has had no part in creating the deficit and the 
     staggering debt. It has always paid its own way. From 1937, 
     when payments started, through 1992, it collected $3,900.7 
     trillion and paid out $3,569.2 trillion, leaving $331.5 
     billion in assets. But no matter, even though its benefits 
     are modest, since everyone is covered, its numbers are huge 
     and will make a tempting target when budgets are forced to 
     balance under a constitutional amendment.
       The Concord Coalition's proposal for means-testing Social 
     Security is the worst proposal--I believe it might well 
     destroy the system--but there are others who, even without a 
     Constitutional imperative, would cut the COLA on the benefit 
     formula. Not because it makes sense from the standpoint of 
     the Social Security system, but in order to reduce the 
     deficit in the consolidated budget of the United States. I 
     hardly see how with a Constitutional Amendment to balance the 
     budget how the Congress could avoid cutting Social Security. 
     Some will cheer but almost all Americans will feel betrayed. 
     Not because Social Security would never be changed. Changes 
     have been made in the past and will be again, but changes in 
     the past have been made with long lead times so that people 
     can adjust, and because Social Security itself needed change 
     to adjust to new conditions. But to cut back on the rights 
     that people have contributed to an worked for because of a 
     year by year requirement for balancing all the receipts and 
     expenditures in the compensated budget will not be 
     understood by either contributing workers or 
     beneficiaries. Yet, under this Amendment, I believe large 
     cuts are the most likely outcome and I think that would be 
     terrible.
       After more than 55 years of experience, we have developed 
     in this country a four-layer approach to retirement income 
     that is working well. The basic layer is the compulsory 
     contributing, way-related Social Security program. The second 
     layer is our private pension system, encouraged by government 
     through favorable tax treatment. The third layer, also 
     encouraged by government through favorable tax treatment, is 
     made up of the savings people made on their own, particularly 
     through home-ownership. Both pensions and savings are built 
     on Social Security so that cuts in Social Security affects 
     the other two.
       The fourth layer is the Supplemental Security Income (SSI) 
     that makes grants on a mean-tested basis to the poorest of 
     the elderly and those with disabilities.
       Social Security is the key element in all this--the base 
     for everything else. In my judgment, the Amendment threatens 
     what has been so carefully built up over the last half 
     century. Mr. Chairman and members of the committee, don't let 
     this happen.

  Mr. BYRD. Mr. President, I close with a reference to my 
grandchildren. I have five beautiful, wonderful, intelligent 
grandchildren. Erma and I had six. The oldest one was killed. He was 
taken by the Father of us all to be in God's garden. Now we have five 
remaining. And they are wonderful grandchildren. We are distinctly 
proud of our grandchildren. I would bet my right arm--my right arm--
that not one of those grandchildren has ever resorted to drugs. I would 
bet my left arm that not one of those grandchildren has ever used God's 
name in vain. So I love my grandchildren. All grandparents do, or 
should.
  Now, my good friend, Mr. Simon, says we should think of our 
grandchildren and not pass the debt on to them. Well, I have tried at 
the summit in 1990 and last year in connection with the budget deficit-
reduction package to assume the payments on that debt in this 
generation. We started the process. President Clinton and the Congress 
working together have begun to move in that direction. And Mr. Bush and 
the Congress, as I say, in 1990 worked out a package, too.
  But that is the way it ought to be done. That way we do not bring on 
cataclysmic reverberations in the economy. We do it in an orderly way. 
And we ought to continue to do that.
  I do not like to pass on debt, either. But from the beginning, this 
country has had debts. There have been some years in which we have been 
in surplus, but throughout the two centuries we have depended upon the 
constitutional powers to incur indebtedness. And so I, too, want us to 
assume that burden.
  But I will tell you something else. I want to pass on to my 
grandchildren the same Constitution that the Framers crafted and that 
our forefathers passed on to me. If this amendment is incorporated into 
that Constitution, we will not be passing on to our children the 
Constitution that we know. We will be passing on to our children a 
Constitution in which the system of checks and balances and separation 
of powers has been eroded and ruptured. And that is key.
