[Congressional Record Volume 140, Number 16 (Wednesday, February 23, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: February 23, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
BALANCED BUDGET AMENDMENT
The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of Senate Joint Resolution 41, a joint resolution
proposing an amendment to the Constitution of the United States to
require a balanced budget, which the clerk will report.
The assistant 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 Senate resumed consideration of the joint resolution.
Mr. SIMON. Mr. President, I will have some remarks shortly. I am
waiting for some material from my staff.
I will, at this point, suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SIMON. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SIMON. Mr. President, before my colleague from Idaho yields to
Senator Strom Thurmond, I want to pay tribute to Senator Thurmond, who
has been a pioneer in fighting for this. I believe Senator Thurmond
told me he has been fighting for this for 35 years, but it has been a
long time. I am proud to be associated with him in this battle.
When I came to the Senate, Mr. President, I confess that I thought,
well, maybe I am going to be fighting with Strom Thurmond on all kinds
of issues. We are on two committees together. We differ on some things,
but it has been a good relationship, and I have great respect for my
colleague from South Carolina.
Mr. CRAIG. Mr. President, let me join my colleague from Illinois in
recognizing Senator Strom Thurmond and the tremendous leadership he has
offered in building the base for this issue, as it has developed over
the years, to stand on the floor on many occasions over the last decade
and bring this issue to a vote--once a successful vote in the mid-
1980's. I offer my congratulations to him for his leadership. I am at
this time pleased to yield to him such time as he may consume.
The PRESIDING OFFICER. The Senator from South Carolina is recognized.
Mr. THURMOND. I express my deep appreciation to the able Senator from
Illinois and the able Senator from Idaho for their kind remarks. I am
very interested in this problem and have been working on it for over 35
years.
Mr. President, I rise today to voice my strong support of a
constitutional amendment to require the Federal Government to achieve
and maintain a balanced budget.
In the last Congress, as in many Congresses before, I introduced a
proposed balanced budget amendment and also joined as a cosponsor of a
proposal which was agreed upon with proponents in the House of
Representatives. That proposal was narrowly defeated in the House. The
defeat was a direct result of the Speaker's successful lobby of several
Representatives who were actually cosponsors of the bill but turned and
voted against it when pressed by the Speaker. We have reintroduced this
proposal as Senate Joint Resolution 41 which is the bill we are now
considering. This current legislation is similar to a balanced budget
amendment passed by the Senate in 1982 while I was chairman of the
Judiciary Committee. Unfortunately, the Speaker of the House and the
majority leader led the movement to kill it. Also, in March 1986, the
balanced budget amendment received 66 of the 67 votes needed for Senate
approval.
Simply stated, this legislation calls for a constitutional amendment
requiring that outlays not exceed receipts during any fiscal year. The
amendment does allow Congress to adopt a specific level of deficit
spending if approved by three-fifths of the whole number of both
Houses. There is also language to allow the Congress to waive the
amendment during time of war or imminent military threat. Finally, the
amendment requires that any bill to increase taxes be approved by a
majority of the whole number of both Houses.
Mr. President, this legislation would strengthen our economy imposing
the requirement to reduce and ultimately eliminate the Federal deficit.
The American people have expressed their strong opinion on the need for
a solution to the deficit problem. Making a balanced budget amendment
part of the Constitution is the only--and I repeat, the only--effective
means of permanently addressing our Nation's runaway fiscal policy.
While Congress could achieve a balanced budget by statute, past
efforts to statutorily achieve this goal have failed. It is simply too
easy for Congress to change its mind and rescind any statutory scheme
which addresses Federal spending. The constitutional amendment is
unyielding in its imposition of discipline on Congress to make the
tough decisions necessary to balance the Federal budget.
I remember years ago Senator Harry Byrd, Jr. offered an amendment in
the Senate to accomplish this very thing by statute. It was passed, but
it did not amount to anything. The Congress went right ahead and
appropriated as it had before that. The only way to stop this spending
is by a constitutional amendment.
The Constitution has been amended only 27 times in our Nation's
history. Amending the Constitution is a most serious matter and of such
earnest concern that it has been reserved to protect the fundamental
rights of our citizens or to ensure the survival of our democratic form
of government.
Over the past half-century, Congress has demonstrated a total lack of
fiscal discipline--I repeat, a total lack of fiscal discipline--
evidenced by an irrational and irresponsible pattern of spending. This
reckless approach has seriously jeopardized the Federal Government and
threatens the very future of this Nation. As a result, I believe we
must look to constitutional protection from a firmly entrenched fiscal
policy which threatens the liberties and opportunities of our present
and future citizens.
The national debt is now $4.2 trillion. Paying off this debt would
cost every man, woman, and child in America over $16,000 each. The
National debt continues to grow. For fiscal year 1993 alone, the
Federal deficit was $255 billion.
Mr. President, in 1957, my third year in the Senate, the entire
national debt was less than $275 billion and there was not a deficit,
but rather a $3 billion surplus. The last time our Nation reported a
surplus was 1969.
Today, the payment of interest on the national debt is over 14
percent of the entire Federal budget.
I want to repeat that statement. The payment of interest on the
national debt is over 14 percent of the entire Federal budget. The tax
dollars that go to pay interest on the debt are purely to service a
voracious congressional appetite for spending. Payment of interest on
the debt does not build roads, it does not fund medical research, it
does not provide educational opportunities, it does not provide job
opportunities, and it does not speak well for the Federal Government.
Mr. President, deficit spending and the alarming growth of the
Federal debt has brought us to this moment. Congress has balanced the
Federal budget only once in the last 31 years.
I want to repeat that sentence. Congress has balanced the Federal
budget only once--once--in the last 31 years. During my service in the
Senate of nearly four decades, I have been amazed and deeply concerned
over the continued growth of Government spending. Federal spending
continues to eclipse Federal receipts and this will only worsen the
deficit problem. A balanced budget amendment as part of the
Constitution will mandate the Congress to adhere to a responsible
fiscal policy.
The American businessmen and businesswomen have become incredulous as
they witness year in and year out the spending habits of the Congress.
Any business person clearly understands that you cannot survive by
continuing to spend more money than you take in. The Federal
Government, like any other institution, should not spend beyond its
means. It is time the Congress understands this simple yet compelling
principle.
For many years, I have believed, as have many Members of Congress,
that the way to reverse this misguided direction of the Federal
Government's fiscal policy is by amending the Constitution to mandate--
I repeat, to mandate--balanced Federal budgets. The balanced budget
amendment is a much needed addition to the Constitution and it would
establish balanced budgets as a fiscal norm, rather than a fiscal
anomaly.
Mr. President, today's deficits will place staggering tax burdens on
future generations of American workers. Who are the future generations
of American workers? They are our children and our children's children.
We are mortgaging the future of generations yet unborn. This is a
terrible injustice we are imposing on America's future and it has been
appropriately referred to as fiscal child abuse.
In 1798 Thomas Jefferson, one of the great leaders of our country,
expressed his opinion of deficit spending, and I quote:
The question whether one generation has the right to bind
another by the deficit it imposes is a question of such
consequences 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.
Those are the words of Thomas Jefferson, the third President of the
United States, and one of our greatest Presidents of the past.
It is time we demonstrate the fiscal discipline which Mr. Jefferson
called a fundamental principle of government. It is time we adopt a
balanced budget amendment. For 31 years, the Congress has failed and
refused to keep spending within income. It is apparent that if we are
going to operate on a balanced budget then we must compel the Congress,
mandate the Congress, make the Congress refrain from deficit spending
year in and year out.
If the Congress adopts this proposal, I predict that three-fourths of
the State legislatures will swiftly approve and the balanced budget
mandate will then be a part of the Constitution as the 28th amendment.
I urge my colleagues to adopt this measure and send it to the American
people.
The American people deserve it, and we should not deny them that
opportunity.
Mr. President, I yield the floor.
The PRESIDING OFFICER. Who yields time? The Senator from Illinois.
Mr. SIMON. Mr. President, I yield myself such time as I may consume.
The PRESIDING OFFICER. The Senator is recognized.
Mr. SIMON. Mr. President, let me respond to the remarks made last
evening by the distinguished President pro tempore, one of the finest
Members to have ever served in this body, Senator Robert Byrd. I have
great respect for Senator Byrd and I ordinarily agree with Senator
Byrd. But this time we are in sharp disagreement.
First of all, when I said that a constitutional amendment expresses
philosophy and prevents Government abuse, he said that a constitutional
amendment--if I am quoting him correctly--does not express philosophy.
I differ. And what we are saying with this amendment is we have to have
pay-as-you-go Government.
But I think there is a philosophy behind almost all amendments. The
first amendment giving us freedom of speech--that expresses, really, a
philosophy that if we have ideas out here freely flowing about, that in
the process we are going to pick the best ideas. I think that is a
philosophy.
The sixth amendment, calling for speedy trial for anyone charged with
an offense, that expresses a philosophy that we have to have justice
for people.
The 13th and 14th amendment, getting rid of slavery, clearly
represents a change in philosophy for this country.
The 15th amendment, saying everyone can vote--everyone did not
include women at that point--but that was a philosophical decision.
The 16th amendment on the income tax--I do not think it could carry
today in the U.S. Senate, but it became an amendment and it expressed a
philosophy in terms of how we get revenue from people, that it ought to
be on the basis of people's income to a great extent.
The 19th amendment that gave women the right to vote, that clearly
expressed a philosophy.
And one of the little known amendments, one of the most important
amendments in the Bill of Rights that is frequently ignored, the ninth
amendment.
James Madison put together a bill of rights. In fact he had 11
amendments he wanted for a bill of rights, rather than 10. And he wrote
to Alexander Hamilton, and Alexander Hamilton wrote back and said if
you spell out these rights there will be people who say these are the
only rights people have. So the ninth amendment was added which says
other rights not spelled out here are reserved to the people. Very
fundamental--that expresses a philosophy about liberty in this country.
Clearly, there is a philosophy in back of this proposal that we move
to pay-as-you-go Government, and I think there is a philosophy in back
of other amendments.
Then, the second criticism is that financial matters should not be
included in the Constitution. There are a great many matters that are
financial matters that are included in the Constitution. We have a list
here, I will not go through them all, but about 15 or so, here, are
included. They include: Coining money--that is in the Constitution; to
borrow money on credit; to regulate commerce with foreign nations; to
fix standards on weights and measures--that certainly is a detail that
is nowhere near as significant as what we are talking about here; to
establish uniform laws for bankruptcy--that is part, clearly, of the
financial side. And the example that I think is the most clear-cut
example: The Constitution talks about patents. That is something that
is clearly a financial matter with nowhere near the kind of overall
impact of this.
Then I would add, and this gets back to the philosophical side of it,
what was the one phrase that came out of the revolution, the American
revolution, more than any other phrase? It was, ``taxation without
representation.'' You talk about taxation without representation--what
we are doing to future generations with this burden that we are giving
them, that really is taxation without representation.
The distinguished President pro tempore said majority rule is being
taken away. Majority rule is not being taken away. What we are saying
is we are going to put some barriers in there so the majority cannot
abuse the public privilege and impose debts on future generations. So
long as we have a balanced budget there is nothing here that prevents a
majority in this Senate from doing anything we want on fiscal matters.
But we have to recognize the majority in this Senate and in the House
has abused the public privilege.
We have other areas where we indicate the majority cannot
automatically prevail. There are several of them: One, two, three,
four, five, six, seven--eight instances in the Constitution where it
requires more than a regular majority to see that something takes
place. And I do not object to that.
On the constitutional amendment, clearly a majority of the people in
this country favor this amendment more than anything that we have ever
done, in terms of a constitutional amendment. In this Senate we clearly
have a majority. Whether we have two-thirds is less clear. But we
clearly have a majority. But we say to protect the Constitution, one-
third plus 1, in either body, can stop this. So we permit a minority to
prevent abuses by the majority.
Senator Byrd also said this is an empty promise. You cannot have it
both ways, incidentally. You cannot say this is an empty promise, it is
not going to do any good, and then at the same time say there is no
wiggle room here; that it is too confining.
Actually, I think neither extreme is accurate. The truth is we have
fashioned something that does make sense. And when he says if we pass
this then we are all going to go back home and say we have really done
something, we are not going to do anything, there will be a let down in
effort--I think I speak for my colleague, Senator Hatch, and Senator
Craig, and my cosponsors on this side also: If this passes we know we
are going to have to go to work. Senator Mathews, who is the Presiding
Officer, is a cosponsor of this. I regret he is not going to be in
Senate for a longer time. But I know Senator Mathews well enough to
know that he is not going to just sit back and say, ``Well, we have
done this, let us forget about it.'' He will be willing to sit down and
help fashion a package.
Then Thomas Jefferson came up. Why did he not promote this
constitutional amendment as President? He did not promote it as
President because there was a different atmosphere then: 7 of the 8
years he served as President he had a surplus. And yesterday, I thought
it was really significant yesterday that my colleague, Senator Carol
Moseley-Braun, came in here yesterday on Washington's Birthday, with
Washington's farewell address, and she read a portion of it. But let me
reread it.
This is the mood of the time when the most revered person of that
time, George Washington, said, in his Farewell Address to the Nation:
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, by my 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.
And he goes on for a few more sentences. That was the atmosphere.
That was George Washington, the Father of our Country, and what he had
to say.
The Louisiana Purchase was mentioned. Very interesting. We say you
have to have a 60 percent vote to have a deficit. The Louisiana
Purchase was approved by this body by a vote of 24 to 7, way more than
a 60 percent majority. The great complaint by the Secretary of Treasury
Albert Gallatin at the time was Napoleon and the French worked out the
Louisiana Purchase so that interest would be paid every year for 15
years but the principal could not be paid off until the 15th year. One
of the great complaints of the Secretary of the Treasury and of our
Government after the deal was consummated with Napoleon was we wanted
to pay this off earlier. That is a very different spirit than we have
today.
Senator Byrd says this amendment would impinge on the power of the
President because we require the President to submit a balanced budget.
I think that just makes no sense. I think if we require the President
to submit a balanced budget, and if that President says this is the
balanced budget I am required by the Constitution to submit to you but
because of the emergency we face, because of economics, or something
else, I recommend that we deviate from this in this way, there we are
not taking any powers away from the President, but we are protecting
the people and that is what a Constitution should do.
There is also the complaint that we require a constitutional majority
for tax increases. Almost all tax increases have that. The big thing
that we prevent, and I think a legitimate thing, we prevent a midnight
voice vote tax increase by this; again, a protection for the people.
Then Senator Byrd complains that the language ``Congress shall
implement relying on estimates'' opens the door wide, and if that were
there in isolation, then we would have some problems, though I have to
say we would still be better off than we are today. But when you say
Congress shall implement and rely on estimates, what we also have is
that three-fifths majority that you have to have to extend the Federal
debt. So we cannot play games. I think that is very significant.
What I will recommend in terms of implementation is that we, first of
all, generally aim for a 1 or 2 percent surplus so we can deal with
recessions and, second, that we have a 2 or 3 percent leeway because
you cannot tell to the exact dollar what is going to happen.
Then let us just say we are 2 percent under, though if we aim for a 1
or 2 percent surplus--that should be rare--but if we are 2 percent
under, then that 2 percent goes into the next fiscal year. I think this
is workable. I think the Supreme Court in years to come can read our
debate and see what we had to say.
But when you compare that 2 percent--or whatever it is--with the last
year that is now projected by CBO, the last year of their projection
now is a deficit of $365 billion and going up from there. These are
relatively minor problems compared to that.
The question is: Why do we need something to force us to do the right
thing? We have shown for 25 years we need something to force us to do
the right thing. As I mentioned yesterday, we are celebrating the 25th
anniversary of spending more money than we take in. I have not noticed
any big celebrations scheduled for that. I do not see anyone bragging
about that. Why? Because we know it is hurting our country and our
future.
In terms of recession, Fred Bergsten, former Assistant Secretary of
the Treasury and, in my opinion, one of the finest economists in this
Nation, said a balanced budget amendment will help us deal with
recessions because we can build in a 1 or 2 percent surplus and then
use that while we are so constrained by our present situation that we
are not able to respond to recessions.
As my colleague from Utah will recall, we tried to get $11 billion
for a jobs program in a $6 trillion economy and we could not get it;
$11 billion would not do much but it would have been some help, but we
were already so overloaded with debt that we could not get it. If we
need a 60 percent vote for something that is needed, we can get that.
We got that to extend unemployment compensation on an emergency basis
in this body. We can get that.
One final point that he made, and that is the big States--California
and over to Illinois--can control things over in the House because they
will have 40 percent of the vote. I did some fast work last night. I
could not find a single instance of any matter of controversy where the
Illinois delegation in the House voted together, and I think you will
find that for New York and California and the other delegations. There
is no such unanimity on anything of controversy. That really is not a
problem.
But the fundamental question that Senator Byrd did not answer is,
what is the alternative? Where do we go if we do not adopt this? I
suggest the lesson of history is something we cannot forget. I brought
from my apartment a book that probably sold 200 copies. I do not know.
``Mountains of Debt'' by Michael Veseth. It is about ancient Florence
and how ancient Florence started piling up debt and then debased their
coins in order to take care of the debt. You do not need to go to
ancient Florence. Go to Adam Smith in ``The Wealth of Nations,'' and he
talks about this is the tradition of nations that start getting into
debt; they start printing money and ruining their economy. That is the
road we are headed down. No question about it.
As you look at those projections and, again, the OMB projections--
people say, ``Well, GAO may not be accurate.'' Let us just take the
projections of this administration, OMB.
Mr. President, on this graph is lifetime net tax rates under
alternative policies, and I do not think my colleague from Utah was
here when I mentioned this last night. In 1930--I was born in 1928--I
will spend 30 percent of my lifetime income on taxes. My colleague from
Idaho maybe 1940--1945. He is in the middle of this. He will spend
around 32 or 33 percent of his lifetime income on taxes. But what do we
do when we get down to future generations? Here is what OMB says--and
this is put in here to show the great accomplishments that we have
made, and we have made some accomplishments--to the credit of President
Clinton.
Before reconciliation, future generations will spend 93 percent of
their income on taxation. After reconciliation, it will be 82 percent.
But assuming health care passes and it does everything the
administration hopes that it will--and I am a cosponsor of it and I
hope it does--assuming every optimistic economic forecast, and they
forecast 10 years of solid growth and I hope it happens, but it is not
typical of any decade, if those things happen, future generations will
spend 66 to 75 percent of their net lifetime earnings on taxation.
Now, my friends, that is not going to happen. We will start printing
money before it happens. We are headed toward what the economists call
monetizing the debt. The most recent example that we have seen was
right next door when Mexico got up to 12\1/2\ percent, the deficit was
12\1/2\ percent of their national income and they had inflation of 114
percent. That means cutting in half all family savings. That means
cutting in half the Social Security trust fund.
What is the alternative? I think the evidence is just overwhelming
that we are drifting toward monetizing the debt. We can take a gamble
that we will be the first nation in history to reach debt of this
character relative to income, we will be the first nation in history to
do that without just printing funny money, but that is a huge gamble on
the future of our country.
Mr. President, I hope this body will do the right thing. I hope the
people out there in this country will contact their Senators and urge
that we do the responsible thing and protect future generations and
protect the future economy of this country.
Mr. President, I yield the floor.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER (Mr. Leahy). Who yields time?
The Senator from Utah.
Mr. HATCH. I really appreciate the very cogent remarks of my
colleague from Illinois and the leadership he has provided on this
particular issue. I believe it has really made a difference, and I hope
people throughout this country will take heed to what he has said and
get with their Senators and their Congress people and let them know it
is time for this game called budgetary practice in Washington to get
serious. The only way it is going to get serious, the only way we are
going to solve these problems is with the type of fiscal discipline the
balanced budget amendment would put into our system.
So I hope everybody out there watching this on C-Span and hearing
about it otherwise will contact their Senators and their Congress
people and tell them we have just got to get that 67-vote margin in the
Senate so that we can pass this amendment.
Mr. President, I was on the ``Today Show'' yesterday with Leon
Panetta, the Director of the Office of Management and Budget, a friend
of both the distinguished Senator from Illinois and myself. We were
being interviewed by Bryant Gumbel, and Leon Panetta said that this
balanced budget amendment is just a gimmick. My favorite quote
responding to that comes from the Congresswoman from Maine, Olympia
Snowe, who said that if it were just a gimmick, if the balanced budget
amendment were just a gimmick, the Congress would have passed it long
ago.
I do not think anything could exceed that particular statement. If
this were just a gimmick, you can bet your bottom dollar Congress would
have passed it long ago and then ignored it.
It is not a gimmick. This is an amendment to the Constitution which
will bring fiscal discipline to this country that is sadly lacking
because the Congress is institutionally unable under current
circumstances to quit spending and to quit spending beyond our means.
I will paraphrase the remark of Mr. Jim Davidson of the National
Taxpayers Union. He said that the administration's so-called 5 year
deficit reduction plan is like putting a 400-pound man on a diet, and
calling it a success when he weighs in at 500 pounds because he thought
he would be 600 pounds.
Basically, that sums it up. We are unwilling to do anything about the
deficit because all of these Cabinet officials come up here in a
hysterical fashion predicting the end of the world and suggesting that
if we have to live with fiscal discipline, we will not have all the
moneys to spend for the programs that are essential for this country.
But we all know that if we keep going the way we are, as the
distinguished Senator from Illinois has eloquently made the point, we
are going to monetize the debt through printing money, bringing
inflation, and the people who will be hurt the worst will be those who
are poor, those who are on Social Security, those who are on fixed
incomes.
We know we have to do something about this, and I think it is time we
do it. That is why I join with the distinguished Senator from Illinois
in leading this fight along with the distinguished Senators from South
Carolina and Idaho and from Arizona, Senator DeConcini, I join with
these colleagues in helping to push this through if we can.
I rise today with a strong feeling that this is one of the most
important debates to ever take place in the Senate. The subject matter
goes back to the heart of our Founding Fathers' hope for a
constitutional system, a system that would protect individual freedom
and maintain the integrity of the Federal Government.
In the latter half of this century, however, the intention of our
Founders has been betrayed by the inability of Congress to control its
own spending habits.
What is the problem? Mr. President, our Nation is faced with the
worsening problem of rising national debt and deficits and the
increased Government use of capital that would otherwise be available
to the private sector to create jobs and invest in our future.
Increased amounts of capital are being wasted on merely financing the
debt through spiraling interest costs. This problem presents risks to
our entire long-term economic growth and endangers the well-being of
our elderly, our working people, and especially our children and
grandchildren. The debt burden is our mortgage on the future.
Mr. President, the time has come for a solution strong enough that it
cannot be evaded for a short term gain. We need a constitutional
amendment to balance our budget.
Mr. President, Senate Joint Resolution 41, the Simon-Hatch consensus
balanced budget amendment, is that solution. It is reasonable, it is
enforceable, and it is necessary to get our fiscal house in order.
James Madison, in explaining the theory undergirding the Government
he helped create, had this to say about governments and human nature:
Government is the greatest of all reflections on human
nature. If men were angels, no Government would be necessary.
If angels were to govern men, neither external or internal
controls on Government would be necessary. In framing a
Government that is to be administered by men over men, the
great difficulty lies in this: You must first enable the
Government to control the governed, and in the next place
oblige it to control itself. A dependence on the people is no
doubt the primary control on the Government; but experience
has taught mankind the necessity of auxiliary precautions.
That is in Federalist Paper No. 51.
Mr. President, we are here to debate such an auxiliary precaution,
Senate Joint Resolution 41, proposing an amendment to the Constitution
of the United States to require a balanced budget, because our recent
history has shown us that the primary control on Congress has stopped
working.
The balanced budget amendment helps to restore two important elements
in the constitutional structure: Limited Government and an accountable,
deliberative legislative assembly, both of which are vital to a free
and vital constitutional democracy. A deliberative assembly, the
essence of whose authority is, in Alexander Hamilton's words, ``to
enact laws or, in other words, to prescribe rules for the regulation of
society,'' for the common good, was considered by the Framers of the
Constitution the most important branch of government because it
reflected, or at least should reflect, the will of the people.
Yet, as the maker of laws, it was also considered the most powerful
and the one that needed to be guarded against the most.
Recognizing that ``[in] republican government the legislative
authority, necessarily, predominates'' and to prevent ``elective
despotism,'' James Madison, the Father of the Constitution, recommended
that the Philadelphia Convention adopt devices in the Constitution that
would safeguard liberty. These include: bicameralism, separation of
powers and checks and balances, a qualified executive veto, limiting
congressional authority through enumerating its powers, and, of course,
the election of legislators to assure accountability to the people.
However, in the late 20th century, these constitutional processes,
what Madison termed ``auxiliary precautions,'' have failed to limit the
voracious appetite of Congress to legislate into every area of private
concern, to invade the traditional bailiwick of the States, and,
consequently, to spend and spend to fund these measures until the
Federal Government has become functionally insolvent and the economy
placed in jeopardy.
Congress has been mutated from a legislative assembly deliberating
the common interest into the playground of the special interest.
The balanced budget amendment, Mr. President, will go a long way
toward ameliorating this problem. It will create an additional
constitutional process--an auxiliary precaution--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.
Mr. President, I would like to read two quotations: First, ``the
public debt is the greatest of dangers to be feared by a republican
government.''
Second, ``once the budget is balanced and the debts paid off, our
population will be relieved from a considerable portion of its present
burdens and will find * * * additional means for the display of
individual enterprise.''
These quotations are not recent statements by current proponents of
the proposed amendment. The first statement was made by Thomas
Jefferson and the second by Andrew Jackson.
These two quotations illustrate an important truth: No concept is
more a part of traditional American fiscal policy than that of the
balanced budget. In fact, Jefferson himself wished the Constitution had
included a prohibition on government borrowing--an early version of a
balanced budget amendment, if you will--because he thought that one
generation should not be able to obligate the next generation.
Throughout most of the Nation's history, the requirement of budget
balancing under normal economic circumstances was considered part of
what has been called our unwritten Constitution.
Influenced by individuals such as Adam Smith, David Hume, and David
Ricardo, the drafters of the Constitution and their immediate
successors at the helm of the new Government strongly feared the
effects of public debt. The taxing and borrowing provisions of the new
Constitution reflected a need of the new Republic to establish credit
and governmental notes and negotiable instruments that would spur
commerce.
Yet, the Founders and early American Presidents were in virtual
unanimous agreement on the dangers of excessive public debt.
Consequently, for approximately 150 years of our history--from 1789 to
1932--balanced budgets or surplus budgets were the norm.
While budget procedures had little of their present organization, the
concept of a balanced budget was accepted widely as the hallmark of
fiscal responsibility. Those deficits that did occur--during wartime or
during the most severe recessions--normally were offset by subsequent
surpluses.
Between 1932 and 1960, the rigid rule of annual balanced budgets gave
way to a fiscal policy in which balanced budgets remained an overall
objective, but in which deficit spending was also viewed as a tool
occasionally useful to affect appropriate economic results.
Nonemergency deficit spending was legitimized in 1936 with the
publication of John Maynard Keynes' ``General Theory.'' Great weight
was placed upon the ability of the Federal Government to manage the
economy through fiscal policy, that is, through spending and taxation.
However, a real turning point in the history of U.S. fiscal policies
occurred during the 1960's. Even the Keynesian objective of balancing
surplus years with deficit years succumbed to the idea of regular,
annual uncompensated for deficits. In other words, our deficits, which
were historically cyclical, reflecting boom and bust, war and peace,
became structural and permanent.
During the 1960's, we were paying for Vietnam war at the same time as
the war on poverty. The Great Society had noble goals and great
intentions. But, the Great Society, on top of the war, was financed
through debt and helped to develop our proclivity for deficit financing
our national aspirations.
During the past three decades, the Federal Government has run
deficits in all but a single year. The deficits have come during good
times, and they have come during bad times. They have come from
Presidents who have pledged themselves to balanced budgets, and they
have come from Presidents whose fiscal priorities were elsewhere. They
have come from Presidents of both parties.
Even more alarmingly, the magnitude of these deficits has increased
enormously. During the 1960's, deficits averaged $6 billion per year.
In the 1970's, deficits averaged $36 billion per year. In the 1980's,
deficits averaged $156 billion per year. And, in the 1990's so far,
deficits have averaged $259 billion per year.
The total national debt now stands at over $4.5 trillion. While it
took us over 200 years to acquire our first trillion dollars of debt,
we have recently been adding another trillion dollars to our debt about
every 5 years. and will continue to do so under current projections at
a slightly faster rate as we approach the end of the decade.
I would like to refer to a few charts. This first chart regards the
Federal debt. It shows the gross debt between 1990 and 1999. The second
one shows the debt as a percentage of the GDP, gross domestic product.
This chart shows the projected growth of the Federal debt in 1990
through 1999 along with the growth of the Federal debt as a percentage
of GDP over the same period. These figures are taken directly from the
President's own budget, his fiscal year 1995 budget. And they are
alarming to me. I think they would be alarming to anybody who looks at
this chart.
In 1990, the gross Federal debt stood at over $3.2 trillion. By the
end of this year, 1994, another $1.5 trillion will have been added,
bringing the projected total to nearly $4.7 trillion in national debt.
By 1996, the amount of gross debt of the Federal Government will be
over $5.2 trillion. That is even assuming the President's optimistic
projections. These are his budgetary figures. And by 1999, more than
$6.3 trillion.
These numbers are staggering; absolutely staggering. Just as
staggering as the estimates of gross debt are the estimates of debt as
a percentage of GDP. In 1990, $3.2 trillion in debt represented 58.5
percent of the country's GDP for that year. This year, in 1994, just
look at it, the projected debt of $4.7 trillion will equal over 70
percent of our GDP. By 1999, the projected Federal debt of $6.3
trillion will represent 72 percent of a projected $8.7 trillion
economy. And 72 percent of GDP means that in 1999 the Federal debt will
equal 72 cents of every dollar earned by each person and 72 cents of
every dollar sold by every business that year.
This mountain of debt must not be allowed to continue to grow. You
can see why the distinguished Senator from Illinois is calling for
people to contact their Senators and their Members of the House and
tell them we have to have this balanced budget amendment.
We cannot live with this. Mr. President, these estimates are based on
the President's own optimistic estimates of economic growth and deficit
reduction over the next few years. He might be wrong. If things are not
as optimistic as he has them, these percentages of GDP and gross debt
could go even higher. Should these projections be wrong, the numbers
for the gross debt, as a percentage of GDP, would surely go much
higher. So I am very concerned about it.
Let me go to chart number two, because I think it is important to go
into this. Chart number two shows the growth in the size of interest
costs on the Federal debt from 1993 right on up through 1999. It is
based on estimates made by the Congressional Budget Office. As the
chart shows, in 1993, interest payments that we have to make against
the debt--which is money down the drain--equal $293 billion. Next year,
in 1995, interest payments will be $311 billion. That is assuming the
optimistic assumptions of this administration. And I hope they are
right.
In 1997, look how it is going up. In 1997, the Federal Government
will pay $346 billion in interest on its debt, and in 1999, a
staggering $382 billion. It does not take much to realize that we
simply cannot live with this situation. That is assuming that the
interest is not going up substantially more than it is now. It is
assuming budget projections that may or may not come to pass. I hope
with all my heart that we could even be more optimistic, but history
indicates that we cannot.
This chart is alarming, and it means we are going to be throwing
almost $400 billion down the drain by 1999 just in interest payments.
As a percentage of the budget, it becomes bigger and bigger. Right now,
it is at about 20 percent, but it will go much higher as we go through
this decade.
Let me go to chart three now. I have been parochial on this chart,
just talking in terms of each Utahn, but it could easily be each
citizen's share of the Federal debt in the United States. This is the
per capita share in our country of the Federal debt. It has increased
sevenfold from 1975, when it was $2,500, and we thought that was
horrendous then. I remember that. It is one of the reasons I decided I
would run for the Senate, hoping to bring about some change, and it is
one reason I have fought so hard for a balanced budget amendment every
day since we have been here. We have not been successful. It rose from
$2,500 that each person owed as their share of the national debt--per
capita share--sevenfold to $18,000.
