[Congressional Record Volume 140, Number 20 (Tuesday, March 1, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       BALANCED BUDGET AMENDMENT

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now resume consideration of Senate Joint Resolution 41, a 
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.

       Pending:
       Reid amendment No. 1471, in the nature of a substitute.

  The ACTING PRESIDENT pro tempore. The time until 1 p.m. today shall 
be equally divided between the Senator from West Virginia [Mr. Byrd], 
the Senator from Utah [Mr. Hatch], the Senator from Illinois [Mr. 
Simon], and the Senator from Nevada [Mr. Reid].
  Who yields time?
  Mr. REID addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from Nevada.
  Mr. REID. Madam President, with some urgency and concern, I spoke 
yesterday to this Chamber about the balanced budget amendment. That 
urgency and concern have only increased.
  I believe a specter haunts this body, Madam President. Gaunt lined 
and hollow eyed as death it leers down at us with malicious glee. It is 
the ghost of lost chances; the shade of missed opportunities; the 
phantom of wrong turns in the paths to which the Senate has turned this 
Nation's feet over these 200 years past.
  In the fire of its eyes one may read of the rejection of the League 
of Nations and of Smoot Hawley. Around its shoulders are draped the 
shades of isolationism and it proudly wears the ribbon of McCarthyism. 
Heaped at its feet are the meaningless failed economic theories upon 
which this Chamber and our Nation have pinned their past economic 
hopes. It counts them with glee as a miser counts coins; glorying in 
every program and every promise that the budget would be balanced by 
1933, by 1964, by 1991.
  That specter is laughing now, Madam President, and clapping its bony 
hands, for once again this body is engaging for its entertainment in a 
sham and a charade.
  The Simon bill will fail, Madam President. Its supporters have 
conceded as much. My amendment, my substitute, has enough support; that 
taken together with Simon, it would finally result in passage of a 
constitutional amendment to the States. Naturally, once the Simon 
supporters recognized that their bill would fail one would expect they 
would flock to an amendment that gives them most of what they want and 
which assures the same requirements for the end result they seek a 
balanced budget. One would think so, but that is only common sense, and 
now, as too often before common sense and the common good seem to be an 
uncommon commodity in this debate.
  I ask you now my fellow Senators, to look not to your own partisan 
political interests, not to party nor dogma nor cant. Listen instead to 
the still, small voice of reason.
  I plead with my friends on the other side of the aisle who have had 
someone announce on their behalf that none of them would vote for the 
Reid substitute. I plead with them to place the future of this country 
over the benefit of the next election.
  Look not to how you will be best able to fool your constituents with 
snake oil tales and opium pipe dreams of what might have been if only 
those others had been true to the quest. Do not seek to camouflage what 
you have not done with stories of what might have been.
  Rather, I ask my friends on the other side of the aisle to join me in 
voting for a substitute which if it passed would join us together. So 
let us join and stand together for that upon which we can agree. This 
is the way the political process is supposed to work. It is the only 
way this body can effectively work.
  E pluribus unum; one from many. It is this Nation's motto. It is a 
touchstone for the Union. Too many of us have forgotten that guiding 
light; too many of us have forgotten our responsibility to work 
together in the common interest; too many have forgotten that politics 
is the art of compromise, the art of the possible.
  I ask one more time of my friends on the other side of the aisle, 
will you join with me? Together we can make a mighty change and place 
this Nation on a road to fiscal responsibility. Separately, we will 
achieve nothing.
  I have been told several times today that the media announced last 
night or this morning that the Reid substitute is going to fail, and 
that the Simon amendment was going to fail. What have we accomplished?
  So, Madam President, the specter is watching and glowing, but the 
Nation is watching and hoping. Let us stand together and be counted 
together. It is the only way we will make a difference, the only way to 
lay this ugly shade to rest.
  I reserve the remainder of my time.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. SIMON. Madam President, I yield to the Senator from 
Massachusetts. How much time does he need?
  Mr. KENNEDY. If the Senator will yield, I understand that the 
chairman of the Appropriations Committee is on his way to the floor. I 
am not familiar with how the time is divided prior to the lunch period.
  Mr. SIMON. Senator Byrd has 1 hour, Senator Reid has 1 hour, Senator 
Hatch has 1 hour, and I have 1 hour.
  I assume the Senator from Massachusetts is speaking on behalf of the 
Simon amendment.
  Mr. KENNEDY. Madam President, the Senator is usually correct 99 
percent of the time.
  Mr. REID. I will be happy to yield to the Senator from Massachussetts 
some time. I am sure Senator Byrd will give it back to me.
  Mr. KENNEDY. If I could have 15 minutes.
  Mr. SIMON. I feel the same. Whatever the time the Senator from 
Massachusetts needs.
  The ACTING PRESIDENT pro tempore. Who is yielding to the Senator from 
Massachusetts?
  Mr. REID. Will Senator Byrd give Senator Kennedy 15 minutes?
  Mr. BYRD. Madam President, as a former Boy Scout, I would consider it 
to be my good deed for the day to yield to Senator Kennedy 20 minutes.
  Mr. KENNEDY. Madam President, I oppose the balanced budget 
constitutional amendment. I support the goal of a balanced budget, but 
it is wrong for Congress to tamper with the Constitution to achieve it.
  Congress and the Clinton administration have made remarkably good 
progress in reducing the deficit in the past year. Last August, we 
enacted the most significant deficit reduction ever--$500 billion over 
the next 5 years.
  We are succeeding where the past two Republican administrations have 
failed. The deficit is coming down. The economy is heading up. There is 
no need to take the extreme step of amending the Constitution to 
achieve our economic goals.
  It does not take a constitutional amendment to reduce the Federal 
deficit or balance the Federal budget. All it takes is enough courage 
by Congress and the administration to make the tough decisions we are 
elected to make. If we are not willing to balance the budget, the 
Constitution cannot do it for us.
  Amending the Constitution could well make all our economic problems 
worse. Writing this kind of straitjacket into the Nation's founding 
charter could jeopardize our economy, diminish the Constitution, 
distort its system of checks and balances, and undermine the principle 
of majority rule that is at the core of our democracy.
  The amendment is unsound and unwise economic policy, because it would 
require a balanced budget each and every year, regardless of the 
condition of the economy, unless three-fifths of the Senate and House 
vote to approve a specific deficit.
  In the Great Depression of the 1930's, nearly one-fourth of our 
citizens were out of work. It is no accident that this country has not 
suffered a depression like that since then. The ability to cut taxes or 
increase spending during recessionary times, even though it means an 
increase in the deficit, has been a powerful tool to stabilize the 
economy, and we should not weaken it by amending the Constitution. When 
the economy slides into a recession, Government policies such as tax 
cuts, unemployment compensation, and jobs programs have provided the 
means to sustain families in need and to maintain demand for the goods 
and services produced by business.
  The balanced budget constitutional amendment could well make these 
``countercyclical'' Government tax and spending policies impossible. To 
a great extent, these policies go into effect automatically, to avoid 
even the delays inherent in the legislative process. When unemployment 
increases by 1 percent, the budget deficit increases by $50 billion 
because of decreased tax revenues and increased spending for benefits 
for unemployeed workers and their families. In recessionary times, the 
balanced budget constitutional amendment would require just the 
opposite--tax increases and spending cuts. It could turn painful 
recessions into catastrophic depressions, with dire consequences for 
the Nation.
  Supporters of the amendment often make what they call a ``common 
sense'' argument that it would simply require the Federal Government to 
balance its budget in the same way that American families do. That 
argument is not common sense--it is nonsense.
  Have the sponsors of this amendment ever heard of a home mortgage? If 
this amendment applied to families, it would require all homeowners to 
pay off their entire mortgage immediately, this year. You could not 
borrow to buy a home, or pay for college. I doubt that the sponsors of 
this amendment would vote to put any family into that kind of 
straitjacket, and they should not do it to the country either.
  Most State constitutions permit deficit spending for long-term 
capital investments. But the balanced budget constitutional amendment 
would flatly prohibit prudent deficit spending for long-term 
investments or even to ease the effect of a recession, unless a deficit 
is agreed to by a three-fifths vote of the Senate and the House.
  As Senator Moynihan pointed out during the debate last week, 
President Roosevelt convinced narrow legislative majorities to accept 
deficit spending to finance the construction of warships during the 
1930's, to ensure that America would have a Navy ready and able to 
fight Nazi Germany when war began. If the balanced budget 
constitutional amendment had been in place, those investments in our 
Nation's security would not have been made.
  Today, by preventing expenditures to solve long-term problems, the 
balanced budget amendment would jeopardize the Nation's economic 
vitality, and make it more difficult to mobilize to protect national 
security.
  The amendment is unsound as a matter of economic policy, and it is 
equally unsound as a matter of constitutional law. The true genius of 
the Framers who gathered in Philadelphia and wrote the Constitution 200 
years ago is in the system of checks and balances that has preserved 
our democracy, allowed the Nation to flourish and protected our most 
fundamental rights and liberties for more than two centuries.
  The balanced budget constitutional amendment says nothing about how 
it would be enforced; and the Judiciary Committee report is ominously 
silent on this important issue. But any fair reading of the amendment 
makes clear that it is fraught with dangerous possibilities.
  A wide range of constitutional scholars have testified that the 
amendment inevitably gives the President broad powers to impound 
Federal funds to achieve the amendment's goal. Neither the language of 
the amendment nor the text of the Judiciary Committee report suggests 
any limit to this broad impoundment authority. The historic power of 
the purse that has served this country so well would be taken from 
Congress and given to the President.
  The amendment would also undermine important principles of our 
Federal system by giving Congress and the President a strong additional 
incentive to place unfunded mandates on the States in order to avoid 
increasing the budget deficit.
  The sponsors of this amendment are already among the strongest 
critics of unfunded mandates. Why would they vote to expand them? If 
this amendment passes, Members of future Congresses can say to 
themselves, ``Why come up with the funds to pay for Federal benefits, 
and the three-fifths vote needed to appropriate those funds, when a 
simple majority vote can mandate the States to provide them?''
  The amendment would also give the courts a new and highly 
controversial role in resolving important and complex budget and 
economic disputes--disputes that unelected judges are ill-quipped and 
ill-suited to resolve.
  Suppose a future President orders an across-the-board cut in Social 
Security payments to avoid a predicted deficit. A Social Security 
recipient would undoubtedly have legal standing to bring suit to 
challenge the cut, and argue that there was no budget deficit, and the 
President lacked the authority to make the cut.
  A Federal district judge would be required to hold a trail to 
determine whether or not the Federal budget would be balanced for the 
year in question. The trial would no doubt involve many expert 
witnesses and take months or even years to complete. When it is over, 
the judge would issue an opinion as to the legality of the across-the-
board cut. If the cut is found to be illegal, it could have profound 
economic consequences for the Nation.
  If we adopt this constitutional amendment, cases of this kind will 
not be rare. Scores of them could occur every year. The Federal courts 
would be required to spend hundreds of hours, and millions of dollars, 
to resolve them.
  In fact, under the language of the amendment as it is now pending 
before the Senate, the judges hearing those cases could order tax 
increases or spending cuts to remedy violations. Obviously, such orders 
from judges would profoundly alter the role of the courts in our 
constitutional system.
  In seeking to avoid such results, the sponsors of the amendment have 
indicated their intent to add a provision offered by Senator Danforth 
to strip the Federal courts of any authority to remedy violations of 
the amendment, except by issuing declaratory judgments.
  The proposed modification would create a new double standard for 
constitutional violations. The Federal courts would retain their 
traditional authority to remedy violations of all other provisions of 
the Constitution. But when a President or Congress violates the 
balanced budget amendment, a Federal court would be powerless to do 
anything but declare that a violation exists. The modification would 
turn the balanced budget amendment into the first toothless amendment 
the Constitution has ever had.

  Finally, the proposed amendment would undermine the principle of 
majority rule that is at the core of our constitutional democracy. In 
the Federalist Papers, James Madison rejected the idea of requiring 
super-majorities to pass legislation. To do so, he wrote, would mean 
that ``the fundamental principle of free government would be 
reversed.''
  The balanced budget amendment would do just that--substitute minority 
rule for majority rule.
  Forty-one percent--a minority--of the membership in the Senate or the 
House could block a measure the majority felt was needed to protect the 
economy. If you like filibusters, if you like gridlock, you will love 
the balanced budget constitutional amendment.
  I fully support the goal of balancing the Federal budget. But today's 
budget deficits are the bitter fruit of 12 years of ``buy-now-pay-
never'' budgets from past Republican administrations. Supply-side 
economics was an experiment that failed.
  After 12 years of these reckless measures, we finally have a 
President ready, willing and able to take the difficult steps necessary 
to deal with the budget deficit.
  President Clinton has provided impressive leadership. Last year, 
Congress passed a $500 billion deficit reduction package, which has 
resulted in low interest rates and a recovering economy. As a result, 
we will have declining deficits for 3 years in a row, for the first 
time since President Harry Truman was in the White House.
  It is ironic--but predictable--that so many Republicans who opposed 
that deficit reduction plan last year are now seeking cover by 
supporting a balanced budget constitutional amendment. They are for a 
balanced budget in the abstract, but they voted ``no'' when the time 
came to act.
  Controlling spiralling health care costs is the next essential step 
in reducing the budget deficit. Here again, President Clinton is 
providing real leadership that will result in real deficit reduction. 
And here again, it is Republicans who are raising objections and 
complaining that the cost controls in the President's plan are too 
strong.
  Obviously, it will take additional steps in deficit reduction to 
achieve a balanced budget by the end of this century. But not one of 
the proponents of a constitutional amendment have offered a serious 
proposal to achieve that result. It is no wonder that the sponsors of 
the amendment do not want it to take effect until the year 2001. ``Gone 
With the Wind''--I will worry about it tomorrow, they say. And tomorrow 
is the next century.
  The fault is not in the Constitution. Let us rededicate ourselves to 
achieving lasting economic prosperity for the Nation in ways that 
count, and spend no more time debating gimmicks that have no place in 
the Constitution.
  Finally, I commend the chairman of the Appropriations Committee, 
Senator Byrd, for the extraordinary leadership he has provided in 
building a solid case against the balanced budget amendment and 
demonstrating its many economic and constitutional flaws.
  Senator Byrd cares deeply about the Constitution and the country and 
the legacy that we will leave to our children and grandchildren. His 
dedicated efforts to preserve, protect and defend the Constitution 
against this unwise and mischievous proposal deserve the gratitude of 
every American. He is truly a profile in courage for the Constitution 
and the country.
  In sum, the balanced budget constitutional amendment will not cut the 
deficit by a single dollar. It will endanger the economy, distort the 
constitutional system of checks and balances, and substitute gridlock-
by-minority for government by majority. And it should not pass.
  The ACTING PRESIDENT pro tempore. The Senator from Nevada.
  Mr. REID. Madam President, I yield 10 minutes to the Senator from 
California [Mrs. Boxer].
  The ACTING PRESIDENT pro tempore. The Senator may be recognized when 
she is removed from the chair.
  The PRESIDING OFFICER (Mr. Reid). The Senator from California is 
recognized.
  Mrs. BOXER. Thank you very much, Mr. President.
  I plan to vote in favor of the Reid balanced budget amendment and 
against the Simon version.
  When I was elected to the U.S. Senate about a year ago, I pledged to 
make my primary focus economic recovery for my State. Economic recovery 
that is steady, strong and consistent. Economic recovery that builds a 
solid base for California's future
  That economic recovery can only move forward if we have real deficit 
reduction; low-interest rates that stimulate private investment in 
business and homes; public sector investment in education, economic 
conversion, and the information highway; expanded trade opportunities; 
health care reform; and Federal reimbursement to the States for such 
costs as immigration.
  We are on course with this President and this Congress.
  Last year we enacted a $500 billion deficit reduction plan that will 
bring down the deficit from 4.9 percent of gross domestic product in 
1992 to 2.3 percent of gross domestic product in 1998.
  Mr. President, I well remember the prediction of doom on the other 
side of the aisle when we debated the President's deficit reduction 
plan. We did not get one vote of support from Members on the other side 
of the aisle. We did not get one vote for a plan that is producing real 
deficit reduction, meaningful deficit reduction. A plan that is having 
a positive impact on our economy.
  Roughly 1.6 million jobs were created over the past year, more jobs 
than were created during George Bush's 4 years in office.
  Real GDP is expected to grow at a steady annual rate of nearly 3 
percent.
  Inflation is low. And, inflation is a very cruel tax indeed. It rose 
at a rate of only 2.7 percent last year, which was the smallest annual 
rise in 7 years.
  The 30-year mortgage rate dropped from 8.22 to 7.09 percent over the 
last year. And, 5.4 million American homeowners refinanced their 
mortgages, putting money in their pockets.
  This is surely a strong start. My home State is still lagging. We got 
hit harder by this recession, and the impact of reducing the military 
budget is felt worst in our State. But I say: We are on the right 
track, and I believe California will join in this economic recovery, as 
long as we are smart and we do not do things that will take us off 
course.
  I believe Senator Simon's version of the balanced budget amendment 
would, in fact, divert us from this economic recovery.
  Now, I know there are philosophical arguments on whether any 
constitutional amendment on a balanced budget is consistent with our 
constitutional heritage, and I respect those who argue this point.
  But, I want to address the economic consequences of the Simon 
amendment, consequences which will affect real people with real 
problems, consequences which simply can and should not be ignored, 
consequences which will impact virtually all Americans.
  A study by the Wharton Econometrics forecasting group, the leading 
economic forecasters in this Nation, found that, with Senator Simon's 
balanced budget amendment: California would lose over 712,000 jobs by 
the year 2003; and, personal income in California would drop by 12 
percent over the next 10 years. The Treasury Department found that the 
Simon amendment would cost California between $21 billion and $24 
billion a year.
  The prospects for the Nation's economy are just as serious. Wharton 
Econometrics found that, with the Simon budget amendment: 6.4 million 
jobs would be destroyed by the year 2003; the Nation's economic output 
would drop sharply; taxes would have to rise to record levels; State 
and local government services would be severely constrained; and, 
income would drop in the country by roughly $479 billion by 2003.
  And, what about Federal assistance after an earthquake or a flood or 
a hurricane? The Simon amendment would require a supermajority vote for 
disaster aid approval, which could mean either no aid or delayed aid 
for those suffering after a natural disaster. Talk about tyranny of a 
minority.
  The Simon amendment makes no distinction between a capital budget and 
the operating budget, a distinction that is crucial in meeting the 
needs of a community after an emergency. A capital budget could be used 
to pay for important disaster aid.
  And, what about bad economic times? Lord knows, we have lived through 
those. The deficit increases automatically whenever the economy 
weakens. Senator Simon's amendment would force Congress to raise taxes 
and cut expenditures when the economy is already weak or in a 
recession--exactly the opposite of what is needed for a weak economy.
  And, what about Social Security? It will be in jeopardy under the 
Simon amendment.
  I do not believe this is the course to follow.
  In contrast, the Reid amendment addresses many of my concerns.
  The Reid amendment excludes Social Security from the balanced budget 
amendment. This will prevent the Government from destroying a program 
that has lifted our senior citizens out of the poorhouse. Many people 
are too young to remember, but we certainly never want to go back to 
those days. This is a program that pays for itself. Social Security 
would be put on a chopping board with the Simon amendment, and I think 
that is wrong.
  The Reid amendment allows capital investments to be excluded from the 
supermajority vote. Most States with balanced budget requirements have 
separate capital and operating budgets. Many States finance capital 
projects, such as roads and bridges and airports, outside their 
operating budgets. I think that makes sense. We must be able to finance 
certain investments that will make our Nation strong and secure and 
competitive in the future.
  The Reid amendment also allows greater flexibility in times of 
economic downturn. It gives us the power to help stimulate the economy 
and job creation in times of slow economic growth.
  Mr. President, I know this has been a long and difficult debate. I 
feel very strongly that this Congress and this President have taken 
real steps to lower the deficit; not phony steps, not steps for the 
year 2002 or 2001 or 1999, but real steps. And we are seeing the 
rewards in terms of a stronger economy.
  I believe that the Reid amendment takes all the objections that I 
have laid before this body and meets them head on. That is why I will 
vote for the Reid amendment and I will very clearly and strongly oppose 
the Simon amendment
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Chair, in his capacity as a Senator from the State of Nevada, 
suggests the absence of a quorum, and asks unanimous consent that the 
time be divided equally.
  Without objection, it is so ordered.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SIMON. Madam 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.
  Mr. SIMON. Madam President, let me respond just very briefly to my 
friend and colleague, Senator Kennedy, in his brief remarks.
  When he says this will result in the President having authority to 
impound, there is not one word in this amendment that gives the 
President any additional authority. The only thing we say to the 
President is, you have to submit a balanced budget when you submit a 
budget. So that simply is not accurate.
  Second, when he suggests that we are saying to States, we are going 
to give you all kinds of unfunded mandates, we do a lot of that right 
now, as you know, Madam President. I am a cosponsor of a bill that 
would say, when we give these mandates, we have to give the finances 
with them. But there is nothing to stop us from doing that right now.
  In terms of the amendment being toothless, we are being criticized on 
both sides: That it is toothless and that it is too tough. When we say 
to raise the debt you have to have a three-fifths majority, that is 
teeth. That is tough, and it has to be tough. It is not toothless.
  In terms of moving away from majority rule, James Madison warned 
about majoritarian abuses. I think we have clearly, for 25 years, spent 
more than we have taken in. That is an abuse of future generations, as 
well as ourselves, by the majority.
  The average American income, family income, today is $35,000. The 
study that was released by the Concord Coalition says the average 
American family income today would be $50,000, but for the deficits 
that we have piled up. That is an abuse.
  In the Constitution there are eight different instances where you 
have an exception to majority rule, plus, the Bill of Rights is clearly 
a place where we say we are not going to let the majority do things.
  Alexander Hamilton originally opposed the Bill of Rights because he 
said it was taking power away from the majority. It does. But when 
there is a potential for abuse, we take away certain powers.
  So long as we have a balanced budget, there is a majority rule here. 
When you have a situation where you have a deficit, that will require 
60 votes.
  But we have, since 1962, on 11 different occasions, passed in this 
body stimulus packages to respond to recession, each time passed by 
more than 60 votes. We can do it, but it does stop some of the abuses.
  Senator Kennedy mentioned we have had declining deficits 3 years in a 
row. That is correct. And to the credit of President Clinton and the 
Members who voted for that, that is happening. But then they start back 
up again.
  Two other points: One is the Senator says that this does not take 
effect until the year 2001. That is correct. We have to get on a glide 
path.
  But I know if this passes, the Senator from California, Senator 
Boxer, the Senator West Virginia, Senator Byrd, and all the rest of us 
will start work immediately to make sure we get on that glide path.
  The arguments against it are precisely the same arguments we heard in 
1986. In 1986, the deficit was $2 trillion. Now it is $4.5 trillion. If 
we do not pass it this time, this is not going to die. The deficit will 
keep piling up and we are going to hear the same arguments as the 
deficit piles up, as we get closer and closer to the edge of the cliff 
in terms of policy.
  Two points were not mentioned by my colleague from Massachusetts.
  I regret I was not on the floor when the Senator from California 
spoke. Perhaps she did mention these. But two things were not 
mentioned.
  One is, as you project, as you take OMB's statistics from the budget 
books they gave us, no nation has gone that far in terms of debt-and-
debt service without monetizing the debt, without just printing money, 
without having hyperinflation. We can take a chance that we can be the 
first Nation in history to do that, but we are taking a huge risk. I 
suggest we do not take that risk. It is not prudent to take that risk.
  Second, the question of foreign debts was not mentioned. Seventeen 
percent of our debt is now held by foreign governments or foreign 
individuals. That is the publicly held debt. In addition to the 
publicly held debt, there are those, I think largely because of laws in 
their own countries, that do not want it publicly known. We do not know 
what that figure is. But at some point, a prudent international banker 
is going to say, ``I ought to put my money somewhere else.''
  Lester Thurow, one of our great economists, says the question is not 
if they are going to do that, the question is when they are going to do 
that. We have to take a look at that. So, with due respect, I differ 
with my colleague from Massachusetts.
  I would like to, finally, quote from a letter of Thomas Jefferson. 
This is in 1816, 10 years before he died, after he had been President. 
We have had a number of Jefferson letters inserted in the Record. Here 
he says:

       Private fortunes are destroyed by public as well as private 
     extravagance. And this is the tendency of all human 
     governments. A departure from principle becomes a precedent 
     for a second; that second for a third, and so on * * *.

  That is exactly the path we have followed, that Thomas Jefferson 
talked about here in this letter of 1816.
  I hope we do the right thing. I hope we reject the Reid amendment and 
adopt the Simon amendment.
  Mr. BYRD addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from West Virginia.
  Mr. BYRD. Madam President, on yesterday I spoke about the history of 
our English forebears and about the various parallels that exist 
between our own written Constitution and the unwritten English 
constitution. There are those who undoubtedly feel that it is 
superfluous to talk about history, especially the history of England or 
the history of the Romans, in connection with the amendment that is 
going to be voted on toward the end of this day.
  First, let me say that I respect my colleague from Nevada, Mr. Reid, 
and those who are supporting his amendment. The Senator from Nevada is 
seeking to cure some of the many ills with which our Nation would be 
inflicted in the event that the Simon amendment, God forbid, ever 
becomes a part of our Constitution. I applaud Senator Reid and others 
for their efforts.
  But try as they may, there is no way to cure the ills imbedded in the 
Simon amendment. It is like a hydraheaded monster: Chop off one head, 
another head appears. Therefore, I shall direct my brief remarks toward 
the Simon amendment.
  The history of England is, indeed, germane to this debate, as is the 
history of the Romans. Montesquieu knew that. That is why Montesquieu 
wrote a history of the Romans. The two things that had the greatest 
influence on the shaping of Montesquieu's political philosophy and 
political system were the history of the Romans and the history of the 
English institutions. The Founding Fathers, the Framers of our own 
Constitution, were greatly influenced by Montesquieu and his political 
system of separation of powers, and checks and balances. It is 
important, therefore, that those histories be studied.
  Let me just briefly call attention, again, to some of the parallels 
that exist in both the English and the American Constitutions. After 
all, we must remember that our Colonies adopted the British model, with 
some adjustments made for local conditions and social forces that were 
existing at the time of the Colonies, and certain adjustments to 
include republican principles.
  Our constitutional framers leaned upon the experience of the Colonial 
governments which had reflected the bicameralism of the British model, 
which, when transferred to the Colonies, took the form of Houses of 
Representatives elected by the people, and upper councils, the members 
of which were appointed by the Royal Governors.
  Section 2 of Article I of the Constitution provides for a House of 
Representatives. Section 3 of Article I provides for a Senate which, at 
the time that the Constitution was framed, would be made up of 
individuals selected by the State legislatures. Hence, the principle of 
bicameralism came down to us from the English archetype, Article I, 
section 1, stating that:

       All legislative powers herein granted shall be vested in a 
     Congress of the United States, which shall consist of a 
     Senate and House of Representatives.

  Also, in section 2 of Article I, we note that:

       No person shall be a Representative who shall not * * * 
     when elected, be an inhabitant of that State in which he 
     shall be chosen.

  Article I, section 3, states that:

       No person shall be a Senator who shall not, when elected, 
     be an inhabitant of that State for which he shall be chosen.

  These provisions, too, have roots in the Middle Ages when kings 
sought to pack the Parliaments. The sheriffs would announce as their 
nominees, knights who had not been chosen in the shires which they were 
supposed to represent, but who were chosen outside the counties which 
they were to represent. But, in 1413, the last year of Henry IV's 
reign, and again in 1430 and in 1445, legislation was enacted to 
require that the members of Commons should reside in the counties, the 
shires, the cities, the boroughs which they represented.
  Section 2 of Article I, provides that:

       The House of Representatives shall chuse their Speaker and 
     other Officers * * *.

  This is taken from the British model. The British Commons chose their 
first Speaker, Thomas Hungerford, in the year 1377, during the rule of 
Edward III.
  Section 3 of Article I says that:

       The Senate shall have the sole power to try all 
     impeachments.

  And section 2 says that:

       The House of Representatives shall * * * have the sole 
     power of impeachment.

  Does the United States Constitution follow the British model in this 
respect? Yes. The first impeachment under the English constitution 
occurred in 1376, in what was called the ``Good Parliament,'' during 
the reign of Edward III. Richard Lyons, a customs officer and merchant, 
and other officers were impeached for abusing their offices.
  Then in 1621, when Parliament met, after having not met for 7 years, 
going back to 1614, Sir Edward Coke, who was at that time a Member of 
the House of Commons, brought about the impeachment of his old enemy, 
Lord Chancellor Francis Bacon. Bacon admitted to having taken bribes, 
and he was sent to the tower. He was not executed but, nevertheless, he 
could never hold any office under the government from that time 
forward.
  So we see that Article I, sections 2 and 3 provide for impeachment 
and trial, and, again, after the British model, impeachment to be 
brought in the House of Commons; in our system in the House of 
Representatives; and trial under the English system by the House of 
Lords, and, in our system, by the United States Senate.
  Section 4 of our own Constitution says that:

       The Congress shall assemble at least once in every Year * * 
     *.

  Now, this was extremely important because the kings called Parliament 
into session only when the kings needed money. When they could not 
borrow from the kings of France or Spain, or raise necessary funds 
through non-parliamentary means, they had to resort to calling 
Parliament into session. When they were forced to ask Parliament for 
grants, the members would demand concessions before providing the 
necessary funds. This was the power of the purse at work.
  For 7 years, from 1614 to 1621, Parliament was not in session. James 
I refused to convene Parliament. From 1629 to 1640, Parliament was not 
in session because Charles I would not convene Parliament. Parliament 
never met for 11 years. Charles I badly needed money grants, and 
finally was driven to call Parliament into session. He was encouraged 
to do so by Sir Thomas Wentworth--``Black Tom Tyrant''--who was the 
Lord Deputy of Ireland and who was ruthless in his policies. Wentworth 
believed in despotic government, and advised Charles I to call 
Parliament into session because the Scots had overrun the northern 
counties of England. Sir Thomas Wentworth, who was made the Earl of 
Strafford by Charles I, told the King that it was popular to be against 
the Scots--the English being anti-Scottish--and that Charles would be 
applauded if he called Parliament back into session, secured money 
grants and bought the Scots out of England. The Scots were costing 
England 850 pounds a day but the Scots refused to get out of the 
northern counties until an agreement could be reached with Parliament 
to meet their demands.
  Therefore, the English kings had to call Parliament into session when 
they needed money. But when they could make do without grants, they 
prorogued Parliament, or dismissed it or dissolved Parliament. That was 
a major problem: the Kings avoided having Parliament meet often.

