[Congressional Record Volume 140, Number 34 (Wednesday, March 23, 1994)]
[Senate]
[Page S]
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[Congressional Record: March 23, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
               CONGRESSIONAL BUDGET CONCURRENT RESOLUTION

  The Senate continued with the consideration of the concurrent 
resolution.
  The PRESIDING OFFICER. Who yields time? The Senator from Tennessee.
  Mr. SASSER. Mr. President, I suggest the absence of a quorum and ask 
that it be charged against both sides equally.
  The PRESIDING OFFICER (Mr. Feingold). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. Mr. President, I wonder if I could ask the 
distinguished chairman of the committee if I might speak for 5 to 10 
minutes on this matter.
  Mr. SASSER. I will be pleased to yield 10 minutes to the 
distinguished chairman of the Finance Committee.
  Mr. MOYNIHAN. Mr. President, I rise to state that the Senate is about 
to take the first vote of this Congress on the issue of health care 
reform, because if the amendment of my friend from Mississippi should 
be adopted, we will be instructed to take some $20 billion in 
entitlement cuts and put them into effect in this coming budget round.
  Those are precisely the sums and the areas in the budget--primarily 
Medicare--which, under the President's proposal and under any number of 
similar proposals, we mean to use to finance health care reform, 
bringing about universal coverage for the population and a measure of 
cost containment which is totally indispensable. The costs of Medicare 
and Medicaid are growing in the same manner, somewhat faster but in the 
same manner, as that of health care generally.