One other thing that is important is, last year, in 1993, this figure
was $16,700. In 1 year, each individual's debt in our society has gone
up $1,300. How many of us can afford another $1,300 in debt in this
society? It is going up very fast, and sooner or later debts have to be
paid. If we do not control these increases, we are going to pay the
piper, because we are going to have a rough time getting by.
Let us go to chart number four. The core of this debate can be summed
up by this particular chart, which shows the tax burden we are passing
on to our great grandchildren and great grandchildren. Elaine and I
have 14 grandchildren, and we are some time away from having great
children, but probably not more than 7 or 8 years, to be honest with
you. The fact is that we are very concerned about our grandchildren.
Again, the estimates on this chart are taken directly from the
President's 1995 budget. So we are not trying to hurt the President
here. We are taking his budget; we are taking his figures. I think they
are optimistic under the circumstances. I hope he is right, and I
certainly know that Leon Panetta intended to be right. I have a high
regard for him. But taking his own figures, the figures of this
administration, they show an alarming trend, these figures on what a
generation's lifetime net tax burden is. A lifetime net tax burden is
taxes paid minus the value of Government benefits received during a
lifetime.
As the chart shows, the net tax rate has steadily increased during
this century. A man or woman born in 1900 could expect a net tax burden
of 23.6 percent. Right there, 23.6 percent. That was each individual
citizen's tax burden at that particular time.
All they are going to pay in their lifetime is 23.6 percent if they
were born in 1900. By 1940, the rate had grown to 31.9 percent. For
children born in 1992, the lifetime rate they will have to pay is
almost 37 percent--36.9 percent. As you can see, that has been gradual.
You go from 23.6 to 36.9. In 1992, 36.3. That is the average net tax
burden a person born in that year will have over his or her lifetime.
The massive Federal debt we keep accumulating is going to have to be
paid back, and it is going to be paid back by those not yet born.
Future generations can expect--using the President's figures--a
lifetime net tax burden of 82 percent. That is virtually everything
they have. The distinguished Senator from Illinois has made this point
again and again. And we are bipartisan on this matter. We are concerned
about that sudden jump. We are concerned about the legacy we are
leaving to our future generations. We are destroying our children's
future inheritance and burdening them with the expense of paying off
our debts. That is because we are unwilling in Congress to do anything
about it.
I have to laugh at these people who say, ``Congress ought to have the
guts to do what it ought to do.'' They have been saying that ever since
I have been here, 18 years. These people who do not want a balanced
budget amendment have been saying every year, ``We ought to have the
guts to stand up and do what is right.'' Yes, we ought to, but that is
not the history of this institution. So we need some fiscal discipline
that will enable us to have the guts to do what is right.
This is a bipartisan effort that we are taking on here, trying to get
that discipline.
Let me go to the fifth chart here. This chart shows the results in 10
years from our present deficit spending policies, based on CBO
estimates. In 1994, the deficit is $233 billion. In the year 2004,
right over here, the deficit is projected to be $365 billion. At the
end of this year, 1994, the gross Federal debt will be $4.69 trillion.
By the year 2004, it will have ballooned to almost double that amount,
and it will be about $8.95 trillion. The amount of that debt held by
the public in 1994 is $3.46 trillion. By 2004, the public will hold
$5.99 trillion in Federal debt.
This year, the gross interest paid on the Federal will be $298
billion. By the year 2004, the gross interest is going to be $503
billion.
Finally, this year, the net interest payment of the Federal
Government is $201 billion--that is net interest--and by 2004 the net
interest payment will be $334 billion.
So if you look at this chart, the deficit is going to go, even under
this so-called deficit reduction approach of the current
administration, from $223 billion in 1994 to $365 billion by the year
2004 unless there is some miracle that occurs.
The gross Federal debt, $4.69 trillion to $8.95 trillion in the 10-
year period; the debt held by the public, $3.46 trillion to $5.99
trillion; gross interest, $298 billion to $503 billion; net interest
payment, $201 billion in 1994, going to $334 billion by 2004. And many
of us believe it will be much higher than that if we do not do
something to get matters under control.
I do not know how much more we can show these things. They are the
facts and people have ignored them. This country is awash in red ink.
We have to do something about it.
And those of us who have gotten together for this amendment in a
bipartisan way are trying to do our best to do something about it and
we cannot see any other way to restore the discipline in the
Constitution, which was always implied and implicit, but which has been
ignored for the last 3 decades.
Let us go to chart 6. The President said we are getting our budget
deficit under control. But this chart, based upon Congressional Budget
Office data, shows this is not the case. The 1994 deficit right here is
$223 billion. The deficit is then projected to decline for 2 years to a
low in 1996 of $166 billion; that is, if everything goes according to
plan. How many of you have seen everything go according to plan in this
country? But even though it is a relative decrease, it is still $166
billion.
But then the red ink after 1996 starts to rise again--$182 billion in
1997; $204 billion in 1999, right here; $256 billion by the year 2001;
$324 billion in the year 2003; and $365 billion in the year 2004.
Now that is the Congressional Budget Office deficit outlook over the
next decade. These figures do not include projections for the
President's health care proposal. But the CBO has already said that,
should it be enacted, that plan would further widen the deficit.
My fellow citizens, we cannot keep going this way. Just common sense
says we cannot keep going this way.
Keep in mind, these are not conservative estimates. These are
estimates done by the current administration, CBO, and others who are
supposed to be responsible in this society today.
In all honesty, Mr. President, these charts tell a pretty drastic
tale. They are accurate to the extent that we can make them accurate.
They are based upon the accuracy of the administration's budget, the
accuracy of the Congressional Budget Office, to the best of their
ability. And I happen to believe there is a lot of ability in both
institutions.
If you take their best projections, this is the best we are going to
do, our outlook is horrible. It is just plain horrible.
And then we have people coming on this floor saying we have to have
the will and the spine to be able to change these things voluntarily.
Well, we do not have the will and the spine to even live up to Gramm-
Rudman-Hollings, which is a simple statute which can be amended any
other simple statute, or by a mere 51 percent vote of a quorum. We
could not live up to that. And the reason we could not is because there
is tremendous pressure on everybody in the Congress to spend because
there is not the fiscal mechanism to cause them to say, ``Hey, wait a
minute. I want to do that, but here is why we can't.'' Or, ``If we want
to do it, we are going to have to either cut somewhere or raise the
revenues to do it,'' a point which the distinguished Senator from
Illinois often makes, which is very, very true.
Deficits and the national debt have grown, in large measure, because
Government spending has grown. As total Government spending has
increased, so has Government's relative share of the economy. In 1929,
Federal expenditures of $3 billion represented just 3 percent of GNP.
By 1950, the Federal share had risen to 16 percent of GDP or about $43
billion. For fiscal year 1993, Federal Government spending of over $1.4
trillion commanded nearly 23 percent of GDP.
To illustrate this growth in another way, the first $100 billion
budget in the history of the Nation occurred as recently as fiscal year
1962, more than 179 years after the founding of the Republic. The first
$200 billion budget, however, followed only 9 years later in fiscal
year 1971. It took 179 years to get to the first $100 billion
budget.The first $200 billion budget was reached just 9 years later in
fiscal year 1971. The first $300 billion budget occurred 4 years later
in fiscal year 1975; the first $400 billion budget 2 years later in
fiscal year 1977; the first $500 billion budget in fiscal year 1979;
the first $600 billion budget in fiscal year 1981; the first $700
billion budget in fiscal year 1982; the first $800 billion budget in
fiscal year 1983; the first $900 billion budget in fiscal year 1985;
and the first $1 trillion budget in fiscal year 1987. The budget for
fiscal year 1993 was over $1.4 trillion.
Under current projections, Government spending will continue to rise,
using capital that would be put to better use by the private sector to
create jobs. To starve the primary engines of economic growth of needed
capital is to risk our long-term economic security.
Mr. President, one of the most pernicious effects of the enormous
deficit beast is the interest cost required to feed it. Interest on the
Federal debt in 1993 amounted to nearly $293 billion. That is more than
total Federal revenues in 1975. Interest alone is more than all
revenues that came to the Government in 1975. Last year's interest
costs took 26 percent of all Federal revenues and 57 percent of all
individual income tax revenues. If we just take individual income tax
revenues, this $293 billion takes 57 percent of all those individual
tax revenues.
OMB projects that interest on the debt will rise substantially over
the next 5 years--substantially. It will pass the $300 billion mark in
1995 and reach $373 billion in 1999. CBO's estimates are even higher,
with $311 billion in interest in 1995 and $382 billion in 1999.
Opponents of the balanced budget amendment suggest that we cannot
afford to cut the deficit more than the Clinton plan does because
decreased social spending will have severe adverse effects. But, think
of how much we could do in crime control, defense, disaster relief,
health, science, and education if we had that $300 billion in interest
available next year. Think of how much we could do if we had it every
year thereafter.
I do not understand the logic of continuing to waste over 20 percent
of our entire budget on interest on the rationale that we cannot afford
to cut spending. What we cannot afford to do is to continue to throw
away one-fifth of our budget on interest payments.
It is important for everyone to understand this point: 20 percent of
our entire budget cannot be used to purchase a single textbook,
innoculate a single child against disease, conduct a single scientific
experiment, pave a single interstate highway, prosecute a single
violator of Federal laws, or keep a single soldier in MRE's.
Twenty percent of our entire Federal budget is thrown right down the
drain and is spent for absolutely nothing of value to the taxpayers. It
is interest on our burgeoning debt.
Mr. President, let me just put one or two things more in and then I
am going to stop and yield to my colleague. To help my colleagues put
this in even better perspective, gross interest on the debt in 1993
amounted to more than the entire defense budget, which was $292.4
billion. It was 97 percent of Social Security payments. We spent $302
billion last year on Social Security. It was 55 percent of all
discretionary outlays, which were $542.5 billion; and 44 percent of all
mandatory programs, which cost us $666.9 billion.
The nearly $293 billion of gross interest costs in 1993 could have
covered our entire health spending, including Medicare and Medicaid--
they were $207.6 billion, all veterans benefits and services--$19.3
billion, unemployment compensation--$35.5 billion, our entire
international discretionary budget, $21.6 billion--and could have also
covered the cost of the earned income tax credit of $8.8 billion. All
of that we could have paid for out of this $293 billion.
Without the gross interest on the debt we would not have 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. Over the next 5 years of
``deficit reduction'' under President Clinton's plan, OMB's own
calculation is that interest on the public debt will total roughly $1.7
trillion. Over the next 5 years, we will pay over $1.7 trillion in
interest alone. This amount could fully fund the entire 1994 budget for
us, with money left over for social programs, or defense, or whatever
else we could decide to use it for.
Interest compounds and it gets larger by itself, even without new
deficits. And if interest rates go back up, the problem is going to be
increased exponentially. These figures could go up dramatically. And if
anybody thinks we are going to have interest rates stay at the current
low levels, they have to be crazy. In fact just yesterday Alan
Greenspan said we are probably going to have short-term interest rates
go up. Self-propelled interest costs are going to eat a larger share of
our National Treasury, destroying our choices to fund new programs and
eroding our ability to keep the commitments we have already made.
Mr. President, I have taken a lot of time on this, but these are
really important things. It is important for us to realize this is not
a game here. This is not a bunch of people coming up with a gimmick. As
I say, if this was a gimmick, as Olympia Snowe said, it would have been
passed already because they would have gotten it behind us just as they
did with some other gimmicks that were supposed to be good solutions.
We are talking about amending the Constitution, putting a rule of
budget discipline into our basic law, which all of us are sworn to
uphold, and which I believe we will uphold since it will be in the
Constitution. But to get there we have to have 67 votes in the U.S.
Senate. We just simply have to have them to pass this amendment.
Frankly, I believe we can get them but it is not going to happen
unless everybody out there gets on the phone, starts writing, calling,
and doing all that they should to bring pressure on the White House, to
bring pressure on my fellow Senators, to bring pressure on Members of
the House, and of course to let people know in this country that, by
gosh, it is time to put a stop to this kind of profligacy. If we do not
do it we are going to reap the whirlwind. But more important, our kids
are going to get stuck with debts that are going to make their lives
miserable all the rest of their days.
It is time for us to be responsible. This is the best way to be
responsible. It is the only way that those of us who support this
amendment can see that will get us to be responsible, and will put
fiscal discipline into all of our lives in a way that we will have to
do what is right.
I yield the floor.
The PRESIDING OFFICER. Who yields time? The Senator from Illinois.
Mr. SIMON. Mr. President, I yield myself 2 minutes here.
I thank my colleague from Utah for his remarks. Those graphs just
spell out why we have to act.
I ask unanimous consent to have printed in the Record an editorial
from the Chicago Tribune that appeared today. It was just handed to me.
The Chicago Tribune in former years opposed the balanced budget
amendment. But they are now for it and say, in the final paragraph,
Changing the basic charter of the Nation is not something
to be done lightly or frequently. But if safeguarding the
fiscal integrity of the Nation is not a sufficient reason,
what, pray tell, would be?
I also ask unanimous consent to have printed in the Record an
editorial supporting the balanced budget amendment that appeared in the
Atlanta Constitution.
There being no objection, the articles were ordered to be printed in
the Record, as follows:
[From the Chicago Tribune, Feb. 23, 1994]
An Amendment the Nation Needs
The federal budget deficit next year is projected at
roughly $170 billion. It is a measure of how distorted our
expectations have become that we think of that as progress.
Only $170 billion is to be added next year to America's $4
trillion-plus mountain of national debt. Only $170 billion
more is to be handed down as a legacy to our children and
grandchildren.
Of course, when measured against the $250 billion to $300
billion deficits of just a couple years ago, $170 billion
really is progress. And Congress and the president deserve a
measure of credit for lowering the red ink to that level.
But they have not thereby demolished the case for the
proposed balanced budget amendment, which the Senate began
debating Tuesday and--if the proponents can sway a few more
votes--may finally pass later in the week.
As cussed and discussed as any legislation in recent
American history, the balanced budget amendment is a
desperate but necessary device for restoring discipline to
the management of the nation's treasury by Congress and the
president.
Just how undisciplined that process has become is indicated
by the size of the national debt and the rapidity of its
growth over the past dozen or so years. In 1981, the debt was
less than one-fourth its current size. In other words, in 13
years, the nation accumulated three times as much debt as it
did during its first 200 years. That way lies fiscal ruin.
During the same time, Congress contrived every manner of
statutory gadget to rein in its prodigality, but nothing
could stand long against the impulse to spend. Even last
year's Clinton deficit-reduction plan barely squeaked
through--with no votes to spare.
Critics of the balanced budget amendment made a host of
arguments, many specious but some quite serious. Among the
latter are the possibility that the courts ultimately will
come to control the federal budget, as litigants spar over
the meaning of phrases like ``outlays'' and ``receipts'' and
``revenue.'' But that speculative danger must be weighed
against the demonstrated reality of a budget process that is
out of control and requires discipline.
Critics also assert, correctly, that a balanced budget is
not always desirable as a matter of economic policy. Nolo
contendere. That's why the amendment allows for its
suspension by Congress during wartime, or any time three-
fifths of the members of each house can be persuaded to vote
for a specific deficit.
Changing the basic charter of the nation is not something
to be done lightly or frequently. But if safeguarding the
fiscal integrity of the nation is not a sufficient reason,
what, pray tell, would be?
____
[From the Atlanta Journal and Constitution, Feb. 17, 1994]
Amendment Would Bring Discipline, Accountability
In the decade-long battle over a constitutional amendment
to balance the federal budget, comes now the Washington
Monument Syndrome. The Clinton administration, busy adding $1
trillion to the national debt over the next four years, is
pulling out all stops to defeat the amendment in the U.S.
Senate. In time-honored Washington fashion, the
administration is warning of calamity--widows and orphans in
the streets, veterans made destitute and perhaps even the
Washington Monument closed.
But the administration is wrong. The federal government and
Congress need the discipline of law to rein in the red ink of
25 years of deficits. This time around, supporters are led by
Paul Simon (D-Ill.), whose liberal credentials are
impeccable. A two-thirds vote is needed for passage in the
Senate. If the House agrees, the amendment would go to the
states.
What's most important in Simon's proposal is its
requirement that any deficit spending be approved by three-
fifths of the Senate and House. It is likely that the
recorded accountability of voting for red ink would force
representatives to have a good reason and to look as hard for
spending cuts as they do for taxes.
It is understandable that the administration would oppose
such discipline. Even in what the president calls a tough
budget, federal spending is increasing by more than $300
billion, far above the rate of inflation. Discipline forces
innovation. Congress has proof at hand. When the Gramm-
Rudman-Hollings Act was in place, the deficit for the last
year of the Reagan presidency dipped below $170 billion. Even
the ill-starred and tax-ridden deficit reduction plan of the
Bush administration has had an effect, helping Bill Clinton
point to lowering deficit.
A balanced budget amendment would place meaning in budget
debates. It would not be a straitjacket in times of national
emergency, but a set of guard rails for a Congress speeding
on the interstate of spending. With the conversion of
liberals such as Simon to the cause, it has a chance in the
Senate. Let the chance become reality.
Mr. SIMON. Mr. President, I suggest the absence of a quorum, and ask
unanimous consent that the time in the quorum be allocated evenly
between the proponents and the opponents.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will call the roll. The time for the quorum will be evenly divided.
The bill clerk proceeded to call the roll.
Mr. HATCH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HATCH. Mr. President, I yield to the distinguished Senator from
Idaho, one of the prime cosponsors of this amendment who has worked so
hard, such time as he may need.
The PRESIDING OFFICER. The Senator from Idaho is recognized.
Mr. CRAIG. Mr. President, as we debate this most important issue----
Mr. BYRD. Mr. President, will the Senator yield just for a
suggestion?
Mr. CRAIG. I will be happy to.
Mr. BYRD. It is my suggestion that the side that puts in a quorum
should charge that quorum to their side. I was not on the floor when
the request was made that the time be equally charged. I prefer that we
do it the other way, and I will object to requests that it be equally
charged.
If I see that the floor is not being used by any Senator I will be
here and I will use some of my time or I will charge it against my
side. I do not think either side should take advantage of the other
side's absence from the floor and get consent that the time be equally
charged. That is all I have to say.
I thank the Senator.
Mr. CRAIG. I will be happy to yield to my colleague from Illinois.
Mr. SIMON. I certainly do not want to be taking advantage of the
distinguished President pro tempore. In fact, I have not learned yet
how to take advantage of the distinguished Senator from West Virginia.
He seems to know these rules a little better than all the rest of us.
I just think it is important that we somehow balance the time so that
we end up--real candidly, we do not want to use up our 5 hours and the
Senator from West Virginia get the last 5 hours here.
Mr. BYRD. Will the Senator from Idaho yield for me to respond?
Mr. CRAIG. I am happy to yield.
Mr. BYRD. I agree to what the Senator has said with respect to the
necessity of kind of keeping some balance of the time here. But if the
Senator, when he feels disposed to do this again, namely, charging the
quorum call to both sides--if he would kindly give me a ring at my
office, I will try to get up here.
Mr. SIMON. I will be pleased to do that. I thank my colleague from
Idaho for yielding.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, last evening, as we began this important
debate in relation to a balanced budget amendment to our Constitution,
there was some suggestion that economic policy ought not be a part of
our Constitution; that it was bad to place in the context of the
Constitution economic principles or economic courses and directions
that, in the argument of the opposition, did not fit or were not proper
in the constitutional setting.
For a few moments this morning, let me discuss that issue because I
think it is very important that we understand that economic policy has
always been a part of our Constitution and that, depending on your
point of view and how you read the Constitution, our Founding Fathers
were very, very specific in suggesting that economics was an important
part of the consideration and, most importantly, rights and freedoms
necessarily clarified in the Constitution.
Governance inescapably involves addressing the question of economics.
Moreover, our Constitution is replete with economic policy. For
example, it refers to private property rights. Of course, in the days
of our Founding Fathers, private property was the essence of economics.
It was the foundation of wealth. It remains so today. It was spoken to
in the Constitution. It prescribes constitutional and executive roles
in Federal fiscal activities, such as raising revenues, spending and
borrowing, provides for uniform duties, imports, excises, discusses the
regulation of international commerce, discusses coinage and the value
of money, and deals with counterfeiting and patents and other economic
issues.
Let me tell you, Mr. President, that is economics. It may not quite
be economics in the sense that the Wharton School would discuss it
today in some grand economic scheme or economic modeling that would
come about through econometrics, but it was the economics of that day,
it is without question the economics of today, and what we do as it
relates to the Federal budget is economic policy. I would argue that
the amendment as it has been crafted is clearly an important and can be
a clear part of our Constitution.
The test is not whether or not an amendment is economic policy, but
whether it encompasses a broad and fundamental principle that it is
relevant, not transitory, and its importance is far-reaching in scope
over time. Those are really the fundamental tests, Mr. President, as to
whether an amendment, proposed either by this body or the other or by a
constitutional convention, fits the constitutional prescription, the
language necessary.
So while some would argue that this is not fitting, I would clearly
argue that in today's context, as 200-plus years ago, it is clearly
fitting. Our Founding Fathers spoke to economic policy and economic
principle. It was embodied within the Constitution in all contexts that
I have just spoken to, and our amendment today is relevant and fits, in
my opinion.
Then should the Constitution dictate such details as a budgetary
period, a fiscal year? It was argued last night that the devil was in
the details and that the details would not work. Some such reasonable
parameters, I believe, are necessary to provide for an enforceable
amendment. Our Founding Fathers knew the particulars; they were clear
in their language. We must be clear in our language if we are going to
be constitutionally responsible in sending forth an amendment for the
States' consideration.
Again, the authors are receptive--I am receptive--if somebody can
come up with a better perfecting change that would clarify more current
periods of fiscal responsibility, but we know, the world knows, what a
fiscal year is. While we might by the law of the majority here decide
to change what a fiscal year meant, we could not change what it would
then provoke, and that would be a set time for budgeting purposes by
which we would judge our performance and allocate resources for such
performances. That is what a fiscal year meant, or we could call it a
fiscal period.
While I would suggest Senate reports 99-162 and 99-163 suggest using
a fiscal year--that does come from the Judiciary Committee--it is
responsible statutory language; it is, without question, in my opinion
and in the opinion of constitutional scholars who helped craft this
document, responsible language to be used within the Constitution.
There is another question: A debt limitation. Why should Senate Joint
Resolution 41 differ with previous balanced budget amendment revisions
in that it requires a three-fifths vote to raise the limit of the
Federal debt held by the public? There is the important and operative
word. Last night, the chairman of the Appropriations Committee
suggested that the three-fifths vote was not the responsible vote, and
I would argue that if it is referring to debt held by the public and we
are incurring debt on the head of the citizen, I would argue that the
right of the citizen to be debt free of its Government and that
economic freedom is a fundamental freedom and that public debt denies
that economic freedom, then a three-fifths vote is very accurate.
It requires a supermajority vote to amend the Constitution.
Therefore, by amending the Constitution to deny the right of free
speech, to deny the right of all of the Bill of Rights or any of the
principles embodied in the Constitution, our Founding Fathers were very
clear that it would take a supermajority; that it would be extremely
difficult for this Congress to propose to the citizens of our country
any deviation away from the principles embodied within the
Constitution.
What we are debating today is a new principle, a principle of
economic freedom and, therefore, a procedure by which this Congress
could not encumber public debt or force the public to hold greater debt
unless it was of an extraordinary nature.
So I would argue that the language we have used is very clear. When
the Social Security and other trust funds run surpluses, we have talked
about how that debt will be handled. It does not register as public
debt; it registers as gross Federal debt when it is borrowed from the
trust funds and moved to the Treasury. That is how this would operate.
We believe it is very clear in the amendment and, therefore, it
strongly justifies the use of the language. We argue that it is
constitutional.
Even Professor Laurence Tribe of Harvard, a leading opponent of the
amendment, told the Senate Budget Committee in 1992 that 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.
Last night you heard that argued differently by Senator Byrd. There
are others who are as strongly opposed to this amendment as he but
would argue that the principle involved in the amendment that we
discuss is clearly worthy of constitutional consideration.
We are debating an attitude. We are debating a philosophy. We are
debating a fundamental change in the principles that our Government is
guided by, and I believe that they are strongly worthy of the
Constitution and constitutional language. I think it is appropriate
that we debate it in those contexts, and I think it is most
inappropriate, Mr. President, for anyone to come to the floor and argue
that it cannot be or that it should not be a part of our constitutional
considerations.
Over the decade and a half that it has taken to craft this amendment
and to refine it to ensure it meets the test of our constitutional
scholars in this country, we believe that test is met. We think it
very, very important that this language meet those tests and that we
have accomplished that, both in language and in principle. We talk
about a freedom. We talk about the freedom from debt. We talk about the
inability of our Government to continue to incur public debt and,
therefore, we talk about the responsibility of the vote of the
supermajority and the extraordinary environment that would require or
call for that kind of debt creation. That is part and parcel of the
total debate that we are involved in. Through the course of this debate
over the coming days, I will continue to point out on a section-by-
section analysis of this amendment that it fits both the charge that it
must be constitutionally worthy and that it is responsible
constitutional language to propose to the citizens of this Nation for
their consideration.
I retain the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. CRAIG. Mr. President, I will be happy to yield such time as he
may consume to Senator Heflin.
The PRESIDING OFFICER. The senior Senator from Alabama is recognized.
Mr. HEFLIN. Mr. President, I appreciate Senator Craig yielding me
this time. I appreciate the ``senior Senator.'' Usually I am introduced
as a senior citizen. But I am sure most Senators who enjoy that status
have had the same thing happen to them.
I am coming to the floor, as I have on numerous occasions, as an
original cosponsor of Senator Simon's resolution calling for a balanced
budget amendment to the Constitution.
The first bill that I introduced when I came to the Senate 15 years
ago was a resolution calling for a constitutional amendment to balance
the budget. With each Congress since that time, the first bill I
introduced was a constitutional amendment resolution.
When we first started out on this path towards adopting such a
resolution to bring about a constitutional amendment, there were a
great number of people who were opposed to it, and there were different
ideas about how to proceed. But I think Senator Simon's support of the
amendment has given it impetus which can mean success. He represents an
element in the Senate that looks very carefully at what is in the best
interest of the country. That is not to say that others do not, but he
is of a philosophy that sometimes means conservatives do not usually
agree with him. Therefore, I think his support has given it additional
support and has picked up votes. That is one of the reasons we have
urged him to assume the leadership role pertaining to this
constitutional amendment requiring a balanced budget.
I am pleased with reports that have come forth in recent days that
the anticipated deficit for 1995 will not be $300 billion, but only
$170 billion. Part of the success for this anticipated reduction in the
deficit is the omnibus deficit reduction plan that was passed by the
Congress and signed by the President, under his leadership. Also, it is
probably due in some degree to a turnaround in the economy and the
increase in commercial business transactions.
But, the anticipated reduction is based on interest rates that are
pretty well stable today. When we stop and think of the fact that $295
billion in interest is to be paid from our budget--$295 billion is what
the report of the committee shows as the interest that is being paid on
the national debt--we have to stop and look at what would happen if all
of a sudden interest rates were substantially increased. The $170
billion anticipated deficit would soar.
Interestingly enough, I looked in yesterday's Wall Street Journal,
and I read that 3-year Treasury bills which the Government buys are
listed at 3.33 percent. A year ago, they were 2.92 percent; 6-month
Treasury bills were 3.43 yesterday. A year ago, they were 3.01.
Treasury bills under a 10-year period were 6.04 yesterday. A year ago
they were 5.89. These are showing an increase. But it is not out of the
realm of reality, possibility, or probability that interest rates
within a period of time of 1 year, 2 years, or 3 years may double.
If they do double, what does that mean for the deficit? We could be
paying, instead of $295 billion a year interest on national debt, $600
billion.
Interest rates at 6 percent were normal for many, many years. It may
well be we will return to that stage of normal interest rates in the
not-too-distant future. I point this out to show that that is a real
danger here if we assume only the rosiest scenarios.
(Mr. AKAKA assumed the Chair.)
Mr. HEFLIN. Even if the economy continues to grow and the gross
national product increases tremendously, an increase in interest rates
would devour the anticipated savings that would result from the deficit
reduction plan that was passed by Congress. An increase would eat up
the anticipated reduction that we are anticipating regarding the
deficit in the 1995 fiscal year. All of these are not only possible,
but probable.
We are already hearing reports that interest rates are going to go
up. Yesterday, Alan Greenspan testified to that effect. Hopefully, we
are not going to get into an inflationary spiral. But when you stop and
think that some 15 years ago, interest rates were at 20 percent, what
would interest rates at a stage of 20 percent--or even 10 percent--do
to the deficit that we would have to operate under?
Therefore, it comes down to the fact that the monster out there is
interest, and we have to adopt this constitutional amendment requiring
a balanced budget or else we are going to be faced with horrendous
deficits in the future if interest rates go up, regardless of deficit
reduction plans, and they probably will go up.
So I urge my colleagues to think about the future, to think about
interest rates, to think about the amount of interest that will have to
be paid on the national debt, and the percentage of the entire budget
that will have to be allocated toward interest payments.
Last summer, when we passed the largest deficit reduction legislation
in history, we were standing at a unique place in time and history with
regard to addressing our most pressing structural economic problems.
The American public, through countless opinion surveys, consistently
ranks deficit reduction as one of its paramount concerns. What we did
last summer was the right thing to do. And we are beginning already to
see the benefits from this legislation. But as we all know too well,
this is not nearly enough. The temptation to spend is still a mighty
one to resist for Congress.
I believe in the inherent good sense of the American people. I
believe that good sense has opened millions of eyes and even hearts to
the fact that America has been victimized by more than a dozen years of
borrow-and-spend Federal fiscal policies that have run up a horrendous
$4 trillion national debt. The public is saying enough is enough. This
irresponsibility must stop. There is a sense of urgency for protecting
the future of our children and grandchildren. The question is whether
we will act further with an even more bold step to not only reduce the
deficit but to eventually wipe it out completely.
If we do not seize this opportunity, the best chance we have had to
pass the balanced budget amendment, we might not get another
opportunity anytime soon. Make no mistake. The clock is running on this
amendment. Unfortunately, our viable alternatives are few. We must
finally begin to service and reduce our debt or our Nation will face
the miserable consequences of bankruptcy.
We are deeply and sincerely committed to doing something about
deficit reduction. The American people by all accounts are prepared to
do their part. This is one of the few times in my decade and a half in
the Senate that I have seen such an array of forces converged in an
attempt to address this pervasive problem.
Indeed, it is rare that we ever have a committed public and a
majority of Congress aligned on any economic issue, much less one that
strikes at the very soul of our free Republic. But we need more than
just a simple majority. We must get 67 votes to send this resolution to
the House of Representatives. The bottom line is this: For the second
time since the debt began mounting, we have the momentum to take bold
and decisive action to begin reducing it. It is an opportunity to build
on what we started last summer. I am fearful that if we do not act this
time and finally send this amendment to the States for ratification we
will lose that momentum, perhaps never to regain it.
So we can continue to wring our hands and play the blame game, or we
can act. There is plenty of blame to go around in both branches of
Government, in both parties, about how we came to this point. But the
time has come for the blame game to end and for us as a body to accept
responsibility.
Winston Churchill once said ``If we open a quarrel between the past
and the present, we shall find that we have lost the future.'' We can
argue forever about what might have been done in the past to avoid the
debt we face. We do not have the luxury of replaying the past, but we
do have the present. And the quarreling of the present will only impact
our future security. Let us heed Churchill's warning and cast a vote
for the future.
I implore all of my colleagues to stop the blame game and the
wringing of hands, and to vote for a new beginning with this resolution
calling for a balanced budget amendment to the Constitution.
Let us give it to the States, where it should be fully debated,
analyzed, and voted on. This is as it should be, because amending the
Constitution is gravely serious business. That is why the process is so
difficult. But the States should have the opportunity to decide this
issue. I urge you to support this historic effort at deficit reduction
by stepping up to the plate and accepting responsibility.
It is what we have been elected to do. The economic future of our
Nation depends on fulfilling that responsibility.
