[Congressional Record Volume 140, Number 57 (Wednesday, May 11, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: May 11, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 1995--CONFERENCE
REPORT
The Senate continued with the consideration of the conference report.
Mr. GRASSLEY. Madam President, we have before us the conference
report on the budget, and I believe you would not know it by its cover,
but this conference report in and of itself is an oxymoron. We went
through this tremendous battle against the big spending machine here in
this town, and it was really quite a struggle, yet all we got out of it
was a small gnat's worth of savings. We labored mightily and of course
we produced, in savings, just a mouse.
The good news in this budget is that it does contain spending
restraints that the big spenders in this city, including the
congressional leadership and the White House, did not want to accept. I
believe it has only been once since I have been in the Senate that this
has happened, and that was back in 1985. When I say ``this happened,''
when we were up against congressional leadership of both parties and up
against the White House when we had an opportunity to make cuts in the
budget, that was when I offered an amendment to freeze the defense
spending that was adopted that year.
Let me just say in as clear terms as I possibly can, and for the
Record, that the sky did not fall in on the defense budget or the
Defense Department then, and it will not fall on this budget now. That
is notwithstanding all the hair-pulling that we heard right here on
this floor during the original debate on the budget resolution.
I would like to think this is a big victory, given the resistance we
encountered. You would think by listening to that debate that we were
pulling teeth without Novocaine when we tried to cut $26 billion from
the budget--and we did that. But now that it is over, that is half that
figure and that is $13 billion. You know that is just one-sixth of 1
percent. That is really only saving 1 penny out of every $6 in this
budget. Nonetheless, I feel the American people--I hope--have some
inkling of how herculean a task it is to cut a single penny from the
Federal budget.
Having observed our antics on this floor in reaction to the Exon-
Grassley amendment, the public must be incensed with how little we do
to save the taxpayers money. They must be ticked to the height of
``tickticity.''
Even those who make the best fiscally responsible speeches on this
floor oppose these cuts. Was it tough to make these cuts? Well, is a
school bus yellow?
It is a significant but I have to admit a small victory to the
taxpayers who are involved in the $13 billion that was finally the
compromise that was left over from the Exon-Grassley amendment.
I cannot praise enough the leadership of my friend from Nebraska,
Senator Exon, who is the main reason the outyear deficits will be that
much lower.
I also commend the deficit hawks on the other side of the aisle for
standing firm against the big spenders in their own party and among
their own leadership.
And I commend those on my side of the aisle who stood firm and also
voted responsibly for deficit reduction.
Also responsible for this victory are many grassroots organizations
that supported Senator Exon and myself during the debate on our
amendment. They also worked hard when it was up on the floor of the
Senate. We had to defend it three times, and they helped us maintain
the half that we maintained in committee. So I thank them very much,
because that grassroots efforts by these organizations are very
significant to making even these small victories in this body.
It is unfortunate, in my view, that the conferees could not agree to
the full $26 billion of savings as passed by the Senate originally.
This is especially so given our latest and newest CBO deficit
projections, because it was just a few days ago--in other words, while
all this was going on--that CBO reestimated the original deficit
baseline for 1995 fiscal year; in other words, what will the deficit be
on September 30, 1995.
During our debate on saving $26 billion or $13 billion, they have
already estimated the deficit upwards by nearly $100 billion. So, Madam
President, it appears that, once again, we are courting Miss Rosy
Scenario. It is kind of like a dallying groupie. Rosy Scenario shows up
on the arm of administration after administration, whether it is
Republican or Democrat.
So this $100 billion upward adjustment on the deficit is just the
same old refrain. We thought the $13 billion would be saved off a much
lower baseline. We now find that for every step forward that we take in
this body toward a lower deficit, we then take eight steps backward.
So how did the conference committee respond in the face of this
latest round of bad news on the deficit front? It responded by cutting
our savings in half, whereas that new projection should have been an
excuse for everybody to want to be fiscally responsible to fight harder
to save the $26 billion as opposed to cutting it in half.