  The Congressional Budget Office projects that private health care 
spending will grow on average at 7.8 percent a year. That doubles in 
about 7 years. That is the rate at which it compounds, I think. In the 
budget outlook sent us earlier this year by the Congressional Budget 
Office, we see Medicare doubling by the year 2004--more than doubling, 
somewhat more than doubling. We see Medicaid going up by 150 percent--
going up 1\1/2\ times.
  The general projection is that the cost of health in our country, 
which now takes up 14 percent of the gross domestic product, of our 
wealth, what we generate as wealth, will go to 20 percent in 10 years' 
time at the rate we are heading. The President hopes to see us hold 
that down to 19 percent--a heroic effort involved, vast legislation 
still to keep us at 19 percent. But part of this is to be done by 
holding down the cost of Medicare and Medicaid, and transferring the 
savings from those programs to the new forms of subsidy and that will 
enable us to provide insurance, health care for the 37 million persons 
who at any given time are uninsured.
  We do make a mistake about this, Mr. President, in that we compound 
the subject of Medicare and Medicaid as being equally something called 
entitlements. It would be useful to keep in mind that Medicare hospital 
insurance is purchased through a payroll tax, paid equally by employer 
and employee and is today in surplus. That surplus is dwindling in the 
face of these cost growths, to be sure. But the combined Social 
Security trust funds--including old age, survivors, disability, and 
hospital insurance--are in healthy surplus. The hospital insurance of 
Medicare will be in surplus into the year 1997, and the combined trust 
funds will be in surplus well into the next century. I believe there 
will be a $71 billion surplus in the year 1997, and indeed there is a 
sense at which the deficits we talk about today are lower than the 
reality would be if we were, in fact, treating trust funds separate 
from the operating budget. But that debate is for another time.
  I have to state, Mr. President, as I look about me, I only see two 
other Senators in the Chamber, the Senator from Mississippi, and his 
most distinguished colleague, the sometime chairman of the Budget 
Committee, the Senator from New Mexico. Why is this floor not crowded 
with Senators as we are about to vote, have our first vote on the most 
important legislative initiative in a generation? And if we adopt this, 
if we take away from the Committee on Finance, which this amendment 
would do, the ability to use Medicare reforms and Medicaid to help us 
achieve health care reform, we will preclude our ability to carry out 
such a measure.
  If that is what the Senate wants, well, here is the moment to say so. 
But I do not think the Senate wants that. I know the Committee on 
Finance does not want that. We spent 2 days this last weekend 
discussing the specifics of health care reform. We want to address this 
issue. We want to see universal health care coverage. If you do not 
want universal health care coverage, then this is an amendment we will 
wish to vote for.
  But when you vote for it, you are voting against just that goal 
which, as President Clinton said in Florida on Monday, President Truman 
proposed. President Johnson came close to it. President Nixon proposed 
it. President Carter proposed it. We have been at this the better part 
of a half a century. We think it is time we got it done.
  I have to say to you that Medicare spending, which has been growing 
at a rate higher than general inflation--but, remember, is a rate of 
spending of persons over 65 and have higher health care costs--we can 
cut that back. We hope to cut it back to 10.5 percent a year, probably 
a sustainable rate given the population involved. But if that reduction 
is to take place, we must have the flexibility to include savings from 
reforms of Medicare and Medicaid or, Mr. President, there will be no 
health care reform for the remainder of this century. And we shall have 
spent half a century looking for something of an industrialized 
democracy which the world has in place, and we will enter the next 
millennium without it. I do not think we want to do this, sir. And I do 
not think we should. I think the vote will so establish that fact.
  I see the distinguished Senator from Georgia is here. I believe he 
wants to speak to other aspects of the measure. I look forward to 
hearing him.
  I yield the floor.
  Mr. NUNN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Georgia [Mr. Nunn] is 
recognized. Who yields time?
  Mr. NUNN. Mr. President, I would like to get some time to ask some 
questions of the chairman of the Budget Committee, and the ranking 
member.
  Mr. DOMENICI. Mr. President, how much time do we have? I do not have 
any time. Senator Sasser has time.
  The PRESIDING OFFICER. The Senator from Mississippi has 27 minutes.
  Mr. LOTT. Can I inquire about the remaining time total?
  The PRESIDING OFFICER. There are 27 minutes controlled by the Senator 
from Mississippi.
  Mr. DOMENICI. Senator Sasser has how much?
  The PRESIDING OFFICER. The Senator from Tennessee has 29\1/2\ 
minutes.
  Mr. NUNN. Mr. President, I probably do not need more than about 5 
minutes. I am really not sure how I am going to vote on this amendment. 
I do not know whose time I am going to be asking for.
  Mr. SASSER. Mr. President, I am always happy to accommodate the 
distinguished chairman of the Armed Services Committee. I will be 
pleased to yield to him.
  Mr. NUNN. Willing to take a chance?
  Mr. SASSER. I am always happy to accommodate him, and willing to 
yield him 10 minutes.
  Mr. NUNN. I thank my friend. I would be delighted to hear from the 
Senator from Mississippi on these questions also.
  I would like to pose a few questions relating to the Lott amendment, 
and also, of course, I am concerned about the effect on defense of the 
Exon-Grassley amendment which would be in the Budget Committee, and I 
believe that this amendment has some relationship to that.
  I suppose my first question to the chairman of the Budget Committee 
and to the Senator from New Mexico, the ranking member, would be 
whether this amendment, the Lott amendment, continues the cuts that 
were made in the Budget Committee in the discretionary account which I 
believe were $43 billion in budget authority and $26 billion in 
outlays. Do those remain in the budget resolution if the Lott amendment 
passes?
  Mr. SASSER. It is my understanding that that is the case.
  Mr. NUNN. Then I would ask my friend from New Mexico, if also 
incorporated in the Lott amendment--if the Lott amendment has in it the 
cuts in the entitlement programs that were really continuations of 
existing reductions or restraints in entitlement programs that were 
going to be used by the Domenici amendment, which I was coauthor of, 
are these cuts also part of the Lott amendment?
  Mr. DOMENICI. Mr. President, in answer to Senator Nunn's first 
question, the answer is ``yes.'' In answer to the second, that is that 
the Exon cuts, reductions, in discretionary are still in in their 
entirety, with reference to your question, yes.
  The distinguished Senator from Mississippi has already stated that he 
acknowledged that the entitlement cuts that are found in his amendment 
are on top of the discretionary, and they are exactly the same ones 
that would have been, and the same procedure that would have been, and 
will be there when the Domenici amendment is offered, if it is later 
today.
  Mr. NUNN. Would I be correct then, I say to my friend from New 
Mexico, that if the Lott amendment passes, those entitlement cuts, or 
those entitlement restraints, continuation of the existing program that 
would expire otherwise, if the Lott amendment passes, if those would 
have been utilized in the Lott amendment, and would they be available 
as an offset to the Exon-Grassley cut in a later Domenici amendment if 
the Lott amendment passes?
  Mr. DOMENICI. No. They would not. They are used as part of this 
amendment in addition to the Exon cuts.
  Mr. NUNN. So those of us who are concerned about the effect on 
defense of the Exon-Grassley amendment--which would have something like 
a 60-percent effect on defense, in that neighborhood depending on the 
allocations of the Appropriations Committee--if those of us who are 
concerned about defense would be in a position, if the Lott amendment 
passes, to have no offset on defense cuts in the Exon-Grassley 
amendment, because those would have been used up, or at least the one 
that we had in mind would have been used up. Is that correct?
  Mr. DOMENICI. The Senator is correct. However it is only fair that 
the Senator from Mississippi explain how he views it. I believe I know 
they are used up, and they will not be available. That is clear from 
what is here.
  Mr. NUNN. I have another question, in fairness to the Senator from 
Mississippi. It is my understanding there is an effort here by the 
Senator from Mississippi, though, to protect the defense budget. There 
is language in here that basically creates, as I understand it, the 
indication at least of a firewall relating to the Grassley-Exon 
amendment.
  But my question is relating to that now, because as I view it, based 
on the questions and answers I have gotten so far, if this amendment 
passes, and if there is no protection for defense in this amendment 
itself, then the hope of some of us at least is that we would be able 
to use the entitlement restraints for a substitution for the Exon-
Grassley amendment, thereby reducing the effect on defense, that 
opportunity would be gone?
  So the crux of my decision will depend on the answer to the questions 
about whether the Lott amendment actually protects defense. That is the 
next question I would pose.
  If I could take it in two or three parts: No. 1, does the Lott 
amendment prevent the Grassley-Exon amendment that is incorporated in 
this from cutting defense in fiscal year 1995?
  Mr. SASSER. First off, I say to my friend from Georgia, this 
amendment is silent on the question of 1995. It does not protect 1995 
at all. It does not even attempt to protect 1995 at all. So defense 
would be subject, in 1995, to taking those chances with everything 
else.
  Mr. NUNN. So whatever effect on defense the Exon-Grassley amendment 
was going to have in fiscal year 1995, would not be in any way reduced 
by the Lott amendment. Is that correct?
  Mr. SASSER. That is correct. At least my reading of it, the Lott 
amendment is silent with regard to 1995.
  Mr. NUNN. Would the Senator from New Mexico agree with that? How does 
the Senator see that?
  Mr. DOMENICI. In direct answer to the question, I agree with that. As 
far as the amendment itself and what it says, there is no effect of 
change, no changing of the Exon-Grassley amendment.
  Mr. LOTT. Mr. President, if the distinguished Senator will yield, I 
do not want to take up his time in responding.
  Mr. NUNN. I would like to give the Senator time.
  Mr. LOTT. I think all the answers that the distinguished Senator from 
Georgia received from the members of the Budget Committee, the Senator 
from Tennessee and the Senator from New Mexico, are accurate.
  First of all, though, I do want to speak on the defense part of the 
question. Obviously, what we are trying to do here is to accomplish the 
purpose of trying to avoid defense being cut more without it being 
subject to a point of order, which would then require 60 votes to 
overcome. That is why it is silent on 1995.
  But the intent of the amendment is clear. The intent is to say, look, 
we need to cut the deficit more. There are a lot of Members that would 
like to support Exon-Grassley, and I suspect probably the Senator from 
Georgia would, but he is concerned about the impact on defense. That is 
why it passed the Budget Committee with some 13 Senators voting for the 
Exon-Grassley amendment. They would like to reduce the deficit more. 
They would like more to come out of discretionary spending. But they 
would prefer it not to further cut defense, which, as the chairman of 
the Armed Services Committee knows, has already been cut 35 percent 
over the past years.
  We are always hearing testimony that is scaring us to death in the 
Armed Services Committee, and we worry about what is happening around 
the world. So we want to do that. So what I have tried to do is to find 
a way to get the additional discretionary savings that Senators Exon 
and Grassley intended without the additional hit on defense. It 
specifies in the amendment that all of these additional discretionary 
spending cuts would come from nondefense accounts.
  It is binding? Does that mean that is the way it would happen?
  The Senator from Georgia knows better than I do that it is pretty 
hard to direct the Appropriations Committee how they might do something 
like this. But the intent is clear. If we could get a good, solid vote 
on this, I think that intent would be clear, and the message would be 
clear that we do not want additional hammering of defense.
  Then the final point I would make--you may have additional 
questions--is that there are some Senators that just felt we had not 
done enough with deficit reduction, and there are some that would like 
to be for Exon-Grassley. There are some that would like to be for 
Senator Domenici's well-thought-out amendment, which is one that 
extends--basically continues--the existing laws, things agreed to in 
1993.
  So the thought developed, well, maybe we can try to find a way to 
build in protection on defense, get the discretionary spending cuts, 
and accept the $20 billion in savings in entitlements.
  I will not give a full, long speech because I know the Senator has 
other questions, but this is the reason; this is what is driving what 
Senators are thinking, and what I am trying to do.
  The gross national debt is going to continue to just go right on up 
with almost another $2 trillion increase over the next 5 years, over 
the time this budget resolution addresses. That is the intent behind 
it. I understand your concerns, and I share them. This is my effort, 
feeble though it may be, to try to accomplish additional deficit 
reduction and try to find a way to protect defense. I think there is a 
lot of concern here, perhaps even some smokescreen. If the idea is to 
say: you are talking about cutting discretionary spending and talking 
about half of it or more coming out of the defense, I do not think that 
is what the majority of Budget Committee members thought when they 
voted for it. I do not think the majority of the Senate thinks that. 
That is what I am trying to accomplish.
  Mr. NUNN. I thank the Senator from Mississippi. My other question 
relates to the wording of the Lott amendment. I understand where the 
Senator from Mississippi is coming from. As I stated at the outset, I 
am concerned about the Domenici-Nunn amendment, which was going to keep 
the deficit down at the level that the Exon-Grassley amendment 
portrayed. The deficit would be at the level it came out of the Budget 
Committee, while protecting defense and discretionary cuts by shifting 
on to entitlements. Many people would want to agree with that.
  What I am perplexed about is, if the Lott amendment passes, the 
offset for the Exon-Grassley amendment is going to be gone; it is gone. 
That is the end of that. Maybe somewhere else we can find the money, 
but if the Senator from Mississippi has not succeeded with his 
amendment, notwithstanding his keen desire to protect defense, then 
defense is worse off because the Lott amendment passes. It is worse 
off, because as I see it right now, the only hope that those of us who 
believe the defense budget is going down too much have is to find an 
offset. In the Domenici amendment, which has not yet been presented, 
was that offset. The Senator from Mississippi is using that offset and, 
therefore, if the Senator from Mississippi has not succeeded in 
protecting defense in 1995 and the outyears, then we have bigger 
problems in defense because of the Lott amendment. I know that is not 
the Senator's intent, but that is the result, as I see it.
  My final question is: As I understand the Lott amendment--and I ask 
my friends from Tennessee and New Mexico this--in the outyears--I 
understand why you cannot deal with 1995, because I have been caught on 
that before; it is a tough one. You have a 60-vote problem. But what I 
am also concerned about is the next 4 years.
  My question really is: As I understand it, the Lott amendment 
basically directs the so-called firewalls only to the protection of the 
Exon-Grassley money, but not to the overall defense budget. So the Lott 
amendment, even if it is effective for those 4 years, would basically 
take the narrow amount of money that was cut in the Exon-Grassley 
amendment and say that that money could not be shifted in the next 4 
years to discretionary. Yet, it would leave the whole defense budget 
for the appropriators, and they could shift everything else. The money 
is fungible.
  We could end up with a situation in which the appropriators say: OK, 
the Lott amendment passes, it cuts discretionary. We cannot offset 
that, and we cannot shift the defense on the Grassley-Exon portion, but 
we can shift everything else, the whole rest of the defense budget. 
That differs from the firewall that I think we ought to put up, which 
is on the whole defense budget--not that it cannot be cut or shifted. 
It can be cut, but cuts would go to the deficit. My question to the 
Senators is: Am I correct that the Appropriations Committee could 
basically take everything but the Exon-Grassley amendment money and 
shift it from defense to nondefense and discretionary accounts?
  Mr. SASSER. The Senator is entirely correct. He has analyzed this 
thing precisely the way it is going to operate. The alleged protection 
that the Senator from Mississippi seeks to impose for defense spending 
here applies only to the incremental cut, the Grassley-Exon cut, and 
that is all.
  I know this is somewhat confusing, but as I read this thing--and 
clearly, as the Senator from Georgia perceives it--there is no 
protection for the remaining portion of discretionary spending. In 
short, given the fungibility of money, this amendment does not protect 
military spending at all, as far as this Senator is concerned, and I 
think my views are well known on that. I would like to see military 
spending take its chances just with all of the other discretionary 
spending. But if it is the intent of the Senator from Mississippi to 
fence off and wall off military spending and protect it, this amendment 
simply does not do it. All it does is simply wall off that portion of 
the Grassley-Exon cut as you take this out of Defense. All the rest of 
this big pool of money is there, and the appropriators can do as they 
wish with it.
  Mr. NUNN. Can I give a hypothetical so that we can be clear? Maybe 
the Senator from New Mexico can answer this, also.
  Assuming--and I do not know the exact numbers--this 5-year so-called 
discretionary account, which includes defense and also domestic 
discretionary--assuming the cap is $550 billion on that, and assuming 
the Grassley-Exon amendment cuts $43 billion out of that; would it be 
fair to say that under the Lott amendment, all the $43 billion cut 
would have to come out of nondefense, except for the 1995 problem? 
Nondefense discretionary. But the remaining $507 billion over 5 years, 
under the Lott amendment, could still be shifted from defense, and all 
of it could go into the nondefense account?
  Mr. DOMENICI. The Senator is correct.
  Let me suggest--and I think Senator Lott, the Senator from 
Mississippi, understands this--that I have tried every way possible to 
put a firewall in, without being subject to a point of order. I tried 
in committee, and I lost 11 to 10 or 10 to 9, or whatever it was. 
Whenever that comes up on a floor, a point of order is raised. Once, 
the Senator from Georgia and I got 54 votes or something. So it cannot 
be done. Senator Lott did not find a way to do it either. So there is 
no wall--even if the language he uses, which is very well-crafted, says 
that you can only take these cuts against nondefense discretionary. The 
amount of money described there is not the discretionary budget of 
America but rather the piece attributable to the Exon cut.
  So all the rest of it is clearly mobile, as I see it. The Senator 
used the word ``fungible.''
  Mr. NUNN. And one-twelfth of it, if you look at the figures, 550, say 
one-twelfth of it, would be protected; the rest of it would be 
absolutely able to be shifted from one to the other.
  I guess the Senator from Tennessee has the answer to that question. 
Does he agree with the answer I received?
  Mr. SASSER. Yes, I agree.
  The PRESIDING OFFICER. The Senator has spoken the additional 5 
minutes.
  Mr. SASSER. I yield an additional 5 minutes to the Senator from 
Georgia.
  I agree completely with what the distinguished Senator from New 
Mexico has said. In fact, there is not even opportunity to put in a 
firewall for 1999 even for the amount of a Exon-Grassley cut in this 
amendment before us.
  Mr. NUNN. The Senator from Tennessee understands when there is a 
Domenici-Nunn effort to put in an effective firewall it will require 60 
votes, and I hope the Senator from Tennessee will look favorably on 
that effort. I know he would want to see the legislation drafted in an 
effective and clear way.
  Mr. SASSER. I say to my friend from Georgia that hope springs eternal 
in the human breast. I understand that. But I may not be counted on the 
side of the Senator from Georgia when the roll is called.
  Mr. DOMENICI. Mr. President, will the Senator yield 2 minutes?
  Mr. NUNN. I will put the Senator from Tennessee in the doubtful 
column. We are going to continue that effort.
  Mr. LOTT. Will the Senator from Georgia yield a second?
  Mr. NUNN. I yield.
  Mr. LOTT. Mr. President, there are several points the Senator made. I 
will try to respond on my own time.
  I do want to just put out a word of caution that I know that what the 
Senator is trying to do is, in effect, to save the $20 billion proposed 
offset in the Domenici amendment, which has been spoken against now by 
the distinguished chairman of the Finance Committee, so it could be 
used later on.
  But I do think you need to think carefully about what is being said 
here and the impact this vote may have on the subsequent vote, because 
there are some Senators who share the concerns of the Senator from 
Georgia in the defense area, but they also feel the deficit has not 
been adequately addressed. They wanted an effort to find a way to get 
some more deficit reduction through using the entitlements. And the 
idea was, look, let us have it; let us try it. Let us see if we can 
find a way to protect defense. Let us see if we can find a way to get 
entitlements savings on top of the discretionary spending cuts. If that 
fails, then we have to look around for another alternative.
  That is what I want the Senator to be aware of. There is a lot of 
thought going on as to how we achieve the goal he is after.
  Mr. NUNN. I understand, Mr. President. The Senator from Mississippi 
and I, I think, share the same general goal.
  My problem, though, is if this amendment passes, as I view it, given 
the vote count around here, there is really going to be no way to 
protect defense.
  I think, as the President said in his State of the Union Address--and 
I hope the Clinton administration will be on the same side as Senator 
Domenici and I will be on the subsequent amendment we are going to be 
considering--the President said very clearly he did not think the 
defense budget should be cut any more.
  The problem I have with the Lott amendment is it is basically taking 
the savings that could be made as an offset, and protect defense, while 
keeping the deficit at the level that it is now in the Budget 
Committee. It does not protect defense from that discretionary 
allocation matter.
  I see where the Senator is coming from. It seems to me if the Lott 
amendment passes, it puts defense in a much more precarious position.
  I also say that I hope there will be a chance to vote on a broad 
entitlement approach later in this debate that is unrelated to any 
offset on defense. I hope that we will have that opportunity. Senator 
Domenici and I again sponsored that amendment last year.
  I also hope we can find some way to deal with the firewall. I get 
very frustrated in being up against the 60-vote rule because of the 
firewall. That was one of the reasons I had a little less sympathy than 
I might otherwise have had when people are adding a constitutional 
amendment, how bad it was, to have 60 votes; otherwise, it would be 
gridlock.
  That is exactly where we are in this whole budget situation. We have 
to have 60 votes on everything that disagrees with the Budget 
Committee. We already have, in effect, a quasi 60-vote requirement.
  Mr. President, I close my remarks by saying I thank the Senator from 
Tennessee, the Senator from New Mexico, and the Senator from 
Mississippi for answering my questions. I believe, because of the 
information that has come from this dialog, I will be voting against 
the Lott amendment, but in the hope that we can put together something 
else that will achieve some of the same purposes the Lott amendment is 
aimed toward. But I do believe that, based on the information we have 
now received from this dialog, the Lott amendment basically puts 
defense in more jeopardy, notwithstanding the Senator's intention.
  So I urge our colleagues to vote against the Lott amendment.
  The PRESIDING OFFICER. The Senator's 5 minutes have expired.
  Mr. DOMENICI. Mr. President, I wonder if I might speak on this issue? 
Will the Senator yield me 2 minutes?
  The PRESIDING OFFICER. Who yields time?
  Mr. SASSER. I yield.
  Mr. DOMENICI. Mr. President, I will take 2 minutes off the 
resolution.
  I say to Senator Lott, let me interpret what I have just heard here 
on the floor. I do not think any of the answers were different than the 
Senator expected with reference to the existence of firewalls and the 
enforceability of the defense language.
  Am I correct in assuming that when the Senator offered this, he knew 
that? I mean, I am not trying to state something here inconsistent with 
what the Senator understood, because I thought we all understood when 
he put together his amendment, which took its entitlement cuts from an 
amendment I had proposed, which the Senator graciously has 
acknowledged, I think it was understood then that we were leaving the 
discretionary spending of the cuts of the Exon-Grassley amendment in 
place and that he would make the best effort he could to articulate 
that those cuts should not be applied to defense.
  Am I stating it about right?
  Mr. LOTT. I think that is accurate, Mr. President.
  I would like to make some additional comments in this area when the 
Senator finishes with his comments.
  Yes, this is basically what I knew. I think the Senator from Georgia 
indicated he knew what I was trying to accomplish.
  The question of whether we can accomplish it in this way, we are 
going to try later on an actual vote on firewalls. We have to have 60 
votes, and we were trying to avoid that problem.
  Mr. DOMENICI. Mr. President, do I have a minute left, or how much, on 
that?
  The PRESIDING OFFICER. The Senator has 30 seconds.
  Mr. DOMENICI. Mr. President, I yield myself an additional minute, so 
it will be a minute and a half.
  Let me say to the Senator from New York, Senator Moynihan, I know he 
has come to the floor and discussed the portion of the Lott amendment 
that exclusively deals with an amendment that has been on the floor 
referred to as the Domenici amendment or the Domenici-Nunn amendment. 
That is the case. That is the case.
  That second portion of the Lott amendment with reference to 
additional restraint on mandatory entitlements is an amendment I 
proposed. I do not choose on this amendment to respond in detail to the 
Senator, but let me just say to the Senate that when the time comes to 
debate it separately, I will make my case for it in terms very 
different from the Senator from New York. In fact, I will give him the 
facts and let him conclude whether it affects health care reform or 
not. I will not conclude, but I do not believe it in any way will 
affect health care reform.
  The President himself wants savings in health care reform. We ought 
to have some. If the Senator is worried about how much this is going to 
impact on health care spending, that is the second part of the Lott 
amendment. We will be spending $1.585 trillion in 1999 on health care, 
the U.S. Government portion, Medicare and Medicaid.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DOMENICI. I yield 1 additional minute.
  I say to the Senator, cumulative over the 5 years, that is cut by 1.2 
percent. That is the numbers as I have them. If that kills health care, 
then I cannot imagine how we will ever get the deficit under control.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from Tennessee.
  Mr. SASSER. How much time is remaining on this amendment?
  The PRESIDING OFFICER. The Senator from Tennessee has 9 minutes 45 
seconds; the Senator from Mississippi has 27 minutes.
  Mr. SASSER. I yield 5 minutes to my friend from New York.
  Mr. MOYNIHAN. Mr. President, may I say to my friend from New Mexico, 
when we do get to that part of the debate, I think the Nunn statement 
was just at the end of this particular amendment we have before us now.
  I know what he says will be factual and will be straightforward, and 
not too arcane. But I would like to say to my friend that in 1999, we 
are scheduled to spend just over $400 billion on Medicare and Medicaid.
  Mr. DOMENICI. The number I gave was the cumulative expenditure over 5 
years.
  Mr. MOYNIHAN. Over 5 years.
  Mr. DOMENICI. And I took the little percentage each year and summed 
that up, and was reducing that over 5 years by 1.2 percent.
  Mr. MOYNIHAN. That is about right. And as everyone knows, it takes a 
good deal of temerity to challenge the Senator from New Mexico on 
numbers.
  Mr. DOMENICI. I thank the Senator very much.
  Mr. MOYNIHAN. I do want to say we are talking about the significant 
$19.6 billion, which is absolutely necessary for the President's health 
care reform measure to be enacted. I think we can stand this vote on 
health care reform and Domenici-Nunn will be a vote on health care 
reform.
  If you are against universal health care coverage, vote for these 
amendments. If not, give our committee, the Committee on Finance, and 
the other committees involved, an opportunity to bring health care to 
this floor after half a century of waiting.
  I thank the Senator.
  The PRESIDING OFFICER. Who yields time?
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. How much time do I have remaining?
  The PRESIDING OFFICER. The Senator has 23 minutes remaining.
  Mr. LOTT. We asked for and received the yeas and nays on this 
amendment, have we not?
  The PRESIDING OFFICER. The yeas and nays have been ordered.
  Mr. LOTT. Mr. President, gee, this sounds awfully familiar. I have 
heard it year after year after year. ``Oh, we can't cut that. Oh, we 
can't cut that. We'll get it later. You can't take it from here. We are 
going to use it somewhere else.''
  We go through this exercise with these budget resolutions.
  I will tell you I voted for the Budget Impoundment Act and, over the 
years, I have voted for some budgets and against others. But I am 
beginning to wonder what does the Budget Committee really do? What is 
it worth? Maybe we ought to abolish the Budget Committee, and say the 
Budget Impoundment Act was a good idea, but, gee whiz, it did not work.
  What are we doing this exercise for? We are told, ``It does not make 
any difference. The appropriators are going to do what they want to 
anyway. We cannot direct them.'' If that is what we are going to do, we 
ought to have real reform and deal with the macro number, the 17 
accounts, I believe, a one-page deal and be done with it.
  And the difference is, if we send the Exon-Grassley amendment or 
leave it like it is and it goes to the Appropriations Committee, my 
God, it is going to be Armageddon; they are just going to take it all 
out of defense. I do not believe the Senator from West Virginia would 
do that. I know the Senator from Hawaii would not do it. I know the 
Senator from Alaska [Mr. Stevens] is not going to agree with that.
  They are not going to go in there with a meat ax and chip away at 
defense. Yes, they may be forced by, I guess, the budget resolution 
numbers to some degree to do more in discretionary spending reduction 
and it would affect defense. I just do not believe, though, as was 
inferred by the Senator from Georgia and others here on the floor, that 
if we send it to Appropriations with these numbers they are just going 
to come in here and take every nickel out of defense, or 50 percent. I 
have some faith in those guys and ladies on the Appropriations 
Committee.
  But, oh, gosh, yes, if there is some cut, some cut that might 
actually bite, you hear all kinds of screaming now about what we cannot 
do, why we cannot do that. We cannot have any kinds of further cuts in 
defense.
  Where has everybody been for the past 3 years? We had a 35 percent 
cut in defense. So to try to avoid any real cuts in domestic 
discretionary spending, the fire alarm goes out: ``Oh, well, it is all 
going to be done in defense.'' And then the next line comes in, ``Oh, 
well, we can't do what Senator Domenici has drafted here because this 
is going to be the first vote on health care and we planned to save 
that money so we could spend it on health care reform.''
  There are some people in America that think we should not begin the 
health care reform debate by assuming we are going to spend billions of 
dollars, new dollars. We have to save this money and a lot more because 
we are going to have this reinventing Government on health care. The 
Government is going to take it over and it is going to costs billions 
of dollars. That is the same old arrangement.
  So we are saying, ``Oh, we can't have any entitlement cuts because we 
are saving that to spend it later on health care reform.''
  ``Oh, we can't have any cuts in domestic discretionary spending 
accounts because it is going to only affect defense.''
  I have voted consistently, year in and year out, for defense 
programs, not to cut defense. I have raised objections and concerns and 
exasperations about the cuts we have made over the past 3 years in 
defense. I am the last guy that wants to do that. I will assure you 
that when 13 Senators of both parties voted for the Exon-Grassley 
amendment in the Budget Committee, their intent was not to have it all 
taken out of defense.
  But it is the same story you hear year in and year out: ``We can't do 
it here. We can't do it there.''
  And somehow or other we develop this buddy system that leads to the 
net result that we do not do much of anything.
  We have talked about, oh, how we have done a great job. We were tough 
back in 1982. Yes, and the deficits went up.
  We talk about how we were going to be tough in 1990 when President 
Bush was in the administration. Yes, we were tough. Very tough 
amendment. And the deficits went up. And, this is a stay-the-course but 
tough amendment. We are going to have some savings and the deficits go 
up. The debt goes up. So it is the same old song that we hear year in 
and year out--``Not here, not there, not anywhere,'' the truth be 
known.
  We talk about how we worry about deficits and debt and spending and 
we are going to control it, but we never do.
  When somebody comes up with an idea that we actually do it, then we 
bring on the chairman of the Finance Committee, we bring on the 
chairman of the Armed Services Committee, who say, ``You can't do this 
part; you can't do that part.'' And then the partners will change on 
the next amendment or the next debate. We will have different people 
dancing, waltzing together, saying, ``Well, OK, we weren't together on 
that last one, but now we are together on this one.''
  But the net result is we never get around to doing what we say we 
intend to do.
  That is all I have intended with this amendment. I am trying to find 
a way to bring Members together. I am trying to find a way to get some 
deficit reduction without emasculating anybody, trying to find a way 
that it would not all have been taken out of the defense, since that is 
all that has been happening in the discretionary area. Everyone in 
Washington is using defense as a cookie jar: ``On, we need a little 
more money for this program or that program.''
  Wonderful programs. We had a couple of those programs here. I voted 
for them. Great, wonderful programs. How could you be against them?
  Most of the time, all the other spending has continued to inch up, 
except defense. That is the only one that has really been going down. 
That is of the reasons I am very much for abolishing the whole system, 
and finally having truth in budgeting. We should get rid of this 
baseline doubletalk where we allow inflation to go up and then we talk 
about it. We think we are fooling somebody, but the American people 
have it figured out.
  We talk about how good the economy is. But I see some troubling signs 
in the economy.
  Again I am not putting the blame on anybody--the Congress or the 
President. All I know is it has been sort of a jobless recovery. I also 
know that the Fed raised interest rates another quarter. I am worried 
what that means for the future.
  So I just wanted to take a little more time now and point out why I 
proposed this amendment and try to correct the Record a little and give 
some statistics.
  In the budget resolution we have here before us from the committee, 
the proposed terminations and reductions in the fiscal year 1995 by the 
President amounted to $5.5 billion, while the new spending amounted to 
$8.2 billion. So you had a net increase; a few cuts, but more increases 
and new spending.
  Over the next 5 years, as I have already pointed out, new spending 
increases total $127 billion. The Federal budget outlays would increase 
17.1 percent in fiscal years 1994 to 1998. The cuts we have proposed in 
the Exon-Grassley amendment, coupled with the Domenici language, would 
barely scratch the surface there. It might reduce it a percentage point 
or two. We would still have a 15 percent increase over the 5-year 
period, in all probability. I have not actually calculated the 
percentage, but I think we need to acknowledge that.
  But another thing that bothers me about all of this, at a time when 
we say this is supposed to be a stay-the-course and honest and 
realistic budget, is that so many parts of what we are going to be 
doing this year are not included, including a lot of cuts in the area 
of allocations for crime.
  Now, the point will be made which was made in the Budget Committee, 
``Well, yeah, the President had some increases for fighting crime.'' 
But, as a matter of fact, the President proposes cutting $600 million 
from existing law enforcement and anticrime programs in this budget, 
including funding for DEA and for fighting organized crime, the parole 
commission, INS, ATF, IRS, the Customs Agency, the Coast Guard. We are 
cutting back on our interdiction funds, cutting back on the national 
drug control policy office and cutting back on the FBI.
  So, again, I am saying here not only is this a budget that allows for 
increases, it does not even acknowledge we are going to have some costs 
for health care or welfare reform. And it actually reduces the 
expenditures in all of these programs for fighting crime.
  So I have real problems with this budget resolution. My whole intent 
here was to try to get some realistic deficit reductions and try to 
find a way to keep defense from being cut.
  I hope my colleagues will look at it very closely.
  I yield the floor at this time.
  The PRESIDING OFFICER. Who yields time?
  Mr. SASSER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. SASSER. Mr. President, my friend from Mississippi said that he 
thought the Budget Committee had not intended to cut defense with the 
Exon-Grassley amendment.
  The debate in the Budget Committee on the Exon-Grassley amendment 
made abundantly clear that these cuts could well come out of defense.
  I ask unanimous consent that the transcript of the Budget Committee 
debate on the Exon-Grassley amendment be printed in the Record at this 
point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Debate From Budget Committee Markup on the Exon-Grassley Reduction 
                       Amendment, March 17, 1994

