[Congressional Record Volume 140, Number 29 (Wednesday, March 16, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                BALANCED BUDGET CONSTITUTIONAL AMENDMENT

  The SPEAKER pro tempore. Pursuant to House Resolution 331, the Chair 
declares the House in the Committee of the Whole House on the State of 
the Union for the consideration of the joint resolution, House Joint 
Resolution 103.

                              {time}  1214


                     in the committee of the whole

  Accordingly the House resolved itself into the Committee of the Whole 
House for the consideration of the joint resolution (H.J. Res. 103) 
proposing an amendment to the Constitution to provide for a balanced 
budget for the U.S. Government and for greater accountability in the 
enactment of tax legislation, with Mr. Skaggs in the chair.
  The Clerk read the title of the joint resolution.
  The CHAIRMAN. Pursuant to the rule, the joint resolution is 
considered as having been read the first time.
  Pursuant to the order of the House of Friday, March 11, 1994, the 
gentleman from Texas [Mr. Brooks] will be recognized for 2 hours; the 
gentleman from California [Mr. Gallegly] will be recognized for 2 
hours; and the gentleman from Texas [Mr. Stenholm] will be recognized 
for 2 hours.
  The gentleman from West Virginia [Mr. Wise] is designated by the 
gentleman from Texas [Mr. Brooks] to control his 2 hours.
  The Chair recognizes the gentleman from West Virginia [Mr. Wise].
  Mr. WISE. I yield myself such time as I may consume.
  Mr. Chairman, today begins 6 hours of general debate on this subject. 
I appreciate the gentleman from Texas [Mr. Brooks] designating me to 
control his time.
  Mr. Chairman, I stand here as a supporter of an alternative 
amendment, and in so doing that, opposing the so-called Stenholm 
amendment.
  Before I do that, I do want to thank the gentleman from Texas [Mr. 
Stenholm], who at every step along the way has structured a fair 
debate. He has made sure that every point of view has a chance to be 
heard, and I think that during the next 2 days the country will have 
the opportunity to fully explore this issue.
  I am delighted to be here, to have a chance to participate in this, 
because in much of my discussion I will be talking about the so-called 
Wise-Price-Pomeroy-Furse amendment that we offer as an alternative to 
the so-called Stenholm amendment.
  Mr. Chairman, this debate is going to be very helpful for a lot of 
reasons. First of all, it will cause us all to be focusing on deficit 
reduction efforts, those efforts that have been made, as well as those 
that need to be made. We will hear a lot of discussion on that.
  Mr. Chairman, I am very excited about this, because this debate is 
going to be the first opportunity I have really had in probably 10 
years to talk about capital budgeting. It will be the longest-running 
debate we have had on this subject.
  Regardless of the outcome today and tomorrow, I think that this 
debate is going to propel capital budgeting, that is, making basic 
decisions about investments for our country and how we invest our 
country's dollars for long-term economic return, I think it is going to 
put capital budgeting on the agenda and will be something revisited a 
great deal. Therefore, if for no other reason, I thank the gentleman 
from Texas [Mr. Stenholm] for convening us here today to promote that.
  This debate is going to be about how we can help our economy grow, 
because while there will be some who argue that deficit reduction in 
and of itself is a worthwhile goal, and certainly deficit reduction is 
important, deficit reduction without economic growth is a hollow 
victory. So a balanced budget amendment, if you are going to lock 
something into the Constitution, you have to remember that one of the 
goals has to be economic growth as well.

  Mr. Chairman, basically the amendment that the gentleman from North 
Carolina [Mr. Price], and the gentleman from North Dakota [Mr. 
Pomeroy], the gentlewoman from Oregon [Ms. Furse], and myself will be 
offering will be significantly different from others that will be 
considered here over the next many hours.
  First, Mr. Chairman, it will take Social Security off-budget. What 
that means is that Social Security, which is, in my opinion, a self-
generated fund, people pay into it and they draw from it, Social 
Security will finally receive that protection that most of the people 
in this Chamber, at some time, have stood up in a senior citizen 
meeting and said, ``We want it to happen, we want Social Security off-
budget. I'm going to go to Congress and I'm going to fight for it.''
  By golly, if you are going to write a constitutional amendment 
dealing with balancing the budget, you had better protect Social 
Security. We will be talking more about that, I am sure, as the day 
goes on.
  Mr. Chairman, the second provision of our amendment is that it has 
something that no other amendment has. That is a provision that says 
that capital budgets will be permitted in the context of the balanced 
budget amendment. We must balance our operating income, our day-to-day 
expenses. A capital budget does not have to be scored and accounted for 
in the same way.
  What is a capital budget? We define it in our amendment as something 
that produces long-term economic growth. The first reaction, obviously, 
is that applies basically to physical infrastructure: roads, bridges, 
water systems, sewer systems.
  Others would extend it further than that. Does it apply to Federal 
buildings, for instance, that GSA builds? Does it apply to grants that 
are made by the National Science Foundation for equipment that is 
involved in research? Does it apply to R&D, research and development?
  Rather than trying to write a tight definition and accommodate 
everybody in a constitutional amendment, for instance, the gentleman 
from Pennsylvania [Mr. Clinger] and I have a bill in, 1182, that 
defines capital budgeting in terms of only physical infrastructure, but 
takes many pages to do so. We leave it to the Congress to implement 
this, but with the proviso there must be long-term economic return to 
justify it.

                              {time}  1220

  So two significant differences already, Social Security off-budget 
and capital budgeting as part of our budget policy.
  The third significant difference, whereas most of the other 
amendments that will be considered, if fact, I think all of them would 
require three-fifths of the body, 60 percent to vote to waive the 
deficit spending prohibitions in any given year, we permit only two 
reasons to waive those, and that would be by a majority vote, only two 
reasons, war or military conflict No. 1, and No. 2, recession as 
defined as two-quarters of negative economic growth.
  So we feel that in many ways we take off the board some of the 
excuses that could be used to relax this amendment. Our amendment takes 
place in the year 2001, as I believe does the Stenholm amendment, and 
is fairly close to the other amendments.
  I want to make some general observations about balanced budget 
amendments. Incidentally, I want to get it out in the open right now 
that I am well balanced on this issue. I have been against the Stenholm 
amendment in years past; I have been for the Stenholm amendment in 
years past. Now I am offering an alternative to the Stenholm amendment. 
So I think I have seen this one from every side, and constantly sought 
to reconcile the needs of deficit reduction and economic growth with 
what we put into the Constitution.
  My first observation is this: That the easiest vote that a Member can 
cast on the floor over the next couple of days is to vote for a 
balanced budget amendment. That is an easy vote. It makes everybody 
feel good. They can clap, and they can cheer, and we can go home, and 
you can put out a press release on it.
  The toughest vote, and that is the one that comes right after, is how 
do we implement the darn thing, how do we actually make it happen. Let 
me say as I get into this debate in no way as I challenge people to 
talk about how they would implement it, how they would take that tough 
vote, I want to acknowledge particularly the gentleman from Texas is 
one who not only fights for his balanced budget amendment, but also 
fights to implement it, and has been supportive of legislation in the 
past that would direct how it would be implemented, so I just wanted to 
call that to Members' attention. Putting a goal into the Constitution 
is one activity. That is the easy one. The hard one then comes of how 
do we implement it, and what are the cuts that you are willing to make, 
and what are the taxes you are willing to raise, what are the programs 
you are willing to reduce, and how is it that you are going to bring 
about growth.

  I want to make another observation. Many people say well, it is time 
to pass this budget, a balanced budget amendment so that we can make 
the Federal Government operate just like a family does. And I am 
prepared to do that. I think the family budget and the Federal budget 
have some similarities.
  But in doing that, I want to first point out that no family that I 
know, at least in the circles that Sandy and I run in, operates on a 
balanced budget in the way that the Federal Government technically is 
required to. I do not know about other Members, but we have a mortgage. 
We cannot afford to pay for our cars up front. We have to go borrow 
money to do that. We have to borrow money for our children's education. 
We think that is something that we get a long-term return on. So it is, 
that each of us as a family member in our budgets, separate very 
clearly out the dollar that is spent going to the fast food store, or 
standing in line at the grocery store for in effect a dollar that is 
spent 1 day with no direct return beyond that, versus a dollar that is 
spent for long-term gain, a house, an education, an automobile, 
whatever.
  Once again, think of businesses. Businesses separate out very closely 
and carefully what it is that is true investment and what it is that is 
consumption. Wages are consumption. That is operating income. But a 
machine tool company that invests in a new piece of equipment that it 
thinks will help increase its productivity knows that is a capital 
investment with a long-term return. In the Federal budget we need to be 
doing the same with a capital budget. That mile of four-lane highway 
that the Federal Government puts 80 percent of their funds in to build, 
that is a capital investment that most people would acknowledge has a 
return for many, many years. That telecommunications structure, that 
bridge, that airport that the FAA is involved with, that water and 
sewer system, particularly if it links up to an industrial park that 
creates jobs, those are all clear capital expenditures.
  But yet, under our present budget system, and under the amendments 
that would be considered here too, it would not be considered as a 
capital investment, and indeed a balanced budget amendment of the 
nature that others have written and will be debating today would 
actually I think discourage that type of investment. So if we want to 
bring the Federal budget in line with the family budget and the 
business budget, then indeed I think we need to be looking seriously at 
capital budgeting.
  At this point we are going to be discussing it in much more detail.
  Mr. INHOFE. Mr. Chairman, will the gentleman yield?
  Mr. WISE. I am happy to yield to the gentleman from Oklahoma.
  Mr. INHOFE. Mr. Chairman, I thank the gentleman for yielding. I would 
only make the point that he draws a very close analogy between the 
family budget and the Federal budget. Like many of us, he does the same 
as I do. But when we borrow money to buy a car, and we borrow money to 
buy a home, does the gentleman pay it back?
  Mr. WISE. I always pay it back, and I have in my income-debt service 
when we budget that, we know how much we owe each month and so, 
therefore, we write it in there. Under my proposal of capital 
budgeting, that amendment called debt service would be included in 
operating income. We are not moving these items off the budget so that 
they are never paid for. We are moving this debt service, what it costs 
each year to build them, we are including that, but we are permitting 
the cost of the asset to be spread out over the useful life of that 
asset.
  Mr. INHOFE. I would suggest to the gentleman I am talking about what 
we have been doing, not what we are planning to do, and the difference 
is when government borrows the money, it does not and historically has 
to paid it back. It still will owe it in future generations.
  Mr. HOYER. Mr. Chairman, will the gentleman yield?
  Mr. WISE. I am happy to yield to the gentleman from Maryland.
  Mr. HOYER. Mr. Chairman, I thank the gentleman for yielding.
   Mr. Chairman, first of all, the gentleman knows where I am coming 
from as a cosponsor of the Stenholm amendment. But I do not want to 
misrepresent to the American people that the U.S. Government is 
currently paying its debt, period. We have always paid our debt.
  The problem is it is growing very rapidly, and we continue to charge. 
But it would be incorrect to represent that we are not paying our debt. 
In fact, we are paying our debt, as the gentleman knows, to the tune of 
about $300 billion this year.
  Mr. INHOFE. But if the gentleman will yield further, it is not 
incorrect to say that our debt is greater each month that goes by, and 
that is not what we could get by with in our family budget.
  Mr. WISE. Reclaiming my time, the gentleman from Maryland [Mr. Hoyer] 
is absolutely correct. It is true that the debt and the debt service is 
growing. However, the Federal Government has been paying it. The 
problem is that it is squeezing more and more on that budget, and it 
does rule out those programs and operations that perhaps the gentleman 
might want to be involved in, and I might want to be involved in. That 
is why deficit reduction is important.
  At the same time, in the name of deficit reduction, I do not want to 
be squeezing out those investments that bring us back a greater 
economic return that helps our economy to grow, and indeed helps our 
budget process as well. That is why I think it is very clear if we are 
going to put into the Constitution of the United States of America a 
provision that we must have a balanced budget, that we have to have in 
it the kind of fiscal policy that encourages investment, not 
discourages.
  Mr. Chairman, I reserve the balance of my time.
  Mr. STENHOLM. Mr. Chairman, I ask unanimous consent that my 2 hours 
be divided equally for purposes of control, 1 hour to myself and 1 hour 
to the gentleman from Oregon [Mr. Smith].
  The CHAIRMAN pro tempore (Mr. Fingerhut). Is there objection to the 
request of the gentleman from Texas?
  There was no objection.
  Mr. STENHOLM. Mr. Chairman, I yield myself such time as I may 
consume.
  (Mr. STENHOLM asked and was given permission to revise and extend his 
remarks.)
  Mr. STENHOLM. Mr. Chairman, first may I say I appreciate the spirit 
in which this debate has begun. I think the gentleman from West 
Virginia [Mr. Wise], has properly made the point regarding capital 
budgeting, an issue that we now will have the opportunity to focus on 
and discuss, and I would say at any time any Member wishes to interrupt 
me in my opening statement, I would be glad to yield to them so that we 
can get seriously into the debate of the question before us, both the 
constitutional amendment and some of the other rhetoric that we will 
hear from time to time about what we are in fact discussing today.
  Mr. Chairman, I did not come to the point of proposing an amendment 
to the Constitution lightly. I share the view that we should be 
extremely judicious in proposing changes to the Constitution. However, 
I have been convinced that an amendment limiting the ability of 
Congresses and Presidents to borrow money is a necessary and 
appropriate addition to the Constitution. I believe that our sustained 
deficits are the result of a fundamental change in the operation of our 
Government and that limiting our ability to borrow money represents 
that type of timeless principle that should be enforced in the 
Constitution. I believe that the balanced budget amendment meets these 
tests of principle and timelessness.
  There has been a fundamental change in the understanding of the role 
and responsibilities of the Federal Government under the Constitution 
since it was first adopted. As Dr. William Niskanen noted in testimony 
before the House Budget Committee in 1992, the Constitution grants to 
Congress relatively few powers that involve the potential for 
significant expenditures. The Framers clearly believed that this would 
serve as a check on the size of Government.
  The fiscal Constitution limiting the activities of the Federal 
Government, combined with the unwritten moral imperative to balance the 
budget, made an explicit limitation on the ability of the Government to 
borrow money redundant.
  The revolution in Constitutional and economic policy that came with 
the New Deal effectively eliminated these checks on Federal 
expenditures. Without the checks provided by a strict interpretation of 
the enumerated powers, Congress created numerous programs that have 
placed tremendous pressure on the Federal budget and brought us to 
where we are today. The Framers of the Constitution could not have 
foreseen these circumstances, since they believed that they had 
explicitly limited the scope of the Federal Government.
  Today, a constitutional amendment restricting the ability of the 
Government to borrow money is an appropriate response to this dramatic 
change in the public perception of the appropriate role of Government.
  The threat of economic and political harm from continued deficit 
spending is the type of governmental abuse appropriately proscribed by 
the Constitution. This point was made by Thomas Jefferson, who said:

       The question whether one generation has the right to bind 
     another by the deficit it imposes is a question of such 
     consequence as to place it among the fundamental principles 
     of government.

  Even Prof. Laurence Tribe of Harvard, a leading opponent of the 
amendment, told the Senate Budget Committee in 1992 that ``The 
Jeffersonian notion that today's populace should not be able to burden 
future generations with excessive debt, does seem to be the kind 
of fundamental value that is worthy of enshrinement in the 
Constitution. In a sense, it represents a structural protection for the 
rights of our children and grandchildren.''

  House Joint Resolution 103 is based on exactly the same principle as 
the rest of the Constitution: It would protect the fundamental rights 
of the people by restraining the Federal Government from abusing its 
powers.
  One of the main purposes of the Constitution was to put certain 
rights and powers beyond the reach of the tyranny of the majority.
  Senator Byrd recently made an eloquent statement on behalf of this 
principle, stating that:

       There have come times when the protection of a minority is 
     highly beneficial to a nation. Many of the great causes in 
     the history of the world were at first only supported by a 
     minority. And it has been shown time and time again that the 
     minority can be right. So this is one of the things that's so 
     important to the liberties of the people.

  This amendment is very much within that spirit. Requiring a higher 
threshold of support for deficit spending will protect the rights of 
future generations who are not represented in our political system but 
will bear the burden of our decisions today. The fundamental premise of 
the amendment can be summed up by a single sentence: The ability to 
borrow money from future generations is a power of such magnitude that 
should not be left to the judgments of transient majorities.
  George Will, one of the many former opponents of the balanced budget 
amendment who are now supporting it, wrote in November of last year:

       A system that selectively enhances the leverage of intense 
     minorities is not inherently violative of the morality of 
     democracy. And morally dubious things should be difficult to 
     do. Given the tendency of our democracy to impose taxation 
     without representation--deficit spending, which saddles the 
     unborn with debts, amounts to that--it is proper to empower a 
     minority to inhibit abuses by the majority.

  Those who focus on the difficulty of achieving a three-fifths 
majority to deficit spend are missing the point of this amendment. They 
are still stuck in the status quo, still focused on what's necessary to 
run a deficit. Those who raise concerns about how the BBA would 
``undermine majority rule'' imply that imposing debts on future 
generations is just another ordinary policy decision like every other 
one that is appropriately left to simple majority. The possibility of a 
three-fifths debt limit vote is a deterrent. Facing it is so 
undesirable that Congress and the President generally would do anything 
to avoid it--even balance the budget.
  This amendment does not represent the end of majority rule. A 
minority would have leverage in exactly one instance: When the majority 
abdicates its responsibility to produce a balanced budget. In that 
case, a 60-percent supermajority would have to go on record to approve 
a deficit. The amendment does not affect the ability of a majority to 
spend on programs it deems important and to set budget priorities as it 
sees fit.
  Some legitimate questions have been raised about how this amendment 
will be enforced. We have answered these concerns completely in 
previous debate on the amendment, and will do so in this debates as 
well.
  House Joint Resolution 103 is self-enforcing through the three-fifths 
majority required in Section 1 to authorize outlays in excess of 
receipts and through the requirement in section 2 for a three-fifths 
vote to raise the limit on the debt held by the public. No matter what 
accounting techniques are used to depict a balanced budget, and 
regardless of any ``rosy scenario'' economic assumptions, smoke and 
mirrors, or honest estimating mistakes, if actual outlays exceed actual 
receipts, the Treasury ultimately would need to borrow in order to meet 
the Government's obligations. This would require three-fifths votes in 
both the Senate and House to raise the debt limit.
  The threat of a ``train wreck'' on the debt limit provides a powerful 
incentive for truth-in-budgeting, because Congress and the President 
could not escape the consequences of policies that increased the debt.
  The courts will have an extremely limited role in enforcing this 
amendment if both Congress and the President abdicate their 
responsibilities. Assuming that Congress does not address this issue in 
implementing legislation, which is extremely unlikely, the courts would 
be limited to finding individual acts of Congress unconstitutional and 
to restraining the executive from some action that would violate the 
amendment. The separation of powers doctrine and a long line of 
judicial precedents make it clear that courts would leave the policy 
decisions on how to comply with the amendment to the political 
branches.
  Members of Congress and the President do take seriously our vow to 
uphold the Constitution. Once the principle that we should not be able 
to burden future generations with excessive debt is enshrined in the 
Constitution, it will be clear whether or not Congress and the 
President have met their obligation established by this amendment. The 
public will hold accountable any official who ignores this 
constitutional mandate. This accountability will provide the ultimate 
enforcement of the amendment.
  Mr. Chairman, we need something to force us to do what we know is 
necessary. I wish I did not have to stand here and say that, but I 
believe in my heart that it is the truth.
  I urge support of House Joint Resolution 103.

                              {time}  1230

  Mr. Chairman, I reserve the balance of my time.
  Mr. GALLEGLY. Mr. Chairman, I yield 8 minutes to the gentleman from 
New York [Mr. Fish], who has served this House honorably for 26 years, 
and who much to the regret of almost everyone in this House, yesterday 
announced his retirement.
  This gentleman has been a tremendous help to me, in the time that I 
have served in Congress, as our ranking member of the Committee on the 
Judiciary. He is a true gentleman and a friend of the entire Nation.
  (Mr. FISH asked and was given permission to revise and extend his 
remarks.)
  Mr. FISH. Mr. Chairman, I thank my colleague, the gentleman from 
California, for his generous remarks.
  Mr. Chairman, on three prior occasions--in 1982, 1990, and 1992--
supporters of a balanced budget amendment in this body mustered 
lopsided majorities but fell short of the two-thirds affirmative vote 
the Constitution requires. This week, as we revisit a critically 
important issue, I look forward to my fourth opportunity to vote for 
the balanced budget constitutional amendment--recognizing with regret 
that the need for constitutional change is greater than ever.
  The $1.1 trillion Federal debt at the end of fiscal year 1982 will 
reach approximately $4.7 trillion by the end of fiscal year 1994--a 
fourfold increase since we first debated the balanced budget amendment 
on this floor. Our failure to act more expeditiously has greatly 
exacerbated the heavy burden our enormous national debt imposes on our 
children and grandchildren. When we shirk our responsibility to pay our 
own bills, we unfairly transfer the costs of our self-indulgence to our 
descendants.
  Decisions to amend the Constitution must not be made lightly. If a 
legislative remedy exists, that obviously is preferable to a change in 
our fundamental charter. Some have argued over the many years of this 
debate that we should utilize the legislative process to balance the 
budget before resorting to a constitutional amendment. We have tried 
that repeatedly. Legislation has not worked.
  The national debt has continued to climb in spite of the 1974 Budget 
Act, the 1985 Gramm-Rudman-Hollings Act, the 1990 Budget Reconciliation 
Act, and the 1993 Budget Reconciliation Act. Congress waived the 
constraints of the Budget Act hundreds of times. The experience with 
Gramm-Rudman-Hollings provided strong evidence that Congress encounters 
virtually insurmountable pressures to circumvent deficit ceilings when 
those ceilings lack constitutional status.
  In the fall of 1990, Congress completed an arduous effort to come to 
grips with the deficit, cutting approximately $500 billion over 5 
years, only to see the deficit rise in the next fiscal year. Last 
summer, Congress enacted legislation the administration argued would 
reduce the deficit by a similar amount--roughly half a trillion 
dollars--during the 1994-98 period. Even taking such claimed savings 
into account, OMB estimates the national debt will reach $5.953 
trillion by the end of fiscal year 1998, more than five times the level 
of just 16 years earlier, and an increase of $1.277 trillion during the 
4 fiscal years beginning this October. Although the Congressional 
Budget Office anticipates relatively flat deficits in the $166 to $182 
billion range during fiscal years 1995 through 1998, steep increases 
thereafter are projected even with the steps Congress has taken to date 
to address the decifit.
  A balanced budget amendment is essential to overcome the current free 
spending habit of the Congress. It is far easier for an individual 
legislator to vote for spending increases than it is to support a 
balanced budget. Those who advocate spending for particular programs 
are in a stronger position to influence Congress than those who seek to 
restrain the growth of spending.
  A new or expanded program may have a major impact on a particular 
constituent group. The advocates of spending possess a focused interest 
that facilitates action--in contrast to the more diffuse public 
interest in resisting specific increases in expenditures. It is for 
this very reason that I support--as a needed enforcement mechanism--a 
line-item veto tailored specifically to this amendment.
  The problem, of course, is that projects may add little to the 
deficit--when viewed in isolation--but have a major impact when viewed 
collectively. The balanced budget constitutional amendment, by making 
it more difficult to engage in deficit spending, encourages Members of 
Congress to view the overall consequences of particular spending 
decisions. The proposal is to require a three-fifths vote of each 
House, of its total membership, before outlays may exceed receipts.
  An amendment making it more difficult for Congress to disregard 
balanced budget principles is an appropriate addition to our 
Constitution. The Framers accepted the concept of a balanced budget and 
could not have foreseen late 20th century America's excessive reliance 
on deficit spending. The balanced budget constitutional amendment is an 
expression of our Nation's recognition that Government should spend 
within its means--a value our constitutional Founders shared.
  Economic matters clearly fall within the Constitution's purview. The 
treatment of interstate commerce, taxation, and property rights provide 
examples of a constitutional design that gives substantial attention to 
economics. The argument that our Constitution must maintain neutrality 
on economic issues disregards the reality of a Constitution that 
incorporates economic rules. An expression of preference for adherence 
to balanced-budget principles would have sounded superfluous two 
centuries ago--but is far from superfluous today.