Most of the criticism that I have read recently centers on the
concerns that such an amendment places fiscal policy in a straitjacket
and upsets the balance within Congress, and between Congress and the
executive and the judicial branches of Government. These two issues are
legitimate points of discussion. But the real point to be remembered is
that the Nation's budget deficits are simply out of control, and a
drastic dose of constitutional medicine is required and must be taken
in order to restore this Nation's health.
While we welcome the news a few weeks ago that our deficit is far
below that which was originally predicted, this does not in any way
negate the need for a balanced budget amendment. It just means that our
deficits are growing at a slower rate, a testament to the effectiveness
of the economic and deficit reduction plan passed and signed into law
last August.
The resolution Senator Paul Simon has offered, and which I strongly
support, would mandate that total Federal spending must not exceed
total receipts. Our constitutional amendment would require a three-
fifths vote of the entire membership of both the House and the Senate
to override this requirement. Further, the President would be required
to submit to Congress a balanced budget on each fiscal year, and a
majority of the entire membership of both the House and the Senate will
be required to raise taxes.
Finally, Congress would have the authority to waive the requirement
that the budget be balanced in the event of a declared war or of
eminent and serious threat to national security. The truth is that this
great Nation can no longer tolerate running runaway deficits and the
exorbitant annual interest payments which can reach as much as $315
billion in fiscal year 1993 on the $4 trillion national debt.
Our Nation must recognize that the adoption of such an amendment will
require that tough decisions will have to be made by the President and
the Congress in order to get its fiscal house under control. Spending
will have to be cut, taxes may have to be raised, and certainly we will
have to set national priorities more clearly and deliberately as we
learn to live within our means.
I believe in the good faith and the good will of the American public.
It is time to enact this proposal and send it to the State legislatures
for debate, consideration, and ratification.
I want to mention one other thing. That is the matter pertaining to
the language concerning waiver in the time of a war.
Section 5 stated:
The Congress may waive the provisions of this article for
any fiscal year in which a declaration of war is in effect.
In 1982, when we voted and got 69 votes for this, that was the
language. I offered an amendment that failed to carry by only one or
two votes, maybe four--I am not exactly sure--which now has been
adopted and put into this constitutional amendment.
I remember that my colleague at that time from Alabama, Senator
Jeremiah Denton, was instrumental in writing that language. It has now
come forward that the provision is in this proposal, which is as
follows:
The provisions for 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.
This goes, really, to the problem dealing with national security in
that we have fought very few declared wars. Most of the military
conflicts that the United States has been involved in have been
undeclared wars. Desert Storm was an undeclared war. The Vietnam war
was an undeclared war, as was the Korean conflict. At the time in 1982,
I attached to the debate and made a part of the Record a list of every
conflict we had been involved in where force had been involved in which
the U.S. Congress had not declared war. I do not remember the exact
number, but it is in the neighborhood of 200 or more.
What this would do would be that you could waive it, but it means
that the waiver would be tougher to obtain than when you waived it when
there was a declaration of war. What it means is that, first, there has
to be a joint resolution passed by the House and Senate and signed by
the President which, in effect, states that the United States is
involved in military conflict which causes an imminent and serious
military threat to national security. That would become law. You could
then have a vote to waive the requirement of a balanced budget with the
requirement of a three-fifths vote in order to go into some sort of
deficit spending.
But this is designed to endeavor to make it tough to waive,
nevertheless to waive. To me, it is important that we have that
provision, because we never know whether we will be faced with a
situation like a Vietnam war or a Korean war or another type of
military action similar to that. So I think that provision is now an
improvement.
Another improvement that has occurred to me is a requirement that you
have to have a rollcall vote and a two-thirds vote in order to increase
the debt of the United States. When you increase the debt of the United
States, the Government continues to operate. But if the debt limit is
not increased, Government comes to a halt. That is, to me, the teeth in
regard to this constitutional amendment requiring a three-fifths vote.
We have always had difficulty getting a majority every time the limit
is raised on the national debt. To me, this is the real guts of the
constitutional amendment, requiring that the debt limit has to be
raised by a three-fifths vote, and it has to be done on a rollcall
vote, which is important.
Many times in the past, when people did not want to really face up to
the issue of raising the national debt, it has been done by a voice
vote. But the idea of having the national debt raised was to put teeth
into the operation, to give you another instrument with which to try to
control deficit spending. So that was the reason relative to that.
Mr. President, I urge that the constitutional amendment to balance
the budget be adopted.
I yield the floor at this time.
The PRESIDING OFFICER. Who yields time?
Mr. MOYNIHAN addressed the Chair.
The PRESIDING OFFICER. The Senator from New York.
Mr. BYRD. Mr. President, I yield to the distinguished Senator from
New York such time as he may consume.
Mr. MOYNIHAN. I thank our revered President pro tempore.
Mr. President, I come to the floor directly from a hearing of the
Committee on Finance at which the Director of the Office of Management
and Budget, our former colleague from the House, the very able Leon
Panetta, presented the President's budget in terms that were, for this
Senator, striking and strikingly reassuring.
May I say, sir, that from the early 1980's, I found myself often on
the floor of the Senate, sometimes in print, saying that in the White
House and in the Office of Management and Budget a huge gamble was
being made, that a crisis could be created by bringing about a deficit
that would force the Congress to cut back certain domestic programs.
The question of how I knew need not be discussed here. But may I say
that the person principally involved, Mr. David Stockman, subsequently
wrote a memoir of his time in Washington called ``The Triumph of
Politics,'' in which he described in detail what happened and how it
had gone wrong. When he began to realize that the cuts were not being
made, that something awful was happening, he pleaded with the then
President and his Cabinet colleagues to do something. Nothing was done.
Of this period, the able journalist and historian, Haynes Johnson, in
his wonderful book, ``Sleepwalking Through History: America Through the
Reagan Years,'' which was published in 1991, said this. I will simply
quote the footnote, and I offer this as credentials.
He says of this Senator:
He first charged that the Reagan administration
``consciously and deliberately brought about higher deficits
to force congressional domestic cuts.'' Moynihan was
denounced and then proven correct, except that the cuts to
achieve balanced budgets were never made and the deficits
ballooned ever higher.
I offer that as a journalist witness to the fact of what I was saying
was happening--and it happened.
I began to grow hugely concerned. I began to share the views and the
alarms of the President pro tempore, our revered Senator Byrd, chairman
now of the Appropriations Committee.
I am not new to the issue of the budget. A decade ago, I was standing
on this floor saying, ``Do you not see what they have deliberately
done, and it is not working?'' That crisis was out of control. I found
myself, if I may say, having very little influence. No one believed
what I said. Well, Haynes Johnson said, ``Moynihan was denounced and
then proven correct.''
People say, ``What do you mean create a crisis?'' I was going around
saying Lenin was not a problem solver; he believed in creating crises.
But this crisis got out of hand. I thought it would lead to an ever-
ascending deficit in actual amounts and as a proportion of gross
domestic product; that this in turn would lead us to a trigger point
where the growth in interest on the debt--now 14 percent, incidentally,
of our budget--would be higher than the growth of the GDP, and you
would be in an unstable situation. Interest would start eating up and
you would be led inexorably to ``solving your problem by inflation.''
A Government such as ours, which has the reserve currency, can do
that because everybody else's instruments are denominated essentially
in dollars. The technical term, Mr. President, is to monetize the debt,
just inflate it away. And we could do that. Oh, we could do that. Only
we wake up and the Japanese yen would be the reserve currency and the
American currency would be no more indeed.
But, I come here from the Committee on Finance, of which I am
chairman, which heard Leon Panetta this morning, to give you the good
news that we have it under control.
Senator Dole was there, and very properly asked if the charts which I
will show you in just 1 minute do not reflect the effect of the 1990
agreement which was reached at Andrews Air Force Base, and at which the
President pro tempore was the leading Senate negotiator. Mr. Panetta,
Senator Byrd and I would all say--the answer is ``yes.'' A beginning, a
process which began, and then last year in the budget reconciliation
was finally, in effect, fixed. It fell to me as chairman of the Finance
Committee to find the 50 votes, plus the Vice President to bring that
about, but we did.
Now, here are the numbers. Remember, the point is, if the deficit as
a proportion of gross domestic product--that is all our wealth produced
in a given year--if it keeps growing, the time would come when the
debt, interest on the debt, would start growing faster than the growth
of GDP and then you are unstable. Then you are a Third World country--a
Third World country, Mr. President.
Here we are. Watch this. In 1989 as a percentage of GDP, the deficit
was a little below 3 percent. By 1990, it went to 4 percent, a 28
percent increase in 1 year. Bang, up like that.
Then in 1991, almost 5 percent. Now we are compounding here. We are
growing. I hate to use the technique of talking about percentages of
percentages, but this measure of the deficit was growing at about 25
percent a year.
Then came the impact of the 1990 agreement, painful and distasteful
as it was. And suddenly, from 1991 to 1992, the growth was slight.
Then came 1993 and it began to come down. That is the year we adopted
$500 billion in increased revenues or program cuts and put on a hard
freeze--no adjustment for inflation, a hard freeze.
And here is the projection--down, down, down, down, down. By 1996, we
will be back at 2.3, well below where we were in 1989. And OMB projects
we are heading, by 1999, to 2.1 percent. I think we have it under
control. And 2.1 percent is a deficit which you would not ordinarily
notice in macroeconomic terms.
Let me show you the spending side, Federal spending itself as a
proportion of GDP. In 1989, 22 percent. Then, bang, up to 23 percent.
But, look. The 1990 agreement held it where it was; stayed right
there in 1992. Then down, down, down, down, down. By 1996, we are back
to 21 percent, which we have not been since the early 1980's. We have
the curve going the way it was. This is where it would have been.
If I could ask the Senator's patience for just another minute. Here
is where we were going. Oh, my God, in 1993, we were headed from a
deficit of $250 billion up to $400 billion, no trouble at all. And then
that interest compounding problem begins. Now, we are going down, we
are going down, we are going down, under $200 billion, under $200
billion this year.
Now it took a lot of pain. And before the President's budget is in
place there will be more pain. But it is necessary.
We indulged ourselves in the early 1980's of a fantasy of young men
who perhaps had too little experience in the real world and too much
power, who thought they could play with fire, create a crisis. The fire
spread. Well, we put it out. Grown-up time came.
And, having done that, I have to ask you, are we dealing with a
problem of the American Constitution? Did the Constitution put those
young men in the Reagan White House in 1981 playing games with supply
side economics and then finding, ``Oh, that would not work. But great,
we will have a crisis"?
First they thought a few reductions in tax rates would pay for
themselves. Then they realized it would not. They said, ``Oh, a crisis
is a good thing.''
And then, of course, I can remember Mr. George Will once in about
1984 speaking to a group of businessmen and saying at breakfast: ``I
have a door prize of a toaster for anyone that will name one program
that President Reagan said he would cut during the course of his 1990
Presidential election.''
And everybody in the room started looking around to their neighbor,
saying, ``Why can't I remember one?'' Finding their neighbor saying,
``Why can't I remember one?''
Mr. Will said, ``Don't feel bad about your memory. There was none.''
They never intended it, but they created a crisis.
But I would like the President pro tempore to hear me one last
moment. He has brought great philosophical and historical rigor and
insight to this Chamber. But I would like to add one thing to him, a
line from a French theologian named Georges Bernanos. He was Parisian,
Jesuit trained, a militant Catholic, who at first was very much to the
right, a royalist, but ended up, with the rise of fascism, appalled by
Franco, appalled by Munich. Again a supporter of de Gaulle and the Free
French.
He said, ``The worst, the most corrupting lies are problems poorly
stated.''
We are taking a problem that arose from the indiscretion and
inexperience and perhaps inflated self-importance of a group of young
people in a new administration in 1981 and interpreting that problem as
a problem of the American Constitution. The American Constitution did
not do this. We did not get through two centuries without anything like
this problem because of our Constitution. And it will not make any
difference to our Constitution save this, and I would like to end on
this note because I know that in a hearing before the Committee on
Appropriations, James Schlesinger, the Honorable James Schlesinger,
former Secretary of Defense, former head of the CIA and so forth, spoke
of deficit financing in the past.
It happens--just autobiographical--but it happens. Next July 1 will
mark the 50th year from the year in which I joined the U.S. Navy. World
War II was raging and the prospects were not very good. Yet we won the
war at sea in two incredible battles. Pearl Harbor was a blow to us but
not nearly--it was a blow to our pride, perhaps. I am sorry about the
men involved. But what they mostly sank--the Arizona was a battleship
built in 1911 and was not going to do very much good to anybody. The
carriers were out to sea, and they were there for Midway.
Do you know when those carriers were built, sir? Not during wartime
when we could have exempted them. You cannot build something important
in wartime and have it ready. The Yorktown was built--the keel was laid
in 1937, or it may have been launched in 1937, either way--when
Franklin D. Roosevelt, in the middle of the Depression, had deficits.
The Enterprise, 1938; the Hornet, 1941. Absent those ships built in the
depression, with a deficit, we would have lost; Hawaii would have been
occupied; California might have been. And then came the Coral Sea. The
issue was Australia. We prevailed in the Coral Sea with, again, the
Yorktown and the fighting lady, the Lexington.
Boy, I am glad we had Carl Vinson and his like on this floor to say,
``It may increase the deficit, but I want the Yorktown built, and I
want the Hornet, and I want the Enterprise.'' That is what we are
putting in jeopardy, the judgment of wise Senators about the state of
the world.
With the greatest respect to my friend from Illinois, the
Constitution is a precious document. That is where our rights are
enshrined and our duties. The Constitution is not meant to establish
budget procedures. We are perfectly capable of doing that. We have
shown in these last few years since 1990 that, all right, a crisis got
out of control, we finally realized what was going on, and we did
something about it.
Here it is: Down, down, down. I will speak more on another occasion
about the degree to which this amendment puts in jeopardy the Social
Security benefits of all Americans. But for the moment I would like to
say it is--I am happy to say, fresh from a hearing in the Finance
Committee with the Director of OMB: The crisis has passed. It is
required of us that we keep to the commitments we made, but we have
made them and they are showing results.
Mr. President, I yield the floor. I see the distinguished Senator
from Illinois is here.
Mr. SIMON. Yes. If my colleague would stay for just a few minutes?
Mr. MOYNIHAN. I am happy to do so.
Mr. SIMON. I wish I could be as sanguine and optimistic as my
colleague is. This, those down years----
Mr. MOYNIHAN. Right, that is what we are talking about.
Mr. SIMON. That is a great tribute to Senator Patrick Moynihan in
addition to being a great tribute to Bill Clinton. They made some tough
decisions. I remember the Senator coming into the Democratic caucus and
saying, ``We did this because we had to.'' I even wrote down the words
when he said that.
We need some similar compelling action.
If I can point out, the real key here is the percentage of deficit
relative to GDP.
Mr. MOYNIHAN. Yes.
Mr. SIMON. But it is going back up, according to OMB. You have 1996.
But if you take a look, it goes back up to 3.3 percent in the year
2004, and up from there, according to GAO.
The GAO account says, and I will be happy to give this to the
Senator----
Mr. MOYNIHAN. This is OMB. You have CBO. This is OMB.
Mr. SIMON. All right. But then if you take GAO's report of June of
1992--and I recognize things have changed, changed somewhat. We have
taken the first step and it was an important step. I was pleased to
support it. But GAO predicted in June of 1992 that by the year 2020 we
would have in excess of 20 percent deficit relative to GDP.
Mr. MOYNIHAN. In 1992. Before the 1993 legislation.
Mr. SIMON. That is correct. That is adjusted down somewhat. But GAO
tells me the same basic trends are there. And no nation has come
anywhere close to that without, as the Senator points out, monetizing
the debt.
Mr. MOYNIHAN. The Senator is correct, it goes to 3.3. This is my
colleague's document.
Mr. SIMON. Right; 3.3.
If the Senator can take a look, this is an OMB--part of this four
volume thing we just got. Look at the top there. ``Lifetime net tax
rates under alternative policies,'' the graph at the top.
Mr. MOYNIHAN. Yes.
Mr. SIMON. Look down to 1930--I was born in 1928. You will see I will
spend about an average of 30 percent. The Senator from New York, born
roughly the same time, maybe a little before me, roughly the same.
Mr. MOYNIHAN. Yes. Yes.
Mr. SIMON. But down to the bottom. It says future generations--way
down at the bottom there, next-to-the-last line. You go over with
reconciliation and with health care reform and with all the optimistic
assumptions, 10 years solid growth, no dip: Future generations,
lifetime net tax rates of 66 to 75 percent.
The Senator from New York knows that just is not going to happen.
Mr. MOYNIHAN. That is not going to happen.
Mr. SIMON. What happens before that, according to history--and maybe
we can be the first country since ancient Florence and all the others
not to do this--what happens is then you start monetizing the debt. You
start printing the money.
I think, as you look at these long-term trends, that is where we are
headed. I wish I could be as optimistic as the Senator from New York,
but I think the hard realities suggest something different.
Mr. MOYNIHAN. Will the Senator yield for a question?
Mr. SIMON. Certainly.
Mr. MOYNIHAN. Simply to say I thank the Senator for the factual way
in which he responded to our facts, the Office of Management and
Budget. I congratulate the Senator, as I always do, on a civil
discussion here. We have large issues to be decided.
I think in the future growing deficits can be prevented, with the
likes of Senator Simon on this Senate floor, the likes of Senator Byrd
and Senator Murkowski, for that matter, by our own choice as Senators,
and we need not have an amendment to the Constitution. But that is the
debate we are having.
I thank you for allowing me the time. The President pro tempore has
been most generous of his time. I will return to the floor when you
have time for me.
Mr. SIMON. Let me just add, in terms of amending the Constitution and
on financial things, Thomas Jefferson, of course, favored an absolute
prohibition against Federal borrowing, and Alexander Hamilton later--
Thomas Jefferson and Alexander Hamilton did not agree on much but they
agreed that it would have been wise to have done this.
Mr. MOYNIHAN. May I say, Alexander Hamilton was not present in
Philadelphia when the Constitution was decided.
Mr. SIMON. Neither was Thomas Jefferson.
Mr. MOYNIHAN. I have to agree, and I regretfully agree, part of the
agreement by which Alexander Hamilton arranged for the Federal
Government to assume the Revolutionary War debt of the States, which he
did--a magnificent enterprise--the only portrait that hangs in the back
room of the Finance Committee today is Alexander Hamilton of New York.
In order to do that, he made the supreme sacrifice of moving the
Nation's Capitol from its natural site on the banks of the magnificent,
lordly Hudson Valley to a swamp on the Potomac.
Mr. SIMON. And you have never forgiven him for that.
Mr. MOYNIHAN. I have never ceased to honor the patriotism with which
he put forward fiscal solvency first. Thank you, Mr. President.
Mr. SIMON. I thank the Senator.
The PRESIDING OFFICER. Who yields time?
Mr. BYRD. Mr. President, if I may take a couple minutes before my
friend from New York leaves the floor, I congratulate him, I salute
him, I greatly admire him. I think he has contributed enormously to the
debate, and I look forward to the hour and the day when he will return
to the floor and discuss the matter of Social Security, about which he
has had so much to do over the years and throughout several
administrations.
May I ask the distinguished Senator from New York, with respect to
monetizing the debt, at the end of World War II, was not the debt more
than 100 percent----
Mr. MOYNIHAN. More than 100 percent of GDP.
Mr. BYRD. Did we monetize the debt then?
Mr. MOYNIHAN. No, we paid that.
Mr. BYRD. What is the proportion today of the debt to GDP?
Mr. MOYNIHAN. About 52 percent at this point and under the
President's budget will begin to go down.
Mr. BYRD. Yes. So I think we need to consider history again, that has
been referred to here and point out, as the distinguished Senator from
New York [Mr. Moynihan], has just done, in 1945, when I was a welder in
the shipyard at----
Mr. SIMON. Baltimore.
Mr. BYRD. Tampa, FL. No, I went south at that point. I was a welder
in the shipyards, in the McCloskey Shipyard in Tampa, FL. I was there
the day the war ended, but we did not monetize the debt then. And at
that time, as the Senator from New York has pointed out, the debt was
100 percent or more----
Mr. MOYNIHAN. Or more.
Mr. BYRD. Of the GDP.
Mr. MOYNIHAN. Yes, sir.
Mr. BYRD. Second, may I say to my friend from Illinois, he is looking
at the budget outlook on page 29 of the book entitled ``The Economic
and Budget Outlook, Fiscal Years 1995 to 1999.''
Mr. SIMON. That is correct.
Mr. BYRD. He pointed to the deficit in the year 2004 as being
anticipated as $365 billion; right?
Mr. SIMON. That is correct.
Mr. BYRD. But the distinguished Senator did not cite the information
on the preceding page, page 28. This is on my time, Mr. President.
A year ago, CBO projected the deficit would top $650
billion in 2003; by last September, CBO had chopped its
projection to $359 billion. The enormous improvement during
that 6-month period was almost wholly attributable--
Listen to this--
was almost wholly attributable to the enactment of an
ambitious deficit reduction package. The newest projection
for 2003, a deficit of $324 billion--
Coming down as the Senator from New York aptly, correctly said--
is only a minor revision in comparison. Of the $35 billion
revision, two-thirds stems from higher revenues as CBO has
upped its estimate of potential growth, and one-third from
lower interest costs as CBO has trimmed its estimate of
Federal debt.
Of course, these extrapolations are not as detailed as
CBO's usual 5-year estimates. Rather than produce a
meticulous 10-year projection for every program in the
budget, CBO attempts simply to judge the likely trends in
broad clusters of spending and revenues. And great
uncertainties surround such long-range extrapolations. The
economy's performance is a big question mark; these
projections are predicated on continued growth in real GDP of
2.3 percent annually in the year 2000 through 2004, on
inflation of 3.1 percent, and on short-term and long-term
interest rates * * * of 4.7 percent and 6.2 percent,
respectively. The economy is bound to deviate from these
assumptions in ways that cannot be anticipated.
So the estimates cannot be accurate. They never have been.
Mr. MOYNIHAN. Do I not recall a word: Floccinaucinihilipilification?
Mr. BYRD. Yes, floccinaucinihili-pilification, meaning valueless;
without value; trivial.
I thank the distinguished Senator, and I thank the distinguished
Senator from New York.
Mr. SIMON. Mr. President, I will just take 1 minute, I say to the
Senator from Alaska, if I could simply point out to my friend and
colleague from New York before he leaves, I have a letter from Charles
Bowsher, the Comptroller General of the United States, dated February
18, in which, among other things, he says the deficit problem, of
course, has not gone away, the forces for escalation of the deficit are
here, and it remains a very serious problem.
Fred Bergsten, you will remember, former Assistant Secretary of the
Treasury and one of the finest economists I know, testified last week
in behalf of the balanced budget amendment and said:
The so-called correction we are seeing is by no means an
up. It will leave us with an abysmally low national savings
rate. Productivity simply cannot pick up by the requisite
amount. We will continue to have very slow economic growth,
high unemployment, lagging standards of living in the future.
Obviously, there are differences of opinion.
Mr. MOYNIHAN. There are differences of opinion.
Mr. SIMON. I respect my colleague but, again, no matter if he votes
wrong on this issue from my perspective, he has contributed immensely
to this Nation by providing the leadership that got us to the
reconciliation last August. That grandchild that he had about a year
ago or so is going to have a better future because of what he did last
August, and I am proud to be his colleague.
Mr. MOYNIHAN. The Senator is very gracious.
Mr. SIMON. I yield the floor.
Mr. MURKOWSKI addressed the Chair.
The ACTING PRESIDENT pro tempore. From whom does the Senator from
Alaska seek time?
Mr. MURKOWSKI. The Senator from Alaska seeks time on the side of the
Senator from Illinois.
The ACTING PRESIDENT pro tempore. Does the Senator from Illinois
yield time?
Mr. SIMON. How much time?
Mr. MURKOWSKI. If the Senator from Alaska could have 15 minutes.
Mr. SIMON. I yield 15 minutes to the Senator from Alaska.
The ACTING PRESIDENT pro tempore. The Senator has 15 minutes.
Mr. MURKOWSKI. Mr. President, I rise today as a cosponsor of the
pending resolution and as a Senator who believes that amending the
Constitution to require a balanced budget is simply the last remaining
option that we have to contain and ultimately begin to reverse the
spiral of red ink that has been hemorrhaging from Washington for more
than 30 years now.
Mr. President, I think if we allow this opportunity to pass, if we
are unable to garner the two-thirds majority necessary to adopt this
resolution, we will have lost a singular opportunity to move this
country in the direction of long-term fiscal responsibility.
Without this amendment, one thing is certain. The Federal deficit and
the national debt will continue to erode our capacity to respond to the
economic and social challenges of the 21st century.
Mr. President, as a former banker, it just astounds me to see this
continued budget process where, after financing various Federal
programs, year in and year out, we find ways to spend more and just add
to the deficit and debt. Yet we mandate in our society that you balance
your checkbook. If you do not have the money, you have to borrow it.
That is what we have done, Mr. President. We have borrowed it, and we
have done it over such an extended period of time that we have
accumulated over $4 trillion in debt. And we are obviously going to
have to pass that debt on to our children and grandchildren.
Now, Mr. President, there is nothing inherently wrong when the
Federal Government must turn to the credit markets to borrow funds to
cover a financial shortfall resulting from an unexpected or emergency
circumstance. A review of our Nation's historical borrowing practices
clearly indicates that for most of our history, Federal deficits have
not been the rule but, indeed, have been the exception. A little
historical background, perhaps.
In the first 120 years of our Nation's history, Federal outlays
exceeded revenues by a mere $1 billion, and even after the turn of the
century, outlays and revenues were generally in balance. It was only
when we entered the First World War that the Federal Government was
forced to turn to the credit markets in a major way. And that was in
1918 and 1919, when the Federal Government ran huge deficits to cover
the cost of our participation in the war.
But after the war ended, Government revenues and outlays then
returned to balance. In fact, we ran a surplus in every year during the
decade of the 1920's. Federal deficits became a tool of countercyclical
fiscal management as part of the Roosevelt administration's efforts to
counteract the devastation wrought by the Great Depression, we all
recall. And when the United States entered the Second World War,
Federal borrowing exploded. It exploded to the point where the national
debt actually exceeded our gross domestic product. But again as soon as
the war ended, the Government began to return to fiscal balance with
revenues exceeding outlays up until the beginning of the Korean war.
And again, in the 1950's, the Government enjoyed a surplus in several
years and endured deficits in recessionary years.
But starting in 1961 and continuing, Mr. President, for 33 out of the
last 34 years, the Federal Government has been running an unbroken
stream of deficits--every single year for the last 33 out of 34 years.
What are the future deficit trends? I think that is what we have to
reflect on as we begin this debate. There is simply no end in sight. In
fact, CBO projects that the deficit will more than double between 1997
and the year 2004 from more than $180 billion to $365 billion--a
billion dollars for each day of the year. Moreover, contrary to what
the administration has indicated, CBO projects that if the President's
health care reform plan is adopted, it could add another $135 billion
to the deficit over this period.
Mr. President, this unending stream of deficits has caused us to
accumulate, as I indicated earlier, over $4 trillion worth of debt,
approximately $4.5 trillion, as a matter of fact. That is likely to
exceed $6.3 trillion before the end of the century, which is less than
6 years away. Left unchecked, the debt will double in 10 years to $9
trillion, with annual debt service costs consuming approximately $335
billion. That is what it will annually cost to service that debt. That
is interest on the debt, Mr. President. That represents more than half
of all the discretionary spending projected for the year 2004; more
than half will be interest.
Mr. President, we can no longer labor under the assumption that
business as usual in Washington assumes that every year we can run
deficits of $150 billion, $250 billion, or $350 billion. The
accumulation of this debt has today brought us to the point where for
the first time in our history we are forced to borrow, forced to borrow
from the credit markets for the sole purpose of paying interest on the
debt. So we are borrowing now to pay interest on the debt, and not
paying the principal.
Mr. President, the reality is we are broke when we have to borrow to
pay interest on the debt. That may come as a shock to this body, but
reality dictates that this Nation is broke from a cash point of view if
called upon to meet our obligations. And the emphasis again, Mr.
President, is we are now borrowing to pay interest on the debt.
It may surprise some people to know that over the next 5 years, we
would be running a surplus in the Federal budget if we did not have to
pay the $200-plus billion interest bill that has resulted from our
inability to bring revenue and spending into balance. But we are not
free of that interest burden. In fact, we will pay out more than $1.752
trillion in interest over the next 5 years, and by the end of the
century, interest expense will exceed the cost we will pay for national
defense. I repeat, Mr. President: By the end of the century, interest
expense will exceed our costs for national defense.
Mr. SIMON. If my colleague will yield on that point.
Mr. MURKOWSKI. I will be happy to yield to my friend from Illinois.
Mr. SIMON. The figure that the Senator is using is a figure that
Senator Fritz Hollings points out we should not use, and that is net
interest. There is no area of Government where we subtract the earnings
before we calculate the interest. So that the interest paid to the
Social Security fund, for example, is not counted as interest on net
interest. The gross interest, which really is the figure we ought to
use, is already in excess of what we spend on defense.
So the figures that my colleague from Alaska is using are very
conservative figures in terms of what the costs are. I have to believe
if the American people understood that, they would say we have to do
something to get ahold of this.
I thank the Senator for yielding.
Mr. MURKOWSKI. Mr. President, I appreciate the point of my friend
from Illinois, and I commend him for his diligence in leading this
effort, which is in the best interest of our Nation, not only for our
own internal security but the health and vitality of America. I say to
my friend from Illinois, as a banker by profession, I can tell you that
interest is like owning a horse that eats while you sleep. It provides
no jobs. It goes on day and night. Its productivity is very hard to
identify. It is only identifiable for those who receive it, but for
those who are paying it, it is a cost of doing business.
The theory of interest is that you can make money with some borrowed
money by investing it and doing something like increasing inventory,
increasing jobs. But what we are doing with interest as a Government is
simply mortgaging the future because with the debt that we are
continuing to pile up and the interest that we are having to pay, we
are finding now that we are having to borrow to pay the interest.
There are those who say, well, this can go on. But reality dictates
that it cannot. If there is anything we can learn from history, it is
that what goes around comes around. And the day of reckoning will
happen. I will explain very briefly how it is going to happen, Mr.
President.
Because in the last year, the Federal Government has been able to
take advantage of low short-term interest rates, it is my understanding
that they have converted more than 20 percent of the debt into Treasury
bills with a maturity of less than a year. That is a good thing to do
because interest rates are low. Although this short-term money
management strategy has reduced our annual interest bill, it opens the
Federal Government to great financial risk should interest rates rise.
And what goes up comes down.
Over the next 5 years, Mr. President, we are going to have to
refinance the vast majority of our outstanding debt. We are going to
have to refinance 82 percent of that debt over the next 5 years. The
administration's budget, which projects that we will spend more than
$1.172 trillion in interest expense, assumes that 10-year Treasury
notes will carry interest rates at only 5.8 percent. That is the
assumption. Testimony from Fed Chairman Alan Greenspan casts grave
doubt on that projection, and it should be noted that as of today, 10-
year notes are paying more than 6 percent. So we are already off on our
projection.
Mr. President, I remind those who have short memories of December
1980. The prime rate in the United States was 20.5 percent--as few
years ago as that was.
So to suggest that it cannot happen, Mr. President, is not reality.
It can happen. As we look at rates today, with Treasury notes paying
more than 6 percent on 10-year notes, and yet an assumption that the
rates will be only 5.8 percent, I would again remind my colleagues that
in December 1980 the prime rate was 20\1/2\ percent. Where would we be
in this Nation today with those kinds of rates? We would be completely
broke.
According to CBO, if interest rates rise only by 1 percent, the
Government will have to pay an additional $150 billion in interest
charges on top of the $1.1712 trillion projected. That would mean that
by 1999 our annual interest rate would approach $300 billion, which is
$30 billion more than the entire Federal budget was barely 20 years
ago.