       Chairman Sasser. Senator Exon is recognized.
       Senator Exon. Mr. Chairman, thank you. I am going to be 
     very brief, because I know Senator Conrad and Senator 
     Grassley, who has worked with me on this--the Exon-Grassley 
     amendment that I am offering at this time is a cut of $26 
     billion in the budget over 5 years. If there is any criticism 
     of this that it is legitimate, it is minuscule, but it is 
     probably the only chance we are going to have to make some 
     reductions.
       This amendment was figured and calculated to freeze the 
     budget authority in our discretionary spending over the next 
     5 years. We then allowed a 50 percent increase above that 
     freeze or a total of $26 billion. The Chairman's mark is 
     actually $52 billion above the budget authority freeze.
       When you add up all these discretionary funds, you see that 
     we are talking about $111 billion over the coming 5 years. 
     That $111 billion is not the complete figure, as the markup 
     materials do not include all of the discretionary add-ons. 
     Total discretionary spending over the next 5 years would 
     total $2.7 trillion in the Chairman's mark. This is less than 
     1 percent of that total, but I think it is at least a small 
     step in the right direction to get on the glide path to a 
     balanced budget.
       I yield to my colleague from Iowa.
       Senator Grassley. To my Republican colleagues, if you voted 
     for the Gramm amendment this morning, this would be the Gramm 
     amendment divided by two. It offers an opportunity to reduce 
     the deficit by $26 billion.
       Senator Exon, I have been meeting off and on since we 
     adjourned just before the Thanksgiving holidays with the idea 
     that we need to do more than what we figured would be planned 
     by the White House in the course of developing this year's 
     budget. We felt that the only way that we could make any 
     progress would be to have a bipartisan approach to reducing. 
     We hope that you will see this as a bipartisan approach to 
     do more, considering the fact that in the outyears, beyond 
     the year 1998, we have a tremendous increase in the budget 
     deficit, and that we need to do more now and not wait 
     until then to take care of a problem that we know is down 
     the road.
       Senator Simon. A question: As I understand it, you simply 
     reduce the number, you do not say where they are allocated or 
     anything like that?
       Senator Exon. We do not, and we reduce the caps 
     accordingly.
       Senator Grassley. Yes.
       Chairman Sasser. Does anyone else wish to speak in favor of 
     the Exon amendment?
       Senator Gregg. I have a question.
       Chairman Sasser. Senator Gregg.
       Senator Gregg. I do not understand how you arrived at these 
     numbers.
       Senator Exon. I said the way we worked this out, after 
     looking at a lot of different formulas, was simply to go to 
     the basis of freezing the whole discretionary budget over the 
     next 5 years, and then we allowed a 50 percent increase above 
     that freeze, cutting in half essentially the increase that is 
     in the Chairman's mark.
       Senator Gregg. I see.
       Senator Grassley. I hope I said it very clearly, you voted 
     for the Gramm amendment. Divide it by two, and that is the 
     figure that you end up with here in our amendment.
       Chairman Sasser. Let me make just a few remarks about this 
     so-celled freeze. first, we are already below a hard outlay 
     freeze relative to the actually enacted levels of the 1994 
     appropriations bills.
       In 1994, the appropriations bills totalled $544 billion in 
     outlays, In 1995, they are going to total $541.1 billion in 
     outlays. So we are actually reducing discretionary spending 
     by $3.9 billion.
       Now, this amendment continues to punish the discretionary 
     accounts which both sides of the aisle agree are not the 
     deficit problem. Our problem is not in discretionary 
     spending. We all know it is in mandatory entitlement 
     spending. Senator Domenici has told us on this committee ad 
     infinitum and on the floor, that is what is driving these 
     deficits, and he is entirely right about that.
       Now, let me make this fundamental point: This amendment 
     does not tell us what is going to happen in discretionary 
     accounts. It does not say what is going to be cut. All it 
     says is that we are going to reduce the discretionary 
     accounts budget authority by $43 billion and outlays by $23 
     billion.
       Earlier today, the effort to reimpose the walls, which the 
     Senator from Nebraska supported, was defeated. Now I have 
     discussed this amendment with the distinguished Chairman of 
     the Appropriations Committee, and I wan to tell my friends on 
     this committee who support a large defense number that 
     defense is going to take the lion's share of the cuts, if 
     this Exon-Grassley proposal passes.
       Now, as far as I am concerned, that would not be a matter 
     of great concern to me. But it is also going to turn around 
     and make some cuts in some of the other discretionary 
     accounts, such as education, as Senator Simon and Senator 
     Dodd tried to increase today.
       Earlier, Senators voted to save the space station from 
     being cut. My guess is the space station will have to be 
     thrown overboard, if this particular amendment passed. We 
     have talked a lot about criminal justice and what we are 
     going to do about that. There will probably be some cuts in 
     that.
       Now, I say to my colleagues we are spending in fiscal year 
     1995 at below the discretionary levels of fiscal year 1994. 
     And when you add into that the effects of inflation, these 
     discretionary accounts are being hit very, very hard indeed. 
     And if I were to allocate across the discretionary accounts 
     where I thought percentage basis these cuts would be made by 
     the Appropriations Committee--and I serve on the 
     Appropriations Committee, I am Chairman of the Military 
     Constructions Appropriations Subcommittee, I serve on the 
     Defense Appropriations Subcommittee--my view would be 
     that defense would take 75 percent of these cuts, and the 
     rest of them would be spread across the discretionary 
     accounts.
       Now, I just say to my colleagues we are straining at a gnat 
     here to swallow a camel. The problem is not in discretionary 
     accounts. All who study this budget know that. The problem is 
     in the mandatories. We are simply going to punish some of 
     these discretionary accounts that has taken about as much 
     punishment as they can take.
       So I would urge my colleagues, although I have the highest 
     regard for my friend from Nebraska, and certainly my good 
     friend from Iowa, and we have worked together on many things, 
     I just do not think this amendment is well advised.
       Senator Exon. Mr. Chairman?
       Chairman Sasser. Senator Exon.
       Senator Exon. I do not know if we have any time left or 
     not. I would simply say that the statement that you have just 
     made and the previous votes that we have had, almost 
     everybody on this side of the table will therefore vote in 
     favor of it, because it will cut defense.
       I would simply say I have heard this before. The Chairman 
     of the Appropriations Committee called me this morning. The 
     Chairman of a subcommittee called me this morning. Others 
     have talked to me. You forgot to mention what others have 
     told me, that this is going to come out of agriculture.
       I think it is time to take a stand on some of these things. 
     I do not know how you can say that 75 percent of this money 
     is going to come out of defense. That is up to the 
     appropriations. I think it is not fair to try and influence 
     votes by making statements like that.
       If all of this comes out of defense, which it will not, it 
     is minuscule. I hope we support the amendment.
       Senator Grassley. Could I have 30 seconds, please?
       Chairman Sasser. Without objection, the Senator from Iowa 
     will have 30 seconds.
       Senator Grassley. You can tell when there is a chance for 
     an amendment to be adopted, they roll out the big guns in 
     this city, and the big guns have been rolled out on this 
     amendment. Because we have been working on this amendment for 
     a long period of time, and the scare tactics are being used 
     and they are being used to affect this side of the aisle.
       I hope that people who voted for the Gramm amendment will 
     not fall for that argument, because that argument is no more 
     applicable to this amendment than it was to the Gramm 
     amendment. It was not made on the Gramm amendment. It is made 
     on this amendment, because this amendment is a true 
     bipartisan effort to do what really needs to be done, and 
     everybody admits it needs to be done, because every chart in 
     this town shows that there is a major problem post-1997-98, 
     and we need to take care of that problem now, not then.
       We always wait manana in this town to do something when it 
     should have been done before.
       Chairman Sasser. A point of inquiry. Am I included as one 
     of the big guns, Senator Grassley? [Laughter.]
       The time is expired on this amendment. Without objection, 
     we will recognize Senator Conrad.
       Senator Conrad. Mr. Chairman, is it possible to make 
     inquiry of the counsel with respect to this amendment?
       Chairman Sasser. Certainly.
       Senator Conrad. I would just like to ask the counsel, with 
     respect to this amendment, as it is constructed, is there 
     anything that limits this amendment to non-defense 
     discretionary?
       Mr. Dauster. No, there is no limit on where in appropriated 
     accounts the cuts are made.
       Senator Conrad. Is there anything that would preclude this 
     from being taken disproportionately from any function?
       Mr. Dauster. No, there is not.
       Senator Conrad. Those are the questions I had, Mr. 
     Chairman. I have an amendment, as well.

