[Congressional Record Volume 140, Number 34 (Wednesday, March 23, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 23, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
               CONGRESSIONAL BUDGET CONCURRENT RESOLUTION

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now resume consideration of Senate Concurrent Resolution 
63, which the clerk will report.
  The assistant legislative clerk read as follows:

       A concurrent resolution (S. Con. Res. 63) setting forth the 
     congressional budget for the U.S. Government for the fiscal 
     years 1995, 1996, 1997, 1998, and 1999.

  The Senate resumed consideration of the concurrent resolution.
  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senator from New Mexico, [Mr. Domenici], is recognized to offer an 
amendment.


                           Amendment No. 1560

              (Purpose: Proposing a Republican substitute)

  Mr. DOMENICI. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The ACTING PRESIDENT pro tempore. The clerk will report the 
amendment.
  The assistant legislative clerk read as follows:

       The Senator from New Mexico [Mr. Domenici], for himself, 
     Mr. Dole, Mr. Grassley, Mr. Nickles, Mr. Gramm, Mr. Bond, Mr. 
     Lott, Mr. Brown, Mr. Gorton, and Mr. Gregg) proposes an 
     amendment numbered 1560.

  Mr. DOMENICI. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (The text of the amendment is located in today's Record under 
``Amendments Submitted.'')
  The ACTING PRESIDENT pro tempore. The Senator is recognized.
  Mr. DOMENICI. Mr. President, as I understand it, we have 2\1/2\ hours 
on this amendment, presumably equally divided. Hopefully, we will not 
use all of our time, but there are a number of Senators who want to 
speak. Perhaps the vote can occur at 11 instead of 11:30. We will try.
  Let me say to the Republicans who were helpful in putting this budget 
together that the way I see things, we will probably use the next hour 
explaining our alternative budget, and if any of you want to speak, I 
urge that you come down during this hour or that you call our cloakroom 
and tell us precisely when you would like to come, and I will try to 
accommodate so that three or four Senators who indicated a desire to 
speak will get in as early as possible, so perhaps we will not have to 
delay things because of other meetings that are occurring.
  Mr. President, essentially, this is a total alternative budget to the 
President's budget which essentially is before us--that is, the 
President's budget--with the exception that the Exon amendment was 
added to it, one of the last votes in the Budget Committee, an 
amendment that Senator Exon offered and was adopted. It further reduced 
the appropriated accounts, the so-called discretionary accounts, by $43 
billion in budget authority over 5 years and by $26 billion in outlays 
over 5 years.
  It is that budget, so amended, but essentially the President's, that 
we offer a full substitute for here today.
  Mr. President, we have heard a lot of talk during the last few months 
about the current economic situation. In a word, it is good. Our 
economy is growing. We are creating jobs for our people. Our businesses 
are growing and, by and large, they are prospering, although there is a 
certain kind of jobs problem in America that is not related and 
associated with growth but has something to do with the changing nature 
of American business, so that there are pockets of unemployment and 
people very highly trained--many white collar people--are unemployed 
during this big transition.
  But for the most part, there is good news about American jobs and the 
American economy. And I believe that this body and the work that we 
have done over a number of years has in no small measure contributed. I 
also believe that, without question, the work of the Federal Reserve 
Board in the last 4 or 5 years has had a lot to do with this economic 
growth that we are now prospering under.
  But I also believe very firmly that the job is far from done. And now 
is not the time for us to take a long lunch break or an evening off and 
put our economy on automatic pilot.
  First, the low-interest rates which began coming down 4 years ago, as 
I indicated in some detail yesterday, and have stoked, to some extent, 
this recent economic growth, are creeping backup. This increase has, 
according to economists, already begun to have a dampening effect on 
consumer activity.
  Moreover, the current decline in our Federal deficit is temporary, 
and the deficit trend, after 1996, is not good because, as we all know, 
after fiscal year 1996, the deficit swings upward again and embarks on 
a relentless upward spiral, driving past the $300 billion mark shortly 
after the turn of the century.
  Yesterday, I showed the Senate and those interested in this 
discussion the unequivocal evidence of that as put forth by the 
Congressional Budget Office. Let me repeat: Now is not the time to rest 
because the deficit will start going up again, in a relentless spiral 
upward, past the $300 billion mark after the turn of the century.
  As I indicated yesterday, the longer we continue to leave this 
deficit in place and permit it to grow adding to the public debt, we 
are taxing, without representation, the next and the next and future 
generations. Americans sort of have a gut sense that taxation without 
representation is one of the true evils of Government. We have had 
revolutions about that. And if this deficit, which is now at about $200 
billion for next year, starts back up because we fail to do anything 
significant while the economy is reasonably strong, then we have taxed 
the next generation of Americans enormously for our unwillingness to 
act.
  Moreover--and I think we all know this--and we alluded to this during 
the last year's debate, the President essentially has said, ``Don't 
worry, and let me stress why we should not worry: Because health care 
reform will bring down the deficit in the future.''
  Almost everyone agrees that unless we get health care reform under 
control and reduce the cost to our Government, we will never get the 
deficit under control. Hence, the statement: ``We will get the deficit 
under control by reducing the costs of health care.''
  Health care reform will not bring down the deficit for a long, long 
time, if ever.
  The Congressional Budget Office dashed that myth. The secret is out. 
There is no deficit reduction in the Clinton health care reform plan--
none, none for at least 10 years. And anyone who would believe that 
they can count on health care reform savings 10 years from now, when it 
might occur, I believe is really risking future generations in terms of 
taxation without representation because we are increasing their debt 
load; they will have to pay for it, which essentially is the definition 
of taxation. And obviously, since they are young or yet unborn, they 
are not represented; they are not here. Nobody is here voting for them.
  So let me say again there is no deficit reduction in President 
Clinton's health care reform plan. So we cannot fool people anymore. We 
cannot say we did the work last year. We are taking this year off. We 
cannot duck our responsibilities because it is an election year. And we 
all know that we have more to do if we are to keep our economy moving 
forward.
  I believe--and let me make it clear--that Republicans are willing to 
make that happen. I want the President to succeed, I want this Nation 
to succeed; and I want the economy to succeed. I wish to bring the 
deficit down to help create jobs and provide some security to our 
people.
  Now, if there is fear that interest rates are going up because we are 
reaching full capacity industrially speaking and the Federal Reserve, 
being concerned about that, wants to tighten money just ever so mildly 
in an effort to keep the economy from going into a downturn sooner than 
it should or keep it growing, if not as fast as possible, for a longer 
sustained period of time, then obviously we would contribute and help 
bring interest rates under control and cause sustained growth to occur 
for a longer period of time during this business cycle if we could 
commit to deficit reductions that are much larger, much more diverse; 
that is, covering the entitlements and mandatory expenditures just as 
we attempt to reduce discretionary accounts more than suggested by the 
President.
  So this budget which I am offering on behalf of all of the 
Republicans on the Budget Committee and Senator Dole, who has joined us 
as a cosponsor, is a principled one. It is a budget that I think is 
designed to do for our people what one might call real security to the 
American people. This alternative helps President Clinton in a way 
achieve two of his most important campaign promises: To cut the deficit 
in half and to provide a middle-class tax cut. And as I said, this 
alternative provides real security. It will give and enhance their 
national security by putting an additional $20 billion in defense, 
which is one of the most patent shortfalls in the budget, so we will 
enhance the national security; we will enhance their personal security 
and their future security.
  So how do we do that? It begins by providing for our current and 
future security by achieving real deficit reduction. The Republican 
alternative would reduce the deficit over 5 years $318 billion. This is 
$322 billion more in deficit reduction than the President proposes and 
$303 billion more in deficit reduction than the House-passed resolution 
over 5 years. It reduces the deficit essentially to $99 billion by 
1999. We break the $100 billion deficit barrier.
  An interesting number, $100 billion. My recollection is that 
President Lyndon Johnson--that is not too long ago for some to 
remember--was the first President to submit a $100 billion budget--not 
deficit, but a full budget for $100 billion. And he was worried about 
how the public and the Congress would accept a $100 billion total 
budget of the United States. The deficit in 1999 under the President's 
and the Democrats' proposal is just under $200 billion. We will reduce 
it to $99 billion. But as we do that, we will also seek to enhance 
personal security to the middle-class families of this country by 
providing tax relief to American families with dependent children and 
to small business in ways I will soon describe.
  In addition to the deficit reduction and accomplishing the goal of 
$99 billion in 1999, this provides tax relief to families by providing 
a $500 tax credit for each child in each household in the United 
States. This provision grants what we perceive to be needed and, we 
know, welcome relief to families of 52 million American children.
  The tax credit provides a typical family of four $80 every month for 
family expenses and savings by virtue of this credit. I wish to 
emphasize here, Mr. President and fellow Senators, because I know some 
of my colleagues on the other side will characterize, or try to 
characterize, this family tax cut as some gigantic tax cut for the 
rich, that is just not so--in fact, it is smoke--because 88 percent of 
the families who will benefit from this tax cut make less than $75,000 
a year. So let us deal with a tax cut for the rich red herring right up 
front. It is foolishness.
  This provision will help middle-class Americans who are struggling to 
raise their families. We believe that we ought to put some tax 
reductions where our mouths are. If there is anything we are talking 
about, it is helping families in this country. I believe especially 
families raising children are having a very difficult time, and they 
have seen the Tax Code of the United States, which at its inception 
tried to provide parents or a parent with enough money annually tax-
exempt to raise their children, we have seen and the families of 
America have seen that concept eroded such that the $500 tax credit 
will not get us back to the ratios that existed in the 1950's and early 
1960's, that is, with reference to per capita earnings versus the 
credit or deduction for dependent children.
  We also help middle-class families and our young people seeking to 
advance their education by restoring the deductibility of interest on 
student loans. And we also seek to index once and for all something 
that almost all economists agree--at least a major portion--makes good 
economic sense; and, that is, we index for inflation capital gains, and 
we allow for capital loss on one's principal residence one time.
  All of that means that on capital gains, equity, and assets--people 
own most of them in business--is that when they sell them they will not 
have that resource depleted by inflation when they sell it. The capital 
gains that we now have will be indexed just as the various brackets of 
tax payments have been indexed in the Tax Code since 1986.
  Our alternative budget creates new incentives for family savings and 
investments through an IRA proposal that can be met by various types of 
IRA's that would allow penalty free withdrawal for first time home 
buyers, educational, and medical expenses.
  Furthermore, we seek to help spur this economic recovery by extending 
the research and development tax credit that is in our Tax Code for 
American business for 1 year providing for a 1-year exclusion of 
employer-provided educational assistance and adjusts depreciation 
schedules for inflation.
  I believe that we are willing to get the deficit moving strongly in 
the right direction and at the same time to share the fruits of our 
budget cuts with the American people through the tax provisions that I 
have just described.
  So in addition on the expenditure side and process side, let me 
explain two or three other things. First, the Republican alternative 
budget seeks to ensure the personal security of Americans by funding 
the Senate crime bill trust fund. We provide $22 billion for crime 
measures over the next 5 years. Obviously, the Clinton budget does not. 
The House-passed budget does not. And, frankly, the way I see things 
moving, I am not sure that is going to pass as a mandatory measure in 
Congress, at least not in the foreseeable future.
  Finally, our alternative bolsters our national security by increasing 
funding for President Clinton's defense program by adding $20 billion, 
a shortfall acknowledged by the Pentagon in their review of the bottom-
up activities of our Federal defense activities. So we add $20 billion, 
and while the budget is austere, we would emphasis that Federal 
spending even at that will continue to grow under this budget. Total 
spending will increase from $1.480 trillion in 1995 to more than $1.7 
trillion in 1999.
  In addition, since there will be further debate along the line today 
and tomorrow about how much we should cut the defense in this budget 
although we reduce discretionary funding substantially, we reinstate 
firewalls; that is, we say that the $20 billion we add to the 
President's budget goes to defense, and after the adoption of this 
budget resolution, you cannot cut into defense to spend on domestic 
programs.
  So this legislation would protect the defense budgets. The best 
advocate of this legislation on defense seems to me to be the President 
of the United States. As he said in his State of the Union Address, 
``Nothing is more important to our security than the Nation's Armed 
Forces.''
  Continuing to quote: ``This year many people urged me to cut our 
defense spending further to pay for other programs,'' said the 
President. ``The budget I send to Congress draws the line against 
further defense cuts. It protects the readiness and quality of our 
forces, and ultimately the best strategy is to do that.''
  Continuing to quote: ``We must not cut defense further. I hope 
Congress without regard to party will support that position.''
  So this budget puts in the firewalls; that is, it sets up a very 
large roadblock to using any of the defense resources for domestic 
programs. To do that, you would have to have a supermajority.
  I think I showed the Senate yesterday that the only part of the 
American Government over the past decade that is really being cut is 
defense, believe it or not. Everything else has gone up. Even while we 
talk about cutting, discretionary programs have gone up, albeit they 
are not nearly the problem that the entitlements and mandatory programs 
are in terms of contributing to this deficit over the past decade.
  In my remarks, I alluded orally in words to this chart that is here. 
I just want to make sure that it is in my statement as part of an 
explanation. If you look at the budget deficit, which is in red--these 
numbers at the bottom are pretty small. But let us make sure. We are 
down here, 1995. Actually, the deficit of the United States will double 
slightly through mid-1996, and then you see the enormous surge upward 
passing $350 billion again.
  So anyone that thinks we have the deficit under control is truly, 
truly not looking at facts.
  This budget of ours would come down into the 1999 area, and it would 
be off this chart or it would be less than 100. This red line will 
continue on down here which we think makes good sense in good times and 
we ought to do that.
  Again, I ask any of my Republican colleagues who want to speak--
Senator Coats I understand would like to speak, Senator Gramm will be 
here shortly, and Senator Hutchison.
  So let me quickly go through how we get to this budget, and indicate 
to my friend, the chairman, that I will have to leave the floor for 15 
minutes at 10 o'clock. Some of my Senators will be here on our side.
  Total savings in this budget over 1995-99 slows the growth of 
Medicare from 10.6 percent average annual growth. Believe it or not, 
that is still what is in the budget. We expect Medicare to grow at 10.6 
average. Clearly, if that continues, there is no way the deficit will 
ever be under control. Through a series of assumptions that could be 
adopted, we have reduced that growth to 7.8 percent. That is all. It 
will be still be growing at 7.8 percent.
  Extensions of current law provide $17 billion of these reductions. 
Overall, the President had $54.5 billion in reform and changes in 
Medicare. We adopt all of those--selective contract competitive 
bidding, lab, home health care coinsurance, hospital of outpatient 
payments--all of those were in the President's budget, and we take 
advantage of them here.
  Other savings that we have included in this proposal amount to $25 
billion. I will insert in the Record a list of those by way of 
description of how we might reduce the spiraling costs of Medicare from 
10.6 to 7.8 percent. We are not cutting it. We are reducing the rather 
extraordinary growth which this Senator thought we were going to commit 
ourselves to as part of health care reform and apply these savings 
somewhat to the deficit. We apply them all to the deficit.
  On Medicaid, total savings over 5 years comes from slowing the growth 
of Medicaid from 12 to 8.1 percent.
  Frankly, I believe that is going to happen, because I do not believe 
we can pay for Medicaid growing at the rate of 12 percent. We have 
chosen to reduce it to a growth rate of 8.1 percent and, in so doing, 
we have applied all of the savings to the deficit. We think we ought to 
start with a deficit plan. When we build health care on top of it, that 
has applied savings that will come from these programs so that we start 
with that as a basis.
  We have also gone to capitalization instead of fee for service like 
the States of Arizona and Texas. We would do that for the Nation--pay 
per-person amounts to States allowed managed care without Federal 
waivers. That means this permission will be granted as part of 
legislation that would follow under our budget resolution. And we index 
amounts to the President's formula. I will state those in the Record by 
the year.
  Disproportionate share is cut by 5 percent and frozen at 1994 levels; 
emergency services only for noncitizens, and we go on to a couple of 
other issues that we recommend as part of our percentage reduction. 
These are ways that this could be achieved if, in fact, the Finance and 
Ways and Means Committees in Congress find other ways to go from this 
spiraling cost of 12 percent, which is built into this red line on the 
chart. If they find better ways, obviously, that is not precluded in 
any budget resolution.
  I note, Mr. President, that Senator Coats is here, and he has asked 
me for 10 minutes on our alternative budget.
  I yield to him for 10 minutes.
  The ACTING PRESIDENT pro tempore. The Senator from Indiana [Mr. 
Coats] is recognized for 10 minutes.
  Mr. COATS. Mr. President, I want to start out by thanking Senator 
Domenici, the ranking member of the Budget Committee. He has worked 
very, very closely with many of us to fashion a Republican alternative 
here that I think redirects the priorities of how we deal with 
taxpayer's funds. It is a budget that takes into account the needs of 
families, the needs of businesses to provide growth, and therefore, 
opportunity and jobs for families. We successfully address, in a 
serious way, the Federal deficit, which undermines our future from both 
an economic standpoint and from the sociopolitical standpoint.
  We are simply denying opportunities that we have enjoyed to future 
generations. Unless we take serious steps to address the deficit, we 
are going to be passing on something to future generations none of us 
will be proud of. The Republican alternative effectively deals with 
reducing the budget deficit. I thank Senator Domenici for his very 
significant efforts in crafting an alternative that philosophically 
presents a clear choice to Members of the Senate and to the American 
public.
  The part of the Republican alternative I want to address, in the 
limited time I have, is the $500 tax credit, which will be made 
available to 52 million American children. The threats to the American 
family today are many, but one which we have direct control over is the 
amount of their own earnings they are allowed to keep. They need the 
ability to decide how to direct those funds in the best interests of 
their children.
  The Congress has traditionally utilized the personal exemption as a 
means of compensating families with children, recognizing that they 
have special needs, that there are special costs that flow to families 
with children that do not affect many of the rest of us. With three 
children myself, I understand those costs. If you go buy a pair of 
tennis shoes, it is not a pair of $4.95 canvas Converse Keds I grew up 
wearing. It is the $125 Air Jordans that you have to pump up. Even if 
you get the discount models, you are looking at $60, $70, $80 for a 
pair of tennis shoes. When you have kids out in the driveway shooting 
baskets or playing football, it seems like you are in the shoe store 
every 3 months.
  College costs have escalated to the point where it is extraordinarily 
difficult for American families to set aside funds to pay the tuition 
at many of our institutions of higher learning. On and on it goes--
whether it is transportation or housing or clothing, it is clear that 
families with children have needs beyond many others.
  How do we address those needs? Through the personal exemption. In the 
1986 Tax Fairness Act, we finally made an adjustment to the personal 
exemption that was long overdue. In 1948, when Congress first 
implemented that personal exemption, it stood at $600 a year, and it 
only increased to $1,000 per child by 1986. Had it been indexed to 
inflation, or to the rise in wages the personal exemption would have 
been double or triple that amount. Today, we know that the value of 
that $1,000 exemption would need to be $8,000 just to keep pace with 
inflation. It is only a little over $2,000. Senator Domenici has 
recognized the need for middle-class tax relief in addressing the needs 
of middle-income taxpayers. So while we are looking at how to reduce 
the deficit and how we structure the way in which we spend taxpayers' 
dollars, we must consider families.
  This is not necessarily a partisan idea, because it was a concept 
supported by the President, during his campaign when he called for 
middle-income tax relief and proposed a $400 tax credit per child. The 
President said,

       People say $400 is not very much money. I think it is a lot 
     of money. It is enough for a mortgage payment, enough for 
     clothes for the kids, and enough to have a big short-term 
     impact on the economy.

  And the Vice President advocated an $800 refundable tax credit for 
every child under 18. I quote him saying:

       This approach, family tax relief, is going to be the 
     centerpiece of the Democrat agenda for 1992.