  A constitutional amendment protects future generations, those who 
will bear the burden of an increased public debt but who cannot 
participate in decisions to increase that debt. The requirement of a 
three-fifths vote of the total membership of each House to increase the 
public debt represents a recognition of the impact of debt increases on 
generations unrepresented today in our political institutions. Laws 
increasing the public debt should reflect a broader consensus of our 
society than ordinary legislation.
  The constitutional amendment that I am prepared to support will help 
rather than hinder our national capacity to maintain essential programs 
for older Americans. By bringing the rapidly increasing national debt--
and mushrooming interest payments--under control, we relieve pressures 
to curtail Social Security and Medicare benefits. We also provide 
protection against the erosion of benefits that can accompany a future 
inflationary cycle.
  The balanced budget constitutional amendment should require a three-
fifths vote of the total membership to increase taxes. Such provision 
is appropriate to discourage reliance on tax increases alone to bring 
the budget into balance.
  The United States undoubtedly will confront situations justifying 
departures from the norms that underlie this constitutional amendment. 
The proposed amendment does not bar deficit spending, public debt 
increases, or new taxes, but rather incorporates special voting 
requirements in order to do so. In a national emergency or period of 
economic dislocation, the proposal should contemplate that Congress 
will vote to take the appropriate action--whether that involves 
engaging in deficit spending, raising the debt ceiling, or altering the 
tax burden. The important point is that decisions to deviate from 
economic norms will be made--in the national interest--with greater 
care and thoughtfulness.
  The understandable reluctance to amend the Constitution, if 
legislation will solve a problem, must now give way, in my view, to a 
recognition that legislation has not prevented astronomical increases 
in the national debt. I call upon those who have been skeptical about 
such an amendment in the past to join with me now in supporting 
constitutional change. We simply cannot afford to lose more ground in 
our effort to bring Government spending under control.

                              {time}  1240

  Mr. PRICE of North Carolina. Mr. Chairman, I yield myself such time 
as I may consume.
  First, Mr. Chairman, I want to join my colleague from California in 
paying tribute to our friend, the gentleman from New York [Mr. Fish] in 
saluting him for his years of distinguished service and saying how much 
we will miss him around here. I also welcome his contribution to this 
debate.
  Mr. Chairman, as we begin general debate, it is critical that we 
remind ourselves of some of the basics. What is the purpose of deficit 
reduction, after all, and of budget policy in general? We need, of 
course, to reduce the deficit. Equally important, we need to redirect 
spending into investments in areas that will pay off for our country in 
the future. Reduce spending, and redirect spending.
  Now, the budget deficit that we are running frustrate both goals and, 
in devising a remedy, we have got to take care that we address them 
both in a credible way.
  The Federal budget deficit squeezes out private and public 
investment, and it does so directly and indirectly. It not only soaks 
up our Nation's savings, but it also forces trade-offs between popular 
consumption expenditures and long-term investments as we write the 
Federal budget each year. The Stenholm version of the balanced budget 
amendment, I fear, could make that situation worse, given the political 
appeal of entitlements. We all can attest to that.

  So we need to ask ourselves: Is there a way to devise a balanced 
budget amendment that, while it would result in reduced spending, would 
also encourage and enhance investment? The answer, I believe, is the 
alternative amendment which Mr. Wise, I, and other members have 
developed.
  Now, our amendment, like the Stenholm amendment, would require that 
the Federal budget be balanced by the year 2001. Like Mr. Stenholm, we 
would require the President to submit a balanced budget for each fiscal 
year, and we provide for waivers when a declaration of war is in effect 
or when there is an imminent or serious military threat to national 
security or in cases of severe economic downtown.
  But there are key differences between our amendments. We place the 
Social Security surplus off budget, thus ending a loophole that would 
hide the true magnitude of the Federal deficit. Our proposal would help 
insure the integrity of the Social Security trust fund as opposed to 
using the near-term surplus to make the deficit appear smaller than it 
actually is.
  As we move the pass a constitutional amendment requiring a balanced 
Federal budget, we have got to make certain that Social Security is not 
jeopardized because politicians clamoring for a balanced budget 
amendment are unwilling to make the tough decisions required to 
actually achieve balance. We cannot hide behind that short-term Social 
Security surplus.
  The Wise-Price-Pomeroy-Furse amendment also provides for 
distinguishing between the operating costs of Government and key 
capital investments. Most States that have a balanced budget amendment 
provide for the financing of key capital investments, like roads, 
schools, and sewer systems. States provide this exemption for a very 
good reason: They know that these investments have a long-term benefit 
to the residents and the economy of the State. And it is foolish not to 
make these investments.
  Like families who take out a mortgage to finance a home, capital 
budgeting permits a Government to finance investments providing long-
term economic returns.
  In our amendment we also require the Federal Government, like a 
family or like a State, to pay back those investments over time. This 
is a sensible provision, and it is also much stronger than the capital 
budgeting provision in the Reid proposal in the Senate which allowed 
for the financing of investment but did not credibly provide for annual 
principal and interest payments to be included in the operating budget.
  Our amendment, unlike the Stenholm proposal and other proposals, 
preserves the principles of majority rule. It is incomprehensible to me 
that requiring a three-fifths' majority to increase taxes or to raise 
the debt ceiling could be viewed as sound budget policy. We all know 
this stipulation would increase the ability of a small minority of 
Members to hold policies hostage, to extract political favors for 
themselves.
  As Al Hunt of the Wall Street Journal has agreed, ``This minority 
rule has the effect of decreasing accountability, increasing the 
influence of special interests, and creating a general chaos that 
serves neither the politicians nor the people well.''
  This rings true, does it not, for any of us who have endured in this 
Chamber the posturing that too often has a accompanied our debt ceiling 
votes?
  I agree that we must set high standards for any breach of a balanced 
budget, but we can do it in a way that does not create the problems 
foreseen by Mr. Hunt and does not violate the principles of majority 
rule.

                              {time}  1250

  Under the Wise-Price-Pomeroy-Furse proposal, the requirement could 
only be breached in time of war, a threat to national security, or an 
economic recession. These waivers would not be automatic. Congress 
would have to pass and the President agree to these waivers, preserving 
accountability. Unlike the proposal of the gentleman from Texas [Mr. 
Stenholm], in times where these emergency conditions did not apply, no 
waiver would be possible, by three-fifths vote or otherwise.
  So, these waiver requirements are more stringent than those contained 
in other proposals.
  The Reid amendment in the Senate allowed for an automatic exemption 
in time of economic recession or war. Furthermore, the Reid amendment 
provided, like the Stenholm amendment, a waiver from the requirement of 
a balanced budget anytime three-fifths of the Congress agreed. Our 
amendment removes this supermajority loophole, allowing no exemption 
whatsoever except under carefully defined circumstances.
  In closing, I know that today we will hear a lot about the Wise-
Price-Pomeroy-Furse amendment providing political cover for Members.
  Our opponents are already saying that to the press. Well, I just want 
to say very clearly that the only people who are getting political 
cover from any of the balanced budget amendments are those who tend to 
go AWOL when it actually comes time to cut spending and reduce the 
deficit. Let me be perfectly candid, and I think this is an astounding 
figure:
  Of the 262 cosponsors of the Stenholm amendment, fully 207 were not 
there when it counted on August 5. They were a.w.o.l. when the time 
came to actually reduce the deficit, to put an ambitious 5-year deficit 
reduction plan in place.
  Now some of these Members had earlier voted for a weaker alternative 
offered by the gentleman from Ohio [Mr. Kasich] which would have 
reduced the deficit by $70 billion less, but on that earlier vote, Mr. 
Chairman, 65 of the cosponsors of the balanced budget amendment voted 
against both the Democratic and the Republican plans.
  We are making progress on the deficit, but no thanks to these 
Members. Remember, it was just a year ago that the 1995 deficit was 
projected at over $300 billion. The projection now is something like 
$170 billion. Not good enough, but more progress than we've seen in a 
long time. The way to achieve that kind of progress is to make the 
tough votes, the kind of votes we had last summer. The only people who 
need political cover from a balanced budget amendment are those who are 
not willing to make those votes, those who, when it came time to break 
gridlock and to make the difficult decisions, were not to be found.
  So, Mr. Chairman, in closing I urge my colleagues to support the 
Wise-Price-Pomeroy-Furse amendment. It builds in a constructive way on 
the work of the gentleman from Texas [Mr. Stenholm]. We know that he 
has labored for many years with great dedication on this issue. We have 
learned from him. We track his language in several areas. But we also 
correct what we honestly believe to be deficiencies in his approach: In 
dealing with Social Security, in discouraging long-term investment, and 
in permitting violations of majority rule. These are, we believe, 
serious problems. We believe we have corrected them while retaining the 
basic constitutional discipline to put and keep our fiscal house in 
order.
  Mr. Chairman, I look forward to this debate as an opportunity to 
explore these issues, and I urge a vote in favor of the Wise-Price-
Pomeroy-Furse amendment as the best mechanism before us for 
successfully combining these crucial dual goals of deficit reduction 
and responsible investment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SMITH of Oregon. Mr. Chairman, I yield myself such time as I many 
consume.
  Mr. Chairman, as the principal Republican sponsor of House Joint 
Resolution 103, I rise in support of a Constitution amendment to 
require a balanced Federal budget.
  When I came to Congress in 1983, I was concerned that deficit 
spending was hampering economic growth, burdening our children with 
mountains of debt, and limiting our potential to provide an opportunity 
for prosperity and the American dream to everyone.
  So I joined my friend and our former colleague Senator Larry Craig--
who is now leading the charge in the Senate--in taking on the balanced 
budget amendment, which the respected Barber Conable had advocated for 
many years.
  A few years later we were joined by Charlie Stenholm. In offering the 
amendment before us today, Charlie and I are joined by Olympia Snowe, 
Jim Inhofe, L.F. Payne, and Joe Kennedy. Together we have constructed, 
along with Senator Orrin Hatch and Senator Paul Simon, a broad, 
bipartisan, bicameral coalition in support of this amendment. I am 
proud of that effort, whatever the outcome of tomorrow's vote.
  Mr. Chairman, in 1983, I was shocked and angered that Congress had 
allowed the accumulation of a $1 trillion debt. Today, with the debt 
rapidly approaching $5 trillion--I am that much angrier. I am 
particularly angered by the cavalier attitude Congress has displayed in 
assuming it has the right to burden future generations with massive 
debt.
  This country, and this Congress, are not supposed to be about the 
game of chasing down pork, grabbing what we can, and damning our 
children with our irresponsibility. We are not operating in a vacuum--
our actions have consequences.
  Many of my colleagues have joined in mocking Congress' appetite to 
spend, and we've even been able to pass a few laws requiring Congress 
to curb spending. Since 1982, we've passed five balanced budget 
statutes. But each time we were faced with the choice of cutting 
spending to meet statutory deficit targets or waiving the statute--
Congress waived and spent and waived and spent.
  We didn't learn from Gramm-Rudman, we didn't learn from the 1990 
budget summit, and we certainly haven't learned from the Clinton plan--
Congress simply cannot balance the budget by chipping away at 
discretionary spending and raising taxes. In fiscal year 1994, 
discretionary spending will comprise only 37 percent of the Federal 
budget. By 1999, it will make up barely 30 percent of the budget, at 
which time mandatory spending will engulf 70 percent of the budget.
  In addition, the Congressional Budget Office estimates the annual 
deficit will rise to nearly $300 billion by 2002. Clearly, even with 
the passage of the Clinton tax plan hailed by many of my Democratic 
colleagues, deficits can only be controlled if the runaway growth of 
mandatory spending is addressed. Only a balanced budget amendment will 
force Congress to find the political will to make the comprehensive 
spending reforms necessary to balance the Federal budget.
  Today, the need for a balanced budget amendment is as great as it has 
ever been. During this debate, many of our opponents will argue that 
the deficit is declining to a manageable level and that there is no 
need to change the Constitution. Well, if the deficit was projected to 
remain at a manageable level, I might agree. However, as this chart 
illustrates, the sea of red ink, which may be suffering from a 
temporary drought, will continue to overflow near the turn of the 
century under current trends.
  Yet, we will hear the same tired criticisms of our amendment. We will 
hear that it would end the Social Security system as we know it, that 
it is unenforceable and would give the courts too much authority, that 
it would strait jacket our ability to make economic policy, that it 
would force dramatic and immediate reductions in Government programs 
and services, and that we don't need the amendment because we can make 
the tough choices on our own.
  These numerous, misleading, and often conflicting arguments basically 
boil down to two points: First, the amendment won't work, or second, it 
would be so draconian it would be worse than deficit spending itself. 
Mr. Chairman, I fail to see how something that won't work can be 
draconian. That contradiction aside, the opponents are wrong on both 
counts.
  Opponents know it would work, and that is why they oppose it. Prior 
to the Senate debate last month, the White House invited several 
special interests, including those who represent agriculture, to come 
in and discuss the perils of the balanced budget amendment. The 
agricultural groups were informed by the White House staff that if the 
balanced budget amendment were to pass, funding for their programs 
would be slashed to the bone.
  However, in a November 5, 1993, letter to Speaker Foley in which 
President Clinton outlined his opposition to the balanced budget 
amendment, he said, and I quote:

       We must reject the temptation to use any budget gimmicks to 
     hide from the specific choices that are needed for long-term 
     economic renewal.