Mr. President, again I say we are broke. We are borrowing just to
cover our interest costs. We are subject to shifting winds of
international investment flows where a minor change of economic policy
in Bonn, Tokyo, or London has a direct effect on the U.S. Government
and our ability to service this unending sea of debt.
Again, can anyone imagine what would happen if the owners of our
debt--and I might add that 18 percent of our debt today is held by
foreign interests--called that debt? If they called in more than the
$4.5 trillion of debt that is held out there both foreign and domestic?
How would we pay the owners off? We could not unless we inflated our
dollars to the point that what $1 buys today would actually be worth
perhaps 10 cents. Let us remember, Mr. President, money goes to the
highest return and the least risk. That is where investment goes.
In order to maintain the borrowings that we need, we simply have to
pay the going rate. We have no other alternative.
So we are placing ourselves in a very dangerous position, beholden to
those that can look at the United States and say the United States has
to have this money at any price, and in competition with other areas,
Bonn, Tokyo or any other country willing to offer high interest yields.
But we have no leverage. We are simply going to be dictated at some
point in time by those capital markets that look at the United States
as the highest return with the least risk but can move out tomorrow,
and with our short-term borrowing position, that could happen in a
relatively short term. That is where we are because again interest
rates will rise.
Some have argued that we do not need to amend the Constitution to
achieve a balanced budget. It is said that all we need to do is find a
bipartisan solution that we can enact into law so that we can achieve
the desired results. But history suggests that legislation will not
resolve this issue. On three occasions, Mr. President, over the past 10
years, legislators on both sides of the aisle sat down with our
President. They hammered out so-called solutions to solve the deficit,
and on every occasion the promise of a zero deficit has evaporated
because we in Congress have never had the political courage to do the
one thing that would bring down the deficit--reducing spending. We have
voted to raise taxes on more than one occasion, but we have never yet
cut or frozen spending.
We have never faced up to the challenge of runaway entitlements which
today account for 52 percent of Federal spending and will grow to 59
percent by the end of the century. Quite the contrary. We have
generally placed entitlement spending off limits in all of the budget
deals that have been negotiated over the past years.
I am going to go over three charts very briefly because we have a
history of sounding tough about budget agreements that we give birth to
in this body. The first chart shows the promise and reality of Gramm-
Rudman one which we all remember which we adopted in 1985. As you can
see, Gramm-Rudman was supposed to bring the deficit down from $171
billion to a zero over a 6-year period ending in 1991. The deficit was
supposed to come down basically by $36 billion a year. But in reality,
in 1991, instead of a zero deficit, we were at a record of $269
billion. So there went Gramm-Rudman, all the reality, all the dialog,
all the promises.
Let us move to chart No. 2.
The second chart shows the revision we made to Gramm-Rudman in 1987.
Most of you will recall that debate. This was going to fix everything.
In that year, we revised the original targets. This time we promised a
zero budget by 1993. Quite frankly, this agreement was an even more
astounding failure than the original Gramm-Rudman. But it was not the
fault of the authors, Senator Gramm and Senator Rudman. It was the
fault of Congress because Congress found enough ways around the law
that when the deficits were supposed to be $100 billion in 1990, it
turned out to be more than double. It was $221 billion, and in 1991 the
deficit was supposed to be $64 billion. Instead, it was more than 400
percent higher, a record $269 billion.
In 1992, the deficit was supposed to be $28 billion. In reality, it
was 1,000 percent higher, at $290 billion. Of course it was clear, Mr.
President, that none of the targets were even remotely met.
So President Bush entered into the summit agreement that we all
recall. He broke his no tax pledge which I think was a disaster, and
the American public was again led to believe that we were finally going
to get a handle on the deficit.
Here is chart No. 3.
This chart shows how the deficit was supposed to come down as a
result of the 1990 agreement. Unlike the earlier budget agreements,
this time the deficit targets were allowed to be adjusted, and the
deficit targets did not include off-budget trust fund balances. What
this chart shows is that by 1995, the on-budget deficit was expected to
be only $83 billion. In fact, the chart shows the actual deficit is 270
percent higher, at $225 billion.
What these charts show is that there is no reason for the public to
really put its trust in the Congress or the Congress' ability to come
up with a budget plan that will eliminate the deficit.
History repeats itself. There are three of them. We all remember
them. We were all a party to them. And the consequences are where we
are--we have not addressed the deficit. Quite the contrary. In the 10
years since we enacted the first Gramm-Rudman law, spending has
increased more than 53 percent, from $990 billion to more than $l.5
trillion. Interest payments increased 57 percent, from $136 to $213
billion; and the national debt more than doubled, from $2.1 trillion to
more than $4.5 trillion. So there is the history of it, Mr. President.
What is the future? What is even more disconcerting is that the
administration, which opposes this amendment, and which a year ago was
able to get congressional Democrats to go along with a $500 billion tax
increase, appears now to have abandoned the goal of bringing the
deficit under control. Its latest budget shows an unending stream of
rising deficits and debt, with no solutions recommended.
President Clinton told us his health care reform program would help
bring down the deficit. But the reality is that his proposal for
massive Government intervention in the health care market does not
reduce Government spending; it adds $135 billion more Government
spending, and larger Federal deficits are in the future.
Mr. President, our incapacity to seriously address the deficit
ensures that we are going to pass on to future generations a Government
strangled by debt and incapable of making the investments in education,
public health, resource development, and scientific research that will
enhance our future standard of living. The only way to guarantee that
we break our addiction to debt is to try what is before us--and I
commend the Senator from Illinois again--which is to amend the
Constitution. The proof is in the pudding. Nothing else has worked.
Mr. President, some of my colleagues here, including the
distinguished chairman of the Appropriations Committee, have raised
serious questions about the propriety of including this amendment in
our Constitution. One of the most important issues that has been raised
is that the amendment could make it impossible for the Federal
Government to respond to an emergency such as we recently saw in
California; or that the Federal Government could exacerbate an economic
recession by having to raise taxes or cut spending at precisely the
most inappropriate moment.
Critics of the amendment fail to recognize that the amendment has a
degree of built-in flexibility. We are not rigidly locked into
achieving balance in every year. Under the amendment, Congress has the
authority to waive, by a three-fifths vote, the requirement for a
balanced budget in any year. There is a safety valve. None of us would
deny victims of a flood or earthquake access to relief funds, nor to
turn a mild slowdown into a recession.
Mr. President, I remind my colleagues that we have not been in a
recession for 33 of the last 34 years; yet, we have been running
deficits for all those years. A little food for thought. What this
amendment aims to do is to make deficit spending the exception rather
than the rule. When unforeseen circumstances that affect the national
interest require us to run a deficit, I am quite confident Congress
will respond appropriately.
Much has also been made of the fact that since the amendment relies
on estimates of receipts and outlays, situations will surely develop
when estimates turn out to be incorrect. I have no doubt that will
occur since the art of economic estimating is far from an exact
science. However, when Congress adopts statutory language to implement
the amendment, we can surely write into law default mechanisms that
would address the estimating problem. For example, if it turns out the
actual outlays during the year exceed projections by more than 2
percent, we can require that such a shortfall be made up in the next
fiscal year. That is just one example of how we can address the
problems inherent in economic forecasting.
The limitations of economic forecasting should not be allowed to
deter us from achieving our ultimate goal--to bring spending into
balance with revenue.
Finally, there is no doubt that we are going to face some very, very
hard choices if this amendment is adopted. But we have put off those
tough choices for far too long. The price for our continued inaction
will be paid by our children and grandchildren, and their
grandchildren. We were not elected to make easy choices, Mr. President.
Let us take the last remaining step we have to right the course of this
Government and adopt the pending amendment.
I thank the Chair and yield the floor.
Mr. SIMON. Mr. President, I will just take 1 minute. I commend my
colleague from Alaska--and particularly since he is a former banker--
for his comments about interest. We are really at a fork in the road
where we are going to determine whether we are going to have higher
interest rates in the future or lower interest rates.
It was very interesting that the Wharton School, last Thursday,
projected that if this passes, 30-year bonds would drop from 6.5 to 2.5
percent. That is a very, very significant thing that I am sure my
friend from Alaska understands. I am not here guaranteeing that is
going to happen, but I do not think every projection is that interest
rates are going to go down if we pass this. I think it would be a great
boon to our Nation. I thank my colleague.
Mr. DOLE. Mr. President, is leader time reserved?
The ACTING PRESIDENT pro tempore. Yes.
Mr. DOLE. Mr. President, I congratulate my colleagues on the floor,
the Senator from Illinois, Senator Simon, Senator Craig, and my friend
from Alaska, Senator Murkowski, for making a case, which I will be
making later, in support of the balanced budget amendment.
My view is that it is going to be very close. There are undecided
Senators on both sides of the aisle out there. Hopefully, we will have
an opportunity to listen to some of the statements being made. I know
it may be a difficult choice for some. I think, as the Senator from
Alaska just pointed out, it is the right choice. I hope we can prevail,
not just because we want to prevail, but because we are concerned about
the next 20, 30, 40 years in our country and about future generations.
The ACTING PRESIDENT pro tempore. Who yields time?
Mr. SIMON. Mr. President, I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The absence of a quorum has been
suggested. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BYRD addressed the Chair.
The ACTING PRESIDENT pro tempore. The Senator from West Virginia [Mr.
Byrd].
Mr. BYRD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The Senator from West Virginia is recognized.
Mr. BYRD. Mr. President, at this time I wish to address just a few of
the problems that I have with the constitutional amendment that is
proposed by Mr. Simon and others, and a few of the points that have
been raised during the discussion.
Mr. President, Mr. Simon, the very able and distinguished Senator
from Illinois, with reference to the provision that requires a three-
fifths majority, section 1, where total outlays for any fiscal year may
exceed total receipts for that fiscal year, then a three-fifths
majority of the whole membership of each House can provide for a
waiver.
As I indicated last evening, that three-fifths majority vote may be
pretty difficult to get.
Section 2 again refers to a three-fifths supermajority.
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 rollcall vote.
Mr. President, with reference to section 2 in particular, we are
talking about the debt limit, the fact that it may have to be
increased.
What if it is not increased? What if it is not increased? We are
talking about debt that we have already accumulated and we are about to
have to raise the debt limit. We already owe the debt and it is
necessary to raise that debt limit because it is necessary under
certain circumstances to add to the debt. I have seen that situation
arise here in the Senate a good many times. What if we do not raise it?
Social Security checks will not go out. The Federal Government will
shut down. Veterans compensation checks will not go out. Veterans
pension checks will not go out. So what are we going to do? We have to
raise that debt limit.
I can remember the games that were played here when we were in the
minority. We Democrats would say, ``Let us let them''--the Republicans
who were then in the majority--``Let them produce the votes. We will
help them, but let us make them walk the plank. So hold back your
votes,'' we would say to our colleagues.
As majority leader, I would say to my colleagues, ``Hold back your
votes and let us make the other side walk that plank because they have
made us walk the plank in the past when we were in the majority.''
So those games are played. They are political games and they are
partisan games. Perhaps they should not be played but, realistically,
they are played and they will be played in the future.
The point I am making is, it is difficult to produce 51 votes to
raise the debt limit. The debt limit is seen as a horse which is sure
to get through to the President's desk. Many Senators on both sides of
the aisle have played games with that horse and tried to add this rider
or that rider, this amendment or that amendment, knowing that the
amendment will reach the President's desk because that is a bill that
has to go, or else Government will shut down. So, there are games
played with that bill.
Now we have this amendment saying:
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.
That means 60 Senators must provide by law for such an increase by
rollcall vote once this amendment is welded into the Constitution. We
cannot do it with 51 votes anymore, or with 49 votes in the event there
are only 97 Senators voting. We have to have 60 votes of the whole
number. If there is a snowstorm and only 60 Senators are able to get to
the Capitol, we may be able to get a majority of the 60. We may be able
to get 31 votes but that will not be good enough. If only 60 Senators
can make it to the Capitol, in a snowstorm, we will still have to
produce 60 votes in order to raise that debt limit. This is really
playing with fire, playing with dynamite.
If 70 Senators are able to get to the Capitol we shall have to get 60
of that 70; not 35 plus the Vice President's vote to break the tie, 35-
35; not 36 out of the 70. We will have to produce 60 votes out of 70 in
the case of one of those January ice storms that we have seen during
this winter.
Now, that is tough. Let me remind Senators of a very recent situation
in which it was tough to get a majority and, as a matter of fact, we
did not get a majority of Senators. That was last year when we passed
the budget deficit reduction package that had been worked out between
the President and Members of the House and Senate. We produced how many
votes? We produced 50 votes in the Senate. We have 100 Senators; we
produced 50 votes. We did not produce a majority. We produced 50 out of
100 votes, and the Vice President had to break that tie because not a
single Member on the other side of the aisle--not one Republican in
this body or the other body--voted for that deficit reduction package
last year for various reasons. Some of them did not like the fact that
it raised taxes on the wealthy.
The point I am making is that it is extremely difficult, if not
impossible at times, to get 60 votes when partisan politics are
involved.
So what did we do? We had the Vice President of the United States
come up and sit in that chair and cast the vote breaking the tie. Vice
President Gore used to be a Member of the Senate, but he was not a
Member of the Senate last year when he cast that tie-breaking vote. He
was the Vice President of the United States. He is not a Member of the
Senate. So we had to depend on the Vice President of the United States,
who is the Presiding Officer over this body under the Constitution, but
not a Member of this body. We had to depend upon him to get us across
the line, and he just barely got us across. In other words, we got 51
votes out of 101 votes by having the Vice President.
So do not let it be said that getting a three-fifths vote is always
easy. It is not. It is not easy to get cloture always. My good friend
from Illinois, Mr. Simon, will remember the stimulus package of last
year. He and I supported that stimulus package, but we were never able
to get 60 votes to stop a filibuster on that stimulus package. Eight
times I tried to get 60 votes when I was majority leader in the 100th
Congress to invoke cloture on legislation dealing with campaign
financing. I was not able to do it, eight times. Robert de Bruce, a
king of Scotland in the 14th century, tried the 7th. He succeeded on
the seventh time. Robert Byrd tried eight times and never succeeded. I
knew that we would not produce that 60 votes. So it is not always easy
to produce a super majority vote.
As I said last evening, and I shall emphasize today, placing these
new supermajority requirements into the Constitution are contrary to
majority rule, and majority rule is a fundamental principle underlying
our Constitution. It is a fundamental principle underlying a
representative democracy. In a democracy, the majority rule. That is a
basic undergirding principle in the Constitution of the United States.
This amendment would violate that majoritarian principle.
We have five instances in the Constitution in which there is a
supermajority vote required. Article V of the Constitution provides for
the amending of that organic document by a supermajority. The
Constitution also requires a supermajority requirement to override a
Presidential veto. It requires a supermajority vote in the Senate to
approve the ratification of treaties. It requires a supermajority in
either House to expel a Member, and it requires a supermajority in the
Senate to convict a President or any other Federal officer under an
impeachment proceeding.
Well, why can't we add another supermajority? That is what the
distinguished proponents of this amendment are saying: Why can't we add
another one?
Mr. President, there is a great difference in the subject matter of
the supermajorities that are required in the Constitution and the new
supermajority that would be written into the Constitution as a
requirement under this amendment. The supermajorities that are in the
Constitution deal with matters concerning which, if the supermajority
is not secured, then the status quo remains and the status quo is
acceptable. If we do not get a supermajority in the Senate, two-thirds,
to approve the ratification of a treaty, well, we just won't have that
treaty. We will go on as we did before.
If we do not get a supermajority in the Senate to convict a person
who is impeached, well, things will go on as they were. The status quo
will govern.
If we do not get a supermajority to override a Presidential veto, the
bill that he vetoed is back at the starting gate. We were unable to
override his veto. We stick to the status quo. We start all over again.
We try again the next year to pass the bill. We have done that before--
pass bills in successive Congresses, bills which were vetoed but we
came back and tried them again. So the status quo is acceptable.
In the case of the expulsion of a Member, if we do not get the two-
thirds, he or she remains a Member.
The underlying status quo remains if we fail to get those
supermajorities that are written into the Constitution. In the case of
article V, that supermajority has its own rationale. If we cannot get
two-thirds in both Houses to adopt a constitutional amendment, the
rationale is self-explanatory. As to convicting an impeached officer,
that two-thirds requirement is for the protection of the checks and
balances principle. Who would say that we should convict the President
of the United States, the Chief Executive, by a majority vote? The
framers did not believe it ought to be that easy. They were thinking
about checks and balances.
It would be easy to rupture the checks and balances between the
executive and the legislative branches if the House could impeach a
President and the Senate could convict him by a majority vote. Thus,
there is a check-and-balance principle in that requirement for a
supermajority to convict the Chief Executive or any other executive
officer. The same exists with regard to impeaching Supreme Court
members or other Federal courts. A two-thirds supermajority is required
to convict. Again, that principle derives from the principle of checks
and balances in our Constitution.
Now, we are talking about nailing into the Constitution a new
supermajority requirement dealing with economic policy. Checks and
balances are not involved.
(Mr. DORGAN assumed the chair.)
Mr. BYRD. In this case, we are talking about microeconomic policy
when we talk about balancing the budget, whether we have to raise
taxes, whether we have to cut spending or have both. And we are talking
also about a circumstance that may be very desirable at one time but
very undesirable at another, a balanced budget at one time or another
is desirable. But there are times when it is not desirable, as in the
case of a recession. In the Eisenhower administration, the Eisenhower
administration went quickly from a $3 billion surplus to a $9 billion
deficit. It did so within four quarters. And so there are times in a
recession when a balanced budget is not needed or desired.
On another day, I expect to talk about the power of the purse. I may
wish to talk a little about English history on that occasion.
Today, I wish to make reference to a very great fear that I have, the
fear being that if this amendment is adopted and if it is ratified by
the necessary three-fourths of the States, it will have the inevitable
result of bringing the courts into the equation.
Oh, you say, they will not come into it. They do not get into a
political thicket. Well, it is not just that it is a thicket. It is a
political thicket. But the courts in recent years have been showing a
proclivity to get into those political thickets.
We would have an amendment to the Constitution that says in section
1: ``Total outlays for any fiscal year shall not''--no maybe, no
perhaps--``exceed total receipts for that fiscal year.''
No ifs, ands, or buts.
Total outlays for any fiscal year shall not exceed total
receipts for that fiscal year.
I will pause right there.
So the American people are going to be told we have balanced the
budget now. We passed the balanced budget amendment. What a great day
this is. We have at last now had the courage.
I hear it said that we need courage to vote for this amendment. You
talk about where courage is needed. You vote against this amendment.
That takes courage. Vote for it. That is easy, because it sounds good.
It does not raise one dime, not one thin dime, not one dime that has
worn so thin you can almost see through it. Not one thin dime in taxes
does it raise, nor does it cut one copper penny out of any program. How
easy!
Why had I not thought about it before? My, what a great idea this is.
We just adopt this little piece of paper.
Where is that little piece of paper? Here it is. How easy that is.
Adopt that little old piece of paper and you mean to tell me we are
going to balance our Federal budget? Yes, sir, because this little
piece of paper says so. Section 1:
Total outlays for any fiscal year shall not exceed total
receipts for that fiscal year.
Well, let us see what another section says.
Now, another section of this amendment says that Congress shall have
the power--section 6 I believe it is--yes, section 6. All in this same
little piece of paper. Section 6:
The Congress shall enforce and implement this article by
appropriate legislation which may rely on estimates of
outlays and receipts.
In the first section, we say:
Total outlays for any fiscal year shall not exceed total
receipts for that fiscal year.
Section 6 says, well, we do not exactly mean what we say in section
1. Congress is going to have to enforce this by legislation, and it
says, in section 6, no, we will not balance the budget. What we will do
is balance the estimates. We are going to balance the estimates.
Section 1 says we are going to balance the budget. We are going to
balance outlays and receipts to the penny. We go over to section 6.
Well, we do not quite mean that. We need only to balance the estimates.
``Congress shall enforce and implement this article by appropriate
legislation, which may rely on estimates''-- estimates, estimates--``of
outlays and receipts.''
The Constitution does not say that a particular bill requires a
different procedure from any other bill, except it says that revenue
bills shall start in the House. The House shall initiate revenue bills.
That is the only instance, regarding bills, in which there is a
difference in process required by the Constitution between the two
bodies. Revenue bills shall be initiated in the other body, the House,
but the Senate may amend such bills, as in the case of other bills.
We passed a crime bill in this body last year. It has not been
enacted into law yet. But suppose in that crime bill there are certain
receipts, or in the Interior appropriation bill there are certain fees
collected from visiting parks or whatever. Wait a minute. When is a fee
a fee, and a fee a tax?
I have been reading about some disagreement between the President of
the United States and CBO with respect to health care legislation. CBO
says that an employer mandate would be a tax. The President says, oh,
no, that would not be a tax.
Now, as Alexander Pope said, ``Who shall decide when doctors
disagree?'' Well, when we have a disagreement of that nature, and we
have this amendment written into the Constitution, who is going to
decide? The courts. The courts are going to decide. Why? Because the
Constitution is law. It is positive law. It will trump any other law
passed by the Congress, any law. The Constitution is the supreme law.
And judges, Federal and State, take an oath to uphold that
Constitution.
While they may sometimes find ways to avoid getting into thickets
dealing with some political questions, one thing they will not avoid is
the aggrandizement of power by one branch over another. They are sworn
to uphold the law, the law being the Constitution. And it is the
responsibility of the judges to interpret the law. With this amendment
to the Constitution, the courts will become an active player. When the
judicial branch gets involved in taxation and appropriations, then my
friend, Mr. Simon, who spoke about ``taxation without representation,''
you will have it. When unelected judges, who are appointed for life,
get into that matter, you will have taxation without representation.
The people would say, who elected those judges to impose taxes on us?
So a citizen, or a group that has standing would go into the court
and say, well, this park fee is a tax, or the money generated in this
crime bill, that is a tax. And under this new amendment to the
Constitution, bills raising revenues are required to have a majority of
the whole membership of both bodies. That crime bill did not have such
a majority. Moreover, they would allege, if it were the case, that the
Crime bill--which raises revenues--did not start in the House where the
constitution says revenue bills shall begin. It started in the Senate.
Moreover, it did not have the Constitutional majority of 51 percent of
the whole membership of both Houses. So, Mr. Judge, this bill that
imposes this tax on me is not constitutional. Section 7 of article I of
the Constitution says revenue bills are to be initiated in the House.
Well, I think the judges would have to agree.
In some instances, the President's advisers would say, well, now, Mr.
President, section 1 of this new amendment that has been riveted into
the Constitution states that outlays shall not exceed receipts. Those
men and women up on the Hill, they argued, they went around and around
on the head of a pin, but they have not acted to bring outlays and
receipts into balance. They have not lived up to the Constitution.
Therefore, it is incumbent upon you because you have the sign on your
desk, Mr. President, ``The Buck Stops Here.'' You should impound
moneys.
Oh, the President might say, ``I cannot do that. Don't you remember
the Budget Impoundment Act of 1974? That says I cannot impound money.''
Oh, but, Mr. President, his advisors would respond, the Constitution
is the supreme law. This new provision in the Constitution trumps the
1974 act. You have a responsibility to uphold this Constitution. So you
should impound the funds.
Heretofore, the President's advisors have said that he had inherent
powers as Commander in Chief to impound or to exercise a line-item veto
or to rescind. They will no longer make that argument. They will say
that the new constitutional amendment gives him that power.
So, the President may order the Social Security Commissioner not to
send out the Social Security checks or to reduce the payments in order
to bring outlays and receipts into balance.
He may also decide to include veterans' compensation checks, or to
close down a number of veterans hospitals, or whatever. A recipient of
Social Security payments will say, ``By law, I am entitled to have the
full payment I have been used to getting. And look at my new check
here. It has been reduced 20 percent, or 10 percent, or whatever. I
want what is due me.''
Therefore, the courts may order Congress to raise taxes. Taxation
without representation? Yes. We fought one war over the principle of
``taxation without representation.'' We may have to fight another one.
The courts, the most ill-suited branch of the Government, gets into
the complex matter of balancing budgets--deciding what constitutes an
``outlay'' or a ``receipt,'' what is ``off budget,'' what is ``on
budget.'' The courts are most ill-suited for that. They are not
equipped to do that. Those are questions, meant to be left to the
elected representatives of the people.
Judges do not stay in contact with the people, as do politicians in
Congress. They are not like the itinerant justices in the time of Henry
I, who reigned in England until 1135, or Henry II, who reigned from
1154 to 1189. Henry II increased the number of itinerant justices from
the curia regis who went out into the shires in the country and held
court. He also increased the number of writs, because that was
additional money for the crown.
Members of the Federal and State courts, honorable though they be,
are not equipped for that job. They are very ill-suited. But, this
amendment places, ultimately, the most ill-equipped, ill-prepared
branch of the Government in charge of balancing the Federal budget. I
am very, very concerned about that.
We have been quoting Hamilton and Jefferson and Madison and George
Washington. Well, Hamilton was conservative. He liked the idea of
having a strong Executive. He was one of the 39 signatories of the
Constitution. What did he say in the Federalist Papers, No. 78?
Hamilton and Jay and Madison decided that in the State of New York they
would need to write essays that appeared in various papers in New York
State in support of the Constitution. The vote was going to be very
close in New York on ratifying the Constitution. In Federalist 78,
Hamilton said:
The executive not only dispenses the honors but holds the
sword of the community. The legislature not only commands the
purse but prescribes the rules by which the duties and rights
of every citizen are to be regulated. The judiciary, on the
contrary, has no influence over either the sword or the purse
* * *
The judiciary is, beyond comparison, the weakest of the
three departments of power.
That is not Robert C. Byrd talking. That is not the owner of the
little dog Billy Byrd talking. It is Alexander Hamilton. What did he
say? He said the judiciary is, beyond comparison, the weakest of the
three departments of power.
What would this amendment to the Constitution do to Hamilton's
prescribed role as set forth in Federalist No. 78? It would stand it on
its head and it would place into the hands of that so-called weakest of
the three departments of power the most complex matters involving
fiscal and budgetary policy, which were intended to be left in the
hands of the elected representatives of the people. It should give
every Senator cause for concern. A case in West Virginia would be
proceeding at a certain pace; there would be a case in Illinois
proceeding at a different pace; there would be a case in North Dakota
proceeding at a different pace. When one considers all of the things
that happen in court cases--discovery, arguments, appeals, and on and
on--one can understand that those cases, once they are finally decided,
may be different in their rationale, different in their results, and it
may take years to decide questions that were intended to be debated and
acted upon in Congress within a few weeks or months.
Talk about a mare's nest of confusion; talk about opening a Pandora's
box--you have it here.
Do we want, ultimately, nine black-robed judges ordering tax
increases?
Oh, you think it will not be done? Well, just ask former Senator
Thomas Eagleton of Missouri if it can be done. He will tell you to look
up the case of Missouri versus Jenkins. It is possible under this
amendment.
This amendment will damage the legislative branch, and I will have
more to say about that at another time.
Mr. CONRAD. Will the Senator yield for a question on the point the
Senator is making?
Mr. BYRD. Yes, just in one moment, then I will yield. Let me finish
my sentence.
This will damage the courts. What will be the credibility of the
courts? How much respect are the people going to have for black-robed
justices who require the legislative branch to raise taxes; unelected
justices? Their decisions would meet with cynicism if they began to
order tax increases and funding cuts to enforce this amendment.
The judiciary is going to be irreparably harmed, the executive will
be harmed, and the legislative branch will be harmed.
I hope that Senators will not look upon this vote as a throwaway vote
or as a vote for which they can escape responsibility. They are going
to be saddled with a heavy responsibility if this amendment is ever
adopted.
Yes, I am glad to yield to the distinguished Senator.
Mr. CONRAD. I have been following this debate very carefully. I have
found that one of the concerns I have about the amendment that is
before us tracks very closely with the concern that has been outlined
by the President pro tempore with respect to the question of the courts
becoming involved.
One of the things I have thought about is, as you examine how the
courts handle issues of this complexity, it is conceivable to me that
under the provisions we have provided in this amendment we might wind
up having a determination of the fiscal 1994 budget in 1995.
Mr. BYRD. Absolutely.
Mr. CONRAD. I think it would be most unwise to have a situation in
which the courts would have the final power of the purse, perhaps not
to decide by line item the budgets of the United States, but as the
Senator from West Virginia points out, they might find themselves in a
position of ordering across-the-board cuts, they might be in the
position of ordering across-the-board tax increases. Is that not
conceivable?
Mr. BYRD. Indubitably; absolutely.
May I say that as the chairman of the Appropriations Committee and as
the chairman of the Appropriations Subcommittee on the Department of
the Interior, I have found in my experience that in order to stay under
the caps, in order to stay within the allocations of my subcommittee,
the easiest way to do that and, as a matter of fact, the only practical
way to do it is to have an across-the-board cut.
The courts may say, ``Make it across the board.'' Then who says
Social Security cuts will not result? Who says that veterans
compensation payments will not be cut? They can all be cut under this
amendment.
Finally, let me say--then I will yield again--no agency, no
department, no program, no activity of the Federal Government will be
immune from being cut--defense, domestic discretionary, entitlements;
everything except interest on the debt.
I yield to the Senator.
Mr. CONRAD. Is it the case in the legal matter that involved the
State of Missouri that the Federal courts ordered tax increases for the
purposes of schools?
Mr. BYRD. Yes. It involved a civil rights matter in the educational
field. The Supreme Court ruled that tax increases could be required of
a school district. And the Court reserved to the Court itself the
ground of levying that tax if necessary.
Mr. CONRAD. Of course, no one ever elected any judge or, for that
matter, selected any judge for the purpose of making budget
determinations in the Federal Government?
Mr. BYRD. Absolutely not.
And judicial nominees, when they come up before the Senate, do not
want to answer a question on this or that. If you ask them how they
feel about capital punishment, they do not want to answer the question
because they may have to render a decision on it.
``Now, what is your position, Mr. Nominee, when it comes to imposing
taxes in order to enforce section 1 of this new amendment?''
``Well, I might have a case come before me.''
I daresay, if this amendment is agreed to, I would be very reluctant
to support any judicial nominee who does not indicate to me, one way or
another, before I vote, how he is going to stand on this matter.
Mr. CONRAD. If I could I inquire further, I must say I share the
Senator's concern about involving the courts. I think that would be
most unwise. It would dramatically change what our forefathers handed
to us in terms of a constitutional document, the separation of powers
which is fundamental to the success we have enjoyed for 200 years in
this country.
Is it conceivable to the Senator that there is any perfecting
amendment that could be offered to the legislation before us that would
take the courts out as the final arbiter?
Mr. BYRD. Yes, it is conceivable. I think it would have to be offered
to the amendment rather than at such time as the matter comes back to
the Congress to be resolved by legislation. Because if it were put into
legislation, then that would probably be unconstitutional in view of
the fact that this constitutional amendment did not authorize it.
Yes, I think that would be conceivable.
Mr. CONRAD. Could I ask one other question, and that is on the
previous chart with respect to section 6.
Mr. BYRD. Let me again respond to this question before we go to
another.
Yes, in this constitutional amendment we could include a provision
that would preclude the Federal and State courts from any such
involvement here or we could lay down certain limitations.
But, Mr. President, as Chief Justice John Marshall said, ``Let us not
forget that we are expounding a Constitution.''
Let us not forget, if I may paraphrase, that we are amending a
Constitution.
Now, to have an amendment here limiting the courts and precluding the
courts from becoming involved, would only deal with half of the
problem. It does not keep the Executive from exercising the power of
the purse. If the courts cannot intervene, it only increases the
likelihood that the President himself will take the bull by the horns
and say, ``I will impound these funds. I will line item this out. I
will rescind this and this and this and this,'' and, as a result, the
President acquires a control over the purse that he does not have in
the Constitution that has come down to us. Consequently, I would
consider that as mortal a danger to the separation of powers and checks
and balances as if the courts intervened.
Mr. HATCH. Will the Senator yield?
Mr. BYRD. Let me continue to yield to this Senator first.