  Well, it was--for 1992. That is when they were campaigning. But here 
it is in 1994, and we are looking at the Democrat budget, and it is not 
only not the centerpiece, it is nonexistent. It does not provide the 
relief for families I think people on both sides of the aisle have 
acknowledged is needed.
  The $500 tax credit will allow families to retain hard-earned income 
and make decisions as to how best to meet the needs of their children. 
It is incorporated in this Republican alternative. It is one of the 
centerpiece----
  Mr. SASSER. Will the Senator yield for a question?
  Mr. COATS. I have a very limited amount of time. At the end of my 
statement, I will be happy to yield. I might be able to address some of 
the Senator's concerns in my statement.
  He may have wanted to raise the question: Well, this is just a tax 
break for the wealthy. Let me point out, Mr. President, that three-
quarters of the children eligible for the credit live in families with 
a gross income of less than $60,000 a year.
  That is where the relief will flow. That is where the needs are the 
greatest. We need to understand, also, that while it is designated as a 
tax credit, we have in place programs that will meet the needs of many 
of those who are earning below $16,000 a year. That is where the earned 
income tax credit comes in. It is an important program for a family of 
two earning below $16,000 a year. Their entire Federal tax burden is 
erased by the earned income tax credit.
  We are targeting those who are caught in the middle, those who have 
not been granted the relief we have provided for low-income families, 
who are struggling to meet the daily needs and expenses of their 
children.
  This leaves a significant amount of money in the hands of families. 
It returns money to the States and to individuals and allows them to 
make decisions on how they will spend it.
  Mr. President, I ask unanimous consent to print in the Record a 
listing of the dollars returned to each State through this $500 per 
child tax credit.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

      DOLLARS RETURNED TO EACH STATE BY A $500 PER-CHILD TAX CREDIT     
------------------------------------------------------------------------
                                                            Amount each 
                                 Number of    Number of     State could 
                                  families     children       receive   
             State                  with       eligible    annually from
                                children in   for a $500  $500 per-child
                                 each State   tax credit    tax credit  
------------------------------------------------------------------------
Alabama.......................      984,846      836,486    $418,243,000
Alaska........................      131,801      134,962      67,481,000
Arizona.......................      901,059      744,524     372,262,000
Arkansas......................      572,309      524,241     262,120,500
California....................    6,864,996    6,625,012   3,312,506,000
Colorado......................      832,055      737,544     368,772,000
Connecticut...................      835,801      723,674     361,837,000
Delaware......................      181,252      172,017      86,008,500
District of Columbia..........      101,346       81,195      40,597,500
Florida.......................    3,410,974    2,233,271   1,116,635,500
Georgia.......................    1,555,254    1,226,073     613,036,500
Hawaii........................      293,296      295,346     147,673,000
Idaho.........................      251,430      263,945     131,972,500
Illinois......................    2,873,440    2,501,462   1,250,731,000
Indiana.......................    1,454,936    1,110,887     555,443,500
Iowa..........................      683,268      641,094     320,547,000
Kansas........................      637,247      651,174     325,587,000
Kentucky......................      901,634      648,121     324,060,500
Louisiana.....................      996,911      868,702     434,351,000
Maine.........................      298,512      223,255     111,627,500
Maryland......................    1,194,734    1,038,365     519,182,500
Massachusetts.................    1,437,080    1,110,453     555,226,500
Michigan......................    2,254,735    1,866,891     933,445,500
Minnesota.....................    1,043,603      946,639     473,319,500
Mississippi...................      572,963      540,359     270,179,500
Missouri......................    1,256,963      981,008     490,504,000
Montana.......................      205,770      197,938      98,969,000
Nebraska......................      414,899      427,724     213,862,000
Nevada........................      313,332      247,958     123,979,000
New Hampshire.................      307,359      246,361     123,180,500
New Jersey....................    1,893,615    1,522,756     761,378,000
New Mexico....................      365,776      321,854     160,927,000
New York......................    4,138,706    3,575,251   1,787,625,500
North Carolina................    1,663,710    1,359,138     679,569,000
North Dakota..................      146,146      146,786      73,393,000
Ohio..........................    2,650,194    2,392,172   1,196,086,000
Oklahoma......................      782,007      644,733     322,366,500
Oregon........................      745,406      607,615     303,807,500
Pennsylvania..................    3,057,172    2,507,260   1,253,630,000
Rhode Island..................      240,767      159,461      79,730,500
South Carolina................      891,157      777,909     388,954,500
South Dakota..................      173,385      158,309      79,154,500
Tennessee.....................    1,242,636      829,778     414,889,000
Texas.........................    3,964,267    3,628,180   1,814,090,000
Utah..........................      390,211      473,448     236,724,000
Vermont.......................      142,093      116,058      58,029,000
Virginia......................    1,528,524    1,286,275     643,137,500
Washington....................    1,252,277    1,141,341     570,670,500
West Virginia.................      452,953      346,642     173,321,000
Wisconsin.....................    1,252,892    1,175,695     587,847,500
Wyoming.......................      117,117      122,668      61,334,000
------------------------------------------------------------------------
Source: U.S. Census, 1992 Current Population Survey.                    

  Mr. COATS. Mr. President, I urge Members to look at the money that 
will flow back to their States as a result of this tax credit. These 
are funds which will be invested back in the local community. These are 
funds which will be invested for the needs of children within their 
State.
  Let me give a couple examples. In my State of Indiana, $555 million 
will be left in the State annually rather than being sent to Washington 
and spent in ways that do not provide relief for the family.
  So I commend Senator Domenici for his sensitivity to this problem, 
for including it in this Republican alternative. It is a central 
feature of this Republican alternative, distinguishing it from the 
Democratic budget plan. It addresses the very heart of what we need to 
do to invest and provide relief for families. It significantly 
strengthens the incentives for savings. It provides incentives for 
businesses to grow and thereby create jobs that will be available for 
children coming out of the family, and provides relief that families 
need in order to make decisions that are in the best interest of their 
children.
  I am proud to support this alternative, and I am again thankful that 
Senator Domenici has been such an effective leader and so instrumental 
in including the $500 per child tax credit in the Republican budget 
alternative.
  Mr. DOMENICI. I think the Senator still has a little bit of time 
remaining.
  The ACTING PRESIDENT pro tempore. The Senator has 1 minute and about 
10 seconds.
  Mr. SASSER. Mr. President, will the Senator yield for a question on 
that time?
  Mr. DOMENICI. Might I first inquire whether he has time, and I will 
yield in a moment.
  I thank the Senator from Indiana for the leadership that is really 
sincere in this issue of families and Government policy that has been 
adverse to families economically and otherwise. I thank him for his 
leadership.
  We adopted it as part of our assumption that we would do in this 
resolution many of the things he has advocated in various tax proposals 
and family-oriented proposals that he has been pushing here in the 
Senate. I commend him for that and thank him for that help.
  Mr. COATS. I thank the Senator for his generous comment.
  On the time I have remaining, I am happy to yield to the chairman.
  Mr. SASSER. I thank the Senator from Indiana.
  I make this point. As I understand the way this tax credit works, or 
child-care credit works, if a family is making $1 million a year they 
would get the same tax credit per child as a family making $30,000 a 
year. Is that correct?
  Mr. COATS. The tax credit applies to every family with children. But 
I point out to the Senator that the bulk of this money, the vast 
majority of this money will go to middle-class families earning under 
$60,000 a year. What distinguishes it from the Democratic plan is that 
we have the----
  Mr. SASSER. Mr. President, if the Senator will yield----
  Mr. COATS. Excuse me.
  If I could respond to the Senator on my time, we have the relief in 
the package and the Democrats have no relief. So it is bogus to argue 
that it goes to some people who should not receive it. We send it to 
everybody; the Democrats send it to no one.
  Mr. SASSER. Let me ask this question.
  The ACTING PRESIDENT pro tempore. The time of the Senator has 
expired.
  Mr. SASSER. On my own time, I will inquire of the Senator from 
Indiana:
  A working family of four making $16,000 a year would get no credit 
under this plan. Is that not correct?
  Mr. COATS. In response to the Senator, under this plan they would 
receive full credit under the earned income tax credit and pay no 
taxes.
  Mr. SASSER. If they are paying no taxes and this gives them no tax 
credit, they would get no benefit under this proposal.
  Mr. COATS. No.
  Mr. SASSER. That is correct.
  Mr. COATS. They get a rebate under the earned income credit, as the 
Senator from Tennessee knows. Those under $16,000 are fully protected. 
It is the middle class the President, the Vice President, Secretary 
Bentsen and others have said the Democrats want to reach out to, and 
have not done it. And the budget plan provides for no relief for 
middle-class income families, no relief whatsoever, and that is what 
distinguishes it from our plan.
  Mr. SASSER. Is the Senator from Indiana trying to represent that this 
is a refundable tax credit to people who make under $16,000 a year?
  Mr. COATS. Not at all. I said the earned income tax credit is 
available to those who earn under $16,000 a year, as the Senator fully 
knows.
  Mr. SASSER. But it is true, is it not, that a family of four making 
$16,000 a year gets no tax credit under this Republican proposal that 
the Senator from Indiana is lauding today? Is that not correct?
  Mr. COATS. The Senator seems to want to divert attention from the 
fact that it is Republicans who are providing relief to middle-income 
families and the Democrats provide zero. We provide a $500 tax credit 
and that is what distinguishes it, and one of the many things that 
distinguishes our plan from theirs.
  I think the Senator from Tennessee knows the relief available to 
those earning $16,000 and under is the earned income tax credit.
  The ACTING PRESIDENT pro tempore. The Senator from Tennessee.
  Mr. SASSER. Mr. President, speaking on my own time here, let us just 
consider this $500 child-care credit.
  Mr. DOMENICI. Mr. President, could I put a chart in and then the 
Senator can give his speech?
  Mr. SASSER. I am pleased to yield to my friend from New Mexico.
  Mr. DOMENICI. Mr. President, I yield 1 minute of my time.
  I just want to print a chart in the Record that shows that of this 
tax credit in terms of percentages below $200,000, taxpayers below 
$200,000, 98.3 percent of this tax credit. That is where 98.3 percent 
goes.
  So to argue about millionaires, or $500,000, is to talk about 1.7 
percent of this cumulative tax credit. So I do believe it is kind of 
smoke.
  I submit the chart please and thank the Senator for yielding.
  The ACTING PRESIDENT pro tempore. Does the Senator wish to have the 
table printed in the Record?
  Mr. DOMENICI. Yes, and I so ask unanimous consent.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

       Where do the benefits of the $500 tax credit go?

------------------------------------------------------------------------
                                                              Cumulative
                            AGI                                 share   
                                                              (percent) 
------------------------------------------------------------------------
Below $1 million...........................................         99.9
Below $500,000.............................................         99.6
Below $200,000.............................................         98.3
Below $100,000.............................................         93.7
Below $75,000..............................................         87.4
Below $60,000..............................................         77.7
Below $55,000..............................................         72.4
Below $50,000..............................................        66.0 
------------------------------------------------------------------------
Source: Individual Income Tax Returns, 1990, Statistics of Income,      
  August 1993.                                                          

  Mr. SASSER. Mr. President, let us just consider this $500 child 
credit here.
  Our colleagues have characterized this proposal as a middle-class tax 
cut. The truth is, nothing could be further from the truth. Let us just 
consider how this credit works.
  For families with $16,000 in income or less, there is no benefit. 
Why? Because the credit is not refundable. Thus, working poor families 
get nothing under this scheme.
  My friend from Indiana seeks to represent that these families under 
$16,000 would benefit from the earned income tax credit. You would 
almost think from listening to him that this is in the Republican 
alternative. The fact is that the earned income tax credit was in the 
President's budget proposal last year. That was passed in this Senate 
without a single Republican voting for it.
  So, tax relief for families making under $16,000 is not present in 
this budget, not in this Republican alternative. It was present in the 
President's budget that was passed last year. As a matter of fact, the 
President's budget that we passed here last year gave tax relief to 
families of four earning $28,000 or less. That was the earned income 
tax credit provision that was passed here without a single Republican 
vote coming from the other side of the aisle.
  It is true that even though a family of four making $16,000 a year or 
less gets no benefit from this alternative that is being proposed here, 
a family of four making $1 million a year does get the $500 per child 
tax credit.
  If my friend wanted to be fair about this on the other side of the 
aisle, why not cap this? If we are really interested in helping middle-
class families why do not we cap this tax credit at $100,000 a year, 
$75,000 a year, even $125,000 a year?
  No. They did not want to do that. The family making as much as $1 
million a year gets the tax credit, whereas a family making $16,000 a 
year or less gets no tax credit under this provision at all.
  To characterize that as a child middle-income tax cut fair to all, 
Mr. President, I think stretches credibility.
  Let me just say a few words about this Republican alternative. As I 
said when this alternative was presented in the Budget Committee at 
markup time, there are so many problems here I really hardly know where 
to begin. First of all, this alternative being presented here might 
best be characterized as cut taxes now, increase deficits later, and 
make the middle class and the poor pay for it. That would be a fair 
characterization, I think, of this alternative that is being presented 
here.
  Yes, it has the Republican standard of tax cuts for the wealthiest of 
Americans which would drive up the deficits in the outyears. To pay for 
these tax cuts for the wealthiest, it slices health care programs for 
middle class people and for poor people. It cripples the key 
discretionary investments in infrastructure, in administration of 
justice programs, and it relies on very questionable savings indeed, 
like asset setters. For example, this Republican alternative raises a 
substantial amount of revenue out of leasing the ANWR project which the 
Congress has voted against time after time after time. And that could 
not be counted as income or revenues anyway, under budget rules. It 
also raises money through a very, very doubtful IRS compliance 
initiative.