  Finally, when the English Bill of Rights was made into a statute on 
December 16, 1689, that document, the English Bill of Rights provided 
that Parliament should meet often. This allowed Members to debate their 
grievances, and to use the power of the purse to obtain a redress of 
those grievances. Therefore, we find that in our own Constitution, 
section 4 of Article I provides:

       The Congress shall assemble at least once in every year * * 
     *.

  Section 5, Article I of the U.S. Constitution provides that:

       Each House shall be the Judge of the Elections, Returns, 
     and Qualifications of its own Member * * *.

  During the reign of James I, in 1604, there was a contested election 
between Sir Francis Goodwin and Sir John Fortescue. The King favored 
Fortescue, but the Commons insisted upon judging the election. Commons 
won.
  After a long dispute, James I acceded to the right of Commons, to 
judge the elections, returns, and qualifications of its own Members, 
and that right was never again challenged.
  In Article I, section 6, we find that ``in all cases, except Treason, 
Felony and Breach of the Peace'' Senators and Representatives shall 
``be privileged from Arrest during their Attendance at the Session of 
their respective Houses, and in going to and returning from the same * 
* *.''
  Freedom from arrest. This was a right accorded to Members of the 
Witenagemote, as far back as Ethelberht, the first Christian King of 
Kent, one of the Anglo-Saxon kingdoms, who lived from 560 to 616. So, 
this right goes back all the way to the 6th century. He provided that 
no person should be put in danger when that person had been commanded 
to attend a meeting of the Witenagemote.
  King Cnut, who reigned from 1016 to 1035, had the same rule. He 
provided protection against arrest of any Members who were commanded to 
attend meetings of the Witenagemote.
  Sir Thomas Shirley was imprisoned for debt in 1604. The House of 
Commons insisted that King James I had no right to collect forced 
loans. Thomas Shirley had been imprisoned because he refused to pay the 
forced loan demanded by the King. Commons won this battle also. James I 
reluctantly accepted the House of Commons' decision upholding Shirley's 
claim of freedom from arrest.
  Also Article I, section 6, the U.S. Constitution, provides that 
Members of both Houses shall be protected in the freedom of speech and 
debate and ``for any Speech or Debate in either House, they shall not 
be questioned in any other Place.''
  Henry IV, who reigned from 1399 to 1413, acknowledged the right of 
Commons to debate freely, and, in 1407, he proclaimed that the Lords 
and Commons had this right, which was finally confirmed by the English 
Bill of Rights in 1689 which declared that: ``Freedom of speech, 
debates, and proceedings in Parliament ought not to be questioned in 
any place out of Parliament.''
  Section 6 also provides that ``no Person holding any Office under the 
United States, shall be a Member of either House during his Continuance 
in Office.'' And the English had that problem, too, when the kings 
sought to pack Commons with their favorites.
  The Act of Settlement of 1701 provided that no person who had an 
office or place of profit under the King or received a pension from the 
crown was capable of serving as a member of the House of Commons.
  Article I, section 7, provides:

       All Bills for raising Revenue shall originate in the House 
     of Representatives.

  That provision has its roots in the Middle Ages. Henry IV made a 
solemn declaration before a joint session of both Houses in 1407, in 
which he laid down the principle that in the future, grants would be 
made by the Commons and assented to by the House of Lords.
  That right was violated from time to time, but finally in 1677, under 
Charles II, the Commons passed a historical resolution declaring that 
all supplies and aids to the King ``ought to begin with the Commons'' 
and that it was the sole right of the Commons to direct, limit, and 
appoint in such bills the purposes, conditions, limitations, and 
qualifications of such grants; which ought not to be changed or altered 
by the Lords.
  As the years went by, the Commons were more and more insistent on the 
origination in the House of Representatives of revenue bills.
  Article I, section 7, also provides that:

       Every bill which shall have passed the House of 
     Representatives and the Senate, shall, before it becomes a 
     Law, be presented to the President of the United States; if 
     he approve he shall sign it, but if not he shall return it, 
     with his Objections to that House in which it shall have 
     originated * * *.

  Early on, the King and the Privy Council issued ordinances which had 
the effect of law. Then as the Knights and Burgesses during the time of 
Edward I--who ruled between the years 1272 to 1307--were included in 
the Parliament, the Knights, and Burgesses insisted on providing 
petitions to the King requesting this or that law. The King would 
consider the petitions with his Privy Council, and the King and the 
Privy Council might or might not convert such petitions into statutes. 
Sometimes the King and Council would change the details from those 
prescribed in the petition, and the resulting statute might be very 
different from the original petition.
  Then by the reign of Henry IV, bills were being substituted for 
petitions. So that when Parliament passed a bill, it contained within 
its four corners the exact statute that Parliament wanted. The King and 
his Privy Council could no longer change that. The statute was already 
in the bill. The King could accept or reject the bill in its entirety, 
but he could not alter or change any of its details.
  Therefore, we find that in our own Constitution, Article I, section 
7, bills that pass the House of Representatives and the Senate are 
presented to the President for his signature. He has to sign them or 
reject them in their entirety. He does not have a line-item veto. Our 
Framers were wise in copying from the experience of the English.

        Section 8. The Congress shall have power to lay and 
     collect taxes.

  That was a power that Parliament insisted upon. The Danegeld was a 
land tax which was approved by the Witenagemote under Ethelred the 
Unready, Ethelred II, who reigned from 978 to 1016. The Magna Carta 
provided that taxes should only be levied by common counsel of the 
Kingdom. And as the years went by, Parliament insisted upon that right. 
Therefore, we have hundreds of years of English history in which the 
Parliament insisted that grants could only be made, and taxes could 
only be levied by act of Parliament.
  Finally, that, too, was nailed down by the English Bill of Rights in 
1689 which said that there would be no levying of money except by the 
grant of Parliament. It was never again a matter of question.
  Article I, section 8, of the U.S. Constitution references the raising 
and support of armies ``but no appropriation of money to that use shall 
be for a longer term than 2 years.''
  The late 1700's, Parliament provided that appropriations or 
expenditures for the army had to be renewed annually. Consequently, our 
Framers copied after the English experience.

       Article I, section 9, provides that, The Privilege of the 
     Writ of Habeas Corpus shall not be suspended * * *.

  The Habeas Corpus Act was passed in England in the year 1679. It 
provided that no British subject could be imprisoned without being 
brought to a speedy trial.
  Article I, section 9, also provides that ``no money shall be drawn 
from the Treasury, but in consequence of appropriations made by law.''
  This, again, is rooted in the antiquity of the English experience.
  The power of the purse was wrested from the English monarchs and 
vested in the Parliament.
  Article III, section 1 of the Constitution says, in part, ``The 
judges, both of the supreme and inferior courts, shall hold their 
offices during good behavior.''
  In the Settlement Act of 1701 it was provided that judges would no 
longer serve at the pleasure of the King, but they could be removed 
only for ill behavior, and that had to be proved in both houses of 
Parliament. So we have the same thing in our Constitution. Judges shall 
hold their offices during good behavior.
  Finally, let us take a brief look at the amendments, and I shall not 
detain the Senate long. I will only touch on one or two of these 
amendments. I shall mention especially the due process in the fifth 
amendment.
  The Magna Carta was the foundation for this phrase ``due process.'' 
There were 63 clauses in the Magna Carta, and in clause No. 39 it was 
provided that no free man would be imprisoned, banished, exiled, 
dispossessed of any of his property, or in any way have his standing 
injured except by the judgment of his peers and--get this--according to 
the law of the land. The law of the land. The law of the land. That was 
a magic phrase, used time and again in the English constitution 
throughout its development.
  That phrase, ``the law of the land,'' became our own phrase, ``due 
process,'' in the fifth amendment to our own Constitution.
  Finally, amendments VI and VII of our own Constitution deal with 
trial by jury in criminal cases and in civil cases. The English Bill of 
Rights provided for trial by jury. Of course, the roots of that right 
go all the way back to William I, who brought from the continent the 
sworn inquiry. Henry I who ruled from 1100 to 1135 and, Henry II from 
1154 to 1189, developed this instrument, the jury trial, which likewise 
had continental origins.
  Finally, I will just touch upon the eighth amendment: ``Excessive 
bail shall not be required nor excessive fines imposed.'' Again, the 
English Bill of Rights in 1689 provided against excessive fines and 
excessive bails.
  So here we are. Let me sum it up by saying that in instance after 
instance, clause after clause, phrase after phrase of our own 
Constitution were adapted from the experience in the English 
Constitution.
  Therefore, it is important that we consider the English history; we 
should not just consider the history of our own Constitution from the 
time it was written. We should also consider the roots of that 
Constitution, and the roots of the power of the purse.
  In my discussions concerning the history of the Romans last year, we 
found that when the Roman Senate gave up its power over the purse--and 
it had complete control over the purse--when it gave up that power over 
the purse to the dictators and to the emperors, it gave away its power 
to check the emperors, to check the dictators, to check the executive.
  We should not just consider our Constitution from the year of its 
writing, in 1787, up to the present time as being in a vacuum. We must 
study the English roots of the Constitution. We must know why these 
phrases are in the Constitution. We must know from where they came. 
What was the history? What were the historical events that generated 
them? We have to realize that our English brethren gave their blood, 
often at the point of the sword, for these rights. They executed a 
king, Charles I of England, for being a traitor, a murderer, a tyrant, 
and public enemy to the good people of England. They executed Charles I 
on January 30, 1649.
  These are matters that are serious. They ought to be considered. We 
must not forget the roots from which this priceless jewel, the 
Constitution of the United States, came.
  I implore Senators not to vote for an amendment that will destroy 
that Constitution, destroy the separation of the powers, destroy the 
checks and balances, and shift away from the Congress the power of the 
purse, which is the central pillar of the Constitution that protects 
the liberties and freedoms of all Americans.
  I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER (Mrs. Feinstein). The Senator from Utah.
  Mr. HATCH. I yield 7 minutes to the Senator from Texas.
  Mr. REID. Parliamentary inquiry.
  The PRESIDING OFFICER. Does the Senator yield for an inquiry?
  Mr. HATCH. Yes. I would be happy to yield for an inquiry.
  Mr. REID. If I could ask my friends who are managing this 
legislation, we all have a number of Senators who wish to speak. I am 
wondering if we could, to make it easier for everyone, kind of arrange 
the time a little bit.
  Mr. HATCH. Why do we not work out a list? Why do we not move to 
Senator Hutchison?
  Mr. REID. She will speak how long?
  Mr. HATCH. Seven minutes.
  Mr. SIMON. I have indicated to Senator Exon that I will yield to him 
next.
  The PRESIDING OFFICER. The Senator from Texas [Mrs. Hutchison] is 
recognized for 7 minutes.
  Mrs. HUTCHISON. Thank you, Madam President. I thank Senator Hatch.
  Madam President, I rise today to add my voice to those who are 
calling for a balanced budget amendment. I want to compliment the 
senior Senators from Illinois and Utah, Mr. Simon and Mr. Hatch, for 
their fine work on this very important legislation. Without their 
courage and leadership, we would not be close to enacting mandatory 
fiscal responsibility.
  You may have seen the editorial cartoon reprinted in Saturday's 
Washington Post showing the famous bow tie of the senior Senator from 
Illinois. It shows what might be called the ``bow tie argument,'' that 
a balanced budget will squeeze too tight.
  The opponents of the amendment are saying that we cannot have a 
balanced budget because we cannot balance the budget. If there was ever 
an inside-the-beltway policy argument, that is it. Imagine the Framers 
of our Constitution adopting such a view. We would not have the fifth 
amendment which says that private property shall not be taken for 
public use without just compensation.
  Of course, the Framers knew that public funds were limited. Some had 
struggled with financing the Revolutionary War and the Government under 
the Articles of Confederation. But as the first stewards of our 
country, they put the Government on a pay-as-you-go basis. They did not 
write, ``The Government will not pay citizens for seized property 
because it will not have the money--so it may seize private property 
without paying for it.''
  The Framers believed in a limited Federal Government. And I do not 
think they would view our grandchildren's pocketbooks as open to 
seizure.
  If we are going to hear more vague claims against the amendment in 
order to protect the Constitution, I want them to include the respect 
for all of the Constitution, including protection of private property, 
freedom from excessive Government intrusion into daily lives. I do not 
believe we are protecting the Constitution by continuing to add to a $4 
trillion debt.
  We have heard objections that the contractionary economic policy of a 
balanced budget will bring on the next Great Depression. Cutting 
Federal spending and freeing up capital for private investment will not 
bring a depression. But interest payments swallowing up the Federal 
budget will.
  Herbert Hoover probably saw this coming when he said, ``Blessed are 
the young, for they shall inherit the national debt.''
  The balanced budget amendment does not strictly require a balanced 
budget. It requires that spending not exceed revenue unless three-
fifths of each House votes to permit a deficit. The amendment only 
tilts the playing field back in favor of a balanced budget. Obviously, 
the playing field is not level now or we would not have over $4 
trillion in gross Federal debt and almost $300 billion a year in gross 
interest payments.
  Of course, balancing the budget will not be easy. But what is the 
opponents' alternative? Increasing the Federal deficit?
  It does not give me any comfort to know that our deficit for 1995 is 
less than expected, mostly because of higher taxes and lower-than-
expected savings and loan bailout costs. Unless we take action now, the 
deficit and debt will continue to grow.
  The plan I support to balance the budget is the First Act, also known 
as Putting Families First. Under the First Act, we can save $542 
billion over 5 years by limiting the annual growth in Federal spending 
to 2 percent a year. The budget can be balanced by the year 2001, and 
we can provide tax relief for American families with children, 
including a tax credit of $500 per child; incentives for private 
savings and investment, including expanded IRA's and IRA equity for 
homemakers, and lower taxes on capital gains; and a repeal of the 
retirement earnings test for older Americans on Social Security.
  These are not across-the-board spending cuts. They are discretionary 
reductions in future spending increases. To meet the 2 percent ceiling 
in growth in Federal spending, the cuts would be determined by a 
commission, as proposed by Senator Mack --a spending reduction 
commission. Then Congress would have to vote up or down on their 
recommendation, like we do on the Base Closing Commission.
  Madam President, there is a plan. It will balance the budget; it will 
take money out of Washington and put it back into the pocketbooks of 
American families; it will increase the savings rate and reduce the tax 
rate on investments. The First Act will increase private investment in 
business, create jobs that increase economic growth, and increase tax 
revenues. No scary-sounding cuts in dollars inflated to the year 2000 
will be necessary--just cuts in increases in future spending. All we 
must do is stop acting as politicians with short-term goals and act as 
the Framers did, as statesmen protecting the future of our country.
  In closing, I want to encourage all of my colleagues to think 
carefully before they vote today. Before voting, think of the heroes of 
the Alamo that have been mentioned here before on the floor. Senator 
Simon, there really was a back door at the Alamo. The back door was a 
line drawn in the sand. Colonel William Barret Travis drew the line in 
the sand before the battle, and he asked all those who wanted to stay 
and fight to cross the line. They had the chance to leave. All but one 
of the 184 men crossed that line, and the one, Jim Bowie, said, ``Carry 
my stretcher across that line.''
  So that band of 184 men crossed the line to stay and fight 6,000 
soldiers coming to the Alamo under Santa Anna. Those brave men 
voluntarily closed the door to protect the independence of Texans for 
generations to come.
  The Congress of the United States today has the opportunity to 
voluntarily close that back door and protect the future of generations 
of Americans to come. Thank you.
  I yield the floor.
  Mr. HATCH. Madam President, I thank the distinguished Senator from 
Texas for her cogent remarks.
  The managers of the bill--the three of us--have gotten together to 
try to get a list of speakers in order, so everybody will know when 
their turn is. If I could recite that order, I think it will help 
everybody to get here on time and to take their place.
  Senator Reid would like 1 minute at this time. Then Senator Thurmond 
will have 8 minutes. Then there will be Senator Exon, Senator Cohen, 
Senator Sasser, Senator Burns, Senator Ford, Senator Kempthorne, 
Senator Robb, and Senator Coverdell. That is as far as we got.
  Mr. REID. Madam President, if I can suggest to my friend from Utah, I 
think it would be well that he list the amount of time and who is 
yielding in case we get out of whack with the time.
  Mr. HATCH. I am not sure what the time is. Senator Thurmond, 8 
minutes. Senator Exon has 10 minutes. Senator Thurmond will be yielded 
time by me. Senator Exon's time will be yielded by Senator Simon. 
Senator Cohen has 10 minutes from me. Senator Sasser needs how much 
time?
  Mr. REID. I will yield him 20 minutes.
  Mr. HATCH. Senator Burns gets 10 minutes from me. Senator Ford has 
how much time?
  Mr. REID. Ten minutes.
  Mr. HATCH. Senator Kempthorne has 5 minutes from me or Senator Simon; 
Senator Robb, 5 minutes; and Senator Coverdell 5 minutes, from either 
Senator Simon or me.
  Mr. SIMON. Madam President, this is just for the convenience of 
Members; this is not a unanimous-consent request. We reserve the right 
to have some flexibility in this.
  Mr. REID. Madam President, I ask unanimous consent that the remaining 
time of Senator Byrd be yielded to me. I ask that with the consent of 
Senator Byrd.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. The reason I wish to stand at this time is to spread across 
the Record in this Congress and for the American public and future 
generations, something that is unique that we just heard. I am an 
attorney. I went to law school, practiced law, had dozens of jury 
trials. I have a son that is an attorney, and I have another son going 
to law school at Stanford University. I did not have--and I am sure my 
sons did not, even though they went to fine law schools--a lesson on 
what the Constitution is really about, such as the one provided by the 
President pro tempore of this Senate.
  This morning, he went through article by article of that 
Constitution, and he gave us the reason it is in our Constitution, and 
the history of why it is in our Constitution. I, frankly, wish that I 
had someone spend an hour with me before I went to law school so it 
would have made studying the Constitution much more meaningful. I am 
going to send a copy of the remarks of the President pro tempore of the 
Senate to my son, the practicing lawyer, and to my son, who is in one 
of the finest law schools in the world, Stanford University, because no 
matter how fine the professors are at Stanford, they could not have a 
better lesson on the Constitution than the one we have just heard this 
morning.
  Mr. HATCH. Madam President, I yield 8 minutes to the distinguished 
Senator from South Carolina.
  Mr. THURMOND. Madam President, I rise today in opposition to the 
substitute amendment offered by Senator Reid which we will vote on 
today at 3 p.m.
  The language of the substitute amendment has been referred to as a 
figleaf, a spurious attempt to provide political cover for those who 
believe they should vote to support a constitutional amendment to 
balance the budget but fear its consequences. I do not question the 
sincerity or motivation of Senators who have spoken in favor of the 
Reid substitute amendment. However, it is clear that the substitute 
amendment is rife with loopholes which swallow the mandate of achieving 
a balanced budget.
  Over the years, proponents of an effective balanced budget amendment 
have carefully crafted language to address the concerns of 
constitutional scholars, economists, and others across the Nation. The 
language contained in Senate Joint Resolution 41 is a result of many 
hearings, debates, and thoughtful discussion to constitutionally 
restrain congressional spending in an effective manner. Included in our 
proposal is a practical safety valve which would allow the Congress, 
when necessary, to engage in deficit spending by a three-fifths vote or 
during military conflict.
  By contrast, the language of the Reid amendment has appeared within 
the last few days without the benefit of any hearings or meaningful 
discourse beyond the Senate floor. The Reid amendment would exclude 
capital expenditures from being considered as outlays by the Federal 
Government under the mandate of a balanced budget amendment. There is 
no consensus as to what should or should not be included as part of a 
capital budget. It strikes me as inappropriate to place such an 
ambiguous concept as capital budgeting in the Constitution as a narrow 
policy decision.
  If the Reid amendment becomes part of the Constitution, I predict 
that there would be a great push to redefine many Federal programs from 
noncapital spending items to place them in the capital budget. Under 
this scenario, by manipulating the capital budget, we could face even 
larger deficits than we have today. This loophole in the Reid amendment 
would render a balanced budget amendment meaningless.
  Further, the Reid amendment would suspend the dictates of a balanced 
budget amendment any time the Director of the Congressional Budget 
Office estimates that real economic growth has been or will be less 
than 1 percent for two consecutive quarters. Madam President, this is 
an enormous amount of power the Congress would be shifting to the CBO 
Director. Just imagine, under the Reid amendment, the Director of the 
CBO--who serves at the pleasure of the majority leader and Speaker of 
the House--would have the power through his estimates on economic 
growth to suspend, nullify, and to eliminate the mandate of a 
constitutional amendment.
  I do not believe that the Founding Fathers envisioned, nor would the 
American people accept, such an arrangement whereby a Government 
official could derail the mandate of a constitutional amendment. On the 
other hand, our proposed constitutional amendment, Senate Joint 
Resolution 41, allows the Congress by a three-fifths vote to exercise 
reasoned judgment as to the necessity for engaging in deficit spending. 
Under Senate Joint Resolution 41, we could rely on the CBO estimates of 
economic growth but it need not be the only factor to consider when 
making a decision on deficit spending.

  Madam President, I will vote against the Reid amendment because in my 
opinion it will fall short of our goal to achieve and maintain balanced 
budgets. The Federal Government has posted deficits in 56 of the last 
64 years, balancing the budget only eight times in 64 years. I repeat 
only eight times in 64 years. This Nation is $4.2 trillion in debt and 
deficits continue to loom on the horizon unchecked and without any 
restraint. The national debt will continue to rise and there is no 
assurance when we will ever begin paying off the principal on this 
debt. For the time being, we are merely servicing the debt by spending 
over $200 billion--I repeat over $200 billion--annually in interest 
payments. Perpetual deficit spending is a shameful reality and a 
disgraceful legacy which we are leaving to future generations.
  I urge my colleagues to vote against the Reid amendment and instead 
vote for Senate Joint Resolution 41 which is the only truly effective 
proposal to constitutionally mandate balanced Federal budgets.
  I repeat again: We have balanced this budget only one time in 31 
years, only eight times in 64 years. How are we going to stop it? The 
Congress has not shown the willingness to stop it. They have not shown 
the will to stop it. The only way to stop it is to mandate the Congress 
to stop it, to make the Congress stop it, require the Congress to stop 
it, and the only way to do that is to pass a constitutional amendment. 
There is no other way to do it. Do we want to ever balance the budget. 
If so, let us pass this constitutional amendment, this constitutional 
amendment No. 41. That is the only way we will get results.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Illinois.
  Mr. SIMON. Madam President, I yield 10 minutes to the Senator from 
Nebraska [Mr. Exon].
  The PRESIDING OFFICER. The Senator from Nebraska is recognized for 10 
minutes.
  Mr. EXON. I thank the Chair and I thank my colleague from Illinois.
  Madam President, having listened to much of the debate on and off the 
Senate floor, I have come to the conclusion that many of the arguments 
for and against the proposed balanced budget amendment are lacking in 
substance. There has been entirely too much bombast and questioning of 
the motives of Members on opposite sides of the issue.
  I come to the floor to support the balanced budget amendment and in 
opposition to the substitute currently before the Senate.
  The timing of the substitute amendment before us, basically to create 
a separate capital and operating budget, might have some merit from a 
technical standpoint. It is not new. The concept has been around for 
years. But to bring it up at this juncture is clearly ill conceived. It 
will not prevail, and I believe that is a given.
  I think we should not be wasting as much time as we have on this 
substitute, notwithstanding the sincere efforts of its well-intentioned 
sponsors. It is going nowhere and the more time we waste debating 
before burying it forever, at least for now, the more tarnished our 
image becomes.
  Three weeks ago, I addressed the Senate and expressed my pleasure 
over the encouraging news that the Congressional Budget Office had 
brought to the Senate Budget Committee regarding the dramatic upswing 
in the overall economy. This was due largely to the deficit reduction 
bill that we passed last year, according to the nonpartisan 
Congressional Budget Office. Our actions to date have allowed the CBO 
to dramatically reduce its estimates of our projected deficits over the 
coming years. However, this does not mean that we can relax in our 
efforts to bring expenditures more in line with receipts.
  For those of you who doubt what I am saying, I suggest that we look 
at CBO's numbers. Our projected deficit for 1994 is $223 billion; for 
1995, $171 billion; for 1996, $166 billion; for 1997, $182 billion; and 
for 1998, $180 billion. That is a total of $922 billion over the next 5 
years of debt that we are simply passing on to the next generation of 
Americans. Suffice it to say, even with our recent steps in the right 
direction, we have a long, long way to go.
  In addition, we should all pay close attention to the fact that our 
deficits are projected to stop decreasing and to start increasing 
significantly in 5 or 6 years. At that point, we veer off of our 
downward glide path toward a balanced budget. As President Clinton 
suggests, health care reform may reverse that upward trend. Yet, the 
details of such reform are too unpredictable, and our cost projections 
too unreliable at this point, to be confident of that result.

  We dare not rely solely on health care reform to also solve our 
deficit problems. I have never been of the mind that health care reform 
can be fashioned to cost the Government less.
  We have allowed our government to operate in the red for far too many 
years and it is quite simply time to begin to stop. It is foolish to 
continue the unabated growth of our Federal debt as it continues on its 
ever increasing upward spiral dramatically. The Federal debt stands at 
over $4.4 trillion. That is the killer, even more than the annual 
deficits which add to it. If we stopped deficit spending tomorrow, we 
would still have to deal with our mountain of debt and its crushing 
interest payments which gobble up about 15 percent of our entire annual 
budget.
  I have heard before, and I hear again, more than a few excuses for 
not adopting a balanced budget amendment but for the most part they 
boil down to one complaint. Please do not change the status quo or cut 
my program. Do not upset the apple cart. Keep things just the way they 
are and continue to curse the beast and the process that got us to this 
point.
  But, I maintain it is time to change. We have started down that path 
with the adoption of the hard fought deficit reduction bill, but I am 
afraid that we are going to stop with the task only half complete. In 
my view, we must continue down that path and pass the balanced budget 
amendment.

  Adoption of such an amendment will surely cause our President and 
Congress to consider and pass legislation equally as controversial as 
the deficit reduction bill. I can well understand the reluctance many 
of us have to engage in a similar battle. Yet, we were sent here to 
make those difficult and tough decisions, not to continue to ignore 
them.
  I do not necessarily disagree with all the arguments of those who say 
we should not need a balanced budget amendment. We should indeed simply 
be able to pass, or get on a steady glide path toward, a balanced 
budget without a constitutional amendment. We should--but we do not. I 
believe we have proven ourselves incapable of achieving that goal over 
the years, despite the constant hand-wringing and rhetoric about the 
evils of deficit spending and the mounting debt which we are leaving to 
our children and grandchildren.
  Let there be no mistake. Even if the amendment is added to the 
Constitution, it will not be a cure-all. It is no panacea. It sure will 
not be easy. Unfortunately, whether it is the best solution or not, 
Congress and the President seem to need the hammer of a constitutional 
amendment to force us to do our duty. Even with some obvious pitfalls, 
I reject the argument that it will ``trivialize'' the Constitution.
  Madam President, I have been a long-time proponent of the balanced 
budget constitutional amendment and have introduced my own version 
during the last several years. When I was Governor of the great State 
of Nebraska, I had the benefit of a similar provision in the Nebraska 
State Constitution. That mandate forced fiscal discipline and has kept 
my State fiscally sound.
  A half-dozen years ago, I stood here in the Senate and said that it 
was time to swim out of our sea of red ink and to put our economic ship 
on course. We failed to pass a balanced budget constitutional amendment 
then and I am sad to say that the red ink continued to flow at even a 
greater rate.
  Many who oppose the amendment for a meaningful balanced budget 
amendment still maintain it is not necessary. They fail to understand 
history.
  During my 15-year history on the Budget Committee, I have been 
pleading and reasoning for stronger fiscal discipline. On May 14, 1982, 
12 years ago, beginning on page S-5329 of the Congressional Record, I 
warned of the coming peril. Then we had much smaller yearly deficits 
and a national debt of a little over $1 trillion. Today it is over $4.4 
trillion. I cited then the alarming projected trend of rising yearly 
deficits of $2.8 billion in 1970 to $175 billion in 1987. I detailed 
the corresponding annual national debt increases, from $382 billion in 
1970 to $2 trillion in 1987. Obviously, little heed was said; even I 
did not then anticipate a $4.4 trillion national debt by 1994. So much 
for those who say we can do this on our own without the discipline of a 
balanced budget amendment. If history teaches us anything, it should be 
clear that we need to dramatically change course.
  Those opposed to the basic constitutional amendment should be 
credited with making some valid points. However, their bottom line 
inconsistency is that while professing support for its worthy goal, 
they offer the historic and failed alternative: just do it without 
a constitutional requirement. Sounds reasonable, but they conveniently 
ignore the fact that this way has not worked and has minuscule chances 
of ever working in the future.