                           *   *   *   *   *

       Chairman Sasser. No.
       The clerk will tabulate the vote and announce the result.
       The Clerk. The result is 7 yeas and 13 nays.
       Chairman Sasser. The amendment fails for lack of a 
     majority.
       The next amendment is an Exon-Grassley amendment, and this 
     amendment would reduce the 602-A allocation reported in the 
     Senate Appropriations Committee for fiscal year 1995 by $5.3 
     billion in budget authority and $1.6 billion in outlays. In 
     essence, it would lower discretionary spending by $5.3 
     billion in budget authority, $1.6 million in outlays for 
     fiscal year 1995. You know what it does overall?
       It would lower budget authority by some $40 billion and 
     outlays by some $21 billion, lowering the discretionary 
     spending by $21 billion over the term of the amendment. It is 
     all discretion, across the board amendment that would reduce 
     all discretionary spending by, what, $26 billion? $26 billion 
     in outlays, $43 billion in budget authority. There is no 
     distinction between domestic discretionary or defense. That 
     allocation would be made by the Appropriations Committee, by 
     the chairman of the Appropriations Committee, really.
       Senator Grassley. For Republicans, that would be one-half 
     of the Gramm amendment.
       Senator Domenici. One-half of the freeze.
       Chairman Sasser. The clerk will call the roll.
       The Clerk. Mr. Hollings?
       Senator Hollings. No.
       The Clerk. Mr. Johnston?
       Senator Johnston. No.
       The Clerk. Mr. Riegle?
       Senator Riegle. No.
       The Clerk. Mr. Exon?
       Senator Exon. Aye.
       The Clerk. Mr. Lautenberg?
       Senator Lautenberg. Aye.
       The Clerk. Mr. Simon?
       Senator Simon. Aye.
       The Clerk. Mr. Conrad?
       Senator Conrad. Aye.
       The Clerk. Mr. Dodd?
       Senator Dodd. No.
       The Clerk. Mr. Sarbanes?
       Senator Sarbanes. No.
       The Clerk. Mrs. Boxer?
       Senator Boxer. No.
       The Clerk. Mr. Murray?
       Senator Murray. No.
       The Clerk. Mr. Domenici?
       Senator Domenici. Aye.
       The Clerk. Mr. Grassley?
       Senator Grassley. Aye.
       The Clerk. Mr. Nickles?
       Senator Nickles. Aye.
       The Clerk. Mr. Gramm?
       Senator Gramm. Aye.
       The Clerk. Mr. Bond?
       Senator Bond. Aye.
       The Clerk. Mr. Lott?
       Senator Lott. Aye.
       The Clerk. Mr. Brown?
       Senator Brown. Aye.
       The Clerk. Mr. Gorton?
       Senator Gorton. Aye.
       The Clerk. Mr. Gregg?
       Senator Gregg. Aye.
       The Clerk. Mr. Chairman?
       Senator Sasser. No.
       The clerk will tabulate the vote and announce the result.
       The Clerk. The result is 13 yeas and 7 nays.
       Chairman Sasser. The Senate Budget Committee has voted to 
     reduce discretionary spending by $43 billion in budget 
     authority and $23 billion in outlays, unspecified.
       Senator Boxer. And that is defense and non-defense; is that 
     correct?