  Well, which is it--an ineffective gimmick or a draconian machete?
  In the midst of these conflicting criticisms, we do know there is at 
least one Presidential adviser who acknowledges the need for the 
balanced budget amendment--refer to chart with Gergen article. I just 
wish Mr. Gergen was not helplessly outnumbered.
  The balanced budget amendment will not cause the sky to fall, and it 
will work. Our amendment would not be effective until fiscal year 2001 
or 2 years after ratification, whichever is later. It would be 
fundamentally dishonest to suggest that it would be impossible for 
Congress to responsibly reach a balanced budget over the next 7 years.
  But make no mistake about it: balancing the budget will require 
discipline, and it will require tough choices. Without the amendment, 
these choices will never be made. The rejection of the bipartisan 
Penny-Kasich and Kerrey-Brown proposal emphasize this discouraging 
reality.
  Above all, the balanced budget amendment will change the psychology 
of how we do business. The typical big spending, pork-barrel way will 
be reformed. Unlike the way we operate today, the bill will come due. 
Gone will be the time-honored practice of grappling for every scrap of 
pork you can find. The new measure of effectiveness will be how much 
you can save, not how much you can spend.
  Mr. Chairman, when the dust settles, there will be two clearly 
defined sides in this debate--there will be the side of special 
interests, the status quo, and the irresponsible, pork barrel spending 
that got us into this mess. Or there will be the side of our children, 
our grandchildren, and the generations to follow them, to whom we have 
already left a $4.5 trillion debt.
  If you support the balanced budget amendment, you will be in good 
company. Not only is the amendment supported by a bipartisan majority 
of both the House and Senate, polls have consistently indicated that 
over 70 percent of the American people support a balanced budget 
amendment.
  Mr. Chairman, I wish there were another way to compel Congress to 
balance the Federal budget. Sadly, there is not. Only a constitutional 
mandate will provide the courage to attack our chronic institutional 
spending problem. I urge my colleagues to support the Stenholm-Smith 
balanced budget amendment to the Constitution.

                              {time}  1300

  Mr. Chairman, I reserve the balance of my time.
  Mr. GALLEGLY. Mr. Chairman, I ask unanimous consent to yield 30 
minutes of the time allocated to me to be controlled by the gentleman 
from Oregon [Mr. Smith].
  The CHAIRMAN. Is there objection to the request of the gentleman from 
California?
  There was no objection.
  Mr. SMITH of Oregon. Mr. Chairman, I yield 5 minutes to the gentleman 
from Oklahoma [Mr. Inhofe], who has been one of the cofounders and 
inspirational leaders of the balanced budget amendment, not only in his 
own State but across the Nation.
  Mr. INHOFE. Mr. Chairman, I thank the gentleman for yielding this 
time to me.
  Mr. Chairman, we are going to be talking about a lot of things that 
will be redundant. I want to cover five things that I don't think 
others will be covering.
  First of all, this body, whether we like it or not, is going to have 
to start listening to the American people, and the American people on 
this subject have very clearly demonstrated what their feelings are.
  I have a Penn-Shore poll that was scientifically conducted of over 
1,000 adult Americans that comes to this conclusion. I would like to 
have all my fellow Members who are going to be making a decision as to 
how they are going to vote on this listen to this. It asks the 
question: How likely would you be to support a candidate for Congress 
who supports a balanced budget constitutional amendment? The results 
were 72 to 13. And when adjusted for those with no comments, 82 percent 
of the people in America who understand clearly what a balanced budget 
amendment is said they would be more likely to support Members of 
Congress who support a budget-balancing amendment.
  There are a lot of people who do not believe that. I can remember a 
very fine young woman who served in this Chamber from the Second 
District of Missouri, Ms. Horn, who campaigned on a balanced budget, 
but who changed her mind during the time she was in this environment 
and she decided to vote against it in 1992.
  Ms. Horn is not with us anymore, and that contributed to her defeat. 
That is going to happen to several other Members.
  I would like to suggest that there is a lot of discussion about 
senior citizens. I think I have attended as many or perhaps more town 
hall meetings on an annual basis than most Members of Congress, and a 
lot of senior Members come to these meetings. When I tell them about 
the real issue, they say they are supportive of a balanced budget 
amendment.
  This is a publication of the Senior Coalition that came out where 
they talk about the three steps to save Social Security: pay-as-you-go, 
independent agency, and the third step, which they actually have 
listened as No. 1, is a balanced budget amendment to the Constitution. 
The point is this: Currently 40 percent of all the income tax that is 
paid in this country is paid to service the debt that we have created 
so far, I realize there will not be enough money left over if we do not 
take fiscal steps.
  The third thing I want to mention is a misconception, and that is 
that only Republicans or conservatives are concerned about a balanced 
budget amendment. Let us keep in mind that the Senate author of Senate 
Joint Resolution 41 is Senator Paul Simon, who is certainly not a 
conservative Democrat. He is a moderate-to-liberal Democrat, and he has 
carried the charge over in the Senate. Certainly on our side, the 
gentleman from Texas [Mr. Stenholm] is not a Republican; he is a 
Democrat. Many individuals who are liberals realize that the only way 
we are going to have revenues to spend on the great needs that we have 
is to discipline ourselves fiscally. In fact, I suggest those Members 
who are liberals looking for an excuse to vote for this should go back 
and read an article by a Tokyo economist in the publication entitled 
``The International Economy.'' The name of that is ``America's Budget 
Deficits, They Redistribute Income to the Rich.''
  The fourth point I want to bring out is this: Let us not just talk 
about the wisdom of the American people. Let us look at people who do 
this for a living, people who are the leading economists in this 
country. I have a list here of the 250 leading economists in this 
country. There is one from a university in every single State that is 
represented here in the U.S. Congress, and they come to the conclusion 
that the only way we are going to be able to balance the budget is to 
discipline ourselves fiscally through a constitutional amendment, 
because we have demonstrated over the past 40 years that we are 
incapable of doing it without that.

                              {time}  1310

  The last point I want to make is one that is the moral issue. You 
know, the gentleman from Texas [Mr. Stenholm] quoted Thomas Jefferson a 
few minutes ago. But he did not go quite far enough, because I want to 
give another quote that Thomas Jefferson made. If you remember, Mr. 
Chairman, in your history lessons, Thomas Jefferson was not in the 
United States during the Constitutional Convention. When he came back 
to the United States and he looked at the product that came out, he 
said:

       If I could add one amendment to the Constitution, it would 
     be to prohibit the Federal Government from borrowing money. 
     We should consider ourselves unauthorized to saddle posterity 
     with our debts and morally bound to pay them ourselves.

  Finally, Mr. Chairman, let me introduce, since you would like to know 
these two individuals, the one on the left is Glade Inhofe, and the one 
on the right is Maggie.
  Mr. Chairman, studies show that somewhere between 45 and 70 percent 
of the lifetime income of my two grandchildren and all others who are 
born at this time will be used to service the national debt. This is 
not a fiscal issue we are dealing with today. This is clearly a moral 
issue.
  Mr. WISE. Mr. Chairman, I yield such time as she may consume to the 
gentlewoman from Oregon [Ms. Furse], a cosponsor of the Wise-Price-
Pomeroy-Furse substitute.
  Ms. FURSE. Mr. Chairman, I rise today in support of the Wise-Price-
Pomeroy-Furse constitutional amendment to balance the budget.
  As a new Member of Congress, I came to Washington determined to help 
get the Nation's fiscal house in order. But after a little more than a 
year, I am not convinced that with the current state of politics, we 
have either the will or the courage necessary to accomplish this goal. 
Yet, Mr. Chairman, we must accomplish this goal. Nothing less than the 
economic security of our children and our country is at stake.
  I believe that one of the very prominent reasons that we in the 
freshman class came to this Congress was to do something about reducing 
the deficit. And we have made some progress. As a result of the deficit 
reduction agreement I supported this fall and the 1995 budget 
resolution I voted for last week, the deficit is at its lowest level in 
years.
  But I am increasingly frustrated by the unwillingness of many Members 
of Congress to cut unnecessary spending and make the choices needed to 
balance the budget. Some of those who refuse to cut this unnecessary 
spending are outspoken deficit hawks. They talk regularly about cutting 
deficits, but when they are given real opportunities, they often turn 
aside.
  Last week there was an amendment before this House to keep the 
Defense Department budget from growing by $2.5 billion. That was 
additional to the budget we agreed on. I was stunned when that 
amendment did not pass. In this day and age, there was no justification 
for any increase in that budget. In my view, $262 billion was enough.
  Now, Mr. Chairman, I sometimes believe that if our foremothers had 
been involved in writing the Constitution, we might have had a balanced 
budget in it, because women are so often involved with trying to keep 
their families living within their budgets.
  So for those reasons, the reasons I have stated, I have concluded 
that we must amend the Constitution to require a balanced budget, and I 
am very reluctant to tamper with this most sacred document. But it 
seems that we have no other choice.
  My plan, however, will make some critical differences with the 
amendment offered by the gentleman from Texas [Mr. Stenholm]. First, 
the Stenholm amendment does not take the Social Security trust fund off 
the budget and away from deficit calculations. If his amendment were to 
pass, senior citizens in Oregon alone would lose about $1,000 each 
year. My amendment would protect that most vulnerable group of 
citizens, these senior citizens, and it is a more honest measure of the 
deficit.