  So what we have here are some smoke and mirrors that are representing 
themselves as revenues to cover some of these tax cuts for wealthy 
people.
  Since the beginning of the year, we in the Budget Committee have been 
subjected to a constant stream of complaints about long-term deficits 
and dire warnings about what is going to happen if we do not address 
them.
  As I said before, I think we ought to be concerned about the outyear 
problems. We have made very, very substantial progress. The budget 
deficit-reduction plan that we passed last year in this body by a one-
vote margin, with the Vice President having to come over here and break 
the tie, has reduced deficits in the outyears very significantly.
  As a result of the deficit-reduction plan that we passed, the deficit 
in fiscal year 1998 will be $200 billion less than it would be 
otherwise. As a result of the deficit reduction plan that we passed 
last year, we have 3 years of declining budget deficits; the first year 
that we put 3 years of declining budget deficits together in a row 
since Harry Truman was President of these United States. And bear in 
mind that Harry Truman presided over a country that was coming out of 
World War II, so you would expect budget deficits to be declining.
  But, having said all that, and in spite of the success of the plan 
that we passed last year which has led this Nation back into economic 
recovery--economic growth in the third quarter of 1993 stood at a very, 
very robust 7.5 percent real economic growth. We have not seen economic 
growth figures like that in years and years and years and years. In 
1993, we created 1.9 million new jobs in this economy. In the previous 
4 years, from 1988 through 1992, we created only 1 million. So we 
created almost twice as many new jobs in this economy in 1 year in 1993 
than had been created in the previous economy over an entire 4-year 
period.
  But, having said all that, I still have some concerns about the 
outyear deficit problems myself. What puzzles me, and what I cannot 
understand, is that several of the tax cut proposals advanced in this 
alternative that we have before us this morning actually worsen the 
deficit in the outyears; actually make it worse. That is right. The 
proposals that they are advancing make the deficits worse in the 
outyears instead of better.
  Well, you may say, ``How could that be? How could it be that those 
who have been complaining and wringing their hands and gnashing their 
teeth over the past few months about outyear deficits, how could they 
possibly be proposing a budget alternative that makes them worse?''
  Well, let me just describe to my colleagues how this works.
  For starters, let us take the individual retirement account 
expansion, expansion of the so-called IRA. We have here what is called 
a front-loaded IRA. Congress got its first taste of this gimmick back 
in 1989. What it does is, it allows people to put large sums of money 
in the IRA up-front pay. It is a so-called back-loaded IRA, where they 
put the money in, pay a little tax up front, and then, as the IRA grows 
later on and they take it out, they pay almost no tax.
  As I say, we got our first taste of this gimmick back in 1989. And 
though this proposal is slightly different, it still suffers from 
exactly the same defects as its predecessors.
  There is serious doubt in academic circles as to whether these new 
IRA's will increase national savings or not. But we do know that, 
beyond an initial revenue burst in the first 5 years, they will create 
a massive deficit hemorrhage in the years beyond.
  More than 70 percent of all Americans are currently eligible for an 
IRA. Only the more affluent taxpayers, with tax-favored company pension 
plans, are excluded from IRA's. At least 95 percent of the proposed new 
tax benefits would go to the top 20 percent of all taxpayers, according 
to estimates for past IRA expansion proposals. And--get this--the 
richest 3 percent of all the taxpayers would collect nearly one-third 
of the tax cut under this IRA proposal being advanced in the Republican 
alternative. And for what?
  According to the Joint Committee on Taxation, they estimated a 1991 
proposal to restore one-half of the old-style IRA deductions would cost 
$15 billion over 5 years.
  Restoring full IRA's would cost more than $30 billion over 5 years. 
What this proposal does, it merely postpones these revenue losses to 
the outyears. When my friends on the other side say they are very 
concerned about the deficit increasing, this merely postpones the 
losses to those outyears by back-loading the tax deductions; that is, 
by telling taxpayers they can pay a little more tax now in exchange for 
a lot less tax later.
  Well, the long-term effect on the Treasury obviously is not good. A 
Congressional Budget Office analysis reported that for each dollar of 
short-term Government revenue from the rollover provision, it costs 
$9.93 in lost future revenues. Now, get this: For every dollar of 
short-term Government revenue, CBO estimates that it costs $9.93 in 
lost future revenues under a reasonable set of economic assumptions.
  So for every dollar in revenues you get on the front end of it, CBO 
says you are losing $10 in revenues on the back end of it. Now, if that 
is not a prescription for increasing the deficits in the outyears, I do 
not know what is.
  But what is so striking about this proposal is that it gravely 
worsens the problem that my colleagues on the other side have been 
complaining about so vociferously, day in and day out--the outyear 
increases in the deficit.
  Well, Mr. President, the IRA proposal is not the only item in this 
alternative which is guilty of this sin of increasing the deficits in 
the outyears. The so-called neutral cost recovery for business is also 
another way of shifting huge tax losses into years beyond the initial 
budget window.
  The proposal would restructure the tax treatment of depreciation by 
businesses and would, in the short run, generate revenues by reducing 
deductions.
  But what happens in the outyears?
  Just as in the IRA's, depreciation deductions would grow 
dramatically, expanding far beyond current baseline projections, and, 
once again, raiding the Treasury.
  The effect of this proposal is to eliminate a good deal of income tax 
on business profits, all at the expense of U.S. taxpayers, those same 
middle-class taxpayers we were so concerned about just a moment ago. We 
heard those expressions of concern, that they would be the ones who 
would pick up the tab in the long run for this so-called business 
depreciation deduction. According to projections made by the 
Congressional Research Service, this little tax break would ultimately 
lose the Treasury $32 billion a year in the outyears. Once again, if we 
are so concerned, as some of my colleagues seem to be, about the 
outyear deficits, why in the world are they proposing these gestures 
which are simply going to increase the outyear deficits?
  We have heard a lot of concern expressed here about small business 
over the past year, and I am very concerned about small business 
myself. I am a strong supporter of small business. I think small 
business in this country is the last refuge of the true entrepreneur. 
My family has been engaged in small business. But for those who are 
concerned about small business, they may be surprised to know that the 
so-called small business tax break does nothing special for them. Small 
businesses are already allowed to expense capital costs of up to 
$17,500 per year. It is the larger corporations, those with more than 
$10 million in assets, who account for 90 percent of all corporate 
income tax. These are the corporations who would stand to benefit from 
this tax change that is billed as being a boon to small business.
  What else do we have in this alternative that increases the outyear 
deficits? I have never seen an alternative or any economic initiative 
emerge from the other side that did not include in it the old standby: 
capital gains. I do not think there is a real need to rehash the debate 
over a capital gains tax cut one more time. Suffice it to say, we 
simply cannot afford it, nor do we need to enact it. It is simply 
another tax break that is pointed toward benefiting the wealthiest 
among us. More than half the benefits from this proposal will flow to 
those with incomes over $200,000 per year. The average benefit for 
those folks would be $8,000 per year. By contrast, the cut would be 
worth less than $400 to families with incomes between $30,000 and 
$50,000.
  Let me just repeat that. The average benefit to those with an income 
of over $200,000 a year under this proposal would amount to $8,000 a 
year in tax cuts. Contrast that to the fact that this tax cut would be 
worth less than $400 to families with incomes between $30,000 to 
$50,000.
  Perhaps we could do this if we could afford it, even though it does 
not seem to be very fair to me on the surface. But what is the price 
tag for all this largess to the wealthy? Why, a mere $7 billion a year 
when fully phased in; $7 billion more in revenue losses in the 
outyears, increasing the outyear deficits they were supposed to be so 
concerned about.
  Finally, we have discussed to some extent the $500 child credit. Our 
colleagues have characterized this in their alternative as a middle-
class tax cut. Nothing could be further from the truth. As I pointed 
out, for families with $16,000 in income or less, there is no benefit 
at all. Why? Because the credit is not refundable. Thus working poor 
families simply get nothing out of it.
  If they wanted to be fair, why did they not make it refundable on the 
bottom end and cap it on the top end? There was some discussion, I 
think, among our colleagues on the other side about doing that. But 
those who wanted to take this approach were overruled. So on the other 
end of the scale for this so-called child credit, a family with $1 
million in income gets the full credit and a working family making 
$16,000 a year gets no credit. That does not make much sense to me.
  The alternative that we have before us proposes that we spend $103 
billion on a tax credit over 5 years that does not benefit those who 
are the working poor and brings this benefit to those who are the 
wealthiest among us. Sure, this proposal helps some in the middle-
income level. But if you really want to be fair about it, why do we not 
make it refundable for those who are the working poor and cap it so 
those who are the wealthiest among us, who do not need the money, do 
not get it? Let that money flow back into the Treasury to help reduce 
the deficit.
  It would be great to be able to provide a middle-income tax cut. I 
have supported such a concept for a number of years. But, 
unfortunately, we just cannot afford it at this time. The plain fact 
is, when you blow all the foam off these tax proposals, two things 
become clear. It is just as plain as the nose on my face that this plan 
is going to drive the deficits up in the outyears. Second, it once 
again contains tax breaks that are aimed at the wealthiest taxpayers, 
and once again it leaves the poor folks to fend for themselves.
  Some will say this is class warfare. It is not class warfare. This is 
just simply telling the truth about things. If some want to 
characterize it as class warfare they can, but I do not think it can be 
characterized as such when you are just simply laying out the facts 
about it.
  (Mr. WOFFORD assumed the chair.)
  Mr. SASSER. That is a quick overview of the tax changes.
  Let us see what is happening on the spending side. I am sorry to say, 
the picture gets worse. It deteriorates even more. The fact is, this 
plan pays for its tax breaks by taking away health care from the 
poorest Americans. The plan would cut Medicaid by $64 billion, and a 
good deal of it specifically directed at payments for hospitals which 
serve large numbers of uninsured and the poor. This would mean that a 
great number of small and rural hospitals all across this country would 
simply go out of business. This would mean that the State governments 
would have placed upon their backs a greater burden in providing health 
care for the poor. And to compound the felony, a large proportion of 
the Medicare cuts would affect the same hospitals.
  What is this paying for? This is paying for those tax reductions we 
talked about earlier, the capital gains tax cut that is targeted to the 
upper income groups and the IRA deduction that will be taken advantage 
of primarily by those in the upper income groups, the wealthiest 
Americans.
  There is something else going on in this budget that our friends on 
the other side are not eager to advertise. This budget plan would 
absolutely kill health care reform. It would drive the last nail in the 
coffin of health care reform, and drive a wooden stake through its 
heart. I have no doubt that the Medicare and Medicaid cuts in this 
package would ensure no comprehensive health reform and would ensure no 
universal coverage.
  The budget would cut Medicare and Medicaid by $144 billion over 5 
years; that is, the budget advanced by our friends on the other side. 
That is more than twice what we cut last year. It would all be used for 
deficit reduction or to finance a tax cut for the wealthy. Either there 
would be no universal coverage health reform or there would have to be 
large tax increases to guarantee coverage and bring about health 
reform.
  Let me point out something else about this alternative plan. Cutting 
large amounts in Medicare and cutting large amounts in Medicaid without 
any kind of health reform is really a huge tax increase masked as 
health insurance premium increases. There is already a well-documented 
health care cost shift from Medicare and Medicaid to private insurance 
payers.
  In the hospital area alone, the Prospective Payment Assessment 
Commission found in 1992 that Medicaid paid about 80 percent of the 
hospital costs for its patients. Medicare paid about 90 percent and 
private insurance paid about 128 percent.
  Now, what if we adopt these cuts in Medicare and Medicaid that our 
friends on the other side are espousing today? What happens? It simply 
means that the hospitals are going to transfer more of the cost to the 
private insurance patients. It means that those citizens who have 
private insurance, their employers and those citizens, are going to see 
their health insurance premiums go up because there will be more cost 
shifting for Medicare and Medicaid patients to make up the difference.
  These cuts they are talking about in Medicare and Medicaid are 
nothing more than huge masked tax increases to those who have private 
health insurance.
  Since the study of the Prospective Payment Assessment Commission, we 
have cut another $63 billion from Medicare and Medicaid. At a minimum, 
last year's reconciliation bill cut Medicare hospital rates by another 
4 percent. This package would cut billions more without the benefit of 
a systemwide health reform. All of this means even larger shifts in 
hospital costs, larger shifts in doctors' costs and other health care 
costs to private payers. It means ever higher and higher premiums for 
health insurance for everyone else, and that is a direct tax on whoever 
pays it, whether the workers pay it, whether the employers pay it or 
whether just private individuals who have privately held insurance 
policies pay it.
  Let us not forget about this hidden tax, this health care cost shift 
tax. And that is a good part of the reason we are having a health care 
crisis now. That is why we are considering comprehensive health reform. 
That is why the distinguished Presiding Officer, the Senator from 
Pennsylvania [Mr. Wofford], has been working day after day, week after 
week, month after month in this body trying to bring about a 
comprehensive health care reform.
  Mr. President, let me not leave the impression that Federal health 
care entitlements have been left untouched. Medicare has already been 
cut by over 20 percent. We have had health care cuts in 10 of the last 
13 years. The cumulative impact of these bills has already reduced 
Medicare spending by as much as 20 percent below what it would have 
been today without the cut. Last year's bill alone cut Medicare by $56 
billion and Medicaid by another $7 billion.
  The specifics of the Medicare cuts include increases in beneficiary 
out-of-pocket costs, but without the additional prescription drug and 
long-term benefits in the President's plan. The Republican substitute 
says it includes only the Medicare cuts in the President's budget. But 
the President's budget included those cuts as part of a much broader 
health reform package and broader reforms in the Medicare Program.
  This substitute would means test the Medicare monthly premiums 
charged to beneficiaries, and beneficiaries would have to pay a higher 
out-of-pocket cost for home health care and for laboratory tests.
  The substitute offered by the Republican minority adds a new increase 
in part B deductible paid by all beneficiaries.
  So what we have is an increase in the part B Medicare tax paid by all 
beneficiaries; we would means test the Medicare monthly premiums 
charged to beneficiaries; we would lower Medicaid and Medicare payments 
to the hospitals; we would, therefore, increase the premiums of those 
who hold private insurance. So what this amounts to is simply pushing 
back on to the population of this country more health care costs to be 
handled at a private level to pay for these tax cuts, most of which go 
to our wealthiest citizens.
  Mr. President, this substitute that is being offered today does not 
include the President's proposal to add a prescription drug benefit to 
Medicare. As I said earlier, it does not provide extended long-term 
care services as part of health reform.
  So much for the savageries to Medicare and Medicaid under this 
alternative that is presented to us today. Let us take a look at what 
is happening on the discretionary side of the budget.
  The plan that our Republican friends put forth proposes to cut 
Justice funding by half a billion dollars in 1995 and by more than $2.7 
billion over 5 years. Many of the proposed programs cut are cut to 
support initiatives of the crime bill. I hear a lot of talk on the 
other side about fighting the war on crime, but when it comes to 
providing the funding, this budget just takes a pass on that.
  The alternative proposes to cut transportation funding by $8.3 
billion in 1995 and by more than $37.2 billion over 5 years. This 
proposed cut would cripple the initiatives to improve our 
transportation infrastructure. This country's transportation 
infrastructure is vital to our economic well-being, allowing products 
to be shipped from producer to consumer with minimal cost in relation 
to the rest of the world.
  This proposal would put our country at a competitive disadvantage as 
we enter the 21st century. Our highway system would continue to 
deteriorate. Roads and bridges would continue to deteriorate. Airports 
would continue to be congested. Amtrak would be in serious trouble in 
the Northeast corridor under this particular proposal.
  I might point out to my colleagues, discretionary spending is already 
under very strict limits. By 1999, under the President's budget, 
discretionary spending, as a percent of gross domestic product, will be 
lower than any time since 1940.
  Let me repeat that. I want all of my colleagues to hear that: By 
1999, under the budget that we passed last year, discretionary 
spending, as a percent of gross domestic product, will be lower than 
any time since 1940. Now, if the budget is adopted, discretionary 
spending will drop by 6.3 percent by 1999 under this proposal.

  Let us get to a provision here. I am really hesitant to bring this 
up, frankly, but I feel compelled to do so, and that is the question of 
asset sales. Now, this is a budget gimmick that I thought went out 
years ago. We have been embarking on a program of budget integrity and 
budget honesty. My friend, the distinguished ranking member, Senator 
Domenici of New Mexico, I remember, when we were at Congressman Leon 
Panetta's, now Director of OMB Panetta, confirmation hearing, talked 
about honesty in budgeting. He was committed to it. He still is. He 
asked Mr. Panetta: Are you going to submit your budget using bona fide 
CBO numbers? Will you get off of this business of rosy scenarios? Will 
you move in the direction of honest budgeting? And the answer to that 
was ``yes,'' and that has been the case. We now are in an era of honest 
budgeting--no more smoke and mirrors, no more rosy scenarios, no more 
fooling ourselves with our own propaganda. And what do we find in this 
budget that we are looking at here today offered as the Republican 
alternative? That time-honored, old budget gimmick, asset sales.
  Now, I should note that there are some questionable accounting 
techniques in this budget. Our friends' alternative that they are 
presenting would defer 7 years' prohibition on counting asset sales. 
The implication of this change is that the proponents of the amendment 
want to pay for current spending by selling the assets of the U.S. 
Government. It is like selling the garage to pay the monthly mortgage 
bill. You might be able to get away with it for 1 month but you 
certainly cannot do that for very long. I guess you would sell the 
garage 1 month and then sell maybe kitchen appliances out of the house 
the next month and then maybe sell the air-conditioning unit the next 
month, and keep on until finally you had just the bare walls of a 
house.
  That is the asset sale approach to trying to meet the budget 
problems. The truth is that asset sales are no more than budget 
gimmicks. If we are going to be responsible, we should cover current 
expenditures with current income. We should not allow permanent 
spending increases to be covered by short-term asset sales. If you use 
the asset sale gimmick in the short run, all you are going to do is 
increase the deficits in the outyears.
  Finally, we have heard from the day we first got it that the 
President's budget is incomplete. The distinguished ranking member 
called it the ``MIA budget,'' missing in action budget, because some of 
the President's initiatives are not explicitly included in the budget 
totals.
  Well, as I look at this substitute, I cannot help but wonder the same 
thing. It says nothing about how you are going to pay for GATT or how 
you are going to pay for health care reform or a number of other 
initiatives that are missing and were said to be missing from the 
President's budget.
  Well, Mr. President, I think that about sums it up. What we have here 
is the usual alternative that we get from our friends on the other side 
year after year. It always includes tax cuts, and they are supposed to 
be tax cuts that benefit middle-income taxpayers, but when you peel it 
back you find that they are tax cuts that primarily benefit the 
wealthiest among us.
  How do they pay for these tax cuts? Well, they cut Medicare, they cut 
Medicaid, they gut investment in our infrastructure, they do away with 
other important discretionary priorities, they use questionable 
accounting techniques, and they call it a deficit reduction budget.
  Mr. President, I think if we will analyze this budget just in a 
cursory way, we will see that it does not measure up. It simply does 
not measure up. In the final analysis, it is going to increase the 
outyear deficit problem, and in the short term it is going to wreak 
havoc on the discretionary portion of the budget. It is going to, I 
think, wreak havoc on Medicare and Medicaid. I do not think, if the 
American people understood this Republican alternative, they would 
countenance for one moment wanting to accept it.
  Mr. President, I yield the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Could I inquire, do we know how much time remains on 
each side?
  The PRESIDING OFFICER. The Senator from New Mexico has 33 minutes; 
the Senator from Tennessee has 31 minutes.
  Mr. DOMENICI. I am going to yield now in the Record 10 minutes to 
Senator Gramm, 8 minutes to Senator Hutchison, 8 to Senator Nickles, 5 
to Senator Gorton, and I think that reserves about 5 minutes for the 
Senator from New Mexico.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, budgets are about vision, and I know 
probably many people trying to follow this debate have been almost 
asleep as they have listened to the droning on of facts and figures and 
outrage about the fact that there are rich people in America--shocking. 
There are too few in my opinion. I would like to do something about it.
  But I want to get away from all that talk about what is really at 
issue. We have before us today in the Senate two competing visions for 
the future of America. That is what this budget debate is about. It is 
not about numbers. It is not about all of these thick sheets of facts 
and figures. They are just outward and visible signs of what we are 
talking about. What we are talking about basically comes down to two 
competing visions for the future of America.
  The distinguished Senator from Tennessee represents and articulates 
one view of America's future. That is a view of bigger Government. That 
is a view supported by more taxes. That is a view that is founded on 
the premise that Government is the answer; that the way to provide 
opportunity and growth for the American people is to have the Federal 
Government getting bigger, spending more money, exercising more 
authority, and making more decisions. It is a perfectly legitimate 
viewpoint. It has been rejected in most of the world, but it has not 
been rejected in the Senate. In fact, it is the majority view.
  Now, let me outline how that vision is manifested in the Democratic 
budget that is before us and then talk about our alternative.
  The budget before us spends twice as much of the productive resources 
of the country on social programs as we spent at the peak of President 
Johnson's Great Society--that is, twice as much of the productive 
resources of America on social spending as we spent at the peak of the 
Great Society.
  The budget before us spends half as much of the productive resources 
of America on defense as compared to what we spent when Jimmy Carter 
was President. The budget before us begins the implementation of the 
tax increase of the last budget retroactively, starting on April 15. It 
taxes Social Security benefits. It taxes gasoline. It taxes small 
business. And it proposes in its health care reform component that the 
Government take over and run another 15 percent of the economy so that, 
if adopted and if implemented, the budget before us contemplates 
legislative action that for the first time in American history would 
have Government at the Federal, State and local level taking more than 
50 cents out of every dollar earned on average by all Americans.
  That is the vision of the Democratic budget. It is a budget that 
spends more than any budget in the history of the United States. It is 
a budget that taxes more than any budget in the history of the United 
States. It is a budget which proposes a growth in Government spending, 
especially in health care, that has never before been contemplated by a 
free society.
  That is the budget alternative for which the distinguished Senator 
from Tennessee speaks. I wish every American family could sit down 
around the kitchen table and look at that alternative, look at that 
vision for their future and compare it to the vision for their future 
which is being proposed by Republicans in the Senate.
  Mr. President, I am proud of this amendment, not because I think it 
is going to be adopted--I think it is going to be rejected basically on 
a party line vote--but I think we have presented a vision for America's 
future with which most Americans would agree.
  First of all, we think the deficit is too high, and we propose to 
reduce the deficit by cutting spending. We reduce the deficit over 5 
years $322 billion more than the President did. We reduce the deficit 
over 5 years $303 billion more than the House-passed version of the 
budget. In short, our budget reduces the deficit dramatically, and in 
the fifth year of this budget the deficit is half the level that Bill 
Clinton's budget proposed.
  But we do more than cut the deficit. We try to reorder priorities. We 
try to let working families keep more of what they earn. And we do that 
by providing a $500 tax credit for every American family that has 
children.
  In 1950, the average American family with two children sent $1 out of 
every $50 it earned to Washington, DC. That same family today is 
sending $1 out of every $4. We have stressed the budget of working 
families in order that Government could grow. What we propose today is 
to give back to families $500 of their tax money that they were sending 
to Washington so that they can spend it themselves.
  I know that the distinguished Senator from Tennessee and others will 
say, ``Well, in the spending cuts, the freezes in your budget, you have 
cut spending growth for housing, nutrition, and education.''
  We did not cut spending on housing, nutrition, and education. We 
simply have changed who is doing the spending. The Senator from 
Tennessee would like the Government to do the spending. We would like 
the American family to do the spending. We know Government, and we know 
the American family, and we know the difference. We have absolute 
confidence that Government is going to squander this money, and we have 
absolute confidence that working families who love their children, who 
earn every dime they spend, if they get an opportunity to keep that 
money, they are going to invest it wisely in their future and in 
America's future.
  Mr. President, there is only one form of bigotry that is still 
acceptable in America, and that is bigotry against the people who work, 
strive, sweat, and succeed. It is fundamentally wrong. I reject it. I 
deeply resent it.
  I believe that people who work hard and succeed should be admired and 
not always attacked. I resent the fact that we are standing on the 
verge of rejecting a tax cut for middle-class America.
  Let me cut through all the rhetoric, and get to the bottom line:
  The distinguished Senator from Tennessee says do not give $500 of tax 
credit for every child in America, and do not do it for two reasons: 
No. 1, people who make less than $16,000 are not paying any income 
taxes anyway, and they will not get any of the benefits.
  Well, my objective here is to help people who are paying taxes. I am 
tired of the only people we ever want to help around here are people 
who do not pay taxes. When do we start helping people who do pay taxes? 
We do a lot of things around here for very modest income families. I 
support many of those things. But it is about time we start doing 
something for middle-income families, the people who do the work pay 
the taxes, pull the wagon, and who make this the greatest and most 
successful country in history.
  I reject the idea that working middle-class families ought not to get 
a $500 tax credit per child because people who are not paying any taxes 
do not get a tax cut. We are trying to cut taxes for people who do pay 
taxes.
  Finally, if you take every family in America who earns $200,000 or 
more--America's most successful people-- they only have 82,000 
children. If I thought I could get them to have bigger families, I 
would give them a tax credit. America needs more families who value 
ability, who encourage drive, who have vision, who yearn to succeed. 
The real point is that when less than 2 percent of the money from a tax 
credit may go to high-income people, to say that you are giving a ``tax 
break to the rich'' by having a $500 tax credit per child so that 
working families can spend more of their money, is just simply 
outrageous and unfair. To deny this help to 51 million working, middle-
class families so we can be absolutely certain that not a single 
wealthy person is eligible for a tax credit is ridiculous.
  So what is the debate about? The debate is about a competing vision. 
Under the President's budget as modified by the Democrats in the 
Senate, what is going to happen is taxes will go up, spending will go 
up, the deficit temporarily goes down, and then goes up like a rocket 
to over $300 billion in 10 years.
  What we do in our budget is dramatically reduce the growth of 
Government spending. We take that savings, and we do two things with 
it: one, we reduce the deficit; and, two, we give part of it back to 
the people who earned it in the first place. We give much of it to 
working families, with a tax credit of $500 per child.
  We restore the deduction for interest on guaranteed student loans. 
Every day we have young people getting out of graduate school, getting 
out of medical school, who have huge guaranteed student loans. They go 
out and they make good money. We tax them very heavily. They do not get 
to write off the interest on the guaranteed student loan. It is a 
business expense, and they ought to be able to write it off. This is a 
benefit to working people who want to be successful.
  The PRESIDING OFFICER. The Senator has used the time.
  Mr. GRAMM. I urge my colleagues to look at these two competing 
visions and to support the one that is in the interest of the working 
men and women of America. I think if they do, it will be our vision.
  I yield the floor.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, I rise today in support of the 
Republican alternative budget resolution. Although news from the 
provinces sometimes arrives late in this city, surely we must all 
realize how hard it is for middle-class American families to provide 
for their children, to give them their material needs, and to provide 
for their nurturing and care. For most parents, time with one's family 
and crushing financial needs are at war with each other.
  Like most of the problems that face middle-class Americans, 
Government is not much help. But we can provide help today by enacting 
this substitute amendment, and its tax credit of $500 per child. That 
would amount to about $80 per month for most families. That may not 
sound like much when we are talking about billions of dollars in a 
Federal budget, but it means a lot to the moms and dads out there. For 
a Government that loves best telling Americans what to do, when to do 
it, how, where, and with whom, it is a bitter pill. But there is no 
escaping the fact that parents know best what their children need, 
whether it is new shoes, new books, rules to follow, love and 
encouragement, or more vegetables. The family tax credit will take 
dollars out of the hands of big government and put it back in the hands 
of parents.
  I want to talk about the second provision of this amendment, because 
it is a bill that Senator Barbara Mikulski and I have introduced. 
Millions of American women willingly take on the challenge of raising 
children. They stay home to provide the constant contact and attention. 
But working for no pay hurts them financially. Not only do they have 
less to live on, but if they are able to put money aside for 
retirement, the Federal Tax Code penalizes them for that too.
  If both spouses in a household work, they can set aside $2,000 each, 
for a total of $4,000. But if mom or dad stay home, they can only set 
aside $250 more, for a total of $2,250. That is approximately one-half 
the amount a two-income family can set aside. As you know, Mr. 
President, we have a marriage penalty in the Tax Code. This limited 
deduction is a family retirement penalty.
  Our amendment corrects this discrimination against those who work 
inside the home by giving them equal IRA opportunities with those who 
work outside the home. Over 30 years at 6 percent interest, this 
provides up to $150,000 more in security for the one-income earner 
family. This is private savings that will reduce the need for 
Government assistance later in life, a worry that can be particularly 
acute for women who work inside the home, especially when you consider 
the national divorce rate.