  Mr. SASSER. But in the debate there, I said: ``Now, I say to my 
colleagues, we are spending in fiscal year 1995 at below discretionary 
levels, fiscal year 1994.'' And what I was pointing out there in that 
debate in the Budget Committee is that we are spending less in 
discretionary spending in 1995 than we are in 1994 and spending less in 
nominal terms. I am not talking about spending less using a CBO 
baseline, I am saying in nominal dollars, uncorrected for inflation, 
there is less discretionary spending in this budget for fiscal year 
1995 than there was for fiscal year 1994.
  I went ahead to say:

       When you add into that the effects of inflation, these 
     discretionary accounts are being hit very, very hard--very 
     hard indeed. If I were to allocate across the discretionary 
     accounts where I thought percentage basis these cuts would be 
     made by the Appropriations Committee--and I serve on the 
     Appropriations Committee, I am chairman of the military 
     construction appropriations subcommittee, I serve on the 
     defense appropriations subcommittee--my view would be that 
     defense would take 75 percent of these cuts, and the rest of 
     them would be spread across the discretionary accounts.

  That is what I said, as chairman of the committee in the debate. So, 
clearly, no Senator who voted for the Grassley-Exon reduction could 
have any doubt that military spending would be placed in jeopardy here.
  Frankly, that is not a matter that concerns me, because as has been 
pointed out earlier, the United States of America is already spending 
more on military spending than everybody else in the world put 
together. My friend from Mississippi cries crocodile tears about the 
reductions in defense spending. What reductions? In 1980 we experienced 
the largest military buildup in peacetime in the history of this 
country. Now we started some reductions since 1985. And guess what. We 
have reduced right back down to the level that was in place prior to 
the time we started building up, during 1980. There is only one 
difference, and that difference is our nemesis, the old Soviet Union, 
does not exist anymore.
  I think it is time to face facts. We can come out here and talk about 
all these real or perceived threats. We can talk about what General 
This is saying, or Admiral That is saying. We all know none of our 
military people will ever admit that they are getting enough resources. 
I do not criticize them for that. It is their job to have an excess of 
capacity to deal with their problem.
  But what we are into now--and my colleagues know it just as well as I 
know it--we are into military pork barrel projects. That is what it is 
all about. It is military pork. It is looking after my shipyard, it is 
looking after my base, it is looking after my factory that produces a 
certain type of military equipment. That is what it is about. Why do we 
just not confess it? We are now into an era of military pork barreling 
in this country. We are not responding to external threats. We are 
responding to internal threats of job losses as a result of cutting the 
military budget. That is what it is about.
  We have to make some choices here. We cannot talk about our concern 
with the deficit and pretend that military spending makes no 
difference, because those dollars that go into the military budget are 
just as real as the dollars that we spend on domestic programs. There 
is no difference between the dollar that goes to fuel a destroyer and 
the dollar that goes to buy a school lunch for a kid in a school 
somewhere with a school lunch program. It costs the same amount of 
money.
  I believe, frankly, we need to spend what is necessary to maintain 
the security of the country from external threats. And I can envision a 
time when we ought to be spending more than we are spending now. But 
the truth is, at the present time there are virtually no external 
threats to the United States. How in the world can we be so concerned 
about this military spending at a time when we are spending more for 
our military than all of our enemies or potential enemies put together?
  So let me say to my good friend from Mississippi, for whom I have the 
highest respect and a good deal of affection, I must say that we did 
discuss this matter in the Budget Committee. And we knew, I think, what 
we were doing at the time we did it. Now there is a lot of sort of 
squirming here. We are trying to work our way out of this. Some of my 
colleagues are concerned about reductions in military spending. And 
they may succeed; they may succeed.
  Mr. DOMENICI. We will.
  Mr. SASSER. But the truth is, they constructed this problem for 
themselves, and they constructed it by moving ahead in the face of 
assertions that if you do this, military spending is going to take 75 
percent of the cuts. But they went ahead and did it anyway.
  We will see how it works out. Maybe they will be able to save 
themselves to some extent. But I predict that when all the dust 
settles, the Exon-Grassley amendment is going to cause a reduction in 
military spending below the levels that the President proposed.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. I yield 5 minutes to the Senator from Oklahoma.
  The PRESIDING OFFICER. The Senator has 13 minutes 38 seconds. The 
Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, I wish to congratulate and compliment my 
friend and colleague from Mississippi for this amendment. I just 
watched and listened to some of the debate. A lot of people have 
attacked this amendment and criticized this amendment. Of course, they 
have that right to do so. But I think it is important to see what this 
amendment does.
  This amendment expands on the amendment, the so-called Exon-Grassley 
amendment, which cut discretionary spending $26 billion. Some people 
said we cannot afford to do that. This amendment adds $20 billion in 
mandatory spending cuts in the entitlement section. A lot of that will 
be done in 1999. I think we can afford to do both.
  I am amazed. I look at the combination, that is $46 billion in outlay 
reductions over the next 5 years. Not $46 billion, I might mention to 
my colleague from Mississippi, not $46 billion next year. Next year we 
are going to spend over $1.5 trillion. That is $1,500 billion. If you 
are going to cut $46 billion in 1995 out of $1,500 billion, that might 
be something. That would be about 3 percent. But we are not doing that 
in 1995. We are not doing it in 1996. As a matter of fact you have to 
add all 5 years, and if you add up all 5 years, we are going to spend 
over $8 trillion--$8 trillion. There are 12 zeros behind a trillion.
  If we agree to the amendment of the Senator from Mississippi, we are 
talking about $46 billion. It is not even a percent, not even a half 
percent. It will not really even show up in the total amount of money 
we spend. Again, if you are talking about $46 billion next year, then 
you are talking about 3 percent. Frankly, I would probably support 
that. I know some people would say we could not afford it, but I think 
we need to get the deficit down and I would support that. But the 
Senator from Mississippi says, let us cut $46 billion over 5 years over 
the budget we have reported out of the Budget Committee--or an 
additional $20 billion over the budget that was reported out of the 
Budget Committee.
  I am amazed. Everybody is saying, ``The sky is falling. If we do 
this, we will not have a defense. If we do this, we will not have 
discretionary spending.'' I just disagree.
  I compliment my friend from Mississippi. This is an amendment saying, 
do you want to cut spending a little more? Not a lot more, a little 
more? I happen to think that we should. I compliment him for his 
amendment. I urge my colleagues to support its adoption.

  The PRESIDING OFFICER (Mr. Wellstone). Who yields time?
  Mr. SASSER addressed the Chair.
  The PRESIDING OFFICER. The Senator has no time left on the amendment.
  Mr. SASSER. Mr. President, I yield myself such time as I may consume 
off the bill.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. SASSER. Mr. President, so as to accommodate a number of Senators 
who are temporarily away from the Chamber on official business, I ask 
unanimous consent that the pending Lott amendment be temporarily set 
aside to allow consideration of the next amendment in order.
  Mr. LOTT. Reserving the right to object, and I do not intend to 
object, I just wonder, does the Senator have any idea when that may be?
  Mr. SASSER. Yes, I do. They will return about a quarter of six, is 
our information.
  Mr. LOTT. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SASSER. Mr. President, has all time been yielded back on the Lott 
amendment?
  The PRESIDING OFFICER. The Senator from Mississippi has 10 minutes 47 
seconds remaining.
  Mr. LOTT. I do have some time left remaining, and I understand we may 
have one final speaker. We can do that when we come back to the 
amendment at a quarter to six, or whatever amount of time the 
distinguished leader speaks on behalf of the amendment.
  Mr. SASSER. So he will use the remainder of the Senator's time?
  Mr. LOTT. I will be glad to yield him the remainder of it.
  Mr. DOLE. When we come back to it, I will use a couple minutes.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
North Dakota is recognized.


                           Amendment No. 1564

 (Purpose: Expressing the sense of the Senate that domestic producers 
should not be asked to continue to bear an unfair share of the Federal 
 income tax burden compared to foreign-controlled competitors and that 
 Congress should move to close tax loopholes that subsidize companies 
that move their plants outside the United States and that allow foreign 
corporations to do business in the United States and avoid paying their 
                          fair share of taxes)

  Mr. DORGAN. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from North Dakota [Mr. Dorgan], for himself, 
     Mr. Daschle, and Mr. Feingold, proposes an amendment numbered 
     1564.

  Mr. DORGAN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the end of the resolution, insert the following new 
     section:

     SEC.   . CLOSING OF LOOPHOLES IN FOREIGN TAX PROVISIONS.

       (a) Findings.--The Senate finds that--
       (1) foreign-controlled corporations doing business in the 
     United States do not pay their fair share of taxes;
       (2) up to 72 percent of foreign-controlled corporations 
     doing business in the United States pay no Federal income 
     tax;
       (3) the Internal Revenue Service has limited its own 
     ability to enforce Federal tax laws against foreign-
     controlled corporations, to the detriment of domestic 
     taxpayers;
       (4) the Internal Revenue Service has been using antiquated 
     accounting concepts to deal with sophisticated multinational 
     corporations;
       (5) billions of dollars of Federal revenues are lost 
     annually due to the inability of the Internal Revenue Service 
     to enforce the ``arm's length'' transaction rule--not even 
     counting the costs of bureaucracy and litigation; and
       (6) the Federal income tax laws encourage domestic 
     taxpayers to relocate abroad by granting them deferral of 
     United States taxes on income earned abroad.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that deficit reduction should be achieved, in part, by ending 
     loopholes and enforcement breakdowns that now enable foreign-
     controlled corporations operating in the United States to pay 
     no taxes and that subsidize the flight of domestic businesses 
     and jobs out of the United States, including--
       (1) a more streamlined and efficient method of enforcing 
     Federal tax laws involving multinational corporations, 
     especially those based abroad, in particular, the use of a 
     formula approach by the Treasury Department where the ``arm's 
     length'' transaction rule does not work; and
       (2) a repeal of tax subsidies for domestic businesses that 
     move jobs to tax havens abroad and then ship their products 
     back into the United States.