  I can sympathize with their argument that we cannot responsibly 
accomplish the desired goal in 7 years, given the magnitude of the 
problem and the uncertainty of future unforeseen problems that could 
face us.
  I do not like gimmickry. That was the reason I voted against Gramm-
Rudman, Gramm-Rudman II, son of Gramm-Rudman and the other phony 5-year 
plans that could not and would not work. I believe that history has 
proven me right, as all but the diehard opposition to the 
constitutional amendment seem to agree.
  Reality and the doable must be understood. I have always maintained 
that if we were going to be eventually successful, we need to be 
committed with a workable plan with teeth and get on a course of a 
glide path to balance that I think will probably require a minimum of 8 
to 12 years.
  Do I think we can accomplish the worthy ultimate goal in the 7-year 
timeframe required in the proposed constitutional amendment? No. And 
you can take my word for it and call me a liar if we miraculously 
accomplish it in 7 years.
  But the redeeming feature that is wisely in place in the proposal 
allows the Senate, by 60 of its 100 votes, to suspend the requirement 
temporarily if and when we can't prudently accomplish the mission as 
scheduled.
  I still have enough confidence in this body that we can and will 
muster the three-fifths vote when and if necessary to do what must be 
done.
  Is that not a loophole that you could, to use the ever-popular 
phrase, drive a truck through? Not if you understand the process. After 
7 years, we would be on the spot, a vote to temporarily suspend the 
mandate by 60 votes would be tough. If the people do not think we acted 
properly and prudently, the spotlight clearly would be on ``the dirty 
or courageous five dozen,'' and they could be shortly voted out of 
office.
  The point is that this is a good proposition to force responsibility, 
with the teeth to make it happen as quickly as practicable and 
possible.
  Is the constitutional amendment proposal a flawless approach to 
getting something done? No, probably not, but at long last we have a 
chance to solve the fiscal mess that has been created over a 
considerable period of time. In my view, with all of its warts, it is 
the only chance we have, since all others have failed.
  As a longtime fiscal realist or conservative, I believe that our 
Government, like a family or business, cannot continue unabated to 
spend more than it has without facing financial ruin. I thus intend to 
support this Resolution calling for a balanced budget amendment and 
strongly urge my colleagues to do so as well.
  Thank you, Madam President.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. HATCH. Madam President, I yield 10 minutes to the distinguished 
Senator from Maine.
  The PRESIDING OFFICER. The Senator from Utah has yielded to the 
Senator from Maine, who is recognized.
  Mr. COHEN. I thank the Chair.
  Madam President, I remember when President Clinton submitted his 
budget last year--a document of some 1,200 to 1,300 pages. I recall 
reading an article by a distinguished columnist and journalist in this 
city, David Broder. He said, in all of those 1,200 to 1,300 pages, two 
numbers that were missing. One number was, as I recall, $940 billion. 
That $940 billion represented the amount of additional debt we will 
accumulate, assuming President Clinton's budget works as planned. 
Assuming all the projections are accurate, assuming all the interest 
rates calculations and revenue projections are correct, we will still 
go nearly $1 trillion more in debt during the next 5 years.
  The second number that was missing was 57 cents. Fifty-seven cents 
did not appear anywhere in the President's budget. The 57 cents 
represents the amount of the individual income tax dollars that go to 
pay interest on the debt. Out of every dollar that we pay in personal 
income taxes now, 57 cents goes just to pay interest on the debt.
  Madam President, we are engaged in what I have called fiscal child 
abuse--fiscal child abuse. We are beating our children with what I 
would call the equivalent of rubber hoses. The bruises do not show just 
now. There are no telltale signs of the beating, but the pain is going 
to last their lifetimes and probably be passed even on to their 
children.
  Mr. President, I rise in support of Senate Joint Resolution 41, 
amending the Constitution to require a balanced budget.
  I have not always supported the balanced budget amendment. When this 
measure was considered by the Senate in 1982 and again in 1986, I felt 
that Congress could and would address deficits without the aid of a 
constitutional amendment. Several years ago, however, I realized that I 
had been wrong about Congress' ability to deal responsibly with 
deficits. For instance, when it came time for the tough spending cuts 
ordered by the Gramm-Rudman deficit reduction law, Congress did not 
have the will to follow through. So in 1992, for the first time I 
supported a balanced budget amendment in the Senate.
  I would like to begin my remarks by explaining why I think a balanced 
budget is good policy. I will then explain why I have reached the 
conclusion that a constitutional amendment, despite its limitations, 
offers the only chance of balancing the budget. Finally, I will address 
the arguments offered by opponents of the balanced budget amendment, 
many of which I think are grossly misleading.
  Public debt is not inherently bad. For example, it was both necessary 
and wise for the Federal Government to borrow heavily during World War 
II. In the three decades immediately following the war, the United 
States gradually paid down this debt. Beginning in the seventies and 
worsening in the eighties, however, the Federal Government reversed 
this trend by borrowing more and more to pay for current expenses. It 
is important to understand that the huge deficits we have been running 
for the past 15 years have not been to finance public investments that 
will yield benefits in the future. We have been borrowing simply to pay 
for current consumption.
  Contrary to popular belief, Congress is never faced with the choice 
of raising taxes or borrowing money to finance Government. Spending can 
only be paid for through taxes; it is simply a question of whether we 
use today's or tomorrow's tax dollars. Borrowing invariably means that 
future taxes will be higher than they would otherwise be. The deficit 
poses a problem for younger generations because it represents higher 
taxes in the future. In fact, the Office of Management and Budget 
recently published an analysis of the growing tax burden. The report 
forecast that, without changes in Federal law, the average net tax rate 
for future generations would eventually reach 82 percent of their 
lifetime earnings. Clearly, this would be an unsustainable situation.
  This situation is compounded by the fact that, because today's 
Government borrowing draws down the pool of savings available for 
investment, future generations will be less able to afford higher taxes 
than they otherwise would be. Rising standards of living require 
investments in infrastructure, plants, equipment, education, et cetera. 
Savings--personal, business, and government--provide the source of this 
investment. By running a deficit, the Federal Government draws down the 
national pool of savings by an equal amount. With less savings and less 
investment, economic growth will not be as quick. As a result, future 
generations will be hit with a larger tax bill and be less prepared to 
handle it.

  Beyond current and future economic problems caused by repeated 
deficits, they pose a serious problem in terms of diminishing respect 
for Congress. For many, Congress' inability to balance its books 
symbolizes our inability to act responsibly. For the sake of the 
integrity of the institution, Congress cannot continue to promise the 
American people long-term deficit reduction and do little about it. 
Actions do speak louder than words. If a majority in the Congress take 
the view, as some economists do, that deficits do not matter, that case 
should be made clearly to the public, and the disconnect between words 
and deeds can be abolished.
  Personally, I believe deficits do matter and now would like to 
explain why I think a constitutional amendment to require a balanced 
budget is necessary.
  As I mentioned, I have not always supported the balanced budget 
amendment. During the debates in 1982 and 1986, I argued that Congress 
should address deficit reduction through legislation rather than 
through changes to the Constitution.
  Since I made those arguments, however, we have tried to deal with the 
deficit through various pieces of legislation. While some have helped 
at the margin, none have successfully addressed the structural deficits 
that continue to be part of the budgetary landscape. The brief respite 
of relatively lower deficits we will enjoy for the next few years 
should not be interpreted as a sign that we have conquered the 
deficits. In fact, such arguments reflect precisely the sort of short-
term thinking that permitted deficits to grow out of control in the 
1980's. The evidence is undisputed that, unless significant steps are 
taken, deficits early in the next century will dwarf those of the 
1980's.
  We have tried every conceivable statutory option to force Congress to 
be more fiscally responsible. With few exceptions, these efforts have 
failed. A constitutional amendment appears to be the only solution 
left.
  Amending the Constitution is not something that Congress should 
propose lightly. It is a very serious matter. However, I believe that 
the balanced budget amendment is consistent with the historic role of 
the U.S. Constitution to safeguard the rights of those who may be 
underrepresented in the political process. In this case the 
underrepresented individuals are future generations who are being asked 
to pay for our profligacy.

  I would now like to address the arguments that have been made against 
the balanced budget amendment currently before the Senate.
  I respect the view of those who oppose the balanced budget amendment. 
After all, I once shared their view. Nonetheless, the distorted 
rhetoric offered by some opponents of this amendment has been 
regrettable.
  Reports, for instance, claiming to detail specific cuts that would be 
required under the balanced budget amendment are baseless. Certainly, 
balancing the budget will require spending to be cut, and it would be 
disingenuous for me to suggest that these cuts will occur in 49 States 
only. Some of these cuts will obviously affect Maine. Nonetheless, to 
suggest that the amendment predetermines cuts in specific programs is 
grossly misleading.
  It is ironic that those arguing that the balanced budget amendment 
will force disastrous cuts in spending in the same breath criticize the 
amendment as a gimmick that will not work.
  It is also misleading to suggest that the balanced budget amendment 
is some sort of sham. The sham has been with budget rules that Congress 
has bent and broken at every stage. The balanced budget amendment will 
only be a sham if Members of Congress lose all respect for the 
integrity of the Constitution--an occurrence I do not expect under any 
circumstances.
  Suggesting that the balanced budget amendment offers Members of 
Congress an ``easy'' political vote is also unfortunate. The easy votes 
have been the ones to spend repeatedly beyond our means. Although the 
balanced budget amendment will not itself reduce the deficit, I have 
not shied away from proposing tough spending cuts. Last year, I joined 
Senators Danforth, Boren, and Johnston in offering a tough bipartisan 
alternative to President Clinton's budget. Our plan would have cut $2 
in spending for every $1 in new taxes. More recently, I joined Senator 
Kerrey and others in offering a list of cuts totaling nearly $100 
billion over 5 years. My support for the balanced budget amendment is 
not a matter of political convenience. I am willing to support the 
spending cuts that will be necessary to enforce it.
  Madam President, I know all about 30-second spots. I know what has 
happened to our political system. I know all about the tactics used by 
political opponents in coming elections. I know that every one of those 
cuts that I voted for will be held up on television and someone will 
say: Look what he did. He voted to cut this program and that program. 
He is cruel and he is heartless. And I know what the political 
consequences of having to face voters under the compressed time of a 
senatorial campaign is all about. So I do not need to be lectured about 
postponing effective dates being an act of cowardice.
  It is also misleading to suggest that the balanced budget amendment 
would somehow target senior citizens. Nothing could be further from the 
truth. To the extent that deficits fuel inflation that undermines the 
purchasing power of those on fixed incomes, seniors have much to gain 
from lower deficits.
  Also, the balanced budget amendment preserves the statutory 
provisions that protect the Social Security trust fund. For example, 
the law excluding Social Security from across-the-board cuts under 
current budget law would be unaffected by the balanced budget 
amendment.
  While the Social Security trust fund currently operates at surplus, 
it is expected to face severe cash shortfalls early in the next 
century. Balancing the budget by 2001, as required by the proposed 
balanced budget amendment would ensure the viability of the trust fund 
for current and future retirees.
  It is also misleading to suggest that the balanced budget amendment 
would prevent Congress from responding in times of national crisis. The 
balanced budget amendment does not categorically prohibit deficits. 
With the approval of at least three-fifths of the Congress, deficits 
would be permitted. In times of war or dire economic circumstances 
warranting deficit spending, three-fifths of the Members of the 
Congress can be expected to recognize the need for deficits at these 
times. Unfortunately, Congress has too often viewed deficits not as 
necessary evils in times of dire circumstances, but as normal parts of 
the annual budget process.
  The balanced budget amendment would essentially raise the burden of 
proof for when Congress should deficit spend. Deficits would be 
permitted only when three-fifths of the Members of Congress are 
convinced that special circumstances exist to warrant them.
  Finally, I would like to address the concerns that the balanced 
budget amendment would open the door for judges to enforce this law by 
taking it upon themselves to raise taxes and cut spending. Unlike some 
of the other arguments that have been raised against the balanced 
budget amendment, I find that to be a very serious and legitimate one.
  As a member of the Senate Judiciary Committee, I take very seriously 
the prospects of judges usurping Congress' role in making budgetary 
decisions. Judges are simply not qualified to undertake these 
responsibilities. Permitting them to do so would be irresponsible and 
would upset the delicate balance of power between the three branches of 
Government.
  To address this concern, I worked with Senators Danforth, Nunn, and 
Domenici to develop constitutional language to restrict the role of the 
Judiciary with respect to the balanced budget requirement. I am pleased 
that this language has been incorporated into the balanced budget 
amendment that the Senate is now considering.
  Our provision would permit the Supreme Court to rule on the 
constitutionality of the Federal budget, but would prohibit the Court 
from taking further steps to enforce its ruling unless such steps were 
specifically outlined by Congress. In other words, judges could not 
order taxes or spending cuts unless specifically authorized to do so by 
Congress. It is unimaginable that Congress would grant such authority.
  This is not to suggest, however, that the balanced budget amendment 
would be unenforceable. The balanced budget amendment will be honored 
because the legislative and executive branches respect the 
Constitution. Neither branch will want to see the Constitution honored 
in the breach, as this would undermine respect for the Constitution 
among all citizens.
  Suggesting that the balanced budget amendment is not enforceable 
simple because judges would not be empowered to raise taxes or cut 
spending ignores the fact that, in the end, no judicial decision is 
ever self-enforcing. As was at issue in the seminal case of Marbury 
versus Madison, the rulings of the Supreme Court are honored by the 
other two branches of Government not because the Supreme Court itself 
has the means of enforcement, but because the other two branches of 
Government respect the judiciary and the U.S. Constitution.
  I cannot help but note the irony that those suggesting that the 
amendment's language limiting the role of judges renders the balanced 
budget requirement meaningless have in the past vehemently argued that 
it would be disastrous to have judges raising taxes and cutting 
spending. If this reflects a change of heart on this matter, I would 
point out that, under the proposed balanced budget amendment, Congress 
could authorize judges to raise taxes and cut spending. I doubt, 
however, that Congress would want to grant such authority.
  In closing, I would like to make three points that I think put this 
debate into context.
  First, 37 States have balanced budget amendments. Complying with 
these requirements is not always convenient. But over the long term, 
forcing governments to balance their budgets promotes good government.
  Second, the fact that taxpayers are willing to finance only $1.3 
trillion of the 1.5 trillion dollars' worth of current Government 
services, it is reasonable to question whether the public really wants 
as much Government as we currently provide.
  Last, we should not lose sight of the fact that there is no free 
lunch here. Every dollar the Government borrows is a dollar unavailable 
for job-creating investment in the private sector. Also, every dollar 
the Government borrows today is a dollar tomorrow's taxpayers will have 
to repay. At its most basic level the balanced budget amendment stands 
for the simple principle that we should pay today for the Government we 
use today. If we are unwilling to put the money on the barrel 
ourselves, by what right can ask future generations to put their money 
on the barrel?
  I heard my distinguished colleague from Illinois quote from Thomas 
Jefferson earlier this morning. There is another quote which I am 
familiar with. Jefferson said that whenever one generation spends money 
and taxes another to pay for it, that we are ``squandering futurity on 
a massive scale.'' We are squandering futurity on a massive scale.
  What we have been engaged in over many, many decades has been the 
squandering of the future of our children by refusing to do that which 
we are elected to do and that is to make the hard, tough choices of 
allocation of responsibilities and priorities. We have not measured up 
to that responsibility. We have tried every device to force ourselves 
to do this. A balanced budget amendment is a last resort for me, but I 
feel it is an absolutely critical one.
  The PRESIDING OFFICER. The time of the Senator has expired. Who 
yields time?
  The Senator from Illinois.
  Mr. SIMON. I will yield myself 1 minute simply to commend my 
colleague from Maine for his excellent, logical remarks. And 
particularly, he is a wordsmith. When he comes up with a phrase, 
``fiscal child abuse,'' that is precisely what we are doing. We are 
imposing on our grandchildren and future generations this huge burden. 
This amendment says let us stop it.
  I commend our colleague from Maine.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Madam President, if I could take another minute, I would 
like to just join in that commendation because I know how difficult it 
is for the distinguished Senator from Maine to change his point of view 
with regard to this. Because I was here in 1982, I was here in 1986, 
and helped to bring those amendments to the floor.
  Frankly, I think he is right. We have reached a point where we can no 
longer continue doing what we are doing. This is the only alternative 
left. Not the Reid amendment, which will not solve the problem, but the 
Simon-Hatch amendment, which is the consensus amendment and the only 
one that has a chance of getting through both Houses of Congress.
  I thank him for his good remarks here today. At this particular point 
I know we are supposed to have Senator Burns here. Senator Sasser could 
not be here at this time so we are hoping Senator Burns will come to 
the floor and we can have him take his time.
  The PRESIDING OFFICER. Who yields time? The Senator from Nevada.
  Mr. REID. Madam President, I want to bring to the attention of this 
body during this lull in the proceedings, a column written by James 
Schlesinger, former Secretary of Defense, Director of Intelligence and 
Director of Budget.
  It is interesting that a number of people who were so vehemently 
supporting--so strongly supporting, I should say--the Simon-Hatch 
balanced budget amendment are also people who are in the throes of 
talking about how great our defense should be, how strong our military 
should be.
  I think those individuals should really look at what they are doing, 
according to former Secretary Schlesinger.

       The balanced budget amendment--talking about the Simon 
     amendment--is an arrow pointed straight at the heart of 
     America's defenses.

  He says, among other things:

       Given the many who vigorously support or profess to support 
     a strong national defense, I have been astonished that so 
     many appear to be advocates of the balanced budget amendment 
     considering its dire consequences for our defense posture. 
     Either they do not understand these consequences or, 
     conceivably, they are just posturing. What we have here is a 
     formula for unilateral disarmament designed for ostensibly 
     conservative reasons. No true supporter of defense could 
     logically vote for this amendment. It is the best way to 
     ensure the recessional of American power.