  The Republican alternative budget cuts the deficit by $318 billion 
over 5 years. That is almost one-third of a trillion dollars that we 
will not have to borrow, and that our children will not have to pay 
interest on in the next century. We can seize this opportunity now to 
put the brakes on runaway debt. We can do it now by approving the 
Republican alternative budget plan.
  At the same time, we can reorder our priorities, which are way out of 
kilter in this country. We can recognize the enormous contribution of 
the stability of families and the full-time homemaker and working 
mother, recognizing that work inside the home is every bit as valuable, 
if not more so, than work outside the home.
  The Domenici alternative is not negative; it is positive. It cuts the 
deficit. It prioritizes our spending and puts the value where it ought 
to be: On the stability and security of the American family.
  I thank the Senator from New Mexico [Mr. Domenici].
  I yield the floor.
  Mr. NICKLES. Mr. President, I wish to compliment my colleagues, 
Senator Hutchison, Senator Gramm, and Senator Domenici, for their 
statements in support of this alternative. I think this is a positive 
alternative.
  It is important to note for the Record, though, that neither one of 
these budgets cuts spending. Neither one of the budget alternatives we 
have before us cuts spending. I think we get so tied up in rhetoric and 
the use of current services baselines and projected CBO numbers that we 
forget the real facts and figures.
  The real facts are, under the Democrats' budget, spending is going to 
rise from $1.5 trillion to $1.8 trillion over the next 5 years. In the 
Republican alternative, we slow that growth down significantly; but 
spending still grows from $1.5 trillion to $1.7 trillion. So spending 
goes up under our plan too, just not as fast.
  I heard my colleague from Tennessee talking about the Republican 
substitute, that it gutted all of these social programs, and how 
catastrophic it would be to health programs. I looked at our health 
numbers, and this includes Medicaid. In 1995, we are going to spend 
$118 billion on health programs. Under the Republican substitute, which 
supposedly guts Medicaid, health spending grows to $150 billion--from 
$118 billion, in 5 years. I heard my colleague from Tennessee say 
Republicans are gutting Medicare, and we are going to close hospitals. 
Under our plan, Medicare grows from $154 billion in 1995 to $210 
billion in 1999.
  So my point is that the Federal spending grows under both of these 
approaches, but it grows a lot less under the Republican approach--
about $322 billion less over the 5 years. That is significant. Then the 
Republican plan gives a tax credit to individuals, a $500 tax credit 
per child, per dependent, under the age of 18. Very simple. Very fair. 
That is a tax credit people really need. We allow families to decide 
whether they will use that money for education, or for health care, or 
for braces. Individual families can make those decisions. If you have a 
family of four that is a $1,000 reduction in the tax bill of people who 
happen to need that money. They can make the decisions on how to spend 
it.
  My colleague from Texas, Senator Gramm, was exactly right. Who do you 
think can better make these decisions? Do you think Government should 
make these decisions concerning education, health, and housing? Or 
should individual families make these decisions?
  We have two different visions here. We have one that will slow down 
the rate of growth in Federal spending. And this budget does touch 
entitlements. The Democrats' budget does not touch entitlements; it 
barely did last year. If you are going to allow half of the budget to 
grow without any restrictions whatsoever, I think that is very 
irresponsible. Any business that you look at, if they are running 
deficits would scrutinize their entire budget.
  We are not doing that. This is a status quo budget. It does not touch 
entitlements. At least the Republican alternative slows down the rate 
of growth in some areas. Frankly, it still does not do enough. But 
under the Republican alternative, we have a significant reduction in 
the deficit every year. We do not end up at zero in 5 years, but we end 
up with less than $100 billion. Under the Democrat version, the deficit 
estimate is $174 billion in 1995. In 1999, it is $192 billion. You see 
their deficit growing. Under the Republican version, the deficit 
declines from $154 to $99 billion. At least it is coming down, and it 
is in the right trend.
  I think it is a significant alternative that I hope my colleagues 
will adopt.
  Mr. DOMENICI. Mr. President, as I understood, by previous request, 
Senator Gorton is next. I think he wanted 3 minutes.
  I yield 3 minutes to the Senator from Washington.
  The PRESIDING OFFICER. The Senator from Washington [Mr. Gorton], is 
recognized.
  Mr. GORTON. Mr. President, there is a substantial, vitally important 
difference between the two budgets between which we will choose in the 
course of the next few hours. That of the majority looks backward. It 
congratulates itself over the proposition that the budget deficit is 
lower now than it was a year ago or 2 years ago--due, of course, to 
vastly increased taxes, and to a natural recovery in the economy.
  This budget includes within it no plans to do any better. The 
alternative budget proposed by the Senator from New Mexico looks 
forward, looks to the proposition that if we are going to have national 
growth, if we are going to have good times, if we are going to have the 
progress, which is assumed in the budget that the majority has put 
before us, we ought to use that time to reduce the deficits, to stop 
borrowing against the future, however valuable or valid spending 
programs may be.
  It is, however, only the Republican budget that looks to that 
proposition. The Democrat budget is based on testimony, which this 
Senator elicited from Laura Tyson, the chairman of the President's 
Council of Economic Advisers, when she was opposing the balanced budget 
constitutional amendment. In response to a question after her criticism 
of that amendment, she said that this administration never plans to 
balance the budget, never shows a budget deficit of less than $150 
billion a year through 1999, or for that matter, through 2001, the year 
in which the balanced budget constitutional amendment would have taken 
full effect.
  So what we have is a budget plan here which assumes that times will 
be good, that the economy will be growing, that there will be no 
recession between now and the end of the century and, nonetheless, 
never gives us a budget deficit of less than $150 billion a year.
  The Domenici alternative does. Budget deficits are much lower, as 
much or more than $100 billion a year lower, and it provides for tax 
incentives for savings and investment and thus for growth in our 
economy, and for education through the deductibility of interest on 
student loans and for families.
  This budget has been criticized for various spending cuts, but no 
alternative has been proposed. The only alternative that is a valid 
alternative is to pass the Domenici budget.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI. Mr. President, frankly, I have two more Senators, but 
we have been doing all the speaking. They are going to arrive shortly. 
I do not want to use all our time waiting.
  I wonder if we could put in a quorum call. Let us try it for now and 
charge it to both sides.
  I suggest the absence of a quorum, and I ask unanimous consent that 
the time be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SASSER. 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. SASSER. Mr. President, how much time do we have remaining on each 
side?
  The PRESIDING OFFICER. The Senator from Tennessee has 29 minutes; the 
Senator from New Mexico has 10 minutes.
  Mr. SASSER. Mr. President, we heard a lot of speeches here this 
morning. Some of them have been very good, some of them have been 
accurate, some of them have been amusing, and some of them have been 
the contrary to those three adverbs.
  But I was struck by something that my friend, the senior Senator from 
Texas, had to allow today when he said that a budget is a vision, and 
then he went ahead to describe his vision of the budget that he is 
presenting here today, or the vision of the budget that he is 
supporting.
  I will tell you what the reality would be of the vision that he is 
trying to foist onto the United States Senate today and onto the 
American people. The vision would create larger deficits in the 
outyears. The deficits would continue to grow and the red ink would 
continue to flow and the Treasury would continue to hemorrhage.
  It is the same vision that the senior Senator from Texas espoused 
when he was a Member of the House of Representatives and helped put 
forth the Gramm-Latta budget proposal that set this country on the path 
of fiscal disaster. We are still reeling today from that faulty, faulty 
vision and proposal. We saw the deficits of this country go to 
unparalleled levels, unparalleled peacetime levels, during the 1980's 
in pursuit of that vision, and that vision is simply cut taxes for the 
wealthiest among us, and let everybody else fend for themselves, and 
let us do not worry about what occurs with the deficit.
  We see it here again. Capital gains tax cuts benefit principally the 
wealthiest among us. I have nothing against wealthy people. I wish I 
were one of them. I hope someday I will be. But I think they ought to 
pay their fair share, and I do not think that they ought to pay less so 
that others can pay for them paying less through cuts in things like 
Medicare and Medicaid.
  So we have it in here the capital gains tax cut that benefits the 
wealthiest. We have a backloaded IRA that benefits the wealthiest. And 
how do we pay for this revenue loss? We pay for it by cutting Medicare. 
We pay for it by cutting Medicaid. They would cut Medicaid by $64 
billion over the next 5 years. And you know what that vision would 
produce? It would produce higher taxes at the State level as State 
governments try to cope with their responsibility under the Medicaid 
provisions. It would produce rural hospitals going out of business and 
depriving people in rural and deprived urban areas of health care that 
was adjacent to their community.
  They would cut Medicare and Medicaid together by $144 billion over 5 
years. What their vision is or what the vision of the Senator from 
Texas would amount to is a health care wasteland in this country, a 
health care wasteland, Mr. President.
  It would mean that those who have private health insurance would see 
their premiums go up to make up for these cuts that are coming in 
Medicare and Medicaid. It would mean that those on part B Medicare 
would see their Medicare taxes go up. It would mean that employers who 
furnish their employees with health care policies would see their 
premiums go up and, ergo, you would have fewer employers being able to 
afford it so you would have more uninsured employees.
  What kind of vision is that? I submit, Mr. President, that that is a 
vision of a Medicare wasteland or a health care wasteland. That is a 
vision that is an anachronism in the modern society in which we live. 
That is a vision that might have been satisfactory in the 1920's but a 
vision that this country began to reject in 1932 and has continued to 
reject more or less ever since then.
  Now, let us talk about the question that was raised about we need to 
do something about this family that in 1950 was sending $1 out of every 
$50 they earned to Washington and today is sending $1 out of every $4.
  First, those figures in my view are highly suspect. I do not accept 
them as accurate. But just for purposes of argument, let us sort of 
strip it back and see what all that means. In 1950, we were at the 
lowest point militarily than we had been since the 1930's. This was 
prior to the Korean war buildup. So, we were not asking the American 
people then to pay for a substantial military budget.
  In 1950, if momma or daddy at the age of 65 had to go in the hospital 
and they did not have any money, their daughters or their sons had to 
foot the bill. We did not have any Medicare in 1950. In 1950, if you 
were a poor person, you either got no health care or you were dependent 
on the kindness of strangers or the kindness of a physician somewhere. 
There was no guarantee, no assurance that you could get health care in 
1950.
  In 1950, if you were a person of modest means and you wanted your 
child to go to college, either you had to foot the bill or you could 
not go. There were no college loan programs or student loan programs in 
1950.
  In 1950, there were no clean water bills, so there were no wastewater 
treatment plants and you just dumped a lot of sewage into the river and 
into the creeks and continued to pollute. I could go on and on.

  Does anybody really want to go back to 1950? Is that the vision that 
we are talking about here? Sometimes I think that is the vision of the 
senior Senator from Texas.
  But I say to you, Mr. President, that does not even pass the Dicky 
Flatt test. I will bet that if you called up Dicky Flatt and said, 
``Dicky, do you want to go back to 1950?'' I will bet, when you 
described it to him, Dicky Flatt would say, ``No, I don't believe that 
would pass my test. I don't believe I want to go back to 1950.''
  So, when we talk about vision, what we are talking about in the 
vision of this budget that we have before this United States Senate is 
a vision of staying the course, a vision of being responsible, a vision 
of making the hard choices and assigning the proper priorities.
  That is what we are doing. That is the reason that these 
irresponsible deficits of the 1980's are coming down. That is the 
reason we are having to cut some programs that the American people want 
and need, because we are bringing these deficits down and we are having 
to cut those programs to pay for the irresponsibilities of the 1980's 
and the vision of those who were in control of the budgetary priorities 
of this country at that time.
  Mr. President, this budget that we have before us today is a budget 
that will continue the prosperity that the American people are now just 
starting to sense and to understand; will give energy to the economic 
recovery that we are now seeing with us presently and more of it out 
there on the horizon. Oh, the figures are very encouraging. Because of 
this Deficit Reduction Act that we passed last year and this stay-the-
course budget that we present to the Senate today, we are creating 
jobs.
  In 1993, we created 1.9 million jobs, more jobs than were created 
under the previous 4 years under the vision of others; in 1993, more 
increase in real disposable per-capita income in 1 year than in the 
previous 4 years, all because of the Deficit Reduction Act of last year 
and the stay-the-course budget that we are presenting to this body 
today.
  I admire Dr. Alan Greenspan. He is a very intelligent, highly 
educated man. I disagree with him on a lot of fundamental economic 
policy and he knows that, but I respect him immensely. Dr. Alan 
Greenspan, a conservative Republican economist appointed by President 
Ronald Reagan, said before the Joint Economic Committee of this 
Congress in February of this year that the economic outlook for our 
economy was better than it has been in 20 or 30 years--20 or 30 years.
  Now, that is the product of the vision that is in this particular 
budget that is before this body today; not a budget that runs out here 
and promises a tax cut here and a tax cut there, knowing it is 
irresponsible, knowing we cannot afford to pay for it. I believe the 
American people see through that. They understand that there is no free 
lunch. They understand that we have got to be responsible and we have 
got to pay our way.
  And, Mr. President, that is what this budget before us does today. 
And it does it without gimmicks. It does it without using things like 
asset sales. That is selling your seed corn, Mr. President. It would be 
just like a farmer selling the corn that he is going to plant in the 
spring of the year, selling it that fall to get through the winter. 
What happens when the spring comes and there is no corn to plant?
  So, Mr. President, I think we do have two conflicting visions here. I 
think the senior Senator from Texas is right. We have a vision of a 
budget that is being presented here by the majority that is 
responsible, that assigns the proper priorities, that makes the tough 
choices; a budget of discipline so that we can continue the economic 
recovery that is well underway, so that we can see this recovery 
continuing out to the year 2000, continued noninflationary economic 
growth as the economists are predicting. It is going to occur because 
we are taking responsible, measured decisions to try to deal with this 
deficit and reverse the excesses that occurred years ago, perpetrated 
by those who had a different vision of what the budget should look 
like, what the economy should look like, and what the Government of 
this country should do.
  So, Mr. President, I rejoice in this contrast of visions, because I 
think if the American people can see both of these visions for what 
they are. They are going to accept the vision that is in the budget 
proposed by the majority here, the budget proposed by the President, 
and I think they are going to reject the vision that is proposed in the 
alternative offered by our friends from the other side.
  Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER (Mr. Akaka). The Senator from Tennessee has 13 
minutes remaining.
  Mr. SASSER. I thank the Chair.
  Mr. DOMENICI. Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. The Senator from New Mexico has 10 minutes 
remaining.
  Mr. DOMENICI. I yield 3 minutes to Senator Lott from Mississippi.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. LOTT. Mr. President, I thank the distinguished Republican leader 
on the Budget Committee for yielding me this time.
  I know the time is all running out. I do have some points I would 
like to make, but it is hard to stay on what I had planned to present 
here in this 3 minutes, after having listened to the presentation from 
the Senator from Tennessee.
  I think we have just heard a perfect prescription and description of 
what is in the Budget Committee's resolution; that is, the solution is 
Government: Government can do it all. The private sector cannot handle 
it. Let the Government move in and take over every program.
  Comments were made, ``We can't afford to let the people have tax 
cuts.'' Now listen to that. We are saying to the people that we cannot 
afford to let you keep your money. No, because we have to bring it up 
here and spend it in Washington.
  Yes, there is a clear difference in vision. And the only place where 
you are going to get a vote for the vision you just heard described is 
on the floor of the U.S. Senate. The American people would not vote for 
that vision.
  Let me talk first about the Clinton package. The most notable thing 
about it is what is missing. There are no real spending cuts. There is 
no credible deficit reduction, no economic growth incentives, and 
certainly true reflections of the Nation's spending priorities are not 
in this budget.
  Now, why do I say that? First of all, with over 5 years in new 
spending initiatives, the President's budget would be up $127 billion. 
Oh, there are a few little small cuts suggested this year, but a couple 
of things happened. The President turns around and recommends that they 
be spent in other areas. Even where the President took a courageous 
stand in several instances, the Budget Committee said, ``Oh, no, we 
can't afford to have cuts there,'' and the Budget Committee took back 
those spending cuts.
  The American people need to know that this courageous budget we just 
heard described will add almost $2 trillion to this Nation's debt over 
the next 5 years. Remember that now. If there is such courageous 
deficit reduction here, why is the debt going to go up another $2 
trillion? So there is no credible deficit reduction here. There are no 
economic growth incentives. What else is missing is no provisions for 
the health care reform, no provisions for the cost of welfare reform, 
and many of the important crime initiatives are not provided for in 
this package. So I describe the Clinton budget and the Budget Committee 
recommendation as a hide and seek budget, because you really have to 
look to find what is in there. And many of the important things are not 
in there.

  The alternative that we have proposed for the Senate to consider, I 
think, is a very good one. It has tough but credible, responsible 
deficit reduction, 60 percent of it on the entitlement side and 40 
percent on the domestic discretionary side.
  I urge my colleagues to look very seriously at this alternative. The 
American people would support this Republican alternative. Why do I 
believe that? Because, as I said before, with the President's and 
Democrat's budget I feel a bit like I am playing one of my favorite 
games--hide and seek. I am seeking several things in this budget for 
our Nation: Real spending cuts, deficit reduction, and economic growth 
incentives. I would also like to find the Nation's priorities--crime 
reduction, welfare reform, and health care reform--reflected in our 
Federal spending. Unfortunately, each of these components are hiding--
very well--or, more likely, not there at all.

  I have looked hard for some real spending cuts. They are not in this 
budget. The administration claims to cut 100 domestic discretionary 
spending programs and eliminate 115 others. In reality, when Defense is 
factored out, domestic discretionary spending actually increases. Even 
if you include the drastic Defense cuts, the spending cuts total $5.5 
billion--a spending cut of 0.36 percent of the $1.52 trillion budget. 
That's hardly a drop in the bucket--only one-third of 1 percent of the 
total budget.
  The economy is not booming, but it is definitely in a recovery. Now 
is the time to take advantage of this and cut spending while the 
economy is stronger.
  In reality, the budget proposed by the President proposes higher 
spending in each of the next 5 years. The proposed terminations and 
reductions in fiscal year 1995 amount to $5.5 billion while the new 
spending amounts to $8.2 billion. Over the next 5 years, the budget 
increases spending on various programs by $127 billion. Federal budget 
outlays will increase 17.1 percent from fiscal year 1994-98.
  The Senate passed budget resolution does include additional cuts to 
discretionary spending. It is doubtful these cuts will survive on the 
Senate floor. If they do, I doubt they will survive the conference 
because the House passed resolution does not include any additional 
cuts. While I fully support additional spending cuts, I do believe we 
must be careful where we cut.
  I am concerned about this amendment because it does not specifically 
state that the cuts will not come out of Defense.
  The President said in his State of the Union Address that we must 
``hold the line on Defense'' and not cut it any further. I agree with 
the President. We have cut Defense too much and too fast. Now is not 
the time to reduce it more. I hope we will have the opportunity during 
the floor debate to modify the committee passed amendment to specify 
that the spending cuts be made--but not at the risk of our national 
security. As the situations in North Korea, China, Bosnia, and Somalia 
prove, the world is not yet a safe place.
  This annual deficit spending has an outrageous effect on our national 
debt. The debt at the end of fiscal year 1993 was $4.351 trillion. By 
the end of fiscal year 1999, this debt is projected to be $6.305 
trillion. The projected growth in national debt over the 6 years for 
which the President has submitted budgets is $1.954 trillion dollars. 
This looks pretty much like business as usual to me--more deficits 
adding to our national debt.
  The deficit projections in this budget are lower. But, are they real? 
What is alarming is that these projections don't include funding for 
health care, welfare, or many of the necessary crime initiatives. 
Additionally, there are no funds for GATT, Superfund, the Bottom-Up 
Review shortfall or disaster relief.
  Since 1989, we've had the San Francisco earthquake, $3 billion; 
Hurricane Hugo, $3 billion; Hurricane Andrew, $9 billion; Midwest 
flooding, $5 billion; and the L.A. earthquake, $10 billion. Buried in 
these relief programs are all kinds of congressional pork. At this 
rate, we have basically set up another Federal entitlement and we may 
as well budget for it.
  When these issues are addressed in one way or another, I fear these 
deficit projections will go out the roof.


                    economic growth incentives/jobs

  We have heard a lot about the lower deficit projections. While I 
believe this is due to our recent economic growth. I do not think we 
should focus on who gets the credit for what. We must look forward and 
enact policies that will best position our Nation for economic growth.
  This budget does not contain any growth incentives, which are the 
only way to create real, lasting jobs. The President attended a jobs 
summit in Detroit last week. Why? Because we have not seen the 
necessary job creation.
  In his State of the Union Address President Clinton boasted about the 
creation of 1.6 million new jobs during his first year in office. While 
this figure is better than no job creation, it represents a much 
smaller increase than usually experienced. At this stage in an economic 
recovery, 33 months after the low point of the recession, total 
employment traditionally has increased by an average of 9.2 percent.
  Even including the 1.6 million jobs created last year, total 
employment has climbed by just 2.5 percent since the bottom of the 
recession-far below the average.
  With higher payroll and income taxes, new mandated benefits, added 
regulatory burdens, and the uncertainty over health care, employers 
today have been much more cautious. The job market's lackluster 
performance indicates Government policy is inhibiting job creation.