  Mr. DORGAN. Mr. President, this is a fairly simple amendment that 
deals with a subject I have worked on for a good number of years. As is 
often the case in Congress, one works for a number of years before one 
achieves success.
  This amendment happens to deal with how much money we raise and from 
where we raise the money. We are talking today about how much we spend, 
how much money we raise, and what kind of a deficit we have left. The 
question is whether we spread the sacrifice around fairly and whether 
we ask the right things of the right groups.
  My amendment deals with a couple of tax provisions that establishes a 
sense of the Senate that we ought to move in two areas.
  One deals with an area where corporations close their doors in 
America and move overseas. These corporations produce in a tax-haven 
country and then ship back their tax-haven products into America. For 
all of that they then get a tax incentive or a tax benefit from the 
Federal Government.
  President Clinton talked a lot about this issue during his campaign. 
He said--and he was right--should we not at least shut down the Federal 
tax incentives that encourage American companies to shut their doors in 
this country, move their jobs abroad, and then ship back to the United 
States? The answer, of course, is yes, we should shut down those tax 
incentives, and I will explain that in slightly more detail in a 
minute.
  The second provision talks about how we tax large foreign 
corporations doing business in our country, and are the large foreign 
corporations doing business in America paying their fair share of 
taxes? Let me refer Members of the Senate to a very simple chart. This 
chart has numbers that are fairly well agreed to by everyone. It is the 
result of a number of studies. ``Foreign Controlled Corporations Paying 
and Not Paying Tax in This Country.'' Seventy-two percent of the 
foreign-controlled corporations doing business in America pay no taxes. 
I am not saying they pay too little or they pay a little. Seventy-two 
percent of the foreign corporations doing business in this country pay 
no taxes to the U.S. Government.
  How could that happen? How on Earth could that be the case? It is 
something called transfer pricing. Foreign corporations shipping goods 
to this country have the opportunity to determine where they want to 
take the profits. They can price sales between subsidiaries at 
virtually any price, and they can move profits out of this country.
  For example, one corporation in this country that was producing 
automobiles over a 2-year period earned over $3 billion but paid 
nothing in Federal taxes because it claimed it did not make any money 
in this country. How does the Treasury Department and the U.S. 
Government deal with these kind of claims by foreign corporations doing 
business in this country? They say, well, we use the so-called arms 
length test. In other words, they measure affiliated corporations and 
the business they do with each other with something called an ``arms 
length'' test. They look to determine how an arms-length price between 
the affiliated companies compares.
  It is an enormously complicated system. But more importantly, it is a 
buggy whip system that does not work at all to catch tax cheaters in 
the 1990's. The result is the Treasury Department is chasing a kind of 
approach that is antiquated and does not work. Foreign corporations are 
doing business in this country, selling an enormous amount of goods in 
America and, in most cases, paying no taxes in this country.
  When we talk about reducing the Federal deficit, getting in the 
revenues we deserve, should we not also do something about this 
outrage? Should we not also do something about changing the approach by 
which we tax foreign corporations doing business in this country? My 
answer is yes, of course.
  We have already done this in the States in this country. Minnesota 
has done it. North Dakota has done it. The States decided they wanted 
to find out how you divide up the income of a company doing business in 
all of the States because the companies would say to Minnesota, ``Well, 
that was North Dakota income, so you cannot tax it.'' They would say to 
North Dakota, ``That was Minnesota income, so you cannot tax it.'' 
Neither State would receive tax on the business profits, and the 
business would pay no tax to either State. In fact, it would be nowhere 
income.
  The States learned early on that the way to deal with that is to 
establish a simple and fair formula that apportions the incomes between 
a State for a corporation doing business with all of the States. The 
States have solved this problem and increased their revenue base by 
getting the appropriate taxes they ought to get from big corporations.
  The Federal Government has not solved the problem with respect to 
foreign corporations. They are still using a system that does not work, 
that is clogging our tax courts, and allowing foreign corporations to 
do an enormous amount of business in this country and escape paying, in 
many cases, any taxes at all. They will do billions of dollars of 
business and pay zero in taxes.
  Of course, the domestic corporation that has to compete with them in 
the United States must pay taxes, and the result is unfair competition.
  My resolution simply says we want the Treasury Department to use 
existing authority to move toward a formulary approach to try to get 
our fair share of taxes from these corporations where the arm's-length 
method does not work. It ought not be controversial. No one ought to 
object to this at all. We ought to simply change the way we do 
business. This is unfair to American businesses, it is unfair to 
American taxpayers who have to pay their taxes and somebody else comes 
in from the outside and earns billions and pays nothing, and we ought 
to change it.
  The second part, the part I mentioned first when I stood up, is 
fairly simple. President Clinton in the campaign talked about a tax 
provision that exists in our Tax Code today that desperately needs 
changing. He talked about our tax laws that tells a business, ``Go 
ahead and close your doors in America, move the jobs overseas, and we 
will give you a tax break for doing so.''
  Here is how it works: If you have two companies side by side doing 
business on the same block, one of them decides: ``I'm leaving, I'm 
going to shut my company, get rid of the 100 jobs in America and I'm 
going to move my company lock, stock and barrel to a foreign tax haven 
and hire 100 people there.''
  What have they done? They have moved their company and their jobs and 
they are producing garage door openers in a foreign country--whatever 
they are producing--and they are shipping them back to the United 
States.
  What is the difference between that company and the other one that 
was beside it that was doing exactly the same manufacturing job? The 
difference is the company that moved overseas can now make the same 
profit but not have to pay any Federal income taxes on that profit as 
long as it does not repatriate it. In other words, the company 
manufacturing abroad from a foreign tax haven gets an interest-free 
loan from Uncle Sam in order to compete against the other business that 
kept its jobs in America.
  That is the tax incentive President Clinton talked about, and that is 
the tax incentive we ought to change. We ought to decide that for those 
companies which close their doors in America and move overseas to a tax 
haven to produce and ship back into this country, we will not any 
longer provide a tax incentive to do it.
  You take a look at all the grotesque distortions in the Tax Code. And 
there are plenty. This ranks right up there as one of the dumbest. We 
ought to take action to change it.
  My resolution does not instruct any committee on exactly how to 
change it, although I have a piece of legislation introduced that will 
do just that. But my resolution simply asks this Senate to decide to 
make these changes. Get rid of the incentives that encourage people to 
move their jobs out of this country and relocate them overseas and get 
rid of the tax enforcement provisions that do not work and replace them 
instead with a formulary approach that allows us to ask foreign 
companies working, selling and doing business in this country to pay 
the same taxes that American businesses have been paying for a long, 
long time.
  My bill would impose no new taxes on anyone. It will simply eliminate 
a subsidy that ought never have been present in the first instance. In 
the second instance, we ought to develop an enforcement approach that 
will finally allow us to determine how much foreign corporations 
selling cars and VCR's and television sets in this country ought to be 
paying us in income taxes. The fact is I have my own notion about how 
much we are losing. I think we are losing around $10 billion a year 
because of the IRS' antiquated ``arms- length'' pricing approach, and 
$10 billion a year is a significant amount of money. There is no excuse 
at the time we are gripping this question of how do we find additional 
revenue for us to continue to ignore these two areas.
  I look forward to working with the chairman of the Senate Finance 
Committee and other Members of the Senate on this issue. I served 10 
years on the House Ways and Means Committee, and have worked on tax 
issues for a long time. I have worked on these issues for a long time, 
too. One of these days this is going to get solved. Until it gets 
solved, at every conceivable opportunity I will raise this question 
with my colleagues: Do you not agree; do you not think it is time for 
us, in all fairness to the American people and American businesses, to 
address these two questions?
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time in opposition?
  Mr. SASSER. Mr. President, I am not sure who is controlling the time 
in opposition, but I would yield such time as the Senator from New York 
would consume in opposition. I know of no one else who wishes to speak 
on it.
  The Senator from New York is welcome to 2 minutes or 5 minutes.
  Mr. President, I suggest the absence of a quorum and ask it be 
charged equally against both sides.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. SASSER. Mr. President, acting for those in opposition, I yield 10 
minutes to the distinguished Senator from New York.
  Mr. MOYNIHAN. Five minutes will do, I say to the Senator.
  Mr. SASSER. Five minutes.
  Mr. MOYNIHAN. I want, first of all, to thank my friend and colleague 
from North Dakota for raising this subject once again. It is a serious 
subject. He is an expert in it. He served a decade on the Committee on 
Ways and Means in the other body, where he pursued the matter. It is an 
issue not only of large salience at this time, but as we become a more 
international economy, with growing firms, increased competition, and 
great complexities in these matters, it will become more of an issue. I 
would dare to think that 40 years ago the question of compliance by 
foreign corporations operating in the United States under the U.S. Tax 
Code would have been very small--some insurance activities, some 
manufacturing. A century ago it would have been large, but then there 
would not have been much Federal tax presence. But this is now coming 
into a new world.

  The issue is that we want to be careful of generalizations. The fact 
that a great many corporations pay little or no tax reflects the 
increasing activity of foreign corporations here, just as our 
corporations are active abroad. The complexity of world trade will 
astound you.
  About 2 weeks ago in the Finance Committee in a hearing on the GATT 
agreement, we had a manufacturer from Ohio, who makes automotive parts, 
describe what goes into a 14-cent air valve in a tire. The copper is 
from Zambia, the lead from Saskatchewan, the steel from Birmingham, a 
whole series of metals of which I have not heard and from some 
countries I would have difficulty locating on the map; about 15 foreign 
sources for a 14-cent device. It is normal.
  That means that staying with compliance is important. I could not 
more agree with the Senator from North Dakota that we may have to 
attend to this.
  I would like to say that the Committee on Finance has tried to do 
just that. We have in 1989 and 1990, and in last year's deficit 
reduction measure, addressed this issue--not to any final conclusion 
because there will not be any final conclusion. Compliance under Tax 
Codes is a permanent task of Government. It is never done once and for 
all.
  We are seeing, ourselves, in our domestic arrangements, that only 
about one-quarter of domestic workers are covered by the Social 
Security taxes which are required by law to be paid. Only about a 
quarter of employers pay them. We addressed that issue just Tuesday in 
the Finance Committee.
  At the same time, I want to say to the Senator from North Dakota that 
a unilateral action by the U.S. Government at this point would, in my 
view--I think in the view of the Committee on Finance--produce a 
reaction from trading partners which we would not desire. The Treasury 
is negotiating.
  If you were to read the tax notes in the Wall Street Journal today, 
you would find that countries--there is a general comment--that 
countries are increasingly sensitive to tax shelters, and that, for 
example, Denmark broke off from a tax treaty with Portugal because of 
the tax havens in the Madeiras.
  As I say, this is a continuous problem. But it is one in which our 
view as regards foreign corporations needs negotiation. The Treasury 
Department feels, with considerable energy, that this should be left to 
negotiations at this point with respect to the matter of arms-length 
assessment that the Senator very properly raises as perhaps one of the 
central issues at this time.
  If the negotiations do not succeed, we must return to the issue. I 
cannot doubt that the Senator from North Dakota will see that we do. 
But for the moment, I would have to register the view that Secretary 
Bentsen and his associates should be allowed to continue the 
negotiations now underway, particularly in the aftermath of the Uruguay 
round agreement, which put a lot of new rules in place which we need to 
get settled on before we can address this complex, fundamentally 
important issue which the Senator from North Dakota has raised.
  Mr. President, I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I have no interest in prolonging the 
discussion. I appreciate very much the comments of my colleague from 
New York. I have great respect for his leadership in the finance area. 
His stewardship of the Senate Finance Committee, his knowledge of 
taxation is substantial. I appreciate it is a great deal.
  I would observe that there is kind of a law of physics about 
bureaucracy in politics, but especially bureaucracy: A body at rest 
stays at rest. I have discovered trying to get the institutional 
mindset in the Treasury and elsewhere to think differently about some 
of these issues is difficult. You can win on the logic and on the 
common sense. But when you confront the difficulty of the bureaucracy 
and the inclination of the bureaucracy to resist change, you have a 
devil of a time trying to get these things done.
  I would just observe that the very essence of what I am trying to do 
would represent simplicity for the corporations doing business all 
around the world. The Senator from New York is quite correct that it is 
increasingly a global economy. Many businesses do business virtually 
everywhere. I understand that. But the experience of the States is 
quite clear about businesses that do business everywhere.
  To the extent that businesses can save money on the bottom of their 
balance sheet or their P&L statement, $1 saved there represents $10 or 
$20 sales on top. You can save it easily in the tax area by simply 
telling the various jurisdictions in which you are doing business, 
``This is not your income. I have attributed it elsewhere.'' And they 
are telling the elsewhere, ``This is not your income. I have sent it 
back to the first locale.''
  The fact is, the income is sent nowhere. And billions and billions of 
dollars represent nowhere income, taxed by no jurisdiction. And those 
same companies that avoid taxes are now doing business in competition 
with domestic companies who are good neighbors and do all of the 
business and pay all of the taxes at a competitive disadvantage.
  The fact is it happens. It happens all the time. It happens 
increasingly as we go to a global economy. And the businesses that are 
moving more globally would be much better served by a system with great 
simplicity, a formula of several factors which the States use at great 
success. That would tell everyone, including businesses, no one is 
going to tax you more than your income base. But neither are you going 
to be able to hide your income from countries in which you do business.
  My intent is not to overtax anybody. My intent is to see if we can 
say to the American taxpayers, you pay your taxes and we are sure going 
to make certain that everybody else--especially the big shots--doing 
business all around the world, that they are not going to avoid theirs. 
When a company comes in here and does $3.5 billion in business in a 2-
year period, and then says, ``You know, what? We did not make 1 cent, 
not a penny, so we do not pay any taxes. How did they do that? Through 
financial accounting manipulation, by price transfers out of the 
country. There is no army of accountants in this town or in this 
country capable of penetrating that kind of price transfer. We have a 
few people who are--and I hesitate, but I will call them this--thick-
headed policy analysts, who would not change what they do forever. They 
say it has always been done that way, so let us always do it that way. 
As I said before, we would still be making buggy whips if the private 
sector behaved that way.
  I say we desperately need to take a fresh look at this and change. 
The Senator from New York is correct that some adjustments have been 
made in a couple of previous pieces of legislation. At least from my 
observation, they are baby steps, not major strides. I hope that we can 
get up to speed here and develop a kind of a cruising speed on changing 
some of these areas that will satisfy not only me but my constituents 
and others who pay taxes and do not want to see others avoid theirs.
  I appreciate the comments of the Senator from New York and the 
courtesy of the budget chairman and ranking member. I shall not request 
a recorded vote on this, provided we can voice vote it and approve it.
  I yield back my time.
  Mr. SASSER. Mr. President, I yield back all time in opposition.
  The PRESIDING OFFICER. All time is yielded back.
  The question is on agreeing to the Dorgan amendment.
  The amendment (No. 1564) was agreed to.
  Mr. SASSER. Mr. President, I move to reconsider the vote.
  Mr. DORGAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 1563