  I will have more to say about that in the days to come, a lot more to 
say, because that basically is the heart of my opposition to this 
amendment; what it does to our Constitution, our organic document, the 
basic instrument which assures us of our freedoms and liberties, which 
provides for the separation of powers, the checks and balances, the 
structure of this Government.
  Put this into the Constitution and we tear that all down, and then 
where are we? Where are our liberties then?
  Section 1 would be violated. As a matter of fact, the amendment 
provides for the violation of it, and the committee report provides for 
the violation of it and tells us all the ifs, ands, and buts about it 
and how we can get around it.
  Now we are about to fool the American people. They are being misled. 
I am not saying that all the supporters of this amendment knowingly are 
misleading people. There are supporters of this amendment who 
undoubtedly are very sincere about it.
  But I am telling you why we should vote against this amendment and 
what we are doing to our future generations, to our grandchildren, mine 
and yours, and their grandchildren. We are acting like Samson, taking 
the pillars of the Constitution in our arms and pulling down the whole 
structure upon us.
  What greater disservice can we do to our grandchildren than to rend 
that Constitution into pieces and create dissatisfaction and distrust 
on the part of the people of this country toward that basic organic 
document that has helped to steer this ship of state over these 200 
years, to avoid the shoals and the rocks, and has been the basis of 
this country's prosperity and its strength and its growth and the 
freedoms and the liberties that are ours?
  This is a serious question. And, believe you me, I will have some 
more to say on the business of what we are doing for our grandchildren, 
what we are sending to them, and what we are doing with this 
Constitution.
  I thank my friends for their patience in sitting and listening. My 
friend from Idaho had wanted me to yield. My time is up.
  If our time has expired, I will be glad to yield to him for any 
question he has.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Wofford). The Senator's time has expired.
  Mr. SIMON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Mr. President, my friend from West Virginia, the 
distinguished Senator from West Virginia, will not be surprised that I 
differ with him. And, let me add, he is my friend.
  One of the things I think that will come out of this is this is going 
to be a civil debate. We are going to look at some very, very basic 
questions in this country.
  I do not have the time remaining to respond this evening. I will be 
responding to his remarks tomorrow and I look forward to continuing 
this discourse.
  I think we have the chance to really make a change for the positive 
for this country. And I hope we take advantage of that.
  Mr. President, I yield back the remainder of my time.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, it looks like I will have the opportunity 
to close out the evening's debate. Let me echo the comments of my 
colleague from Illinois as it relates to the remarks of the chairman 
from West Virginia. It will be a civil debate but it is a very profound 
and fundamental debate. So, tonight for the Record, let me add, and I 
ask unanimous consent that I might add into the Record, Thomas 
Jefferson's constitutional dilemma, as laid out tonight by the 
chairman.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. CRAIG. He did have a fundamental dilemma. He had inherited a 
budget that was not balanced and he did not want to borrow money and 
inflict a new debt. So he provided and got the necessary supermajority, 
the three-fifths in this instance as required in our proposed 
constitutional amendment from both Houses, the necessary go-ahead to 
project a note--in those days they called it a stock--that would come 
due 15 years out, so that during that time he would have a balanced 
budget and then the note would come due at 6 percent interest.
  That is exactly what happened. The note was offered at 6 percent 
interest due in 15 years to the French, and the French immediately sold 
it to the Dutch to finance it. So, from 1803 to 1818 there was nothing 
paid on it and from 1818 to 1823 the debt was paid off.
  So let the Record show that the amendment that the Senator from 
Illinois and I have offered is very consistent with the philosophy of 
Jefferson in the three-fifths required as he sought from the 
legislatures of the Congress, both Houses, and got it; and then in the 
out years, paid it off. Because it was, as the Senator from West 
Virginia said, an exceptional opportunity to acquire property equal to 
that of the continental United States at that time. The Congress with a 
three-fifths--or 60 percent I believe at that point--agreed with 
Jefferson. I will argue that the Jefferson principle was not violated, 
that he paid off the debt, he brought the budget into balance, and he 
provided a unique financing opportunity that would fall under section 1 
and under section 2 of our amendment to deal with this issue.