Of course, these $13 billion in savings are now dwarfed by the size
of this reestimate.
Madam President, common sense is perhaps not so common after all.
This is why I believe that Republicans will vote against this budget,
because it fails to seize the moment. We had an opportunity to take
advantage of favorable economic circumstances and make further spending
reductions in the outyears, but the response has been little more than
business as usual. I do not know how this bodes for continued efforts
next year to lower the deficit, given the reaction to the modest Exon-
Grassley amendment this year by the leadership. The odds in Las Vegas
against greater savings next year must be pretty darn high.
There is another important reason, though, why Members of my party
will, hopefully, oppose this budget, Madam President. This budget also
contains bad news for the American taxpayer. The leaders in Congress
and the administration have decided that it is not enough to raise
taxes to near record amounts, as we did in last year's budget, but they
also now want to unleash 5,000 more IRS agents on the taxpayers because
that money is in this budget to hire those additional agents. They will
do this without carefully crafted protections that we passed in the
Senate originally as conditions for these new agents. Most outstanding
of that was the passage by the Congress of the Taxpayers' Bill of
Rights No. 2 sponsored by Senator Pryor and myself.
This is the same administration, by the way, that claimed during the
last campaign that they could find $45 billion of new money by taxing
foreign companies. And now that they occupy the White House, they
cannot seem to find even 10 percent of that original $45 billion that
they said they could get.
Even more incredible, the money for these new agents are off budget.
The Treasury claims these agents will raise enough money to pay for
themselves. I wish I had a nickel for every time I heard that argument.
I decided not to oppose this proposal during the Senate consideration
only because the sponsors and the Treasury Department agreed to
protections for the taxpayers, like I explained in the Taxpayers' Bill
of Rights. But those protections are gone in this conference agreement.
I spoke about this at length last week. And 5,000 new IRS agents,
without the kinder, gentler instructions that were in the original
Senate proposal is not how to treat taxpayers in a civilized country.
This proposal is strictly a Democrat initiative, let me make clear,
snuck in by clever Treasury bureaucrats, aided and abetted by the
leadership in the Congress who, at a minimum, I want to say, looked the
other way with a wink and a nod.
I want to make it clear that this is not a Republican position to
have 5,000 new IRS agents without protections for the taxpayers through
the Taxpayers' Bill of Rights No. 2.
Finally, Republicans will vote against this amendment because of the
mismatch between the Defense Department's budget and the President's
budget. The General Accounting Office is currently evaluating the
magnitude of this mismatch.
To date, the General Accounting Office has identified at least $26
billion in negative funding wages. These negative accounting entries
are used to hide discrepancies between the 5-year defense program and
the budget and to mask over programming. They provide an artificial way
of forcing the books into balance.
Such devices are inconsistent with the law governing the preparation
and submission of the 5-year plan to Congress. The practical effect of
this mismatch is to create management havoc which could lead to serious
damage and consequences against our national security. This is the same
problem that led to the hollow army syndrome of the seventies, and if
we do not correct this problem, we could be doomed to repeat it.
Madam President, I regret that I cannot join with my colleagues on
the other side who showed courage and fought to preserve some of the
Exon-Grassley savings by voting to adopt this. What was salvaged of
Grassley-Exon is a victory not because of its substance but because it
is modest. Rather, it is a victory because of enormous barriers it
overcame, and that is a sad commentary. But it is reason enough for
Republicans to just say no to this budget.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. SASSER. Madam President, I yield 15 minutes to the distinguished
Senator from California [Mrs. Boxer].
The PRESIDING OFFICER. The Senator from California is recognized.
Mrs. BOXER. I thank the Chair, and I thank my chairman, the Senator
from Tennessee.
