[Congressional Record Volume 140, Number 21 (Wednesday, March 2, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 2, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                     THE BALANCED BUDGET AMENDMENT

  Mr. MURKOWSKI. Madam President, it is this Senator's contention that 
yesterday this body missed a historic opportunity to end the Federal 
Government's three-decade-long addiction to deficit spending and 
uncontrolled debt. I know there is a difference of opinion among a 
number of my colleagues on that point, but nevertheless it is still the 
conviction of the Senator from Alaska.
  I think we will recall that the Republican leader indicated last 
evening the issue of amending the Constitution to require a balanced 
budget is an issue that is not going to go away. It is undoubtedly 
going to return next year. In my opinion, it is going to return the 
year after, if it is not taken care of.
  I predict that before this decade is over we will add this amendment 
to our Constitution for the very reason that we have been unable to 
address deficit spending, and all actions we have taken to reduce the 
debt have been to no avail.
  We all recall Gramm-Rudman I, Gramm-Rudman II, and the Budget Act of 
1990.
  I am willing to forecast that the taxpayers out there are not going 
to forget the action taken last night. I think they are going to hold 
every one of us accountable for our vote yesterday.
  But, Madam President, I want to refer specifically to some remarks 
made last evening by the distinguished majority leader, Senator 
Mitchell, for whom I have the highest esteem. He correctly observed 
during the debate yesterday that the State governments do not always 
balance their budgets, but they balance their books. And, of course, 
the majority leader is correct.
  He pointed out that States often have to borrow in the credit markets 
to finance the construction of many new things--new roads, schools, 
pollution control facilities, and a host of other capital investments. 
There is certainly nothing wrong with a State or local government 
borrowing to finance long-term investments--new bridges, airports, 
schools, roads, and so forth. I would certainly concur that is in the 
public interest.
  Nor is there really anything wrong when an individual family borrows 
to purchase a major asset, such as a home. It is the only way that most 
of us can achieve that kind of financial commitment.
  But what the majority leader did not point out, and I think most of 
my colleagues are aware, is that the current Federal Government 
borrowing has really nothing to do with long-term investments. Because 
the difference, Madam President, is the current Federal Government is 
borrowing to pay interest--interest--on that debt. It is not borrowing 
to put in roads, invest in schools, airports, and so forth. We are at 
the current time and for the next several years borrowing for the sole 
purpose of paying interest on that debt. It is the position of the 
Senator from Alaska that, indeed, there is a difference between the 
Government's borrowing and providing specific services and necessities 
that are needed in this country and borrowing to pay interests on the 
debt.

  This year, our interest costs are about $212 billion. That is what it 
costs us to service that 4.5 trillion dollars' worth of national debt. 
If we did not have to pay that $212 billion, we would have operating 
surpluses, I am told, of approximately $40 billion. A surplus, not a 
deficit.
  According to the Congressional Budget Office, all the money we have 
to borrow over the next 8 years totals $1.673 trillion. The interesting 
thing is all of that money is going to be used to pay interest on the 
debt. None of it is going to provide roads, airports, schools, sewers, 
police--you name it. That is $1.673 trillion we will not be investing 
to update the Nation's infrastructure or build new hospitals or upgrade 
our inner city areas that are crumbling. And not a single job will be 
created, not a single program will benefit from that outlay of $1.673 
trillion that is going for interest. It is interest on top of interest 
and all it does is increase the size of our national debt.
  Madam President, I take issue with the generalization made by the 
majority leader that there is nothing wrong with borrowing. I think 
there is a definitive difference, if you will, between borrowing and 
mortgaging the future.
  I was in the banking business prior to coming to the U.S. Senate. One 
of the great temptations of a banker, when a loan is delinquent, is to 
bring the borrower in, rewrite the loan, and make it current. That is 
how the banker gets his interest paid, and the interest is the income 
that helps to show a profit. Banks are not allowed to rewrite loans to 
add interest to the principal and create an illusion they are 
generating earnings. All the bank is doing is creating a false income 
stream.
  But that is what we are doing here. We preclude the private sector 
from doing this because it is a terrible business practice; it is a 
straight road to bankruptcy. But that is what we are doing in the 
Federal Government here, in the sense that we are borrowing $212 
billion to service our $4.5 trillion debt. We are not building anything 
with it. We are not providing any new jobs.
  I want to reiterate the point. The majority leader was correct when 
he said there is nothing wrong with borrowing for long-term investment. 
I could not agree more with him on that statement. But borrowing year 
in and year out for the sole purpose of covering your interest costs is 
an entirely different matter, and it leads to bankruptcy. It is a 
policy that our Government enforces through the Comptroller of the 
Currency.
  The Federal Deposit Insurance Corporation does not allow our private 
sector businesses to do that. It simply says you cannot take a 
delinquent loan, bring in the borrower, have him or her sign an 
extension to bring it current and add your delinquent interest to the 
principal and pay yourself back, because it is such a terrible business 
practice. It would weaken the institution, weaken the capital base, and 
mislead the shareholders and the general public.
  That is just what we are doing. We are misleading the public into 
believing that we can go on and indefinitely borrow, pile interest and 
debt on top of interest and debt, ad infinitum, without there being 
serious long-term consequences to the health and vitality of our 
domestic economy. Mr. President, future generations will bear the 
burden of our failure to come to grips with our debt addiction.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. METZENBAUM. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. Murray). Without objection, it is so 
ordered.

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