Mr. CONRAD. If I might go to the second question, because section 6
also is a great concern to this Senator. It is a concern to me because
the language says, ``the Congress shall enforce and implement this
article by appropriate legislation, which may rely on estimates of
outlays and receipts.'' I would like to inquire of the Senator, does
that not put us back much in the condition that we faced with respect
to Gramm-Rudman that held out the promise of a process which would lead
us to a balanced budget over a 5-year period? What we found was there
was a gigantic loophole in that legislation. The loophole was you could
base it on estimates or projections. And we got ``Rosie Scenario.''
Mr. BYRD. Yes.
Mr. CONRAD. Good old ``Rosie Scenario,'' in which every year we were
presented with estimates that simply overestimated revenue,
underestimated expenditures. And for the purposes of meeting the
requirements of the legislation, once we had passed through the budget
cycle and met the projections, we had done the job. And of course the
result was the deficit grew geometrically.
Does that not subject us to the same danger with section 6 of this
amendment?
Mr. BYRD. It does. But in that instance we were finding a way around
a statute. Here we are finding a way around the Constitution of the
United States.
In section 1 we say outlays shall not exceed receipts. In section 6
it says, oh, well, we do not really mean that. ``Congress shall enforce
and implement this article by appropriate legislation * * *'' which
will balance--not the budget, not balance outlays and receipts, actual
outlays and receipts because they can only be balanced after the close
of the fiscal year, and I mean a few weeks after the close of the
fiscal year, because it is only then that we really understand what the
outlays and receipts are--but this will say we do not really have to
balance the budget, we can just balance the estimates of outlays and
receipts. And we have seen what happens when we deal with estimates.
Mr. CONRAD. And, perhaps, not delivering the promised result at all?
Mr. BYRD. Not delivering the promised result at all.
Let me cite to the Senator what the committee report says, the
Judiciary Committee report. When it reported this amendment to the
Senate it also submitted its report on the amendment. So here is a
chart titled, ``What Does Section 6 Mean?'' That is the section we were
just talking about, which allows the Congress to balance the estimates,
which is not what the people are being told at all. Those estimates may
be off by billions of dollars--tens of billions of dollars.
Mr. CONRAD. And have been in the past.
Mr. BYRD. And they have been in the past. We have never seen any
estimate--and this is not the fault of the CBO or the OMB. It is just
impossible. Only God--only God--and He is not being called upon in this
debate, He is not going to be asked by the courts----
Mr. HATCH. Yes, he is.
Mr. BYRD. Only God can say, prior to the end of a fiscal year, what
the outlays are finally going to be and what the receipts are going to
be.
What does section 6 mean, then? The Judiciary Committee reported this
constitutional amendment which says two things, balance the outlays and
receipts in section 1; balance the estimates of outlays and receipts in
section 6.
So there has to be some explanation. Well, what does section 6 mean?
Reading from the report.
``This provision gives Congress an appropriate degree of flexibility
* * *'' Section 1 did not give----
Mr. CONRAD. Any flexibility.
Mr. BYRD. Any flexibility. But ``This provision gives Congress an
appropriate degree of flexibility * * *'' What is an appropriate
degree? ``* * * in fashioning necessary implementing legislation. For
example, Congress could use estimates of receipts or outlays at the
beginning of the fiscal year to determine whether the balanced budget
requirement of section 1 would be satisfied, so long as the estimates
were reasonable * * *'' What does that mean? ''* * * so long as the
estimates were reasonable and made in good faith.''
Again, let me refer to the all-knowing, omniscient, omnipresent,
omnipotent God. Only God knows what we are saying--what is in good
faith. I cannot tell whether the Senator is acting in good faith. He
does not know whether I am acting or speak in good faith. But so long
as they are reasonable and made in good faith, Congress, then, could
say that the requirement is satisfied.
``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.'' So Congress can
say that the article is not violated. Congress could say that it is all
right to violate it.
``Similarly, 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? In a budget this year of $1.474
trillion, how much is small? Fifty billion dollars? Five billion
dollars? Ten billion dollars?
Fifty billion dollars would be small in a $1.474 trillion budget.
That is small, is it not? Fifty billion dollars is small? It only
constitutes 3.3 percent of total budget. That is small.
We have given you one way to get around this. We have given you two
ways. We have given you three ways. Here is another way.
``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.'' So you can just roll it over.
Suppose the following fiscal year there is a shortfall? Then we
merely compound the problems in that subsequent year by rolling over
the shortfall in the preceding year. So the committee report itself
anticipates that the budget will not be balanced.
Mr. CONRAD. Might I just pursue this a bit further and ask the
Senator if, in fact, this would not appear to be ripe for further court
intervention? That is, what is reasonable? What is in good faith? What
represents very small, or negligible deviations? Would any citizen have
standing to go to the courts to question whether or not what was
adopted by the Congress represented, in fact, a constitutionally
acceptable definition of reasonable good faith?
Mr. BYRD. I do not think that the standing would necessarily be a
major problem in a matter of this kind. Some citizens or groups or
Members of Congress themselves might have standing.
The point is that somebody somewhere will find a reason to go into
court, and the courts will take that case. They will take that case. As
one who used to play a few tunes on the fiddle, there was a tune called
the ``Fiddler's Dream.'' This amendment is the lawyer's dream, the
litigator's dream. You talk about improving the economy. This amendment
will really improve the economy insofar as litigators and lawyers are
concerned. A lawyer's dream. Yes.
Mr. CONRAD. In fact, we might have a whole budget section over at the
Supreme Court. You might see an exodus of the budget experts on Capitol
Hill. We would be in a contest with our courts now to have their own
budget experts.
If I can make one further inquiry, and that is with respect to what
States that have a balanced budget amendment do to avoid or evade the
requirements of a balanced budget amendment.
I would be interested in the perspective of the chairman of the
Appropriations Committee on what States do. I just had a conversation
with a fellow Senator from another State who said in his State they
have a balanced budget amendment but they get around it by having off-
budget items in which they go to a taxing district, or some other
district that is permitted to issue bonds, to take on debt and then
they service that debt by having payments made to that other entity. It
is not State government strictly speaking. By that artifice, they avoid
the requirements of a State balanced budget amendment.
In fact, I just read last night a study that indicated the vast
majority of States that had a balanced budget amendment in fiscal year
1991 actually spent more than they took in. In other words, the vast
majority found ways around the balanced budget requirements they have
in their own Constitutions by this method of taking things off budget,
by shifting the timing of spending and by other artifices that they
have creatively, I might say, conjured up. Is it the Senator's
understanding that is the case with respect to States?
Mr. BYRD. Yes, that is my understanding. The States--most of them--
operate on two budgets: An operating budget and a capital budget. The
capital budgets do not have to be balanced and most of the time
probably not balanced, and the operating budgets are not always
balanced either. States do resort to various gimmicks.
In addition, the States are unlike the Federal Government. Just lay
down the constitution of the State of West Virginia and compare that
constitution with the Federal Constitution. In the first place, the
constitution of West Virginia would be about seven or eight times
longer than the Federal Constitution. It goes into all kinds of detail.
In the second place, the constitution of West Virginia does not have
to deal with the common defense, the common welfare of this country,
national economic policy, international relations, treaties with other
countries, interstate and foreign commerce, the raising and supporting
of armies, the providing and maintaining of navies. States do not have
those things to worry about.
They do resort to all kinds of ways. They put items off budget or
they will mandate the counties or the municipalities to carry out some
function or program; thus, it does not show up as an outlay on their
budget. The Federal Government will resort to the same thing if this is
ever included in the Constitution; it will be. And then what happens?
The lack of confidence that the American people have today, the
cynicism that is prevalent throughout this country will be increased
manyfold because they will see that those Senators did not really mean
what they said when they adopted this constitutional amendment. They
did not balance the budget.
What did they say? They said it is all right to balance the
estimates. What did they say? Who will enforce it? This amendment says
that the Congress shall enforce it. Well, that is where it is right
now. My friend, Mr. Simon, in essence says: ``These Senators get around
these statutes; they play games with the statutes; they will amend the
statutes; they will say one thing on Gramm-Rudman and the next year
they will change that statute and make it say something else. So we
have to have something to force us,'' Senator Simon says, and other
Senators who are supporting this amendment say, ``We have something to
force us, we have to have this little piece of paper here to force us,
to give us the courage, because otherwise we Senators play games. But
if we get this constitutional amendment, we know we cannot play
games.''
What makes you think so? The amendment itself says that Congress
shall enforce through appropriate legislation, through statutes which
can be amended by us weaklings who need this piece of paper to be
strong. Why take 7 years to say--the old tune: 7 years with the wrong
woman. Here we are going to have 7 years sending this amendment out to
the people to be ratified by their legislatures and after all that
time, it comes right back here, where it is now; here among we Senators
who cannot be trusted, who do not have the courage, who do not have the
backbone, who do not have the spine; we will get around statutes, but
the amendment says that is how it is going to be done, enforced by the
Congress through appropriate legislation.
Mr. CONRAD. Can I ask, is there any way, in the Senator's judgment,
that using estimates, which I think at least some of us see as the
Achille's heel of what is before us because of our experience, bitter
experience, with Gramm-Rudman which held out so much promise to the
American people and failed so completely, is there any way in the
Senator's judgment that that defect could be corrected and be workable?
Mr. BYRD. If this balance is done on the basis of estimates, there is
no estimate that will ever be accurate.
Mr. CONRAD. In fact, this would encourage inaccurate estimates?
Mr. BYRD. It would encourage inaccurate estimates, and all of the
estimates going over the past 10 or 12 years, as I showed on the chart
earlier, are off. Some revenue estimates are overly optimistic, others
are not. Some outlay estimates are overly optimistic, others are not.
The point being that they are always off, one way or the other. To
depend upon estimates is a very weak reed upon which to lean.
So the people are going to be chagrined and disappointed. We are
being given wiggle room, may I point out to the Senator, when we can
use estimates, when the Congress can use estimates under section 2. The
President is not being given that wiggle room. There is a section in
this amendment which says that the President shall send up a balanced
budget. It does not say anything about using estimates.
So the President is being ordered to do something that is far
different from what his responsibilities are under the Constitution. He
is being ordered to say, whether you like it or not or whether you
believe it or not, you have to send up a balanced budget.
Now, from time to time around here some of us have voted the
President should send up a balanced budget. The truth of the matter is
we played politics when we did that. We tried to point out no President
has ever sent up a balanced budget in the last several years, so we
played politics. Well, that was a statute. This is the Constitution.
This amendment says the President cannot send up what he believes is an
honest budget because if he exercises honesty and truth, he is going to
have to point out the budget is not going to be balanced. But he is
ordered here to send up a balanced budget, a budget in which the
outlays will not exceed receipts.
Suppose the President believes that the economic situation is such
that there needs to be an unbalanced budget; there is a recession
coming on and it will get worse if he does not exercise the
countercyclical fiscal tool that has been available to him.
So he may think he ought to send up an unbalanced budget, but he is
going to be ordered by this amendment not to do that. Send up a
balanced budget in which the outlays do not exceed receipts. That is
going to damage the President. It is going to make him a weaker
President, and it will do that harm to the checks and balances and
separation of powers of the Constitution.
Mr. CONRAD. I thank the Senator for his answers.
Mr. BYRD. I thank the Senator.
Mr. SIMON. Will my colleague from West Virginia yield for 60 seconds,
charge it to my time, to also respond to my friend from North Dakota?
Mr. BYRD. Yes. Yes, I will be happy to.
Mr. SIMON. And I will get into the court matter on my time. But the
reality is you have to have some form of estimates. And the way that
becomes tough--in fact, according to the Senator from West Virginia,
too tough--is it takes a three-fifths majority to increase the debt
limit. So we cannot play games on this matter of estimates. We are
going to have to be realistic. And I think that balance is a good one
in this amendment.
Mr. CONRAD. Might I inquire on the Senator's time?
Mr. SIMON. Mr. President, I did not mean to be taking the floor from
Senator Byrd.
Mr. BYRD. That is quite all right.
Does the Senator have a question?
Mr. CONRAD. I do. I would not want it to come off the time of the
Senator from West Virginia. I really have a question for the Senator
from Illinois.
Mr. BYRD. I will yield my time for the Senator to ask the question.
The Senator from Illinois may answer it on his own time or he can use
my time, too.
Mr. SIMON. I will answer it on my own time, yes. I thank the Senator
from West Virginia.
Mr. CONRAD. The great concern I have--and the Senator from Illinois
has been a great ally on the Senate Budget Committee. We have been two
who have tried to push for reduced deficits in the period that we have
served on that committee together. I just say to him, one of the great
concerns I have is what appears to be reasonable on its face, when
turned into what we deal with in the budget process, becomes quite
different, and that is when you rely on estimates there is so much room
for monkey business. And we have experienced it.
With Gramm-Rudman, every year--every year--they would send us a
budget that was a total fiction because we knew the estimates that were
behind the numbers were false. We knew that they were ``Rosie
Scenario'' with respect to interest rates, with respect to economic
growth, with respect to unemployment. So what appeared to be something
that was in compliance was, in fact, an absolute fiction and did
nothing more than mislead the American people that somehow we were on a
course that was going to deliver deficit reduction, and instead
resulted in dramatic increases in the deficits.
I am very worried that we have the same prospect here.
We talk about the debt limit. Let me just say that with respect to
the debt limit, when you get to the crunch, the question then becomes
to every Member in this body, are you going to shut down the Federal
Government? Over and over I have been in the position of wanting to
stand up and say, ``No, filibuster a debt limit, stop it dead in its
tracks.'' And every time my staff comes in and says, ``Senator, if we
do that, you shut down the Federal Government. You keep the Social
Security checks from going to your grandparents. You stop the person
from getting Medicare that is in a life-threatening situation. You shut
down the functioning of America.''
So I really wonder at the end of the day if we have really
accomplished what we think.
Mr. SIMON. If I may respond, first, this changes the dimensions of
what you do in the Budget Committee. We are not dealing simply with a
statute. The Senator and I took an oath when we stood up there to
protect the Constitution. This is now part of the Constitution. And
when we put that budget together, we know we are not dealing with a
statutory thing. We are dealing with requirements that are tough. There
is no question it is tough. The Senator from West Virginia said it is
tough.
But that, I think, will force reality onto us. It does not mean we
are always going to guess right. The Senator from West Virginia is
absolutely correct. It is difficult. But I think there will be a
different tone of reality in the Budget Committee with this kind of
provision in the Constitution.
Mr. BYRD. Mr. President, may I say to my friend from North Dakota,
the Senators who are elected today are supposed to understand reality
and what it means. When we write this amendment into the Constitution,
who is going to decide what reality is? Under section 6, the Congress,
Senators, House Members, are going to legislate. They are going to
implement this amendment by appropriate legislation.
Now, I hope to be around here, and I expect to be, if it is the good
Lord's will--and I am running again this year so I expect and hope that
it will be the people's will of West Virginia. What is there in this
little piece of paper, this is a constitutional amendment we are
debating, what is there in this piece of paper that will enable me to
understand reality more than I understand it now? What is there in this
piece of paper that will make me face up to reality more in the year
1999 or the year 2000, or the year 2001 than today?
This is the philosopher's stone, my friend would say. This is the
magic potion. This is the silver bullet. Somehow or other we will
understand reality more. Somehow or other we are going to have more
courage in 1999. Somehow or other we are going to be forced to face up
to reality.
It is somewhat ironic for me to think that that little bit of paper
is going to make any difference, when it is the same people who are
managing the budget and fiscal budget in this body today who are going
to be managing it in 1999. Maybe not to the individual, but the same
group of people.
So let me on this point read these excerpts from testimony before the
Appropriations Committee, the hearings on the balanced budget
amendment. Gimmicks will occur. Stanley Collander, director of Federal
budget policy of Price Waterhouse testified as follows:
The reason a constitutional amendment will fare no better than a
deficit elimination state is that there are too many ways for the
seemingly straightforward balanced budget requirement to be avoided,
circumvented, and evaded.
Of all the gimmicks that would be used to thwart the amendment's
goal, Mr. Collander concentrated on 5. The first one he called ``the
return of the `Rosie Scenario.'''
The Senator from North Dakota referred to ``Rosie'' a little earlier,
so ``Rosie Scenario.'' The first one Mr. Collander called the return of
the ``Rosie Scenario.'' That is the use of overly optimistic economic
assumptions such as occurred during President Reagan's presidency under
OMB Director Stockman.
Second, he, meaning Mr. Collander, cited the likely tactic of changes
in accounting so that outlays would be pushed into future years. An
example would be a return to more costly leases by the Federal
Government of its buildings and equipment in order to avoid the larger
outlays that would occur from purchasing these items.
Third, shifting of revenues and outlays from one year to the next in
order to avoid a deficit, delayed obligations, a method already used in
the budget, one which Senator Byrd fights against.
Fourth, Mr. Collander says one of the biggest gimmicks would be for
the Federal Government to do things through regulations or mandates
rather than through spending or taxing. A strong incentive would exist
to mandate that State or local government or businesses do certain
things rather than the Federal Government spending its dollars for
foregoing revenues to accomplish the same ends.
Five, would be the gimmicks of selling Government assets. They, for
example, would involve sale of our national parks to private developers
and then leasing them back. This would allow revenues to go up and
thereby help meet the balanced budget requirement.
Mr. Collander is pointing out the gimmicks that will occur. Yes, in
answer to the question of the Senator from North Dakota, the Federal
Government will resort to gimmicks. And it will mandate to the States--
and the Governors of the States are already screaming about the Federal
mandates. Well, just wait until this amendment becomes a piece of that
great document, the Constitution of the United States, and see how the
Federal Government mandates the States to fund this program or that
program, Medicaid, whatever. The Federal Government will use the same
gimmicks that the States use.
The distinguished Senator from Utah asked me to yield. I would be
happy to yield for a question.
Mr. HATCH. If the Senator will yield, I was concerned.
Mr. BYRD. I will be glad to yield the floor.
Mr. HATCH. If the Senator would, I would like to speak for just a few
minutes on the points the distinguished Senator made.
Mr. BYRD. I would be happy to yield the floor. I thank the Senators
for their patience, and I thank the Senator from North Dakota for his
questions.
Mr. HATCH. I thank my dear colleague from West Virginia and
appreciate the comments that he has made. I also appreciate my
colleague from North Dakota and his concern about this amendment
because we are all concerned. We want to do what is right here. We
want to get our country back in order and get spending under control.
But on a couple of legal matters, I think it would be well if I
addressed them for just a few minutes because he has raised some very
interesting questions, and others have raised the concern that the
balanced budget amendment will give the courts the power and authority
to raise taxes.
The concern, I believe, lies in regard to a recent Supreme Court
decision, Missouri versus Jenkins. In that case, in 1990, the Court in
essence approved a lower court remedial remedy of ordering local,
State, or county political subdivisions to raise taxes in order to
support a court-ordered school desegregation order.
That is what happened in that case. Intentional segregation in
violation of the 14th amendment's equal protection clause had been
found in the lower court in a prior case against the school district.
So there was, in effect, intentional segregation found by the lower
court.
The question the distinguished Senator, it seems to me, has raised is
would this balanced budget amendment allow a Federal court to order
Congress to raise taxes to reduce the budget? I think the answer is
clearly no. For instance, I would just say first, Jenkins is a 14th
amendment case. Under 14th amendment jurisprudence, Federal courts may
issue remedial relief against the States. However, the 14th amendment
does not apply to the Federal Government.
So, literally, that is why they can do it in that case. I do not
agree with what they did in that case. I think it is a horrendously bad
decision. But that would not be a precedent pursuant to which courts
would be able to force Federal taxation through the courts on the
American people pursuant to this balanced budget amendment. That is No.
1.
Second, Congress cannot be a party defendant. In order for taxes to
be raised, Congress would have to be a named defendant, and in this
case, of course, it could not be. Presumably, suits to enforce the
balanced budget amendment would arise when an official or agency of the
executive branch seeks to enforce or administer a statute whose funding
is in question in light of the balanced budget amendment.
I would point out the Riegle v. Federal Open Market Committee case,
which said, ``When a plaintiff alleges injury by unconstitutional
action taken pursuant to a statute, his proper defendants are those
acting under the law--and not the legislators which enacted the
statute.'' And the court cited Marbury versus Madison as a precedent in
making that decision.
The executive branch official, however, cannot be ordered to raise
taxes, because he or she does not have the authority to do so. So there
is no way that the Supreme Court is going to order the payment of
taxes. And the Jenkins case is distinguished because of the 14th
amendment.
Finally, under section 6 of the balanced budget amendment, which is
the enforcement mechanism, Congress can limit the type of relief
granted by Federal courts to declaratory judgments and thereby limit
court intrusiveness into the budget process. This authority arises out
of article III's delegation to Congress to power define and limit the
jurisdiction of the lower Federal courts.
Having said all of that, let me just mention that there is much more
that can be said on the role of the Federal courts that would make it
very clear that there is just no way that they are going to be able to
impose taxes based upon this particular amendment.
But I want to bring to the attention of my dear friend from North
Dakota that we are working on an amendment right now, the distinguished
Senator from Illinois, others, and myself, with Members of the House.
The problem with the balanced budget amendment is getting a consensus,
and a constitutional consensus at that. If any of us could write it
just exactly the way we want to, it might be different in one or two
respects. But we are talking about a consensus amendment that has to
get a two-thirds vote, and it has to be bipartisan. We have to work
together on it. In this case, we have to have Republicans in order to
get this passed. And probably a majority of those who vote for it will
be Republican because it has always been an effort on our side.
But to make a long story short, we Republicans cannot pass the
amendment by ourselves, and neither can any Democrats do it by
themselves. So what we are trying to do is accommodate our colleagues,
like the distinguished Senator from North Dakota, by finding language
that will resolve this problem in their minds even though all of the
law on the books flies in the face of the Supreme Court exercising
jurisdiction--unwise jurisdiction--in these matters.
In order for courts to exercise jurisdiction, they would have to meet
three standards that they themselves have set up. They would have to
find standing, and you cannot find any case that would show they would
grant standing in this type of case. They would have to find
justiciability. And they would have to avoid ``political questions.''
They cannot get by all three of those. They know it, we know it, and
anybody who studies constitutional law knows it.
There is room to raise a ``what if.'' In the case of Bob Bork, in his
letter expressing concern about the amendment, he basically raises a
``what if.'' He says, ``I don't think the courts are going to do this,
but what if?'' What if you get a bunch of judges who are irresponsible
who really ignore constitutional law, prior precedents, the
Constitution itself, and go ahead and do this? I guess you could have a
``what if'' in every situation under those circumstances.
But what we were going to try to do to resolve this--we have been
working with a whole coalition of people, with one of the prime
spokesmen, the distinguished Senator from Missouri [Mr. Danforth]. We
are trying to get language that basically says this: The power of any
court to order relief pursuant to any case or controversy arising under
this article shall not extend to ordering any remedies other than a
declaratory judgment or such remedies as are specifically authorized in
implementing legislation pursuant to section 6.
If such language were adopted, any possible argument that could be
made in this area is gone. I believe we can bring that about. Certainly
the distinguished Senator from Illinois and the Senator from Idaho and
myself are working very hard to bring that about.
I would not mind taking time and explaining----
Mr. CONRAD. Will the Senator yield on that point?
Mr. HATCH. Yes.
Mr. CONRAD. I had instructed my staff to work on an amendment along
these same lines, because I must say I am very concerned about the
concept and the possibility that the courts would wind up in a role of
being the final arbiter here. And I understand what the intentions of
those who are carrying this amendment are. I also, after having been a
tax commissioner and having dealt with the courts for many years, know
about the law of unintended consequences. I am very concerned that we
would find ourselves in a situation, unintended as it might be, that
the courts were the final arbiter.
I thank the Senator.
Mr. HATCH. I hope that helps. But before this debate is over, both
the Senator from Illinois and I will put in the Record why this is not
really an issue anyway. I think the law is very clear that we do not
have to worry about that. But, we are probably going to put language
into this amendment to resolve the problems of some of our colleagues,
like yourself, who have sincere concerns in this area. We think that
language would resolve those problems, and we hope it will satisfy the
distinguished Senator.
Mr. SIMON. Mr. President, I yield myself such time as I may consume.
First, in terms of the estimates aspect we were talking about before,
there has to be some way for Congress to have a little flexibility on
this. And the reason we then have the three-fifths majority is to make
this tough.
The Senator from North Dakota has some concerns. I simply say to
Senator Conrad: Balance those concerns against the huge, huge threat we
face longterm of monetizing the debt and all of where we are headed,
which is really unknown territory for us. Unfortunately, it is not
unknown territory for many other nations. If we do not pass this, we
are taking a gamble that we can be the first Nation in history to have
that kind of debt and not monetize the debt.
In terms of this whole thing just being gimmicks, I do not think my
friend--and I respect him a great deal--Senator Byrd would be fighting
this so hard if he felt it were just a gimmick, and I do not think
others would. It has teeth and it should have teeth.
In terms of the court situation and the possible court involvement,
first, in general, the States restrictions have--there are loopholes
out there. But the leading scholar in this field, a faculty member at
the Cardozo School of Law in New York testified before us last week,
and he said that despite the loopholes, there is no question that this
is a restraint on State government, a restraint that we do not have in
the Federal Government. Have the State courts been involved to a great
extent? You find occasional cases, but, generally, there has not been
much State court involvement.
Just to make sure we do not have a problem, we have the language that
``Congress shall implement.'' There was a letter sent to Senator Byrd
by a group of law professors, and I asked the distinguished former
Attorney General of the United States, Griffin Bell, who is both a
former Federal judge and a real scholar, to give his evaluation. I
would like to enter into the Record the letter sent to Senator Byrd,
and Griffin Bell's response to me in response to that.
I ask unanimous consent that those letters be printed in the Record.
There being no objection, the letters were ordered to be printed in
the Record, as follows:
February 8, 1994.
Dear Senator Byrd: The undersigned join in urging the
Congress to reject the proposed Balanced Budget Amendment.
Some of us support the present Administration, others do not.
We disagree about the nature, causes and cures of our present
budgetary situation. We share the conviction that the
Balanced Budget Amendment now before the Congress is a
serious mistake. We have different reasons for this
conviction. They include:
The Amendment would deprive the Congress and the President
of needed flexibility.
It would rigidly and permanently bias decisions against
spending on social programs.
It would seriously distort the balance between federal,
state, and private institutions by creating a permanent
incentive to accomplish national objectives indirectly
through the imposition of mandates and regulatory burdens on
state and local governments and the private sector.
It would inappropriately involve the judiciary in
intractable questions of fiscal and budgetary policy.
It would be unenforceable and thus use the Constitution as
a billboard for failed slogans.
Sincerely,
Boris I. Bittker, Professor Emeritus, Yale Law School;
Robert Bork, Esq., American Enterprise Institute,
Washington, DC; Haywood Burns, Dean, CUNY Law School at
Queens College; Archibald Cox, Professor Emeritus,
Harvard Law School; William A. Fletcher, Professor,
University of California at Berkeley Law School;
Charles Fried, Professor, Harvard Law School; Lawrence
M. Friedman, Professor, Stanford Law School; Walter
Gellhorn, Professor Emeritus, Columbia Law School;
Gerald Gunther, Professor, Stanford Law School; Louis
Henkin, Professor Emeritus, Columbia Law School; Burke
Marshall, Professor, Yale Law School; Norman Redlich,
Dean Emeritus, New York University Law School; Peter M.
Shane, Professor, University of Iowa College of Law;
Geoffrey R. Stone, Dean, Chicago Law School; Kathleen
Sullivan, Professor, Stanford Law School; Laurence
Tribe, Professor, Harvard Law School; Harry Wellington,
Dean, New York Law School
____
King & Spalding,
Atlanta, GA, February 21, 1994.
Hon. Paul Simon,
U.S. Senate,
Washington, DC.
Dear Senator Simon: I write in response to the February 8,
1994 letter you received from a number of legal academicians
in opposition to the Balanced Budget Amendment. I believe
that the reasons given by these individuals for opposing the
Amendment are misplaced.
First, the Amendment would not deprive Congress or the
President of Flexibility in budgetary matters; rather the
necessary flexibility would be preserved by allowing
Congress, by a three-fifths majority in each House, to permit
deficit spending. For example, just last week Congress
overwhelmingly passed an emergency supplemental
appropriations bill to provide much-needed assistance to the
victims of the Los Angeles earthquake.
Second, the proposed Constitutional Amendment will not in
any way bias decisions against social spending. In fact, it
is the fiscal status quo that biases government decisions
against social spending. Increasingly, Congress and the
President are prevented from making real fiscal choices due
to constraints imposed on them by rising interest payments on
the national debt and the growth of entitlement programs. A
Constitutional requirement to balance the budget will restore
the viability of governmental decision-making on fiscal
priorities by insuring that we stop paying $300 billion a
year on interest payments that do not go to any social
program.
The writers of the February 8 letter also argue that this
Amendment would ``distort the balance between federal, state
and private institutions by . . . [imposing] mandates and
regulatory burdens on state and local governments and the
private sector.''
Unfortunately, this describes not come fanciful future
under a Balanced Budget Amendment, but the reality facing
Congress today. States and the private sector are reeling
from the impact of regulation and unfunded mandates. In a
fiscal environment where interest on the debt and
entitlements are crowding out all other spending, Congress is
left with little choice.
A Balanced Budget Amendment would require the federal
government to function on a pay as you go basis, and would
gradually ease the burden on other spending by reducing
interest payments on the debt. It is now, when the hands of
Congress are tied by rising interest payments and
skyrocketing entitlements, that the incentive to push costs
on to the private sector and other units of government is
greatest.
Congress could, if it wanted, decide tomorrow to stop this
insidious practice, but the political cost is too great. A
Balanced Budget Amendment would force Congress to make the
tough choices that would eventually ease the burdens on
states and the private sector.
Finally, I would like to address concerns that judicial
review of the Amendment would either (1) embroil the
judiciary in ``intractable questions of fiscal and budgetary
policy'' or (2) prove unavailing. Leaving aside the fact that
these conclusions are basically contradictory, they are in
any event wrong.
With respect to the first of the above points, some have
said that judicial enforcement of the Amendment would require
courts to involve themselves in the minutiae of the budgetary
process, such as by raising taxes or by decreeing specific
spending limitations. Judicial review would not, however,
lead to this result. To the extent that enforcement of the
Amendment would involve the judiciary in deciding specific
budgetary issues best left to the political branches, the
courts would be free to--and would likely--find the
enforcement action to present a non-justifiable political
question and dismiss the suit. Indeed, as the Supreme Court
noted in United States Department of Commerce v. Montana, 112
S.Ct. 1415 (1992), questions of enforceability, and the
respect due coordinate branches of government by the courts,
lie at the heart of the political question doctrine: ``In
invoking the political question doctrine, a court
acknowledged the possibility that a constitutional provision
may not be enforceable.'' Even more recently, Justice
Souter's concurring opinion in United States v. Nixon, 113
S.Ct. 732, 747 (1993) noted that the political question
doctrine reflects ``prudential concerns about the respect
[courts] owe the political departments.'' Therefore,
consistent with current law, where judicial action to
enforce the Amendment would require the courts to address
policy questions best left to the departments, courts
would refrain from doing so. E.g., Panama Canal Co. v.
Grace Line, Inc., 356 U.S. 1, 15 (1972) (noting courts'
inability to act ``as virtually continuing monitors of the
wisdom and soundness of'' the actions of the political
branches); Harrington v. Bush, 553 F.2d 190, 215 (D.C.
Cir. 1977).
Critics are also mistaken when they offer the opposite
claim--that the courts would have absolutely no role in
enforcing the Amendment. Even without making specific taxing
or spending decisions, a court could--within the limits of
Article III of the Constitution--use its injunctive powers to
strike down legislation that clearly violates the terms of
the Amendment.
Moreover, Section 6 of the Amendment--which states that
Congress shall ``enforce and implement this article by
appropriate legislation''--gives Congress the authority to
limit the kind of plaintiffs who would be able to sue to
enforce the provisions. See Bread Political Action Committee
v. FEC, 455 U.S. 577 (1982) (noting Congress' right to limit
standing to bring particular federal claims). Section 6 also
empowers Congress to designate the forum in which such suits
could be brought. See ASARCO, Inc. v. Kadish, 490 U.S. 605,
617 (1989), (holding that Congress may proscribe state
jurisdiction to consider federal claims). Therefore, while
enforceability of the Amendment would be preserved,
enforcement would not come at the expense of judicial
manageability.