Madam President, I am pleased to rise as a member of the Budget
Committee in support of the budget conference report. I hope the Senate
today will say yes to this budget. I do not anticipate we will get many
of our colleagues on the other side of the aisle to join us. Maybe we
will get one or two; perhaps we will get none. But that is not
surprising. They have been against the general approach that President
Clinton has brought to the budget process. That approach is one that
has led to lower deficits, it has led to, in most parts of the country,
an economic recovery, it has led to the creation of thousands and
thousands and thousands of jobs.
Not one Republican, as I can recall, voted for the budget or voted
for the reconciliation bill that carried it out. They had their own
good reasons and they expressed them very eloquently on the floor then,
and I am sure they will do so again today.
But you see, I think it is the results that matter. I think we need
to look back to the comments that were made at the time when this
country started to turn around its economy. We have to remember, under
the previous administration of George Bush, there was not any job
creation. More jobs have been created in 1 year of this Presidency than
in all 4 of the previous Presidency. I know that does not sit well with
my Republican colleagues from the standpoint of politics. But I have to
say the facts are the facts.
Now, is this economy perfect? You and I know, Madam President, it is
not. You and I know in southern California we are dragging. We have not
caught up to northern California or to the rest of the Nation. But we
are on a sound course, and this budget will in fact continue that
course. And again, it is not a matter of rhetoric. When you and I voted
on the President's budget we were not sure of the results. We hoped for
good results. Now we have those good results: Deficits coming down
finally, jobs being created finally, new investments being made
finally, export controls being lifted finally. We have an economic
strategy in this country. Again, I do not think it is perfect. I think
there is room for improvement. This is not a perfect world. But what we
have before us is a very sensible, commonsense document, and I support
it.
We see deficits continuing to go down. Yes, we would all like to see
them go to zero. No one would rather see that than I. When I was in
local government, on the board of supervisors, I brought zero-based
budgeting to that board. I said, ``Let's go back to zero and start all
over again.'' We did not have the term ``reinvent Government,'' but we
did it on the county board. We had to balance our budget, and we did.
I think there is definitely room for improvement here, but we are
beginning to see it happen: A reduction of the Federal work force, a
crime bill for which we are going to pay. So things are moving in the
right direction.
The budget deficit is down. A couple of years ago, before we passed
the reconciliation bill and the President's strategy, the OMB told us
we would have 302 billion dollars' worth of deficits, Madam President.
We now see that coming down to $182 billion--$120 billion below where
it would have been had we not acted in that courageous fashion.
I have to say to many of my colleagues who are up for reelection,
that was not an easy vote. It was not an easy vote. But you can be
proud that you took the courageous stand.
My friend from Iowa, whom I greatly respect, Senator Grassley, one of
the leaders in military procurement reform--he and I have worked
together--says the Republicans should just say no. Well, that is a
continuation of what they have been doing. I am sure they will continue
to say no. It is up to the American people to determine whether just
saying no is a policy. I do not think it is a policy. I think we have
an economic strategy embodied in this budget resolution, and I feel
proud to support it.
Now, it hurts when you cut spending. We all know that. But this
budget does it. It has to be done right, Madam President. You just
cannot do it with a meat ax, because you will disturb this economic
recovery. And what the chairman of the Budget Committee, Senator Sasser
from Tennessee, has tried to do is walk that fine line, to make sure we
have progress on the deficit and at the same time make enough
investments in this economy so that growth can take place.
That is what this budget does. And again, I am proud to associate
myself with his work and with this product.
Madam President, many of my colleagues on the other side of the aisle
have come to this floor to decry the military budget. I think it is
very important to look at what we are doing in this military budget.
There are those on the other side of the aisle who are saying we are
destroying the military. Let us look at the facts. In 1994, last year's
budget, the budget authority was $261 billion. In 1995, in this budget,
it is $263 billion. So with all the rhetoric, as if we are destroying
our military, we actually are increasing the budget authority by $2
billion. We are spending more on the military than we do in any other
category in the domestic discretionary budget.