                                families

  In addition to providing incentives to businesses to create jobs, I 
believe we should do something for families who are really carrying the 
tax load. While I have been looking, I am not sure what the President's 
proposed budget has in it for families.


                  national spending priorities: crime

  The rise of violent crime in this country is forefront in almost 
every American's mind. Yet, this budget is sorely lacking in it's crime 
proposals.
  For everything it ``giveth, it taketh away''--the rhetoric does not 
match the reality.
  The President proposes cutting $600 million from existing law 
enforcement and anticrime programs. The budget cuts the DEA--
surveillance airplanes, high speed ships--organized crime, the U.S. 
Parole Commission, the INS, the ATE, the IRS, the Customs Agency, the 
Coast Guard, the Office of National Drug Control Policy, and the FBI. 
It also proposes the elimination of the Edward Byrne Formula Grant 
Program, which is an essential source of funds for multijurisdictional 
narcotics task forces that are the main defense against drug 
traffickers at the local level.
  What does the budget do in the crime area? The budget only earmarks 
three provisions of the Senate crime bill for funding and yet, it 
proposes a 30-percent cut in prison construction and increases the 
civil rights and environmental law divisions at Justice. It increases 
funding for the Legal Services Corporation by $100 million and it funds 
$100 million in grants to States for criminal record upgrades to 
implement the Brady bill. Additionally, it does fund 50,000 additional 
police officers on the street, $1.7 billion; $300 million for 
immigration control, including greater enforcement of sanctions on 
employers; and it proposes $303 million in unspecified crime control.
  I believe we must make some radical changes to the President's 
proposed budget. We can--and should--do better.


                         Republican Alternative

  For that reason, I fully support the Republican alternative. I 
believe it charts a much better course for our Nations's future. It 
addresses each of the areas I have discussed where the President's 
budget is lacking.
  In terms of real spending cuts, we propose $318 billion, $287 in 
policy savings and $31 billion in interest savings. This is $322 
billion more in deficit reduction than the President proposed. In 1999, 
the Republican alternative budget proposes a deficit of $99 billion--
$106 billion less than the $205 billion deficit projected by the 
Clinton budget in 1999.
  This would allow President Clinton to fulfill his campaign promise to 
cut the deficit in half in 4 years.
  In addition to reducing the deficit through spending cuts, our 
alternative provides relief to families and offers incentives for real, 
sustained economic growth.
  Our plan would help President Clinton keep another one of his 
campaign promises--a $500 per child tax credit for families.
  No, this is not a tax break for the rich. This would benefit over 51 
million children. This credit would be available to every family with 
children in the Nation--not just middle to high income families as many 
of my colleagues have stated. The median income of a family in my home 
State of Mississippi, is $24,448. Is that rich I ask my colleagues?
  It is important to note that 86 percent of the children in the 
country are in families with incomes less than $75,000. The credit is 
available to children of two-parent and single-parent families.
  This tax credit will benefit families on the lowest end of the income 
scale because it is designed to offset either income or payroll taxes, 
much like the EITC. Thus, anyone who is working, regardless of their 
income tax liability, could benefit from this tax relief.
  This bill puts money back in the hands of the American family--they 
are carrying the tax load. This will directly impact the lives of 
approximately 51 million children. One may make partisan arguments 
about how the tax burdens have shifted over the years--but no one will 
dispute the fact that families were hit hard by the Tax Code.
  In 1950, a family of four with an average income paid only 2 percent 
of its annual income to the Federal Government while today that family 
pays 24 percent in income and payroll taxes. When State and local taxes 
are included, the tax burden exceeds one-third of the family's income. 
In 1950, close to 80 percent of family income was protected from 
Federal income tax through the personal exemption. Today the personal 
exemption only shields 20 percent of that income.
  Since 1960, a family with 2 children has seen their tax burden 
increase 43 percent--and a family with 4 children has seen a rise of 
223 percent.


                       economic growth incentives

  The Republican alternative also provides real incentives for economic 
growth. It would: Index capital gains; allow for capital losses on the 
sale of a principle home; provide for neutral cost recovery; and create 
a new IRA and allow penalty free IRA withdrawals for education, medical 
expenses, and first-time homebuyers. It would allow equality for 
spouses as well.
  Additionally, it would extend the R&E tax credit for 1 year. It would 
also assist people trying to get an education by restoring the 
deductibility for interest on student loans and providing for a 1-year 
exclusion of employer provided educational assistance.
  The alternative reflects our national priorities by funding the 
Senate crime bill, providing $22 billion for anticrime measures. It 
also funds the $20 billion defense shortfall acknowledged by the 
Pentagon.


                               conclusion

  This amendment clearly offers Senators a choice between two very 
different approaches to Government. I am proud to stand for the 
alternative which includes additional spending cuts and deficit 
reduction, tax relief for Americans, and incentives for real economic 
growth.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I modify my allotment of time and give 
1\1/2\ minutes to the Senator from Alaska [Mr. Stevens], and 1\1/2\ to 
Senator Grassley.
  The PRESIDING OFFICER. The Senator from Alaska is recognized for 1\1/
2\ minutes.
  Mr. STEVENS. Mr. President I am delighted to share the time left with 
my good friend from Iowa. I was surprised here, a moment ago, to hear 
the Senator from Tennessee talk about the number of jobs created in 
1993. Those jobs were created because of several years of good monetary 
and fiscal policy reducing the interest rates. Now I think the people 
on the other side of the aisle ought to look and see what is happening 
now under the Clinton administration's policies--interest rates are 
going up.
  I support the Republican alternative budget resolution offered by my 
good friend from New Mexico for three reasons: It includes greater 
deficit reduction than President Clinton's proposal; it fully funds the 
Department of Defense's Bottom-Up Review force structure, and it 
addresses the growing problem of entitlements.
  Over the next 5 years, the Republican alternative would result in 
more than $322 billion in deficit reduction over the President's plan. 
It would reduce the deficit to $99 billion in fiscal year 1999 
ultimately providing $318 billion in deficit reduction over 5 years. 
That is $106 billion less than the 1999 deficit projected under the 
Clinton Plan.
  In addition to greater deficit reduction, the Republican alternative 
includes an additional $20 billion to fully fund the Department of 
Defense's Bottom-Up Review force structure. The Bottom-Up Review was 
prepared by the Department of Defense outlining the restructuring and 
minimum financial resources needed to ensure this country's military 
preparedness. It is the blueprint of how the steep downward trend in 
defense spending through 1999 will be accomplished. Recently the Chief 
of Staff of the Army, said, ``The fiscal year 1995 budget is our tenth 
consecutive budget representing negative raw growth.'' He is talking 
about Defense real growth. Although President Clinton funded the review 
in fiscal year 1995, his budget fails to fully fund it in fiscal year's 
1996-99. Unless we sustain the force levels assumed in the Bottom-Up 
Review we can expect the President not to have the flexibility to deal 
with contingencies such as Bosnia, another Desert Storm or Korea. 
Failure to have a 10 division Army, 20 Airforce wings and 350 Navy 
combatant vessels leaves the country unable to lead in international 
crisis. In hearings before the Defense Appropriations Subcommittee, all 
the members of the Joint Chiefs have testified that we are at the 
edge--deeper cuts will destroy our ability to meet the two Major 
Regional Conflict scenario envisioned by the Bottom-Up Review.
  In addition to reducing the deficit and funding crucial defense 
spending, this proposal begins to address the spiraling growth of 
entitlement spending. Approximately 56 percent of the savings in this 
plan comes from changes in mandatory and entitlement spending. This 
deficit reduction package includes $162 billion over 5 years in 
discretionary cuts in Government programs and $213 billion in mandatory 
spending cuts. Without facing the fact that entitlement spending must 
be addressed--serious deficit reduction will never take place.
  Last month during consideration of the balanced budget amendment I 
spoke about the need to reform our entitlement spending which accounted 
for over 61 percent of all Federal spending in fiscal year 1992. I 
voted against the balanced budget amendment, in part, because it did 
not include any requirement to reform entitlement spending. It did not 
set up a procedure to address the problem of ``uncontrollable 
spending.'' Under current law, most of the cuts required by the 
balanced budget amendment would have come out of Government programs 
and services from airport control to weather service to Coast Guard 
search and rescue to national defense. I believed that was not in the 
best interest of our country's national security.
  The Republican alternative is a blueprint for serious deficit 
reduction. It contains reductions in entitlement spending as well as 
cuts in other Federal programs. This proposal contains specific reforms 
that if adopted will result in deficit reduction exceeding both the 
President and the House's proposed budgets.
  Incidently, I would like to commend the drafters of the Republican 
alternative for including a provision to lease the Arctic National 
Wildlife Refuge [ANWR]. One-half of the receipts would be deposited in 
the Federal Treasury and the other half would be paid to the State of 
Alaska as required under the Alaska Statehood Act. The opening of ANWR 
is one example of how the Federal Government can better manage its 
resources to help reduce the Federal budget deficit.
  In the final analysis the cuts found in the resolution before the 
Senate from the majority will cut national defense. The Republican 
alternative budget resolution is what this country needs to put it back 
on the path of fiscal responsibility.
  The PRESIDING OFFICER. The Senator from Iowa is recognized for 1\1/2\ 
minutes.
  Mr. GRASSLEY. Mr. President, I want to offer my strong support to a 
middle-class tax cut for the family, which is in the Republican 
alternative. It is time to start giving back to families what is 
rightfully theirs.
  If the dependent exemption had kept up with inflation, it would be 
near $7,000 by now, instead of the $2,350 one that exists.
  A new $500 tax credit for each dependent in every family will help 
the President keep his promise to cut middle-income taxes.
  This amendment is the latest in a series of attempts to achieve 
family tax relief. Besides legislation I have introduced in the past, 
the Budget Committee voted for a resolution of mine 2 years ago in 
support of family tax relief. Congress later passed a family tax credit 
that was part of a vetoed bill.
  A $500 tax credit will send billions of dollars directly back to 
families. Families in my State of Iowa will get over $300 million back. 
In the chairman's State of Tennessee, families will get direct tax 
relief in the amount of over $470 million.
  Instead of throwing more money at Government bureaucracies, we need 
to let people keep more of their own money and use it in a way that is 
best for them. Not in the way that the Government says is best for 
them. People are sick and tired of hearing from some Government 
bureaucrat who says I am from the Government and I am here to help you.
  So, Mr. President, now is the time for all of us here to start giving 
people back the money that Congress has been taking away from them. We 
can never give Government back to the people as long as we continue 
picking their pockets. If you really support family tax relief, now is 
the time to vote for it.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Who yields time?
  Mr. DOMENICI. We have 4 minutes remaining, is that correct?
  The PRESIDING OFFICER. The Senator from New Mexico has 4 minutes 
remaining.
  Mr. DOMENICI. How much time does the chairman have?
  The PRESIDING OFFICER. The Senator from Tennessee has 13 minutes 
remaining.
  Mr. DOMENICI. Is it possible the Senator could use some time while I 
wait for our leader? It would be helpful to us.
  Mr. SASSER. Of course.
  The PRESIDING OFFICER. The Senator from Tennessee [Mr. Sasser] is 
recognized.
  Mr. SASSER. Mr. President, it has been suggested here on the floor 
that there are no provisions for health care or welfare reform in the 
budget being presented here by the majority. There are no provisions in 
the alternative before us either. In both versions they are included 
through reserve clauses. That is how we deal with these matters in a 
budget resolution. We simply create a reserve clause for health care or 
welfare reform or whatever. That allows the committee of competent 
jurisdiction, or of appropriate jurisdiction, to take up that 
particular subject and to produce a deficit-neutral provision with 
regard to that particular item.
  For example, in the case of health care, because of the reserve 
clause in this bill, should the Finance Committee choose to produce a 
health care reform bill, they are free to do it under this budget on 
either side, as long as it is budget neutral. So the two are similar in 
that particular way.
  The statement was made a moment ago that perhaps we could afford a 
tax cut at this time. I wish we could give our citizens a tax cut. We 
gave a lot of our citizens a tax cut when we passed the Budget Act last 
year. There was a lot of discussion at that time about the fact that we 
were passing nothing but a tax bill, that everybody was going to get 
their income taxes raised.
  I did a study--I did not do it, the Treasury Department did a study 
of the taxpayers in my native State of Tennessee. We have something 
akin to about 2 million individual income tax filers down there. 
Interestingly enough, the Treasury study indicated that 1 percent of 
that group was going to see their taxes go up. It also indicated that 
16 percent of those who filed in my native State of Tennessee were 
going to see their taxes go down: 20,000 people would see their taxes 
go up; 305,000 people would see their taxes go down. And the 
overwhelming majority, over 80 percent, those in the middle, would see 
their income tax liability not change at all.
  I would like very much to be able to give middle-income citizens 
another tax cut. I look forward to the day when that will come. But we 
cannot do it until we can do something about these very severe deficits 
we have been trying to deal with over the past few years. We have made 
very, very substantial cuts. We have cut spending in mandatory 
entitlement programs, in Medicare, in Medicaid, cuts in other 
entitlements which I lined out in detail to the Senate yesterday. 
Discretionary spending, the other portion of the budget, will be at its 
lowest level as a percentage of gross domestic product next year than 
at any time since 1940. Domestic spending next year is going to be 
lower than it was last year. I am talking, Mr. President, about not 
lower on a CBO baseline factor; I am talking about lower in nominal 
dollars, in actual dollars. We are lowering domestic spending from year 
to year, and that is the first time that has happened since 1969. Bear 
in mind, 1969 is the last time that we had a balanced budget in this 
country.
  So we are cutting spending. We have cut the fat and, in some cases, 
we are now cutting right into the muscle.
  We simply cannot get in the posture of, I think, at this time doing 
what we like to do, and that is come forward with a tax reduction for 
middle-income people, until we can get our deficits under control 
somewhat better.
  Mr. President, may I ask how much time we have remaining?
  The PRESIDING OFFICER. The Senator from Tennessee has 6 minutes 20 
seconds remaining. The Senator from New Mexico has 3 minutes 52 seconds 
remaining.
  Mr. SASSER. Mr. President, I yield the floor to my distinguished 
friend from New Mexico.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. We have 4 minutes?
  The PRESIDING OFFICER. Four minutes remaining.
  Mr. DOMENICI. Mr. President, I yield myself 2 minutes and, hopefully, 
Senator Dole will arrive shortly.
  I just want to remind everyone that if we take one more look at this 
chart, the stay-as-you-go budget with reference to future generations 
and what kind of legacy we are leaving them is described right here in 
these two bar graphs. The stay-as-you-are, steady-as-you-go, 
everything-is-going-great approach shows that the entitlements and 
mandatory expenditures of this Government from 1995 to 1999 will go up 
from $843 billion to $1.99 trillion. At the same time, the nondefense 
discretionary will go from $249 billion to $283 billion, a $45 billion 
increase.
  Mr. President, that is not what we ought to be doing in good economic 
times if we want to rid our future generations of this taxation without 
representation that is represented by a growing debt.
  Second, I do not know what would be said on the other side if they 
could not speak of the rich and the poor. It seems like, to be fair 
with everyone, including those who are wealthy in America, we have to 
always hear an argument that unless it hurts them, it cannot possibly 
help the poor. Frankly, I do not think anyone believes that. It makes 
nice rhetoric.
  The PRESIDING OFFICER. The Senator has spoken for 2 minutes.
  Who yields time?
  Mr. DOMENICI. I yield as much time as I possibly can, without the 
chairman taking away what little time he has, to the Republican leader.
  How much does that mean the leader can speak?
  The PRESIDING OFFICER. The Senator has about 1 minute remaining.
  Mr. DOLE. Can I use 2 minutes of leader's time?
  The PRESIDING OFFICER. Without objection, it is so ordered. The Chair 
recognizes the Republican leader.
  Mr. DOLE. Mr. President, after years of having Democrats declare 
Republican budgets dead on arrival, or D-O-A, Senator Domenici has 
called President Clinton's first complete budget ``missing-in-action.'' 
It is missing measures to control the deficit. It is missing the tough 
decisions about entitlement spending. And, it is missing funding for 
the President's biggest new spending initiatives. But before the 
American people get too discouraged, I can assure them that there is a 
choice: One budget plan does contain the tough calls on spending; that 
is the republican budget plan. I thank my colleague from New Mexico, 
Senator Domenici, for his efforts and the efforts of Republicans on the 
committee.
  Our plan cuts President Clinton's 1999 deficit in half. And we do it 
without any tax increases and without any cuts in Social Security. The 
Republican recipe for deficit reduction is simple--tough, enforceable, 
balanced cuts in Federal spending.
  And, while the President wants us to invest in more Big Government 
and more bureaucracy, Republicans make a real investment in America's 
future by providing much-needed tax relief to working families and 
children.
  The Congressional Budget Office, the President's hand-picked budget 
scorekeeper, estimates that if the President's budget were adopted, the 
deficit would move down from $223 billion this fiscal year to $174 
billion in fiscal year 1996, then move right back up again to more than 
$200 billion in fiscal year 1999 and even higher in future years. The 
budget resolution reported out of the Budget Committee is an 
improvement over the President's budget. Over 5 years, the projected 
deficits are more than $43 billion lower than the levels set in the 
President's budget.
  After all the tough talk we heard last year about the importance of 
reducing the deficit, and after all the appeals from the American 
people to ``cut spending first,'' the White House has consistently 
opposed any additional spending cuts for deficit reduction. Republicans 
are not satisfied with $200 billion deficits as far as the eye can see, 
and we believe we can do better.
  As indicated, under the leadership of Senator Domenici and the 
Republicans on the Budget Committee, Senate Republicans have put 
together an alternative budget that makes progress in cutting the 
deficit without any new taxes and without any cuts in Social Security.
  Over 5 years, the Republican plan cuts the deficit by more than $300 
billion below the President's budget plan and more than $275 billion 
below the Senate Democrats' budget plan.
  Mr. President, the Republican alternative demonstrates that 
Republicans are serious about offering entitlement and discretionary 
spending cuts to reduce the deficit. Our plan would get the deficit 
down to $99 billion by 1999. That is more than $100 billion lower than 
President Clinton's 1999 deficit and more than $90 billion lower than 
Senate Budget Committee's 1999 deficit.
  Mr. President, budgets say a lot about priorities.
  Because working families and children are a priority for Republicans, 
our plan contains a number of provisions aimed at providing tax relief 
to working families.
  We believe that inflation is a tax that erodes the value of your 
assets--whether it is your home, your small business, your family farm, 
or your investments. To protect these assets from the corrosive effects 
of inflation, and to unleash new investments, our plan would index 
capital gains.
  Maintaining a strong national defense is a Republican priority. The 
administration's own defense experts calculate a shortfall of at least 
$20 billion in the Clinton defense plan. And while the President used 
his State of the Union address to announce that he would make no 
further cuts in Defense, his budget plan forces our military to eat 
that $20 billion shortfall. This is a hidden cut on top of the $127 
billion cut the President has already applied.
  The truth is that the Republican alternative is the only budget that 
provides what the President's own defense experts say they need.
  The Republican alternative backs up the tough talk about crime-
fighting by fully funding the violent crime trust fund with $22 billion 
over 5 years. This money will hire more cops, make our schools safer, 
put away violent criminals, and slam shut the revolving prison door.
  The American people want us to make the tough decisions needed to get 
the deficit under control. This plan demonstrates that Republicans are 
willing to make the tough calls and set priorities, not just with words 
but with our votes. We are willing to cut back Government programs in 
order to make continued progress to reduce the deficit, provide tax 
relief for working families, provide the funds needed for a strong 
defense and a tough crime-fighting package.
  I urge my colleagues to vote for our approach--less spending, less 
Government, lower deficits, tax relief for working families, and a 
stronger, more secure America both at home and abroad.
  Mr. ROTH. Mr. President, the budget alternative we are proposing 
today returns us to the promises President Clinton made during his 
campaign. Leading up to his election, President Clinton was clear about 
his desire to offer middle class Americans a tax cut. President Clinton 
was also determined to cut the deficit in half during his first term in 
office. Well, Mr. President, this is exactly what we propose today with 
this alternative.
  This bill will reduce the deficit by $318 billion over the next 5 
years. It will provide middle class tax relief, and it offers 
incentives that America needs right now to save and invest for the 
future. This alternative represents a real cure for the tax-as-usual, 
spend-as-usual virus that seems to be contagious around these parts. 
This alternative brings together some of the best ideas of both 
parties--proposals that have found strong support in this body before.
  In fact, this alternative mirrors a proposal I introduced with 
Senator Lloyd Bentsen--now our Secretary of the Treasury--back in 1991. 
It offers tax credits for children and expansion of individual 
retirement accounts. Each of these proposals has found strong support 
on both sides of the aisle. As currently written, this plan will 
benefit some 52 million Americans, giving them a $500 tax credit for 
dependent children. In Delaware alone, more than 180,000 families will 
benefit from a tax break of more than $85 million. In Delaware and all 
across America, millions more will benefit from the IRA program, a 
terrific vehicle for encouraging Americans to save.
  Savings equals investment; investment equals economic expansion; 
economic expansion equals jobs; and jobs equal a secure future for our 
families and our Nation. It is a simple equation. And under this bill, 
up to a $2,000 tax deduction would be available for all Americans, 
including spouses who work at home. This bill also expands the 
usefulness of the IRA, allowing it to better serve our families. Early 
withdrawals can be made to pay for education costs, to buy a first 
home, to cover medical bills or expenses during long-term unemployment. 
Again, Senator Bentsen and I championed these changes for years before 
he was picked by President Clinton to run the Treasury.
  Mr. President, there are many components of this alternative that 
will be beneficial to Americans. It is the right medicine at the right 
time. History has proven that our economy does best when taxes are cut 
and when spending is controlled. This is no secret held by one party or 
the other. President Kennedy successfully cut taxes to spark the 
economy in the 1960's. In much the same way, President Reagan created 
record-setting job growth in the 1980's. President Clinton appeared to 
understand this when he was campaigning. Americans believed him. This 
is the opportunity to make good on those promises.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. SASSER. Mr. President, do I have any time remaining?
  The PRESIDING OFFICER. The Senator has 3 minutes.
  Mr. SASSER. Mr. President, I will be very brief. I will not use the 3 
minutes.
  Mr. President, to sum up, in essence what this Republican alternative 
does to the majority budget, it simply cuts taxes, reduces revenues, 
and the principal tax cuts are the time-honored capital gains tax cut 
which we know from past experience inures primarily to the benefit of 
those in the upper income brackets.
  It also includes a back-loaded IRA which also inures primarily to 
those in the upper income brackets. It includes a $500 child credit 
which is not capped, so a family making a million gets the same credit 
as one that makes $30,000 and one that makes $16,000 or less gets no 
credit at all under this particular proposal. It pays for all of these 
tax cuts that are primarily aimed at upper income taxpayers, it pays 
for these tax cuts by cutting Medicare and Medicaid by $144 billion 
over the next 5 years. This is simply going to mean that many rural and 
urban hospitals are going to go out of business. It is simply going to 
mean that private health insurance premiums are going to go up because 
employers and employees who have private health insurance are going to 
have to make up the difference from these Medicare and Medicaid cuts.
  It also pays for these tax cuts with cuts in discretionary spending, 
cuts that affect the infrastructure, cuts that affect a whole host of 
programs.
  And interestingly enough, I know that many of my colleagues on the 
other side of the aisle are worried about cuts in military spending. 
Well, looking at the discretionary allocation in the Republican 
alternative, we find that outlays in discretionary spending are cut 
$118 billion over the next 5 years under that in the majority budget. 
Now, we all know where those cuts are going to take place--75 to 80 
percent of those cuts in discretionary spending, if they were enacted, 
would take place in the military budget.
  Now, that may be all right with a lot on my side of the aisle, but 
those on the other side of the aisle who have been constantly concerned 
about cuts in the military budget, if their budget is enacted, should 
it become the governing force here, then we are going to see very, very 
substantial cuts in military spending below those proposed by the 
President.
  Mr. DOMENICI. Mr. President, might the chairman yield for a question 
on that?
  Mr. SASSER. I will be pleased to yield.
  Mr. DOMENICI. I believe the Senator is mistaken. I believe the 
Republican alternative has the fire walls in so I do not think the 
situation just alluded to could happen as a matter of law.
  Mr. SASSER. It is my understanding that it is a sense-of-the-Senate 
fire wall resolution.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DOMENICI. It is because of a 60-vote majority, so it is a sense 
of the Senate.
  Mr. SASSER. But it would not be effective really in safeguarding the 
discretionary spending from being raided.
  Mr. DOMENICI. The Senator is correct.
  Mr. SASSER. Mr. President, has all time expired?
  The PRESIDING OFFICER. All time has expired.
  Mr. DOMENICI. Mr. President, might I have 30 seconds on a different 
issue?
  Yesterday, I think the Senate under the leadership of Senator Gorton 
with all Senators voting in favor accomplished something. The 
administration has changed its mind on the Byrne grants and had the 
Attorney General appear before Appropriations and say the Senate is 
right. I congratulate Senator Gorton. They are going to find other cuts 
so that the Byrne grants helping our cities and States to fight illegal 
drugs can be fully funded.
  I yield the floor.
  The PRESIDING OFFICER. All time has expired.
  The question now is on agreeing to amendment No. 1560 offered by the 
Senator from New Mexico [Mr. Domenici].
  Mr. DOMENICI. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The yeas and nays have been ordered. The clerk 
will call the roll.
  The assistant legislative clerk called the roll.
  The result was announced--yeas 42, nays 58, as follows:

                      [Rollcall Vote No. 66 Leg.]

                                YEAS--42

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

                                NAYS--58

     Akaka
     Baucus
     Biden
     Bingaman
     Boren
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Campbell
     Chafee
     Conrad
     Daschle
     DeConcini
     Dodd
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Jeffords
     Johnston
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mathews
     Metzenbaum
     Mikulski
     Mitchell
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Pell
     Pryor
     Reid
     Riegle
     Robb
     Rockefeller
     Sarbanes
     Sasser
     Shelby
     Simon
     Wellstone
     Wofford
  So the amendment (No. 1560) was rejected.
  Mr. DeCONCINI. Mr. President, I move to reconsider the vote.
  Mr. SASSER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Connecticut, [Mr. Dodd], is recognized to offer an amendment.


                           Amendment No. 1561

   (Purpose: To increase the Federal share of education funding for 
  individuals with disabilities by $6 billion in fiscal year 1995 and 
                      $30.5 billion over 5 years)

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

       The Senator from Connecticut [Mr. Dodd], for himself and 
     Mr. Jeffords, proposes an amendment numbered 1561.

  Mr. DODD. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       On page 24, line 17, increase the amount by $6 billion.
       On page 24, line 18, increase the amount by $0.7 billion.
       On page 24, line 25, increase the amount by $5.5 billion.
       On page 25, line 1, increase the amount by $4.7 billion.
       On page 25, line 8, increase the amount by $5 billion.
       On page 25, line 9, increase the amount by $5.4 billion.
       On page 25, line 16, increase the amount by $6.5 billion.
       On page 25, line 17, increase the amount by $5.3 billion.
       On page 25, line 24, increase the amount by $7.5 billion.
       On page 25, line 25, increase the amount by $6.3 billion.
       On page 10, line 3, decrease the amount by $1 billion.
       On page 10, line 4, decrease the amount by $0.5 billion.
       On page 10, line 10, decrease the amount by $1.6 billion.
       On page 10, line 11, decrease the amount by $1.2 billion.
       On page 10, line 17, decrease the amount by $2 billion.
       On page 10, line 18, decrease the amount by $1.7 billion.
       On page 10, line 24, decrease the amount by $2.4 billion.
       On page 10, line 25, decrease the amount by $2.2 billion.
       On page 11, line 6, decrease the amount by $2.5 billion.
       On page 11, line 7, decrease the amount by $2.4 billion.
       On page 5, line 1, increase the amount by $5 billion.
       On page 5, line 2, increase the amount by $3.9 billion.
       On page 5, line 3, increase the amount by $3 billion.
       On page 5, line 4, increase the amount by $4.1 billion.
       On page 5, line 5, increase the amount by $5 billion.
       On page 5, line 11, increase the amount by $5 billion.
       On page 5, line 12, increase the amount by $3.9 billion.
       On page 5, line 13, increase the amount by $3 billion.
       On page 5, line 14, increase the amount by $4.1 billion.
       On page 5, line 15, increase the amount by $5 billion.
       On page 5, line 22, increase the amount by $0.2 billion.
       On page 5, line 23, increase the amount by $3.5 billion.
       On page 5, line 24, increase the amount by $3.7 billion.
       On page 5, line 25, increase the amount by $3.1 billion.
       On page 6, line 1, increase the amount by $3.9 billion.
       On page 6, line 7, increase the amount by $0.2 billion.
       On page 6, line 8, increase the amount by $3.5 billion.
       On page 6, line 9, increase the amount by $3.7 billion.
       On page 6, line 10, increase the amount by $3.1 billion.
       On page 6, line 11, increase the amount by $3.9 billion.
       On page 6, line 17, increase the amount by $0.2 billion.
       On page 6, line 18, increase the amount by $3.5 billion.
       On page 6, line 19, increase the amount by $3.7 billion.
       On page 6, line 20, increase the amount by $3.1 billion.
       On page 6, line 21, increase the amount by $3.9 billion.
       On page 7, line 1, increase the amount by $0.2 billion.
       On page 7, line 2, increase the amount by $3.5 billion.
       On page 7, line 3, increase the amount by $3.7 billion.
       On page 7, line 4, increase the amount by $3.1 billion.
       On page 7, line 5, increase the amount by $3.9 billion.
       On page 7, line 8, increase the amount by $0.2 billion.
       On page 7, line 9, increase the amount by $3.7 billion.
       On page 7, line 10, increase the amount by $7.4 billion.
       On page 7, line 12, increase the amount by $14.4 billion.
       On page 8, line 7, increase the amount by $02. billion.
       On page 8, line 8, increase the amount by $3.5 billion.
       On page 8, line 9, increase the amount by $3.7 billion.
       On page 8, line 10, increase the amount by $3.1 billion.
       On page 8, line 11, increase the amount by $3.7 billion.
       On page 70, line 21, decrease the amount by $3.9 billion.
       On page 70, line 22, decrease the amount by $3.5 billion.
       On page 70, line 24, decrease the amount by $3.0 billion.
       On page 70, line 25, decrease the amount by $3.7 billion.
       On page 71, line 2, decrease the amount by $4.1 billion.
       On page 71, line 3, decrease the amount by $3.1 billion.

  Mr. DODD. Mr. President, I offer this amendment on behalf of myself 
and the Senator from Vermont [Mr. Jeffords].
  Let me briefly describe what this amendment does. Senator Simon of 
Illinois and I offered a similar amendment in the Budget Committee 
several days ago, which was defeated on a tie vote. Our colleague from 
Mississippi, [Mr. Lott] arrived a few minutes late, and under the rules 
of the Budget Committee, was unable to vote. He would have voted for 
the amendment and it would have carried. On a tie vote, the amendment 
failed.
  I have changed the amendment Senator Simon and I offered in the 
committee. In the committee, we took money from the Milstar Program, 
made modest cuts in the intelligence budget, and across-the-board cuts 
in the Departments of Agriculture, Commerce, and several other 
agencies. In this amendment, we still maintain the cuts in the Milstar 
Program and intelligence, but we eliminate the across-the-board cuts 
that were offered as part of the amendment we proposed in the Budget 
Committee.
  In lieu of that, we have a partial restoration of the spending 
resulting from the Exon-Grassley amendment that was successfully 
proposed in the Budget Committee.
  Let me just break out the numbers very quickly and then get to the 
substance of the amendment.
  This amendment would provide for $6 billion in fiscal year 1995 and 
$30.5 billion over 5 years to go to the States and localities to offset 
the spiraling increase in special education costs. A number of years 
ago, the Federal Government made a commitment to spend or contribute 40 
percent of that cost. Nonetheless, we are only contributing 7 percent 
of that cost currently. This amendment would raise our participation in 
the cost of special education in every school district in this country 
by 23 percent raising the Federal commitment to 30 percent of the 
original commitment of 40 percent.
  So the numbers spin out this way: We would reduce intelligence 
funding by $300 million in 1995, reaching a height of $1.7 billion of 
cuts in 1999, for a grand total in budget authority, of some $5.4 
billion over the next 5 years; we would cancel the Milstar Program, 
which gives us a budget authority savings of $4 billion over that same 
period of time; and we would restore about 50 percent of the reductions 
in the Grassley-Exon amendment. This would provide us with an 
additional $21 billion in budget authority, giving us a rough total of 
$30 billion that I mentioned a moment ago. That is how we pay for this.
  So it is the cancellation of Milstar, a modest reduction in 
intelligence, and then a partial restoration of Exon-Grassley.
  What do we do with this money? This is where I want to ask for the 
attention of my colleagues because this is something we have talked 
about here on countless occasions. We have heard over and over again 
the word ``mandates'' used. This is not a mandate. We have to be 
careful about the use of that word.
  Special education is a critically important program that the Federal, 
State, and local units of government have a legal responsibility to 
fund. But, it is also a very expensive program. We have insisted that 
our States and localities participate in paying for the cost of 
educating children with disabilities across this Nation. When the 
Individuals With Disabilities Education Act was authorized, we said we 
will help you pay up to 40 percent of the total costs; we will 
participate. We do not want you to bear all the burden. We will 
participate.
  As I mentioned earlier, we spend about 7 percent or $3.3 billion of 
the total costs of special education across the Nation. This amendment 
would raise our participation by 23 percent reaching a total of 30 
percent of the 40 percent we originally talked about.
  Let me explain what some of the costs mean in real terms, in terms of 
some of our States.
  Let us take the State of Kansas, for instance. The latest statistics 
that were available from the U.S. Department of Education indicate that 
the State of Kansas has an $8.7 million commitment from the Federal 
Government for special education. The State of Kansas spends $53.8 
million, and the local governments in Kansas spend $53.5 million for 
special education. If this amendment were to be adopted, we would 
provide an additional $15.8 million to the State of Kansas. That would 
potentially reduce the local commitment to special education in the 
State of Kansas by $15.8 million in property taxes.
  In the State of New Hampshire, the reduction could be $3.4 million. 
In the State of Oregon, the reduction could be $31.1 million. In the 
State of Connecticut, it could be $35.5 million, just to cite some 
examples. I will be glad to provide any Member who is interested in how 
his/her State will fare with this information. But every single school 
district in America potentially has a property tax reduction if this 
amendment is adopted.
  It is clear the costs are tremendous, and they are rising. In fact, 
we are being told by the Governors conferences, and others, that the 
costs of special education are skyrocketing. By relying heavily on 
local property taxes, the costs are most painful to communities that 
have the least amount of economic viability. Our wealthier communities, 
of course, can afford to do it, but poor rural and urban communities 
are strapped tremendously.
  I think we ought to be more of a participant in special education. 
And, I also think we ought to be more of a participant generally in the 
education of our children.
  Today, in fiscal year 1994, out of the entire Federal budget the 
commitment of the U.S. Government to the education of our children in 
this country is somewhere between 1.8 and 1.9 percent of the entire 
Federal budget. Of the entire Federal budget, that is our commitment to 
education in this country. Yet every single one of us knows--and I am 
confident everyone has given a speech about--how important education is 
for the 21st century. Yet of the entire Federal budget, that is all we 
commit to the education of our children. I am including higher 
education.
  With the Clinton budget--and I commend him for it--that number 
reaches just about 2 percent for 1995, maybe up a tenth of a percentage 
point. If this amendment is adopted, we would be at 2.5 percent of the 
Federal budget by picking up more of a share of the special education 
costs of our children.
  Mr. President, it is not easy to come up with offsets. We have to do 
it. I am sure there will be people here who do not like these 
particular offsets. We tried to do it in a balanced way. We have 
suggested canceling a program that many have raised some very severe 
reservations about.
  I am not permitted, nor would I mention the total amount we spend on 
intelligence. That is a number that I am not allowed to reveal. But I 
am confident my colleagues here know what that number is. When I talk 
about a $300 million reduction in the intelligence budget reaching $1.7 
billion in 1999, I am not talking about reducing a great deal of that 
budget.
  Given the fact that the cold war has ended and the world has changed 
dramatically, this is not a significant reduction in that particular 
budget.
  Then, of course, we are picking up 50 percent of Exon-Grassley. 
Again, I realize deficit reduction is an important issue, and it should 
be. But we should not continue to reduce our deficits simply by 
shifting the costs to other units of government. I think we could 
really assist our financially overburdened communities by taking some 
of our resources and applying them to meet our promised levels of 
educational commitment.
  There is a great movement going on across this country over property 
tax relief. Here is a chance for us to finally do something about it in 
a very real and meaningful way, to actually reduce the property tax 
burden because of the rising costs of special education needs.
  So I would urge my colleagues to look at this amendment carefully and 
raise questions if they have them. But here is a chance, as I say, for 
us to provide either real potential tax relief or greater resources to 
allow communities to purchase computers, additional teachers, better 
facilities, et cetera. Local communities simply cannot continue to 
raise these tax rates much longer, or much higher, and this amendment 
would provide some relief either to cut that tax or relocate resources 
in other areas.
  So I would urge the adoption of the amendment. I would be glad to 
yield to my colleague from Vermont for any comments he may have as 
well.
  The PRESIDING OFFICER (Mr. Kerrey). The Senator from Vermont is 
recognized.
  Mr. JEFFORDS. Mr. President, I rise in support of my colleague from 
Connecticut, and commend him for this amendment.
  As Senator Dodd has pointed out, this amendment is within the budget 
cap. But most importantly, for the knowledge of Members, it follows the 
instructions which were given us in a 93-to-0 vote on the Goals 2000 
bill. In that Sense-of-the-Senate vote, we stated that as soon as 
reasonably possible we should fulfill our commitment dating back to 
1975 and fully fund 40 percent of the cost of special education in this 
country. To remind everyone what that vote of 93 to 0 was about I will 
read the language delivered a few months ago.
  ``It is the sense of the Congress that the Federal Government should 
provide States and communities with adequate resources under the 
Individuals With Disability Education Act''--that is special 
education--``as soon as reasonably possible through the reallocation of 
noneducation funds within the current budget monetary constraints.''
  What we are doing here today, is what we were committed to do after 
that vote. We are fulfilling that commitment, to give you the 
opportunity to be able to go back to your States and say that you have 
lived up to a 93-to-0 vote that we should move toward fully funding the 
special education provisions.
  We have done our best to try to find the most logical and sensible 
way to take funds from other parts of the budget and move them over to 
this critical area.
  But before I get into more detail on Special Education, let me turn 
to a little bit of budget philosophy and to the critical crisis this 
Nation faces with respect to education. I think to fully understand why 
this amendment is so important, we must not only recognize the problems 
that have been created by the underfunding of special education, but we 
must also fully understand the realities of our educational system as 
we move toward the future in critical areas.
  First of all, it is critically important that we are able to have the 
work force we need for the next century.
  Mr. President, the evidence is overwhelming that unless we devote 
more resources into education, and direct them toward attaining what 
the Goals 2000 would require, we will not have an adequately educated 
work force. We will not be able to meet the competition in the next 
century to be able, or keep this country at the level of greatness that 
it is now, and it should be in the future.
  Second, we cannot solve the problems of crime by building more 
prisons. We must go to the causes. And when you understand that 82 
percent of those who are incarcerated are school dropouts, it is not 
difficult to see the linkage between education and crime.
  Third, we must also look at the impact that our welfare system has 
had and understand that in order to solve the causes of the welfare 
problem, we must also look to education. To dramatize that, reflect on 
the fact that 60 percent of our teenage pregnancies are school 
dropouts.
  Finally, if we are going to bring the problems of health under 
control in this Nation, it will be impossible to do so unless we 
provide the resources to ensure that our people are knowledgeable and 
understand what must be done to take care of their children to make 
sure they are healthy and ready for school.
  In my mind, I have a budget philosophy, and that is that we have to 
cut, but when we cut, we should also consider that we have to 
reallocate resources to meet the priorities of this Nation. I could go 
on at length about the dire need for reordering resources to go into 
education.
  The philosophy that I have adopted and am pursuing here is that when 
we make cuts, we should reserve half of those cuts for reordering 
national priorities and half of those cuts for deficit reduction. That 
is what the Dodd-Jeffords amendment does.
  What we have been doing, I think unfortunately, for the past few 
years is placing ourselves on a course which is guided only by the 
amount of deficit reduction. I call this fiscal dead reckoning. It is a 
lack of ability to discern what course we want in the budget situation. 
We chart forward where we are going, using the same course and the same 
speed, and we hope when we are finished we will get to where we want to 
be.
  We only use that when we do not have the ability to look at 
navigational aids, whether it be land or satellites or whatever. But 
when we see that a course change is necessary, to continue on a dead 
reckoning course will lead you into the shoals and destroy your ship. 
We cannot allow our ship of state to continue on that same course 
without recognizing we need to modify the course and the speed in many 
respects.
  So when we do the cuts, I believe strongly, as I said, that we should 
save some of those cuts to reorder national priorities and not 
mindlessly pursue a locked-in course with the same priorities at 
slightly lower levels.
  Now let me again take a look at the crisis in education in this 
country. It is not a simple matter of throwing money at an issue. I 
will be the first to recognize that. But, on the other hand, it is 
incomprehensible that we can do what must be done without some 
reallocation of resources.
  We have chosen one where reallocation is most significant and most 
necessary in order to free up our educational agencies, our local 
educational agencies in States, to be able to unshackle themselves from 
the failure of the Federal Government to meet its commitments in 
funding of special education.
  My colleague from Connecticut has outlined very dramatically what it 
could do for each of the States. But, more importantly, it will provide 
reassurance to those communities so that they can plan for the future 
under the Goals Planning Act, with some hope that they will have 
Federal resources to meet some of the demands that are being placed 
upon them.
  Yes, it is true that you can do much without those resources to 
better define the programs and plans at the local level. But it is also 
impossible to recognize that, without additional money to fulfill the 
Federal commitment, it will not be possible to meet the goals and 
provide the work force for the future.
  In the HHS appropriations bill back last September, without 
objection, an amendment was included by myself, Senator Simon, and 
Senator Dodd which, in essence, states this:

       To express the sense of the Congress that the total share 
     of Federal spending on education should increase by at least 
     1 percent each year until such share reaches 10 percent of 
     the total Federal budget.