Sincerely,
Griffin B. Bell,
Former Attorney General
of the United States.
Mr. SIMON. Judge Bell basically says he does not think this would be
a great problem. We do have, very clearly, the ability to determine who
has standing. We can say there has to be 30 Members of the Congress, or
whatever, so there would not be a proliferation of suits.
I add that the court precedence on this--and Senator Danforth is very
concerned because of the Jenkins case. But that does, as Senator Hatch
mentioned, involve the 14th amendment. The courts have been very clear
on what they call ``political matters.'' A great illustration is when a
former colleague of ours, Senator Barry Goldwater and about a dozen
people tried to knock out what happened on China and Taiwan. Senator
Goldwater and his colleagues said this violates a treaty that we have
with Taiwan and, in my opinion, he was correct in saying that violated
the treaty. But the Supreme Court said:
This is a matter between the legislative and executive
branch. This is a political matter, and we are not getting
involved in that.
Just to make doubly sure that we are not going to have a problem, we
have this amendment, and we would be happy to have the Senator look at
the language. I think it locks it in--and we would be happy to have
Senator Conrad as one of the sponsors of that amendment--just to make
sure we do not have a Federal judge coming along and saying you have to
cut everything 10 percent, or you have to add this tax. We all agree
that should not be part of the process. Any future court can read the
record of our discussions here, and that should help on that.
Let me comment on a few other things, very briefly, that Senator Byrd
said. When he said we will invite partisan games with this because of
the three-fifths majority; First, there are --and I have to say that I
give credit to my staff for this, I was not aware of this--he mentioned
five cases in the Constitution that required super- majorities.
Actually, there are three others, for a total of eight in the
Constitution that require supermajorities; this would add a ninth one.
The supermajorities are there, for example, on treaties. Why do we have
two-thirds? Does this result in partisan games? With rare exceptions. I
do not think it has resulted in partisan games. But we have that in
there to protect the people. And we have illustrated for 25 years now,
and you and I have been involved in this fight.
I commend the Senator from North Dakota for being a champion of
fiscal common sense on the Budget Committee. But we have been involved
in this fight to try and hold those deficits down, and we have seen
what happened. The abuse has been massive. As you look long-term--and I
keep pulling this chart out. We have been shown by the administration
how it is coming down. This goes back up to $365 billion, according to
CBO.
The big thing is when you take OMB figures--these are the
administration figures--assuming health care saves all the money they
are suggesting, assuming we have 10 years of progress with no dips in
the economy, both of which are a long way from certain, but they say
then that--well, say I was born in 1930; I would spend 30 percent of my
lifetime earnings in taxes. My colleague, I believe, is about 15 years
younger than I am, or so. Let us say you were born in 1950; you will
spend about 34 percent in your lifetime earnings in taxes. Let us get
down to future generations, and they say, assuming all these ``Rosie
Scenarios,'' 66 to 75 percent of lifetime earnings will go for taxation
because of debt service.
We are not going to end up with 66 to 75 percent. We are going to
start printing money before that happens. That is the real danger. That
is why we need something here.
In terms of my distinguished colleague, Senator Byrd, saying we are
getting into microeconomic policy, the Constitution talks about
patents; the Constitution talks about weights and measures.
There are all kinds of financial things mentioned in the
Constitution. And I would add, the lead witness--and I think you were
there when he testified before the Budget Committee last year--against
the constitutional amendment was Prof. Laurence Tribe from Harvard. I
have great respect for him and he still opposes the amendment and I do
not want to suggest anything to the contrary.
But he did have one shift. When he started out his testimony, 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 ill-suited kind of provision to
include in the Constitution. The Jeffersonian notion that
today's populists should not be able by profligate borrowing
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 relates to a
structural protection for the rights of our children and our
grandchildren.
I think we have to keep in mind that we are talking about something
very fundamental here.
I see my friend rising and he has a question or a comment.
Mr. CONRAD. I do. If the Senator would yield for a question or two, I
would be grateful.
As you know, this issue concerns me perhaps more than any other. I am
personally persuaded that one of the most important things we can do is
reduce this budget deficit, reduce pressure on interest rates in order
to support economic growth in this country to restore our position as
international competitors.
Mr. SIMON. Absolutely.
Mr. CONRAD. I think last year's budget deal, in which we did make a
significant reduction in the deficit, has proven the theory; that is,
we have seen now the lowest interest rates in 20 years, we have seen
the strongest economic growth in 6 years, we have seen reduction in
unemployment, we have seen record housing starts, we have seen record
automobile sales. We have seen this, in part, because of what we did in
getting an economic recovery underway. So I am personally persuaded
that reducing deficits is in the economic interest of the country.
I have concerns that I have outlined here today with respect to court
involvement. I am very pleased to hear the Senator's reaction to that.
I am concerned about the use of estimates. I am very concerned about
that, because I have seen through the Gramm-Rudman process how that can
be used to subvert what is an honest intention.
There are two other areas that I would like to raise with the Senator
from Illinois with respect to issues that concern me.
One of those two is the matter of Social Security being included. It
strikes me that Social Security, which is a separate trust fund, should
not be used to balance other parts of the Federal budget.
My colleague, Senator Dorgan of North Dakota, I understand, has an
amendment he will offer to eliminate Social Security from the balanced
budget requirement. As you know, the underlying rationale for that is
Social Security is in substantial surplus, at least for the foreseeable
future.
I am wondering whether the prime mover of this amendment will support
that amendment or, if he is in opposition, what the rationale for that
opposition would be.
Mr. SIMON. Yes, I will oppose the amendment. I have great respect for
Senator Dorgan who, on a number of things, has shown real insight,
including standing up on the issue of intangible assets, which is one
of those issues someday somebody is going to hear about that will be
important.
I might mention that the former actuary for 23 years for the Social
Security Administration, the chief actuary, Bob Myers has sent a letter
to me saying the only way to protect the Social Security fund is by
passage of the balanced budget amendment.
Mr. CONRAD. I read, by the way, the letter you sent around from him.
I thought it was an instructive letter.
But your intention is to oppose it?
Mr. SIMON. I oppose it.
Mr. CONRAD. What is the rationale?
Mr. SIMON. Let me tell you the rationale.
First, originally, when I drafted my first balanced budget amendment,
I included that, interestingly.
The reality is that we do have a surplus at this point right now in
Social Security. I would like to balance that budget without that
surplus. It would make it much tougher, but it would be a great thing
for our country if we were to do it.
I will join the two Senators from North Dakota in moving in that
direction. But we also face in the outyears a point when there is not a
surplus but a loss there. One way of protecting Social Security--not in
my lifetime, but in the lifetime of my children--is to include Social
Security in this.
So long term, I think it is a protection for Social Security not to
have the exemption.
Mr. CONRAD. Let me, if might, respond quickly to that question and
then ask another question.
The thing that is disturbing to me, as I reflect on Rev. Jim Bakker,
Rev. Jim and Tammy Bakker--and I think everyone remembers the PTL Club
show that was on. I can remember saying in one of our Budget Committee
meetings during our deliberations, ``Does anybody remember why Jim
Bakker is in a Federal prison?'' Nobody could remember the exact
details, but fundamentally he is there because he promised to raise
money for one reason and then used it for another purpose.
That is precisely what we are doing to Social Security today--not in
the future, today. We are telling people we put that payroll tax on in
order to fund Social Security. And, indeed, we are funding part of
Social Security that way. But we are also funding the operating
expenditures of the rest of the Federal Government by running a Social
Security surplus and taking the money and using it for another purpose.
By those tests that were applied to Rev. Jim Bakker, all of us would
be in a Federal penitentiary.
I find it disturbing that for the foreseeable future Social Security
is in surplus, and under the terms of the amendment we have before us,
we would achieve a balance but only achieve a balance because we would
be using the Social Security trust fund to make that balance.
Mr. SIMON. First of all, I agree with everything my colleague from
North Dakota says in terms of Social Security. I think it was a mistake
when we got a unified budget.
We talk about this being the 25th anniversary of balanced budgets. In
fact, in 1969, you had a balanced budget because for the first time you
included Social Security, and without that, there would not have been a
surplus.
I have been critical, as my colleague may recall, of our budget for
two reasons: First, is we include the Social Security surplus. I favor
putting that as a separate item in the budget. I will join my two
colleagues from North Dakota in statutorily trying to do that. It does
complicate getting to a balanced budget very, very much. No question
about it. I recognize that and I recognize we have to have a two-thirds
vote. And this is a practical compromise.
The second point that I have fought on is when we list interest we
should list gross interest instead of net interest. It is one of the
little games we play around here. We would never think of saying to the
Justice Department, ``Well, you collected so many dollars in fines,
therefore, your appropriation is that much less.'' It is one of the
games that we play.
But I am eager to join my two colleagues from North Dakota in
statutorily doing everything we can to protect Social Security.
Mr. CONRAD. May I raise one final point with the Senator from
Illinois?
Mr. SIMON. Yes.
Mr. CONRAD. One other concern that I have is with respect to a
question of when the country is in recession. In examining the economic
history of the country, I am personally persuaded that there is a
countercyclical role for Government to play. We have, under the terms
of this agreement, the ability to deal with a wartime situation. And I
am concerned what if this country were in recession or headed into
recession, and we would be required to meet the terms of the balanced
budget amendment through a tax increase or spending cuts that might
accelerate the downturn rather than allowing the Federal Government to
serve as a buffer and to provide some economic lift by way of a budget
deficit? That is, I am personally persuaded we ought to run balanced
budgets over time, but in any 1 year we might want to run a budget
deficit.
I am interested in the view of the Senator from Illinois with respect
to the possibility of having the Government play that kind of role. Is
it the view of the Senator that the three-fifths test would be used and
that when we are in recession it would be possible to get 60 votes in
the U.S. Senate for the purposes of countering the effects of a
recession?
Mr. SIMON. The answer is a little complicated. But, first of all I do
believe that in a real recession we can get the 60 votes. We got 60
votes for unemployment compensation extension on an emergency basis
because of the problems that we have had. But I think there are other
answers that are even more significant than that and they tie in with
what my colleague just said about Social Security. If we try to lean on
Social Security less in terms of a surplus and aim for what Charlie
Schultze, who formerly chaired the Council of Economic Advisers for
President Carter, and Fred Bergsten, who was the Assistant Secretary of
the Treasury--Fred Bergsten has said, and testified last week, that
with a balanced budget amendment we will be much more able to respond
to a recession than we are now, if we use common sense in building in a
little surplus. Then you can respond quickly, and you do not have the
problems that we have had.
We tried, and with my colleague's vote too, I am sure, we tried to
get $11 billion for a jobs program. We could not do it here because we
are so strapped by where we are. We could not come up with that kind of
money. If we built in a surplus then it would be easier to respond
quickly and much more significantly; $11 billion in a $6 trillion
economy is nothing.
Then a second part of this that is really important. When you talk
about countercyclical. One of the things we have done, as the Senator
and I know very well, this last year we spent $293 billion on interest.
Interest is not countercyclical. When you give money to people on
Social Security that is countercyclical. They spend the money. You give
money to people who are fortunate economically, if times go bad they
save the money. It does not become countercyclical. So the interest in
fact aggravates our recessions.
And this amendment will do one other thing. The Wharton School last
Thursday announced--and both my friends from North Dakota, who have
been very active in the financial field may have seen this, but it is
significant--the Wharton School says if this passes, 30-year bonds will
drop from 6.5 percent to 2.5 percent. That is going to make a huge
difference in our economy. And it means we can use funds for
countercyclical things rather than things that aggravate the
countercyclical trend.
Mr. CONRAD. Let me say on this point, I read the WEFA study last
night. In my interpretation of that--the Senator mentioned this point
the other day in the caucus--my understanding of the WEFA report was
they were talking about the Federal funds rate going down to 2.5
percent, rather than the 30-year bond. Perhaps I missed something in
reading it. But my interpretation was the 2.5 percent they were talking
about was the Federal funds rate rather than the 30-year bond.
Mr. SIMON. I have to say I got that from my staff. My impression is
to the contrary. But the Senator may be correct.
Thirty-year Treasury bonds, it is 30-year bonds.
Mr. CONRAD. Goes to 2.5 percent?
Mr. SIMON. Yes, 2.5 percent from 6.5 percent.
Mr. CONRAD. That would be exceptionally good news for the economy, if
we were having 30-year bonds at 2.5 percent.
Mr. SIMON. What a great lift this would be for housing, construction,
industrial investment--everything.
Mr. CONRAD. The estimate given for last year by the Treasury
Department, for every 1-percent drop in interest rates that provided a
$118 billion lift to the economy by reductions in consumer
debt, corporate debt, Government debt. And that in fact that is one of
the reasons we are seeing an economic recovery of the dimensions that
we see now. These lower interest rates are providing a lift to the
economy.
Let me just conclude by saying I hope the Senator from Illinois and
the other movers of this amendment have not made a determination, a
final determination, to oppose all amendments. Frankly, my reading of
the situation is that there are not the votes now to pass this
amendment. That is my own view. I may be wrong. But I have talked to
many of our colleagues and I think that is about where it is. As of
today, you do not have the votes. Senator Byrd does not have the votes.
There are a group of us who have genuine concerns with respect to the
issues I have raised here. The question of estimates, the question of
court involvement, the question of dealing with a recession, and the
question of Social Security.
I would say to my colleague, it may be possible to pass an amendment
that would address another concern that many of us share which is the
growth of debt. Because I feel deeply about it, very deeply. But I do
not want to vote for a constitutional amendment that I believe has some
flaws. Some of them I consider to be serious flaws.
This is a very, very serious business to amend the Constitution of
the United States. At least for this Senator. I believe that is the
case for the Senator from Illinois as well.
So I hope and I urge my colleagues who are the movers of this
amendment--and I hope my voice is heard beyond this Chamber--not to
make a final decision to oppose all amendments. Because I believe if
that is the course that is taken this will fail. I believe that. I
believe it will fail. I think there is a chance if we work together
that we might get the votes to have something that seriously addresses
this matter of the growth of the debt and at the same time is sensitive
to these issues that I have raised this afternoon.
I thank very much the Senator from Illinois.
Mr. SIMON. I thank my colleague. Let me say because it is such a
serious matter, amending the Constitution is not something where one of
us can sit down and start scribbling down an amendment and saying let
us do this. We have to approach this very, very carefully. For example,
the judicial amendment that we have talked about, we have had scholars
look at it. We have been looking at this very, very carefully because
we want to do the right thing.
I am not saying we are automatically going to be opposed to any
amendment, but when you talk about the Constitution of the United
States we have to be extremely careful. I can say, on the matter of
estimates, there is no way to my knowledge of dealing with this problem
without giving Congress the ability to make some estimates. But you
have to lock it in in some way so they do not play games, as we have
played games here. That is why the three-fifths majority is there.
In other respects we will take a look at amendments. I have to say my
predisposition is to reject amendments unless they are very, very
carefully drawn because we are dealing with the Constitution.
Mr. CONRAD. Might I just ask the Senator from Illinois, does he
believe he has the votes now to pass?
Mr. SIMON. The answer is on the basis of what I know I do not believe
I have the votes to pass this. I do not believe Senator Byrd has the
votes to stop it. I think Senators like my colleague from North Dakota
hold the balance on this.
Mr. CONRAD. I just say to the Senator and the other people who have
an interest in trying to get a result here that would accomplish a
purpose that I think is the common goal of many, that we not get fixed
in concrete with respect to amendments. Because I am personally
convinced, absent amendments, this will not succeed. Unless in the days
ahead there is a chance for us to address some of these concerns, which
are sincere and genuine on the part of people who probably hold the
balance with respect to this question, we will not have a successful
conclusion.
Mr. SIMON. Let me just say again in response, we will take a look at
whatever is suggested. We felt the judicial amendment was not
necessary, but just to make sure, because there are genuine concerns,
as you have expressed and others have, I think we are about to work out
something that I think meets that objection.
So we will take a look at other amendments. But we also want to be
very, very careful because of the nature of what we are doing. We are
not just amending some statute that I dreamed up or you dreamed up or
someone else did. We are talking about the Constitution. I know my
friend from North Dakota has the same feeling of sacredness about the
Constitution that we have to proceed with caution.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, let me make a comment to the concerns of
the Senator from North Dakota and other concerns that have been brought
forth in the last hour on the floor that are significant. And they are
important.
I do not think there is any question that we are very intent on doing
the right thing. We also understand that the process has to have an
element of flexibility and, in that element of flexibility, the
Congress of the United States must work its will. Certainly that is an
important part of any budget process. The Senator from North Dakota has
been involved in making budgetary estimates, as have others, and has
used the Gramm-Rudman example as a target by which to argue estimates.
Let us cast estimates in an entirely different light from which they
have ever been made before.
We all know that estimates before to project revenue for a Federal
budget, although I am not arguing that they were not made with a sense
of accuracy, did not necessarily have to be accurate because they
always knew that there was an open end in that process. If you missed
the estimate, you borrowed. If you missed the estimate, there was not a
drop dead or a very severe process that would be difficult to get by in
the end. So as best you could guess, you guessed your best.
We also know that State legislatures, even in States as large as
California, which has an economy one-sixth of the Nation, because of
the nature of their requirements, become very, very accurate in making
estimates. How accurate? Within a couple of percentage points? Is that
so dramatic as to say, if you cannot make that--well, we had one
Senator on the floor a few moments ago saying, my goodness that is a
huge amount. My guess is that is pretty accurate, and I do believe that
we have enough smart people around here doing econometric modeling to
figure out how to get about that close, considering all things. But,
recognizing that, we also understand that you cannot be totally
perfect, and the American people know that when you are guessing in
terms of $1 trillion plus. We grant within this amendment the kind of
flexibility to do so.
But the flexibility is tough. Why? We do not want the Senator who
says 2 percent is difficult to come to the floor and say, aw, but look
at the gaping loophole; such a gaping loophole Senators will jump
through it and a balanced budget will never be achieved and, therefore,
the Constitution is being used only as a political surrogate to a
problem that just takes Senators voting tough votes.
We want to make sure that it is a real amendment, that it works in
real ways, and that it does force a Senate and a House to respond in
sincere and politically honest ways to produce a balanced budget.
For years, as I worked to craft this amendment and worked with my
colleague from Illinois and other Senators and Members of the House,
there was a very conservative side of me that said we had to put in
this amendment an absolute formula to devise so that Congress could
only raise revenue by a certain amount on an annual basis based on a
percentage of the gross domestic product. We had to be tough because
you could not trust the Congress; they would just go out and raise
taxes. It would be easy for them to do and, therefore, we had to have
some form of tax limitation language in there.
I finally, over the years, decided that the greatest tax-limiting
factor in this country of ours was the electorate themselves. They
would choose the Senators or the Congressmen who failed to respond to
their call to be fiscally responsible if we could but give the
citizenry the tools by which to measure, on an accurate basis, whether
in fact that Senator was being fiscally responsible or not. And I chose
to come with this amendment and to support it.
We heard the Senator from West Virginia just confirm, in my mind, the
toughness of this issue when he, in fact, said this is a tough
amendment. Now, he was talking about the three-fifths vote. In other
words, he was talking about the ability to raise the debt ceiling. A
tough vote. He spent over an hour explaining how difficult it is to get
that vote. What he tells me and what I hope he is saying to all who are
listening is that this is a tough amendment; that those of us who have
worked over a decade to craft it, recognizing that we wanted to make
these kinds of issues tough, may well have accomplished that. We may
well have put together a process that is doable, that offers a little
flexibility in extraordinary situations but at the same time truly
recognizes that if you provide the loophole, there is probably 50 plus
1 percent in this body who might just avoid the tough vote and jump
through the loophole. We did it in Gramm-Rudman because the loophole
was that, in fact, it was a law and not a constitutional provision.
When the tough times came, we buckled under. What we are providing here
is a new environment in which budgeting will occur. That is why in
section 6 we say that it is the responsibility of the Congress to come
forth with that which will cause us to operate under this new
environment.
I am not saying it is going to be easy. I am saying it will be tough.
It should be tough because, if it is not tough, we will continue to do
what we have done because we have never made the tough decisions around
here. That is why the $4 trillion-plus debt. That is why a $200
billion-plus deficit. That is really what it is all about.
How about majority rule? We heard once again about that today. Let me
tell you, it cannot be a simple majority. The founders of our
Constitution said we will not allow a simple majority to tamper with
the Constitution of this country. What we are saying today is that our
amendment becomes constitutional law. It becomes one of those inherent
rights of the people to be free of a profligate Government and to be
free of the compounding of debt on the shoulders of future generations.
Now that becomes a right, a new right in this country, one that Thomas
Jefferson agreed with, one that Alexander Hamilton agreed with, one
that I agree with, one that the Senator from Illinois agrees with.
So, do we want a simple majority just to change it? No, not at all.
It is why we have worked for 10 years using the constitutional route,
and while it is not ours to fix, it is ours to propose. It will be 38
States who will decide whether this becomes the right of the citizenry,
and, therefore, the process must be tough. It cannot be an easy walk
away if we are going to arrive at a constitutional amendment that will,
in fact, bring about a balanced budget with the flexibility to
understand that you can move to fix it and to adjust it but within a
very tough framework that always keeps us constantly working to keep
the budget in balance. Not an easy process. Never has been. The one we
are involved in now is not an easy process. It has become tremendously
convoluted. That is why I think all of us are concerned about it.
For the last day and a half, we have talked about constitutional
language, we have talked about countercyclical processes, we have
talked about econometric modeling. For just a few moments, I would like
to get away from that, Mr. President, and talk about people, because I
will bet the average citizen is sitting out there scratching their head
and saying, ``Well, we don't quite understand what you're saying, but
what we do understand is that the budget isn't balanced and it doesn't
look like Congress is going to balance it and we've got a President
that just asked for a huge tax increase but his people don't want to
balance the budget, and what is it going to do for me, average
citizen?''
Let me tell you what happens, in my opinion, to the average citizen
in the small community of Idaho if we fail to do what we should do and
in the proper form. I remember what happened in the late seventies and
the early eighties when inflation took off in this country and this
Congress refused to use fiscal policy to take care of inflation and the
Federal Reserve had to use monetary policy to take care of inflation.
Thousands of Idahoans were out of work. It was a very real life
experience. They lost their jobs, they lost their life savings, they
lost their families, some of them. They lost all they worked for, and
it really was the Congress that should have been blamed. But the
average citizen out there took it right on the chin.
I do not care how complicated this debate is. The bottom line is a
government that lives within its means, that does not risk the
destruction of an economy that creates the jobs, that builds the homes,
that puts the food on the table of the average working men and women of
our country.
Alan Greenspan this morning was in the national news suggesting that
maybe he had to turn up short-term interest rates just a little bit
over the next little while because inflation just might be igniting
ever so slightly, and we do not want that to happen.
What he is really saying is I am going to use monetary policy to
guide this economy again. What he did not say but is my guess that is
in the back of his mind is that Congress' fiscal policy is not working
very well.
Now, what does short-term interest rates do if they go up? Again,
they deny the average citizen in this country the opportunity to have
spending power to do what? To buy goods and services for the benefit of
families.
So our debate today, as technical as it may become, as
countercyclical or noncountercyclical as we may argue, as econometric
modeling may or may not have the type of results that can and should
produce a reasonable revenue projection, or even the very technical
nature of constitutional law, in the end what this debate is really
about is the right of the average citizen to be free, free of a
government that will constantly move to progressively debt them in a
way that they cannot afford.
This administration, its own agencies will suggest that the child
born today, in their lifetime, will pay out 82 percent of their gross
income in taxation, and so when we suggest that that may reduce them to
the lifestyle of a Third World citizen, we are really talking about a
lifestyle that none of this generation has ever experienced and none
that we would ever want.
Now, I can suggest in closing that that is a very fundamental part of
our debate. I would hope that Senators as they listen and as they
become involved in this debate over the next week and as they are
concerned about the technical language of whether the judiciary is or
is not involved and how they get involved, and whether they can only
make declaratory judgment or they cannot, or whether we have figured
out the right way to make estimates, many of us believe we have because
this amendment has been 10 years in the crafting. And while we are
willing to be flexible and work with other Senators because we are not
to suggest that our ideas are the only ones or are the best, but there
are a good many Senators here who have worked with this issue a long
time.
After the smoke has cleared, the question is have we served the
citizens well? Can we proudly stand and say that we have begun a
process that will produce for this country, for our taxpayers, for the
citizen the unique opportunity to be free of a governmental debt that
they as citizens are responsible for in the end.
I believe that is the ultimate debate. Let us talk jobs and kids and
people and homes and vitality and opportunity and future. That is just
as much a part of this debate as the very technical language that all
of us are extremely concerned about today.
I yield back the time.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER (Mr. Kerrey). The Senator from Utah is
recognized.
Mr. HATCH. One issue that arises in terms of the nonjudicial
enforcement of the balanced budget amendment is whether section 1 of
Senate Joint Resolution 41, which mandates that total outlays for the
fiscal year shall not exceed total receipts for that year, implicitly
grants to the President authority to impound funds to suspend the
operation of spending measures or to rescind earmarked funding
measures.
This question was raised by the distinguished Senator from West
Virginia in response to some questions of the distinguished Senator
from North Dakota [Mr. Conrad].
I wish to mention just for a few minutes some thoughts on this
subject. This contention made by opponents was echoed by former
Solicitor General Charles Fried, a great friend of mine, during his
appearance at Senator Byrd's hearing on February 15.
Admittedly, the law of Presidential impoundment is far from clear.
However, the plain meaning of the structure of Senate Joint Resolution
41, buttressed by its legislative history, indicates that the amendment
does not grant--and I repeat, does not grant--the President any
additional authority and is in fact intended only to circumscribe
Congress' taxing, borrowing, and spending powers.
Specifically, section 1 of Senate Joint Resolution 41 directs that
outlays exceed receipts only if three-fifths of both Houses of Congress
vote to so provide.
The only mention of the President is in section 3 which requires that
the President submit a balanced budget to Congress for each fiscal
year. This view is supported by the committee report and prior floor
debates which make it clear that the amendment grants to the President
no new additional authority.
Finally, in section 6 of the balanced budget amendment, it is
mandated that Congress promulgate enforcement legislation. Now, this is
a very strong indication that Congress, and not the President, has the
exclusive authority to establish a mechanism to enforce the balanced
budget amendment which would resolve a lot of the problems that Senator
Byrd raised here today.
The President's constitutional role therefore is limited to enforcing
that legislative mechanism which we must pass for him to enforce. In
any event, impoundment authority is probably irrelevant. Although the
Supreme Court has not decided the issue of whether the President
possesses constitutionally inherent Executive impoundment authority, it
has held that the President may not impound funds when Congress
mandates that the sums be spent. And the cases are Kendell versus
United States, ex rel Stokes, State Highway Commissioner versus Volpe
and National Council of Community Health Centers, Inc. versus
Weinberger.
This implicitly supports the position that even if the President
possesses only limited impoundment authority, Congress could protect
its constitutional and institutional prerogatives by promulgating
detailed enforcement legislation pursuant to section 6--and that is
what is going to happen here, as the distinguished Senator from
Illinois has made so clear on the floor yesterday and today.
Once passed, such legislation would trump any conflicting
Presidentially created enforcement procedures such as impoundment
because the President must enforce any law the Congress creates.
So I just wanted to spend a few minutes on that because it is an
important point. It is one that bothers some members of the Budget
Committee, including our own Senator Domenici from New Mexico on our
side, and I think this answers that question about as well as it can be
answered.
This amendment is carefully drafted. We have come a long way. We have
brought together a maximum of people. We have a consensus on it. It is
the only one that is likely to pass. And I guarantee, if this does not
pass, it is only a matter of years until one a lot more restrictive,
with a lot more enforcement mechanisms, with much higher supermajority
requirements is going to pass. This one is tough enough. This one will
do the job. This one will get us on that glide path towards balancing
the budget and, hopefully, creating surpluses so we can cut down on the
national debt. Frankly, it is just something we simply have to do.
Mr. President, I yield the floor.
Mr. SIMON addressed the Chair.
The PRESIDING OFFICER. The Senator from Illinois is recognized.
Mr. SIMON. Mr. President, I thank my colleague from Utah for his
remarks. Let me just underscore his final comments before I yield to my
colleague from North Dakota, Senator Dorgan. I heard Senator Brown the
other day say if this does not pass, then we will, before the decade is
out as the situation gets more extreme, pass a more extreme
constitutional amendment.
I think that is the reality. As my colleague from Utah knows, I
resisted attempts to put some language in here that is frankly much
tougher than this. I think this is constitutional in nature. I think it
will do the job. But I think it is designed in such a way that it will
help the country and not harm the country.
Mr. HATCH. If the Senator will yield on that point, one of the
problems we have had since I--and a lot of us--have worked on this
Constitutional amendment is that there are a lot of people in Congress
who would like to have a three-fifths vote requirement not only for
balancing the budget but for increasing taxes.
I agree that would be too restrictive, although it appeals somewhat
to me when I look at how the country is going. This amendment is
carefully crafted. It brings together a wide group of consensus
builders. It really will give us a chance to have some discipline in
the process. It certainly is better than any statute we could pass. We
have tried statutes in the past. They have not worked. This will work
without it being so extreme that we hamper the country. But if we do
not do something like this to put some discipline into this process, I
guarantee you it is going to be done--when people get so frightened and
so mad out there and they see this exponential growth of the deficit
and interest against the national debt.
When that happens, we are going to have the other side start to take
action, and we are going to have a much tougher amendment than this
that could hamstring the country. This amendment will work.
I want to commend all my colleagues who have worked on it,
particularly my friends from Illinois and Idaho.
Mr. SIMON. Mr. President, let me make one other point that I should
have made to Senator Conrad earlier when I talked about countercyclical
effect. I mentioned that those who now receive the $293 billion in
interest are more likely to save the money than someone who gets Social
Security or something like that.
What I should also mention is that we have 17 percent-plus--no one
knows what that plus is--of that interest that goes to Japan, Great
Britain, the Netherlands, Saudi Arabia, and other places. That does not
do anything. That is roughly $60 billion-plus a year that is a drain on
our economy rather than a stimulus to our economy.
I am pleased to yield at this point to my colleague from North
Dakota, Senator Dorgan. He wants how much time?
Mr. DORGAN. Twenty minutes.
Mr. SIMON. Mr. President, I yield 20 minutes to my colleague from
North Dakota.
The PRESIDING OFFICER. The Senator from North Dakota [Mr. Dorgan] is
recognized for 20 minutes.
Mr. DORGAN. Mr. President, I appreciate very much the courtesy of the
Senator from Illinois.
This is, indeed, an odd group of people who have come to the floor of
the Senate to support a constitutional amendment to balance the budget.
If, as is often the case politically, we divide this Senate into people
who are either warm-hearted or cold-blooded, I suppose I fit into the
warm-hearted group. For 14 years I have supported things that try to
help people in this country, programs that are necessary and that
invest in human potential. But this debate goes beyond traditional
political lines.
I sat in the chair for a couple of hours today presiding over the
Senate, and it has been an interesting discussion. We find so often on
the floor of the House or the Senate that what is said often is not so
relevant and probably often not so important. This is important.
What has been said by both sides in this debate has been said in
eloquent ways. I should compliment Senator Simon for his leadership and
for his vision. Let me similarly compliment Senator Byrd. Everyone in
this Chamber knows that Senator Byrd is the authority on the history of
the U.S. Senate. He is a wonderful person. I greatly respect his
opinion.
This has been an interesting debate to listen to. I have listened
with care.
As I said, this is no ordinary debate because we are not debating a
law or a sense-of-the-Senate resolution. We are debating a proposed
change in the U.S. Constitution.