  Mr. SASSER. Mr. President, is the regular order a return to the Lott 
amendment?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. SASSER. Will the Chair advise me how much time is left for the 
proponents of the Lott amendment?
  The PRESIDING OFFICER. The Senator from Mississippi has 10 minutes 47 
seconds.
  Mr. SASSER. The opponents?
  The PRESIDING OFFICER. The opponents time has expired.
  Mr. SASSER. I thank the Chair.
  Mr. DOMENICI. Mr. President, I understand Senator Lott wants to yield 
5 minutes to the Senator from New Hampshire, so I do that in his 
behalf.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, I rise in support of the Lott amendment and 
to address briefly at this time the budget as presented by the 
President.
  If you look at the budget presented by the President, it is, 
regrettably, a budget that is really a stand-pat budget on the issue of 
addressing the budget deficit. It does not move forward the issue of 
reducing the deficit. It says that last year we passed a lot of taxes 
and, therefore, under the context of what the President believes, we 
should be able to reduce the deficit this year. It is not a visionary 
proposal but vision-impaired proposal. If you look at the numbers in 
the outyear, we cannot afford to do nothing on the issue of the budget 
deficit.
  This chart reflects what is happening to the budget and the deficit 
over the coming years. As you can see from the lines here, the green 
line, which is the bottom line, is the deficit. Although it flattens 
out over the next few years and goes down, it rises as we head into the 
next decade. The reason it starts to rise is because entitlement 
expenditures, which have been explained a number of times on this 
floor, increase dramatically.
  So the practical effect is that if we do not start addressing this 
entitlement line today, we are not going to get in place any 
significant budget reduction in the deficit in the outyears. The 
President's budget, of course, has been put forward, and the rhetoric 
is on the premise that they are going to address entitlements in the 
outyears with their health care program. But if you look at the actual 
budget, the health care program, they create a trust fund, which is to 
be basically revenue neutral within their budget. So they are assuming 
absolutely no savings in the budget from health care reform.
  Thus, we come to the proposal that is presented here today by Senator 
Lott. That proposal should be looked at in the context of the entire 
budget and what we are spending in other areas. If you look at the 
budget over the next 5 years we are going to spend $8.3 trillion. That 
is a colossal amount of money. The accumulated deficit over that same 
5-year period is $934 billion. That is what we are going to take and 
run up bills on and pass those bills on to our kids and say: Here, 
children, take care of these bills. We did not have the guts to do it 
in the U.S. Senate this year.
  This $26 billion is basically the cut which has been proposed by the 
Grassley amendment. It is increased by $20 billion by the Lott 
amendment, up to about $46 billion. It does not even appear on this 
chart. There is a bottom line, and it does not even appear on the 
chart. It is so minuscule compared to the $8.3 trillion we are 
spending, and the $934 billion of deficit that we are running up, that 
it cannot even appear here. That is how small this cut is. Yet, we are 
saying we cannot do it.
  My goodness, if you have children, how can you go home and look them 
in the face and say you cannot even cut this little amount? I am almost 
embarrassed for Senator Lott, because it is such a small amount. But at 
least he brought forward something that is substantive on this floor. 
He is shooting with real bullets. It is one of the first amendments on 
this floor that is shooting with real bullets. It is a good starting 
point.
  The fact is, if there is not the political courage in this body to 
cut this small amount out of what is both discretionary spending and 
mandatory spending over the next 5 years, then I do not know how we 
can, with a straight face, say that we are concerned about the fiscal 
responsibility and solvency of this Nation.
  This should be one of the simplest and easiest votes anybody in this 
body casts over the next few days, because it is such a small vote in 
the area of numbers compared to the entire spending that is planned 
over this period--$8.3 trillion, $934 billion in deficit, and way down 
here, this number plus $20 billion is what we are asking for in the cut 
in the Lott proposal. It is a very reasonable proposal. It is extremely 
fair and is not asking us to do anything overly courageous. It is 
asking us to do something as a starting point, so that tonight, and 
hopefully for the next few days, when we go home and look at our 
children, we will not have to say to them: Here is the bill we are 
passing on to you. We can say to them: We are still going to give you a 
big bill, but at least we had the guts to cut it a little bit. I 
support what Senator Lott is proposing, and I hope this body will also 
support it.
  I yield back whatever time I have remaining.
  Mr. LOTT. Mr. President, how much time do I have?
  The PRESIDING OFFICER. The Senator has 6 minutes 19 seconds.
  Mr. LOTT. We were waiting for the Republican leader. I believe he 
will be here momentarily, and my intent is to yield to him the 
remainder of the time. I ask the Senator from New Mexico, is any other 
time remaining, or will we be prepared to vote at that time?
  Mr. DOMENICI. I think we will. They are finished with their time. 
Quarter of was the time we were trying to hold to. So I think we will 
vote.
  I know the Senator needs that time for Senator Dole. But I want to 
speak 2 minutes on the bill, not in opposition to the Senator's 
amendment but merely to make an observation.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized for 
2 minutes.
  Mr. DOMENICI. We find ourselves in a very strained and awkward 
position, and I want to make a couple of observations for the Senate 
from my vantage point regarding what Senator Lott is trying to do.
  Frankly, the Republicans offered an alternative today and had the 
full support of almost every single Republican. As I remember it, two 
Senators voted against it. It made the Republican case for real 
substantial entitlement cuts and for a moving toward a balanced budget 
in a realistic way. Senator Lott was there in the forefront supporting 
that. I believe what he is doing in his amendment should in no way 
detract from the fact that there is no stronger supporter for defense 
than Senator Trent Lott in this body.
  Whatever the interpretation of his amendment, it is because of the 
nuances and peculiarities of budget processes. The truth of the matter 
is that he clearly intends to reduce the deficit more than was done in 
the Budget Committee, and he intends to do it in a way which he feels 
very comfortable with in spite of his very strong feelings with 
reference to defense.
  It just happens that there are interpretations indicating that some 
of the things he hopes to do will not be mandated on this body, but 
will be there as clear intentions and clear guideposts.
  So I commend him for his effort. I am very hopeful that we can do 
something very specific before we are finished with reference to 
defense if, in fact, we have to.
  Once again, I commend the Senator from Mississippi for his efforts 
here on the floor. The amendment, which takes an amendment which I 
intend to offer and incorporates it in his, is a good amendment, a 
solid amendment. The other Republicans speaking to it have so 
indicated, and I laud him for it.
  The PRESIDING OFFICER. The Senator from Mississippi has 5 minutes and 
29 seconds.
  Mr. LOTT. Mr. President, I yield the remainder of my time to the 
distinguished Republican leader, Senator Dole.
  The PRESIDING OFFICER. The Republican leader is recognized.
  Mr. DOLE. Mr. President, there is nothing very complicated about this 
amendment. It takes the $26 billion discretionary outlay cuts contained 
in the Exon-Grassley amendment. It ensures that these will come from 
nondefense accounts, and it cuts entitlement spending--and also I think 
the excellent amendment by the Senator from New Mexico--by $20 billion 
over 5 years, and locks in those savings for deficit reduction.
  I have listened to the debate on the floor, and I must say I do not 
consider this to be some kind of a pork barrel or grab bag for all the 
different services in the Defense Department.
  I think we can just look at one threat we are facing right now in 
North Korea, and it will have a sobering effect on a lot of people. 
This is dangerous business in North Korea.
  I am not certain where we are from the standpoint of what we might be 
able to do there.
  I was told today by the Government Accounting Office that if we go to 
send 25,000 troops to help keep the peace in Bosnia, they are going to 
have to call up the Reserves.
  So I think we ought to be very careful when we say: Take it out of 
defense; take it out of defense.
  That is the point that is made by the Senator from Mississippi in his 
statement just a few moments ago.
  We hear time and time again how entitlements are consuming a large 
and growing share of the Federal budget. It is no secret that 
entitlement spending is the main force driving up the deficit.
  We are told we have to save that money for health care. That will be 
the next amendment. I do not think that is the case. We ought to be 
talking about how to save money before we start talking about how to 
spend more money on health care.
  I think this amendment offers a balanced approach. It cuts nondefense 
discretionary. It cuts entitlement spending and, above all, it reduces 
the deficit.
  I believe that most supporters of the Exon-Grassley amendment never 
intended the cut to apply to defense. But we are being told that 
defense will bear the lion's share of the burden of these cuts.
  In my view, as I said earlier, this is the wrong time to make further 
cuts in defense. When Candidate Clinton talked about cutting defense, 
as I recall, he was talking about $60 billion on top of the $60 billion 
President Bush already advocated. We cut defense by about $127 billion, 
and it is starting to have an impact on defense.
  Defense was never meant to be a jobs bill. It was not meant to 
guarantee all bases remain open. But it was meant to protect us from 
potential problems around the world, because whether we like it or not, 
America is the leader in the world now, whether it is militarily or 
economically, or whatever.
  I remind my colleagues that we had a similar debate in 1990, before 
Saddam Hussein reminded us that the world was still a dangerous place. 
A lot of people thought: Just do not cut other programs; just take it 
out of defense. Our troops prevailed in Desert Storm only because 
President Reagan and President Bush maintained the commitment to be 
strong.
  The continued slashing at the defense budget has already taken a 
heavy toll. We have cut the defense budget every year for the past 10 
years.
  So it just seems to me the defense budget has already taken a heavy 
hit. The Senator from Mississippi pointed out 35 percent, as I recall.
  So I think we have to take a look at the real world outside the 
Appropriations Committee, the Budget Committee, the Finance Committee, 
or whatever committee. Wishful thinking will not protect American 
interests. I think it is time we stop the raid on the defense budget.
  I hope we will have the support of the President of the United 
States, who said himself, in the State of the Union Message: ``We cut 
defense enough.''
  So I urge my colleagues to support what I consider to be a very good 
amendment for the reasons outlined by the Senator from Mississippi and 
underscored by the Senator from New Mexico.
  The PRESIDING OFFICER. All time has expired.
  The question occurs on amendment No. 1563, offered by the Senator 
from Mississippi [Mr. Lott]. On this question, the yeas and nays have 
been ordered. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. FORD. I announce that the Senator from Ohio [Mr. Metzenbaum] and 
the Senator from Michigan [Mr. Riegle] are necessarily absent.
  The PRESIDING OFFICER (Mr. Mathews). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 34, nays 64, as follows:

                      [Rollcall Vote No. 69 Leg.]