  That was what we passed in the HHS appropriations bill.
  For the knowledge of my colleagues, the House the other day passed an 
amendment, without objection in the House of Representatives, and added 
an identical amendment to the Elementary and Secondary Education Act. 
So we now have on record position statements by both bodies that this 
Congress will reallocate the resources necessary to make our commitment 
to education.
  Mr. President, I have supported Senator Dodd and Senator Simon in 
these efforts and will continue to work with them to improve our 
Nation's schools.
  This amendment, as I pointed out, will add $6 billion to Function 500 
in fiscal year 1995 to be used to fund special education, bringing it 
up at least halfway to where our commitment was in 1975.
  The increase, when combined with the increases in Head Start the 
President included in the budget request, provides sufficient money to 
produce some visible results in our schools. This is the first step in 
a multiyear process of providing resources that will get school 
improvement really moving, to start showing progress that our students 
can see and benefit from.
  When the special education program was enacted in 1975, the Federal 
Government agreed to pay 40 percent of the cost. Today, the Federal 
Government pays less than 8 percent. In my State it amounts to only 3 
percent.
  The increases in the program over the last 15 years, combined with 
the failure of the Federal Government to live up to its commitment, 
have created an enormous financial burden for the State and local 
governments. This proposal would bring the Federal contribution up to 
in excess of 25 percent, a significant increase but still well below 
the level promised when the bill was authorized.
  No one wants to solve our deficit problem more than I do. But we 
cannot put our fiscal house in order by ignoring the needs of our own 
people. Only by addressing those problems can we ever hope to control 
the spending programs and bring them in line with the ability to 
support them with revenues.
  Let me give a very simple example of how this works with education. 
The national average graduation rate for our schools is 72.9 percent, 
while the rate for urban schools is 66.5 percent. In human terms, this 
is 86,000 young Americans who try to enter the work force each year 
without high school degrees. We know from statistics that these 
individuals will earn 65 percent less money than their colleagues who 
have graduated from high school.
  Let me repeat that. By earning a high school degree, a young person 
can expect to increase his income by 65 percent. If we could just get 
the graduation rate for urban schools up to the national average, the 
additional tax revenues would be about $200 billion per year.
  That gives an indication of what can be done. One could only imagine 
the enormous economic effect if we could raise the graduation rate for 
all schools up to the goals we have set in the Goals 2000 bill.
  Mr. President, bringing our poorest performing schools up to the 
current national average is not an unachievable goal. It is an 
investment that makes sense and it is for the sake of our children. If 
we expect to maintain the current standard of living for our children 
it must be a requirement that we provide all of them with an education 
that will prepare them to cope and indeed prosper in the years ahead.


                               background

  It has been nearly 11 years since ``A Nation at Risk'' was released. 
The authors of that report described the status of our education system 
as follows:

       If an unfriendly foreign power had attempted to impose on 
     America the mediocre educational performance that exists 
     today, we might well have viewed it as an act of war.

  In my view, they were portraying a very serious problem, and making a 
plea to the Nation to take action. This commission was not the first to 
make these recommendations, nor the last. In fact, I have a list of 
dozens and dozens of studies that have been done on the problems of 
U.S. education.
  Unfortunately, the policymakers and leadership of our country have 
not treated education as a crisis, and with isolated exceptions, have 
made only marginal changes.


                      status of america's schools

  Let's examine just a few of the measures that one normally uses when 
talking about the health of education.
  The first is funding. How much are we spending on our schools? It is 
well known that school funding is not a very good predictor of student 
achievement, but it is useful to examine how much is being spent.
  According to the Congressional Research Service, a total of $247 
billion was spent to operate approximately 87,000 elementary and 
secondary schools around the Nation in 1992. The Federal Government 
provided 5.6 percent of this total. This compares to $127 billion spent 
in 1982, one decade earlier, when the ``Risk Panel'' was conducting its 
work. At that time the Federal Government contributed 7.7 percent of 
the total.
  This may look like a big increase, but when expressed on a per-
student basis, in constant dollars, it amounts to about 2 percent real 
growth per year. Mr. President, I'm not an economist, but I can tell 
you that the price deflator CRS used to compute constant dollars 
measures only price changes of local government purchases, not the cost 
of educating a young person. Government mandates, initiatives such as 
special education, security problems, health care for students, and 
many other concerns have driven the average cost of educating a young 
person far beyond that indicated by the deflator used in this report.
  My point is simply that the raw data may seem to indicate school 
funding has increased substantially, but the reality is that the 
increase is small. When compared to the demands placed on the schools, 
and the needs of the students, funding has not kept pace.
  Finally, I would like to point out that while the Federal Government 
is beginning to increase its share of elementary and secondary school 
funding--which I support wholeheartedly--it is at the State and local 
government level that the vast majority of the increases in funding 
have occurred over the last decade.


                      high school graduation rates

  The percentage of students who graduate is another commonly used 
measure of how our schools are performing. According to ``The Condition 
of Education.'' put out by the U.S. Department of Education, the 
percentage of 19- to 20-year-olds who have not completed high school 
declined slightly, about 2 percentage points, over the last decade. The 
percentage of this age group still enrolled in school increased 
slightly, and the percentage who had completed high school remained 
about the same.
  In a word, Mr. President, these trends are in the right direction, 
but the rate of improvement is wholly inadequate--not nearly enough to 
produce the results that are needed.


                          student achievement

  Finally, there is the issue of student achievement. What are our 
students learning?
  According to the ``Statistical Abstract of the United States, 1992'' 
published by the Department of Commerce, Scholastic Aptitude Test [SAT] 
scores for college-bound seniors, although not a perfect indicator of 
scholastic ability, have remained virtually unchanged over the last 
decade. The same is true of American College Testing [ACT] Program 
Scores.
  Looking at younger students, the results are equally unimpressive. 
The U.S. Department of Education, in ``The Condition of Education, 
1993,'' reports trends in proficiency in science, math, reading, and 
writing of 9-, 13-, and 17-year-old students. All measures for all 
groups were unchanged or worse over the last two decades, except for a 
small improvement in math for 9- and 13-year-olds, and in reading for 
17-year-olds.

  To me, the data indicates that, when measured in traditional ways, 
our students are about as good as they were 20 years ago. The alarming 
aspect of this becomes evident when our students are compared with 
those of our international competitors. A recent test of students from 
11 industrialized nations reported in the ``National Assessment of 
Educational Progress,'' put our 13-year-old students last in 
mathematics and next-to-last in science. The test results indicated our 
13-year-old students were approximately 2 years behind students in 
Taiwan.
  In summary, we have maintained the status quo in our schools while 
our competitors have made major strides forward. If we expect to be 
able to compete successfully against them into the next century, then 
we must find a way to bring about similar or greater improvements in 
the educational attainment of American students.


             the need for improving educational achievement

  The Workforce 2000 Study saw the need for educational improvement. It 
predicted that more than half the new jobs created by the year 2000 
would require education beyond the high school level. Unfortunately, 
what is evident among many of our leading corporations such as 
Motorola, Xerox, MCI, and others, is that they are compelled to set up 
their own remedial education programs to correct the deficiencies they 
identify in the skills of young people graduating from American high 
schools.
  These are the companies that are on the cutting edge of international 
competition in the high technology industries of the future. If they 
cannot succeed in international markets with products manufactured by 
American labor--the product of American schools--then we have a bleak 
future, indeed.


          the increasing challenges to educational achievement

  We must remember that our schools are being challenged from every 
direction. On the one hand, we are asking them to take a significant 
step forward in preparing students for the workplace of the 21st 
century. On the other hand, we are sending them children whose 
educational success is threatened by an increasing number of risk 
factors.
  Poverty is the biggest risk factor to a child's educational success. 
In the last two decades, the percentage of children living in poverty 
has increased by 48 percent. The Department of Commerce announced 
yesterday that this figure has gone up for the third consecutive year. 
It now stands at 22 percent. Saddest of all is the fact that poverty 
rates are highest among the youngest children. Of children under the 
age of six, almost 25 percent live in poverty.

  There are other risk factors as well: language, family status, drugs, 
and many others. Most of them are increasing, as well. I might 
interject here to say that many people claim these are not education 
problems. I will not argue the semantics. Whatever they are called, 
they still affect a child's ability to learn. When a child fails at 
school, all of us pay the price in the long run--whether it is lost 
productivity, forgone tax revenue, welfare costs, unemployment costs, 
or crime.
  Our country cannot wait until we solve the problems of the American 
family, or the problem of poverty before turning our attention to 
education. Indeed, I would argue the most effective solution to these 
problems may lie with our schools. I believe the creation of a fully 
literate society is the foundation on which we can make real progress 
toward breaking the cycle of poverty that grips too many American 
families. No training component of any welfare reform effort can 
succeed without a strong educational foundation. We must improve 
education, and we must do it as soon as possible.
  The bottom line is that our schools must produce graduates that are 
better educated than in the past. They must do it by starting with 
students that are less prepared to learn than in the past. Over the 
last decade, we have asked them to do this with only meager increases 
in funding. If we expect them to make the kind of progress that is 
really necessary, we must be willing to provide them the necessary 
resources.
  Now is the time to start putting this proposal into action. We can no 
longer sit on the sidelines and hope that someone else figures out a 
way to prepare our children for the 21st century using methods and 
funding levels from the 1970's. We have to be willing to meet today's 
promises and tomorrow's challenges. To do that, we have to be willing 
to provide the resources.
  As the chart indicates, we have many excellent programs that are 
producing good results but simply are not being funded adequately to 
address the national needs. There are also several new initiatives that 
are widely recognized as beneficial to our students that should be 
implemented as soon as possible, such as extending the school year.
  As we have in the past, this Nation has responded to pressing 
national needs with aggressive and innovative programs to provide 
opportunities to our citizens who needed them. The GI bill after World 
War II is a good example of America meeting a unique challenge. In 
1947, the peak year of spending for this program, the Federal 
Government spent $3.6 billion sending veterans to college. In today's 
dollars, this would equate to $31 billion. Once again it is time to 
take this action to address the educational needs of our population. 
This time, it is for all American children. We must guarantee the 
educational opportunities that fulfill the promise for a better future.

  Only by taking drastic action to improve our education system can we 
expect to provide our children with the bright future that all of us 
have taken for granted during our lifetimes. We have been warned, but 
we have not taken bold action. The time to act is now.
  I want to say a few more words about special education and why it so 
important we continue to move forward with this amendment.
  In 1975 when the Education of the Handicapped Act [EHA], now 
Individuals with Disabilities Education Act [IDEA], was passed, the 
authorization level for funding the program was 40 percent of the 
``average per pupil expenditure'' setting a goal and an expectation for 
future funding. Funds appropriated for the program have not begun to 
reach this level of commitment. In fact, the Federal contribution is 
projected to be about 8 percent in 1994. Clearly, the anticipated 
funding level has not been realized. This amendment would raise the 
Federal share to about 30 percent.
  Much has changed in special education since the act was passed. 
Disabilities have emerged that were previously rare or nonexistent. 
These include technology dependence due to the survival of low-birth-
weight infants, traumatic brain injuries, problems resulting from 
addiction and lead poisioning, health impairments due to AIDS and 
herpes. Currently, the category of ``severely emotionally disturbed'' 
is under review and may be amended to include a broader array of 
problems. The inclusion of ``attention deficit disorder'' as a new 
category of disability is being studied.
  This expansion of the population of students with disabilities has 
increased the demand for staff for special education and related 
services. Additionally, the educational challenges presented by the 
expanded population have created the need for new and different 
approaches to the teaching and learning process. Existing staff have 
required training or retraining. New models for the provision of 
services have been developed and tested.
  New requirements have been added to the act through the 
reauthorization and regulatory processes. The planning for and the 
provision of services designed to transition students from school to 
work have been added. Students with disabilities must now be provided 
assistive technology as a related service. Some of the assistive 
technology must be designed and developed on an individual basis in 
order to meet the unique requirements of individual students. States 
are required to meet the ``highest professional standard'' for staff, 
thus increasing costs for both training and salaries. Public agencies 
are now required to reimburse parents under certain circumstances for 
attorney's fees.
  In addition to requirements that have been added through the 
legislative and regulatory processes, requirements have been imposed as 
the results of court actions. Examples of these requirements include: a 
prescribed process for the suspension and expulsion of students with 
disabilities which limits the time a student may be suspended or 
expelled under specified circumstances; the provision of services by 
the schools of services that were previously considered medical 
services; the availability of damages or compensatory services; the 
expansion of ``Free Appropriate Public School'' to include year round 
services for some children; and, the expansion of services offered to 
students with disabilities placed by their parents in private schools, 
to name a few.
  Services and costs have expanded due to policy interpretations made 
by the U.S. Department of Education. The Department has further defined 
States responsibility to provide services year round to students with 
disabilities determined to need such services. Recently, it was ruled 
that hearing aids which were heretofore considered personal devices, 
since they were required in settings other than school, were ruled to 
be assistive technology and must now be supplied by schools.
  The Department has further defined the courts' standards for the 
provision of services to students who are suspended or expelled by 
requiring school systems to continue to provide services to students 
with disabilities under certain circumstances during the time they are 
suspended or expelled. Policy interpretations by the Department have 
had the effect of expanding the circumstances under which a school 
system must pay for an evaluation to be provided by persons who are not 
employed by the school system. It should be noted that the imposition 
or requirements on States and local school systems through policy 
interpretation without the benefit of the legislative or regulatory 
process has been ruled by the courts as being within the authority of 
the Department of Education.