Not too many years ago I was selected to represent my State at a
quite interesting ceremony at Constitution Hall celebrating the 200th
birthday of the Constitution. Two hundred years ago 55 white, largely
overweight, men went into a room in a hot summer in Philadelphia and
wrote a Constitution. It was a hot Philadelphia summer, and they had no
air conditioning. So they kept the shades drawn all summer. But they
wrote this Constitution.
Two hundred years later we celebrated the Constitution's 200th
birthday, and 55 of us were selected to go into this same room. It was
men, women, minorities. It was a wonderful group of 55. I was
privileged to be among them.
George Washington's chair still sits at the front of the room. It is
where George Washington presided. Madison was there in that room.
Franklin was there. So were the other great Americans who created the
grounding of our democratic society, which we call the Constitution.
We now discuss changing the Constitution. It is not the first time we
have discussed that. We have changed it many times, in most cases not
on a whim but after thoughtful debate.
There have been thousands of proposals to change it. But the
Constitution is a sacred document. Wise men wrote it. And in it they
set out the three branches of our Government, distributed the powers
among the branches, and created a mechanism to protect the liberties
and freedoms of our people.
It is a misunderstood document. I have had constituents who have
asked me to do something and propose something. You say that would
clearly violate the Constitution. They say, ``I don't care what the
Constitution says. Pass a law.'' Well, obviously, the Constitution
governs.
But I do not think anyone here misunderstands the importance of this
debate. I have been very reluctant in the years I have served in
Congress to join those who want to change the Constitution. People want
to change it with respect to abortion. I have not been willing to
cosponsor or join them. People want it changed to allow prayer in
school. I have declined. I have chosen not to join them. Others wanted
to change it because some scruffy little guy burns an American flag.
They wanted to change the Constitution to prevent flag burning. I
declined. I did not think that was what we ought to do.
I have not been very likely to support those who want to change our
Constitution.
The proposed change today is about economic policy. The proposed
amendment before us suggests that we should require our Government's
receipts and expenditures to be in balance.
Why have we come to this point? Why is a constitutional amendment on
balancing the budget offered today? It is because this country is now
awash in a sea of red ink. In the last decade-and-a-half especially, we
have seen a tidal wave of deficit spending, and a substantial increase
in the Federal debt. We now have about a $4.4 trillion debt.
I do not know what $1 trillion is. I do not reckon any of my
constituents know what is a trillion dollars is.
I could describe it, of course, but it is a $4.4 trillion debt. We
have, up until the last year or so, been spending a billion dollars a
day that we do not have; every day we spend $1 billion more than we
take in. We spend our kids' money and their kids' money; we spend it
and add it to the debt.
Some say, ``Well, the debt is what we owe to ourselves. So it is not
all that important. It is not growing at an alarming rate.'' Well, of
course, it is. It is $4.4 trillion now; 14 years ago, it was less than
$1 trillion; 10 years from now, it will be $8 trillion. This is not a
problem? Look at the figures to understand how serious a problem this
is for the future of this country.
There is a lot of cynicism about the institution of Congress. Some of
it is fed by all of the news magazine shows and other folks who want to
make a dollar by creating cynicism about our institutions. Some of the
cynicism is very real. Some of that cynicism is directed at an
institution that people think cannot manage our affairs very well. It
spends money it does not have. It saddles this country with a mortgage
it should not have, and it mortgages our children's future.
The question is what do we do about it? We have tried in many
different ways with different devices to balance the budget. But we
have not succeeded. Entitlement programs grow. They mushroom. We have
tried dozens of different things.
A year ago, we decided with a one-vote majority here to take tough
medicine in the President's economic program. I supported that. There
were tax increases we do not like and spending cuts nobody liked. But
the fact is that it was $500 billion of medicine that was necessary.
But it was not enough.
Look at the numbers. Let me just show my colleagues the numbers. The
numbers show that in the year 2004, the total public debt will be
almost $8 trillion--an $8 trillion debt.
Things look pretty good in 1995 and 1996, as a result of the deficit
reduction bill. But what happens beginning in 1997 and every single
year from then on? The deficit continues to increase.
And even then it does not look awful because the money collected from
Social Security taxes is used to offset the deficit. But, of course,
that is dishonest and we cannot do that. We cannot do it in the long
term and we should not do it in the short term. No one should doubt
that this is a crisis. The question is what do we do about it?
Several weeks ago, I spoke on this floor about economists and
``augurs.'' We have heard debate about the economic projections the
dire consequences of what would happen if we pass this, or the
consequences if we do not pass that. I talked about economists a few
weeks ago.
In the year before we went into the last recession, in 1990, 35 of
the 40 leading economists predicted that we would continue to see 12
months of economic growth in the next year. Of course, the next year we
saw a recession. But 35 of the 40 leading economists had predicted the
next year would be a year of steady economic growth. Most of the
leading economists were wrong.
So I spoke about augury. In Roman times, the Romans would read the
entrails of cattle and view the flights of birds in order to project
the future. I wondered whether that was so different from what we do
now.
But no one--not the best economists in this country, and certainly
not the folks back home who work every day--misunderstands the
consequences of this debt and the difficulty it poses for our country's
future.
If somebody asked me to spend $500 billion that we do not have in the
next 12 months and said, with that, cancer would be cured, I would say
fine. That would not bother me a bit. It would be the best investment
we ever made. Let us do it.
But that is not what this deficit is about. This deficit is not about
investments that yield enormous rewards. This is an operating budget
deficit of, year after year after year, close to a billion dollars a
day.
Some have raised some concerns about this balanced budget amendment
proposal. I have some concerns about it too. In fact, I am going to
offer an amendment, which was discussed on the floor recently, to
exempt the Social Security trust funds from the balanced budget
amendment's calculations. We should not, under any condition and in any
case, use Social Security revenues to reduce the Federal deficit. Let
me explain a bit what I mean by that.
When American workers pay their Social Security taxes, it is not
voluntary, it is mandatory. We say if you earn a dollar, then part of
that dollar must go into the Social Security Trust Fund. But this
particular tax will only go to the trust fund.
That is a covenant we have with people we tax. It is not a choice. We
do not decide when we get the money to put it here or there. Putting
this money in the Social Security trust fund is a requirement. It is a
law.
But what are we doing now? We say now and have said for years that we
will tax you and put it in a trust fund and use it in our charts to
show that the deficit is reduced, because we collect more in Social
Security than we need.
I was part of the group in 1983 that wrote the Social Security reform
legislation in the House Ways and Means Committee. It was tough
medicine. We increased Social Security taxes. We increased the age from
65 to 67 in the outyears. We got rid of a number of different kinds of
benefits for survivors.
We did all that for a very specific reason. We knew that when the
biggest baby crop in this country's history reached retirement age, we
were going to have trouble. We needed to save money for that date. We
started deliberately creating surpluses in the Social Security Fund.
This year, the surplus is going to be around $66 billion, close to $70
billion.
But if you look at the back of all of these budget books describing
the economy, and if you look at the detail of this balanced budget
amendment, where the deficit is computed, the Social Security revenues
are used to reduce the operating budget deficits. That is wrong.
I am going to offer an amendment to correct that. I do not know
whether it will be accepted. But nobody, in my judgment, can stand on
the floor of this Senate and defend this practice. It simply is not
defensible.
If we are going to put this away and save it for the future, as we
must and should, let us do it. We should not tell people we are taking
it out of your paychecks and putting it in a trust fund, and not
mention that, by the way, we'll use it to show a reduced budget
deficit. Under this scheme, you could conceivably have an operating
budget deficit of $200 billion in a year and have a surplus in the
Social Security System of receipts over expenditures of $200 billion
and have a balanced budget. Under these current computations, this
proposed constitutional amendment would balance the budget. We would
say we are just fine, perfectly balanced; we would be at zero,
supposedly, and no action would be necessary.
But that is not the case.
Whenever we collect Social Security, deliberately creating a surplus
for the future, we must, in fact, start saving that for the future.
This balanced budget amendment proposal does not do that. So I am going
to offer an amendment to try to change this.
Yes, the supermajorities the amendment would require are troublesome
to me. But the fact is, if you do not have that, you do not have an
enforceable situation with respect to the balanced budget.
The issue of involvement by the courts is troublesome, as well. But
many States have constitutional provisions that require balanced
budgets. I do not know of a wave of State courts being involved in the
fiscal affairs of the States. I might be wrong. I would like to hear
from my colleagues if that is the case.
At the State level, where you have a State constitutional requirement
for a balanced budget, the State courts generally have not been
involved in the fiscal policies of the States as a result. Why should
we expect massive court involvement at the Federal level? I would enjoy
hearing my colleague respond.
I am happy to yield.
Mr. SIMON. My colleague is absolutely on target. The cases are very
rare. There have been a few, but they are rare indeed. So the
combination of that experience, plus the other amendment should really
preclude any problem along this line.
Mr. DORGAN. I appreciate the comment.
This proposal is not new. The States have it in their constitutions.
Presumably, if there will be a real mess as a result of this proposal,
the State courts will have already demonstrated that kind of a mess.
But the other point made is that this proposal is countercyclical in
the Keynesian sense. Keynes was an economist who believed that the
Government, through its spending patterns, can really affect our
economy. When things slow down, we can have massive Government
investment to speed them up.
I studied Keynes. I even taught Keynes in college a bit. And no one
can convince me that anybody in the history of humankind has ever been
more Keynesian than this country has been lately. Can you be more
Keynesian or stimulative than $300 billion deficits? I doubt it. We had
what you would call a gigantic Keynesian countercyclical stimulus as we
moved into the recession.
But of course nobody has repealed the business cycle. Nobody ever
will. I do not demean the argument made by this amendment's sponsors
that we need the opportunity to use fiscal policy at the Federal level,
complimenting monetary policy, to respond to the business
cycle. Clearly we do.
But I just say that if one holds out the hope of some countercyclical
Keynesian stimulus as the method by which we will improve our economy,
we have demonstrated the absurdity of that in recent years.
What will really improve our economy, I am convinced, is for us to
demonstrate to all the folks out there who rely on this Government, to
the folks that run this Government, that we can exercise some
discipline in what we spend and what we raise, and we can balance our
books.
My colleague from North Dakota, Senator Conrad, echoed my sentiment.
I do not believe the budget has to be balanced every year, but I
believe over time it must be balanced. And I think there was some
testimony before your committee, Senator Simon, which I heard you
mention yesterday, in which some suggested that there are times when we
should have a surplus of 1 or 2 percent.
There are times when your economy is moving along at a pretty healthy
clip, you have good economic growth, fundamentals are sound. One would
expect in those periods that one would be able to accumulate a little
reserve so you could use that reserve for countercyclical investment,
when the business cycle begins to turn the other way. As I said, we
cannot repel the business cycle. Nobody is going to repel the business
cycle. We had a business cycle before we had the income tax.
The fact is, we need to be available to use the devices at our
disposal to respond to a recession. But the best thing we can do for
our country, I am convinced, is to get our fundamentals in order.
Let me compliment this President. He has done a whole lot more than
the other two. The other two always claimed they were for a balanced
budget. But they didn't do what this President proposed and this
Congress did. We took tough medicine last year to try to ratchet down
the deficit, and we have. But the deficit will grow again.
So let me just read a few of the administration's projections about
our economic future. This is page 249 of the summary tables of the
President's budget. The on-budget surplus or on-budget deficit are both
on this table. And on-budget means that you take the Social Security
surplus out of the number, because Social Security is now legally off
budget, although you wouldn't know it from the numbers the
administration and other people throw around.
The on-budget deficit for fiscal year 1995 will be $225 billion. That
is relatively good news. If last year's bad news was $350 billion, $225
billion is better. But in 1996, it will go to $236 billion; in 1998, it
will go to $279 billion; in 1999, to $278 billion.
Even with the Social Security revenues used to reduce the deficit in
the year 2004, the deficit will be $365 billion. Our total accumulated
debt will be close to $8 trillion.
One can make a case for doing nothing, I suppose. But in my judgment
that would be irresponsible. The question is not whether we do
something. The question is what.
We can monkey around with all kinds of devices or we can have a
debate here, as we are, about changing the Constitution.
Senator Byrd was absolutely correct when he said changing the
Constitution will not balance the budget. Let us assume it is voted on
here tomorrow and in the House tomorrow night and it goes out as
ratified. It will not change by 1 cent the budget deficit, until and
unless men and women take actions to respond to the constitutional
requirement.
We will need to consider a range of options, some of which are
probably easy to do. But some of them will be agonizing and tough. They
will confront us with some of the most difficult decisions that
American society has had to confront, in its democratic way, through
the Congress.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. DORGAN. I ask the Senator for 3 additional minutes.
Mr. SIMON. I yield 3 additional minutes to the Senator.
Mr. DORGAN. There are going to be many arguments proposed both for
and against this constitutional amendment in the days ahead.
I am a cosponsor of the amendment and I am very likely to vote for
the amendment.
I want to offer a change, as I said. I want to see the change the
Senator is talking about offering to his own amendment. But I do not
think we have the luxury of continuing to do what we have done for the
last decade.
We will hear a lot of fancy arguments. But there is one timeless
truth that existed in this Chamber before this debate started and will
exist after it is over. That timeless truth is you cannot forever spend
money you do not have. You cannot forever spend resources that honestly
are your children's.
We must somehow confront this problem. The Senator from Illinois
serves rather than betrays us by bringing this issue to the floor of
the Senate now. None of us would prefer to deal with it. The easiest
approach, I suppose, is to say; ``Well, gee, this is a tough issue.
Let's postpone it.'' But I am not interested in postponing these issues
until we have an $8 trillion debt.
I put to bed every night a young boy and a young girl and tell them a
story. I want that story to have wonderful messages of hope and
inspiration in it. But, one piece of hope and inspiration they may not
yet understand because they are too young would be if I could tell my
young son and young daughter that we have done the things that are
necessary to make their future bright. I want to be able to give them
some notion that in the years ahead this country will be a strong
country, moving ahead with economic expansion, providing jobs and
opportunity and hope to families again.
Instead, our country has a mess of trouble. It is a wonderful place.
But to make it as good as it can be is going to require all the
leadership we can muster to make these kinds of tough decisions.
I wanted to say a few things about the constitutional amendment
today. And I would say to Senator Simon I think he has served the
interest of this institution and this country by raising these
questions.
I would also say to those on the other side of the aisle who joined
him, and colleagues of mine who have joined him, that this is a debate
that has been too long postponed, and I hope will result in
satisfactory answers for all of us and good progress for our country's
future.
I yield back the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. SIMON. Mr. President, I thank my colleague from North Dakota for
his common sense and his wisdom.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BYRD addressed the Chair.
The PRESIDING OFFICER. The President pro tempore is recognized.
Mr. BYRD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BYRD. Mr. President, I yield 30 minutes to the distinguished
Senator from Ohio [Mr. Glenn].
The PRESIDING OFFICER. The Senator from Ohio is recognized.
Mr. GLENN. Mr. President, I thank my distinguished colleague from
West Virginia.
Mr. President, this is a most important debate. As the Senate begins
to debate a constitutional amendment to require a balanced budget, I am
sure that we are not going to hear many voices in support of increased
spending and spiraling deficits. It is very attractive, to vote for a
balanced budget and that proposes to take care of our problems. It
forces us into doing something that we might not otherwise do. It
reflects the fact that all of us here have grown so frustrated over the
years with deficit spending, deficit spending that just seems all too
intractable.
Over the past decade, Democrats and Republicans have pointed fingers
at each other. We pointed fingers at the White House, the White House
has blamed Congress, the Congress blamed everybody. While everyone
argued, the national debt has soared out of control.
What led us into this? We had basically a 12-year experiment with
supply-side economics, and the answer to the experiment is that it did
not work. During that time our national debt quadrupled from $1
trillion to over $4 trillion. It led us into deficits and deficit
spending beyond anything that we ever thought possible and into more
debt than we ever thought possible for this country.
Without arguing the merits of Laffer curves and supply-side
economics, we looked for what some saw as gimmicks. We were in
gridlock, and many reached out for simple solutions to what are very
difficult problems. And they are difficult problems. They are tough. We
looked at and tried what some saw as gimmicks and others called tough
medicine. We are going to show our merit around here. We tried measures
like Gramm-Rudman. We considered line-item vetoes and a balanced budget
amendment. They all fit in the same category of things that reflect the
gridlock we got into and the concern that we had about this ever-
spiraling Federal deficit.
Our approach to budgeting has been to say: Look, Ma, no hands. We
will put ourselves on some sort of automatic track and that will take
care of it. It reflects a deep frustration that has caused many of us
to consider this kind of approach more and more seriously over the
years; the balanced budget approach. It is not unattractive. It is a
forcing mechanism. I compliment my distinguished colleague from
Illinois for bringing this forward because he is just as concerned as
anybody in this body about the fact that we cannot go on into the
future, mortgaging the future of our grandchildren, as he pointed out
so eloquently in our Democratic conference yesterday.
We know that the real solution--rather than trying to put us into
some sort of legislative solution--the real solution starts with
responsible leadership making hard choices and casting tough votes.
In an attempt to force responsible leadership, back some years ago I
authored legislation--it was twice passed by the Senate--that would
have forced the President to submit a balanced budget to Congress and
if he did not, to explain why. In that legislation, we went back to the
1921 legislation, the Budget and Accounting Act, where the President
submits a budget and if it is out of balance, the President will
suggest to Congress, and the words were, ``appropriate action.'' And
appropriate action was taken to mean new taxes, loans, or other.
In other words, it required the President to make recommendations
regarding new taxes, loans, or other--as the way they defined
appropriate action--to meet projected deficits if an unbalanced budget
was submitted. This section was restated in the 1982 recodification of
title 31 of the United States Code and the specific references to new
taxes and loans were removed. That is why I subsequently offered
legislation explicitly requiring that the President submit a balanced
budget and, if not, explain why. It was my hope that this would force
the kind of responsible leadership necessary to end budget gridlock.
Mr. President, although my provision was passed twice by the Senate,
it was not enacted into law. We debated it on the floor. I had a lot of
support for it. It was passed. It was not just passed with some kind of
unanimous consent. It was considered very thoroughly on the floor, and
we passed it. I felt that that kind of leadership was necessary to do
something about the deficit. I was proud of that.
While it has been sometimes tempting in the past to consider a
balanced budget amendment, we have to view it in light of today and the
current circumstances in which we find ourselves. What are those
current circumstances?
Last year, we saw the inauguration of a new administration committed
to reducing our budget deficit. In its first year, the administration
proposed and the Congress passed the largest deficit reduction bill in
the history of this country. Last year's bill will reduce the deficit
by $504.8 billion over 5 years. We have seen the deficit estimates drop
by 40 percent from a projected $302 to $176 billion. The deficit is
projected to decline for the next 3 consecutive years, something that
has not happened in over 40 years, since the days of Harry Truman--40
years. We are now heading in the right direction.
The President's budget proposal for this year calls for cuts in more
than 300 programs; 115 programs are targeted for elimination. For the
first time since 1969, discretionary spending will actually decline.
Secretary of the Treasury Lloyd Bentsen, our former colleague in the
Senate, former chairman of the Finance Committee said, ``There is a lot
of pain in it, a lot of blood on the floor,'' and he was right.
I, for one, think there can be even more blood on the floor, but now
it is up to us in Congress to spill that blood to make sure that we
keep this trend going.
At last we are putting the days of budget gridlock behind us. The
President has led the way and the Congress is making the cuts that need
to be made. Our economy is starting to recover; housing starts are up;
industrial production is up; unemployment is going down.
We had testimony just a couple of days ago from the Chairman of the
Federal Reserve Board, Alan Greenspan, in which he said he cannot
recall as good an underlying base for the long-term outlook than we
have today.
Just when we are stepping out of the straitjacket of gridlock, just
as we are beginning to head in the right direction, we are being asked
to step right back into another straitjacket: the balanced budget
amendment.
I think this takes us back to an earlier day. It is a vestige of the
days of finger pointing and inaction; it is a day when I, too, shared
the frustration of gridlock that forced us in desperation to look for
mechanical means of leadership. But I believe we have passed the time
when that would be an appropriate solution. I believe that kind of
activity has no place in today's consideration of what is best for us.
Make no mistake about it, just the idea, the concept of saying we
want a balanced budget amendment that is going to force us into
something is very attractive--very attractive.
We do have to cut Government. I am chairman of the Senate
Governmental Affairs Committee. We had hearings today on H.R. 3400, the
House bill that starts for the first time to reinvent Government, as
Vice President Gore has put it. We had a hearing this morning on that
bill, which I chaired. We had Mr. Charles Bowsher, Comptroller General
of the General Accounting Office, and Ms. Alice Rivlin, who is Deputy
Director of the Office of Management and Budget. One of the things we
considered this morning is how we go about reducing the number of
Government employees by 252,000 over a 5-year period.
We are getting into this in depth and considering some major measures
on how we are going to control Government spending.
As to the cutting down of employees by 252,000, just to give an
example and expand on that just a little bit, the Government ratio of
managers to employees is about 1 to 7. In most private industries, that
ratio is about 1 to 12 or 1 to 15. In labor-intensive industries, it is
probably about 1 to 20. We want to cut out some of this middle
management bloat that has occurred in Government, the GS-13's, 14's,
and 15's.
Will that alone solve the deficit? No, it will not, but it is
indicative that we are, in fact, not just nibbling around the edges of
this thing; we are taking substantive action to get the budget under
control. It is going to take some time and we must, we simply must,
stop this deficit dead in its tracks.
I think we have the chance to do that, and let us do it right, not in
a way that will place Government in a straitjacket, eliminating our
ability to respond to, for instance, economic cyclical downturns,
eliminating our ability to react to national crises, to make rational
budget choices, and to adequately prepare for military threats. And
inserting instead courts and endless litigation into the budget
process.
I think it is very important to remember how important our national
budget is and what a broad impact it has on our general economy.
Many have reminded us that most of the States are required to balance
their budgets. They say, ``If the States can do it, why can't the
Federal Government do it?''
Let us be clear about exactly what the States do. Most States,
typically, have separate budgets for operating and capital expenses. So
it is not the same thing as the Federal Government. Requirements for
balanced budgets apply only to their operating budget. Many State
investments made in roads, in bridges, and school construction can be
financed through bonds or other borrowing measures, and does not count
as it does in the Federal accounting process. In fact, State debt
actually rose to a record high of $372 billion at the end of fiscal
year 1992.
Our national budget does have a broad impact on our general economy,
and our economic policies have had a favorable impact on the boom and
bust cycles of an unregulated economy. This Nation once was at the
mercy of devastating economic disasters. Look back through history.
Just pick up the encyclopedia, pick up the World Book, as I did in my
office a little while ago, and look at it. I saw a chart that shows the
panic of 1873, the panic of 1893, the panic of 1907. I can well
remember the catastrophe of the Great Depression. I was a boy during
those days of the early 1930's, and I remember when we had to go out
and plant a bigger garden so we could take care of not only ourselves
but some of the other people in our small town of New Concord, OH,
where I grew up.
I remember those days of the Great Depression very well. I remember
my parents talking once about whether we were going to lose our home or
not. New Government policies were put in to help with refinancing
mortgages. I was part of that, and I was old enough that I remember
some of those things to this very day. Federal economic policies have
often relieved the suffering of a downturn in the economic cycle.
Now, if you look at that same chart I referred to just a moment ago,
in the World Book, from the days of the Great Depression, when new
economic policies were instituted, have we had recessions? Have we had
dips? Yes, we have had dips but nothing that even approached those days
of that Great Depression that started in 1929 and ran for nearly a 10-
year period. Movies, such as ``The Grapes of Wrath,'' have depicted
what really happened back in that time period. Federal economic
policies have often relieved the suffering of the economic cycle.
Under the proposed amendment, in times of economic downturn our
economy would in effect, be placed on autopilot. The economic downturn
would cause an unpredictable hemorrhage of revenues. Tax increases and
massive spending cuts would be forced at just the time a fragile
economy could not sustain them. That is just what turned a recession
into the Great Depression of the 1930's. Policies instituted back at
that time helped to bring us out of that depression as well as World
War II, of course. But since that time, we have had policies that were
countercyclical, that operated to stimulate the economy just at times
when needed. Not to put in tax increases and massive spending cuts at a
time when the economy would not be able to react.
Because three-fifths of the Senate would be needed to suspend this
amendment, a minority of legislators, 40.1 percent of legislators,
would decide the fate of all Americans during these times, during times
when we might want an economic stimulus. That is less than a majority,
obviously. I think we should be deciding these things not by requiring
a supermajority, but I think a majority will of the people should be
expressed.
The judicial consequences of the amendment have brought together an
unexpected alliance of legal scholars who have linked arms in
opposition to the amendment. Liberals such as Archibald Cox, Laurence
Tribe, and over on the other side, conservatives such as Robert Bork
and Charles Fried, all think, to quote Robert Bork, that it is a
serious mistake.
Why? Because as the executive and legislative branches throw up their
arms and say, in effect, look, no hands; we can just put this on
autopilot, the courts then will be forced to come into the process. The
courts will be forced to determine compliance with the amendment if it
is brought into the courts, which it undoubtedly would be. If we pass
this amendment, we better appropriate money for accountants at the
Supreme Court because I think they are likely to need it. Every
interest group that is unhappy with a cut that is being proposed will
file suit and say that Congress is not complying with the amendment.
This sounds like a lawyer's dream, I guess.
If Congress and the Executive should fail to comply, what next? What
is the next step? Will unelected judges then mandate tax increases or
budget cuts?
The amendment says that Congress can at some future time enact
enforcement legislate to iron out some of these questions. But I must
say I would feel much more comfortable about amending the Constitution
if some of these questions were answered now, not at some later date.
Would the same minority of legislators decide the fate of Ohioans hit
by a natural disaster or the people of California or Hurricane Hugo
down along the east coast? Would we be locked into a straitjacket
there? Over the years tornadoes and floods have ravaged parts of Ohio.
The Federal Government has come to our aid, as we do for other States
when they have a problem.
But with the amendment in place, legislators who have never even been
to Ohio would suddenly have veto power over Government compassion.
``Tough luck. You are on your own, Ohio. You did not give us any
notice. You were struck by a tornado but we did not include any relief
in the budget. We would like a little warning next time, or have your
disaster early in the year when there is relief money available.''
That would be the kind of thing we have the potential of stepping
into with this kind of straitjacket, it seems to me. We turn over the
hourglass and frantically begin hopping around trying to figure out
what to do next and, like Houdini, the Congress has always been very
good at finding its way out of these things, creating some smoke and
mirrors, the same things that made a mockery out of Gramm-Rudman. And
that is what America thinks Congress will do also.
A Wall Street Journal-NBC poll showed that 77 percent of Americans
think that a balanced budget amendment would not produce a balanced
budget. They think that Congress will spend more time trying to get out
of the amendment's requirements than trying to comply with it. And you
know, they might be right. They know that the real solution lies in
responsible leadership and in tough action.
Let us say Congress earnestly seeks to comply with the amendment. The
timer goes off and away we go. The race begins. Congress has until 2001
to come up with $600 billion, give or take $100 billion, given the way
budget estimates can vary, and it does not matter what may happen in
the meantime, what emergencies may arise, what threats we may face
overseas, what our national priorities may be. In the process I fear
that the historic health care initiatives might be one of those things
that would get trampled.
The Clinton administration has worked very hard to come up with
savings to finance health care reform, and I expect these savings will
be the first thing grabbed up in the wake of this amendment. I hope we
do not do this, because with them will go the hopes of millions of
Americans who thought for the first time they and their families would
have access to basic health care that they could rely on for the
future.
(Mr. CONRAD assumed the chair.)
Mr. GLENN. There is another area that I have some very serious
concerns about, very serious concerns, and that is doubts about whether
our national defense might become victim to this frantic race.
The amendment has a military conflict waiver which is extremely
important, but I do fear that this may not go far enough. What happens
if America faces a military threat--not a conflict, a military threat?
Will we be able to gear our forces up from the confines of a
straitjacket?
We have a very interesting cycle that has gone on in this country
ever since the days of the Spanish-American War. It is interesting to
look at. It shows that on an average there is a 17-year cycle in which
we have a buildup and builddown of our military forces. Ever since the
days of the Spanish-American War we buildup, builddown, buildup,
builddown.
Every time we have been so optimistic that peace has broken out and
we can relax we have cut back on our military forces. Later we have
turned right around and built up again on this 17-year cycle.
This cycle depicted on a chart is interesting to look at. Someone
brought it to my attention one day, and I have made copies of it and
have passed it out to a lot of people. Every 17 years we decide the
world is safe, we can cut back on our military and then something
happens that makes us reconsider and we begin building up again to
prepare for this new threat.
Military readiness is not something that just happens overnight. We
cannot wait for a declaration of war to start building up. It does not
work that way. You cannot produce the equipment that fast. You cannot
train the people that fast. This concerns me very much because we are
in the process of reducing our military personnel down to 1.6 million
by the end of next year; our active duty forces. And it is now proposed
that we take it on down even lower than that.
I think our worldwide commitments are beginning to outstrip our
military ability to back up those commitments. Congress is charged in
the Constitution with the awesome responsibility of providing for the
common defense. Today we are debating an amendment to the Constitution
which I fear may not allow Congress to live up to that responsibility.
There are trouble spots throughout the world that could erupt at any
time. We have seen that over and over.
Not only that, what will our allies as well as our adversaries think
if they know that we have no ability to rise to the occasion? I do not
think our NATO partners would view us as being that reliable if we have
locked ourselves into no spending on military matters unless we have
some sort of an emergency, that we cannot be prepared unless some
eminent or actual conflict is going on.
The States may balance their budgets but one of the fundamental
differences between the States and the Federal Government is providing
for the common defense. States are not constitutionally required to
raise and support armies or provide and maintain a Navy.
What are the possible effects of this amendment on State and local
governments?
I have been working hard to reverse the recent trend of unfunded
Federal mandates. We place many requirements on the States to do things
and we share the expenses. But trying to take care of this problem will
be virtually impossible if we pass this. We look to the Governors of
the States who are so concerned about this, and the State legislatures,
and it seems to me it is going to be a much tougher fight to take care
of some of those unfunded mandates if this amendment is in place.
Legislators will seek to carry out their agendas through mandates and
regulations on State and local governments, and nobody can afford that.
Mr. President, if we want a balanced budget amendment that requires
cuts--that is what this would do, it would require cuts --I would
suggest that it would be better to figure out what those cuts would be,
make a list of the cuts, and figure out what areas we are going to cut.
Are we going to cut in crime prevention, farm supports, or Social
Security, or health, or education, training, employment, emergency
spending, unemployment compensation, Medicare, Medicaid, Federal
deposit insurance, international obligations, national security?
Are we going to cut what we can do overseas with regard to Somalia,
Bosnia? These are not declared wars. What are we going to do in these
areas?
What if something erupts one of these days where there are hundreds
of thousands of people who are in danger or actually dying now in
Angola, or Chad? What if something breaks in North Korea? Should we be
prepared? Are we going to cut in these areas?
If this is what we are to do, if we are going to lock ourselves in a
straightjacket, then we are going to force ourselves to cut in some of
these areas. Let us describe right now, ahead of time, what the cuts
will be and where they come from. Let us total up the dollars, and
maybe we do not even need a balanced budget amendment. We can start
voting these things one at a time and see if they are acceptable rather
than placing ourselves in that kind of a straightjacket.
Mr. President, I think the Cincinnati Post said it all in a recent
editorial:
Despite its superficial appeal, a balanced budget amendment
would exacerbate distortions already present in the political
system without curing the Federal Government of over
commitment. For that the only antidote is political will.
They are right. Mr. President, it is time we stopped debating these
mechanical fixes. Let us put the days of gridlock behind us and get to
work. The President has sent us a budget that continues the fight. Last
summer we all debated whether we would vote for the reconciliation bill
that made some very tough cuts. Those were hard votes. We got the whole
thing started. And the President is continuing it with this year's
budget.
The last time we debated the balanced budget amendment we were on the
wrong track with deficits going steadily uphill. Now we have made a new
start, and the President has sent us a budget that reduces spending; we
can reduce it more. It cuts some programs; we can cut a whole lot more.
We do not need constitutional cover to make the tough choices.