                                YEAS--34

     Bennett
     Bond
     Brown
     Burns
     Cochran
     Cohen
     Coverdell
     Craig
     D'Amato
     Danforth
     Dole
     Faircloth
     Gorton
     Gramm
     Grassley
     Gregg
     Hatch
     Helms
     Hutchison
     Kassebaum
     Kempthorne
     Lott
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Pressler
     Roth
     Simpson
     Smith
     Thurmond
     Wallop
     Warner

                                NAYS--64

     Akaka
     Baucus
     Biden
     Bingaman
     Boren
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Campbell
     Chafee
     Coats
     Conrad
     Daschle
     DeConcini
     Dodd
     Domenici
     Dorgan
     Durenberger
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Hatfield
     Heflin
     Hollings
     Inouye
     Jeffords
     Johnston
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lugar
     Mathews
     Mikulski
     Mitchell
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Packwood
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Sarbanes
     Sasser
     Shelby
     Simon
     Specter
     Stevens
     Wellstone
     Wofford

                             NOT VOTING--2

     Metzenbaum
     Riegle
       
  So the amendment (No. 1563) was rejected.
  Mr. SASSER. Mr. President, I move to reconsider the vote.
  Mr. MITCHELL. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. BURNS. Mr. President, I rise today to make some comments about 
the fiscal year 1995-99 budget resolution.
  As several of my colleagues have already said, this budget resolution 
contains few surprises. However, I have a few concerns about the 
direction that the debate on this bill may take.


                                defense

  First, I am deeply worried about the continuing decline in defense 
budgets. Given the recent events in North Korea, I think we need to be 
especially cautious.
  I would like to remind my colleagues that there are still potential, 
serious shortfalls in the defense budget.
  My colleagues on the Armed Services Committee have already raised the 
red flag regarding unrealistic future inflation estimates for this 
particular budget.
  I also remain concerned about potential shortfalls regarding bottom-
up review requirements. I have seen widely varying estimates, but they 
are all in the billions of dollars.
  I think we are harming military readiness with continued budget cuts. 
Let us put this in perspective: If we continue on our current course, 
entitlement spending will have increased by almost 40 percent between 
1990 and 1999, domestic discretionary spending will have increased by 
12 percent over that same time period, but defense spending will have 
decreased by 35 percent.
  Therefore, I cannot support amendments to this bill that will make 
further cuts in our defense budget. As much as I support increasing 
funding for IDEA, as set forth in the Jeffords-Dodd amendment, I just 
cannot support cutting defense further to accomplish this.
  I am pleased that the President promised Americans that he will not 
try to accelerate cuts in the defense budget. In my opinion, defense 
has already taken more than its fair share of cuts.


                       the republican alternative

  I think the Republican alternative budget is a positive step forward. 
I am a cosponsor of S. 1576, which is the basis for a good part of the 
alternative.
  We hear a lot about empowerment these days. I think that the group 
that needs empowerment today is the American family.
  But there are other folks out there who think empowering a family 
means creating more Government-run programs and entitlements.
  I disagree. I think the best way to help families is to reduce the 
intrusion of Government in their lives. This includes the intrusion of 
Uncle Sam in a family's pocketbook.
  The centerpiece of the bill is a $500-per-child tax credit. I am 100 
percent behind this initiative, because I think giving tax relief to 
hard-working families is long overdue.
  As I am sure my colleagues know, the dependent tax deduction has not 
kept pace with inflation. A nonrefundable tax credit like this would 
keep more money in the pockets of families.
  I know there are a lot of Montanans who would tell you that they 
could spend their money a lot better than any Government bureaucrat 
can.
  This tax credit would provide the middle class tax cut that families 
were promised not too long ago.
  This alternative budget plan includes other provisions that I have 
been fighting for since I arrived in the Senate, including indexing the 
capital gains tax, and expanded access to individual retirement 
accounts. It would also provide deficit reduction.
  I must say, however, that I would prefer that the money to pay for 
this plan not come from the additional funding added into the budget 
resolution by the committee for the Impact Aid Program LIHEAP, Rural 
Electrification Administration, or Head Start Program. Portions of 
these programs were cut in the President's budget and the committee 
added back extra funding.
  However, the opportunity to provide Montana families with $98 million 
in direct tax relief is too important to pass up. I voted in favor of 
this plan when it appeared before the Senate today.


                 funding for the byrne memorial program

                           amendment no. 1558

  Mr. HOLLINGS. Mr. President, I yield to no Senator in my support of 
the Edward Byrne Memorial Program. In the community-level war against 
crime, this has been a hugely successful program--both nationally and 
in my own State of South Carolina.
  In South Carolina, more than 170 criminal justice professionals are 
currently funded as a direct result of the fiscal year 1993 Byrne 
Memorial Formula Grant Program. These individuals are involved in Drug 
Abuse Resistance Education [DARE] projects, public defender projects, 
addiction treatment units, and Community-Oriented Policing [COP] 
projects. South Carolina will receive $5.1 million in Byrne Memorial 
grants in fiscal year 1994. The Byrne Memorial Program is making a very 
real difference in city and county police departments across my State.
  Because of my strong support for this program, I want there to be no 
misunderstanding of my vote Tuesday on the Gorton amendment to the 
budget resolution. As we all know, the administration's proposed fiscal 
year 1995 budget would eliminate Byrne formula grants, while increasing 
Byrne discretionary grant funding. The Gorton amendment proposed to 
restore $375 million in Byrne formula grant funding by cutting an 
offsetting amount from spending on new furniture and furnishings in the 
executive branch.
  I was the only Senator to vote against the Gorton amendment, which 
was adopted 97-1. My vote on that amendment was in no way a vote 
against the Byrne Memorial Program. It was a vote specifically against 
the transparent shenanigan of allegedly funding the Byrne Memorial 
Formula Grant Program by taking money from an alleged furniture fund. 
The truth is, there is no such furniture fund to raid. This was 
strictly a feel-good amendment with no practical consequences 
whatsoever.
  Despite passage of this amendment, any attempt to restore fiscal year 
1995 funding on the Byrne Memorial Formula Grant Program will have to 
take place within the allocation provided to the Commerce, Justice, 
State, and Judiciary Appropriations Subcommittee. As chairman of that 
subcommittee, I will continue my fight to preserve this program, as I 
have in the past. But I am under no illusion--and nor should anyone 
else--that as a result of the Gorton amendment, my committee's overall 
allotment will be increased by $375 million. That simply is not the way 
the process works.
  I make no apologies for my lone vote against the Gorton amendment. 
Time will abundantly prove that the Gorton amendment was an empty--and 
perhaps cynical--gesture. The Byrne Memorial Formula Grant Program may 
be restored in the end, but its funding won't come from any phantom 
furniture fund. It would have to come from hard, painful tradeoffs 
among equally important programs under the jurisdiction of my Commerce, 
Justice, State and Judiciary Appropriations Subcommittee.


                           amendment no. 1560

  Mr. HATFIELD. Mr. President, I intend to vote for the Republican 
substitute budget resolution presented to us today because its guiding 
principle is that we must strive harder to reduce the deficit, cut the 
growth rate of entitlement programs, and enable private enterprise to 
prosper. However, I disagree with several of the proposals assumed 
under this substitute, and will describe my objections shortly.
  One of the greatest challenges facing Congress today is to get 
control over our budget deficit. This Republican substitute amendment 
would cut the deficit to $99 billion by 1999, whereas the resolution 
passed by the Budget Committee only cuts the deficit to $192 billion by 
1999. Most of this extra deficit reduction would be attained by 
lowering the rate of annual growth in Medicare and Medicaid--the 
largest and fastest growing mandatory programs--by imposing real cost 
cutting measures. However, this is done without jeopardizing service to 
the elderly, the sick, and the poor. This proposal allows Medicare to 
continue to grow by 7.8 percent annually, and Medicaid to grow at 8.1 
percent per year, and makes no changes at all in Social Security.
  Another important point in favor of this substitute is the set of tax 
provisions that will benefit middle-class families. This includes a 
$500 credit for each child, individual retirement accounts [IRA's] for 
homemakers, IRA withdrawals for first-time home purchases, and 
deductibility of interest on student loans. Beneficial tax incentives 
for businesses include the indexing of capital gains and depreciation 
schedules to inflation, and extending the research tax credit and 
employer educational assistance programs for an additional year. These 
are all proposals that I have supported and will continue to support.
  One section of this amendment that I object to and have opposed in 
the past is the proposal to single out nondefense spending for 
additional reductions over the next 5 years, while allowing for an 
increase in the defense budget by $20 billion over the committee 
recommendation. Discretionary spending should not be divided into 
separate categories or caps that favor defense over important 
nondefense programs. Shifting funds to defense at a time when we are 
struggling to find funds for low-income energy assistance programs and 
child immunizations does not make sense. Similarly, the assumption that 
reductions are needed in overhead expenditures for university research 
is unwarranted in my opinion.
  Another proposal in this substitute amendment with which I disagree 
involves fully funding the trust fund established in the Senate crime 
bill last year. I was one of the few Senators to vote against this 
method of funding our crime fighting priorities because, while proper 
funding of worthy justice programs is crucial, I believe that crime 
programs can and should compete in the usual appropriations process. 
Making more and more pieces of our Government into entitlement programs 
with separate trust funds will not lead to budget efficiency or to an 
effective approach for fighting the root causes of the horrible crime 
threatening this Nation.

  Finally, because the Davis-Bacon Act is not mentioned by this 
amendment or its authors, it is my understanding that a previous 
proposal to repeal Davis-Bacon that was associated with a Republican 
alternative amendment has been deleted or modified. While I would 
strongly oppose a repeal of Davis-Bacon, I would not object to some 
modest reform proposals.
  It is important to note that the budget resolution we are considering 
today does not enact any laws. Rather, it is a statement of intentions 
and principles with unwritten assumptions as to how we might meet those 
broad objectives. Only twice in the last 20 years has the 
Appropriations Committee adopted the same spending totals for the 
general function areas--areas such as ``Justice'' or ``Health''--that 
the budget resolution contained. So, while I am concerned about some of 
the guidelines in this amendment, I am hopeful that the Congress will 
not approve some of these proposals when the Appropriations Committee 
takes up the actual laws implementing the Nation's spending priorities 
later this year.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. MITCHELL. Mr. President, may we have order?
  The PRESIDING OFFICER. The Senate will be in order.
  The majority leader.

                          ____________________