I think it is also important to take a look at what our potential
enemies are spending on their military. Madam President, rhetoric
aside, let us take a look at it: Russia, $29.1 billion; Iraq, $8.6
billion; China, $7.3 billion; North Korea, $2.2 billion; Libya, $1.8
billion; Iran, $1.2 billion; Syria, which many people say is moving
toward our camp, $1.2 billion; Cuba, $1.2 billion.
Madam President, those are all the potential enemies I could garner.
That adds up to $50 billion, and we are spending $270.7 billion on
outlays. If you look at the 10 largest countries--in other words, the
countries that spend the most on the military after America--if you add
them all up: Japan, France, UK, Germany, Russia, Italy, South Korea,
Taiwan, Saudi Arabia, and Kuwait--you will come up to $240.1 billion.
So we spend more than the next 10 countries combined, and most of those
are our friends.
So if anyone tries to scare the American people, Madam President,
that we are not spending enough on our military, please let us look at
the facts.
Now, there are always those who say they could do better with $400
billion. We all know, if money is no object, it would be lovely. It
would be lovely to have it in the military. It would be lovely to have
it in education. It would be lovely to have it in everything we try to
do for the American people. But we have to budget wisely, and we have
to expect that at that amount of money our military can and should
perform. We need to bring better management into the system. I think we
are doing that with procurement reform.
So let us put that one to rest. Every time someone on the other side
of the aisle gets up and says we are not spending enough, let us bring
out these facts, that we spend more than the next 10 biggest spending
countries combined, and we spend much more than all of our potential
enemies added up together.
Finally, Madam President, I wish to say how proud I am that this
budget contains the Children's Initiative which I brought to the Budget
Committee and which was supported on the floor by Republicans and
Democrats alike. It swells my heart with pride to know that, finally,
there is a consensus emerging in this country on the need for investing
in our children. When we deal with the crime issue--and, Madam
President, your brilliant leadership to ban assault weapons is
something that will go down in history books forever--we know that we
are dealing with the consequences of neglect. When our children live in
poverty, when they do not have anything to believe in, when they do not
think they have any hope or any stake in the future, they will grab an
assault weapon if a gang member says, ``You can belong.''
So we have to get to the root causes of the problem. And I am so
proud that this Senate voted 93 to 5 to stand up and say, yes, we will
cut Federal travel. It is time for a few of us to stay put so our
children can move forward.
Perhaps the most critical investment this budget makes is in our
children--an investment that is overdue and necessary.
Last month the Carnegie Corp. of New York released a new report
documenting the circumstances faced by children under the age of 3 and
their families. Their condition threatens our economic strength and
competitiveness. Too many of our children fail to receive adequate
prenatal care, child care, or parental attention which means that they
are less likely to perform well in school or on the job--if they get a
job. The Carnegie Corp. dubbed it the ``quiet crisis.'' But the
appalling statistics scream out for attention.
One in five children in this Nation lives in poverty. The number of
poor school age children in California alone increased by 38 percent
between 1980 and 1990. Every year nearly 1 million infants are born
with severe medical problems that could have been avoided if their
mothers had access to prenatal care. According to the Centers for
Disease Control, only 44 percent of children in our Nation's major
cities have been fully vaccinated by their second birthday. More than 5
million children under the age of 3 are in the care of other adults
while their parents work.
After years of shameful neglect, it is time to make the health and
welfare of children a top priority. With this budget, we are finally
putting our dollars where they count--into proven programs for children
that address these problems. I am proud of the fact that this budget
includes the Boxer amendment which I have called the children's
initiative.
It overhwelmingly passed the Senate by a vote of 93 to 5.
The children's initiative, which is a pay-as-you-go provision,
provides $1 billion to six exemplary children's programs by cutting
spending in Government travel expenses.
Specifically, the amendment provides an additional $120 million for
Head Start, enough to fund slots for approximately 24,000 children.