  Let me close the evening by saying I referenced in my opening remarks 
that indebtedness--or more importantly the lack thereof--inflicted on 
the citizens was a right, a right that ought to be in the Constitution. 
And if it is a right--and I believe it is a right--I do not have 
grandchildren yet but I hope someday to have them, and I do not want 
one of my votes to force them into an indebted posture that they cannot 
live with. I will argue that every right that is in the Constitution 
today is guarded by that three-fifths vote. That is constitutional.
  So, when we talk about a majoritarian principle, as my colleague from 
West Virginia talked about tonight, we walk the constitutional line. We 
maintain the constitutional tightrope, because the Congressman--the 
Senator from Illinois--I used to know my colleague as a Congressman in 
the House--will argue with me that it is a fundamental right that we do 
not indebt future generations; that we pay as we go.
  If it is a right, and we believe our amendment says it is, then 
article 1 and article 2 of our amendment are absolutely consistent with 
the right of free speech, the second amendment rights, all of the other 
rights that I delineated tonight.
  We are within the concept of the element of the majority and most 
assuredly we have not violated, nor will this amendment violate, the 
Constitution. I believe it will strengthen it. I believe it fits into 
the concept of Jefferson. It certainly adheres to his principles and 
the arguments he placed before the Congress when he was provided with a 
unique and unbelievable opportunity. If this Congress, and its budget 
were balanced, came under tremendously difficult times and the citizens 
cried out--or if it in fact stumbled upon a unique opportunity, as did 
Thomas Jefferson at a time when he began to close Government down and 
tighten it up to balance the budget--he went to the Congress and they 
gave him that supermajority, that three-fifths necessary.
  He stayed within his principles. He stayed within his belief of the 
Constitution. He provided for this country a phenomenal legacy, and out 
of that legacy came the Idaho Territories, and out of that territory 
came the State of Idaho that I represent today. But it was done in a 
balanced approach, with a debt that was paid off in 5 years after it 
came due, in the responsible fashion that was of the day, and of the 
human principle of that day.
  So when he talked about an amendment that said this Nation should not 
borrow and it should not be allowed to indebt, what he was talking 
about was the belief of a principle that was embodied in the human 
element of the day. If you read, as I know my colleague from West 
Virginia has, the history of the Constitutional Convention, they did 
not even think you had to put the first 10 amendments down; that they 
were fundamental, that they were already embodied there.
  But to sell it to the States, they had to do more. They had to 
specify. They had to guarantee. And it was that --that was what Thomas 
Jefferson meant, that we had failed to guarantee what was fundamentally 
a belief of the time. His practices as a President demonstrated it. 
What he brought forth to the House and the Senate demonstrated it.
  So I will argue, and I think the paper that I presented, which is a 
compilation of the Jefferson argument and the Jefferson concern, will 
suggest to all of us that we are not revising history, that we are 
extending history. Thomas Jefferson was, as his comments in letters so 
profoundly said, fundamentally one who believed in balanced budgets and 
fiscal responsibility and not passing forth debt to future generations, 
and his Presidency did not do that.
  I yield the remainder of my time.

                               Exhibit 1

    Jefferson's Constitutional Dilemma With the Louisiana Purchase--
                               (Summary)

       It is widely thought that Thomas Jefferson ignored his own 
     principles of a strict interpretation of the Constitution 
     when the United States was given the opportunity to purchase 
     the Louisiana Territory in 1803. On the contrary however, the 
     purchase raised no question of unconstitutionality in his 
     mind. It was the admission into the Union of new states which 
     might be created from the territory that caused him great 
     concern. Creating additional debt for the country also seems 
     to be contrary to traditional Jeffersonian principles, but 
     Jefferson was hopeful the Congress could finance the purchase 
     without raising taxes.