  I would like to put it this way. It is not really right or 
particularly honest to take Social Security out of the budget because 
it masks the fact--because there is a surplus in the Social Security 
budget, it masks the fact that the deficit is in fact larger than we 
like to calculate.
  In other words, if you take Social Security out, as we do in our 
amendment, we are much tougher and much more fiscally responsible, 
while we still protect the benefits of millions of older Americans who 
earned those benefits through their own hard work.
  There is another important distinction in the Wise-Price-Pomeroy-
Furse amendment, and that is, I believe more and more as I work in this 
body, that the Government needs to operate more like a business.
  Now, businesses routinely borrow money if it is for a long-term 
investment, something that will give something back, that will increase 
future profits. I quite frankly do not know of any business, whether it 
is Intel Corp., the largest employer in my district, or my own small 
vineyard that I operate with my husband, that does not believe in 
investing, in investing some money in something that will return in 
long-term benefit. When you buy a house, when you send your children to 
college, you do so because you think that is an investment, that is 
something that I will get something back from in a long-term way, that 
there will be a real economic benefit.
  The Stenholm amendment precludes the Government from borrowing funds 
for capital, and it renders it nearly impossible to make cost-effective 
investments. Our amendment even ensures that the Federal Government 
uses sound business practices by establishing a capital budget, 
requiring that long-term investments be paid for over their useful 
life.
  I would like to quote right now from the New York Times an editorial 
where, in fact, they opposed a balanced budget amendment, but they 
said, ``No rational business or government would balance a budget this 
way.'' They are talking about taking capital investment out. 
``Businesses borrow to invest. Even States required to balance their 
operating budgets borrow for capital investment.''
  It seems sensible to me if we are looking for change, we should look 
first at successful models. I looked to my own constitution, the Oregon 
Constitution, which was written, I should add in 1859. It includes an 
exception for capital expenses. Our amendment would allow Congress 
under a majority vote to temporarily waive the balanced budget 
requirement in the event of only two things: war and a recession of two 
terms, two quarters.
  Under these and only these two circumstances, could the Federal 
Government run a deficit, and in this regard, I believe that our 
amendment is even tougher than the gentleman from Texas [Mr. 
Stenholm's].
  Ultimately, the amendment will force the Congress to make the choices 
necessary to balance the budget. States and local governments have done 
this for years. In other words, the Wise-Price-Pomeroy-Furse amendment 
will force Congress to do what it is elected to do. It will put our 
economic house in order and provide the Nation with a secure economic 
environment for decades to come.
  Mr. Chairman, I urge the adoption of the Wise-Price-Pomeroy-Furse 
amendment.
  Mr. WISE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I thank the gentlewoman from Oregon [Ms. Furse], who 
has been instrumental in crafting this. I would note for Members that 
you should have hand delivered to your office the latest copy of the 
amendment that we will be offering tomorrow. Additionally, we will be 
asking that there be printed in the Record for tomorrow as well a copy 
of our balanced budget amendment. Third, we should have copies here at 
some point on the table that Members can pick up. So I would urge 
Members to scrutinize this carefully.
  Mr. Chairman, I include a copy of our amendment for the Record.


    amendment to h.j. res. 103 Offered By Mr. Wise of West Virginia

       Strike all after the resolving clause and insert the 
     following:
       That the following article is proposed as an amendment to 
     the Constitution of the United States, which shall be valid 
     to all intents and purposes as part of the Constitution if 
     ratified by the legislatures of three-fourths of the several 
     States within seven years after its submission to the State 
     for ratification:


                               ``article

       ``Section 1. Total outlays of the operating funds of the 
     United States for any fiscal year shall not exceed total 
     receipts to those funds for that fiscal year.
       ``Section 2. The Congress may waive the provisions of this 
     article for any fiscal year in which a declaration of war is 
     in effect. The provisions of this article may be waived for 
     any fiscal year in which the United States is engaged in 
     military conflict which causes an imminent and serious 
     military threat to national security and is so declared by a 
     joint resolution, adopted by a majority of the whole number 
     of each House of Congress, that becomes law. If real economic 
     growth has been or will be negative for two consecutive 
     quarters, Congress may by law, passed by a majority of the 
     whole number of each House of Congress, waive this article 
     for the current and next fiscal year.
       ``Section 3. Not later than the first Monday in February in 
     each calendar year, the President shall transmit to the 
     Congress a proposed budget for the United States Government 
     for the fiscal year beginning in that calendar year in which 
     total outlays of the operating funds of the United States for 
     that fiscal year shall not exceed total receipts to those 
     funds for that fiscal year.
       ``Section 4. Total receipts of the operating funds shall 
     exclude those derived from net borrowing. Total outlays of 
     the operating funds of the United States shall exclude those 
     for repayment of debt principal and for capital investments 
     that provide long-term economic returns but shall include 
     annual principal and interest payments for borrowing on 
     capital investments. The receipts (including attributable 
     interest) and outlays of the Federal Old-Age and Survivors 
     Insurance Trust Fund and the Federal Disability Insurance 
     Trust Fund shall not be counted as receipts or outlays for 
     purposes of this article.
       ``Section 5. Congress shall enforce and implement this 
     article by appropriate legislation, which may rely on 
     estimates of outlays and receipts.
       ``Section 6. This section and section 5 of this article 
     shall take effect upon ratification. All other sections of 
     this article shall take effect beginning with fiscal year 
     2001 or the second fiscal year beginning after its 
     ratification, whichever is later.''.

                              {time}  1320

  Mr. STENHOLM. I yield 5 minutes to the gentleman from Maryland [Mr. 
Hoyer].
  Mr. HOYER. Mr. Chairman, I rise today to support an amendment to the 
Constitution to require a balanced budget. Quite simply, I believe that 
our obligation to future generations--to our children and 
grandchildren--requires this action of us today.
  Year after year people stand here and claim that this amendment is 
not required. I know, I used to be one of them. It is true that this 
amendment will not in and of itself create a balanced budget--any more 
than the Constitution of the former Soviet Union, which guaranteed its 
citizens freedom of religion, created that right for any Soviet 
citizen.
  The bottom line is that it will take the collective will of this 
House and the other body, joined with that of the President to 
accomplish a balanced budget. It will take the collective will of the 
American people to abide by the decisions necessary to accomplish a 
balanced budget. It will take our collective backbones to make what 
will be a statement of national policy a reality.
  But with that policy clearly ennunciated in our Constitution--I 
believe our backbones will find a stronger pillar from which to support 
the heavy lifting that will be required to accomplish this goal.
  There is no question that we have taken significant action under the 
leadership of President Clinton to reverse the dramatic increasing 
deficits the country suffered under Presidents Reagan and Bush. I 
supported that effort and am proud of the results--a stronger economy, 
increasing jobs, lower interest rates and controlled inflation.
  But the bottom line is that in 1993 gross interest payments alone 
consumed 57 percent of all personal income taxes and these payments 
were five times higher than all of the money we spent on education, job 
training and employment programs combined. And though we have reversed 
the growth in our annual deficits--they still continue--as does the tax 
burden they place upon your children and my grandchild.
  Thomas Jefferson said: ``I place economy among the first and most 
important of Republic virtues, and public debt as the greatest of 
dangers to be feared.''
  Jefferson, along with our founders like Madison and Hamilton, agreed 
that the rights of the minority must be protected against the tyranny 
of the majority. Our system of government is replete with protections 
for the minority of the present.
  Why Jefferson saw public debt as the greatest danger to be feared was 
because he realized that future generations were even more vulnerable 
to abuse than the minorities of the present--because they were 
disenfranchised. As silent sufferers, 
unable to join the debate of today, they would be uniquely vulnerable 
to the ability of the majorities of the present to commit and spend 
their resources of the future. We've done that, we need to stop it.
  As someone who suffered under a system of Government that enforced 
taxation without representation, Jefferson saw public debt as the 
ultimate intergenerational expression of that tyranny and one which 
should be avoided and rejected.
  I support the Wise amendment's provisions on capital budgeting. I 
will also vote in support of the amendment by Mr. Stenholm of Texas.
  I do that because I agree with the gentleman from West Virginia that 
it is fair to ask future generations to pay for assets that they too 
will enjoy. An aircraft carrier will protect my granddaughter's freedom 
tomorrow as well as it does my own today, and therefore it is fair that 
she pay for a portion of that security. What is not fair is that we 
spend today her earnings of tomorrow; that we undermine the discretion 
that she and her generation deserve in their future to apply their 
future to apply their future to apply their resources as they see fit, 
not simply to pay our debts and transfer their money to us in our older 
years. That my colleagues, is the immoral, irresponsible, undisciplined 
evil of which Jefferson spoke.

  Simply put, it is not fair that she be taxed tomorrow for what we 
enjoy today.
  I do not agree with those who hold that capital budgeting is a 
loophole through which we gut the goal of a balanced budget. The 
Congress shall establish in law what capital budgeting will be.
  And I believe that we can draw that definition narrowly enough to 
ensure that only physical assets with a lifetime greater than 10 or 
more years shall be included in such a definition.
  Mr. Chairman, more than 2 to 1 Americans feel deficit reduction is 
more important than short term spending to boost the economy. And the 
General Accounting Office said it best in their 1992 report on the 
budget. They said: ``Inaction is not a sustainable policy.''
  We need to act. And in acting, we will give the greatest gift to our 
children and grandchildren that we could ever give--the security of 
knowing that they have the ability and the resources to face whatever 
problems they may confront in their own time. What a wonderful gift for 
them to know that when they need to turn to the wealth of America in 
time of need they will not find it has been robbed and pillaged by 
their parents and grandparents. We owe them no less.
  Support the balanced budget amendment to our constitution.
  We need this amendment, Mr. Chairman. I hope it passes.
  I want to congratulate both the gentleman from Texas [Mr. Stenholm] 
for his leadership and the gentleman from West Virginia [Mr. Wise] and 
his cosponsors for their leadership. Both of them are saying we need to 
bring discipline to the fiscal structure.
  I do not agree with a lot of my colleagues with whom I am going to 
vote. I believe that we need to have programs at the Federal level. I 
support the taxes to pay for those. But the ultimate discipline in a 
democracy for spending is having to raise the revenues to pay for that 
spending. If Members will not vote for the taxes, then they ought not 
to vote for the spending. I am one of those who is prepared to do both, 
if I believe that those expenditures are in the best interest of this 
country, and, yes, of my grandchild.
  We need to have the courage to exercise the discipline of saying that 
we will pay for that which we want to buy. Very frankly, we did not do 
that in the 1980's, as has been mentioned, from less than $1 trillion 
to now $4.7 trillion, an almost 500-percent increase.
  We need to say ``enough.'' Let us pass this amendment. Let us send 
the message of fiscal responsibility.
  Mr. SMITH of Oregon. Mr. Chairman, I yield such time as she may 
consume to the gentlewoman from Maine [Ms. Snowe], a lovely lady 
legislator who has been an outstanding spokesperson for the balanced 
budget amendment and a leader in the House of Representatives.
  Mr. Chairman, will the gentlewoman yield?
  Ms. SNOWE. I yield to the gentleman from Oregon.
  Mr. SMITH of Oregon. Mr. Chairman, I wanted to at least address the 
Social Security thing which is already getting out of hand, the rumor 
that somehow Social Security is going to be destroyed. The facts are 
that we are already camouflaging, masking the budget.
  For instance, the deficit is supposed to be $223 billion this year. 
The Federal funds deficit is $336 billion. That is $113 billion more 
than the stated debt and that includes Social Security surpluses, as 
well as 149 other surpluses. The idea that balancing the budget 
actually saves Social Security and, if this House of Representatives 
wants to destroy Social Security, they can do so by vote, I am not 
going to do that. And I do not plan on it.
  Ms. SNOWE. Mr. Chairman, I thank the gentleman for yielding time to 
me.
  First of all, I want to say that I am very pleased to have been able 
to join with the gentleman from Oregon and the gentleman from Texas in 
working on this constitutional amendment to balance the budget. And I 
certainly want to express my appreciation for the leadership they have 
given on this very critical issue over the years.
  Time and time again, Mr. Chairman, the voters of Maine and the rest 
of the country have sent Congress an unmistakable signal that they want 
the Congress to change the way in which it conducts its fiscal business 
as well as addressing the issues concerning the national budget. 
Nothing would better personify the fact that we have gotten the message 
of change from the voters than enacting a constitutional amendment to 
balance the budget.
  This debate marks the seventh time since 1982 that we have had this 
debate in either Chamber of the Congress. Each time we have debated 
this issue, we have heard time and time again that all we need to 
balance the budget is the will to act or the courage. They have told us 
in debate after debate, vote after vote that we can balance the budget 
without a constitutional amendment. And, of course, we have never been 
able to achieve a balanced budget in all of that time. In fact, the 
lowest deficit level Congress has reached in this last decade was $150 
billion in fiscal year 1987, under the Gramm-Rudman-Hollings Act. That 
is hardly perfection.
  Even in the administration's own budget, it projects a deficit level 
of $176 billion in 1995. And if Members look at projections by the 
administration, the lowest deficit level for the rest of this decade is 
$173 billion.
  Are we prepared to accept that as the norm, as the standard for the 
rest of this decade? In fact, in 1998, the deficit goes up to $187 
billion. In the year 1999, the year 2000, it is over $200 billion. And 
we know that it will reach $365 billion, according to the Congressional 
Budget Office, by the year 2004.
  So even by the administration's own estimate, it will be adding $1.7 
trillion to the national debt, increasing the national debt by 38 
percent. The administration and others may be upbeat about that level 
of deficit. Granted, it is better than what it has been before, but 
what we are saying, we are accepting the norm of the range of $200 
billion deficits for the rest of this decade.