  I think those individuals should reassess their position and take a 
look at the Reid substitute.
  Madam President, I suggest the absence of a quorum and ask that the 
time be allotted equally between the three managers of the bill.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Campbell). Without objection, it is so 
ordered.
  Mr. REID. Mr. President, I yield myself as much time as I may 
consume.
  During this lull in the proceedings, I thought it would be 
important--in that we have just a short amount of time to debate the 
Reid substitute--I think it is important to note again the differences 
between the Simon balanced budget amendment and the Reid substitute, 
which is also a balanced budget amendment.
  The Reid substitute does what is done in virtually every State in the 
Union. Virtually every State in the Union has a balanced budget. We 
should have one, but we should do it in a reasonable manner. What the 
Reid substitute does is say, yes, we should have a balanced budget, but 
we should also have an operating and a capital budget, like the States 
have. We should also take off the budget Social Security.
  In effect, in calling for an operating budget and a separate capital 
budget, we are simply asking the Federal Government to balance its 
budget the same way that States, families and businesses balance their 
budgets. That seems reasonable.
  We all know that balancing the Federal budget, as the Simon-Hatch 
amendment would have us do, would be devastating to the country. The 
Reid amendment treats Social Security participants fairly by setting 
the Social Security trust funds outside the budget and establishes the 
Social Security trust fund and not the ``Social Security Slush Fund.''
  For those who say, well, there is going to come a time when the 
Social Security funds may not be there, it certainly is not going to be 
there if this amendment passes. Mr. Ball, who was head of the Social 
Security Administration during three Presidents, testified--and I have 
read that testimony time after time before this body the last 3 days--
where he said if the Simon amendment passes, it will be the end of 
Social Security. So that is the reason we have to recognize the 
importance of the Reid substitute.
  It is interesting that there are those who say the Reid substitute 
is, by the terms of one newspaper report, a fig leaf. Mr. President, if 
it is a fig leaf, a cover, I would ask the Members on the other side of 
the aisle to call my bluff and vote for this amendment because the way 
things now stand, the Simon amendment, we have all acknowledged, is 
dead, and now they are saying mine is dead. That is probably true 
because the spokesperson on Friday for the Simon-Hatch position, the 
senior Senator from Idaho, said no Republicans would vote for my 
amendment. That puts me 44-0 right to begin with and then there are 
some people who will not support any balanced budget amendment. That 
also puts me in trouble.
  So those people who believe in a balanced budget amendment, that 
recognize that this is not a partisan issue, I suggest, Mr. President, 
that they call my bluff and vote for the Reid-Ford-Feinstein amendment.
  I see on the floor one of the cosponsors, the senior Senator from the 
State of Kentucky. I yield to him 10 minutes, or if he needs more, of 
course, he is welcome to that.
  The PRESIDING OFFICER. The Senator from Kentucky [Mr. Ford] is 
recognized for 10 minutes.
  Mr. FORD. Mr. President, I have but a few minutes to speak this 
morning on behalf of the Reid-Ford-Feinstein balanced budget amendment. 
So I will concentrate my remarks this morning on trust.
  The public trusts the Congress to keep the Nation's finances in 
order. Nowhere is that agreement and that trust more evident or more 
important than in governing the Social Security trust fund.
  In the debate over our amendment and the Simon amendment, honesty and 
protection of the trust fund have played a very big role. Right now, 
surpluses in the trust funds are being used to hide the true amount of 
the deficit. The biggest example of this is in Social Security, but it 
is by no means alone in this distinction.
  During the 1980's, we allowed the Federal trust funds to run up huge 
surpluses. We would collect a gasoline tax to fund highway construction 
but then not spend it all on highways, thus creating an accounting 
surplus. The problem is, we did spend money elsewhere creating masked 
deficit and budgetary illusions.
  The Simon amendment will allow us to continue to do this. I have a 
speech in my folder that I made back in October of 1987 that addressed 
this very issue. This particular speech dealt with the Aviation trust 
fund. At the time, it represented a $6 billion surplus.
  Mr. President, I say to my colleagues that that is only peanuts when 
compared to Social Security. According to OMB, from 1985, when the 
Social Security System started to run a surplus, to 1993, it 
singlehandedly covered up $366 billion in Government red ink. Social 
Security covered up $366 billion in Government red ink.
  If you think that is bad, wait until we look to the future. From 1994 
through the year 2001, the date that Senator Simon's amendment would 
likely take effect, CBO projects another $703 billion in budgetary 
chicanery, for a grand total of $1.69 trillion worth of deception.
  When compared with that, the deficit hidden by the other trust funds 
are small potatoes--only another $35 to $40 billion. Pretty soon 
though, as we have heard in the past, it adds up to real money. We pat 
ourselves on the back and claim to cut spending and do what is right 
for our electorate, all the while our Social Security trust fund is 
full of IOU's.
  Well, I, and those who support our amendment, mean to do something 
about that. Our amendment respects the pact our Nation made with its 
people many years ago. It reinforces it, makes it stronger, safer, and 
more secure. Social Security is exempt from our amendment, thus 
securing and fortifying its position as a separate trust fund. If you 
do not believe me, just listen to the Gray Panthers, and they will tell 
you themselves. I have here three letters to that effect. AARP, the 
National Alliance for Senior Citizens, and the National Committee to 
Preserve Social Security and Medicare, all endorse Social Security's 
treatment under this amendment.
  Other trust funds will be treated honestly as well. They will be 
considered as a part of the capital budget that invests in 
infrastructure and development. Building highways and airports pays 
dividends in the future through higher productivity and job opportunity 
and growth. Social Security and these other trust funds did not cause 
the deficit, and under our amendment they will not be used to hide the 
deficit either. This is honest budgeting and a workable balanced budget 
amendment.
  Mr. President, time is short and a vote on the Reid-Ford-Feinstein 
balanced budget amendment is near. Unfortunately, I fear that it is not 
near passage but defeat. Standing beside that defeat will be a good 
faith effort of those who are truly concerned about the world that we 
leave for future generations. Standing beside that defeat will be the 
last attempt of this Congress to face reality and tackle an ever-
crippling debt and deficit problem. Standing beside that defeat will be 
faith in Government. I support the efforts of my friend and colleague 
from Illinois to take on this persistent fiscal dishonesty, but his 
version of the amendment will go down to defeat as well.
  The Reid-Ford-Feinstein amendment is the only amendment that could 
stand the chance of final passage. We all know that. Yet standing by 
the defeat of yet another balanced budget will be my colleagues from 
the other side of the aisle. Instead of getting what they could, they 
will go home proud of taking the supposed moral high ground. If that is 
what they want, they can have it. What I want and what 70 percent of 
our Nation's people want is a sound financial future. What they will 
get is more of the same under the Simon amendment, for standing tall at 
the end of the day will be disenchantment, dishonesty, and fiscal 
irresponsibility.
  I hear so much about ``if 40-some-odd Governors can operate a 
balanced budget, why can't the Federal Government.''
  Well, I give them an opportunity. I operated under it. It worked. We 
had a huge surplus when I left the Governor's office. We had an 
operating account. We had a capital account.
  They say operate like you do at home. At home you have income, your 
salary. That is your operating account. You buy a car within your 
means. You pay that out of your operating account. You buy a home. You 
pay that out of your operating account. But your operating account is 
always balanced. And we have a time period in which to pay it off.
  They say, ``Oh, we will never implement that legislation.'' How do 
you know we will not? I have seen some amazing things come out of this 
Chamber. I have seen people work and do the right thing.
  I think implementation of this amendment will work. I think we can 
make it work. But on the other hand, if we want an issue, fine. Stay 
with Senator Simon and Senator Hatch. Stay with them and then have an 
issue when you go home.
  But do you want a balanced budget amendment? There are enough votes 
with those who are supporting that amendment that we can get one.
  Oh, I hear all this, ``The House is going to make us do it.'' I have 
never seen us make the House do anything. I have never seen the House 
make us do anything. So when they pass their balanced budget amendment, 
what is it going to do? It is going to die between here and there. That 
is what is going to happen to it. It is going to die between here and 
there.
  ``Oh, we will be forced into it.'' Nope. The House will not do that 
to us. We will not do it to the House. So if you want a balanced budget 
amendment operated like Nebraska was operated, like Kentucky was 
operated, I will guarantee you that we can do the right thing.
  That is what it is all about here today, to do the right thing. We 
have an operating budget. We are going to pay this in 10 years. The 
slice is in here. We have IOU's in the Social Security. We are going to 
buy it. It is in operating. We buy it, pay it off. So Social Security 
is sound. I do not understand why it takes a brain surgeon to 
understand how you operate a budget the way the States do.
  And so, Mr. President, I would hope that we would reconsider between 
now and 3 o'clock this afternoon that this is an opportunity to pass a 
balanced budget amendment that will work and will give us a financially 
sound future, not only for ourselves but for our children and our 
grandchildren.
  I hear my distinguished friend say he is going to do it for his 
unborn grandchildren. I have five. The Senator is no ``Lone Ranger.'' I 
am just as worried about my grandchildren as he is. And I think I have 
a pretty good idea. I have had to work under it. I had to operate it. I 
understand how it works. There are few in this Chamber who do. You will 
find that most of those will vote for this amendment because it works.
  Do it like the Governors do; pass the Reid amendment. Do it like you 
do at home and operate your own budget; pass the Reid amendment. It is 
just that simple, Mr. President.
  I do not know how much time I have remaining, but I will reserve it.
  The PRESIDING OFFICER. The Senator has 20 seconds.
  Mr. FORD. Pardon?
  The PRESIDING OFFICER. The Senator has about 20 seconds.
  Mr. FORD. I yield back the remainder of my time.
  Mr. HATCH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Utah [Mr. Hatch].
  Mr. HATCH. I yield 10 minutes to the distinguished Senator from 
Montana.
  The PRESIDING OFFICER. The Senator from Montana [Mr. Burns] is 
recognized for 10 minutes.
  Mr. BURNS. I thank the Chair. I thank my friend from Utah.
  I was not a Member of this body whenever the Gramm-Rudman-Hollings 
Act was passed, but it was one of those many efforts we have had to 
control spending in this Government. While well-intentioned, the law 
did fall short of what it was to do. Mostly, it could be rendered in 
the neutral position just by waiver vote.
  In 1990, I would remind my colleagues, I introduced a little bill 
called the 4-percent solution. Now, there are a lot of scare tactics 
going on around here. They are telling a lot of folks that it is going 
to cost them more money, the benefits are going to be slashed. Let us 
call them exactly what they are. They are scare tactics.
  I come out of county government. The Senator from Kentucky came out 
of State government. I expect he probably ran his State a lot better 
than we ran our county. But when I left, we had a lot of money in the 
bank, we had a reserve. The three county commissioners were budget 
cutters, they were the budget setters, and they were the appropriators.
  It is a little bit different here, so that is where maybe a little 
bit of our problems start.
  The 4-percent solution said this. We could establish a budget based 
on previous years' expenditures, not this baseline budgeting of add 6 
percent and they will say, OK, you are either over the baseline or 
under the baseline, which nobody knew what it was. We were throwing a 
lot of chaff out here, and a lot of dust, so nobody really knew how the 
budgeting process operated.
  But what I said is, OK, if inflation grows, or the demand for 
Government services continues to grow, we can allow Government to grow 
or finance those programs, each and every program, each and every one 
of them grow 4 percent a year, based on previous years' expenditures.
  That makes a lot of sense to me. If I am making more money this year, 
I will tell my wife, OK, we can increase our budget that much. But if 
we are not, then we have to make some very hard choices. And the debate 
so far on this floor says I was sent here to make those hard choices 
without any strings attached. And I agree with that. But we have not 
done it. That is the problem. That is the crux. That is the base to it 
right now.
  We have a lot of folks in town calling on our offices that say in 
this budget we are going through right now, appropriations, they will 
say, ``Don't cut me, don't cut thee; cut the guy behind the tree.'' 
What happens when they are the ones behind the tree?
  The American people understand. They are not so naive that they do 
not understand what we are doing. If you want a new program, they 
understand it is going to cost more money. Therefore, it is going to 
cost more in taxes. More is going to come out of your paychecks. But we 
are almost to that point where we can vote ourselves in the red. Then 
this society, as a free society, may be in serious jeopardy as we know 
it.
  There is not a person in this country who does not understand that 
they want the same opportunities for their children and their 
grandchildren as we had. But with deficit spending, those opportunities 
melt away. Yet, those very folks are in town saying: We want more of 
the pie from Uncle Sam.
  I said, ``Fine. What do you suggest we cut?''
  ``I do not know.''
  There has to be some balance here. We have to pay for it in some way 
or another. We like to balance it, and we need your help. Maybe we have 
to do more with less. Maybe more is going to be required of you, the 
responsibility. Everybody talks about rights and entitlements; rights 
and entitlements. Nobody talks about responsibility. And we have to 
start doing that.
  The 4 percent solution was merely this: Let the budget grow 4 percent 
based on previous years' expenditures, and nobody takes a cut; 
everybody increases a little bit every year. In 4 years, we would have 
balanced the budget, and we could start to work on this terrible debt 
of over $4 trillion on which our children and our grandchildren will be 
paying the interest. It will be a long time, the way they are cutting 
things around here. The biggest line item in the budget will be the 
interest on national debt.
  I agree some of that interest probably goes out to folks that own 
bonds. That is not all that bad. The investment has been pretty good 
thus far. As long as we are solvent, that is a pretty good investment. 
But where are we?
  So I realize--and I respect my good friend from West Virginia and all 
the folks who would say vote for my amendment, and my friend from 
Nevada. But what does it do? Nothing. That is what it is meant to do--
nothing. It was not offered to do something. Go home and feel good? I 
do not think so.
  You go home and talk to people who pay taxes, who walk up to that 
window and pay taxes. They will say, ``Well, there is a lot of cynicism 
in Government.''
  I will say, there sure is; because every time you turn around, you 
are looking at a Government employee or a bureaucrat in some way or 
another. They are in more people's lives now than they ever have been. 
The only way we curb that is we have to operate our house a little bit 
tighter than we are operating it right now.
  I heard all the threats. We have all heard them. But I will tell you 
right now that if it is going to take draconian measures to get our 
house in order, then let us get our house in order. Let us take that 
step. Let us all hurt a little. It does not hurt us. Let us all hurt a 
little with the people of this country, because I think they really 
want to do that.
  I still go back to the old 4 percent. There are people telling Social 
Security recipients that their benefits are going to be slashed by over 
$500 a year if this amendment passes; that is wrong. That is as wrong 
as wrong could be. It is not there.
  I noticed my good friend in the chair this morning. We understand the 
cattle industry. There is an old saying that liars figure, but figures 
don't lie. This is wrong. You cannot tell people and scare people into 
accepting something that is unacceptable to 75 percent of the people in 
this country.
  I spoke to a group of people who are involved in rural water systems 
just last Friday. There was a couple hundred people there who serve my 
State of Montana. I said, ``How many people would like to see a 
balanced budget amendment?'' You do not want to know how many hands 
went up. Three-fourths of them put their hands up.
  So let us not hoodwink the American people and do not believe that 
they are naive enough that they do not understand and know what is 
going on when we offer this balanced budget amendment.
  I want to congratulate my friend from Illinois. It has taken great 
sacrifice for him to fight this battle and to come up with a proposal 
that at least gets us started in the direction of fiscal responsibility 
in the U.S. Government.
  I know he has the support of folks in Illinois, because I know some 
of his constituents. They are in support of this, 75 percent. Those are 
big numbers when we start talking about doing the right thing when it 
comes.
  But if this does not happen, then the American people are the big 
losers. I think we have an opportunity there to really pass this 
amendment and make it part of the Constitution. If you do not want to 
do that, I would even entertain the suggestion to let us write it into 
law. Let us just write it into civil law, right into the codes. If it 
works, I want to see some people standing on this floor making the 
argument to repeal it.
  If you do not want to put it in the Constitution, let us put it into 
law where the lawmakers can handle it. It does not have to go in the 
Constitution so that it binds this body. It is just merely a 
suggestion. I think maybe we ought to think about that if we do not 
make it a constitutional amendment.
  I thank my friend from Illinois, my friend from Utah, and the Chair.
  I yield the floor.
  Mr. SIMON. Mr. President, I yield myself 2 minutes.
  Just to respond to my friend from Montana, I thank him for standing 
up. The National Taxpayers Union just released a poll done of 1,000 
Americans asking about this constitutional amendment: Favoring it, 67 
percent; opposing it, 18 percent. That is almost 4 to 1. That simply 
underscores it.
  Then, in terms of the statutory suggestion the Senator makes in 
changing the law, the reality is we have a law right now, believe it or 
not, introduced by Senator Harry Byrd a long time ago, which requires 
us to have a balanced budget. We just ignore it. That is the problem 
with the law. We either ignore it or we change the law. That is why we 
need the constitutional amendment.
  I yield the floor, Mr. President.
  The PRESIDING OFFICER. Who yields time? The Senator from Utah [Mr. 
Hatch] is recognized.
  Mr. HATCH. Mr. President, before I summarize the reasons the Reid 
amendment is an unacceptable alternative to the Simon-Hatch balanced 
budget amendment, I would like to reply to some of the points made by 
the Senator from Nevada and others in response to my statement 
yesterday.
  The Senator from Nevada said that my arguments criticizing his 
amendment were a lot of ``legal mumbo jumbo.'' It seems odd to me that 
anyone would object to a discussion of constitutional law and 
principles in a debate on a constitutional amendment. It seems even 
odder that a recitation of the significant Supreme Court precedent 
would be termed ``legal mumbo jumbo.''
  The Senator stated that, as an attorney, he was familiar with the 
maxim that when the facts are not on your side, argue the law.
  Well, as with so many other things in this debate, the Senator from 
Nevada has it backwards. The traditional maxim is that when the law is 
not on your side, argue the facts, and when the facts are not on your 
side, pound the table.
  Mr. President, the Senator from Nevada did not respond to my 
arguments that his amendment flies in the face of constitutional theory 
and history: That the Reid amendment cedes unprecedented power to 
suspend the Constitution and to make budget decisions to unelected 
officials, and violates the basic norms of due process, which we have 
followed for 200 years in constitutional history.
  In fact, he admitted that his amendment would overturn the very 
important Bowsher decision, which struck down the grant of budget-
cutting authority to the Comptroller General of the United States as 
inconsistent with the constitutional principle of separation of powers.
  He once again raised the false specter that the Simon-Hatch amendment 
could enhance Presidential impoundment. I have responded to this point 
at length during the past few days of debate. By way of summary, the 
Simon-Hatch amendment does not grant the President any impoundment 
authority, because it is intended solely as a limitation on Congress' 
taxing, borrowing and spending powers. Ironically, he did not fully 
respond to the suggestion that his amendment created possible 
impoundment powers in unelected officials in Congress.
  Instead, finding the law against him, the Senator from Nevada 
attempted to argue the facts, but he could find none. Instead, he 
invoked, just as Clinton administration officials did a week earlier, 
what seems to be the substitute for the facts in this debate--a litany 
of dire consequences if our amendment is enacted--all transportation by 
car, rail, and plane would shut down; people freezing and dying in the 
streets. Mr. President, that is not constitutional argument; that is 
not arguing the facts; that is hysteria.
  Mr. President, the law supports the Simon-Hatch balanced budget 
amendment, and the facts do as well, because it is the only amendment 
that will actually balance the budget. The facts are that we have a 
$4.5 trillion debt. And without the Simon-Hatch amendment--with no 
amendment or with the Reid amendment--the debt will be $6.4 trillion in 
1999.
  Finally, the Senator made the point that hard choices make bad law. 
On the contrary, Mr. President, hard choices make good government. 
Invoking hysterically exaggerated dire consequences of prioritizing our 
spending is not the way to rationally discuss correcting our fiscal 
mess. Of course, we must make hard choices under our amendment, because 
under our amendment we must actually balance the whole budget. But 
under the Reid amendment, we can avoid those hard choices by exempting 
virtually everything or turning the difficult jobs over to some 
unelected officials.
  Mr. President, the Reid amendment is clearly insufficient. It is not 
a serious balanced budget amendment.
  I will list 10 reasons why the Reid amendment is an unacceptable 
alternative to the Simon-Hatch balanced budget amendment.
  First, the Reid amendment is a political fig leaf.
  Mr. President, the Reid amendment is simply a sham, a cover vote to 
allow Members to say to their constituents--the vast majority of whom 
want a balanced budget amendment--that they supported something of that 
name.
  Second, the Reid amendment is in fact a killer amendment.
  Even if the Reid amendment passed, which it will not, a substantial 
change of this nature to the balanced budget amendment will kill its 
chance of passage in the House of Representatives. In 1992, the 
Gephardt amendment, which had similar exemptions, lost handily. It got 
only 104 votes, with over 300 votes against it. Make no mistake, the 
Reid amendment is a killer amendment.
  Third, the Reid amendment is a hastily constructed, poorly thought-
out attempt at a balanced budget amendment.
  It is ironic that Senate Joint Resolution 41, the Simon-Hatch 
amendment--the product of years of hearings and public and 
congressional debate--has been criticized as trivializing the 
Constitution. Talk about trivializing the Constitution. The Senate 
will, at 3 o'clock today, vote on the Reid amendment, which is called a 
balanced budget amendment--a proposal unveiled just 5 days ago. Not one 
day of hearings, and not any public debate, other than what we have had 
over the last few days. No hearings, 2 days of debate, and here we are 
voting on an amendment to the U.S. Constitution. This is truly 
inadequate for the Senate, for the American people, and for the 
Constitution's framers.
  Fourth, the Reid amendment is undemocratic.
  It is quite ironic, as well, that Senate Joint Resolution 41 has been 
criticized as being undemocratic. Talk about undemocratic. This Reid 
alternative, one, cedes authority to suspend the operation of a 
constitutional requirement to balance the budget to the Director of the 
Congressional Budget Office, an unelected official whose appointment is 
not even subject to congressional confirmation; and, two, says that 
Congress may delegate the power to order uniform cuts in the budget to 
some unnamed ``officer of Congress.''
  Mr. FORD. Will the Senator yield information a question?
  Mr. HATCH. On your time.
  Mr. FORD. Do I have 20 seconds left, Mr. President?
  The PRESIDING OFFICER. Yes.
  Mr. FORD. Does that not say ``may,'' and when we have the situation 
on legislation to implement the amendment, do we have to do it?
  Mr. HATCH. You do not have to do it.
  Mr. FORD. It says ``may,'' and the Senator acts like it is mandating 
it.
  Mr. HATCH. Congress may delegate the power to order uniform cuts in 
the budget to some unnamed officer of Congress. We have all heard the 
expression a player to be named later. Well, if this alternative 
passes, we will have a similar provision in the U.S. Constitution, 
where the Congress may delegate to an unnamed, unelected official the 
right to order uniform cuts. That is unprecedented anywhere. The 
Senator's point does not diminish my point at all.
  Fifth, the Reid amendment does not require that the whole budget be 
balanced, and it contains a number of loopholes through which large 
deficits could be run.
  Mr. President, it is ironic, as well, that opponents of the Simon-
Hatch amendment have incorrectly criticized it as a gimmick which could 
be easily circumvented. It is the Reid alternative, however, that has 
mammoth loopholes, such as exemptions for everything outside of the 
undefined operating funds of the United States, including what it 
refers to as capital investments, a term which is not defined, and its 
meaning is not agreed upon at the Federal level. Who knows how broadly 
that might be construed? It could cover everything from education to 
transportation expenditures. That is a laugher. Would welfare payments 
be considered investment in human capital under that amendment? 
Virtually anything could be excluded by this loophole.
  Sixth, the Reid amendment has no functional enforcement provision.
  The Reid amendment requires that estimates of spending and income be 
balanced, but it has no backup enforcement provision to ensure a 
balanced budget if those estimates are wrong. In marked contrast, the 
Simon-Hatch amendment has a debt ceiling which cannot be circumvented 
except by a three-fifths rollcall vote of the Congress. Furthermore, 
the Reid amendment allows enforcement only in accordance with some 
possible future legislation, ensuring that Congress can control how 
much or how little enforcement is available. We want a balanced budget 
amendment so that we can force Congress to do what is right, or at 
least give every incentive to do what is right, rather than leaving it 
up to Congress to do business as usual. Consequently, the Reid 
amendment really is an unenforceable gimmick.
  Seventh, the Reid amendment allows deficit spending in so many 
instances that under it we would never get the debt under control.
  The Reid amendment only requires that the undefined operating funds 
of the Federal budget be balanced. Everything else can be financed by 
deficits. Even this weak requirement of balancing Federal operating 
funds, however defined, can be avoided for a full 2 years if there is 
ever an economic slowdown for two quarters as estimated by none other 
than the Congressional Budget Office.
  Thus, if the economy slows down for two quarters, Congress has free 
reign to run up deficit for 2 full years under the Reid amendment. It 
has been estimated that applying the standards of the Reid amendment 
could have resulted in a suspension of the balanced budget rule in 22 
of the last 45 years.
  Where are the teeth in this amendment?
  Eighth, the Reid amendment constitutionalizes questionable economic 
policies.
  Section 3 of the Reid amendment allows deficit spending in times of 
recession or economic slowdown. This is a distorted version of 
Keynesianism, and it is not clear that it would work to stimulate our 
current economy. In fact, our recent history seems to refute such an 
expectation. We had record deficits and zero or low growth for 3 years. 
This sort of stimulus mechanism is obviously not working. Perhaps more 
importantly, it is not clear that the definition of recession contained 
in the Reid amendment is appropriate. With all the questions about the 
economic assumptions underlying the Reid amendment, it should not be 
included in the Constitution.
  Ninth, the Reid amendment conflicts with the philosophy underlying 
the Constitution.
  The Reid amendment conflicts with constitutional theory and history 
in two ways. First, it explicitly cedes broad constitutional authority 
to unelected officials, such as the Director of the Congressional 
Budget Office and another unnamed ``officer of Congress,'' in a way 
wholly inconsistent with traditional constitutional law and principles, 
such as the separation of powers. Second, it denies fundamental norms 
of due process by denying any and all access to any court to vindicate 
any private rights unless Congress so allows in future legislation.
  Tenth, the Reid amendment encourages continued congressional 
irresponsibility in the budget process.
  Each of the flaws I have discussed opens the Reid amendment to abuse 
and creates a vent through which the pressure to make the hard choices 
can escape, along with the possibility of a balanced budget. Mr. 
President, the Reid amendment is a rule swallowed by exceptions.
  It allows numerous avenues for deficit spending through which 
Congress can continue its current profligacy. It contains numerous 
abdications of congressional responsibility and accountability for 
taxing and spending decisions. And finally, it supports continued 
congressional irresponsibility.
  In contrast, the Simon-Hatch amendment, the only one that has a 
chance of getting through the Congress and I believe has a chance of 
getting through today in spite of those who have been decrying this 
amendment, requires Congress to take responsibility for all Federal 
spending and taxing decisions. It forces Congress to set priorities and 
make spending decisions within the limits of the available revenues. It 
requires Congress to spend for the things the American taxpayers are 
willing to pay for and no more. It stops the further abdication of 
congressional responsibility encouraged in the Reid amendment, and it 
requires Congress to once again take its constitutional duties 
seriously in the way the framers intended.
  Mr. President, for all these reasons the Reid amendment, this 
political fig leaf, this caricature of a constitutional amendment, must 
be rejected. The American people must not, and will not, be fooled. The 
only serious balanced budget amendment is the Simon-Hatch amendment. It 
is the only one that has the possibility of moving this Nation to a 
balanced budget and the only one that will restore congressional 
responsibility and accountability in the Federal budget process. The 
Congress knows it, and the American people deserve it. I do not think 
they will accept anything less than their Senators' support for the 
Simon-Hatch balanced budget amendment.
  This has been tough talk. I know there is a lot of sincerity in what 
has been done, but that does not negate these 10 points which I do not 
think can be refuted.
  Mr. President, I am happy to yield 10 minutes, if I have it. How much 
time do I have remaining, Mr. President?
  The PRESIDING OFFICER. The Senator has 6 minutes remaining.
  Mr. SIMON. I am happy to yield 6 minutes to the distinguished Senator 
from Idaho.
  Mr. HATCH. I yield 4 additional minutes to the Senator from Idaho.
  The PRESIDING OFFICER. The Senator from Idaho is recognized for 10 
minutes.
  Mr. CRAIG. Mr. President, I thank my colleagues for yielding. Let me 
build upon their comments and testimony this morning as it relates to 
the Reid amendment. I use the word ``testimony'' for a very important 
purpose because the Reid amendment has had no testimony, not 1 minute 
of committee examination or Member examination beyond its presence here 
on the floor as it freshly appeared last week.
  I appeared on the floor yesterday in debate in opposition to the 
amendment, and I brought with me a stack of documents that covered this 
desk and nearly reached the top of this podium, some 3,000 pages of 
testimony of both positive and negative critique of this amendment, the 
Simon-Hatch-Craig-Thurmond amendment, which I think, in all fairness, 
in reality deserves to be called the real amendment versus the Reid 
amendment.
  Yesterday during that give and take between Senator Reid and myself I 
offered him 34 questions about his amendment that I submitted to the 
Record that clearly deserved to be answered. I hope they can be 
answered today. I hope they can become part of the Record.
  Mr. REID. Mr. President, will the Senator respond?
  Mr. CRAIG. Quickly.
  Mr. REID. I will. There are a lot of questions we have answered. We 
have answered many of them. Before the debate is ended, we will put 
them in the Record so they will be there for the future.
  Mr. CRAIG. I thank the Senator.
  It becomes very important that we build this Record on an amendment 
that in our opinion is serving very poorly as a substitute.
  Now, I had just concluded those comments yesterday when the Senator 
from Alabama came to the floor, Senator Heflin, and again began to ask 
questions about an unknown commodity, the Reid amendment.
  I think it is clearly incumbent upon the Senator to respond to those. 
He has now just said he will attempt to do so, and it becomes very 
important in the final outcome of this whole debate and more 
importantly to the understanding the American people will have about 
what is or is not the proper tool or device to put in the Constitution 
for the purpose of balancing the budget.
  First and foremost, the Reid amendment does not even address what we 
commonly refer to as a balanced budget. It is his concept of a balanced 
budget. It is a little off here, and a little off here, and we will 
balance the rest. It is not a total picture for the American taxpayer 
to analyze what their Government is doing in any regard.
  Between actual outlays and receipts there is a phenomenal disparity. 
Our amendment, the real balanced budget amendment, allows the use of 
estimates as a means of achieving what we require, a balance between 
actual outlays and receipts. His merely says estimates ought to be in 
balance.
  In other words, in our amendment estimates are acknowledged as 
realistic means to an end. That becomes a very important part in the 
total understanding of this issue.
  Mr. President, I rise in support of Senate Joint Resolution 41, the 
bipartisan, bicameral, consensus balanced budget amendment to the 
Constitution, and in opposition to the amendment offered by the Senator 
from Nevada [Mr. Reid].
  The Reid proposal, technically, is called an amendment in the nature 
of a substitute. But let us make no mistake: The Reid amendment is no 
substitute for the real thing.
  I pointed out yesterday on this floor that, over the last 14 years, 
we have had--and I am estimating conservatively, here--3,000 pages of 
legislative history behind our consensus balanced budget amendment. 
That has included hundreds of hours of debate here on the Senate floor 
and in the House, extensive committee hearings in both bodies, and 
Judiciary Committee reports in virtually every Congress.
  But when we look at the Reid amendment, we have only questions.
  Yesterday, I submitted to Senator Reid and for the Record some 34 
questions about his amendment. These were not rhetorical questions--
they were, and are, questions about the definitions in and the 
operation of his amendment. The answers are not obvious from reading 
the amendment and there is no legislative history, no hearing record, 
to guide us.
  Later yesterday, the senior Senator from Alabama [Mr. Heflin] asked a 
number of additional questions, as did the senior Senator from New 
Mexico, the former chairman of the Budget Committee [Mr. Domenici]. I 
suspect that, if we had more than a couple of days to look at the Reid 
amendment, we would see the need to ask more and more questions.
  I still look forward to reviewing answers to the questions I 
submitted to the Senator from Nevada. At this moment, I would like to 
revisit just a few of the questions--as well as some of the serious 
problems--that his proposal raises.
  First and foremost, the Reid amendment does not even address what we 
commonly refer to as a balanced budget--a balance between actual 
outlays and receipts.
  Our amendment, the real balanced budget amendment, allows the use of 
estimates as a means of achieving what we require: A balance between 
actual outlays and receipts. His merely says that estimates ought to be 
in balance.

  In other words, in our amendment, estimates are acknowledged as 
realistic means to an end, that end being an actual balanced budget. In 
the Reid amendment, some statement of balance between some outlays and 
some receipts is the end itself. No followthrough is required.
  Our amendment is basically self-enforcing, because even the most 
honest failure to comply with it would result in the need to increase 
the debt limit by a three-fifths vote in both bodies of Congress. 
Congress and the President would do just about anything to avoid the 
threat of having to face that hurdle--even balance the budget. If 
Congress or the President actually violated our amendment in an 
extreme, blatant way, we provide the backstop of limited but necessary 
judicial enforcement.
  The Reid amendment has absolutely no legislative or judicial 
enforcement. His amendment allows legislative enforcement, while ours 
makes it inescapable.
  The Reid amendment excludes capital investment from estimated 
outlays, although--and this is interesting--it does not exclude the 
receipts of capital investment trust funds from its definition of 
estimated receipts.
  Apparently, Senator Reid would have us use highway taxes to pay for 
the expenses of the operating budget, while highway spending would not 
have to be paid for at all. This would destroy our current system of 
dedicated trust funds.
  There is no commonly accepted definition in the Federal budget 
lexicon for capital investments, and Reid amendment does not define 
them. I ask unanimous consent to print in the Record a table from page 
109 of the ``Analytical Perspectives'' volume of the President's fiscal 
year 1995 budget.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

          TABLE 8-1.--COMPOSITION OF FEDERAL INVESTMENT OUTLAYS         
                        [In billions of dollars]                        
------------------------------------------------------------------------
                                                   1993      Estimate   
                                                  actual ---------------
                                                           1994    1995 
------------------------------------------------------------------------
        MAJOR FEDERAL INVESTMENT OUTLAYS                                
                                                                        
Major public physical capital investment:                               
  Direct:                                                               
    National defense............................    76.1    66.5    60.4
    Nondefense..................................    19.1    22.5    22.9
                                                 -----------------------
      Subtotal, direct major public physical                            
       capital investment.......................    95.2    89.0    83.3
  Grants to State and local governments.........    31.2    34.2    36.5
                                                 -----------------------
      Subtotal, major public physical capital                           
       investment...............................   126.4   123.3   119.8
                                                 =======================
Conduct of research and development:                                    
  National defense..............................    40.4    38.9    39.4
  Nondefense....................................    28.0    29.2    30.3
                                                 -----------------------
    Subtotal, conduct of research and                                   
     development................................    68.4    68.1    69.7
                                                 =======================
Conduct of education and training:                                      
  Grants to State and local governments.........    21.5    24.9    25.6
  Direct........................................    20.4    17.4    19.0
                                                 -----------------------
    Subtotal, conduct of education and training.    41.9    42.3    44.6
                                                 =======================
Major Federal investment outlays................   236.7   233.6   234.0
                                                 =======================
                   MEMORANDUM                                           
                                                                        
Major Federal investment outlays:                                       
  National defense..............................   116.6   105.5    99.8
  Nondefense....................................   120.1   128.2   134.2
                                                 -----------------------
    Total, major Federal investment outlays.....   236.7   233.6   234.0
                                                 =======================
Miscellaneous physical investment:                                      
  Commodity inventories.........................    -0.2    -0.8    -0.2
  Other physical investment (nondefense, direct)     5.6     5.8     5.5
                                                 -----------------------
    Total, miscellaneous physical investment....     5.4     4.9     5.3
                                                 =======================
    Total, Federal investment outlays, including                        
     miscellaneous physical investment..........   242.1   238.6   239.3
------------------------------------------------------------------------


  Mr. CRAIG. As we see from this table, the President's budget lists 
the following investment spending: $89 billion for physical capital--
the category most analogous to traditional State government practices; 
$68 billion for research and development; $34 billion for grants for 
State and local physical capital; and $42 billion for education and 
training.
  Does the Reid alternative contemplate a capital budget of $89, $123, 
$191, or $234 billion? Well, that would depend on how Congress, 
implementing the Reid amendment, would define capital.
  Many in Congress, the administration, academia, and the private 
sector believe we should focus on the emerging concept of human capital 
as an investment priority. If Congress adjusts its definition of 
capital investments accordingly, then the Reid amendment may be calling 
for a capital investment budget that would amount to $234 billion this 
year. And remember all of that amount could be deficit spending under 
the Reid amendment.
  The Reid amendment's exemption of Social Security was dealt with 
extensively in debate yesterday. I just want to reiterate a couple of 
points briefly in this regard.
  First, a constitutional amendment should enshrine timeless 
principles, not address temporary situations.
  The proponents of the Reid amendment have focused exclusively on the 
surpluses that the Social Security trust funds are running today.
  However, according to the Social Security trustees, by the year 2016, 
trust fund outlays will begin exceeding trust fund tax receipts. By 
2024, those outlays also will exceed interest revenue being earned on 
Treasury securities. At that point, the trust fund will be operating 
with annual deficits, as I pointed out yesterday with a graph, here on 
the floor.
  When the trust funds start running deficits, including them under the 
balanced budget umbrella will result in annual surpluses in non-Social 
Security spending, guaranteeing that funds will be available to meet 
Social Security obligations to today's workers.
  Today and in the future, the largest threats to Social Security are 
deficit spending, the growing debt burden, and the interest payments 
that increasingly crowd out other fiscal priorities. The only sure way 
to protect Social Security from these economic and fiscal pressures is 
to stop deficit spending, stop growing the debt, and start lowering 
interest costs.
  Under the Reid amendment, there is no bar to Congress redefining 
other, non-Social Security programs, so that they could be moved off-
budget and paid for by draining Social Security revenues.
  Under the Reid amendment, if Congress wanted to stimulate the economy 
with tax cuts, there would be no balanced budget consequences from 
slashing the off-budget Social Security taxes, without replacing those 
revenues from somewhere.
  In both cases, the Reid amendment would put the integrity of the 
Social Security trust funds in great jeopardy.
  I ask unanimous consent to print in the Record a copy of a Dear 
Colleague several of us sent out last week that discusses in greater 
detail how our amendment, the bicameral, bipartisan consensus 
amendment, actually protects Social Security, along with endorsements 
from seniors' groups.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       [From Congressional Leaders United for a Balanced Budget]

                                                February 23, 1994.
       Dear Colleague: Some opponents of S.J. Res. 41/H.J. Res. 
     103, the Balanced Budget Amendment to the Constitution, once 
     again have resorted to scare tactics, claiming that such an 
     amendment would threaten the existence of Social Security. We 
     can assure you that nothing could be further from the truth. 
     In fact, the amendment will protect Social Security from the 
     threat posed to by continued federal deficits.
       Analyses of the amendment that project deep cuts in 
     specific programs as a result of across-the-board reductions 
     assume that, within a balanced budget framework, Congress and 
     the President will abdicate our responsibility to make 
     choices and put the budget process on automatic pilot. We 
     believe that members of Congress take their responsibilities 
     seriously. The Balanced Budget Amendment would impose a 
     discipline--now lacking--that would foster crucial priority-
     setting.
       The amendment does not change in any way the existing 
     status of Social Security. Current statutory protections 
     would not be compromised by the amendment and Congress surely 
     would take cognizance of Social Security's history of 
     protections in any implementing legislation. For example, any 
     legislation that would change the actuarial balance of the 
     Social Security trust fund is currently subject to a 60 vote 
     point of order in the Senate.
       The greatest threat to the long-term status of the Social 
     Security program is the rapidly increasing federal debt. 
     Interest on the debt is consuming an increasingly larger 
     percentage of the federal budget. Interest payments will 
     continue to crowd out other spending, including eventually 
     Social Security, and will impair the ability of future 
     generations to repay monies borrowed from the Social Security 
     trust fund. By making deficit spending a rare exception 
     instead of the norm, a balanced budget amendment will protect 
     the long-term stability of Social Security and Medicare.
       We have attached additional information regarding the 
     effect of our amendment on Social Security. If you have any 
     questions, you can contact any one of us or Damon Tobias 
     (Craig, 4/2752), Sharon Prost (Hatch, 4/7703), Janice Long 
     (DeConcini, 4/8178), Thad Strom (Thurmond, 4/9494), or Ed 
     Lorenzen (Stenholm, 5/6605).
           Sincerely,
     Charles Stenholm,
     Dennis DeConcini,
     Larry Craig,

                              Orrin Hatch,

     Strom Thurmond.
                                  ____


       The Balanced Budget Amendment Will Protect Social Security

       The largest threats to Social Security are deficits and 
     debt.
       Ballooning interest payments on the national debt already 
     are squeezing out other fiscal priorities. Spending more and 
     more on interest eventually threatens all programs, even 
     Social Security.
       The BBA will protect Social Security now and in the long 
     run.
       Even the Wharton study commissioned by BBA opponents shows 
     interest rates dropping immediately in anticipation of 
     phasing in a balanced budget. The 30-year government bond 
     rate would drop from 6.6% to 2.5% by the year 2003. Besides 
     all their other benefits, zero deficits, a smaller debt, and 
     lower interest rates would reduce the debt service squeeze on 
     Social Security and other federal programs.
       When the trust funds start running deficits in the future, 
     including them under the balanced budget umbrella will result 
     in annual surpluses in non-Social Security spending, 
     guaranteeing that funds will be available to meet Social 
     Security obligations to today's workers.
       Exempting Social Security from the balanced budget 
     requirement would threaten the trust funds.
       The temptation would be irresistible to redefine other 
     spending items as ``Social Security,'' shift them out of the 
     balanced budget constraint, and pay for them by draining the 
     Social Security trust funds. This obviously would undermine 
     the integrity of the funds and threaten the purposes for 
     which they were established.
       Forceful statutory protections can and will continue.
       Social Security currently enjoys unique statutory 
     protections in the budget process. None of those would be 
     changed by the BBA. Both political reality and the positive 
     budget and economic effects of the BBA point to maintaining, 
     not eroding, its priority status.
       A constitutional amendment is supposed to enshrine timeless 
     principles, not address temporary situations.
       Social Security is running large surpluses today. However, 
     the funds' Trustees project that, by the year 2024, the 
     growing retirement needs of baby boomers will cause annual 
     deficits in the trust funds and begin drawing down 
     previously-accumulated surpluses. Unpredictable economic or 
     demographic changes are always possible.
                                  ____


       How the Balanced Budget Amendment Protects Social Security

       Put an end to the rapid growth in interest payments that 
     threaten to crowd out Social Security spending.
       Interest payments have nearly quadrupled since 1980. 
     Interest payments in 1993 were $200 billion and are expected 
     to exceed $300 billion annually by the end of the decade. 
     Until we balance the budget, spiralling interest payments 
     will continue to crowd out other spending, including Social 
     Security.
       Forcing Congress to balance the budget will avert the 
     threat of runaway inflation.
       As Senator Simon and others pointed out during recent 
     hearings, no industrialized nation has reached the level of 
     debt we will face next century without monetizing the debt by 
     printing more dollars. Monetizing the debt will lead to 
     explosive inflation. Huge debt burdens contributed to ruinous 
     inflation in Germany in the 1920's and several Third World 
     nations in the 1980's. It would have a particularly severe 
     impact on senior citizens living on a fixed income. It will 
     not do any good to get a $1,000 retirement check if bread 
     costs $100 a loaf.
       The amendment will force Congress to deal with the deficit 
     before we are faced with a budget crisis that forces 
     draconian cuts each year just to maintain the status quo.
       The General Accounting Office has warned that if the amount 
     of deficit reduction required just to limit the deficit to 
     three percent of GDP will increase exponentially by the year 
     2005. By the year 2020, Congress would be required to enact a 
     half a trillion dollars of additional deficit reduction each 
     year just to restrain the deficit to three percent of GDP. No 
     program--including Social Security--will be able to escape 
     deep spending cuts under this scenario.
       Balancing the budget will promote the economic growth 
     necessary to sustain the Social Security trust fund.
       GAO, CBO and most economists warn that continued growth in 
     deficit spending will result in lower productivity and 
     deteriorating living standards. As real wages for taxpaying 
     workers decline, there will be increasing resistance to the 
     taxes necessary to meet the growing commitments of the Social 
     Security program. GAO found that balancing the budget by the 
     year 2001 will lead to the higher productivity and growth in 
     real wages that will be necessary to support our commitments 
     to the growing elderly population.
       The amendment will help ensure that Congress takes action 
     before the Social Security trust fund begins running yearly 
     deficits.
       Although the Social Security trust fund currently is 
     running a surplus, within a generation, it will face cash 
     shortfalls. A balanced budget amendment will provide Congress 
     and the President with the necessary incentive to take 
     corrective action to deal with this threat and provide for 
     the long-term solvency of the trust fund.
       The amendment preserves statutory provisions that protect 
     Social Security.
       The current statutory protections for Social Security would 
     not be eliminated by the amendment. For example, under 
     current law, any legislation that would change the actuarial 
     balance of the social security trust fund is subject to a 
     point of order which requires a three-fifths vote to waive in 
     the Senate. Under the 1985 Gramm-Rudman Act and the 1990 
     Budget Enforcement Act, Social Security was completely 
     protected from all sequesters. Given political realities, 
     Congress almost certainly would set budget priorities in such 
     a way that the protections for Social Security are maintained 
     or even enhanced.
       Exempting Social Security would open up a loophole in the 
     amendment and tempt Congress to take irresponsible actions 
     that threaten the trust fund's integrity.
       Exempting the Social Security trust fund from the amendment 
     would create an incentive for Congress to use it as an 
     instrument of countercyclical stimulus, social policy or 
     other uses other than as a retirement program, threatening 
     the ability of the trust fund to fulfill its obligations to 
     retirees. For example, Congress might pass legislation to 
     shift spending for Medicare, other retirement programs, or 
     any number of programs to the social security trust fund to 
     avoid a three-fifths vote to unbalance the budget. Thus, the 
     non-Social Security budget could be ``balanced'' simply 
     changing program definitions and draining the Social Security 
     trust fund.
       The Constitution is not the place to set budget priorities.
       A constitutional amendment should be timeless and reflect a 
     broad consensus, not make narrow policy decisions. As noted 
     above, the financial status of Social Security will change 
     drastically, and perhaps quite unpredictably, in the next 
     century. We should not place technical language or overly 
     complicated mechanisms in the Constitution and undercut the 
     simplicity and universality of the amendment.
                                  ____