       The Treaty of 30 April 1803 set the terms for the purchase 
     of the territory. A payment of $11,250,000 to France at six 
     percent interest, not redeemable for fifteen years was the 
     price. An additional $3,750,000 would be used to assume the 
     claims of American citizens against France. While there is no 
     record of Jefferson giving a written justification of 
     incurring such a debt, it might be assumed that because he 
     was eventually willing to set aside his concerns about the 
     constitutionality issue (because of what one historian called 
     the national emergency of acquiring Louisiana), he was also 
     willing to lead the country into debt because of the long-
     term advantages he foresaw.
       This paper attempts to give a brief summary of the events 
     leading to the ratification of the treaty by which the United 
     States purchased the Louisiana Territory with special 
     attention given to Jefferson's constitutional concerns.

     Jefferson's Constitutional Dilemma With the Louisiana Purchase

       The presidential election of 1800, often referred to as the 
     ``Revolution of 1800'', marked the beginning of the end of 
     the Federalist Party and the rise of a more democratic, less 
     formal style of government. In his inaugural address, the new 
     president proclaimed: ``* * * a wise and frugal government, 
     which shall restrain men from injuring one another, which 
     shall leave them free to regulate their own pursuits of 
     industry and improvement, and shall not take from the mouth 
     of labor the bread it has earned. This is the sum of good 
     government, and this is necessary to close the circle of our 
     felicities.''
       During Jefferson's first term internal taxes were 
     abolished, the national debt was reduced by half, the armed 
     forces were restructured, West Point was established and the 
     land area of the country was doubled by the purchase of the 
     Louisiana Territory. This last accomplishment, however, was 
     the subject of strenuous debate among Jefferson's Cabinet and 
     in Congress because the Constitution gave the Federal 
     government no explicit authority to acquire territory and 
     incorporate it into the American nation.
       Through a secret treaty with Spain in 1800, France secured 
     title to the Louisiana Territory of North America. 
     Circumstances on the European continent, however, led 
     Napoleon to seek a means of raising funds to purchase war 
     supplies for France's military campaigns and he was forced to 
     forego his dream of an empire in the Americas and turn his 
     attention to the coming war with Great Britain. As a result, 
     he was willing to sell the millions of acres just across the 
     Mississippi River from the United States. President Jefferson 
     had a tremendous opportunity to enlarge the country's borders 
     by purchasing a territory many in Congress had advocated 
     taking by means of war.
       In January of 1803 legislation was introduced in the House 
     of Representatives to appropriate $2 million to speed the 
     negotiations between the United States and France, or rather, 
     ``to defray the expenses which may be incurred in relation to 
     the intercourse between the United States and foreign 
     nations; to be paid out of any money in the Treasury not 
     otherwise appropriated, and to be applied under the direction 
     of the President of the United States; who, if necessary, is 
     hereby authorized to borrow the same, or any part thereof, an 
     account whereof, as soon as may be, shall be laid before 
     Congress.'' (Annals of Congress, 7/2) The bill was passed and 
     referred to the Senate, which passed the bill by a 14-12 
     margin.
       The American negotiators in Paris announced the purchase of 
     the territory in a letter to the Secretary of State dated 13 
     May. It was not until 14 July, however, that the treaty and 
     its accompanying documents arrived in Washington. Two days 
     later, the president met with his Cabinet to consider the 
     proper course of action. Under the terms of the treaty, the 
     United States would purchase the Louisiana Territory for 
     $11,250,000 with an additional $3,750,000 going to satisfy 
     private American claims against the French government. As 
     payment, the United States would create a stock of the former 
     amount bearing interest at the rate of six percent a year. 
     Interest payments were to be made each year with the 
     principal being payable no sooner than fifteen years from 
     the date the treaty was ratified. The treaty also 
     stipulated that should France wish to dispose of the stock 
     before maturity, the transaction would be conducted in the 
     manner most favorable to the credit of the United States. 
     Finally, the document provided that, in the event the 
     treaty was not ratified by 30 October 1803, the land would 
     revert to the French.