It increases funding for the WIC Program by an additional $100
million which will provide services for 200,000 pregnant women, infants
and children.
It adds $2000 million for childhood immunizations, enough to
appropriately immunize over 2 million children up to age 2.
It increases funding for the child care development grant by $200
million, enough to provide quality child care for roughly 44,000
children.
The amendment increases the maternal and child health block grant by
$200 million--an important weapon in the right against low birthweight
babies and infant mortality.
Finally, the amendment adds $180 million for The Emergency Food
Assistance Program or TEFAP which is a vital resource for feeding the
hungry and homeless in our States and communities; 1.4 million
Californians rely on food from TEFAP every months.
Each of these programs has a proven record of success in helping
children and their families. The Head Start, WIC, and childhood
immunization programs, for example, have been praised over and over for
their cost effectiveness. All of the programs enjoy strong bipartisan
support.
Madam President, I am especially grateful to the distinguished
chairman of the Senate Budget Committee, Senator Sasser, for his
assistance in including the children's initiative in the conference
report. Investing in our youngest citizens is the best economic
investment that we can make for the future.
Madam President, if the chairman of the Budget Committee is willing,
I would like to engage him in a brief colloquy on the children's
initiative. Since the budget resolution does not list the specific
funding levels for each of the children's programs in my amendment, I
would simply like the chairman's help in clarifying the Senate Budget
Committee's intent to fund those programs at the level I requested.
Is it the chairman's understanding that Function 350 of the fiscal
year 1995 budget allows room for an additional $180 million above the
President's request for food purchases under the Emergency Food
Assistance Program?
Mr. SASSER. Yes; that is correct.
Mrs. BOXER. Is it also his understanding that Function 500 of the
fiscal year 1995 budget allows room for an additional $120 million
above the President's request for Head Start?
Mr. SASSER. Yes; that is correct.
Mrs. BOXER. Does he further agree that Function 550 of the fiscal
year 1995 budget allows for an additional $200 million above the
President's request for the maternal and child health block grant, and
an additional $200 million above the President's request in
discretionary funding for the childhood immunization program?
Mr. SASSER. Yes; that is correct. There is also in the Function 550
room for an additional $100 million for teenage pregnancy prevention.
Mrs. BOXER. Finally, is it his understanding that Function 600 of the
fiscal year 1995 budget allows for an additional $100 million above the
President's request for the WIC Program, and an additional $200 million
above the President's request for the child care development block
grant?
Mr. SASSER. Yes; that is correct.
Mrs. BOXER. I thank the chairman. Again, it is an honor to serve with
him on the Budget Committee and to have his invaluable support for
these proven children's programs. With this budget, we are making an
important investment in a future generation that will be healthier,
better educated, and better able to contribute more to the economic
strength and well-being of our country.
Mr. SASSER. My thanks are to Senator Boxer for her tireless efforts
on behalf of these children's programs. The Budget Committee, as well
as America's children, have been well served by her participation in
this year's budget process.
Mrs. BOXER. Madam President, in closing, let me thank the chairman,
let me thank the members of the Budget Committee, and let me thank this
administration. Finally we have an economic strategy in this country of
which we can be proud, and we are making some critical investments in
this budget. Even though we are bringing the deficit down, we are
making some investments that will yield great dividends in the future.
I yield the floor.
Mr. SASSER. Madam President, I wish to take this opportunity to pay
tribute to the Senator from California for the really marvelous work
she has done in bringing the Senate's attention to the children's
initiative and the problems of children in this country through
including it in this budget resolution as presently before us today.
I also want to express my appreciation to my friend from California
for being such a valuable and productive member of the Senate Budget
Committee. We have gone through some very historic times, Madam
President, in the Senate over the past year-and-a-half as far as the
budget is concerned.
We have enacted a deficit reduction package of really monumental
proportion. We are now seeing how the salutary effects of that are
working its way through our economy. The Senator from California was a
leader in getting that done. I want to pay tribute to her today for her
help and her support, indeed her leadership, in moving this deficit
reduction through the Senate last year and for her support this year on
the budget resolution.