                                            Silver Spring, MD,

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



                             United Seniors Association, Inc.,

                                   Fairfax, VA, February 16, 1994.
     Hon. Paul Simon,
     Hon. Larry Craig,
     U.S. Senate,
     Washington, DC.
       Dear Senators Simon and Craig: The United Seniors 
     Association is proud to stand with you in support of the 
     Balanced Budget Amendment to the U.S. Constitution.
       The 400,000 members of our organization--and the majority 
     of seniors across the country--know the importance of thrift, 
     of responsibility and of ``paying as you go.'' Seniors know 
     that, like a family or an individual, the federal government 
     cannot borrow more and more money, year after year, without 
     facing disaster.
       Seniors are unconvinced by those who try to frighten them 
     about the future of Social Security if a Balanced Budget 
     Amendment were approved. They know that Social Security will 
     not survive if the government is unable to meet its 
     obligations, and the day of insolvency is approaching like a 
     freight train.
       Certainly, balancing the budget will require sacrifice on 
     the part of seniors along with most other Americans. But 
     seniors are fed up with politicians who use them as a shield 
     for costly boondoggles. Seniors know that the federal 
     government spends too much money, and they want it to stop.
       As one columnist wrote in 1992 in U.S. News & World Report, 
     ``we can no longer afford the illusion that we can spend our 
     way to prosperity.'' We need to ``move forward immediately--
     no more mannas--to restore our financial solvency. Some 49 of 
     our 50 states have learned to live within laws requiring 
     balanced books; surely Washington can do the same.''
       That columnist was David Gergen, and he was right.
       At the United Seniors Association, we recognize that the 
     amendment is not a cure-all. But if the amendment were 
     approved, political leaders tempted to overspend would find 
     at least one obstacle in their path.
       We pledge to you that we will use our organization's 
     resources to spread the word among senior citizens across the 
     country--that a vote for the Balanced Budget Amendment is a 
     vote for the future of this country--for our children, for 
     our grandchildren, and for all of us.
           Sincerely,

                                              Steven J. Allen,

                                        Director of Communications
                                                and Public Policy.
                                  ____


         [From the Seniors Coalition Issue Paper, October 1993]

  The Balanced Budget Amendment--Restoring Fiscal Integrity to America

                        (By Daniel J. Mitchell)

       It took 167 years for America's national debt to reach $100 
     billion, another 40 years to $1 trillion, but only nine more 
     years to climb to $3 trillion. The explosion of debt should 
     come as no surprise; the federal budget has not been balanced 
     since 1969. Deficit spending since that time is responsible 
     for about 90 percent of the national debt. Annual interest 
     payments on the national debt now consume nearly $200 billion 
     annually, a $3,300 burden for every family of four in 
     America.
       The only solution to America's federal spending crisis is a 
     balanced budget amendment. Members of Congress repeatedly 
     have demonstrated that they are completely incapable of 
     exercising fiscal responsibility. On the rare occasions when 
     Congress approves legislation such as the Gramm-Rudman 
     Deficit Reduction Act, which actually slows the growth of 
     government, they quickly figure out some way to get around 
     the law. In most cases, of course, Congress simply makes a 
     bad situation worse. In 1990, for instance, Congress and the 
     Bush Administration approved a record tax increase. While the 
     politicians claimed the higher taxes were needed to reduce 
     the deficit, then projected to be about $150 billion, the 
     money was actually used to finance an orgy of new spending. 
     As a result, the budget deficit has climbed to nearly $300 
     billion, an all-time record. This year, unfortunately, the 
     Clinton Administration decided to ``solve'' the deficit by 
     repeating the mistakes of the 1990 budget deal. As a result, 
     a record tax hike will increase rather than reduce government 
     borrowing.
       More than anyone else, it is the politicians who benefit 
     from the current system. They got to spend the money, in 
     effect buying votes from various interest groups. The bill 
     for this spending spree, however, is simply added onto the 
     national debt. In other words, while hurting today's 
     taxpayers, the bulk of the problem is passed on to future 
     taxpayers.
       A balanced budget amendment would restore balance to fiscal 
     policy. By requiring politicians to balance the budget every 
     year, legislators finally would be forced to set priorities. 
     Wasteful, duplicative, and unnecessary spending programs 
     would be subject to some long overdue discipline. 
     Bureaucratic red tape and overhead expenses would be put 
     under a microscope. Pork-barrel spending, Congressional 
     junkets, and other unjustifiable expenditures presumably 
     would come to a stop.


             special interests oppose fiscal responsibility

       The arguments in favor of a balanced budget amendment are 
     well known. Most citizens recognize that it is immoral to 
     spend today while leaving the bulk of the bill for our 
     children and grandchildren. In addition to the moral 
     argument, economists have explained how deficits also are a 
     burden on today's economy, as government spending crowds out 
     legitimate borrowing in the productive sector of the economy. 
     Every time the government borrows a dollar, it leaves one 
     less dollar available for consumers to finance auto loans, 
     one less dollar a family can use to get a mortgage, and one 
     less dollar businesses can use to finance economic expansion 
     and job creation.
       The myriad interest groups feeding at the public trough, 
     however, are not persuaded by arguments on behalf of the 
     public interest. If they were, they would not be riding on 
     the federal gravy train in the first place. Special interest 
     groups instead can be expected to use their well-honed 
     lobbying skills to fight a balanced budget amendment. These 
     groups, which already have demonstrated political clout by 
     pressuring politicians to support various federal programs 
     and pork-barrel spending, will pull out the stops to derail a 
     balanced budget amendment.
       Unfortunately, one of the first casualties in this battle 
     will be the truth. Not that this should come as a surprise. 
     Interest groups are not going to persuade Americans to oppose 
     a balanced budget amendment by arguing in favor of subsidies, 
     pork-barrel spending, and government waste. Big city mayors, 
     for instance, are not likely to convince voters by arguing 
     that a balanced budget amendment is bad because it would 
     reduce subsidies to money-losing mass transit boondoggles 
     they have created in their cities. Large farmers will not get 
     much sympathy when they complain that a balanced budget 
     amendment will reduce the amount of taxpayer money they get 
     not to grow crops. Welfare lobbyists will not impress working 
     Americans by protesting that a balanced budget amendment 
     might restrict how much money people are being paid not to 
     work.
       Special interest groups cannot reveal their real reasons 
     for opposing a balanced budget amendment. Politicians may be 
     impressed with their arguments (after all, the groups have 
     convinced politicians to create and fund the programs which 
     cause the deficit), but others are not likely to be 
     sympathetic. And make no mistake about it, voter outrage 
     is driving the balanced budget amendment. Were it not for 
     the 80 percent-plus support among the American people for 
     a balanced budget amendment, the politicians would not be 
     considering this long-overdue constitutional reform.


                      opponents try scare tactics

       In an effort to defeat a balanced budget amendment, 
     opponents are using every weapon in their arsenal. They 
     assert that a balanced budget amendment would harm economic 
     growth by restricting lawmakers' ability to use fiscal policy 
     to stimulate economic growth. This claim, however, is based 
     on now-discredited economic theories which argued that 
     deficit spending is good for the economy. The work of Nobel 
     Prize-winning economists such as Milton Friedman, Friedrich 
     Hayek, and James Buchanan, in addition to many others, 
     conclusively demonstrated the flaws of any theory which 
     assumes that giving politicians and bureaucrats more to spend 
     is good for the economy.
       Perhaps more than anything else, however, the events of the 
     last twenty years have proven that deficit spending is an 
     economic burden rather than a blessing. Rising deficits in 
     the late 1970s did not stimulate economic growth; nor have 
     today's record deficits been associated with a booming 
     economy. Instead, the evidence conclusively demonstrates that 
     tax cuts and fiscal responsibility are the keys to economic 
     growth, while higher taxes and deficit spending hinder job 
     creation and economic expansion.


                        frightening the elderly

       Opponents of a balanced budget amendment are targeting 
     various groups and segments of the population. They argue 
     that a balanced budget amendment would wreak havoc, causing 
     massive budget cuts if not outright repeal of the program 
     being discussed. Underlying these arguments is the 
     implication that the entire $300 billion-plus budget deficit 
     would have to be eliminated next year. Not surprisingly, 
     opponents have included Social Security and Medicare in this 
     misleading campaign, implying that ratification of the 
     balanced budget amendment will be a disaster for senior 
     citizens.
       These scare tactics are completely wrong. Assume that 
     Congress approves a balanced budget amendment. Most experts 
     believe that it would take at least a couple of years before 
     the amendment is ratified by three-fourths of the states, as 
     required. According to the amendment language, Congress then 
     would have two years before the amendment would take effect. 
     Since the balanced budget amendment is not going to take 
     effect until at least 1999, Congress effectively has five 
     years to bring deficit spending under control.
       As the following table makes clear, balancing the budget by 
     1999 is not difficult. As a matter of fact, the budget can be 
     balanced without cutting spending by one penny. Federal tax 
     revenue is projected to increase from $1,244 billion this 
     year to more than $1.6 trillion in 1999. This $375 billion 
     revenue increase is more than enough to eliminate a $253 
     billion deficit. Indeed, Congress can balance the budget by 
     1999 and still be able to increase spending by $120 billion 
     between now and then.

                        FUTURE BUDGET PROJECTIONS                       
                        [In billions of dollars]                        
------------------------------------------------------------------------
                               1994     1995     1996     1997     1998 
------------------------------------------------------------------------
Revenues...................    1,244    1,332    1,403    1,472    1,547
Spending...................    1,497                                    
Deficit....................      253                                    
------------------------------------------------------------------------
Source: The Economic and Budget Outlook: An Update, Congressional Budget
  Office, September 24, 1993.                                           

       Any budget plan which limits annual spending increases to 
     about $24 billion will be opposed by interest groups. These 
     special interest organizations will charge that too much 
     fiscal discipline will be harmful. The evidence suggests 
     otherwise. As recently as 1965 that government spending 
     actually fell from one year to the next. Nobody argues that 
     1965 was a disaster. Similarly, even though the federal 
     budget was nearly nine times larger by 1987, federal spending 
     that year grew by ``just $13.6 billion. Contrary to what some 
     would predict, the economy proposed and there was no 
     indication that the fiscal discipline actually harmed anyone.


  what about built-in social security and medicare spending increases?

       Balanced budget critics will be quick to point out that the 
     cost of programs for the elderly are projected to increase by 
     considerably more that $24 billion annually between now and 
     1999. Social Security recipients receive annual cost of 
     living adjustments, for instance, and both Social Security 
     and Medicare are expected to expand because the elderly 
     population is expected to climb. All this requires more 
     money. Does this not prove, they argue, that a balanced 
     budget amendment is poison to senior citizen programs? Not at 
     all! Consider the following scenarios:
     Scenario #1: Full Funding of Social Security and Medicare.
       Assume that lawmakers choose to balance the budget by 
     imposing discipline on every program with the exception of 
     Social Security and Medicare. According to Congressional 
     Budget Office projections, these programs, if unchecked, will 
     expand by a total of $195 billion between now and 1999. 
     Recalling from the previous table that tax revenues are also 
     expected to expand considerably, the net effect of fully 
     funding Social Security and Medicare is that all other 
     spending must decline by a grand total of $75 billion. Even 
     in Washington, $75 billion is a lot of money, but all that 
     would be required is for all other programs to shrink by 7.4 
     percent over five years. Is it really that draconian to put 
     government on a diet where programs have to shrink by less 
     than two percent annually? American families and businesses 
     facing hard times do it all the time.
       Consider, however, that the defense budget already is 
     expected to shrink because of the collapse of communism. 
     Defense spending, which is about $275 billion this year, will 
     decline to somewhere around $250 billion according to the 
     Congressional Budget Office. So, of the $75 billion in 
     required budget cuts, at least $25 billion will be achieved 
     through the peace dividend.
       What about the remaining $50 billion of budgets cuts that 
     would be required between now and 1999? That number may still 
     sound big, but the Congressional Budget Office projects that 
     declining deposit insurance experiences will make up some of 
     that gap. The federal government will spend $14 billion to 
     bail out the Savings & Loan deposit insurance system this 
     year. After the government takes over all the insolvent S&Ls, 
     however, Uncle Sam actually will begin to make money as the 
     assets of the seized financial assets are auctioned off. 
     Under current projections, the $14 billion cost this year 
     will disappear next year and by 1999 the federal government 
     will actually be collecting $4 billion from asset sales.
       The $18 billion shift in deposit insurance spending will 
     measurable ease the alleged burden of complying with a 
     balance budget amendment--even if Social Security and 
     Medicare are fully funded. Indeed, once falling defense and 
     deposit insurance numbers are taken into account, all that 
     will be required between now and 1999 are $32 billion of 
     genuine budget cuts. In other words, the federal government 
     can balance the budget, fully fund Social Security and 
     Medicare, and only have to cut other spending by less than $7 
     billion annually. Some crisis!
     Scenario #2: Limit Medicare Spending Growth to Twice the Rate 
         of Inflation.
       Supporters of other government programs will be quick to 
     complain if programs benefiting senior citizens are 
     completely untouched while other programs effectively are 
     precluded from getting budget increases. That position can be 
     defended. After all, the Social Security program is running a 
     cash surplus of $28 billion this year and that surplus is 
     expected to grow to more than $40 billion by 1997. Nor is 
     Social Security spending growing that rapidly, with annual 
     increases between now and 1997 expected to average less than 
     5.2 percent.
       Seniors, though, have never argued that their programs 
     should be completely exempt. Indeed, seniors are very 
     cognizant of the moral arguments against deficit spending, 
     and do not want to leave a deteriorating economy to their 
     children and grandchildren. The concern among the elderly is 
     that they not bear a disproportionate share of the deficit 
     reduction burden. So long as other interest groups are being 
     subjected to fiscal discipline, seniors will contribute their 
     fair share, particularly from the Medicare program.
       Medicare is one of the fastest growing of all government 
     programs, with annual spending increases expected to average 
     more than 10.5 percent--over three times the expected rate of 
     inflation. If Medicare spending growth was limited to twice 
     the rate of inflation, something market-based reforms could 
     accomplish without compromising the quality of care, the 
     government would save $49 billion by 1999. Combined with 
     already expected declines in defense and deposit insurance 
     outlays, these modest Medicare savings would still allow 
     Medicare spending to grow twice as fast as inflation, full 
     funding of Social Security, and $17 billion higher spending 
     for other government programs.


                               conclusion

       Government policy makers will have the ultimate 
     responsibility for choosing how to comply with a balanced 
     budget amendment. As with any strategy that relies on 
     politicians, there is some risk. Legislators, for instance, 
     could evade the intent of a balanced budget amendment by 
     raising taxes, causing suffering for all Americans because of 
     a weakened economy. Legislators could choose to attack 
     programs for senior citizens, though few, if any, observers 
     can foresee the circumstances under which legislators would 
     find such an approach popular.
       Instead, a balanced budget amendment is likely to lead to 
     an outcome similar to that outlined in Scenario #2. 
     Legislators will take advantage of the projected $373 billion 
     increase in tax revenues to achieve the bulk of deficit 
     reduction. Already scheduled declines in defense and deposit 
     insurance spending will provide $43 billion of additional 
     deficit reduction.
       The real question will be how legislators decide to limit 
     the overall growth of remaining government programs. In the 
     final analysis, programs for senior citizens are unlikely to 
     be completely unscathed, but it is realistic to assume that 
     the overall benefits of a balanced budget amendment to senior 
     citizens (and their heirs) will greatly outweigh the minor 
     costs it imposes.

  Mr. CRAIG. Mr. President, with all its lack of enforcement, lack of 
definitions, lack of legislative history, and explicit exemptions, the 
Reid amendment is more loophole than law.
  The National Taxpayers Union rapidly put together an analysis of the 
Reid amendment showing how much deficit spending it would, on its face, 
allow.
  In the year 2001, the first year in which the real balanced budget 
amendment would be effective, and the first year in which the Reid 
amendment would be ineffective, the deficit under our amendment would 
be zero, while the Reid amendment would allow ``off-budget'' deficit 
spending of up to $200 billion.
  By the year 2020, the Reid amendment would allow deficits of between 
about $200 billion and $800 billion. By the year 2050, which year is 
included in the projections of the Social Security trustees, Reid 
amendment off-budget deficits would range from about $2.7 trillion to 
$6.3 trillion.
  These estimates count total investment spending as shown in the 
President's fiscal year 1995 budget and are based on alternatives II 
and III in the ``1993 Annual Report of the Federal Old Age and 
Survivors Insurance and Disability Insurance Trust Fund.''
  I want to emphasize: These are the off-budget deficits that the Reid 
amendment explicitly allows: These projections assume that Congress 
does not abuse the loopholes that the Reid amendment would give it. 
This is the best-case scenario under the Reid amendment.
  Finally, I want to touch again on inclusion of the Director of the 
Congressional Budget Office in the Constitution, under the Reid 
amendment.
  Think of this: The most timeless document of governing principles, 
enshrining fundamental rights and creating a compact between a great 
people and their Government. It contains the once-novel, now revered, 
system of checks and balances, in which no one branch of the Government 
can attain supremacy and thereby threaten the liberties of the people. 
And it specifies the powers and responsibilities of the executive, the 
legislative branch, the judiciary--and, in a couple of areas, the 
Director of the Congressional Budget Office.
  The Congressional Budget Office is the figment of the imagination of 
50 percent-plus-one of the Members of Congress. It doesn't belong in 
the Constitution.
  The Director of CBO is a political appointee of the congressional 
leadership. Thankfully, those appointments up until now have been 
relatively nonpolitical. But once the Director of CBO would have sole 
power under the Constitution to declare recessions and suspend part of 
the Constitution, that office either would become the fourth branch of 
government or be turned into a political football of Super Bowl 
dimensions.
  The Senator from Nevada quoted Justice Marshall, in McCulloch versus 
Maryland, as warning against over-complicating the Constitution. 
Senator Reid's amendment contains some thoughtful ideas. Some of them, 
I would agree with, as part of a statute. But proposed as a part of the 
Constitution, his is the amendment that departs from Justice Marshall's 
admonitions.
  I know the Senator is in sincere agreement with the contents of his 
amendment, but they are more appropriate to the debate over technical, 
implementing legislation, not a constitutional amendment. We should 
defeat the Reid amendment, and we will.
  Once we do, we will have left before us the amendment worked on for 
years by Senators Simon, Hatch, Thurmond, DeConcini, and myself; 
members of the other body like Representatives Stenholm, Smith, Inhofe, 
Kennedy, and Snowe; other members of both bodies; outside public 
interest groups, constitutional scholars, and economists.
  That is the bipartisan, bicameral, consensus version. That is the 
real balanced budget amendment. Despite some of the debate we have 
heard over the last couple of days, that the only amendment with a 
chance of passing both bodies. In fact, just last Thursday, that was 
the amendment discharged in record time and scheduled for floor debate 
as early as March 14 in the other body.
  I urge my colleagues to defeat the Reid amendment and then to support 
the bicameral, bipartisan consensus amendment.
  Because my time is limited and I have had opportunity to talk and 
there are others who are waiting to talk, let me cover a couple of 
brief points before I conclude.
  There has been a great but frankly very confused debate on Social 
Security. Anybody observing will hear all kinds of allegations made 
about what is or is not going to happen to Social Security. The Simon-
Hatch-Craig amendment leaves it in the budget. The Reid amendment takes 
it out of the budget. It is safe. It is secure. The bottom line is 
Social Security today is very secure and it is secure for the 
foreseeable future and Congress is handling it in a responsible 
fashion.
  What is at question is the future in the year 2024. That is when the 
reserves are ultimately used up and the outgo begins to outpace the 
reserves. If at that time our budgets are not in balance and our debt 
is $9 trillion or $10 trillion, or more, is the American public going 
to be able to afford the new revenue necessary to fund this line here 
or will future citizens simply and clearly say, ``We cannot afford 
it?'' And it is at that point that we begin to see dramatic changes in 
Social Security. If the Reid amendment passes, this line stays intact, 
this line stays intact, and we mount a huge deficit incapable of 
responding to the very real human requirement required in this graph 
and with this statistic.
  We can afford Social Security today because we are a rich nation. If 
we mount a debt of $9 trillion, if we are paying out $800 billion or 
$900 billion a year in interest we are no longer rich. We are very 
poor, and as a poor Nation can we, in fact, afford those 
responsibilities?
  I am offering for the Record what is known as analytical 
perspectives. That is a volume of the President's 1995 budget, and the 
question there is capital investment an issue inside the Reid amendment 
and wholly undefined as to what it may or may not be, and it becomes 
increasingly important to understand if we understand the debate.
  The President's budget lists the following investment expenditures: 
$89 billion, physical capital; $68 billion, research and development; 
$34 billion grants to States for local physical capital; $42 billion 
for education and training. The Clinton administration says that is an 
investment. Is that the kind of investment that Senator Reid proposes? 
We do not know. No hearings, no facts, no way for this Congress, this 
Senate to make a wise judgment on a last-minute effort to create an 
alternative to a document that has been 10 years in to making, and as I 
said with over 3,000 pages of testimony pro and con as it relates to 
the Simon-Hatch-Craig amendment, the basis from which it was 
established and why we argue the point of view that we argue today.
  Mr. President, that is the essence. There is a clear alternative 
today. If you do not want a balanced budget amendment to pass, if you 
find that it is not within your philosophy or your desire to see a 
change in the environment in which we budget and therefore the outcome 
of the budget process, then I would suggest you vote for the Reid 
amendment and that the record shows and that the American people know 
that that is exactly the choice you make, that you are not willing to 
make the tough calls, you are not willing to address the current 
deficit debt problem and you are not willing to say to your 
grandchildren we are now today starting to build an environment in 
which your future will be strong and your opportunity will be exciting.
  There is an alternative, and the alternative is the Simon-Hatch-Craig 
amendment, an amendment that says all things are on budget, there are 
clear bounds by which the public can judge as to our performance and 
our process. It leaves the responsibility of developing the new 
budgetary mechanisms inside the amendment to the Congress as it should 
and it says to the court, as it should, judiciary, you, like in all 
other instances within the Constitution of our country, have a right to 
determine whether acts of this Congress are or are not constitutional, 
but you do not have the right to tell them then how to become 
constitutional.
  We have assured that because we do not want the courts raising taxes. 
We do not want the courts prescribing budgets. But the American people 
deserve to know that there is an enforcement mechanism within what we 
are about today. There is not within the Reid amendment. In fact, the 
only enforcement mechanism that makes realistic sense is that the Reid 
amendment will create such a jungle of the budget process that 
ultimately it will collapse and the American people frustrated by it 
will turn back to Congress to solve the problem.
  My last graph. If we take the percentage of the Clinton budget today 
that is off budget and we extrapolate rates of increase as projected in 
the Clinton budget, we come up with a phenomenal off-budget debt 
structure that is proposed within the Reid amendment.
  Mr. President, I would not want to tell this Senate, or anyone 
watching, that this is an accurate chart. It is a projection based on 
what we believe to be the reality of the Clinton budget--as we can 
interpret through the Reid amendment--investment off-budget capital 
expenditure to be.
  The reality is debts well beyond----
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. SIMON. I yield my colleague 2 additional minutes.
  Mr. CRAIG. My conclusion is this, and this chart dramatically shows 
it. If I can accept the concept of capital budgets based on the 
investment scenario of the Clinton administration, then these kinds of 
conclusions can be drawn.
  All of us know we would not create a whole new debt structure worth 
trillions upon trillions of dollars knowingly. So what it merely speaks 
to is the inability of this Congress to understand the Reid amendment 
or what the Senator from Nevada is trying to say.
  There are no questions and there is no doubt within the Simon-Hatch-
Craig amendment. All of the scenarios have been played over the last 
decade. All of the questions have been asked and all of the answers are 
available.
  The judgment you make today on the Reid amendment and the judgment 
this evening on the Simon-Hatch-Craig amendment can in fact be an 
informed decision toward a true balanced budget and a new chapter, a 
new amendment in our Constitution that is clear and profound in its 
directives to the Congress of the United States.
  I yield the remainder of my time.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.
  Mr. REID. Mr. President, the most direct, concise statement made 
during the last two presentations was the statement made by my friend 
from Idaho that this was not an accurate depiction of the Reid 
substitute. And that is true.
  What we have been dealing with here, in the last two statements, is 
make believe. The fact of the matter is that the Reid substitute is of 
the same vintage as the Simon amendment. The Simon amendment was 
introduced 5 days ago.
  Remember, they keep changing it. Even though they have had 3,000 
pages of hearings--it has been around 10 years--they changed it 5 days 
ago. Why? Because it is a faulty amendment and they tried to correct it 
to pick up a few extra votes. But it still was not enough. The 
amendment is a bad amendment.
  My friend from Utah, and I guess following the Late Show With David 
Letterman, put forth his 10 points as to why he did not like my 
amendment. Recognize that not once was there an insinuation, a 
suggestion, or a contemplation or a remark about Social Security. Why? 
Because they know that Social Security would be devastated with the 
Simon amendment, as indicated by Mr. Ball, who was director of the 
Social Security Administration during three Presidents, when he said 
among other things, ``I believe it [the Simon amendment] would put at 
great risk--'' everyone listen to this--``would put at great risk the 
monthly benefits of 42 million people who are currently receiving 
benefits and the benefits of millions more who are working and building 
credits for future benefits.''
  That is why it was not in the Late Show With David Letterman 10 
points why he does not like the Reid amendment. Because he could not 
talk about Social Security. He could not refer to Social Security 
because the Simon amendment devastates Social Security. The Simon 
amendment is a new amendment. It is of the same vintage, the same age 
as the Reid amendment. They were both introduced on the same day, in 
spite of 10 years and 3,000 pages.
  The Senator from Utah still complains, as he did the other day--this 
time I respectfully request that he listen to what I said. I will say 
it again. The Senator from Utah complains that my amendment allows 
Congress to delegate the power to make across-the-board cuts to a 
congressional officer. The Senator from Utah is correct when he says 
this is intended to overturn the decision of Bowsher versus Simon. The 
Reid amendment would allow Congress to provide by law that a neutral 
third party, the Comptroller General of the United States, could 
referee across the board. This is the same compromise Congress embraced 
in the 1985 Gramm-Rudman Act of which the Senator from Utah was one of 
the major proponents.
  Mr. HATCH. Will the Senator yield?
  Mr. REID. The Senators from Utah and Arizona complained my amendment 
delegates powers to an unelected official, the Director of CBO, to make 
economic determinations.
  Mr. HATCH. Will the Senator yield on that point?
  Mr. REID. The point of that provision is to provide that a 
nonpartisan, unelected official could make that decision. That seems 
totally reasonable. But I find it amazing that the Senator from Utah 
complained of ceding powers to unelected officials. In testimony before 
the Budget and Appropriations Committees, respected constitutional 
scholars testified that the Simon amendment granted the President 
increased impoundment powers. Section 5 of my amendment ensures this 
will not happen under my amendment.
  You see, Mr. President, my amendment preserves what the framers of 
the Constitution wanted. They wanted separate but equal branches of 
government. The Simon amendment makes them unequal and gives all the 
power to the executive branch.
  I yield on Senator Simon's time since my colleague is out of time.
  Mr. SIMON. I will be pleased to yield 3 minutes to the Senator from 
Utah.
  The PRESIDING OFFICER. The Senator from Utah is yielded 3 minutes.
  Mr. HATCH. I just hasten to point out that when the Gramm-Rudman-
Hollings bill came up, I was consulted by both sides, in both the House 
and the Senate, and they asked us whether we thought that provision 
would be constitutional. We told them we did not think it was.
  Frankly, we advised them not to go that route, but the House insisted 
on having congressional control over the budget process through the 
Comptroller General. As we all know, the Bowsher case confirmed what I 
suggested would happen.
  I am saying again today that we will be flying in the face of 200 
years of separation of powers doctrine and constitutional law, to go 
the way that the distinguished Senator from Nevada would have us go. I 
think it would undermine the separation of powers principle and, I 
think, cause people all over the country to fight his amendment, even 
if it had a chance of passing, just because of that one point.
  I reserve the remainder of my time.
  Mr. REID. Mr. President, I appreciate the statement of my friend from 
Utah. We have a simple disagreement based on the record before this 
body and constitutional history of this country. It is a disagreement 
that I think that those on the other side of the aisle should listen 
to.
  I think it is irresponsible for the Members on the other side of the 
aisle to say that they are going to vote against my amendment. The only 
hope we have of having a constitutional amendment is that we have some 
of our friends on the other side of the aisle join in supporting the 
Reid amendment. Otherwise, we are going to walk out of here today with 
no amendment from anyone, and we will be right back where we started, 
which I think would be a disservice to the American people.
  The PRESIDING OFFICER. Who yields time?
  Mr. SIMON. Mr. President, I yield myself 3 minutes, and then I will 
yield to my colleagues.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.
  Mr. SIMON. Mr. President, first, two points made by my friend--and he 
is my friend--from Nevada, Senator Reid, on the language of our 
amendment. We have gone over this carefully in all kinds of hearings. 
The only language change is the Danforth language on judicial 
involvement, and that was done very carefully.
  Mr. President, some heard Senator Danforth speak on the floor saying 
he checked that language with people as varied as Judge Bork, on the 
right, and Prof. Laurence Tribe of Harvard. We also checked this out 
with constitutional authorities. It was very, very carefully done. When 
we are dealing with a constitutional amendment, we ought to do it 
carefully. There have been no hearings on the Reid amendment. It is 
hastily put together. It is obvious from the language it is hastily put 
together.
  On Social Security, it is ironic, Mr. President, because in the 
Budget Committee, I have been the leader in terms of defending Medicare 
for Social Security recipients. The chief actuary of the Social 
Security Administration for 23 years, Robert Myers, has written me a 
letter saying the most important thing we can do to protect Social 
Security funds is to pass your amendment. The reality is the great 
danger is monetizing the debt, printing money if we just keep piling up 
this debt. If we go that route, Social Security trust funds are going 
to be devastated. Our amendment protects Social Security, and no other 
amendment protects Social Security.
  Second, in terms of Social Security long-term--and I have indicated 
to Senator Dorgan, who is very much concerned about this, I am willing 
to work out a statutory change here long term--this amendment does not 
deal with the fact, as Senator Craig was pointing out, in the year 2024 
Social Security starts to go into the red. We have to protect people 
who are 35 years old today, who will be totally dependent on that; or 
someone 50 who, in the year 2024 will be 80 years old. That person 50 
years old should be concerned. Our amendment protects them.
  So in this general area of Social Security, if you are interested in 
protecting Social Security, vote for the amendment which Senator Hatch 
and I have proposed.
  I would like to yield 10 minutes now to the Senator from Georgia, 
Senator Coverdell.
  The PRESIDING OFFICER (Mr. Breaux). The Senator from Georgia [Mr. 
Coverdell] is recognized for 10 minutes.
  Mr. COVERDELL. Mr. President, I thank my colleague from Illinois. I 
rise in support of his, and others, balanced budget amendment and in 
opposition to the amendment of the Senator from Nevada [Mr. Reid].
  I would like to just make several comments with regard to what I view 
has turned into three spears at the amendment, three arguments that are 
being consistently made against the balanced budget amendment.
  First, we have heard for weeks that the balanced budget amendment, as 
offered by the Senator from Illinois and others, is a gimmick. Let me 
just say that I think that argument has been rendered moot by the 
intensity of the lobbying to defeat the amendment.
  Clearly, if all the sectors who have so vigorously opposed this 
amendment thought it was but a gimmick, we would simply let politics be 
politics and go home. But, indeed, that has not been the case. 
Throughout the Nation, we have had such an intense effort to 
characterize and belittle the amendment, first classifying it as a 
gimmick.
  It is not a gimmick. It is the first serious attempt on the part of 
this Senate and the people of this country to bring into control 
runaway debt that will bring this Nation to its knees. We have stood 
off so many enemies around the world: Hitler, Saddam Hussein, 
Khrushchev, Stalin--stood them down. But we are in danger of failing by 
our inability to manage our own affairs at home. This is not a gimmick.
  Second, there is a scholarly argument. We have heard repeated 
references to the fact that it is diminishing the power of the 
legislative branch and strengthening the power of the executive branch.
  The ultimate authority in our democracy rests with the people. The 
legislative branch is the peoples' branch. The American people have 
told us in the loudest terms that they expect us to seize control of 
the financial health of this Nation; 32 States of the Union have 
already passed resolutions calling for a Constitutional Convention to 
address the subject of balancing the budget, only 2 States away from 
the convening of that convention.
  The American people, by anyone's poll, three out of four, are in 
support of the Senator's balanced budget amendment. The American people 
are where the final power rests in the United States, and they have 
said loudly that they want a balanced budget to be put in place. They 
have spoken in every way they know, and they are calling upon this 
Senate, this Congress, to impose new rules of the road to gain control 
of the financial health and security of the United States.
  The third argument is that we need to be just responsible; that the 
leadership of the Congress simply needs to do what is right: To seize 
control of the financial abuses that we have seen over the last 30 
years.
  Since this amendment was first voted on in 1982, we have responsibly 
added another trillion dollars in debt. Then 3 years later, we voted on 
it again and we heard the arguments--``We just need to be 
responsible''--and we added $2 trillion more in debt. Then on the last 
vote, we heard that same argument--``We just need to be responsible''--
and we added another trillion dollars in debt.
  By the President's own budget numbers, before this term has exhausted 
he will have added another trillion dollars in debt. The debt right now 
is nearly $5 trillion, and by 1996 it will be nearly $7 trillion. The 
Senator from Idaho talked about the debt may be approaching, after the 
turn of the century, $9 trillion or $10 trillion. We will have passed 
that long before we get to the turn of the century at the pace we are 
going.
  The argument that we need just be responsible has been totally 
rejected and ridiculed by our own behavior, as we have added $1 
trillion, then $2 trillion, another trillion dollars and now another 
trillion dollars in the face of the arguments that we just need to be 
responsible.
  A gimmick? Absolutely not, proven by the intensity of the effort to 
defeat it. The scholarly argument that it is a divestiture of power in 
the legislative branch; the power in America rests with the American 
people and they are asking the legislative branch to impose this 
restraint. The argument of being responsible leadership has been proven 
by the behavior of the Congress over the last two decades. We need a 
balanced budget amendment. We need new rules of the road.