                              {time}  1330

  The Congressional Budget Office, of course, offers a different point 
of view. According to the CBO, and I quote, ``The deficit may have been 
brought under control temporarily, but it has not been tamed.'' The CBO 
also projects a $226 billion deficit by the year 2000, and as I said, 
$365 billion by the year 2004. Unless deficits are firmly brought under 
control, CBO predicts they will constrain the improvements in the 
standard of living that can be expected in the United States in the 
early 21st century.
  It is interesting to note that yesterday President Clinton remarked 
at his job summit with a group of seven industrialized nations that the 
fact is that the United States must continue to bring down the deficit. 
It is interesting, because the budget that was passed by this body last 
week does nothing more on deficit reduction. The administration's 
estimated savings go for more spending and not for deficit reduction. 
There will be no other attempt to reduce the deficit in this Congress.
  Mr. Chairman, that is explicitly accepting the status quo of earlier 
deficits and debt. It is really accepting the status quo on our 
economic circumstances and the acceptance of deficits in the $200 and 
$300 billion range.
  People might think, What is the impact of the deficit in our daily 
lives? It is not an abstract impact. In fact, the Concord Coalition 
compiled an analysis of the deficit that suggests our productivity 
would have been much higher, and that the average American family 
today, instead of having an average yearly family income of $35,000, 
would have had an income of $50,000.
  What better example of an injustice could there possibly be than 
those figures? How many children go out without an education because of 
that missing $15,000? How many couples or single parents cannot afford 
additional daily necessities of life, like child care, because they 
have seen their standard of living erode as a result of the deficit?
  The most devastating and alarming impact the deficit has had on our 
economy is its effect on economic growth and job creation. The New York 
Federal Reserve Bank says that from 1979 to 1989, we lost 5 percent 
growth in the GNP and national income because of the deficit.
  The CBO says that for every percentage that is lost on the GNP, we 
lose 650,000 jobs. That means as a result of our recurring deficits, we 
will lose approximately 3.75 million jobs. We can hardly afford that, 
given the current economic conditions in our country, given the fact 
that we are having a low job growth rate compared to historical levels 
of the past.
  People know they are facing chronically high unemployment, that it is 
difficult to get a job. These deficits are doing just that. They are 
creating job losses in America.
  What are we doing with the $200 billion interest payments? We cannot 
make the investments we need. That is how we can make the investments 
in health care, education, and worker retraining, is by reducing the 
deficit, eliminating the deficit, so we will have more investments for 
the future and not be paying 14 percent of our budget in interest 
payments.
  The point is that now people feel comfortable that we have a $176 
billion deficit level, so we do not have to worry about it anymore; we 
have already done our job. We have accepted the status quo.
  That is why we need a constitutional amendment to balance the budget, 
because each and every year we will have to do what everybody else in 
America does, 48 States, American families, and American businesses. 
They confront the economic realities, even when their revenues are down 
and they have to make those choices.
  What we have said here, what I am hearing, is that we passed the 
budget last year. Therefore, we do not have to do anything more on the 
deficit because the deficit has come down, so we are going to accept 
the standard of $200 billion deficits for the remainder of this decade.
  Mr. Chairman, I would hope that we would not begin to think that 
budget deficits are an acceptable commodity for an American economy 
that is facing stiff competition from abroad and will continue to face 
that stiff competition. What I am pleased about in this debate is that, 
in fact, it is not Republicans and Democrats or liberals and 
conservatives. In fact, it is Republicans and Democrats and liberals 
and conservatives that are supporting this constitutional amendment to 
balance the budget.
  Mr. Chairman, it is a debate between those who want to get rid of the 
scourge of deficits and debts, knowing what it is going to do to future 
generations, and those who do not. It is the difference between those 
who are concerned about our future economic standards and understand 
that every time we pass budgets with budget deficits in the $200 
billion range, we are saying that we are willing to compromise the 
standards in this country and be second best, and compromise the 
economic opportunities that will build upon the American middle class, 
allow small businesses, like my businesses in Maine, to create jobs and 
to build upon the American dream.
  I would also like to add to what the gentleman said about social 
security, the gentleman from Oregon [Mr. Smith], because I think it is 
a very important issue here today. I cannot think of a better way to 
ensure the integrity of the Social Security trust fund than to require 
a constitutional amendment to balance the budget.
  I would like to quote from Robert Myers, the former Deputy 
Commissioner of the Social Security Administration, and the executive 
director of the National Commission on Social Security Reform, just 
last month on the constitutional amendment to balance the budget, that

       * * * 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.

  Finally, I would say that this is a sincere bipartisan effort to 
address the real issues concerning budget deficits, and those who are 
willing to actually balance the budget and those who are not. For those 
who are opposed to the constitutional amendment to balance the budget, 
they are saying yes to the economic status quo, and they are saying yes 
to the range of $200 and $300 billion levels of budget deficits. I do 
not believe that that is the answer the American people want to hear.
  Mr. WISE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, the best way to preserve Social Security and keep it 
intact is to keep it off budget. That, indeed, is what I think I have 
heard at some point. A majority of my colleagues, in written 
statements, spoken statements, speeches to senior citizens, say that we 
have to preserve the integrity of Social Security. I suspect that if we 
look deep within our minds, that everyone in here at some point has 
promised to work to get Social Security to the status of an independent 
agency and off budget.
  If we want it off budget, then we cannot pass a constitutional 
amendment that locks it forever in the budget. The gentleman from Texas 
[Mr. Stenholm] and I were talking, and we may mix it up a little bit in 
the interest of debate in a few minutes, once we get through some of 
these speakers on Social Security. I think that could be informative, 
but there is a clear difference here. If we want to protect Social 
Security, then I think we have to support the so-called Wise-Price-
Pomeroy-Furse amendment that takes it off budget and settles that 
question.
  Mr. Chairman, I yield such time as he may consume to the gentleman 
from North Dakota [Mr. Pomeroy], who has been very active in promoting 
and developing this amendment, on which we have spent many, many hours 
in developing and crafting the language.
  Mr. POMEROY. Mr. Chairman, I came to this body prepared to cast very 
difficult votes to deal with the deficit, the terrible and deep deficit 
which faced this country's budget. I have cast those tough votes. Yet, 
we still have a deficit.
  I have become convinced that in order to avoid the havoc that we face 
as we deal with this budgetary dilemma facing the country, we need to 
place a guarantee in the Constitution that there can never be such a 
period of irresponsibility when it comes to spending in this country as 
we saw in the 1980's, so that future generations will not have the 
dilemma that we face today.
  Therefore, Mr. Chairman, I approach this debate differently than I 
might have in the past. For me it is not a matter of whether or not 
there should be a balanced budget amendment. I believe recent history 
in this Chamber shows that indeed, we must have a balanced budget 
amendment. The debate at this point is how do we best accomplish this 
objective, what is the most appropriate balanced budget requirement 
that we can place in the Constitution of this country.
  I would commend in particular my colleague, the gentleman from Texas 
[Mr. Stenholm], for his tireless efforts on the balanced budget 
amendment approach. I respect his views, but I believe that the 
alternative being advanced by myself, the gentleman from West Virginia 
[Mr. Wise], the gentleman from North Carolina [Mr. Price], and the 
gentlewoman from Oregon [Ms. Furse], is a better approach to this 
problem. It is a tough amendment, but it has sufficient provisions to 
deal with the true emergency conditions which face this country.

                              {time}  1340

  It also deals with legitimate budgetary needs in a more sophisticated 
fashion.
  First let me speak briefly to the very limited exceptions, war and 
negative economic growth in two consecutive quarters. The posting of 
this type of economic condition would signal a country heading quickly 
not only into recession but heading into depression, and congressional 
action in those circumstances would clearly be imperative. Improvements 
to the earlier versions of the balanced budget amendment, I believe, 
are offered by exempting the Social Security trust fund. For me this is 
in part a simple matter of common sense. I practiced law in a small 
town. You learned from day one that the trust fund was something 
sacred, you did not confuse the trust funds which held representative 
clients' assets, in with the general ledger accounts.
  This country has several trust funds, I acknowledge that. But the 
Social Security trust fund is the preeminent source of the Social 
Security Program, the old age and retirement program administered by 
this country, and deserves, I believe, that special standing.
  There are two more immediate policy consequences that flow from this 
as well. First of all, the Social Security is to a degree actuarially 
priced. It means we are running tremendous surpluses now, but in the 
future, when the baby boom bulge in this country's population reaches 
retirement age and begins drawing on retirement, we are going to see 
this positive cash flow reversed, and there will be actually an outflow 
from this trust fund. It does not make sense, in my opinion, if we are 
going to get serious with the budget deficits of this country, to mask 
those deficits by rolling in the Social Security trust fund and letting 
its positive cash flow shield and mask and hide the deficit. The true 
deficit situations run on the rest of the budget.
  Second, rolling it into the budget I believe places the Social 
Security Program at risk. Changes could be made to Social Security not 
to deal with long-term, future needs of the Social Security Program, 
but merely to deal with short-term budgetary needs of this country as 
it would struggle to meet the requirements of the balanced budget 
amendment. Social Security, in my opinion, is placed very much at risk 
if it is not set apart as our amendment seeks to do.
  Another improvement in the version that we are offering provides for 
capital accounts for projects which offer long-term economic return. 
This approach on capital spending sees precedent both in the private 
sector and in State governments operating under balanced budget 
constraints.
  I do not think there is an MBA in the country that would suggest to a 
business never ever consider debt as you evaluate expanding your 
business. Of course not. Plant construction, machinery purchase, all of 
these things are properly financed by long-term debt, but debt which is 
amortized over the future. That is not reckless spending. It is prudent 
in the private sector.
  In the State governments operating under balanced budget constraints 
we commonly see capital spending approaches. My own State, North 
Dakota, a State where the balanced budget approach is held in highest 
regard by both political parties in the legislative session, they 
specifically fund a bricks and mortar account in the capital budget and 
amortize the payment over the bonds issued to fund those projects. It 
tracks, of course, with the useful life of the actual projects 
constructed.
  It makes no sense as we look at a balanced budget approach for the 
country to reject the real life example seen in the private sector and 
seen in other spheres of government with balanced budget approaches.
  This capital fund is an enhancement, an improvement, a better 
balanced budget idea that our amendment offers as opposed to the other 
versions.
  In conclusion, let me suggest that this debate is not an exercise in 
budgetary machismo as to who has the biggest, baddest balanced budget 
amendment to offer for this country. This is an important debate where 
we recognize that future generations deserve the assurance of a 
balanced budget amendment to the Constitution of this country. And let 
us now get about the business of trying to craft, and carefully so, the 
requirement that gets that best accomplished.
  Mr. WISE. Mr. Chairman, will the gentleman yield?
  Mr. POMEROY. I yield to the gentleman from West Virginia.
  Mr. WISE. Mr. Chairman, I thank the gentleman very much for some of 
the remarks and points he has made. He has already sent a ``Dear 
Colleague'' letter on the relationship of States.
  If I could just follow up for a second, a lot of Members in this 
Chamber say they want a balanced budget amendment because most of the 
States in the United States have similar provisions in their 
constitution, and just as North Dakota does, so does West Virginia. I 
might add that it did not prevent West Virginia from being left several 
years ago with a $500 million in the red, lack of bank account when the 
Governor went out of office. And the only way, incidentally, it got 
back was with some courageous steps and efforts to cut spending and 
raise taxes, both unpopular measures.
  But notwithstanding that, the point is, is it not, that if we want a 
balanced budget amendment that mirrors what the States have done using 
their experience, that every State, including the ones that were 
surveyed, and I believe 50 States were surveyed by the General 
Accounting Office which had balanced budget requirements focused 
largely on the operating or general funds, every State has some sort of 
capital investment program, whether it is a capital budget itself or 
indeed the ability to borrow and thus issue bonds, which in itself in 
servicing that debt is a capital budget? is that not the case?
  Mr. POMEROY. That was the finding of the General Accounting Office as 
they surveyed the State requirements.
  Mr. STENHOLM. Mr. Chairman, will the gentleman yield?
  Mr. POMEROY. I yield to the gentleman from Texas.
  Mr. STENHOLM. Mr. Chairman, in the gentleman's research on the States 
and what they are doing regarding capital budget, did he look to see 
how many of those States might perhaps now be getting into financial 
difficulty because they have stretched the definition of capital 
accounting to the point that they now have problems paying for the 
capital side of the ledger?
  Mr. POMEROY. The General Accounting Office report that I read, I say 
to the gentleman from Texas, did not detail that particular aspect of 
the question.
  Mr. WISE. Mr. Chairman, will the gentleman yield?
  Mr. POMEROY. I yield to the gentleman from West Virginia.
  Mr. WISE. Mr. Chairman, I know of what the gentleman speaks in the 
sense that many have expressed concern about the experience of New York 
City back in the early 1970's. I am not aware of any great problems 
arising out of capital expenditure in my own State. For instance, we 
have a debt ceiling that we cannot go above in the sense of how much we 
can bond, how much we can borrow, and I think the tightest control on 
that is the implementing legislation that must be passed.
  The converse to what the gentleman from Texas is suggesting is not to 
have capital budgeting, is to count $1 of investment the same as we do 
$1 of consumption, and thus we are not able to develop and not able to 
grow, and indeed, we are not able to make those investments to develop 
our own economy.
  If the gentleman would not mind yielding just a little bit further, 
let me make the point that, for instance, we have been restricted in 
our own growth with the Federal Government. Most people, I think, think 
it is time to be about the business of building infrastructure. But are 
people aware that we are spending, in relation to our GDP by percentage 
amount, by one-half of what we were spending only 25 years ago, and so 
what has happened is that capital investment, that which would help us 
grow, has been squeezed down as we see mounting consumption or 
operating income rise? That is once again reflecting the need for a 
capital budget similar to what it is my understanding just about every 
State has.
  Mr. POMEROY. Language in the General Accounting Office report states, 
I believe, that a capital budget helps narrowly focus on infrastructure 
needs and the funding and establishment of those needs, and addresses 
it in a much better fashion than is presently the case.
  Mr. WISE. The gentleman is also correct, because the language in our 
amendment says capital budget reflects those investments, capital 
investments which produce a long-term economic return. That language 
was specifically added to make sure to provide greater protection so 
that we would not be randomly adding any project we wanted.
  I do not think wages and salaries are a capital investment. I do 
think concrete and infrastructure are.
  I thank the gentleman.
  Mr. POMEROY. The people I represent I think understand that you do 
not fund operating costs out of debt. That is what this country has 
done, and it is time for it to stop. The balanced budget amendment 
approach we seek would put a stop to it.
  On the other hand, they do not want the Social Security Program 
placed in jeopardy as short-term, budget-driven decisions might erode 
the sanctity and ability of the Social Security Program to meet the 
retirement needs of this country moving forward.