Madam President, I see the able Senator from Florida is on the floor.
I see no one on the other side wishing to speak.
Would the distinguished ranking member have objection if I yield 15
minutes to the distinguished Senator from Florida?
Mr. DOMENICI. Madam President, I wonder if I might use 2 minutes or 1
minute to make a point and then I will choose to use some time after
the Senator from Florida to address a few of the points raised by
Senator Boxer.
Might I just take 2 minutes? I take it off my side.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from New Mexico is recognized for 2 minutes.
Mr. DOMENICI. Madam President, I note that over the past 10 or 12
days there has been a very concerted effort on the part of the White
House to contact the Indian people of this country through their
leaders. They had a summit at the White House. They had a listening
session for the Indian leaders of the country in the State of New
Mexico in the city of Albuquerque, and the various Cabinet people
attended.
I would like to make a point that in this President's budget, if we
do not change it in the appropriations process, one of the most
important functions of government in behalf of the Indian, Indian
health, was rather dramatically cut--as a matter of fact, about $244
billion less than is required just to maintain the current efforts and
put personnel in the new facilities like the one at Ship Rock, NM.
In this budget resolution, while we cannot guarantee that moneys will
be added to that category of expenditures by allocating less money to
some of the President's $8.6 billion in new programs or add-on
programs, we have expressed a sense of the Senate, which is now a sense
of the Congress, that the Indian health programs should not be cut and
should be retained at the level of last year, plus added personnel to
maintain the facilities.
I just want to make that point because it has a lot to do with some
of the problems in Indian country regarding children and families. It
is somewhat an add-on to Senator Boxer's comments about children and
families.
I yield the floor.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. SASSER. Madam President, let me just note that the measure just
discussed was sponsored by Senator Bingaman, along with Senator
Domenici. It is, I think, a very outstanding measure, and I commend
them for bringing this to the Senate.
Madam President, I yield 15 minutes to the distinguished Senator from
Florida.
The PRESIDING OFFICER. The Senator from Florida is recognized for 15
minutes.
Mr. GRAHAM. Thank you very much, Madam President.
Madam President, I would like to begin by extending my appreciation
and commendation to our distinguished chairman for the outstanding job
he has done this year, as he has in previous years, in bringing to the
Senate a responsible budget resolution. I commend him and the members
of the committee and the able staff of the committee for their
outstanding service to America.
Madam President, I would like to talk about the dual purpose which
the Senate has in considering the conference report on the budget
resolution this afternoon. The first and the most obvious purpose is to
develop a broad framework, an outline, for Federal spending for the
fiscal year that we begin October 1.
I support the fiscal plan that has been developed by the Budget
Committee. In my judgment, it responsibly meets the needs of our people
at a time in which there is increasing scrutiny of Federal spending.
As a member of the Armed Services Committee, I am particularly aware
of the pressures that are being imposed on the United States to be
militarily strong to protect democracy in this country and around the
world. I believe that this budget provides for a reasonable capacity
for our military to continue to meet that function.
I think similar statements of adequacy to function can be found
throughout the rest of the budget. I particularly am pleased at the new
emphasis that is being given to areas that will contribute to our long-
term economic and social strength, areas such as education, job
training, and job creation. These are important, creative initiatives
to which this budget recommits our Nation.
But I would like to use most of my time, Madam President, to talk
about the second purpose of the budget resolution debate today; that
is, the purpose of signaling our commitment to continue to pursue the
goal of reducing the Federal budget deficit.
Congress made significant progress in reducing the deficit in 1993.
Last August we took a giant step in the right direction by adopting a
significant deficit reduction program. Before Congress had taken that
action, Madam President, the Office of Management and Budget, pursuant
to the blue line on this graph, had projected the Federal deficit from
1993 through to the year 2003. It was a very depressing and alarming
line. We started in 1993 with a deficit of $319 billion and 10 years
later a deficit of $639 billion. That was what the President and the
Congress faced as they began in January of last year.