       Secretary of the Treasury Albert Gallatin complained that 
     the treaty would allow the French to dispose of the stock for 
     cash (which they did almost immediately). At the same time, 
     the United States could not begin to curtail the debt for 
     fifteen years. The president, however, wrote an acquaintance 
     that the United States had gained in four months of 
     deliberations what would have required seven years of war and 
     cost 100,000 lives and $100,000,000 of debt. (There is no 
     record of the source of these estimates.)
       Writing to a friend on 17 July, Jefferson explained that 
     Congress ``will be obliged to ask from the people an 
     amendment to the Constitution authorizing their receiving the 
     province into the Union providing for its government, and the 
     limitations of power which shall be given by that amendment, 
     will be unalterable but by the same authority.''
       Writing to John Dickenson on 9 August, ``Our confederation 
     is certainly confined to the limits established by the 
     revolution. The general government has no powers but such as 
     the Constitution has given it; and it has not given it a 
     power of holding foreign territory and still less of 
     incorporating it into the Union. An amendment to the 
     Constitution seems necessary for this. In the meantime we 
     must ratify and pay our money, as we have treated, for a 
     thing beyond the Constitution, and rely on the nation to 
     sanction an act done for its great good, without its previous 
     authority.''
       In letter to Senator John Breckinridge three days later, 
     Jefferson wrote: ``This treaty must of course be laid before 
     both Houses, because both have important functions to 
     exercise respecting it. They, I presume, will see their duty 
     to their country in ratifying and paying for it, so as to 
     secure a good which would otherwise never again be in their 
     power. But I suppose they must then appeal to the nation for 
     an additional article to the Constitution, approving and 
     confirming an act which the nation had not previously 
     authorized. The Constitution has made no provision for our 
     holding foreign territory, still less for incorporating 
     foreign nations into our Union. The executive in seizing the 
     fugitive occurrence which so much advances the good of their 
     country, has done an act beyond the Constitution. The 
     Legislature in casting behind them metaphysical subtleties, 
     and risking themselves like faithful servants, must ratify 
     and pay for it, and throw themselves on their country for 
     doing for them unauthorized, what we know they would have 
     done for themselves if they had been in a situation to do it. 
     It is the case of a guardian, investing the money of his ward 
     in purchasing an important adjacent territory; and saying to 
     him when of age, I did this for your good; I pretend to no 
     right to bind you: you may disavow me, and I must get out of 
     the scrape as I can: I thought it my duty to risk myself for 
     you. But we shall not be disavowed by the nation, and 
     their act of indemnity (an amendment to the Constitution) 
     will confirm and not weaken the Constitution, by more 
     strongly marking out its lines.''
       Because Congress had adjourned for the summer and was not 
     due to go back into session until November, Jefferson called 
     for a special session beginning on 17 October. The purpose of 
     the session was to gain Senate approval for the treaties and 
     House authorization for payment of the purchase before the 30 
     October deadline. He spent the rest of the summer and fall 
     preparing for the coming session and trying to gather all the 
     information he could about the territory. (He also drafted 
     two versions of an amendment which Congress might consider 
     upon its return.)
       In late August, word arrived from France that Napoleon was 
     having second thoughts about selling the territory to the 
     United States and would not accept the American ratification 
     if the Senate made any changes in the treaty. Jefferson 
     quickly surmised that raising the issue of the 
     constitutionality of the purchase would give Federalist 
     opponents in Congress an opportunity to delay the 
     ratification process into winter. As a result, he wrote to 
     Secretary of State Madison on 20 August: ``I infer that the 
     less we say about constitutional difficulties respecting 
     Louisiana the better, and that what is necessary for 
     surmounting them be done sub silentio.''
       According to historian Dumas (Doo-mah) Malone, Jefferson's 
     most scholarly biographer, the president seemed to consider 
     the affair of Louisiana at this point a national emergency 
     that justified stretching the Constitution beyond its 
     original shape. To Treasury Secretary Gallatin, Jefferson 
     wrote: ``It will be well to say as little as possible on the 
     constitutional difficulty, and the Congress should act on it 
     (ratifying the treaty) without talking.''