                              {time}  1350

  They do not want this country to be unable to maintain a vital 
Interstate Highway System, to be able to make the essential capital 
expenditures that this great country must make, just like States make 
under their own balanced-budget requirements.
  Mr. WISE. If the gentleman will yield further on that point, because 
as you point out as well, our language in the Wise-Price-Pomeroy-Furse 
substitute, what our language does is to track the language in many 
State constitutions by saying that that which you consider a capital 
investment, the debt service, what you pay to finance it each year, 
that is included as part of your operating income. So, please, do not 
make the mistake, as some have, of assuming that we just moved capital 
investments off budget.
  In fact, that may have been the approach taken in the other body. 
This is far different from that, because we bring the debt service into 
the operating income in the manner that most States do.
  Mr. POMEROY. I would only conclude by saying that is precisely 
correct. The Wise-Price-Pomeroy-Furse amendment is not a sham. It is 
not saying, ``We do not want a balanced-budget amendment, but, wink, 
wink, we will vote for this one, great cover.''
  This is a better balanced-budget amendment. The debate is not about 
whether we ought to have a balanced-budget amendment, as far as I am 
concerned. I agree with those of you who for so long have contended 
that was an essential step needed by the country at this point in time.
  How best do we do it? I believe the proposal we are offering does 
represent the best way to tackle this problem.
  Mr. SMITH of Oregon. Mr. Chairman, I yield 5 minutes to the gentleman 
from Arizona [Mr. Kyl], an outstanding Member of Congress, and one who 
wants to move his position across the street or down the road. We wish 
him great luck. The gentleman will be offering an amendment which I 
support.
  Mr. KYL. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  Mr. Chairman, I, too, will support his amendment as I have willingly 
done in the past.
  Mr. Chairman, the amendments the house is debating today are of 
critical importance to every American, but I think particularly to 
young Americans.
  This year alone, interest on the national debt will amount to about 
$300 billion. That is $800 million a day just to pay the interest on 
the national debt. That is $800 million a day of hard-earned tax 
dollars that cannot be applied to education, health care, highway 
improvements, law enforcement, defense, or other good causes. The 
national debt is like a ticking time bomb set to explode on future 
generations.
  Congress can either run and hide or stop the debt clock and defuse 
the time bomb before it wreaks havoc on our children and grandchildren.
  A balanced-budget amendment to the Constitution will not solve the 
problem by itself, but it will establish the framework and impose the 
discipline absolutely necessary to ensure Congress does balance the 
budget.
  Mr. Chairman, I just received a letter from a 15-year-old Scout from 
my district in Arizona, Nicky Vejvoda. Nicky's letter reads as follows:

                                                      Phoenix, AZ.
       Dear Senator Jon Kyl: My name is Nicky Vejvoda, and I am a 
     15-year-old Scout. I am not very happy that our Government is 
     spending more money than they bring in. At home I have a 
     budget book that I keep track of all my money I bring in, and 
     take. If I spend more than what I have, then I am in trouble. 
     How am I going to pay off the debt when I grow up? Please 
     vote ``yes'' on the Balanced Budget Amendment.
           Sincerely
                                                          Nicky V.

  Mr. Chairman, I invite my colleagues to join me in answering Nicky's 
letter and the plea of all young Americans to end the destructive 
practice of deficit spending by passing the Kyl substitute, the 
balanced-budget-spending-limitation amendment which we will be voting 
on later today.
  This proposal, Mr. Chairman, has been endorsed by a variety of 
organizations and individuals.
  Just today in the Washington Times, there is an editorial by Walter 
Williams, a respected economics professor at George Mason University 
and a nationally syndicated columnist. Here in part is what Dr. 
Williams said, and he talks about my proposed balanced-budget 
amendment, and he says:

       It's Section 2 of Mr. Kyl's amendment that gives it 
     piranha-like teeth and as such creates dim prospects for 
     passage: ``A fiscal year's expenditures shall not exceed 19 
     percent of that year's gross national product.'' The 
     reasoning is that 19 percent of the GNP is the average 
     federal revenues collected over the last 40 years, despite 
     good or bad economic times or tax rate increases or 
     decreases. The spending limitation mandate would eliminate 
     congressional hot-dogging with our earnings. The bill gives 
     Congress incentive to enact growth policies; that's the only 
     way it'd get more money to spend.
       Mr. Kyl's proposal is the best thing going so far and would 
     go a long way toward reining in congressional spending.

  My proposal is endorsed by the Americans for Tax Reform, Citizens 
Against Government Waste, Citizens for a Sound Economy, Free the Eagle, 
National Association of Manufacturers, National Roofing Contractors 
Association, National Tax Limitation Committee, National Taxpayers 
Union, and many more. In fact, just today the Washington Times 
newspaper in its lead editorial endorsed my proposal, and that offered 
by my colleague, the gentleman from Texas [Mr. Barton], and I quote in 
part from this editorial:

       Posturing over a balanced budget is one thing. Actually 
     putting teeth into is something else again. The two toughest 
     of the four under consideration are offered by Republican 
     Reps. Jon Kyl and Joe Barton. Mr. Kyl's proposal is scheduled 
     to come to a vote tonight.
       Mr. Kyl's resolution calls for more than just a balanced 
     budget. He would go further, limiting federal spending to 19 
     percent of gross national product permanently. The Clinton 
     team, trying to frighten the public from supporting a 
     balanced budget amendment in the Senate, threatened huge tax 
     increases, saying that only with them could the budget gap be 
     killed. Mr. Kyl nixes that threat with his limit on spending.

  Mr. Chairman, we will have an opportunity to vote on four substitutes 
beginning tonight and concluding tomorrow. I urge my colleagues to 
begin by voting yes on the Kyl substitute, the spending limitation 
which includes the line-item veto. Then I would urge tomorrow that they 
also vote ``yes'' on the Barton-Tauzin amendment and the Smith-Stenholm 
amendment. These are all three good approaches.
  I would suggest that the best approach, as Walter Williams and 
several taxpayer groups have said is the spending limitation, because 
it not only assures that we achieve the balanced-budget requirement by 
limiting spending, which is the real problem--our problem is not we are 
not getting enough revenues, our problem is we are spending too much--
but it also assures that we have the line-item veto to help enforce it.
  Mr. SMITH of Oregon. Mr. Chairman, I yield 2 minutes to the gentleman 
from Illinois [Mr. Ewing], a great friend of the balanced budget 
amendment to the Constitution.
  Mr. EWING. Mr. Chairman, it comes as no surprise to some of us that 
have not been around here too long that the national debt is a rock 
around our neck.
  Now, poor judgment got us into that condition. That national debt has 
been growing since Harry Truman's time.
  I take no great pride in the fact that under some Republican 
Presidents we have grown a lot on our national debt. But I also point 
out that at the same time we had Democratic-controlled Congresses.
  We have in America separation of powers between the Congress and the 
administration. When the White House is controlled by one party and the 
Congress by another, we both have a dual responsibility to spend 
wisely.
  It is obvious we have not been doing a very good job of that. Common 
sense would tell the responsible American business person that they 
have to balance their budget or they go out of business, or the 
responsible American family that if they fail to balance their budget, 
they will not have money for educating their children, recreation, 
health care, retirement, even providing a home.
  These strangely are the very same things that this Congress wants to 
provide for our constituents. They are our responsibility of a 
conscientious government. So we had better put common sense into our 
spending and look at the American budget, if we want to provide Social 
Security retirement, health care for the less fortunate, education for 
our children, recreation, and even defense.
  You know, I am very, very upset by the scare tactics used on senior 
citizens that are calling my office and saying, ``If you vote for the 
balanced budget, they will cut Social Security.'' That is totally 
false. Nothing in any of these amendments would make us cut Social 
Security.
  Ladies and gentleman, we have four choices. Three are all right. One 
is a fig leaf. Let us pass something that is meaningful for the 
American people.
  Let us pass the balanced budget amendment that truly gets the job 
done.
  The CHAIRMAN. The time of the gentleman from Illinois has expired.
  Mr. WISE. Mr. Chairman, I yield myself such time as I may consume, 
and I will be glad to yield to the gentleman on my time if that is 
agreeable to the other gentleman. My question is very simple: I respect 
what you say about Social Security. But is it not the simplest way--if 
you know that it will not be cut--is it not the simplest way to take it 
off budget and remove that issue of concern once and for all?
  Mr. EWING. Mr. Chairman, will the gentleman yield?
  Mr. WISE. I am happy to yield to the gentleman from Illinois.
  Mr. EWING. If we do not address the budgetary problems of this 
country as a whole, taking Social Security off budget will not do it.