  While new populations and requirements have evolved, States and 
schools have also worked to improve the quality of services provided. 
Among areas that most agree need improvement are: program evaluation; 
personnel preparation; support to families; services to students with 
disabilities in correctional facilities; and services to students whose 
native language is other than English.
  Other factors also contribute to the costs of special education. The 
paperwork burden has increased as a result of the litigious nature of 
the act. Transportation costs are impacted by the cost of gasoline and 
have increased tremendously over the past several years. Due process 
hearing overall have dramatically increased since 1990. This may be due 
to the increasingly litigious nature of our society or it might be 
viewed as the result of inadequate services. Whatever the reasons, the 
increased hearings contribute to the costs associated with special 
education are increased.
  The public demand for educational restructuring and reform has 
significant implications for the education of students with 
disabilities. There is a call for high expectations and commensurate 
achievement for all students, including students with disabilities. The 
provisions of the Goals 2000: Educate America Act apply to all 
students. If we are to improve teaching and learning for all students, 
ways must be discovered to make curriculum content, not just buildings, 
accessible to students with disabilities. The programmatic and fiscal 
implication of these challenges are yet to be determined.
  Those who were part of the passage of the act in 1975 could not have 
foreseen the current circumstances. Yet, authorized funding was 
established at 40 percent of the average per pupil expenditure. 
Congress has an obligation to evaluate the appropriate level for 
funding IDEA in light of the current situation and the intent for 
future funding previously expressed by Congress when the authorization 
level was established.
  Mr. President, how much time do we have remaining?
  The PRESIDING OFFICER. The proponents have 33 minutes and 44 seconds.
  Mr. JEFFORDS. I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI. Mr. President, I yield 10 minutes to Senator Grassley.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, obviously, I am going to rise against 
the amendment by the Senator from Connecticut and the Senator from 
Vermont, not because there is anything wrong with the programs they 
want to spend more money on--they are very good, worthwhile programs--
but because their approach would add to the deficit that is in the 
budget resolution. I think it is wrong to add to that deficit.
  I would like to read a paragraph from a letter I got from the 
National Taxpayers Union in support of the Exon-Grassley amendment. The 
third paragraph says: ``The National Taxpayers Union strongly opposes 
any effort''--I assume that would include the effort being made by the 
Senator from Connecticut--``to restore the $26.1 billion in Federal 
spending that you have successfully cut.'' This would only be a part of 
this total amount of money, but they would oppose an effort to restore 
any. ``We urge your colleagues to oppose any such effort and we would 
score any vote to oppose restoration of funding as a major protaxpayer 
vote in our annual rating of Congress.'' That is just one organization. 
There are a lot of other organizations that would have similar 
feelings.
  There are a lot of other organizations on the other side that would 
say we ought to spend more money. But what you have to look at is, what 
is the mood of the country? It is for Congress to get its act together 
when we are talking about spending money and budget issues. The biggest 
part of our act here in Washington, DC, and in the Congress, is getting 
our fiscal house in order. For some reason, some of my colleagues just 
do not get it. There is a good reason why last Thursday, 13 out of 21 
members of the Budget Committee voted to make additional cuts. These 
were the Exon-Grassley cuts. That good reason is because these 13 
Senators have received the message. The American people want us to have 
guts and to make cuts.
  Every budget chart in this town, Republican or Democrat, public 
sector or private sector, shows deficits rising again after 1999. The 
purpose of the Exon-Grassley amendment, which the Dodd amendment would 
detract from by spending some of the savings, was to change the slope 
of the rising deficit path that shows up on every chart in this town. 
The committee was very cognizant of this looming predicament. The 
euphoria of having a couple of good years here of reducing those budget 
deficits will soon go up in blue smoke as we get down there to 1999, 
and those deficits go back up.
  The Budget Committee's decision was to make a downpayment, a simple, 
small downpayment on lowering tomorrow's deficits, particularly post-
1998 deficits. We did not want to wait until manana to deal with a 
problem the people of this country want and expect us to deal with 
today, not in 1998 or 1999.
  There has been some talk about how discretionary spending has been 
cut to the bone. That is something the Senator from Connecticut is now 
dealing with. They would say there is no more room to cut, 
discretionary spending is only one-third of the budget and therefore is 
not really the problem.
  Let me suggest, however good-intentioned those arguments are, that is 
an argument that does not sell at the grassroots of America.
  Spending is spending is spending. All spending, Mr. President, is the 
problem. Whether it is entitlement spending, discretionary spending, 
defense spending, interest payments, it is all part of our problem. And 
we have to start somewhere.
  So in undoing what we did in the committee, which the Senator from 
Connecticut would partially do--and we did it to save just $26 billion 
over 5 years--any effort to rescind that would be a step backward. It 
would signal retreat in the face of the superior forces in this body 
who want to spend more.
  Mr. President, not since 1985 have I seen so many in this body react 
so irrationally over such a modest amount of cuts. 1985 was when we cut 
a mere $17 billion over 3 years from the defense budget, which 
amounted, at that point, to a freeze. Back then, we were told that a $1 
reduction would cause the decline of the West into the dustbin of 
history. Yet, we froze the defense budget, and it was the Soviet Union, 
not the United States of America, that was swept into the dustbin.
  With the Exon-Grassley cuts--which, incidentally are not cuts but 
merely a prudent limit in the increases--we are told the very same 
thing in 1994 that we were told in 1985. I have been getting letters, 
calls and faxes saying that the effect of the Exon-Grassley amendment 
will be to undermine health care reform, it will decimate education, it 
will destroy the environment, and it will end all assistance that we 
provide to our youth.
  Let me just say that Exon-Grassley cuts only--cuts only--$1.6 billion 
in outlays in the first year of this budget. Just $1.6 billion next 
year.
  This must be, considering all of the screams of despair that are 
going up over the Exon-Grassley cuts, the most magical $1.6 billion in 
the budget that we ever had. If cutting it will destroy all these 
worthy programs, that must mean that spending this measly $1.6 billion 
will do enormous things. Think of what this means in terms of the 
multiplier effect. It reminds me of the story of Jesus and his Sermon 
on the Mount where he had only two loaves of bread and five fish, and 
yet he fed the multitudes. Every time a fish was taken from the basket, 
another one would miraculously appear. Yes, this must truly be a 
miraculous $1.6 billion.
  The deficit savings in the Exon-Grassley amendment are not large. In 
fact, notwithstanding what I said before, they are not even modest. In 
fact, they are embarrassingly low and small. Yet, it was the most that 
we could hope to do in that Budget Committee last week. I commend each 
of my colleagues on the Budget Committee for the courage and the guts 
to make these cuts. Especially I wish to commend my good friend from 
Nebraska, Senator Exon, who had not just courage but provided the 
leadership to buck his party leaders and to give the taxpayers this 
small but very significant victory.
  As one who has been on the point many times, bucking my own party 
during the Reagan-Bush years, I know what he is going through. 
Sometimes it can get awfully lonely when you follow your convictions 
and when you do what you think is right.
  The savings in the Exon-Grassley amendment are so small that they 
have been characterized as a gnat. In my view, Mr. President, it is 
even smaller than that. It is a pimple on the back side of a gnat. Yet, 
we are reacting as if it were the end of time. Imagine if we did 
something real serious to lower the deficit. Why should we want to give 
up this small victory for the taxpayers?
  I urge my colleagues to reject the Dodd amendment, which is just one 
of many, many attacks we are going to have in the next few hours and 
few days as we discuss this budget resolution, to undo what the 
taxpayers of this country are asking us to do: to make a small 
downpayment on the debt that is looming on the horizon post 1998.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. DODD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Connecticut is recognized.
  Mr. DODD. Mr. President, let me point out a number of things, if I 
can, in response to my colleague from Iowa.
  First of all, this is an amendment that could result in lower 
property taxes. In fact, in the State of Iowa, it could mean a 
reduction of at least $710,000 in property taxes because that State, 
like all States, is being asked every day to pay an increasing share 
for the special education cost of children.
  I offered an amendment in the Budget Committee that did this by 
making across-the-board cuts in a number of agencies' discretionary 
spending budgets; cutting Milstar, and so forth. My colleague from Iowa 
voted against that amendment, which amounted to real property tax 
relief in every single school district in this country--every single 
school district in this country. But that amendment was rejected on a 
tie vote, 10 to 10, in the committee. That would have saved us having 
to come to this conclusion.
  But I happen to believe, based on the comments of my constituents, 
and many others across the country, that the property tax burden is 
crippling to people. Talk about the deficit. We load up our local 
communities with increased costs, and special education contributes to 
them. Today the burden is pretty significant.
  What this amendment does is offer some relief to every single State 
in that area. In my State, it is a savings of $35.5 million 
potentially. In the State of Oregon, I mentioned it is $31.1 million. 
In the State of Iowa it is $710,000 because local communities are 
paying a tremendous amount in property taxes to support the special 
education needs of children. We said years ago the Federal Government 
ought to be involved in the cost of special education in this country, 
and then, typically, we backed away. We said you ought to do it, you 
have to do it, now you pay for it. You pay for it. Nebraska, Iowa, 
Connecticut, New Mexico, you pay for it.
  So all I am saying here is how about living up to our words? How 
about participating? How about offering those school districts a bit of 
a break? That is all, to lower that property tax a bit, which is one of 
the most regressive taxes in the country. Lower that property tax a 
bit. Participate and contribute.
  I do not like taking money from the proposal of my colleagues from 
Nebraska and Iowa, but all the money got sucked up in that. Here is a 
way of asking for some of that money back to offer some relief to the 
very people you talk about in deficit reduction. Get rid of the Milstar 
program, make a modest reduction in intelligence over 5 years, and 
increase from 7 percent to 30 percent the Federal Government's 
commitment to educate the kids who have disabilities in this country. 
Is that too much to ask?
  I know deficit reduction is important. I do not know anybody here who 
does not care about it. We all do. But to say somehow we are pure, we 
will reduce our deficit and then shove the costs on to our local 
communities across the country and ask them to bear the burden--once 
again, is pure gimmickry. Those are heavy costs to the local community 
and they are going up every day. Ask your Governors, ask your mayors 
where the single largest cost is rising in their education budgets--it 
is special ed.
  We promised to contribute 40 percent of the costs, and now we do not 
want to pay for it because we are seeking the Holy Grail of deficit 
reduction. Every school district in this country can benefit if this 
were adopted. If you want to provide relief for people, buy this 
amendment.
  So the amendment is different than what I asked my colleagues in the 
Budget Committee to vote on. But in light of the Exon-Grassley 
amendment being adopted in the committee, we ask to restore 50 percent 
of those cuts for education. You still have 50 percent of your 
reductions.
  So I urge my colleagues to look at this amendment. Deficit reduction 
is important. Property taxes are also important. The burden on local 
people is important. I think we ought to keep them in mind as we talk 
about these issues. This amendment does.
  Mr. President, I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI. Mr. President, I am going to yield very shortly to the 
Senator. He needs 15 minutes?
  Mr. EXON. Yes.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized.
  Mr. DOMENICI. Let me take 1 minute.
  Mr. President, about an hour ago, maybe an hour and 15 minutes ago, I 
was speaking to the Byrne grants, formula grants that the President has 
recommended take a very large cut--$358 million in this year's budget. 
I commented that the Attorney General appearing before the 
appropriations subcommittee of jurisdiction had indicated that perhaps 
they have seen the light and would fund the program.
  I was slightly in error in that the Attorney General indicated the 
cut was too severe and that they would propose another $125 million in 
cuts elsewhere and put that $125 million back into the Byrne formula 
grants. So the administration did not take care of this problem today 
and correct the very serious mistake they have made in their budget, 
and I was a little anticipatory in saying that they did.
  Senator Gorton, who had proposed the amendment to fully reinstate it 
by cuts elsewhere in Government, I told him that he should be very 
joyous, that he had succeeded. But it looks as if there is only a 
partial victory, although it would seem to this Senator that the 
administration is beginning to understand that you cannot be for crime 
prevention in this country and cut $358 million out of the most 
effective Federal Government program in helping our States and 
localities fight drugs.
  So with that, I hope Senator Gorton will understand that I made a 
mistake of being too optimistic, that the administration is not 
suggesting a way to pay for it all but only a part of it.
  With that, I yield 15 minutes to my friend, Senator Exon from 
Nebraska.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. EXON. I thank the Chair, and I thank my friend and colleague from 
New Mexico.
  Mr. President, I will talk about the budget resolution in a few 
moments. But despite the plea by the Senator from Connecticut on his 
amendment, which has certain attractive features, I would admit, this 
is basically the first raid on the Exon-Grassley amendment, and others 
are likely to follow before we have our final vote. Therefore, I oppose 
the amendment offered by the Senator from Connecticut and hope that it 
will not prevail.
  Now, having said that, I wish to amplify for just a moment, if I 
might, that this is a rather unique experience that I have seen. 
Certainly, I agree with the Senator from Connecticut that property 
taxes are oppressive. They are certainly oppressive in Nebraska. The 
only fault I have with his argument is that I do think special 
education is tremendously important, and under another set of 
circumstances I might be supportive of the thrust of what this Senator 
is trying to do, but I would simply say I am opposed to this amendment 
not on the grounds I do not recognize the need for financing special 
education, not on the grounds that I am not concerned about local 
property taxes. Not very often have I heard, in my experience in the 
Senate, a Senator talking about doing something here that is going to 
provide some relief from local property taxes.
  I would simply advise my friend and colleague from Connecticut that 
those of us who have served as Governors of our States, those of us who 
have served in the legislatures of our States, would exercise a caution 
flag here at least. Even if the amendment by the Senator from 
Connecticut were adopted, Mr. President, that would not ensure, nor do 
I think it likely to occur, that the property taxes, therefore, in 
Connecticut and elsewhere would be reduced. I believe that you can find 
history replete with the fact that good intentions for providing more 
money for education do not necessarily, and not very often, reduce 
property taxes. It gets continued to be swallowed up in the ever-
increasing cost of education.
  So for a variety of reasons, I hope that we would defeat the 
amendment offered by the Senator from Connecticut.
  Mr. President, I principally rise today to express my support for the 
fiscal year 1995 budget resolution as reported by the Senate committee. 
And as reported by the Senate committee, this includes the Exon-
Grassley amendment. This is a tough budget which continues the 
tremendous progress that we have made just this last year with the 
passage of the $500 billion deficit reduction bill.
  As a result of that bill, we have unquestionably made enormous 
strides toward restoring some fiscal sanity to our Federal budget. Like 
my colleagues who voted in favor of last year's budget reduction, I am 
proud that we have clearly and finally begun the difficult task of 
reducing our Federal deficits.
  I emphasize, Mr. President, that we have only begun, and we have not 
licked the monster.
  Although it is perhaps still early to make any final conclusions, the 
early returns are in regarding President Clinton's economic plan and 
they are revealing the wisdom of the action we took. Our projected 
deficits are significantly lower than last year's. The economy is doing 
quite well.
  In that respect, critics of last year's efforts were clearly wrong. 
At that time, you heard prediction after prediction that our economy 
would go sour, that jobs would be lost, that small businesses would be 
devastated, and that our deficit would continue to increase. None of 
these predictions has come to pass.
  In a different respect, however, the critics of that effort were 
partially correct. We have not yet done enough to control Federal 
Government spending, and we are not yet on a path toward a balanced 
budget any time in the future, as far as we can see, as I addressed, 
Mr. President, in this Chamber on March 1 last. In this regard, I 
disagree with some of my colleagues who assert that we have now done 
enough and we should rest on our laurels. I believe we need to do more 
and we can do that as part of this budget resolution.
  The chairman of the Budget Committee has said that we should stay the 
course, and I agree. But I thought the course that we set last year was 
toward reducing our deficits. We have started on that course and we 
need to continue on it.
  In this regard, I was pleased to be able to work with my colleague, 
Senator Grassley, in successfully presenting an amendment in our 
committee markup to lower discretionary spending by $42 billion in 
budget authority, and $26 billion in outlays over the next 5 years.
  Because we reduced our spending caps as part of that amendment, this 
is a direct cut against future deficit spending, and we are making more 
progress. It can and it will save $26 billion, and probably more, over 
5 years. Those who want to restore those funds should be warned that 
they are directly increasing our deficits. Those who want to keep 
reducing our Federal deficit spending and to continue making spending 
cuts, should know that the Exon-Grassley amendment is the only action 
taken by the Senate Budget Committee that calls for further deficit 
reduction this year beyond that which was in place last year.
  I recognize that the spending caps which were set in place by last 
year's reconciliation bill are tough and that those caps are already 
having a major impact. The caps are having their desired effect. Our 
President and the Congress have been confronted with the difficult task 
of setting priorities as we can no longer simply add to our deficit 
when we cannot agree over which programs need to be cut.
  President Clinton's fiscal year 1995 budget submission surely reveals 
that difficult decisions are indeed being made. Hundreds of programs 
have been placed on the chopping block and will be reduced or 
terminated. This budget resolution, by closely following our 
President's proposals, continues that process. Few will doubt that the 
discretionary spending caps are either directly or indirectly the cause 
of most of those cuts.
  The question remains whether last year's caps were tough enough and I 
conclude that they are not. In my view, discretionary spending should 
be squeezed a bit more. Although many programs are being reduced in 
this budget plan, many others are allowed significant increases. In 
fact, over the coming 5-year period, in spending priorities, according 
to the President, there will be an increase of well over $100 billion.
  The Exon-Grassley amendment thus reduces those increases by 
approximately 25 percent in outlays over 5 years. It is a very modest 
reduction in spending and one that recognizes that we cannot and should 
not devastate overall discretionary spending as many of the critics of 
the President's budget would do.
  The President must have the ability to reorder our Nation's 
priorities and this amendment does not stand in our President's way in 
that regard. In the coming fiscal year, for example, the Exon-Grassley 
amendment calls for a reduction of $1.6 billion from a discretionary 
total of about $541 billion.
  Let me emphasize that, Mr. President. Next year, Exon-Grassley only 
calls for reduction of $1.6 billion out of a total spending in the 
discretionary area of $541 billion. That is hardly devastating.
  I also remind my colleagues that this $26 billion cut over 5 years 
translates to about a 1 percent cut in our overall discretionary 
spending, which over 5 years will total nearly $2.7 trillion. I repeat, 
only a 1-percent cut out of the total spending will total $2.7 trillion 
over 5 years. And compared to total Government spending, it is less 
than one-third of 1 percent.
  Mr. President, the Exon-Grassley amendment was surely a modest effort 
that hardly means that it was not an important effort. There seems to 
be a common and accepted opinion in Congress that progress toward 
solving our budget deficits can only be made in giant leaps, such as 
last year's reconciliation bill or as in the promise of controlling 
health care costs through health care reform. According to that view, 
modest efforts to solve our deficit problem, which continues to fester, 
are not worth the effort.
  I do not agree with that view and was pleased when a majority of the 
Budget Committee indicated that it did not agree with that view. 
According to the Budget Committee, we can and should continue to make 
progress in solving our budget deficit problems even if that progress 
cannot be described as the largest deficit reduction bill ever 
contemplated by mankind. More modest efforts may not balance our budget 
in 5 years but they might help to keep our deficits on a downward glide 
path, which I think is essential.
  I am also convinced that the American people want to see more budget 
cuts and that they want Congress to continue its budget cutting efforts 
this year. In that respect, it is vitally important that we prove to 
the American public that we understand that our Federal budget problems 
have not been fully resolved and that we have both the courage and 
determination to continue to make the difficult and, sometimes 
unpopular, decisions that must be made.
  As such, I am very hopeful that the full Senate will agree with the 
recommendation of the Senate Budget Committee regarding our 
discretionary spending levels as reduced by the Exon-Grassley 
amendment. Having made a major step toward rejecting the borrow and 
spend policies of the 1980's and early 1990's, Congress should not have 
a relapse and must not revert to its old ways.
  Yesterday morning, the chairman of the Budget Committee attacked the 
Exon-Grassley amendment on the basis that it did not call for specific 
cuts. In response, I would remind my colleagues that our budget 
resolutions include absolutely no specific spending cuts. They never 
have and they most likely never will. The Senator from New Mexico 
pointed this out in his opening remarks. The chairman of the Budget 
Committee, during the debate on the Harkin amendment yesterday, said 
essentially the same thing when he indicated that the amendment was 
merely changing nonbinding functional totals. The chairman 
unfortunately appears to be employing contradictory arguments to 
support his position at will.
  So, Mr. President, the budget resolution clearly does not make 
specific budget cuts and, in my view, claiming that it does is 
misleading and amounts to nothing more than posturing. That is 
budgeting by headline, not my amendment.
  Those of us who truly want to cut spending often find that we are in 
a catch-22. The only time we can make specific cuts is during the 
appropriations process. But, then, it is correctly argued that those 
cuts do no good unless the caps are reduced. The only time we can 
effectively change the caps is during the budget process, but then it 
is argued that we have to be specific. The specific cuts fail due to 
the general cap while reducing the general cap fails because of the 
specific cuts. Either way, those who want to cut spending lose and 
those who want to continue spending win.

  I recognize that we no longer have separate caps for both domestic 
and defense spending. We have but one allocation to the Senate 
Appropriations Committee. In my view, the cuts in the Exon-Grassley 
amendment should be taken from nondefense spending. In contrast to many 
of our domestic spending initiatives, defense spending has already been 
cut significantly over the past few years and more cuts are planned. 
Defense spending peaked at over $300 billion a few years ago will 
decline to near $260 billion in 1998. That is a steep decline in actual 
terms, a decline that is much steeper if you account for inflation.
  In sum, defense spending is already being cut. I have no quarrel with 
those cuts. President Clinton is moving in the right direction in 
calling for defense cuts and I add that it was only 2 years ago that I 
led an effort in the Senate that called for further defense cuts. But, 
I agree with President Clinton that the defense cuts we have made and 
that we are contemplating are about right, but they are not sacrosanct.
  I point out to my colleagues with or without the Exon-Grassley 
amendment, the division of defense and domestic spending is within the 
purview of the Appropriations Committee. If defense spending is put on 
the table, as I expect it will be despite my objections, then I submit 
that those cuts in defense should be, at a maximum, no greater than the 
defense percentage of discretionary spending. If defense is so slightly 
reduced it is something they could live with just as our domestic 
spending could live with the modest reductions required by the Exon-
Grassley amendment.
  So, in conclusion, I want to remind my colleagues that the Exon-
Grassley cut will indeed reduce our deficits by $26 billion over the 
coming 5 years. It is the only deficit reduction effort now alive in 
either the House or the Senate. If we fail to accept the Exon-Grassley 
effort, we are completely ignoring the need for further spending cuts 
in the budget process this year. It will not devastate President 
Clinton's initiatives. It is a modest cut but an important cut for our 
country as it shows that Congress understands that it cannot let up in 
our efforts to restore fiscal responsibility to our Federal budget. I 
urge my colleagues to support this budget resolution and to oppose any 
effort to reverse the $26 billion in spending cuts that the Exon-
Grassley amendment will achieve.
  I thank the Chair. I yield the floor.
  Mr. SASSER. Mr. President, on behalf of the manager of this 
amendment, Senator Dodd, I yield the Senator from Minnesota 4 minutes 
from the time under the control of the proponents of the amendment.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized.
  Mr. WELLSTONE. Mr. President, I thank the Senator from Tennessee. I 
have a tremendous amount of respect for both of my colleagues from 
Nebraska, but I am in profound disagreement with the Senator from 
Nebraska on this question.
  The Senator from Nebraska has talked about the need for deficit 
reduction. I stepped up to the plate and voted for the reconciliation 
bill, and I voted for a $500 billion-plus deficit reduction over the 
next 5 years, and I was proud to do so. I think that has to be one goal 
of domestic public policy. I disagreed with the Senator from Iowa when 
I heard him talking about spending. We can talk about this as 
investment. I said to Senator Harkin, as we started this discussion, 
that I really believe that if we have not learned this lesson, I do not 
know when we will: Either we invest in our children when they are 
young, or we pay the price later on.
  Mr. President, I rise to support this Dodd-Jeffords amendment, which 
would transfer $6 billion to special ed-- in fiscal year 1995, $30 
billion--over 5 years. It takes some of the money from the obsolete 
Milstar program and some of the money for spending on intelligence, as 
we move into a post-cold war period of time. Mr. President, I come from 
a State--the State of Minnesota--where we believe that each and every 
child, every boy and girl, ought to have the opportunity to be all that 
she or he can be. And this amendment is in that spirit.
  The reason that I think there will be bipartisan support for this 
amendment is because it calls for some investment in special education, 
handicap grants, preschool grants, grants for infants and families, 
deaf and blindness, serious emotional disturbance, severe disabilities, 
early childhood education, and secondary and transitional services.
  My colleague from Iowa, Senator Harkin, perhaps has been the greatest 
and strongest voice when it comes to fighting for people and alongside 
people with disabilities. Mr. President, this amendment calls for an 
investment in special education--an investment that we should make. We 
have not made near the commitment that we have promised as a Federal 
Government in this area.
  This is but a small amount of money. I say to my colleagues that 
given the reasonableness of this proposal, part of the transfer and 
part of restoring some of the cuts and investing it in a decisive and 
important area--that is to say support for special education--I do not 
think my colleagues can have it both ways.
  I have heard Senators get up here on the floor in this debate and say 
that they are for special education. I have heard that said by those 
opposed to the Dodd-Jeffords amendment. You cannot have it both ways 
and say you are for special education and then vote against it. It is 
not your words that count, it is your vote. All of us know that well. 
That is how people in our States hold us accountable.
  So, Mr. President, it strikes me that this amendment is eminently 
reasonable. I have a feeling it is going to generate bipartisan 
support. I think there is broad-based support for more of a commitment 
to special education. We know from what we hear from people in our 
States the strain this has had on the local school districts and the 
property tax budget. This is but a small step in the right direction. 
Therefore, I hope we see this amendment pass with strong bipartisan 
support.

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