I think those tough choices are what we were sent here to do. We have
a good start. Let us finish the job.
I regret very much that I must oppose the balanced budget amendment.
Mr. President, I ask for 2 more minutes please.
Mr. BYRD. Mr. President, I yield 2 additional minutes.
The PRESIDING OFFICER. The Senator from Ohio is recognized for 2
additional minutes.
Mr. GLENN. Mr. President, I would also ask unanimous consent that
editorials, one from the Cincinnati Post, one from the Cleveland Plain
Dealer, three from the Washington Post, and one that appeared in the
Wall Street Journal on October 28, 1993, called ``Congress v. The
Framers and Reason,'' be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Cincinnati Post, Feb. 16, 1994]
No Way to Cure a Deficit
In a scant half-page, an impressive collection of the
nation's top legal scholars sum up the case against the
Balanced Budget Amendment to the Constitution. From Lawrence
Tribe and Archibald Cox on the left to Robert Bork and
Charles Fried on the right, the 17 jurists blast the
amendment--due to be debated in the Senate next week--as ``a
serious mistake.''
We agree--for most of the reasons the scholars recite in
their letter to Sen. Robert Byrd, D-W.Va., an amendment
opponent. The first reason, though--that outlawing deficits
would ``deprive Congress and the President of needed
flexibility--we would put differently. The amendment pretends
to deprive Congress of needed flexibility, while actually
changing little since by a mere three-fifths vote Congress
could authorize the same deficit spending it has opted for
every year since 1969.
Either Congress would openly vote to circumvent the ban on
new borrowing or it would use unrealistic budget assumptions
and balance the budget only on paper. Who would punish it?
One possibility, the scholars note, is that the federal
courts would step in, inappropriately called on to settle
intractable budget choices by judicial fiat.
Yet another form of false compliance the letter cites is
passing the buck. The amendment would create ``a permanent
incentive to accomplish national objectives * * * through * *
* mandates and regulatory burdens on state and local
governments and the private sector.'' This incentive already
exists, it would be magnified a thousandfold under a Balanced
Budget Amendment.
In 1995, the president proposes to spend $176 billion more
than Washington takes in. If that deficit had to be erased,
what would Congress and the president be more likely to do:
order painful service cuts, job losses and new taxes worth
$176 billion, or conceal some of the damage by shifting costs
to states, localities and businesses?
Despite its superficial appeal, a Balanced Budget Amendment
would exacerbate distortions already present in the political
system--without curing the federal government of
overcommitment. For that, the only antidote is political
will.
____
[From the Cleveland Plain Dealer, Feb. 22, 1994]
Balancing Budgets
It's hard to dispute the central premise of the many
politicians who will argue on the Senate floor this week in
favor of a constitutional amendment to balance the federal
budget. Without a straitjacket imposed from outside, they
say, Congress will never summon the discipline to restrain
its impulse to spend more money each year than it has.
Who can argue with such a prediction?
Just last week, hoping to sway the close vote coming soon
in the Senate, the Clinton administration dispatched a
phalanx of Cabinet secretaries to Capitol Hill to preview the
horrors that would follow enactment of a balanced-budget
amendment.
Among other things, the Cabinet secretaries said, a
balanced-budget amendment would jeopardize economic growth,
throw defense planning into chaos, increase crime and hurt
the poor and the elderly. In other words, a central premise
of many opponents of a balanced-budget amendment is that the
nation would be hurled to the brink of disaster if the
government were ever forced to balance its books. Deficits,
in other words, are healthy.
To those of us who look askance at borrowing, the
administration's arguments were less than persuasive. Indeed,
they stengthened the case of respected advocates of the
amendment, such as Sen. Paul Simon and former Sen. Paul
Tsongas, who note the cost to future generations of the huge
interest bills necessary to finance the federal government's
debts.
Still, for all our sympathy toward those frustrated by
federal spending habits, we will be siding with the
opposition when debate begins on a balanced-budget amendment
today. Our concern is less with fiscal nightmares that the
ramifications of fiddling with a document as sturdy and wise
as the U.S. Constitution.
Amending the Constitution is a huge step that should be
taken only after careful consideration of the likely
consequences. Certainly, the recent history of deficit
spending in Washington suggests a need for something dramatic
to change a dangerous habit. But there is reason to question
whether amending the Constitution would solve the problem of
perennial overspending, and whether it would do so without
damage to important institutions.
There are grounds for concern on both fronts. In order to
ensure some fiscal flexibility, the proposed amendment would
allow deficits in any year when Congress could muster a
three-fifths majority in favor of such a move. That exemption
would almost certainly suffice to allow deficit spending in
times of war and recession. But given Congress' fondness for
spending, it probably would suffice also to allow deficits
when such emergencies are absent.
Congress could sidestep a balanced-budget amendment in
another, less obvious way--by building budgets on unrealistic
economic forecasts that exaggerate likely revenues or
underestimate expenses. As any observer of Congress knows,
lawmakers are expert at finding ways around spending limits.
Which raises the question of how a balanced-budget
amendment would be enforced. Who would resolve the dispute if
Congress were accused of approving a phony balanced budget?
Do we want federal courts to become referees in bruising
budget battles that have traditionally been the province of
the legislative and executive branches?
Advocates of the amendment ask poignantly what alternative
there is to coax Congress to behave more responsibly. The
answer is the ballot box.
____
[From the Washington Post, Nov. 8, 1993]
Distorting the Constitution
President Clinton on Friday took a position on the misnamed
balanced budget amendment to the Constitution, on which
Congress is scheduled to vote in the next couple of weeks.
He's opposed, as well he ought to be; he laid out the
principal reasons in a compelling letter to House Speaker Tom
Foley. You could be forgiven if you failed to get the news.
There was no announcement; the letter was sent up late Friday
afternoon, which is exactly when administrations generally
take actions they hope won't get noticed. Officials say that
wasn't the intent, and that the administration plans to
campaign vigorously against this insidious proposal in the
time that remains. We hope so.
This amendment wouldn't require, and most of the time would
likely not produce, a balanced budget. It would simply
require a three-fifths rather than majority vote of both
houses to pass an unbalanced one. The balance it would mostly
affect is the balance of power. It would add to the price
that a president--any president, of any persuasion--would
likely have to pay each year to get a budget passed. Every
year Congress searches for the perfect vote on the budget,
the one that will let it stand four-square for frugality
without having to say at whose expense the frugality is to be
achieved. The amendment has the added virtue of putting off
the frugality until later; it will be another Congress's
responsibility to achieve.
The president rightly observed that ``the amendment by
itself would not reduce the deficit by a single penny.'' But
unlike some of the gimmicks that have preceded it, this one
would tamper with fundamental law and likely do great harm to
precisely the future ability to make the disciplined choices
that sponsors say it would enhance. It would enshrine
minority rule, and thereby add to the chance each year of
gridlock. The president warned that by likely increasing
``accounting subterfuge * * * for example * * * moving more
federal programs off budget or * * * imposing more unfunded
mandates on the states,'' it might well end up producing less
fiscal responsibility rather than more.
It would be ``bad economics,'' he said, in that it would
complicate the government's counter-cyclical role, wherein
the deficit automatically widens when the economy turns weak;
it ``risks turning minor downturns into serious recessions''
and ``would make recovery from recession far more
difficult.'' The amendment could do programmatic harm as
well. The goal of some supporters is not so much to balance
the budget as to shrink the size and role of government. The
president spoke up for reducing the ``investment deficit'' as
well as the budget deficit. He said the amendment could
``make it impossible to pass meaningful health reform
legislation.'' Aides are preparing to warn backers that other
likely effects could include increased pressure on defense
and a greater burden on precisely the states that would have
to ratify the amendment; that's because federal aid to state
and local government would likely be cut.
This amendment, far from facing up to such choices, closes
its eyes to them. It is a means of deferring precisely the
discipline that it pretends to impose; in the name of
strengthening the government, it would hobble and weaken it.
It abuses the Constitution by using it as a political shield.
Mr. Clinton, whose budget this year was itself a good first
step toward deficit reduction, is right to oppose it.
Congress should vote it down.
____
[From the Wall Street Journal, Oct. 23, 1993]
Congress vs. the Framers--and Reason
(By Albert R. Hunt)
Despite tough competition, Congress may be on the verge of
its dumbest act in years: monkeying with the Constitution,
while ignoring the Founding Fathers as well as contemporary
constitutional scholars, ranging from liberal Archibald Cox
to conservative Robert Bork. In the process, lawmakers would
display the rankest hypocrisy.
This remarkable feat would be a constitutional amendment to
mandate a balanced budget. The only exceptions would be war
or if a statutory three-fifths of the total members of both
houses vote for an unbalanced budget. The chief Senate
sponsor, Paul Simon (D., Ill.), says he has a commitment from
the leadership that it will come up within the next month.
In 1986, the Senate voted on a similar measure and it lost
by one vote; the environment is more conducive today. Private
tallies suggest supporters are only a handful of senators
away from the required two-thirds support. If it passes the
Senate, favorable action is likely in the House, where it
fell nine votes short last year, a margin more than offset by
electoral changes.
The prospect is mind-boggling. The same institution that
has approved $2.6 trillion of red ink over the past dozen
years now wants to cure the problem by amending the
Constitution. Many supporters cynically figure this will
divert attention from their cowardice in tackling real
budgetary issues and priorities. ``To use the Constitution
for such a purpose not only trivializes it by an irrelevancy
but, in the long run, would reduce the respect for, and
therefore the effectiveness of, our bulwark of liberty,''
charges Archibald Cox, chairman emeritus of Common Cause and
the former U.S. solicitor general and Harvard law school
professor.
Even in the short run the people may be much smarter than
these politicians think. By an overwhelming 77% to 17%,
people don't think a constitutional amendment actually would
produce a balanced budget, according to this week's Wall
Street Journal/NBC News national survey.
Experience is on their side. Take, for example, the 65
members of the House who this year voted against both the
Clinton deficit reduction plan, with many saying it relied
too much on tax hikes, and the Republican alternative, with
many saying it cut spending too much. Yet these 36
Republicans and 29 Democrats are sponsoring the balanced-
budget amendment.
``We need the forced discipline of a constitutional
amendment,'' explains Rep. Sonny Callahan (R. Ala.), one of
the 65. Why did he vote against the GOP budget-cutting plan?
Mr. Callahan says it was too tough on Medicare and other
sensitive entitlements. In the Senate, the amendment's patron
saint, Paul Simons, last week sent a private memo to
President Clinton advocating an expansive new program for the
inner cities. It apparently is interesting and meritorious;
it also is totally at odds with his amendment.
It's tough to figure whether this amendment would do more
harm economically or politically. Even most traditionally
conservative economists agree that trying to balance the
federal budget in recessionary times is crazy. And in a well-
reasoned 25-page analysis, Robert Greenstein, of the liberal
Center on Budget and Policy Priorities, convincingly argues
that under a balanced budget amendment--which could take
effect before the end of the decade--the poor would bear
``the heaviest sacrifices since they are the weakest
constituency.''
But the political damage might be even greater. Since a
balanced budget often would be politically and economically
disastrous, the real issue would be how to get a 60% vote for
revenue and spending measures; in both houses, 40.1% of the
members would have an effective veto power.
There's an illustrative model: California, where a two-
thirds legislative majority is required to pass a budget.
This minority rule has had the effect of decreasing
accountability, increasing the influence of special interests
and creating a general chaos that has served neither the
politicians nor the people well. Whatever reforms are
desirable for Congress, becoming more like the California
Legislature isn't one of them.
This year it would have meant that President Clinton never
would have gotten a budget through, or it would have been one
almost identical to the last Bush budget, after voters
demanded change. The effect, in the House at least, would be
to give Newt Gingrich veto power over fiscal policy.
Sounds pretty good, some conservatives no doubt are
thinking. Think harder. This minority rule also would have
killed the Reagan tax cuts of 1981, which fell 23 votes short
of three-fifths of the House. And, if conservatives really
believe that Mr. Gingrich has a real shot to be speaker
before the decade is out, how about liberal Democratic Rep.
Barney Frank exercising a similar veto power?
``This is a conservative measure that conservatives haven't
thought about,'' worries Robert Bork. ``It would create a
real mess.''
He highlights two likely unintended consequences: more
regulation and more power accruing to unelected judges.
Congress almost surely would try to get around any binding
fiscal restraints by escalating regulatory measures, which,
Judge Bork argues, ``could be worse than taxation from a
conservative point of view.'' Moreover, if lawmakers
circumvented the limits simply by adopting wildly unrealistic
estimates, there's no enforcement mechanism. The result: the
courts would get deeply into fiscal policy.
the hypocritical 65
Here are the 65 members of the House who earlier this year
voted against both the Clinton and the Republican plans for
reducing the deficit but now sponsor a balanced-budget
constitutional amendment:
Democrats: Browder (Ala.), Coppersmith (Ariz.), Condit
(Calif.), Deal (Ga.), Rowland (Ga.), Lipinski (Ill.), Long
(Ind.), Roemer (Ind.), Baesler (Ky.), Hayes (La.), Minge
(Minn.), Parker (Miss.), Danner (Mo.), Skelton (Mo.), Swett
(N.H.), Andrews (N.J.), Pallone (N.J.), Mann (Ohio),
Traficant (Ohio), English (Okla.), Johnson (S.D.), Clement
(Tenn.), Chapman (Texas), Edwards (Texas), Goren (Texas),
Hall (Texas), Laughlin (Texas), Sarpalius (Texas), Wilson
(Texas).
Republicans: Callahan (Ala.), Stump (Ariz.), Huffington
(Calif.), Allard (Colo.), Hefley (Colo.), McInnis (Colo.),
Schaefer (Colo.), Canady (Fla.), Diaz-Balart (Fla.), Fowler
(Fla.), Ros-Lehtinen (Fla.), Stearns (Fla.), Kingston (Ga.),
Burton (Ind.), Grandy (Iowa), Leach (Iowa), Lightfoot (Iowa),
Roberts (Kan.), Rogers (Ky.), Bentley (Md.), Emerson (Mo.),
Hancock (Mo.), Barrett (Neb.), Bereuter (Neb.), Vucanovich
(Nev.), Boehlert (N.Y.), Taylor (N.C.), Gillmor (Ohio),
Regula (Ohio), Machtley (R.I.), Spence (S.C.), Duncan
(Tenn.), Bateman (Va.), Goodlette (Va.), Petri (Wis.), Roth
(Wis.).
Writing economics into the Constitution and requiring a
supermajority for important actions aren't new ideas. In the
Federalist Papers, Number 58, James Madison considered the
idea of a supermajority and persuasively rejected it: ``the
fundamental principle of free government would be reversed.
It would be no longer the majority that would rule; the power
would be transferred to the minority.''
Over the next few weeks, as Congress decides whether to
profoundly change the Constitution, take your pick: James
Madison or Sonny Callahan.
____
[From the Washington Post, Nov. 1, 1993]
A Sloppy Way To Govern
To pass his budget last summer, President Clinton had to
promise some further votes on fiscal matters later in the
year. Those fuzzy and incautious promises are now coming due.
The problem for the president and the leadership in Congress
is that they may not have control over the terms of the
votes. The anti-spenders are teeing up the choices in such a
way that members will mainly be able to vote against spending
in the abstract, say yes to cutting without saying how. That
will be fine for the holidays; everyone can go home having
cast the perfect vote, which is always for virtue without
pain. Only later will they--or someone--have to figure out
how to govern within the limits to which these showy and
unwise propositions could condemn them.
The most dangerous of the proposals is the misnamed
balanced budget amendment to the Constitution. It's the
granddaddy of false promises. It wouldn't require a balanced
budget, just a three-fifths vote in both houses to pass an
unbalanced one. It would empower minorities; anyone with an
idea that could command the allegiance of 41 percent of
either house could hold the government hostage. The theory is
that such a system would somehow lead to leaner government.
The effect would much more likely be the opposite.
There are lots of years when for economic or social reasons
the government ought to run a deficit. To do so the party in
power would have to win the support of 20 percent more
members in each house than it does today. The president, or
someone, would have to bargain with more stray members; who
thinks that that would lead to an epidemic of self-denial?
Last summer, when this president needed every Democratic
vote, is a case in point. By all means reduce the deficit,
the professed fiscal conservatives of the party came round to
say one after the other, but surely not at the expense of * *
* imposing an energy tax, increasing grazing fees, cutting
farm support as much as the president proposed, taxing a
larger share of Social Security benefits, cutting defense,
cutting Medicare. The president had to deal for votes and
then was condemned for dealing by some of the very people who
threatened to withhold their votes until he dealt. Will they
change the Constitution to bar that too?
In the House, meanwhile, some members now also are
proposing what they describe as $103 billion in further
spending cuts over the next five years. To lock some of these
supposed savings in place, they would reduce the already
tight appropriations caps that were set for the next several
years in the budget. The problem is, they don't specify
enough new cuts to get the caps down to the new levels they
propose; instead they try to snatch some administration
proposals that the president needs to get spending down to
the existing caps. No fair; by one estimate, to get total
spending down to the point they propose, they would have to
list $70 billion more in specific cuts that they have. That's
the opposite of a blank check; it's a blank cut. They would
also preempt and pocket as ``cuts'' some health care savings
that the president has proposed to use in financing health
care reform.
This is no way to do the government's business. The
amendment and proposed cuts both are ragged, slapdash
policymaking that a lot of members think would do them some
short-term political good. They would meanwhile do the
country long-term substantive harm. The Democrats should beat
them back.
____
[From the Washington Post, Oct. 20, 1993]
Farewell to Majority Rule
The Democratic Congress is about to take up legislation
that would basically end the American system of majority
rule. The Senate is tentatively scheduled to vote sometime in
the next few weeks on a so-called balanced budget amendment
to the Constitution. The sponsors of the simplistic and
dangerous idea are said to be within a few votes of the two-
thirds they need to send it to the House. A similar measure
fell only nine votes short in the House last year, and
opponents doubt that this time they could stave it off.
The misnamed amendment wouldn't so much balance the budget
as it would destroy political accountability by creating
minority control of both houses. The budget deficits of
recent years have done the country enormous damage, but they
have been the result of political, not constitutional,
failings. Such deficits did not exist in earlier years, when
politicians had the courage to vote no. The right way to
reduce them is to approve the specific tax increases and
spending cut that the goal of responsible policy requires.
This amendment would instead allow the members once again
to postpone the very action that they pretend to take. They
would go home having virtuously voted to balance the budget
in the abstract and in the distant future, without ever
having had to say how. They mortgage the future and
trivialize the Constitution in order to preen before
constituents without inflicting pain. The President should be
the one to speak out against the travesty, educate the
country against it and provide the nervous members who know
better with the cover they need to vote no. His aides know
the vote is coming; the Senate leadership is opposed to the
amendment. But so far the White House, too, has gone to
ground.
Mr. Clinton and the congressional Democrats took a larger
step toward deficit reduction last summer than they have been
given credit for--and perhaps as large a step as a recovering
economy can withstand. Instead of defending their actions,
they seek political purposes to give the impression of doing
more than even they think wise. The amendment would not ban
unbalanced budgets, just require three-fifths majorities of
both houses to enact them or to raise the statutory ceiling
on outstanding federal debt. The measure would also make it
marginally harder to raise taxes than to cut spending.
The budget would no longer serve as an automatic economic
stabilizer, wherein a recession creates a wider deficit and
the deficit partly offsets and cures the recession in turn.
The redistribution role of the government would also likely
be reduced. Democrats, including those who are unaccountably
sponsoring the amendment, can like neither of these likely
results. But the worst is that 40 percent of either house
would hold the country hostage, and you can bet not just on
fiscal policy, either, but on everything that a budget can be
made to contain. You heard it said, and rightly so, that the
country in the last election traded gridlock for party
responsibility. The amenders would trade us back to gridlock,
and in the process compound precisely the weakness of
government that they profess to deplore.
Mr. GLENN. Mr. President, I thank the distinguished floor manager of
the bill. I say to my friend, Paul Simon, that I regret very much
having to oppose his amendment. I know how seriously he takes this. He
worked on it a long time. We worked on other things together. I am
sorry I had to oppose him on this, but I just feel that we are on the
right track now, and I think that a balanced budget amendment would
lock us into a straightjacket that we would regret down the way. For
that reason, I must oppose it at this time.
I yield the floor.
Mr. BYRD addressed the Chair.
The PRESIDING OFFICER. The Senator from West Virginia.
Mr. BYRD. Mr. President, I thank the able Senator from Ohio, [Mr.
Glenn] for his excellent statement.
I yield now 15 minutes to the distinguished Senator from Washington
[Mrs. Murray].
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I thank the distinguished Senator from
West Virginia.
Mr. President, I rise today despite the fact I have laryngitis, and
it is hard to speak, I do speak loudly today in opposition to the
balanced budget amendment.
The senior Senator from the State of Illinois knows how much I
respect him and the great service he has given this country. He and I
serve on the Budget Committee together, and he knows I agree with him
more often than not on budgetary issues.
In fact, we both agree that the deficit must come down. We agree the
Government has not been serious in the past about living within its
means.
But, Mr. President, sometimes friends disagree. And, today we do.
Last year, the President sent to Congress a bold plan to reduce the
Federal deficit. It reversed the course of the past 12 years of
reckless borrow-and-spend policies. It took the deficit head on. And,
it is working.
It is working, Mr. President, even better than the most wide-eyed
economists thought possible. It is working because we made tough
decisions to cut spending programs. It took courage, discipline, and
common sense. And we need more of it this year, especially as we
consider health care reform.
But the balanced budget amendment takes no courage, no discipline,
and no common sense. It denies the Federal Government--in other words,
the people of this country--the basic practice most businesses and
families use across this country to stay strong and solvent. It denies
us responsible investments in the future.
There has been lots of talk here already about the future. About how
this amendment will help American children. But, this amendment is
likely to damage the economy more than help our children. It will tie
their hands. It will raise their taxes. It will cut Government spending
to irresponsible levels.
It also teaches our children a dangerous lesson. Mr. President, there
is nothing wrong with responsible borrowing. That is the backbone of
our financial services industry. Saving and investing. After all, how
many American families could afford to buy their homes without a
mortgage? Or, send their children to colleges without a student loan?
Maybe the majority in this Chamber, but only a small minority across
the country.
This amendment destroys the American dream. It tells our kids, if
they come from a family that can't afford to pay cash for a home, they
shouldn't try. It reaches them that investment--even if that means
borrowing for eduction--is not an option.
Congress should be setting an example by teaching our children how to
be responsible borrowers. How to think about their future needs. How to
invest wisely, how to plan and work to pay back their debts in a timely
and organized manner. This amendment does not do that.
Mr. President, we all know words on a piece of paper cannot balance
the budget. But legislators, like you and I and Senator Simon, can. It
is our job and responsibility to do so. I have money concerns about
this proposal. The proponents of this amendment have not told us how
they intend to balance the budget. Which taxes will they raise? Which
programs will they cut?
Will the big States with more votes in the other body be able to
dictate the national budget? Will they be able to protect their
programs, while smaller States, like mine, will suffer?
I fear the cuts required to balance the budget will fall
disproportionately on the smaller States. They will also fall squarely
on the backs of the most vulnerable in our society--our children, our
elderly, our disabled most in need of help. If Social Security were to
be cut proportionately to reduce the deficit, the cost to our Nation's
elderly would be significant. In my corner of the country, Social
Security payments will be cut by $1,000 per person. The total loss in
my State will amount to nearly $1 billion in 1999.
And, I fear the economists will be proven right. Those at Wharton
predict Washington State will lose 209,000 jobs 2 years after this
amendment takes effect. They predict my State will experience a 15-
percent drop in total personal income. They tell me hardest hit will be
the manufacturing sector--especially the aerospace industry--which is
already experiencing massive job losses.
This amendment will add more political game-playing to the very
serious business of forming a national budget. It will allow 40 percent
of this body to bring our economy to a halt. The American people are
fed up with gridlock. This amendment will only encourage it.
Instead of continuing the courage this body displayed by passing last
year's budget, we would abdicate our responsibility to the court
system.
This amendment will threaten us with a new power tool for lobbyists
who will say: ``If I do not get my way, I will challenge this budget in
court.'' If the President and the Congress disagree on spending
priorities and raising revenue, does that mean the court system will
write our budget? Does it mean unelected jurists, accountable to no
one, will wield incredible power?
And, does it mean lobbyists who roam these Halls on behalf of rich
and powerful interests will win out over American families? The weakest
among us will shoulder a disproportionate share of the impact of this
amendment. How many children have you ever seen sue the Congress for
more funding? How many elderly, or disabled?
So, Mr. President, before we talk about how much we are helping our
children by passing this proposed constitutional amendment, let's think
about what this amendments forces on our families, and the bad economic
and political example it sets.
Reducing the deficit is one of the most important, and challenging
goals we face as legislators. My grandparents fought a world war and
survived the Great Depression because of this Nation's ability to
invest when necessary. And, my family has ridden out nasty recessions,
because we were able to borrow.
I do not want my grandchildren's hands tied. It is not fair to tell
them--after we are long since gone--``you have no say in determining
your future. Your grandparents have told you what you must do.''
I believe in budgets which reflect tomorrow's economic needs, not
today's political bargains.
That is why I oppose this amendment.
I yield the floor.
Mr. SIMON. Mr. President, I yield 10 minutes to the Senator from
Alabama.
Mr. SHELBY. Mr. President, I hope that this will be the last time I
must rise and urge my colleagues to support a balanced budget amendment
to the U.S.Constitution.
Today, Mr. President, it is critical that this body realize the
importance and necessity of a balanced budget amendment to this
country's future fiscal and economic health. And it is a tough
realization too, Mr. President, because, at base, it is a recognition--
an admission--that Congress lacks the institutional ability and the
political fortitude to address our pressing deficit and national debt
problems.
In fact, Congress suffers from what is known as weakness of the will
when it comes to spending taxpayers' money. And year after year, it
becomes clearer and clearer that Congress is inherently incapable of
foregoing Federal deficit spending. Look at the record.
Mr. President, today's call for a balanced budget amendment is but
one of many previous attempts to erect external controls over Congress'
ability to spend beyond its means.
From the Congressional Budget and Impoundment Control Act, to Gramm-
Rudman-Hollings, to the Budget Enforcement Act--all of these deficit
targets and discretionary spending caps and pay-as-you-go provisions
were supposed to help rein in Federal spending and lower the deficit.
But, looking at our debt and deficit today, Mr. President, it is
clear that these controls were not enough. It would appear that we
require something more--something that Congress cannot so easily
ignore, waive, or amend.
Mr. President, that something is a balanced budget amendment to the
U.S. Constitution--a constitutional mandate requiring the Congress to
bring Federal spending in line with Federal revenues by the year 2001.
I have long been a supporter of such an amendment. In this Congress
and in past Congresses, I have introduced legislation similar to that
which we are considering today. I continue to believe that Congress
requires such a constitutional requirement if we are ever to
effectively combat our increasing debt and deficit problems.
While CBO's most recent projections show the deficit declining over
the next few years, it predicts that the deficit will continue to climb
steadily after 1997. This is attributed to continuing increases in
spending for Medicare and Medicaid and expiring discretionary spending
caps.
There is no question that the discretionary spending caps are
somewhat effective in holding down our deficit, but for the most part,
policymakers have looked to tax increases to lower the deficit rather
than cutting the growth of Federal spending.
Over the next 5 years, Federal spending continues to not only exceed
expected revenues, but continues to grow from about $1.5 to $1.8
trillion--about a $300 billion increase.
Even with a deficit at $176 billion for 1995, we still expect to pay
close to $300 billion just on interest on the debt this year.
Why is that, Mr. President? It's because we continue to spend at a
higher rate each year than we collect in revenues. Indeed, while caps
and taxes may slow the growth of annual spending, they do not affect
the fundamental cause of our problems--Congress' systemic inclination
toward progressively higher Federal deficit spending.
Mr. President, a balanced budget amendment would give Congress the
political fortitude and institutional ability it needs to close the
ever-expanding black hole of Federal deficit spending.
It is surprising to me then that the administration is actively
opposing this legislation. Over the past few weeks, the President has
made it clear that he intends to work hard to defeat the passage of a
balanced budget amendment.
In fact, according to the administration's position, while deficit
reduction and debt reduction may be good reasons to raise taxes and
finance more Federal spending--they are not sufficient reasons to
justify a balanced budget amendment.
Mr. President, opponents are currently waging a full court press
against the balanced budget amendment. Just last week the
administration started floating around projected State-by-State impact
analysis detailing the proposed effect the amendment would have on each
State and the average taxpayer.
They threaten the taxpayer with new taxes, and the States with new
burdens. Again, I ask, why is it that the taxpayer must always be
called upon first to finance balancing the Federal Government's
checkbook?
And I would also note that the projected costs to States would not be
nearly so high if they were not burdened with excessive Federal
mandates and regulations that we are all aware of. So, let us not lose
sight of the big picture here, Mr. President.
Every year, without a balanced budget, it will cost the taxpayer in
accumulated debt and interest. We cannot continue to accept annual
deficits that run from about one-fifth to one-seventh of Federal
spending nor can we continue to make interest payments on the national
debt that exceed annual deficits.
Otherwise, if we do, an increasing share of our taxes, now about 14
cents on the dollar, will go to financing the debt, and it will go
higher.
What that means is that interest payments will consume more and more
of Federal spending, sacrificing many of the worthwhile and necessary
programs that opponents cite now as a legitimate reason for defeating a
balanced budget amendment.
Mr. President, this country desperately needs a balanced budget
amendment. While the most expedient way to reduce the deficit may be to
raise more taxes--as we can all recall from the tax bill last summer--I
submit it is not the right way. A surer way, a more fiscally
responsible way, is to cut back Federal spending until it is in line
with Federal revenues.
Mr. President, this amendment will make it harder to raise taxes and
harder to borrow more money, thus forcing Congress to face the tough
choices necessary for long-term solutions to our debt and deficit
problems.
Mr. President, a balanced budget amendment is not draconian, it will
not ruin the economy and end democracy as we know it as the naysayers
would have you believe. On the contrary, it will simply force Congress
hand on taking control of Federal spending. Admittedly, the stakes will
be high, because Congress will not just be breaking Federal law if it
fails to meet the designated balanced budget date, but I say the stakes
are already high and we cannot afford not to meet them today.
Mr. President, it is only a matter of time and courage. And the
decision is really very simple, we can act now or be forced to act
later.
Mr. President, I say we act now, and I urge my colleagues to join me
in supporting Senator Simon's balanced budget amendment.
I yield the floor.
Mr. BYRD addressed the Chair.
The PRESIDING OFFICER. Who yields time?
Mr. BYRD. Mr. President, how much time remains?
The PRESIDING OFFICER. The Senator from West Virginia controls 2
hours and 44 minutes, the Senator from Illinois controls 10 minutes,
and the Senator from Utah controls 42 minutes.
Mr. BYRD. Mr. President, I will be happy to yield some of my time to
the distinguished Senator from Illinois [Mr. Simon] if he wishes.
Otherwise, I do not plan to speak anymore today and I do not have any
speakers for the rest of the day.
Mr. SIMON. Frankly, we have two Senators who have indicated they
would like to speak, but I am sure they would be happy to speak
tomorrow. I think both Senator Simpson and Senator DeConcini indicated
a desire to speak, but we are checking that.
I do not want to yield back all the time without checking to see if
this is OK, but my instinct is that it would be OK because we are under
no time constraints in terms of tomorrow or after that.
I see Senator Hatch here on the floor now. We are talking about the
possibility of closing up for the evening. Senator Simpson and Senator
DeConcini indicated they would like to speak, but they could do that
tomorrow or some other time.
Mr. HATCH. They sure could. I do not see any problem with doing that,
if the distinguished Senator would like to do that.
Mr. SIMON. Mr. President, with that understanding, I yield back the
remainder of my time.
Mr. HATCH. I am happy to yield back the remainder of my time.
Mr. BYRD. Mr. President, I yield back the remainder of my time.
The PRESIDING OFFICER. All time has been yielded back.
Mr. SIMON. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BYRD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________