  My final comment deals with the executive branch. If this balanced 
budget amendment fails, and I am fearful that it will, I believe that 
its failure will rest directly at the feet of the President of the 
United States and of this administration because even though coming 
from an election that called for new restraints on the fiscal behavior 
in Washington, the President has engaged in a wide-open battle to 
defeat the balanced budget amendment. In this very close vote, that in 
my judgment will have been the final difference. That will have been 
the final difference.
  Mr. President, the American people have spoken. They want a balanced 
budget amendment.
  Mr. President, I yield my time back to the Senator from Illinois.
  Mr. REID addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. I yield 5 minutes to the Senator from North Dakota.
  The PRESIDING OFFICER. The Senator is recognized for 5 minutes.
  Mr. DORGAN. Mr. President, I have listened somewhat this morning, as 
I have been in meetings, and as I had an ear tuned to the television 
set, it occurred to me we are doing the least productive thing we could 
possibly be doing here this morning in the Senate, and that is spending 
a lot of time debating about which constitutional amendment is better 
than the other.
  Both of these constitutional amendments have merit. I intend to vote 
for the Reid amendment, and if that fails I will likely vote for the 
Simon amendment. It is not a case where one side walked down from the 
mountain with tablets of stone and said: This is the only amendment 
that has merit; this is the only amendment that is worthy; and this is 
the only amendment that will work. It is just wrong.
  That chart--read the fine print--is wrong. It is wrong. That is not 
the Reid amendment. If the Reid amendment passes, we will be better off 
than we are today, in my judgment. And I will bet you this. If the Reid 
amendment were the only constitutional amendment on the floor of the 
Senate today, it would pass. If the choice was do we support the 
constitutional amendment offered by Senator Reid versus the current 
situation, I think this body would likely pass it, or at least be very 
close. We should not be in a situation where more than enough Members 
of the Senate support a constitutional amendment to pass it, but we end 
up not passing it because we exercise all of our energy spending time 
in the Chamber talking about which is worse.
  Now, I read a lot of respected writers and thinkers who say we should 
not do a constitutional amendment to balance the budget.
  There was a time in my life when I thought that was the case, but you 
get to $4.4 trillion in debt, spending $1 billion a day on things you 
do not need, and at some point you wonder about your children's future 
and you wonder whether we can continue, under any condition, to believe 
that spending resources that are not ours will do anything but injure 
this country's future.
  The Senator from Nevada does a service to this body by offering this 
amendment. It is a good amendment. I will not go into great detail 
about Social Security, but this amendment has the Social Security 
amendment which I was proposing to offer to the Simon proposal. That is 
the right amendment.
  Now, if the Reid amendment does not pass--and I am going to support 
it--is the Simon amendment fatally flawed because it does not have it? 
No, it is not fatally flawed. We can impose a higher standard later, 
and we can discuss that this afternoon if the Reid amendment does not 
pass.
  But I think, listening to the discussion in the Chamber, we are in 
the worst possible position. Those of us who honestly believe we should 
do something to deal with this crippling deficit and this crippling 
debt, which so injure this country's future, are reduced to spending 
our time figuring out how we can divide votes between two proposals in 
a manner that may allow neither to succeed.
  I believe we will be better served today if, at the end of the 
debate, we have advanced a constitutional proposal to ratchet up the 
pressure, yes, on Congress, and also the American people, to reconcile 
among all of us in this country that which we spend with the resources 
we have to spend, and decide how we are going to balance those in some 
reasonable fashion.
  I have said it before--let me say it because it bears repeating--I 
would not lose a minute's worth of sleep and I would not care one bit 
if we spent $500 billion this year that we did not have and added it to 
the deficit if, with that expenditure, we cured cancer. It would be a 
bargain.
  But that is not what this deficit is about. This deficit is not about 
some unusual investment that is going to yield enormous potential 
rewards. This is a structural operating budget deficit that represents 
a permanent, continual imbalance between what we raise and what we 
spend, and the Congress and the American people have conspired together 
in a way in our political system that prevents us from dealing with it. 
This constitutional amendment, no matter what one thinks of it, will 
add to the pressure that we reconcile what we spend with what we raise, 
and that we begin to assure a better economic future with economic 
growth and hope and opportunity for our children once again. That is 
what this debate is about.
  I just wanted to come over again to say we ought not be spending most 
of these hours arguing that one is awful and one is better. Either of 
these will advance the interests of requiring reconciliation in our 
fiscal policy so that it is a fiscal policy that promotes growth and 
opportunity, not danger and despair and decline.
  Mr. President, let me thank the Senator from Nevada. As I have said, 
I intend to support him. If that does not prevail, I will be on the 
floor in a colloquy with my friend from Illinois who, I think, also has 
served this body's interests and served the country's interests by 
proposing a constitutional amendment to balance the budget.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. SIMON. Mr. President, I yield 5 minutes to the junior Senator 
from Idaho.
  The PRESIDING OFFICER. The Senator from Idaho is recognized.
  Mr. KEMPTHORNE. Mr. President, I thank the Chair. I also want to 
thank the Senator from Illinois and the Senator from Utah and the 
Senator from Idaho for their leadership in this effort.
  We have heard all these numbers discussed the last 4 days: The fact 
that the debt is $4.4 trillion, the fact that our Federal budget spends 
$1.5 trillion each year. All these numbers, how do we boil them down so 
all Americans can truly understand what is taking place? Many of the 
speeches this morning were 10 minutes in length. In 10 minutes' time, 
we will pay $5.5 million in interest payments in this Nation. If we did 
not have to pay this interest, that would equate to adding 100 police 
officers to State and local governments. In just 10 minutes' time, that 
$5.5 million that we are spending in interest would pay to immunize 
more than 45,000 children. It would provide a year of Head Start for 
almost 1,500 kids.
  In the 4 days that the Senate has debated the balanced budget 
amendment, we have paid $3.2 billion in interest. That $3.2 billion 
could have reduced taxes $40, $40 for every taxpaying family, $10 a 
day. We are talking real money.
  George Washington and Thomas Jefferson feared that this day might 
come. In his Farewell Address to the Nation, President Washington 
warned Congress to cherish public credit, to use it as sparingly as 
possible, avoiding occasions of expense. And Thomas Jefferson, one of 
our Founding Fathers, who believed so strongly in a balanced budget, 
said that it was so important 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.
  Mr. President, in the roughly 1 year that I have been a Member of 
this body, I have seen a number of occasions when we have had 
opportunities before us to cut the size of the Federal Government, when 
we have had opportunities to reduce taxes, and on virtually all of 
these occasions, we just miss. We come close. Then we have another 
opportunity to vote to reduce the size of the Federal Government, and 
it is a different coalition of Senators that forms, so that in time we 
establish a record that, yes, we have all been supportive of trying to 
reduce the Federal Government, trying to reduce taxes. But the net 
result is, it is not happening; it is not working.
  The balanced budget amendment as offered by Senators Simon, Hatch, 
and Craig is tough medicine; it is not necessarily easy; but the 
illness of the national debt requires that type of medicine. We need to 
do it because in all of the other efforts--and we have heard them 
eloquently discussed--we always come just a little bit short. And so we 
need to have the balanced budget amendment so that the law of the land 
is that we do not live beyond our means as a government. Families 
cannot do that, individuals cannot do that because, if they do, then 
they find themselves on the brink of bankruptcy.
  I would just like to add that as I have listened to the argument and 
the points raised by the Senator from Nevada, I respect the Senator 
from Nevada. I respect everyone that is taking part in this debate 
because at least we are focused on the fact that something has to 
happen. But please let us reject the status quo. Let us make a 
difference. Let us not walk away from this opportunity to do what the 
American people are asking us to do as the representative body, and 
that is to vote for the balanced budget amendment as offered by the 
Senators from Illinois, Utah, and Idaho. That is the medicine that is 
required to cure this national debt.
  I yield my time.
  Mr. REID addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. I yield 15 minutes to the senior Senator from Tennessee.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. SASSER. Mr. President, I thank my friend from Nevada for yielding 
to me.
  Mr. President, I rise today in support of the Reid alternative 
amendment. I think Senator Reid offers a different, a fairer, and a 
more enforceable balanced budget amendment. The amendment offered by 
our friend from Nevada excludes the Social Security trust fund from the 
budget, and, in so doing, he exempts Social Security from any program 
cuts that might be needed to enforce the balanced budget stricture.
  This balanced budget amendment vests in the Congress and the 
President the exclusive responsibility for implementing legislation 
that produces the necessary deficit reduction. It removes the 
ambiguities that might create a court-ordered fiscal policy. I think it 
would be the height of irresponsibility for this U.S. Senate to hand 
over to the judicial branch the decisions about how the budget of the 
United States and the business regarding the budget of the United 
States are to be conducted.
  As a matter of fact, Mr. President, I think that would be a gross 
violation of the balance of powers in the Constitution. But the Reid 
amendment mandates that the Federal Government balance its books. It 
mandates that it do so in the same way that the States do--separating 
operating budgets and capital budgets.
  This process safeguards needed investments that will yield long-term 
benefits to the Nation. And the Reid amendment provides flexibility to 
prevent the Government from converting minor economic slumps into 
recessions, or from converting recessions into major depressions. This 
protects us from unintended counterproductive fiscal actions that 
without the Reid amendment I think our economy would be subjected to.
  But today I want to focus my remarks almost exclusively on the 
importance of protecting the Social Security Program under the balanced 
budget amendment.
  As my colleagues know, Social Security was established in 1935 to 
protect the economic security of working people. And millions of our 
senior citizens, millions of disabled workers, and their survivors 
depend on Social Security for a major portion of their income.
  Social Security touches the lives of virtually every American of all 
generations. More than 41.5 million people in this country currently 
receive Social Security. Twenty-five percent of all of the families in 
this Nation receive Social Security. And the overwhelming majority of 
these people are citizens of very modest means indeed.
  The Social Security Program, perhaps more than any other program of 
this Government, represents a solemn trust obligation between American 
workers and the Government of the United States. Social Security is 
widely perceived as a successful program and has tremendous popular and 
political support as well it should.
  There are some who, because they mistake Social Security for a so-
called ``entitlement'' program, believe that Social Security ought to 
be cut; that its benefits ought to be reduced to reduce the Federal 
budget deficit. I categorically disagree with that characterization, 
both with the statement that Social Security is a simple Government 
transfer program, and with the notion that it is part of the deficit 
problem.
  Make no mistake about it. Social Security is not a simple entitlement 
program. It is part of our fundamental social insurance system. Social 
Security is an earned benefit. You have to work. You have to pay into 
the system to earn Social Security. There is no entitlement. You have 
to work for it, pay for it, and pay into the system.
  Social Security is not a welfare program. People who work pay into 
this system. In return, those workers and their families are guaranteed 
benefits upon retirement, injury or death. Employee and employer 
contributions are paid into a special trust fund, and those funds are 
to be used only--only--to pay Social Security benefits.
  Social Security is almost entirely self-financed from these 
contributions coming in from workers and employers. The program 
receives virtually no Federal subsidy. The Federal Government only pays 
into the program the Federal Insurance Contributions Act taxes that are 
owed for Federal employees, and it repays interest that is owed to the 
program when the Treasury borrows from the Social Security fund. Even 
the administrative costs of running the program are paid for from the 
employee and employer contributions.
  Let us be clear about this. Social Security is not contributing to 
the budget deficit in any way whatsoever. The reverse is true. Social 
Security is building up reserves. Social Security pays out every year 
less than it takes in by way of contributions. And this is no accident. 
Congress intentionally created this surplus in Social Security in 
response to funding concerns and because we recognize that our 
population was aging, putting new strains on the Social Security 
system.
  In 1983, Congress and President Reagan appointed a blue ribbon 
commission, chaired by now Federal Reserve Chairman Alan Greenspan, to 
review the problem that Social Security was perceived to be developing 
in the outyears, and to make recommendations. At that time, significant 
changes were made to the program, and it was restored to financial 
solvency.
  Since that time, in 1983, when we adopted the report of the blue 
ribbon commission on Social Security, we have been building up 
surpluses, or reserves, in the Social Security system, to make sure 
that funds will be available to pay benefits.
  The Social Security Board of Trustees projects that these reserves 
will grow substantially over the next decade, accumulating more than $1 
trillion in assets by the year 2003.
  These funds are going to be needed to pay retirement benefits for the 
baby-boom generation. The large group of Americans born after World War 
II will begin to retire in the middle of the next decade and start to 
draw down the reserves that we are building up now in Social Security.
  So the reserves continue to build until the year 2003, and then they 
will be needed to meet the program's obligation to retirees of the 
future.
  Under current projections, reserves should be able to pay benefits 
through the year 2036. It is true that spending under Social Security 
continues to grow for the foreseeable future, but its growth should not 
be a subject of law, because the growth in Social Security spending is 
projected to be steady relative to the economy as a whole. Contrast 
that to health care spending, which is one area of the budget that is 
predicted to grow faster than the economy as a whole. Over the next few 
years, in nominal terms, the economy is slated to grow at about 5.5 
percent; that is in nominal terms, not real terms corrected for 
inflation. In nominal terms, health care is subjected to growth by 11 
percent. So that is where your problem is--in health care growth. That 
is what is driving these deficits.
  It is also true that the reserves are currently being borrowed to 
finance other Federal spending. In fact, one major reason to bring the 
budget into balance is so that we will actually be able to save the 
Social Security funds in order to meet the obligations to future 
retirees. That is why I worked very hard to obtain budget agreements in 
1990, and again in 1993, to bring about significant deficit reductions, 
and that is one of the primary reasons I support a balanced budget 
amendment. But, Mr. President, make no mistake about it, these deficits 
are coming down. They are going to continue to come down both in 
nominal dollars and in relation to our debt and in relation to the 
gross domestic product.
  We will reduce the deficit by 40 percent from projections over the 
next 3 years. And for the first time, we will have a string of deficits 
coming down for three successive years--the first time since Harry 
Truman was President. Bear in mind that Harry Truman, as President, was 
presiding over a nation coming out of World War II, a time in which we 
ran absolutely unprecedented deficits in proportion to our gross 
domestic product.
  Let me give my colleagues an example of what I am talking about. In 
1945, for example, the national debt of this country stood at 110 
percent of gross domestic product. We had accumulated that 
extraordinary debt over a period of 4 or 5 years as we successfully 
fought to the conclusion of World War II. As I speak to you today, debt 
stands at about 52 percent of gross domestic product. It has been 
coming up in recent years after having been going down for a number of 
years, until we reached the oil shocks of the 1970's, and finally the 
irresponsible fiscal policy that we engaged in during the 1980's.
  But we must not try to deal with the deficit problem by reducing 
Social Security benefits, by cutting Social Security, or robbing the 
Social Security trust fund. We have to look at the Social Security 
Program as a long-term commitment to the working people of this Nation. 
It is shortsighted to view it only in the context of our current 
budgetary situation. While the Social Security Program is solvent now, 
and will be well into the future, we have to make sure that it will be 
able to pay benefits for the 132 million people who are paying into the 
system today. We must not do anything to jeopardize the confidence of 
the American people that the Social Security Program will be there for 
them when they need it. We want it to continue to be there, because it 
has worked.
  We hear a lot about Government efforts that fail. Nobody talks very 
much about Government efforts that succeed. I want to recite some 
positive numbers about the Social Security Program. Over the last 35 
years, poverty among the elderly has been reduced from 35 percent at 
the poverty line or below, to just 13 percent. That is progress. That 
is a program that works. The actual number of seniors living below the 
poverty line has declined by nearly 2 million since 1959. That has 
occurred even though the elderly population has nearly doubled to more 
than 32 million people. Even Pete Peterson, the Secretary of Commerce 
in the Nixon administration, and President of the Concord Coalition, 
and has written extensively on entitlement programs, concedes that 
entitlement spending prevents some 20 million Americans--half of them 
elderly--from falling into poverty. The program that protects the 
majority of the elderly from poverty is Social Security.
  In fact, the American Association of Retired Persons estimates that 
nearly 45 percent of all seniors--nearly 45 percent of the elderly in 
this country--would live in poverty if there were no Social Security 
Program. In the past, some people have suggested we could save money by 
eliminating or cutting back on the cost-of-living adjustments, the so-
called COLA's. I have steadfastly resisted those efforts to cut back on 
the cost-of-living adjustments. These are the payments that make up for 
the loss of purchasing power that occurs because of inflation and price 
increases. Eliminating these cost-of-living adjustments would push a 
half-million of our elderly into poverty and reduce the standard of 
living for more than 41 million of our fellow citizens.
  On the other hand, some have advocated means testing for Social 
Security; that is, the benefits would only go to those in the low-
income bracket. If Social Security is subjected to a balanced budget 
amendment, I submit that means testing would be a very likely outcome. 
What would this mean for the future of the program and its ability to 
reduce poverty among the elderly and disabled and their families? 
Advocates of means testing argue that because we are running a budget 
deficit, we can no longer afford to pay benefits from the Social 
Security fund to middle-income people.
  I dispute that argument on four separate points.
  First, Social Security is not causing the deficit. It is fully self-
financed and is in fact running a very substantial surplus.
  Second, The average Social Security benefit is not making people 
rich. It barely helps most retirees make ends meet.
  Mr. REID. Parliamentary inquiry. How much time does the Senator from 
Illinois and the Senator from Nevada have?
  The PRESIDING OFFICER. The Senator from Nevada controls 6 minutes. 
The Senator from Illinois controls 15\1/2\ minutes.
  Mr. REID. I yield 5 more minutes to the Senator from Tennessee.
  Mr. SASSER. More than 70 percent of all Social Security beneficiaries 
have annual incomes of $30,000 or less. Asking these people--the 
retired elderly, 70 percent of whom make $30,000 or less--to give up 
some of their benefits could create very real hardships. Even middle-
income seniors rely heavily on Social Security as their primary source 
of retirement income. More than half of all the people over age 65 rely 
on Social Security for at least half of their income, and nearly one-
quarter of them rely on Social Security for 90 percent or more of their 
income. Without that income from Social Security, many would have a 
very difficult time meeting their expenses indeed.
  Third, the reason I would oppose means testing for Social Security is 
the benefit structure is very strongly progressive so that lower income 
beneficiaries receive a significantly higher percentage over their 
earned income back in benefits. The program provides much greater 
returns to those who are at the lower end of the economic ladder. Also, 
as of 1984, the benefits to wealthier recipients are subject to a 
Federal income tax. Just last year the portion of benefits that is 
taxed increased from 50 percent to 85 percent, and this has had the 
effect of reducing the benefits for wealthier beneficiaries. One in 
five beneficiaries currently pays taxes on benefits.
  Fourth, the reason I would oppose means testing for Social Security 
is that if higher income beneficiaries no longer receive any benefits 
from Social Security, then they may no longer be willing to pay into 
the system. If these individuals demand to opt out of the system, the 
program would experience a serious funding shortfall and replacing this 
revenue would be very difficult, involving either major tax increases 
or cuts in other programs. Finding an alternative way to support lower 
income seniors and disabled individuals and their families would be 
very, very difficult indeed.
  I predict, if we moved into a program of means testing Social 
Security, over the long run that would mean the death of the program. 
It would mean the death of Social Security. Upper income individuals 
would say, since we do not pay into it any longer, we do not like the 
program, we think it ought to be abolished. It would take on the 
character of a welfare program, and sooner or later Social Security 
would disappear from the American economic scene.
  Then the young people would have the obligation of going back to 
where we were at the turn of the century--taking care of their elderly 
parents. I wonder how many young people now have thought about what 
would happen if Social Security were to disappear overnight and what 
would happen to their parents and what would happen to their obligation 
to pick up part of the support of their parents. I think that is 
something we ought to think about when we talk about means testing 
Social Security and ultimately, I think, destroying the program.
  Finally, I think we must look to the future when we contemplate 
changes that affect a program with as broad a scope and as long a time 
horizon as Social Security. Our population is aging as more people are 
living longer. Americans aged 80 years and older are the fastest 
growing part of our elderly population. The number of those over age 85 
increased by 38 percent, by 38 percent; almost one-third from 1980 to 
1990, while the population of under age 65 increased by only 8 percent. 
This older group tends to need most help with health care as well as 
economic and other kinds of physical support. The retirement of the 
baby boom generation will exacerbate this trend.
  So let me summarize the following, Mr. President: Social Security is 
not a welfare program. Social Security is the single most successful 
example of broad-scale social insurance in this Nation's history.
  Its very success explains why it has become a target for ideologues 
and cynics. We cannot let the deficit problem--which Social Security 
actually reduces--be used to undermine this fundamental covenant in our 
social contract.
  Congress has long recognized Social Security's unique nature and 
granted the program differential budgetary treatment as a matter of 
law. Many of my colleagues on the Budget Committee and others who 
support a balanced budget amendment to the Constitution, have supported 
a number of efforts to protect the Social Security program. I think it 
might be useful at this point to review recent legislative history in 
this area.
  As I discussed earlier, reserves have been accumulating in the Social 
Security trust funds so that the Federal Government can meet its 
obligations to current and future retirees. Those reserves, while 
necessary, create a large and growing budgetary surplus that, when 
combined with the rest of the Federal budget, has the effect of masking 
the true size of the deficit in the operating budget.
  Minimizing the deficit leads the Nation to run larger operating 
deficits than it otherwise would. Economists tell us that deficits 
amount to negative saving. Before the 1990 budget agreement, the 
deficit calculations included the surpluses in the Social Security 
trust funds. A number of us in Congress, including my distinguished 
colleague from South Carolina, Senator Hollings, and my colleague from 
New York, Senator Mohnihan, recognized that this practice detracted 
from the national saving necessary to finance capital formation and 
build the Nation's productivity and wealth.
  We also understood that making sure that our economy will continue to 
grow in the future is essential if we are to meet the obligation to 
future retirees. The Government needs to develop real saving--after 
taking into account the deficits run by the operating budget--in order 
for the Nation to have the capacity to support the retirement claims of 
the baby boom generation without imposing unbearable fiscal burdens on 
its children and grandchildren.
  So, the 1990 Budget Enforcement Act, among other things, restored 
budget honesty by taking Social Security out of the calculation of the 
deficit. Accurately displaying the true size of the Nation's deficit 
problem helps protect the fiscal integrity of Social Security trust 
funds and provides the Nation with an accurate assessment of the fiscal 
policies needed to eliminate the deficit.
  This was not the first time Congress had debated the budgetary 
treatment of the Social Security system. Before fiscal year 1969, the 
Government generally used the administrative budget, which did not 
include trust funds but focused on the movement of funds into and out 
of the general fund of the Treasury. In October 1967, the President's 
Commission on Budget Concepts--the first major review of the budget 
since the Budget and Accounting Act of 1921--recommended that the 
Government move to a ``unified'' budget, showing trust funds together 
with the rest of Government spending.
  The Commission acknowledged that trust funds were a legitimate and 
complementary budgetary concept and recommended maintaining separate 
accounting procedures to allow their activities to ``be reported on in 
a way which allows the identity and integrity of trust fund 
transactions and balances to be preserved.''
  In the wake of that recommendation, the President's budget submission 
started including Social Security and other trust funds in the budget 
beginning with fiscal year 1969. With the adoption of the Congressional 
Budget and Impoundment Control Act of 1974, Congress adopted the 
unified budget approach.
  In the 1970's and early 1980's, controversy arose over the inclusion 
of Social Security in the budget. Various deficit reduction proposals 
included cuts in Social Security benefits. Congress and the President 
eventually did cut the Social Security minimum benefit, student 
benefit, and lump-sum death benefit, among others. Defenders of Social 
Security saw inclusion in the budget as a threat to the program.
  On July 29, 1981, as part of the debate on the Economic Recovery Act 
of 1981, the Senate passed by a 97-to-2 vote an amendment offered by 
Senator Eagleton--for himself and Senator Stennis--that would have 
required a special statement on the outlays, revenues, and surpluses of 
Social Security as part of the President's budget submissions. The 
conference committee dropped the provision, but Senator Eagleton 
offered it again on October 14, 1981, as an amendment to the Social 
Security Amendments of 1981, and the Senate agreed to the amendment by 
a voice vote. Once again, the conferees dropped the provision, but the 
issue remained highly visible.
  In January 1983, the report of the National Commission on Social 
Security Reform stated:

       A majority of the members of the National Commission 
     recommends that the operations of the OASI, DI, HI, and SMI 
     trust funds should be removed from the unified budget.

  In the legislation that would become the Social Security Amendments 
of 1983, first the House Ways and Means Committee and then the House 
responded to the Commission's recommendation with a bill that would 
display the Social Security trust funds separately but in the budget 
through fiscal year 1988 and remove them from the budget beginning in 
fiscal year 1989. The Senate bill had no such provision, and the Senate 
rejected two floor amendments that would have added similar language. 
By a vote of 56 to 41, the Senate tabled a motion to waive a point of 
order raised by Senator Domenici under the Congressional Budget Act 
against an amendment by Senator Heinz that would have displayed the 
Social Security trust funds separately but in the budget through fiscal 
year 1988 and removed the Social Security trust funds--but not the 
Medicare trust funds--from the budget beginning in fiscal year 1989. 
The Senate then tabled an amendment by Senator Riegle that would have 
kept Social Security on budget but exempted it from reconciliation. The 
conference committee agreed to a modified version of the House bill, 
ordering more prominent display of Social Security and Medicare through 
fiscal year 1992, and then their removal from the budget in fiscal year 
1993. The conference committee's recommendation became the Social 
Security Amendments of 1983.
  The 1983 law also included provisions to speed up implementation of 
increases in the payroll taxes which pay for the Social Security 
program in order to put the program on a more sound financial footing. 
The result of this action was to move from the existing ``pay-as-you-
go'' system to one that built up reserves to provide a cushion for 
annual spending and prepare for the retirement of the baby boom 
generation. Concerns about protecting these reserves caused the issue 
of budgetary treatment to remain an issue.
  The 1985 Gramm-Rudman-Hollings law amended section 710 of the Social 
Security Act to take Social Security out of the budgetary totals 
beginning with fiscal year 1986. Social Security was also exempted from 
any across-the-board cuts--or sequestration--that might be required 
under the new law. The conference report explains:

       The Conference Agreement leaves unchanged from the House 
     and Senate amendments the budgetary treatment of the Social 
     Security trust funds. The conferees note that Section 201 
     includes the receipts and disbursements of the trust funds in 
     the Federal budget for Fiscal Year 1986 through 1991 only for 
     the purpose of the deficit estimates required to determine 
     whether the Federal deficit is within the maximum deficit 
     amount targets required in the emergency balanced budget act.