In large part because of the action that was taken last August, we
are on a slightly less treacherous economic course. The red line
indicates what the projection is and actually the first 2 years of
accomplishment of the new economic plan. The deficit which had been
projected to be $319 billion in 1993 was actually $255 billion. The
deficit which was projected to be $301 billion in this fiscal year,
1994, now appears to be $223 billion. In the budget that we are
considering, instead of recommending a deficit of $296 billion for
1995, the deficit will be $171 billion. By all accounts, those
represent significant steps toward reduction in our deficit.
However, Madam President, I point out the end, the tail of this red
line. The tail of this red line is that deficits begin to rise again in
approximately 1997. By the year 2004, we will be back up to $365
billion, or higher than the deficits were projected to be when we
commenced this process in 1993. That says very clearly that our work is
not over.
There was an unexpected bonus, a dividend, that came from our efforts
last year to reduce the Federal budget deficit. That was a
``surprising''--to use a word of one prominent economist on Wall
Street--impact on long-term interest rates.
In January of 1993, long-term interest rates hovered above 7.3
percent. By the first of August, they were down to slightly above 6.5
percent. By the middle of October they had dropped to 5.9 percent. So
over a period of 10\1/2\ months, long-term interest rates have gone
from 7.3 percent to 5.9 percent. A substantial amount of that slide
occurred in the period immediately after the adoption of the August
economic program.
This sharp reduction in long-term interest rates had a dramatic
stimulus effect on our economy. People were able to buy homes and cars;
businesses were able to expand, employ people, and invest in new
capital goods. It was a major contributor to the strongest economic
report for the fourth quarter of 1993 than we have had in recent
American economic history.
This drop in interest rates made clear the relationship between
fiscal policy and the state of the economy and the state of that
economy on the lives of every American. Long-term interest rates are
heavily influenced by the market's sense for the potential for
inflation.
When there is likely to be a resurgence of inflation, long-term rates
will rise. When there is confidence that inflation will be checked,
including checked by responsible Federal fiscal policy, long-term
interest rates will trend downward.
Unfortunately, just as in our previous chart, which had a tail of two
points on the graph, the good news of the left side and the bad news of
the right side, again, we have a tail of two points on the graph as it
relates to long-term interest rates. Since late October of last year,
when interest rates moved toward 5.9 percent, we have seen an upswing
almost as dramatic as the downswing that preceded it.
As of yesterday, long-term rates were approaching 7.5 percent, or
higher than they had been in January 1993, when this chart commenced.
The drop in interest rates, in turn, affects directly our Federal
deficit. A 1-percent rise in interest rates, assuming all other
economic assumptions are held constant, will cause net interest on the
Federal debt to rise by $2 billion in the current fiscal year and $7
billion in 1995. In fact, if you use yesterday's 7.48-percent long-term
rate, rather than the 6.1-percent rate calculated by the Congressional
Budget Office last January, net interest on the Federal debt will
increase this fiscal year by approximately $2.5 billion and, in 1995,
by over $9 billion.
So we have this duality. The budget resolution that we are adopting
not only sets Federal fiscal policy, including the level of the
deficit, it also influences long-term interest rates; and long-term
interest rates, in turn, influence the extent of our deficit.
Obviously, there are a variety of factors that affect the movement of
the market, the health of the economy, and long-term interest rates.
But a core factor is confidence in the capacity of the U.S. Government
to control its deficit.
In spite of the rise in long-term interest rates, Americans currently
have many things to be confident about. Unemployment has fallen
sharply, down nearly a full percentage point since 1993; housing starts
rose 25 percent between July and December; spending for durable
equipment is expanding at the fastest pace since 1972; inflation is
low; prices rose just 2.7 percent in 1993, the smallest increase since
1986. In January 1994, for the first time in more than 4 years,
consumer prices were totally flat.