                              {time}  1400

  We will not have the funds for Social Security in a few years; that 
is the point. And yet you tell people, senior citizens, that balancing 
the budget is going to destroy Social Security. In fact, not balancing 
the budget or taking it off budget will destroy Social Security.
  Mr. WISE. Mr. Chairman, continuing to yield to the gentleman: What is 
the role, then, of Social Security? Why do you not just say we are 
going to give you the peace of mind, we are going to move it off 
budget? Unless you want to use Social Security--and I am not accusing 
the gentleman of planning to cut Social Security, please understand 
that--but I do understand that Social Security, under any 
administration, is used to mask the full size of the deficit.
  It is used to mask the size of the deficit. Why not, then, move it 
off and let Social Security worry about Social Security's problems and 
worry about the operating income and the general Federal income on its 
own?
  Mr. EWING. Because I think of our budget as a whole in this country 
and we have to look at it as a whole. When we start piecemealing it, 
that is when we get into trouble.
  Mr. WISE. Does the gentleman from Texas [Mr. Stenholm] want to get in 
on this?
  Mr. STENHOLM. I would share the time that we might consume.
  The CHAIRMAN pro tempore (Mr. McNulty). We are currently under the 
time of the gentleman from West Virginia.
  Mr. WISE. Mr. Chairman, I request that I use my time and I know the 
gentleman from Texas will give me some time later.
  Mr. Chairman, I yield to the gentleman from Texas.
  Mr. STENHOLM. I think it is important that we clarify this. I do not 
know of a single Member of this House who is proposing to cut Social 
Security. I do not believe there is anyone who is proposing to do that. 
I certainly am not, and I know the gentleman from West Virginia is not; 
neither is the gentleman from Illinois.
  What some of us believe, though, is that unless we deal with the 
total fiscal problems of this country today--and I would like to put in 
another, a little different perspective--if we agree, and most of us do 
agree, that the private pension funds of this country are having some 
difficulties today in this unfunded liability status--and they do--then 
perhaps we have the same in the Social Security fund today.
  It is very true that, by talking about the Social Security trust fund 
as it is today, with current recipients, there is surplus. But all of 
us know that unless changes are made in the out years, that we are 
going to run into some additional problems, we are going to run into 
some unfunded liabilities. There are two ways to address that:
  One of them is what the gentleman from Texas [Mr. Pickle] will have, 
if he does not already, and that is to increase the retirement age for 
Social Security, so that we tell the young, our sons and daughters 
entering the work force today, ``You will not be able to retire at age 
67 as under current law but you will have to retire at age 68 or 
perhaps at age 70, and prepare for it.'' And if we do that, there will 
be no problem for anyone.
  The second thing--and this is where I object to the language of 
exclusion of Social Security--if we have the unfunded liability, and we 
do, if it is true that our current surplus is roughly $360 billion, 
which it is, if it is true that we will build another add-on of the 
surplus this year of about $67 billion, let us round it off to $420 
billion, that is still only about a 13-month period of obligation of 
those funds.
  Therefore, I would hope that, as we talk about whatever we need to do 
in the entitlements, in Social Security, that we refrain from using 
that to spend it for other purposes, but we think in terms of building 
the Social Security trust fund so that there will be a greater 
assurance of that money being there for our children and grandchildren.
  I yield back and appreciate the gentleman from West Virginia yielding 
to me.
  Mr. WISE. Mr. Chairman, I am beginning to run a deficit on my own 
time.
  Could I give up my time and grab a few minutes from you later on?
  The CHAIRMAN pro tempore. The gentleman from Texas.
  Mr. STENHOLM. Mr. Chairman, I yield to the gentleman from West 
Virginia [Mr. Wise].
  Mr. WISE. We are balancing our rhetoric, if not the budget, at this 
point.
  Let me just say, in response, that the gentleman makes some good 
points. I want to point out that the Social Security system is in a 
separate fund; it has always enjoyed that reputation, that integrity 
with the American people. Indeed, when many years ago there was a first 
attempt at encouraging, if you will recall, when the Treasury was 
beginning to divert some funds coming in, on a bipartisan basis this 
House raced in, closed that loophole, paid the money back with 
interest, and said, ``Never again.'' I think that reflected the 
sanctity of the Social Security system.
  Yes, indeed, there are many other areas, but those are not funded. 
They come out of the general fund, VA, Federal retirees, the COLA's 
particularly. I do not know of any other program that is totally 
generated with its own revenues, including the cost-of-living 
adjustments that Social Security recipients receive.
  Furthermore, as the gentleman has been one of the ones most 
aggressive in promoting honest budgeting and honest accounting, and yet 
he has to be as frustrated as many of us to know that our real deficit 
is significantly higher because the Social Security surplus that the 
gentleman refers to masks that. It just seems to me that you could have 
sound fiscal policy by moving it off.
  Finally, there is one other point sometimes made, and that is the 
concern that other programs would be moved under the Social Security 
umbrella if it were off budget, such as veterans' programs or other 
beneficiary programs. The gentleman and I both know of the sanctity of 
the Social Security system. We would be hung at every town meeting and 
every Member in here would, justifiably, if that was attempted to be 
done. Both those that are retirees and beneficiaries of the Social 
Security system, as well as those who look forward to drawing from it, 
watch that program very carefully. They have some questions, 
particularly younger people, about whether it would be there for them, 
but, boy, they are watching that program.
  So, I do not think it is very likely you are going to see that kind 
of monkeying. I just think you protect Social Security more by moving 
it off budget and then you can have the honest debate about the overall 
income balancing the real budget of the United States.
  I appreciate the gentleman yielding.
  Mr. STENHOLM. Briefly reclaiming my time, I say that is precisely 
what the argument should be. It should not be, as we have heard one or 
two previous speakers, suggesting that those of us who support our 
version are going to somehow gut the Social Security system. That is 
furthest from the truth.
  And I say, if I hear anyone else saying it, which the gentleman from 
West Virginia is not, we intend to challenge those statements, because 
we can differ as to how we fiscally get to the point, but we cannot 
differ regarding the intent. There is no stronger supporter of the 
Social Security system in this body than this gentleman from Texas. I 
believe I share that with the gentleman from West Virginia.
  Mr. STENHOLM. Mr. Chairman, I yield 3 minutes to the gentleman from 
Florida [Mr. Hutto].
  First, let me say that we heard some rhetoric earlier about some 
tough votes and on May 23, 1985, there was the Leach-Slattery-McCain 
piece of legislation on the floor. It was defeated 56 to 372, and the 
gentleman from Florida was one of the 56. It was one of those tough 
votes we can look back on. If we had all voted as did the gentleman and 
as I did, we would not be here today discussing the Social Security 
trust fund or any other aspect of our budget.
  Mr. HUTTO. I thank the gentleman for yielding.
  Mr. Chairman, I rise in support of the Stenholm balanced budget 
amendment, and I want to commend him on his work through the years. He 
has worked very, very hard to get our fiscal house in order to balance 
the budget. And this is the true balanced budget amendment, the 
Stenholm amendment, which our Nation needs to put our fiscal house in 
order.
  The time has come to get our Government on the right track.
  When I speak to my constituents about the deficit, I try to explain 
that the American people and Members of Congress want to reduce the 
deficit, but at the same time do not want a reduction in Government 
programs. We all know that something must give. While one can argue 
that Congress has the power to balance the budget right now, the 
political reality is that Congress needs an enforcement mechanism like 
the balanced budget amendment to hold our feet to the fire.
  The Stenholm balanced budget amendment will provide the stick to see 
that the tough decisions are made to reduce our deficit. This is not an 
easy vote, but we must stand up now for the sake of our Nation's fiscal 
future.
  I recently received a very touching letter from a 10-year-old 
constituent named Candy Magee from Pensacola who told me how much she 
wanted a balanced budget amendment, because she feared for the economic 
future of our Nation. Out of the mouths of babes--We must listen to our 
future. Much has been said about leaving this debt for future 
generations to bear.
  My friends, the debt has already built to enormous proportions, more 
than $4 trillion, and we must correct this injustice. We simply cannot 
afford to mortgage the future of our young people.
  Candy Magee says she thinks her debt to the Government at $17,500 
this year is unfair. I agree. Can you imagine that? All of us, every 
man, woman, and child in the United States owes $17,500 just in 
interest on the national debt this year.

                              {time}  1410

  This constitutional amendment is necessary to get us out of the sea 
of red ink. The times demand it. We cannot continue to go on with 
business as usual. We must not think about special interests or what 
might happen when tougher votes follow. The American people sent us 
here to do what has to be done, and they deserve our devotion to duty.
  So, Mr. Chairman, I urge my colleagues on both sides of the aisle to 
put aside the bickering over how to reduce the deficit and agree that 
we absolutely must balance our budget. So, vote for the Stenholm 
balanced budget amendment for this Nation's recovery.
  Mr. SMITH of Oregon. Mr. Chairman, I yield 2 minutes to the gentleman 
from Wyoming [Mr. Thomas].
  Mr. THOMAS of Wyoming. Mr. Chairman, let me begin by thanking the 
gentleman from Oregon [Mr. Smith] and the gentleman from Texas [Mr. 
Stenholm] for the very long and tireless efforts that they have put in 
on this issue, and I appreciate it much, and I hope everyone does.
  The Federal Government has run deficits for 25 years straight; 55 of 
the last 63 years, deficits.
  My colleagues say, ``Well, we don't need to do much; we'll just fix 
it.'' That is not the evidence. That is not what we have done.
  The national debt will grow to over $6 trillion by 1998, so the 
numbers speak for themselves. The national debt restricts economic 
growth and job creation, and it puts funding of every Federal program 
at risk. We need the discipline of a constitutional amendment.
  Mr. Chairman, we have it in my State, a constitution amendment to 
balance the budget, and we balance the budget. We either cut back 
expenditures or we raise taxes, and it causes us, which is proper, to 
have a consideration of whether this expenditure is worth the taxes at 
cost-benefit ratio. That is what it is all about, and it forces that to 
happen.
  Everyone here has said we need to do something, but I am a little 
concerned that we will have a wimpy amendment pass where people can 
say, yes, I voted for a balanced budget amendment, but the fact is it 
does not work. We had that a few years ago. We had it here in 1988, 
when they had the lowest--seventy-six had the lowest deficit, and then 
we found a way to go around it and say that is off budget so it does 
not count. It does count. It counts in the debt.
  Mr. Chairman, this problem just will not go away. The longer we 
ignore the responsibility, the tougher it gets. The choice is simple. 
Either vote for Stenholm and begin to move forward or saddle our future 
generations with additional taxes.
  It seems to me that budgets are more than a collection of numbers, 
that they are, in fact, a philosophical direction of where we want to 
go. Budgets decide whether indeed we want more government or whether we 
want less. If we want more government, we have to have more money, we 
have to have more taxes, or do what we have done in the past, and that 
is charge it. But our charge card is maxed out. And so budgets have 
something to do with philosophy.

  I ask my colleagues, ``Do you want more taxes or do you want less? Do 
you want more programs? Do you want less? Do you want to use the 
private sector? You want to use local government? You want more Federal 
Government programs?''
  I certainly support the Stenholm amendment and the other two 
amendments that go with it, and I urge their support.
  Mr. WISE. Mr. Chairman, I yield 2 minutes to the gentleman from 
Georgia [Mr. Bishop].
  Mr. BISHOP. Mr. Chairman, Congress has a spending problem that 
threatens the economic foundation of our country. Our red-ink policies 
are mortgaging the future of our children and grandchildren.
  In my home State of Georgia, we are required by law to have a 
balanced budget--and we do. We simply cannot spend more money that we 
collect--except for capital outlays which can be financed with bonds.
  Georgia is one of the most fiscally sound States in the Nation today, 
largely due to the legal requirement of a balanced budget.
  Yet, we are moving swiftly in Georgia to improve the quality of life 
for our people with quality programs for economic development, 
education, crime control, highway construction, tourism, health care, 
the environment, and agriculture.
  We must have the same fiscal responsibility here in Washington as we 
do in Georgia.
  That's why I signed the discharge petition to bring the balanced 
budget amendment to the floor today. That's why I support the Wise 
substitute to the balanced budget amendment that will force a balanced 
budget by the year 2001--except for instances of war and recession.
  Most of all, Mr. Chairman, I strongly support the Wise substitute 
because it excludes the Social Security fund so as to protect our 
senior citizens. We need to protect the Social Security fund because 
its belongs to the people who helped build a strong America, who have 
worked hard and are now in the sunset of their lives. They deserve no 
less.
  However, I will reluctantly support the Stenholm version of the 
balanced budget amendment as a less attractive option, because of the 
impact it could arguably have on senior citizens.
  Yet, we all know that it's time for us to bite the bullet in favor of 
fiscal responsibility. It's time for a balanced budget. And to make 
that happen, it's time for a balanced budget amendment.
  I, therefore, urge my colleagues to vote to lift us from the 
quicksand of deficit spending that is about to suck us under. Vote for 
the balanced budget amendment.
  Mr. STENHOLM. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly the Committee rose; and the Speaker pro tempore (Mr. 
Wise) having assumed the chair, Mr. McNulty, Chairman pro tempore of 
the Committee of the Whole House on the State of the Union, reported 
that that Committee, having had under consideration the joint 
resolution (H.J. Res. 103) proposing an amendment to the Constitution 
to provide for a balanced budget for the U.S. Government and for 
greater accountability in the enactment of tax legislation, had come to 
no resolution thereon.

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