  The Gramm-Rudman-Hollings law created another, separate protection 
for Social Security by amending the Congressional Budget Act to 
prohibit congressional consideration of language in reconciliation 
legislation that would change Social Security benefits. That law set up 
a requirement for the affirmative vote of 60 Senators to waive the 
point of order for violating that prohibition.
  On the other hand, Gramm-Rudman-Hollings amended the definition of 
the term ``deficit'' to include Social Security within the calculation 
of the deficit for purposes of determining whether across-the-board 
cuts would be required. Once again, the conference report to accompany 
Gramm-Rudman-Hollings explains:

       The conference agreement leaves unchanged from the House 
     and Senate amendments the treatment of the social security 
     trust funds. This provision allows the yearly income and 
     outgo of the social security trust funds to be included in 
     the Federal budget only for purposes of estimating the total 
     deficit amount which must be addressed through sequester or 
     Congressional action in order to reach the maximum deficit 
     amount target. The scope of this provision is limited to that 
     purpose of comparison with the maximum deficit amounts, and 
     does not otherwise abrogate or contradict the effect of other 
     amendments in this act that remove the operations of the 
     social security trust funds from the unified budget. It is 
     anticipated that the estimating agencies named in other 
     provisions of this Act will in all other tasks related to the 
     budget and legislative process adhere to the requirements of 
     Section 261 of this Act, and remove the trust fund operations 
     from the Federal budget as required.

  Now, it is important to recognize that the circumstances of the 
Social Security trust funds has changed dramatically since all of these 
actions occurred. For the entire period between the President's 
Commission on Budget Concepts and Gramm-Rudman-Hollings, during which 
Social Security was on budget, the surpluses and deficits of the Social 
Security trust funds that Gramm-Rudman took off budget were relatively 
modest. In other words, while Social Security was on budget, the actual 
difference between the unified budget deficit and the operating budget 
deficit was relatively minor.
  For fiscal years 1967 through 1975, the trust funds ran small 
surpluses of from $0.5 billion to $5.9 billion, averaging just under $3 
billion a year. Including them on budget for the years beginning with 
1969 decreased the deficits in the operating budget for those years 
modestly. Indeed, for the first year of inclusion, 1969, a $3.8 billion 
surplus in funds now off budget transformed a $0.5 billion operating 
deficit into a $3.2 billion unified surplus, the last surplus recorded 
by the Government.
  For the period from fiscal year 1976 through 1982, the funds ran 
relatively modest deficits of from $1.1 billion to $7.9 billion, so 
that inclusion of Social Security in the unified budget actually 
worsened the deficit during those years by an average of a little less 
than $4 billion a year.
  In the wake of implementation of the recommendations of the National 
Commission on Social Security Reform, however, the reserves in the 
Social Security trust funds began to grow, as intended, with fiscal 
year 1985. The Congressional Budget Office projects that these 
surpluses will be $62 billion in fiscal year 1994, $70 billion in 
fiscal year 1995, and will reach $100 billion in fiscal year 1999. 
Consequently, beginning with fiscal year 1988, increasing surpluses in 
the Social Security trust funds have fundamentally changed the meaning 
of the unified budget deficit and its relationship to the deficit in 
the operating budget.
  A number of bills introduced in the Senate in the 100th and 101st 
Congresses sought to address this change by repealing the provision 
that included Social Security in the definition of the deficit for 
purposes of Gramm-Rudman-Hollings.
  The Committee on the Budget held a hearing on March 24, 1988, on 
``Social Security, Deficits, and the Baby Boomers' Retirement.'' During 
the debate on the fiscal year 1989 budget resolution shortly 
thereafter, Senator Chiles offered an amendment that would have stated 
the sense of the Congress that ``the Congress should enact legislation 
that makes the definition of the deficit exclude the surplus--or 
deficit--from the Social Security trust fund for all purposes.'' After 
substantial debate and amendment of the amendment, the Senate adopted 
by a voice vote an amendment offered by Senator Domenici stating the 
sense of the Congress that the National Economic Commission should 
``study the budgetary treatment of Social Security.''
  The report of the National Economic Commission, issued March 1, 1989, 
recommended validating the Social Security surplus, that is, ``running 
a unified budget surplus equal to the Social Security surplus,'' or 
``balancing the non-Social Security budget.''
  In October 1989, the Committee on the Budget and the Committee on 
Governmental Affairs held two joint hearings on the budget process. 
During the hearing of October 18, 1989, the committees discussed the 
budgetary treatment of Social Security in the context of the testimony 
of Senator Heinz on his bill, S. 1752.
  During the 101st Congress, a number of Senators engaged in sometimes 
lengthy discussions on the Senate floor calling for consideration of 
legislation to remove Social Security from the calculation of the 
deficit. Indeed, on June 19, 1990, the Senate voted 96 to 2 to adopt an 
amendment offered by Senator Heinz that would create a point of order 
against considering a debt limit extension ``if Congress has not acted 
to remove the OASDI revenues and expenditures from the calculation of 
the deficit.''
  In 1990, Senator Hollings introduced the Social Security Preservation 
Act to remove Social Security from the calculation of the deficit. This 
was important because those calculations trigger sequestration as part 
of the Budget Enforcement Act of 1990. In August 1990, the Senate 
Budget Committee, on a motion offered by Senator Hollings, reported the 
Social Security Preservation Act, after defeating a number of 
amendments. The final vote in committee was 20 to 1 with Senator Gramm 
of Texas the only member of the committee voting in opposition.
  Later that year, during debate on the legislation that would become 
the Budget Enforcement Act on October 18, Senator Hollings offered an 
amendment to remove the Social Security trust fund from the calculation 
of the deficit. The Senate adopted the amendment by the overwhelming 
vote of 98 to 2. Only Senators Armstrong and Wallop opposed the 
amendment.
  The Budget Enforcement Act, which was adopted in November 1990, 
following the Senate amendment, included a provision stating that the 
receipts and disbursements of the Federal old-age and survivors 
insurance trust fund and the Federal disability insurance trust fund 
shall not be counted as new budget authority, outlays, receipts, or 
deficit or surplus in the budget submitted by the President, in any 
budget resolution agreed to by the Congress, or as part of the Gramm-
Rudman-Hollings deficit reduction law.
  Plainly, nearly every Senator who has served in the Senate for at 
least 4 years is on the record favoring the separate treatment of 
Social Security. If we adopt an amendment to the Constitution that once 
again exposed Social Security to further cutting, we would break faith 
with that earlier commitment. We were right at that time. We should 
stick by the pledge we made them to protect this most important trust 
with the American people.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Senator Reid controls 1 remaining minute; Senator Simon controls 
15\1/2\ minutes.
  Mr. SIMON. Mr. President, just in response to one item mentioned by 
my friend from Tennessee. He and I agree on Social Security. We differ 
on the Reid amendment. When he talks about 110 percent of debt versus 
GDP in 1945 after World War II, what that ignores is there was no 
corporate debt and no consumer debt, for all practical purposes, then. 
We now have $4.3 trillion in corporate debt and $3.7 trillion in 
consumer debt, and we have a very different situation.
  I yield 1 minute to the senior Senator from Idaho.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. CRAIG. Mr. President, let me ask unanimous consent to print in 
the Record a letter from a former Secretary of Defense, Dick Cheney.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
                                                    March 1, 1994.
     Hon. Larry Craig,
     U.S. Senate,
     Washington, DC.
       Dear Larry: As you know, I have been a long-time supporter 
     of a balanced budget amendment to the Constitution. I think 
     it offers the best prospect of forcing Congress to carry out 
     its Constitutional responsibilities and bring some discipline 
     to the Federal budgeting process.
       I know that a number of individuals are concerned that 
     somehow such an amendment will lead to unwise cuts in 
     defense. Obviously, there is no reason why that has to be the 
     case since Congress will still be free to set priorities. And 
     clearly providing for our national security must continue to 
     be an urgent priority.
       I would urge all of my friends in the Senate to support the 
     proposed amendment to the Constitution.
           Best regards,
                                                      Dick Cheney.

  Mr. CRAIG. Former Secretary of Defense Dick Cheney spoke of his 
support for a constitutional amendment to balance the budget and says:

       I know that a number of individuals are concerned that 
     somehow such an amendment will lead to unwise cuts in 
     defense. Obviously, there is no reason why that has to be the 
     case since Congress will still be free to set priorities. And 
     clearly providing for our national security will continue 
     must continue to be an urgent priority.

  I yield back my time.
  Mr. SIMON. Mr. President, I yield 8 minutes to the Senator from 
Colorado [Senator Brown].
  The PRESIDING OFFICER. the Senator is recognized for 8 minutes.
  Mr. BROWN. Thank you, Mr. President. I thank the distinguished 
Senator from Illinois for not only the time but his distinguished 
leadership on this, as well as the senior Senator from Idaho, who has 
spent such a great deal of congressional career battling the waste and 
fighting for a responsible budget amendment.
  Mr. President, this is a moderate proposal. This is not a strong 
balanced budget amendment. It is one that is designed to make it easy 
to work with and work through. I want to make a forecast for my friends 
in the Chamber, and then I am willing to stand behind and perhaps 
answer for later on.
  I believe a balanced budget amendment to the Constitution will pass 
within the next decade. Mr. President, if it is not the one that is 
before us, it will be much stronger and much tougher than what the body 
votes on today. Let me be specific.
  The measure that is before the Senate today has a long phase-in 
period, making it easy for Congress to adjust to it, and in reality 
does not require Congress to cut spending at all to make the targets. 
It merely requires Congress to slow down the rate of increase in 
spending. If we do not adopt this, we will adopt one that is much 
tougher in that regard.

  Second, to waive this requirement to move toward the balanced budget 
only takes 60 percent of the votes. I can tell my colleagues that a 
good number of us who are sponsors of this would prefer it would be a 
much higher percentage. At least two-thirds, or perhaps higher. If this 
measure does not pass, my guess is eventually we will have one that is 
much tougher.
  Third, this only involves a constitutional majority, a simple 
majority to raise taxes. A good many of us would strongly prefer a 
measure that requires two-thirds to increase taxes.
  So if this measure does not pass, I believe one will pass. It is 
likely it will be much tougher and much more strict than this. Some 
Members have come to the floor and said in so many words, there is not 
a problem. I invite anyone who feels that to take a simple look at a 
graph of our deficits and our debt over recent periods. This chart goes 
since 1950, but I think Senators would see an equally dramatic 
continual rise in prior years.
  Those who believe we have this problem licked and solved with our 
current actions, let me simply mention that on this chart where we see 
the red rising, as it goes off, by 1997 the debt will not only have 
continued to rise but will literally have gone off the top edge of this 
chart by 1997. What we are into is a curve that is rising at a rate 
near the vertical. It is a train wreck waiting to happen, and every 
Member of this body must know it. Some may choose to close their eyes, 
and I suspect future generations will wonder how in the world their 
Congress could have done that.
  Each Member who votes, I think, and speaks on this floor, perhaps 
will give them the answer of what their own thoughts were as they move 
forward. But I, for one, believe this is a major problem that faces our 
economy and our Government. The simple fact is we cannot continue as we 
have, and in reality everyone knows it.
  I want to deal with some of the things that have been suggested. One 
is a comment by the Washington Post. Today they urge Members of the 
Senate to vote against the balanced budget amendment, and they conclude 
their editorial with this line:

       The Senate should kill the amendment [that is the balanced 
     budget amendment] and get on with the difficult task that the 
     amendment only obscures [i.e., cutting the deficit].

  The Washington Post is composed of bright people. For them to 
advocate getting on with cutting the deficit, to this Member, is a bit 
of surprise. The Washington Post endorses candidates every election. If 
Members can come to the floor and tell me when the Washington Post 
endorsed candidates most likely to control spending, I would be 
interested in hearing it. At least my perception is that the Washington 
Post has been a champion of those who want to increase spending, not 
cut it. For them to suggest that the real answer is simply to control 
the deficit by getting on with the difficult work of controlling 
spending, strikes me as a bit unusual. I hope it is a new policy on 
their part and I hope it is one that translates to whom they endorse, 
because my own feeling is that until people cast their votes based on a 
willingness to control spending and confront the issue, real progress 
is not going to be made.
  This morning I heard the President of the United States talk about 
this problem. He said ``we are solving the problem now.'' I want to 
express a difference of opinion on that subject.
  The PRESIDING OFFICER. The time allocated to the Senator has expired.
  The Senator from Illinois has 8 minutes and 30 seconds.
  Mr. SIMON. I would like to yield further time but Senator Robb also 
wants some time. I will yield 1 additional minute to the Senator from 
Colorado.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. BROWN. Mr. President, the fact is the President's own budget 
forecasts the biggest deficit in the history of our country. It 
forecast a deficit that is rising in the outyears, not dropping, and a 
debt as percent of GDP rises, not falls.
  There is only one way to get the deficit down or begin to control it, 
and that is to control spending and to control our appetite. This is a 
moderate approach. If we do not adopt this, we will adopt one much 
stronger and under much more difficult circumstances in the years 
ahead.
  I yield the time.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Mr. President, I yield the remainder of my time to the 
Senator from Virginia, Senator Robb.
  The PRESIDING OFFICER. The Senator from Virginia is recognized for 8 
minutes.
  Mr. ROBB. Mr. President, many debates in the Senate are called 
important. Today's debate lives up to that characterization. The action 
we take later today, in voting on the Reid and Simon proposals, may not 
turn out to be important. But this may well be the most important 
debate we will undertake this year.
  I rise as an original cosponsor of the underlying Simon resolution 
which requires a balanced budget. I oppose the Reid substitute with 
reluctance, and do so with my eyes wide open, acknowledging the 
shortcomings of both proposals. Whatever the outcome today, I will 
continue to support serious responsible proposals to achieve the goal 
of a balanced budget.
  I think it is important that we have been having this debate. If 
nothing else, this resolution has provided the public focus on the need 
for long-term fiscal responsibility. I, for one, do not think we have 
had enough of that.
  The Reid substitute amendment, is a noble attempt, but I fear that it 
sounds more effective, than it would prove to be in practice. It will 
not instill the same fear of God into policymakers that the Simon 
resolution will and is, in my view, too easy to circumvent. While the 
Simon amendment may not be perfect, at least it has enough teeth to 
scare folks into making more responsible decisions.
  I support the tougher Simon amendment not because I believe it is a 
cure-all for our budget woes, because in and of itself, it is not going 
to bring our budget into balance, but because this amendment 
establishes a destination. It is still up to the President and the 
Congress to plan a detailed route to get there.
  In truth, I have supported the balanced budget amendment and a line-
item veto for over a decade. That support followed an evolution in 
thinking which may not be uncommon in this body. When I was chairman of 
Democratic Governors' Association, Dick Thornburgh, then my Republican 
counterpart, proposed that the National Governors' Association throw 
its support behind the balanced budget amendment. I resisted it 
initially, because, like most Americans, I was, and I remain, reluctant 
to seek solutions in the Constitution for transient problems. I 
promised, however, that if the Federal Government did not get serious 
about fiscal responsibility, I would support the amendment the next 
year.
  Unfortunately, there was talk about a balanced Federal budget, but 
tax cuts were far more appealing politically, so the problem only got 
worse. In the absence of a Federal commitment to real fiscal 
responsibility, I endorsed the balanced budget amendment, and the NGA 
officially changed its policy and came out in support of the amendment.
  I have never claimed that the amendment alone would solve the 
problem. But it compels a solution, by eliminating the most convenient 
excuse for avoiding tough choices. It requires a chief executive and a 
legislative body to establish priorities. And it raises the specter of 
remedies that are so harsh that it may give the President and the 
Congress the political cover necessary to make the tough choices 
required.
  I can tell you that a balanced budget will not cause our economy to 
collapse. The former Governors in this body know this well. As 
Governors, we were required to submit balanced budgets every year, and 
we did. That provision in our constitutions was not a hindrance, it was 
an invaluable help. It lent weight to our efforts to curtail less 
important spending while preserving funding for essential programs such 
as education initiatives. And while a State's balanced budget 
requirement differs from the constitutional amendment we are 
considering today, a balanced budget amendment still takes away the 
excuses for irresponsible spending.

  Mr. President, I have supported a number of proposals to cut and 
raise revenues that were not very popular, from entitlement caps to $94 
billion of additional specific budget cuts. I am willing to continue to 
do so in the future.
  But the vote on the Kerrey-Brown amendment makes that point very 
clear. Each of us has very different ideas on how to achieve a balanced 
budget. Forging a consensus on common action, however, is extremely 
difficult. We only have to look back to last summer's budget bill 
debate to see just how intractable cutting Federal spending can become.
  Mr. President, I submit that Congress by its nature tends to be 
shortsighted when dealing with our fiscal problems, and that it always 
finds plenty of excuses why not to cut today and why tomorrow would be 
better. We are rewarded for spending. As long as we name courthouses 
and highways for spending money rather than saving money, spending will 
continue to dominate. Spending programs have strong constituencies. By 
contrast, those of us who want to say ``no'' find that our bleachers 
are nearly empty.
  I personally encouraged the President to embark on meaningful deficit 
reduction when he took office. I applaud him for what he's 
accomplished. He deserves real credit for taking tough politically 
unpopular steps to achieve meaningful deficit reduction.
  But we need to do even more, and we certainly can't afford to stop 
now and rest on our laurels. The lowest interest rates in two decades 
have lulled us into a sense of complacency. Unfortunately, because of 
these very low rates, the costs of continued fiscal irresponsibility 
are lost on many policy makers. The Simon amendment makes those costs 
very clear and very real.
  It seems to me that the arguments against the balanced budget 
amendment amount to conceding that we can't live within our means. I do 
not accept that. Those with concerns about the possible negative 
consequences of the amendment simply have to come to grips with the 
underlying problem: we are spending more than we are taking in, and we 
are unwilling to make the choices to correct it.
  A commitment to principled choices is the only cure for the long run. 
My concern is that most feel we have bitten the bullet and everything 
is getting better. The truth is, even under a much tougher disciplinary 
framework, we are still going to increase the debt by at least three 
quarters of a trillion dollars over this next 5-year period. If 
interest rates go up significantly, we could be in very serious 
trouble. So I am going to continue to press for fiscal sanity.
  Mr. President, we have come to an unhappy pass. Amending the 
Constitution is harsh medicine. And if the executive and legislative 
branches were living up to our full responsibility, we would not need 
it. But everything else has failed or been thwarted. And this 
discipline reluctantly is required in order to truly serve the people 
we represent.
  It is a cry for help--to stop us before we spend again. We just 
cannot keep doing this to future generations.
  I yield back the remainder of my time.
  The PRESIDING OFFICER. The Senator from Nevada has 57 seconds. And 
the Senator from Illinois has--all time has expired.
  Mr. REID. Mr. President, this is a balanced budget amendment that 
Senators Reid, Ford, and Feinstein have offered. It treats the Federal 
Government like the family is treated in America, like the State 
governments are treated, where they balance their budgets.
  It is also very important because it excludes Social Security. As Mr. 
Ball said about this amendment, the Simon amendment, ``I believe large 
cuts are the most likely outcome, and I think that would be terrible. 
After more than 55 years of experience, we have developed an approach 
to retirement income that is working well.''
  I think it is wrong that those who support the Simon amendment do not 
cross over and support the Reid amendment, the only one that has the 
opportunity to pass.
  This is not horseshoes. Coming close is not the answer. We need to do 
what is right for this country. You cannot leave this Chamber tonight 
and say, ``Well, I voted for a balanced budget amendment; it is 
somebody else's fault.'' The only fault lies with those who refuse to 
support the Reid amendment, the only one that has the opportunity of 
passing these Chambers.
  Mr. HOLLINGS. Mr. President, I could offer my colleagues 3.5 trillion 
reasons for a balanced budget amendment to the Constitution; that is 
the number of deficit dollars added to the national debt since 1981. 
But I will rest my case with one simple reason: It ought to be a 
minimal moral obligation of our national government to match its income 
with its expenditures on an annual basis, barring an emergency 
situation, so that additional debt is not passed on to future 
generations.
  The wisdom and necessity of such a policy has been driven home by the 
deficit-spending binge of the last decade and a half. I recall the 
words of James Madison in the Federalist No. 51:

       But what is government itself but the greatest of all 
     reflections on human nature? If angels were to govern men, 
     neither external nor internal controls on government would be 
     necessary. In framing a government which 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.

  The Federal Government's profligacy, over the last decade was indeed 
a reflection of the profligacy and speculation rampant in the larger 
American economy. Today, however, the excesses of the private economy 
have largely been tamed. The unfinished task is to accomplish Madison's 
imperative: to oblige government to control itself. This is exactly the 
purpose of the balanced budget amendment to the Constitution.
  The wisdom of a balanced budget requirement has been fully vindicated 
by State governments across this land. All States but Vermont have a 
balanced budget requirement. As Governor of South Carolina in the early 
1960's, my State's balanced budget requirement obliged me to work with 
the legislature to balance the books each year. Thanks to those 
balanced budgets, South Carolina became the first Southern State to win 
a triple-A credit rating on Wall Street. At the same time, that 4-year 
record of fiscal discipline laid the foundation for a boom in 
investment and economic growth that has continued to this day.
  Mr. President, let me be clear that I support the balanced budget 
amendment knowing full well it alone will not balance the budget. I 
object to the cynical selling of this amendment by politicians who have 
no intention of following through with the nasty, wrist-slashing work 
of actually balancing the Federal budget. Absent this followthrough, a 
balanced budget amendment is the moral equivalent of thigh cream.
  Recall that Congress has passed a balanced budget amendment once 
before. It was called Gramm-Rudman-Hollings. Like today's balanced 
budget amendment, the 1985 Gramm-Rudman-Hollings amendment boldly 
promised a balanced budget in 5 years' time. It, too, was embraced by 
big, bipartisan congressional majorities and enjoyed public support. 
Gramm-Rudman-Hollings cut the deficit to a low-water mark of $150 
billion, but was later gutted and gelded by a succession of budget 
summits. The deficits exploded once again.
  A wise man once observed that history repeats itself, the first time 
as tragedy and the second time as farce. The balanced budget amendment 
could prove to be the ultimate farce unless we learn from the mistakes 
of the past.
  Mr. President, the deficit this fiscal year, $223 billion, is nearly 
the same as when we began the Gramm-Rudman-Hollings exercise in 1985. 
The difference is that, after 8 years of steady economizing, we have 
already stripmined the easy budget cuts. What is more, Congress last 
year took the unprecedented step of imposing a hard freeze on 
discretionary spending for the next 5 years. A balanced budget 
amendment on top of this will require cuts of nearly $600 billion 
between 1995 and 1999.
  Using the Congressional Budget Office's most recent projections, to 
balance the budget by 1999 without new taxes we would have to cut all 
Federal spending--excepting mandatory spending for judges' pay and 
interest on the debt--by $26 billion in 1995, $73 billion in 1996, $119 
billion in 1997, $162 billion in 1998, and $205 billion in 1999. This 
includes cutting Social Security by $130 billion by 1999, which could 
require not only the elimination of COLA's but major benefit cuts as 
well.
  Of course, Congress would not dare cut Social Security by $1, much 
less $130 billion. So exempt Social Security from cuts: now the 
required across-the-board cuts rise from 10.7 percent to 14.2 percent 
in 1999.
  Inevitably, other programs--including veterans' benefits, military 
pay, the Women, Infants and Children nutrition program--would also be 
sheltered from cuts. As the burden of $600 billion in cuts falls on a 
smaller and smaller share of the total budget, reductions of 20 percent 
and up will be required in unprotected areas such as law enforcement, 
education, and environmental protection.
  Are we willing to follow through with cuts of this magnitude? I 
remind my colleagues that 61 Senators and 271 Representatives hitched a 
ride on the Gramm-Rudman-Hollings bandwagon in 1985. But later, when 
those same politicians were asked to cast tough votes to actually cut 
the deficit, they lit out for the tall grass. For example, in 1990 in 
the Senate Budget Committee, I proposed a strict spending freeze to 
meet that year's Gramm-Rudman-Hollings deficit-reduction target; the 
most zealous supporters of Gramm-Rudman-Hollings joined forces to kill 
the freeze.
  Face it, most Members of Congress view a ``yea'' on the balanced 
budget amendment as a free vote. They get to preen their deficit-hawk 
feathers in an election year, comfortable in the belief that doomsday 
will not arrive until 1999, if ever.
  Indeed, conventional Washington wisdom says that Congress can pass 
the balanced budget amendment, give itself the good government award, 
and then count on State legislatures to kill it off--after all, State 
governments supposedly are addicted to billions in Federal aid. This 
analysis overlooks the obvious: State politicians will see the same 
short-term advantage in posturing as antideficit tough guys. Leaders in 
the South Carolina General Assembly tell me the balanced budget 
amendment would pass by acclamation in Columbia. I predict a similar 
reception elsewhere, and easy ratification by the required three-
quarters of the States.
  We must be beware, too, of the many dodges and subterfuges that can 
be used to subvert the balanced budget amendment. Bear in mind that the 
theory of the balanced budget amendment is identical to that of Gramm-
Rudman-Hollings: If you put a gun to Congress' head, Congress will get 
discipline. The reality, however, is that when you put a gun to 
Congress' head, Congress gets creative.
  Bear in mind that both Gramm-Rudman-Hollings and the balanced budget 
amendment are strictly process-oriented mechanisms. Process can always 
be defeated by more process. The process of Gramm-Rudman-Hollings was 
defeated by the counterprocess of the budget summits.
  Recall that by 1987, it was clear that huge tax increases and budget 
cuts would be required to meet the ambitious Gramm-Rudman-Hollings 
deficit-reduction targets. This was seen in Washington not as a budget 
problem to be solved, but as a political problem to be finessed. So 
Democratic and Republican leaders huddled in summits--annual bipartisan 
love-ins with a single purpose: To yank the skeleton out of Gramm-
Rudman-Hollings.
  At the summits, Dick Darman and friends cooked up an ingenious 
jambalaya of gimmicks--excuse me, process reforms. One year the 
summiteers saved $2.9 billion by moving a Pentagon payday from October 
1 back to September 29 of the previous fiscal year. Another year they 
lopped $36 billion off the deficit simply by penciling in absurdly 
optimistic economic assumptions. Finally, in 1990, the summiteers 
killed Gramm-Rudman-Hollings outright, replacing it with a fudgeable 
framework of floating targets that actually increased the deficit.
  History now repeats itself with the balanced budget amendment. 
Already the cloakroom conspirators are talking about process reforms 
that will assist in balancing the budget: moving more programs off 
budget; creating a separate capital budget to finance investments with 
deficit spending. What is more, the balanced budget amendment expressly 
allows Social Security trust fund surpluses to be siphoned off to help 
balance the budget; in 1999 alone, we will be robbing $100 billion from 
Social Security. Balanced budget, indeed.
  So let us debate, pass, and ratify the balanced budget amendment. But 
let us avoid the gamesmanship and duplicity that betrayed Gramm-Rudman-
Hollings. If you are not for massive cuts in Federal spending, or for 
making up the difference with new taxes, then hold the hypocrisy; vote 
``no'' on this amendment.
  CBO Director Robert Reischauer on January 27 told the Senate Budget 
Committee that it is inconceivable the budget could be balanced without 
new taxes as a significant component. Warned Reischauer: ``If Congress 
adopts an amendment requiring a balanced budget beginning in 1999, it 
should not ignore the need to enact a package of tax increases and 
spending cuts to provide some hope of achieving that goal in an 
orderly, gradual way.'' In other words, we should match our process 
vote with an actual vote on substance. Exactly.