       Jefferson's third annual message to the Congress on 17 
     October made only passing reference to the constitutional 
     question. (It is also one of his few public statements about 
     intentionally increasing the debt.)
       ``It is already ascertained that the amount paid into the 
     treasury for that year (FY 1803) has been between eleven and 
     twelve millions of dollars, and that the revenue accrued 
     during that same term exceeds the sum counted on as 
     sufficient for our current expenses, and to extinguish the 
     public debt within the period heretofore proposed.
       ``The amount of debt paid for the same year is about three 
     millions one hundred thousand dollars, exclusive of interest, 
     and making, with the payment of the preceding year, a 
     discharge of more than eight millions and a half dollars of 
     the principal of that debt, besides the accruing interest, 
     and there remain in the treasury nearly six millions of 
     dollars. Of these eight hundred and eighty thousand have been 
     reserved for payment of the first instalment [sic] due under 
     the British convention of January 8th, 1802, and two millions 
     are what have been before mentioned as placed under the power 
     and accountability of the president, toward the price of New 
     Orleans and other territories acquired, which, remaining 
     untouched, are still applicable to that object, and go in 
     diminution of the sum to be funded for it.
       ``Should acquisition of Louisiana be constitutionally, 
     confirmed and carried into effect, a sum of nearly thirteen 
     millions of dollars will then be added to our public debt, 
     most of which is payable after fifteen years; before which 
     term the present existing debts will all be discharged by the 
     established operation of the sinking fund. When we 
     contemplate the ordinary annual augmentation of imposts from 
     increasing population and wealth, the augmentation of the 
     same by revenue by its extension to the new acquisition, and 
     the economies which may still be introduced into our public 
     expenditures, I cannot but hope that Congress in reviewing 
     their resources will find means to meet the intermediate 
     interests of this additional debt without recurring to new 
     taxes, and applying to this object only the ordinary 
     progression of our revenue. Its extraordinary increase in 
     times of foreign war will be the proper and sufficient fund 
     for any measures of safety or precaution which that state of 
     things may render necessary in our neutral position.''
       The Senate ratified the treaty on 20 October by a vote of 
     24-7. A subsequent Senate vote to establish a government for 
     the new territory passed by a 26-6 margin less than a week 
     later. New England Federalists provided the opposition on 
     both votes.
       On 25 October three resolutions relating to the government 
     of the territory and payment to the French government were 
     introduced in the House. A resolution to enforce the 
     provisions of the treaty passed 90-25. The bill establishing 
     a government for the territory met with stiff initial 
     opposition because it would have given all military, civil 
     and judicial powers to the President. Even loyal Jeffersonian 
     Republicans refused to support the resolution until an 
     equitable distribution of power between the President and 
     Congress was added. This measure passed 89-23. The resolution 
     regarding payment for the territory was approved by voice 
     vote the same day it was introduced.
       Not content to let the constitutionality question die, 
     Senator John Quincy Adams of Massachusetts introduced a 
     measure on 25 November which would have established a special 
     Senate committee ``to inquire whether any, and if any, what 
     further measures may be necessary for carrying into effect 
     the treaty between the United States and the French Republic 
     * * * whereby Louisiana was ceded to the United States.'' The 
     Senate did not consider the measure until 9 December. Only 
     two of his Federalist colleagues joined him in supporting the 
     motion. It subsequently died and the issue of the 
     constitutionality of the Louisiana Territory ended.
       The debt incurred by the purchase was finally paid off in 
     1823, twenty years after the agreement was ratified.
       This chain of events established a precedent for the 
     principle of implied powers in the Constitution and the 
     elasticity to meet changing situations.
  Mr. SIMON. Mr. President, I ask unanimous consent that the time 
allocated for myself tomorrow, Wednesday, February 23d, be equally 
divided between myself and Senator Hatch, or our designees.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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