  I have long advocated a national value-added tax as the ideal vehicle 
to simultaneously pay for health care reform and balance the budget. 
Alternative plans to stick small businesses with the bill for health 
care reform are grossly unfair. After all, we do not stick small 
business with the bill for education or national defense or welfare, so 
why do so for health care reform? As a universal benefit, health care 
should be financed by a universal VAT on consumption. Most important, a 
VAT will raise sufficient sums at relatively low rates, while boosting 
the competitiveness of U.S. producers.
  Balancing the Federal budget--while simultaneously paying in full for 
universal health care--calls out for an American version of shock 
therapy. So pick your poison: VAT, higher income tax rates, draconian 
budget cuts, and/or reduced benefits. And spare us the process reforms 
and pixie dust that suffocated Gramm-Rudman-Hollings.
  By writing a balanced budget amendment into the basic law of the 
land, we will compel Washington to do its job. No more weaseling. No 
more excuses. Just make the hard choices and balance the budget. And do 
not be surprised when a balanced U.S. budget turns out to be the best 
economic growth program this country has ever seen.
  Mr. AKAKA. Mr. President, I have listened closely to the balanced 
budget debate over the past week. I wish to commend the senior Senators 
from West Virginia [Mr. Byrd], Illinois [Mr. Simon], Utah [Mr. Hatch], 
and Nevada [Mr. Reid] for their effort to bring this debate to a vote. 
They have focused the Nation's attention on the critical need to reduce 
the Federal deficit by an amendment to the U.S. Constitution.
  The question is not whether the dire predictions that have been 
offered by both sides of the debate would come true if this resolution 
was or was not adopted. The questions are how are we going to keep 
Federal spending from outpacing receipts, and will Congress accept the 
responsibility for Federal spending that already is granted by the 
Constitution?
  I have reservations about the need to amend the U.S. Constitution to 
dictate fiscal policy. I oppose amending the Constitution to deal with 
our Nation's economic problems.
  Last summer, Congress adopted the President's budget proposal by 
instituting tough deficit control measures. Through the tireless work 
of President Clinton and Congress, the largest deficit reduction 
package in the Nation's history was adopted. Partly in response to 
these events, the economy in 1993 grew at an annual growth rate of 2.8 
percent. The Congressional Budget Office projects that the Federal 
deficit will fall from $223 billion in the current fiscal year to below 
$170 billion in 1996.
  The recent economic data confirm that the difficult choices adopted 
last year are paying off and lowering the Federal deficit. The proposed 
fiscal year 1995 budget builds on the work of last summer by 
maintaining discretionary spending levels, calling for the enactment of 
the National Performance Review, offering a new rescission package, and 
proposing to limit the growth of Medicare and Medicaid through 
comprehensive health care reform.
  If the balanced budget amendment offered by the Senator from Illinois 
[Mr. Simon] is enacted, CBO Director Reischauer predicts that $204 
billion in deficit reduction would be required to balance the budget by 
1999, the initial date of this proposed amendments implementation. 
Although the Senior Senator from Illinois will amend his measure by 
pushing back the implementation date to 2001, enactment of this 
amendment will require large tax increases and spending cuts to meet 
the requirements of the proposed amendment.
  Why should Congress amend the Constitution when the ability to meet 
specified spending levels already exists? We do not have to alter the 
Constitution to implement fiscal policy. What we need to do is make the 
tough choices that are before us today, take charge of our 
responsibility to implement our President's budget proposals, and 
demonstrate that Congress is able to act in behalf of the Nation's 
interests.
  I believe adoption of Senate Joint Resolution 41 is likely to damage 
the economy more than strengthen it. There is no guarantee how long the 
current period of economic growth will continue. We should not forget 
that when the economy slows, greater deficit spending would be 
required. Moreover, Congress must have the flexibility to deal with 
emergencies. We cannot rely on assurances today that there would be the 
60 votes required under the Simon proposal to override a balanced 
budget amendment during a disaster some time in the future.
  The Simon amendment also has the potential of limiting public 
investments that are critical to long-term growth. Senate Joint 
Resolution 41 makes no distinction between investments, such as 
education and training and early intervention programs for children, 
and other types of government spending. These investments are necessary 
in ensuring that the United States remains competitive with the global 
community.
  I also wish to make a few remarks about the Reid amendment. Although 
it too would amend the Constitution, I view the Senator from Nevada's 
proposal to be more reasonable in its approach to mandating fiscal 
policy. The Reid amendment minimizes the potentially devastating impact 
of Senate Joint Resolution 41. It is a reasonable alternative to the 
original amendment because it acknowledges that the Federal Government 
has capitalized assets and allows for capitalization of annual costs.
  Moreover, the amendment preserves Social Security as a separate trust 
fund and does not jeopardize our senior citizens. This is an important 
difference, which should not be pushed aside in the rush to balance the 
budget. The working men and women of America have contributed to their 
retirement and should not worry that, in the future, the Government of 
the United States may be forced to balance a budget on their backs.
  Although I will not vote in favor of either proposal that would 
require a constitutional amendment to balance the budget, I am pleased 
that the Senate is debating the matter in the light of day. A budget is 
only a plan of spending, the responsibility for which, rests with the 
Congress and the President. Congress is already addressing the need to 
balance the budget and reduce the Federal deficit. A balanced budget 
amendment is not an appropriate precept to include in our Nation's 
Constitution.
  Mr. President, Congress already has the ability to bring down the 
deficit with the eventual goal of balancing the Federal budget. 
Congress should not be handcuffed in its ability to respond to the 
fluctuations of national and global economies. Rather, Congress must 
continue to rein in unnecessary spending in order to guarantee our 
children's future prosperity.
  Mr. GORTON. Mr. President, I support the Reid balanced budget 
amendment. I believe that Senator Reid's balanced budget amendment, 
like the Senate Joint Resolution 41 sponsored by Senators Simon and 
Craig, will put this country on the right budgetary road. I believe 
that without a balanced budget amendment, Congress will never come to 
grips with deficit spending. That is why I support both of these 
efforts to bring Federal spending in line with Federal receipts. At 
this time, I want to review why I support Senator Reid's effort to 
amend the Constitution.
  I support Senator Reid's amendment because I know that legislative 
efforts to balance the budget will never succeed. I have been a part of 
such efforts. These were honest efforts, by honest men and women. Each 
time, when the choices got tough, however, the President and most 
Members of Congress blinked. The budget deficits grew. Our children and 
grandchildren went deeper and deeper in debt.
  I also support Senator Reid's amendment because the Clinton 
administration has no, repeat no, plans ever to bring the budget into 
balance. Laura Tyson, Chair of the President's Council of Economic 
Advisers, told me that the administration has done all that it intends 
to do to bring the budget into balance. Even under the best case 
scenario, the Clinton administration's budgets for the rest of the 
decade will bring hundreds of billions of dollars per year in new 
deficits.
  I support Senator Reid's amendment because it is better than doing 
nothing. And I support his amendment because it is clear that the 
Clinton administration has no plans ever to lead this country toward a 
balanced budget. I am happy to support Senator Reid in his efforts.
  Mr. KOHL. Mr. President, this is a red letter day for me and for the 
Congress. We have two votes on constitutional amendments requiring a 
balanced budget today. And I will have the honor of voting for both of 
them.
  That this debate is even occurring is progress. When I first came to 
the Senate, I offered an amendment to recommit the budget resolution 
because it included numbers that were dishonest and out of balance. I 
lost. This Congress, we have enacted spending caps to enforce a hard 
freeze on discretionary spending, we have received from the President a 
fiscally conservative budget, and we may today pass a Balanced Budget 
Amendment. That is progress.
  But it not enough. It is now time to move beyond talking about 
balancing the budget, and just start doing it. Currently, our national 
debt exceeds $4.3 trillion, that is $17,495 for every man, woman, and 
child in the United States. We ought not to kid ourselves, though, that 
the burden of the debt will be so evenly distributed. It is the 
children of this country who will pay for our borrowing now. If 
Government does not change its fiscal policies, future generations will 
have to pay 87 percent of their income just to clean up the debts we 
leave them. In other words, our children will owe 87 percent of their 
income to the Government to pay for services we received. We generously 
have left them 13 percent of their own income for Government services 
from which they might benefit.
  The Balanced Budget Amendment represents an idea understood by every 
family that ever had to balance a checkbook--pay now for what you need 
now; save for what you need later. Unfortunately, our Government has 
forgotten this basic maxim--we have spent what we don't have; and we 
have saved nothing for future generations. It is time to write the 
basic American values of thrift and fiscal responsibility into this 
Nation's most basic statement of values--the Constitution.
  I support both Senator Reid's and Senator Simon's approach to 
balancing the budget. Senator Reid's amendment recognizes explicitly 
some principles not explicitly stated in--but certainly not excluded 
by--Senator Simon's approach.
  First, Senator Reid explicitly exempts the Social Security trust fund 
from the strictures of his amendment. I was an original sponsor of the 
successful proposal to take Social Security off budget, and I have 
introduced legislation that segregates the trust funds from other 
budget accounts. The Reid amendment is in line with what I have always 
strongly believed: The Social Security trust fund is not Government 
money--it is working Americans' money held in trust until their 
retirement. It is a savings plan that is available to all who are 
willing to work. As long as Social Security remains this sort of 
contributory savings program, it ought to be treated differently than 
the other spending and tax programs of our Government.
  That said, I believe strongly that the biggest threat to the Social 
Security system is our mounting Federal debt. As long as Social 
Security runs a surplus, and as long as that surplus is invested in 
U.S. Treasury bonds, the retirement savings of our working families 
will be invested in Government debt. And the way to insure that debt is 
paid off, paid off in full, and paid off with a decent return, is to 
make sure that the U.S. economy is strong. That, of course, means that 
the Government must stop consuming such a large percentage of this 
country's valuable resources.
  Both the Simon and the Reid amendments will protect Social Security 
by reducing the deficit, eventually balancing the budget, and 
strengthening the U.S. economy. Senator Reid makes that protection more 
explicit by specifically exempting the Social Security trust fund from 
the balanced budget amendment.
  Another difference cited between Senator Reid's amendment and Senator 
Simon's amendment is, in my mind, not nearly the issue it has been made 
on the floor. Senator Reid's amendment requires that the operating 
budget of the Government be balanced, but allows debt-financed capital 
spending. This is a budgeting approach I have long favored, and it is 
one that closely parallels the approach taken by many State 
governments. It is also an approach that is consistent with the Simon 
amendment.
  Those of us who have supported Senator Simon's balanced budget 
amendment never thought that balance would be achieved by uniform or 
across the board spending cuts. There is no mechanism in the amendment 
that requires or even suggests this sort of draconian and senseless 
budget cutting. Instead, I have always believed that a constitutional 
balanced budget amendment would force Congress to make difficult and 
reasoned choices about spending. Of course, we should continue to 
invest in the capital improvements that make this Nation strong. 
Senator Simon's amendment would allow that. It would encourage it, in 
fact, by requiring Congress to look more closely at its spending 
decisions and choosing only those that have a real return for this 
country.
  Mr. President, I hope we finish today's work by passing on to the 
House a constitutional amendment requiring a balanced budget. Fiscal 
responsibility is an American value worth enshrining in our basic 
document of government--and a congressional responsibility worth 
writing into our highest law.
  Mr. MATHEWS. Mr. President, fiscal discipline is without doubt one of 
the most critical concerns on the Nation's agenda. A balanced budget 
amendment to the Constitution is the single most serious step--perhaps 
even a dire step--that Congress can take to achieve that discipline. I 
believe that step is necessary.
  Senator Simon has done the Nation a service by making us face our 
failings. I cosponsored the amendment by Senator Simon, and I salute 
the courage and wisdom he has shown.
  But as the debate has proceeded, another amendment--the Reid 
amendment--appears to chart a clearer path.
  The Reid amendment provides effective fiscal restraint without 
placing the Nation in a straitjacket.
  I have spent 40 years in public service as a State treasurer and as 
chief executive financial officer. I have operated under a balanced 
budget provision in the Tennessee constitution. I know what it takes to 
balance a budget. I know why it works, and I know how it works.
  I am convinced that the Reid amendment creates in the Federal budget 
process the fundamental conditions that make a balanced amendment work 
for the States.
  Matching expenditures with income is the first essential of balancing 
a budget. The principle of pay as you go has to be inviolate for a 
balanced budget to work.
  Cash on the barrel head is the way to pay as you go with an operating 
budget. It is not prudent to pay in part or pay later for something 
that won't be around later. We've gotten ourselves in a great deal of 
trouble because we've violated that principle.
  Like the Simon amendment, the Reid amendment requires the Federal 
Government to balance operating expenses with current revenues.
  But pay as you go doesn't mean the same thing for an operating budget 
and a capital budget. With a capital budget, pay as you go means 
matching the duration of expenditures with the duration of assets. You 
set aside part of today's income to amortize assets over their 
serviceable life. If you pay for long-term assets today, you totally 
miss the point of matching expenditures with income.
  Congress has a legitimate responsibility to finance expenditures that 
build the Nation's resources. Capital assets created by those 
expenditures remain in service beyond a single budget cycle, and they 
should be paid for over the period that they're in service. A separate 
capital budget is the appropriate way to finance capital assets, and 
that's what the Reid amendment gives us.
  I have more than a little experience dealing with State and municipal 
debt--not as much experience, thank heaven, as other State treasurers 
have had--but I have had the experience of borrowing money.
  Mr. President, many times during this debate, I've heard the same 
question: What right to we have obligating future generations to pay 
for our spending? My answer is that we have every right, provided that 
the benefits extend to future generations.
  Again, the distinction lies between current operating expenditures 
and capital investment expenditures. The Reid amendment imposes a 
three-fifths vote requirement for deficit spending in the operating 
budget. It would take 60 percent of this Chamber to spend tomorrow's 
money on today bills.
  That is serious and necessary discipline. Some might say it is 
hamstringing discipline--too tough. I reply that it ought to be tough 
to do the wrong thing.
  But it would not--and rightfully would not--hamstring our ability to 
raise money for capital assets that span generations. The Reid 
amendment is the proper framework through which we can separate 
obligations we incur for ourselves and for future generations. And 
while doing that, the Reid amendment enforces the required discipline 
on current operating expenditures
  By the same token, the Reid amendment retains the flexibility to use 
fiscal policy as a tool of countercyclical economic policy. It enables 
us to react to national emergencies and national threats. These, too, 
are legitimate duties of Government and legitimate reasons for 
temporarily setting aside the stern requirements of budgetary 
restraint.
  Many of us in this Chamber and millions of Americans have seen 
expansionary fiscal policy save us from economic calamity. With our 
budget the way it is, we virtually have forfeited any chance to recover 
from recession using fiscal policy.
  A balanced budget will restore fiscal policy as an economic tool. But 
after we've wrung decades of excess from the budget, we must assure we 
still have the option of expanding spending in an economic emergency. 
The Reid amendment preserves this option.
  War and emergencies are exceptional and uncommon. They touch the 
lives of all Americans only rarely. The same cannot be said for the 
programs that operate under Social Security.
  Senator Reid has already offered us impressive statistics 
illustrating the importance of Social Security not only to retirees but 
also to families and children. We need no statistics to tell us 
something we all know: the American people want our hands off of Social 
Security. They do not trust Congress to preserve this vital program in 
ways that serve them. Whatever we reassure them to the contrary, they 
believe we will gut Social Security to balance the budget if we have 
to.
  And I must say that at some future date--as spending swells--as 
pressures mount from years of abuse, as the relation between taxes and 
spending grows ever more strained, their fears could be proved right.
  The comingling of Social Security funds and general revenues 
increases the likelihood of this happening. What's more, the comingling 
of Social Security funds into the general fund disguises the real size 
of the problem we're facing. It is time to do what needs doing, make 
Social Security the separate, secure, and self-sustaining entity it was 
intended to be.
  Social Security is not the reason we're in this budgetary problem, so 
let's separate it from the budgetary problem by separating it from the 
budget.
  This is a good idea on its own merits irrespective of the balanced 
budget debate. Pension programs routinely are segregated into separate 
accounts in State and corporate finance. Many times, it's not accurate 
to draw that parallel with Federal programs, but in this case the 
comparison is apt. Social Security is a contributory program that is 
separate and distinct from general government programs. It should be so 
on our ledgers as well.
  Mr. President, throughout this debate our colleagues have referred 
repeatedly to the budgetary standards and practices that State 
governments have adopted. They have called upon the Federal Government 
to implement similar standards and practices because they see what 
those methods have achieved. I would say, in all respect to my 
colleagues, that my four decades of service as a State financial 
officer have given me extra insights into our debate.
  All of my years and all of my experience convince me that Senator 
Reid's amendment creates the kind of discipline that has worked for 
State governments. It takes the crucial step of dividing operating 
budgets from capital budgets. It enables us to make the distinction 
between approval for responsible and irresponsible debt. It allows 
flexibility to meet fiscal emergencies, and it takes the wise step of 
safeguarding the Social Security trust fund.
  Mr. President, this has been an emotional issue and an issue that 
invites political posturing.
  I believe we should set aside the emotion and take an approach 
dictated by rationality. And if we do what's rational, I believe we'll 
not merely support a balanced budget amendment but actually pass one.
  On the basis of every principle that's made State constitutional 
fiscal restraint amendments work, Senator Reid's amendment is the one 
we should pass.
  Ms. MOSELEY-BRAUN. Mr. President, the fact that Illinois ranks 48th 
among the 50 States in the rate of return on the tax dollars 
Illinoisans send to Washington may, in an ironic way, explain why 
Senators from the State of Illinois are able to see the forest for the 
trees, and thus support a balanced budget amendment to our 
Constitution.
  The trees are the horror stories of economic and fiscal catastrophe 
that opponents so earnestly argue. Social programs, they say, will be 
cut so dramatically as to cause public suffering and chaos.
  Social Security, the most sacred of entitlements, is threatened by 
the balanced budget amendment, they say. It is, of course, not lost on 
anyone that the Social Security constituency is the most powerful in 
the Nation. This list of horribles which is pointed to by opponents 
then goes on to span the gamut from defense cuts to child welfare 
programs. By making a lot of good caring people nervous about what can 
happen to them--to go back to the forest and trees analogy again--the 
opposition has taken log-rolling to new heights.
  On a more scholarly note, opponents also cite the dangers inherent in 
not being able to deficit spend in times of economic contraction. The 
Government's ability to pump money it doesn't have to stimulate the 
economy saves us, they argue, from the severity of economic downturns, 
and allows fiscal policy to serve when monetary policy can not.
  None of this is lost on the proponents and supporters of the balanced 
budget amendment. The forest, we maintain, is in crisis precisely 
because of the incapacity of the Congress and successive Presidents to 
make the choices needed to put our Nation on a sound financial footing. 
Between 1978 and 1992, the annual deficit grew more than sixfold, from 
$54 billion to $340 billion. Over the same period, our overall national 
debt grew nearly as fast, increasing more than fivefold from less than 
$800 billion to over $4 trillion. And we are today spending well over 
$230 billion, or over $600 million each day, just to make the interest 
payments on that growing national debt.
  In this same time period, most families had to resort to two, instead 
of one, worker in the household, largely because the buying power of 
their earnings declined. And it is worth keeping in mind that, even 
with two-worker households, many American families did not keep up with 
inflation; their standard of living declined even as they worked 
harder.
  Persistent Federal deficits, and the infiltration they helped 
inspire, hit the poorest Americans even harder. Their real income 
dropped by roughly 40 percent, in spite of the fact that nondefense 
Federal spending more than tripled over the 1978-1992 era--rising from 
$354 billion in 1978 to $1.082 trillion in 1992.
  This is directly attributable to our fiscal imprudence. Each and 
every member of each American family now owes over $18,000 to pay for 
decisions long forgotten.
  The real insult of this habitual resort to debt is in what it is 
doing to our children. We are essentially living off a credit card, 
with the bills being saved to present to our children and 
grandchildren. The ``Analytical Perspectives'' volume of this year's 
``Budget of the United States Government'' makes the point clearly. In 
a frightening table, it concludes that, even with health care reform, 
generations of Americans born after 1992 will have to pay an incredible 
73.9 percent of their lifetime income in taxes. Is that really the 
legacy we want to leave our children?
  Mr. President, I first ran for public office on a platform of 
providing more help to Americans that so need Federal help. I want to 
see us do more in areas like education, housing, health care, and 
economic development. I want to deal with the root causes of 
homelessness and the root causes of crime. My entire political career 
has been about helping people and communities; no one is more concerned 
about these problems than I am.
  I did not run for the Senate because I thought that Federal deficits 
and the national debt make helping people and communities impossible. 
And I do not believe that acting on a balanced budget constitutional 
amendment makes action on a strong social agenda impossible now. 
Instead, what the deficits and the debt present us with is a 
challenge--a challenge to rigorously set our budget priorities, a 
challenge to spend smarter and more efficiently, and a challenge to set 
our budget priorities, a challenge to spend smarter and more 
efficiently, and a challenge to concentrate Federal resources where 
they are really needed. The Government will have to reinvent itself in 
regards to domestic programs--and that reinvention is critically needed 
with or without a balanced budget amendment. In fact, any reasonable 
look at the conditions we currently confront compels the conclusion 
that we need to revisit our approach to these domestic problems in any 
event.

  The Constitution shouldn't be lightly tinkered with. True. But the 
requirement of a balanced budget amendment is an item specifically 
called for by the Framers of the Constitution, including Thomas 
Jefferson. Indeed, it was advocated by the Father of our Country, 
George Washington himself. However, to that generation, it was thought 
to be so basic a tenant of prudent policy that it was unnecessary to 
make it a part of the Constitution.
  Moreover, the balanced budget amendment is not a rigid, mechanical 
requirement that would preclude Government from acting in the national 
interest. For example, it has a safety valve, in case of war or a 
situation that threatens the national security of the country, the 
Congress would be free to spend and borrow as necessary. In all other 
cases, however, a three-fifths vote would be required to spend more 
than we have.
  The last time the budget was balanced was in 1969, 25 years ago. We 
have been through recessions since then, and periods of strong economic 
growth. Only one thing has been constant--the Federal red ink.
  Mr. President, I believe that the Federal Government has a 
responsibility to help Americans who want to work, but who, because of 
temporary economic conditions or other reasons, find themselves out of 
work. But the Federal Government needs to act in a way that doesn't 
hurt working and poor Americans--and that is where the Federal fiscal 
policy has failed. It has hurt working Americans; it has hurt poor 
Americans. Only the wealthiest Americans have been able to benefit from 
continuous Federal deficits.
  Keynesian economics says that Federal deficits can help stimulate the 
economy in recessions. But Keynesian economics also calls for balancing 
Federal budgets over the business cycle. The evidence of the last 25 
years suggests that the Federal Government is currently unable to 
balance its budget in either good times or bad. The balanced budget 
constitutional amendment is designed to change that.
  No specific cuts are dictated by the amendment, and it will still be 
possible to run deficits in a recession if that is what the President 
and Congress think makes sense. Rather, the most fundamental thing the 
amendment does is to change the political calculus required in making 
Federal fiscal policy decisions. It builds in greater political 
accountability. The President and Congress will have to explain to the 
American public why a deficit is needed in a particular year. The 
current situation, where everyone involved, including past Presidents 
and the Congress, acts as if the Federal budget is uncontrollable and 
takes no responsibility for deficits, is what will be ended.
  Making the President and Congress more accountable for deficits is 
perhaps the most important reason the balanced budget amendment is 
needed. To see why, all anyone has to do is look at Government from the 
viewpoint of ordinary Americans. Congress is held in the lowest public 
esteem at any time in my lifetime. Federal deficits are headed down, 
but the public does not even believe the numbers. Past failures and 
past short-term budget trickery have created a kind of public cynicism 
that actually undermines the ability of the Government to work--and 
which actually prevents the Federal Government from helping people.
  This cynicism is corrosive. The benefits of ending the corrosion are 
incalculable. With public support, there is a lot we can do to make the 
future brighter and to open up opportunities for every American. The 
cost of not acting, however, is equally incalculable. Continued 
pervasive cynicism and distrust of Government jeopardizes the ability 
of Government to act in the public interest, and indeed, undermines the 
very foundation of our political system.
  Mr. President, we must act; we cannot afford not to act. I decided to 
run for the Senate when my 15-year-old son said: ``Mom, your generation 
has left this world worse off than you found it.'' I am determined to 
prove him wrong. Unless we act, ours will be the first generation of 
Americans to bequeath a lower standard of living to our heirs and 
successors. Unless we act, our political legacy to the generations that 
will follow is will be one of distrust and cynicism. They, and we, 
deserve better.


   WHAT A BALANCED BUDGET AMENDMENT WOULD MEAN TO AMERICA'S VETERANS

  Mr. ROCKEFELLER. Mr. President, I want to take a few moments to talk 
about the uniquely negative impact a balanced budget amendment to the 
Constitution would have upon the brave men and women who have defended 
this country. Veterans of the U.S. Armed Forces make up a select group 
within American society, and our Nation could never have enjoyed the 
strength and security it is blessed with today without the tremendous 
contributions they have made. As chairman of the Committee on Veterans' 
Affairs, I cannot ask America's veterans to forsake the benefits and 
services they earned through military service because of the Federal 
deficit.
  Mr. President, I support the idea that each American must do his or 
her part to help solve our economic problems. Everyone's belt must be 
tightened. This year's budget submitted by the President does just 
that. We have an obligation, however, to ensure that veterans of this 
country don't bear an undue burden from our effort to get the 
Government's fiscal house in order. Many of America's veterans depend 
on VA's programs and services, much like America once depended on them. 
To reward the loyalty and service veterans have given with a hollow 
promise is unacceptable.
  What would this balanced budget amendment to the Constitution mean 
for the men and women who have given so much of themselves to their 
country already? It would mean, Mr. President, that they would be 
forced to give of themselves again.
  It is impossible to predict with complete accuracy how this 
amendment, if adopted, would impact America's veterans. However, 
Secretary of Veterans Affairs Jesse Brown has estimated in recent 
testimony that this amendment would result in an 11.4-percent cut in 
veterans' services, totaling $4.3 billion--$2.3 billion in entitlements 
and $2 billion in discretionary programs. These figures assume that 
Federal revenues would not increase through taxation, and that cuts 
resulting from this amendment would be spread equally across the board, 
Governmentwide. While some supporters of the amendment claim that they 
do not intend to make further cuts in veterans' services, the fact is 
that there is nothing in the amendment before the Senate that would 
shield veterans' programs from the indiscriminate budget policy 
inherent in this amendment. If defense spending or Social Security 
benefits were exempted, as has been proposed, the impact to veterans 
would increase substantially above these 11.4-percent figures.
  Mr. President, $4.3 billion is a lot of money, and I want to explain, 
in real terms, how cuts of this magnitude would affect veterans 
everywhere. The proposed amendment would take effect in fiscal year 
1999, but for purposes of illustration, I will use fiscal year 1995 
figures since they will undoubtedly be more accurate. There is no way 
to be sure how much higher these figures would be in fiscal year 1999.
  This amendment would cripple the VA health care system, and could 
result in the closure of approximately 20 VA medical centers. This 
would lead to denying nearly 325,000 of America's veterans VA health 
care, and employment at VA medical centers would be reduced by 24,500 
full-time employees. Additionally, VA would be forced to eliminate over 
3 million outpatient visits and over 142,000 inpatient stays annually. 
The activation of newly constructed medical facilities would be 
eliminated or postponed, and VA's ability to compete under health care 
reform would be close to impossible. And all this at a time when the VA 
health system is only serving about 10 percent of our veterans.
  Mr. President, the average annual compensation paid to the 2.2 
million veterans with service-connected disabilities would be reduced 
by $634, from the current amount of $5,602 to $4,968. In the case of a 
totally disabled veteran requiring aid and attendance in order to avoid 
admission to a hospital or nursing home, the veteran's annual 
compensation would decline by $2,495, from the current amount of 
$24,444 to $21,949.
  Veterans with service-connected disabilities who seek vocational 
rehabilitation would have to wait 4 to 5 months for an initial 
interview, and no followup on the veteran's progress would ever ensue; 
surviving spouses of veterans would be forced to wait 6 months for the 
proceeds from their spouse's insurance policies--long after funeral 
homes would begin demanding payment for services; and VA home loan 
foreclosures would increase substantially due to the forced 
discontinuance of loan processing within VA.

  For the 342,000 veterans receiving educational assistance under the 
GI bill, the average benefit would be cut by $287, from the current 
amount of $2,427 to $2,140. These benefits were earned through a 
combination of dedicated service and a $1,200 payroll deduction from 
each veteran's pocket. Such a reduction would prove detrimental to many 
veterans' prospects for a higher education, particularly in an era when 
tuition costs continue to rise.
  Mr. President, it is even more symbolic that the cuts resulting from 
a balanced budget amendment would deny VA burial to more than 12,000 
veterans annually. Cemeteries would have to be closed--35 of VA's 58 
cemeteries which still offer full services to first interments would be 
closed to meet the required reductions in full-time employees. This 
amendment would also reduce VA's ability to mark the graves of our 
Nation's veterans by 35,000 headstones.
  Mr. President, this amendment would impose cuts upon many more 
programs and services for veterans than I can mention here today, and I 
stress to my colleagues that the other cuts would be equally unjust and 
harmful. It might seem tempting to think that we can control the 
Federal deficit by using a simple formula written into the 
Constitution, but we cannot. It requires skilled leadership and the use 
of tools already available to the Federal Government. With this year's 
budget legislation, the President and Congress have begun to exercise 
that leadership. This is no time to pretend there is some easier way.
  Mr. President, certain benefits and services were promised to the men 
and women who helped to defend our country. By passing this amendment, 
we are not only sending all Americans a message that we are unable to 
exercise leadership, but also that Government is unwilling to honor its 
obligations to those individuals who have brought honor to their 
Nation.
  Mr. DOLE. Mr. President, poll after poll has shown that the majority 
of Americans support a balanced budget amendment to the Constitution. 
That makes the Senators who want to vote for more spending and against 
the balanced budget amendment nervous. So instead of resolving to make 
the tough choices, they have put forward a balanced-budget-lite-
amendment to give themselves political cover.
  Two weeks ago, one budget expert predicted and I quote--``There are 
going to be some Members who are going to have to have an alternative 
proposal that they can vote for in order to give them cover to come out 
against the Simon proposal.'' He added, ``If you just allow people to 
say `are you for or against a balanced budget,' you'll lose it.'' 
That's not Bob Dole talking--That's President Clinton's Budget Director 
Leon Panetta.
  Let's face it, this amendment is political fig leaf, and a pretty 
skimpy one, at that. Let no one be fooled into believing that this so-
called balanced budget amendment will come anywhere close to balancing 
the budget. For starters, this amendment only requires that the 
operating budget be balanced. That means all spending for Federal 
Investments would be outside the reach of this constitutional 
amendment.
  Now what exactly would be counted as an off-budget Federal 
investment? Scientific research and development? The construction of 
Government office buildings? The purchase of military hardware? Human 
capital investments, such as job training and education? Or even social 
investments in national health care and drug abuse treatment?
  If the big spenders have their way, the definition of Federal 
investment could be as broad enough to include almost everything the 
Federal Government does. That won't leave much Federal spending subject 
to the discipline of a balanced budget amendment.
  Another big loophole in the Reid alternative is the recession waiver. 
This provision would suspend the balanced budget requirement if the 
Director of the Congressional Budget Office declares a recession.
  How long do you think it would take for the big spenders in Congress 
to pressure CBO to predict convenient annual recessions? That is an 
additional burden the Congressional Budget Office does not need or 
want. If Congress decides the economic situation warrants deficit 
spending, then let us come up with 60 votes to waive the amendment. 
That is what the Simon-Craig amendment requires and I don't think it is 
unreasonable.
  The ultimate failing of the Reid amendment is that it does not 
require a supermajority vote to raise the debt limit. Senator Simon 
included this requirement as a protection against misestimates. With 
the Reid amendment, there is nothing to keep congressional budget 
estimators honest. As long as a balanced budget is predicted, no cuts 
are required, even if we later learn the predictions were nothing but 
smoke and mirrors.
  No doubt about it, the Reid balanced budget amendment substitute has 
so many loopholes, you could drive a $300 billion deficit through it. 
So, if you support real budget discipline, as most Americans do, save 
your ``yes'' vote for the only real balanced budget amendment to the 
Constitution--the Simon-Craig amendment.
  Mr. COATS. Mr. President, I rise today in opposition to the Reid 
substitute amendment. The Simon-Hatch-Craig balanced budget amendment 
is the product of hundreds of hours of debate; thousands of hours of 
testimony; years of consensus building in Congress and in the States. 
The Reid constitutional amendment has not had the benefit of any 
similar careful review.
  Over the last several days, Members have come to the floor and 
expressed their grave concerns about amending the Constitution with the 
Simon amendment. I admit that amending the Constitution is serious 
business--the most serious act of which the Congress is capable. But I 
wonder if any of those Senators who have been reluctant to amend the 
Constitution will now find it acceptable to vote for the Reid 
constitutional amendment.
  And, let there be no mistake. A vote for Reid is a vote for the 
status quo or worse. The Reid amendment calls for the balancing of the 
operating expenses of the Federal Government but exempts so-called 
capital investments. By keeping capital investments out of the mix, the 
amendment creates a huge loophole that will likely cause deficits to 
rise. It would allow the Federal Government to fund programs to its 
heart's content by classifying them as capital investments and thus 
moving them off-budget.
  Moreover, the Reid substitute does not even define capital 
investment, and there is no commonly held Federal budget concept of 
this term. President Clinton's fiscal year 1995 budget, for example, 
contains five broad categories of spending totaling $234 billion that 
may or may not be defined as a capital expenditure.
  With today's votes, we hold our credibility in our hands. We can 
prove our commitment to deficit reduction to a nation that doubts it, 
or we can maintain the status quo and continue to mortgage our Nation's 
fiscal future.
  The Simon amendment is an opportunity--a chance to leave our children 
a legacy other than monumental debt. It is also a chance to restore 
some needed trust in this institution. The trust of our citizens, just 
like their tax dollars, has been spent and wasted as though it would 
never end. But that supply, too, has run out.
  If Congress kept its commitments, no constitutional amendment would 
be required. Yes, it is a shame that an amendment is necessary. But it 
is necessary because Congress has lost its shame.
  The PRESIDING OFFICER. All time has expired on the amendment.

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