Now is the time to maintain this confidence with increased vigilance.
It is clear that congressional action directly affects long-term
interest rates, which, in turn, directly affect Americans' confidence
in their economic future. We have a clear mission to continue to pursue
deficit reduction. We must be aggressive. Americans are beginning to
focus on what may happen when the deficit starts to rise again after
1997.
Congress should use every opportunity available, including this
budget resolution, to continue to fight the deficit. I supported the
Senate passed Exon-Grassley amendment, which cut an additional $26
billion from the 1995 budget. With five other Senators, I offered a
sense-of-the-Senate resolution during the budget resolution debate,
urging that legislation should be enacted to provide enforceable limits
to control the growth of entitlement or mandatory spending.
Those kinds of efforts should continue. The resolution we are
considering today contains $13 billion in additional budget cuts. I
would have, frankly, preferred the $26 billion contained in the
original Senate-passed version. But $13 billion in spending reduction
is a step in the right direction.
I am also pleased that the Senate has expressed a commitment to
restrain entitlement spending. As we know, the primary culprit of out-
of-control entitlement spending is in the health care area. And in the
next few weeks, as Congress debates the health bill, we should turn the
statement of commitment into real action.
Madam President, I hope our actions today in adopting this budget
resolution and our resolve to take further steps in the near future
will indicate our commitment to continued deficit reduction. If we
continue working to reduce the deficit, we will see interest rates
fall; more people will purchase and refinance homes; more people will
have jobs; the economy will grow stronger. We have a chance and we have
a responsibility to stop spending money we do not have, to help further
strengthen our economy, and to make certain that our grandchildren are
not left to foot the bill for a generation of irresponsible spending.
It is my intention to vote for the budget resolution conference
report because I believe that it is a responsible fiscal plan, and I
hope that it will be interpreted by Americans as a statement of resolve
today and in the near future to take further actions to reduce our
budget deficits.
But this must not be the only step we take. I will continue to seek
ways to implement deficit reduction, because we owe it to America and
we owe it to our grandchildren.
Thank you, Madam President.
(Mrs. MURRAY assumed the chair.)
Mr. DOMENICI. Madam President, I wonder if my friend from Florida
would mind if I borrowed his two charts for just a couple of minutes.
Mr. GRAHAM. Madam President, I would be honored to loan our charts,
at a very nominal rate of interest, to our friend and colleague from
New Mexico.
Mr. DOMENICI. We will do it at the interest rate of 6 months ago,
rather than today, since it was a little cheaper then.
Madam President, first, I yield myself 10 minutes. I might say to the
Republicans who still desire to be heard on our side, I just hope they
will make time to come down here. I do not know how much time they
want. Senator Gramm of Texas wants some time; Senator Brown wanted 10
minutes; and Senator Gregg and Senator Lott. Perhaps they could call in
and tell us what time they can come, so we can pull this budget
resolution down for final approval later on and get on with some other
things here on the floor. I would appreciate it if Senators on my side
will accommodate me with that.
With reference to Senator Boxer's comments on the Defense Department
of the United States and America's military, the United States is not
Iraq; the United States is not Russia; the United States is not the
Ukraine; the United States is not Japan, and so on down the list of
countries that the distinguished Senator from California listed with
reference to our military preparedness.
Point 1: During the Nixon years, we changed from an army that we
drafted, a military that we drafted, to a volunteer military, a
gigantic step for the United States. We have decided since that time
that we were going to call for parity to our military. It took us time
to get there, but we are getting close to paying them for similar
things as if they were out in the private sector. That is a historic
situation and a magnificent statement for a democracy to make about its
military.
So, right off, none of those countries that were alluded to take care
of their military. As a matter of fact, in the Soviet Union today, they
do not even know where they will get the money to pay them, but they
are still in the military. They do not know where they are going to get
the money to take care of the nuclear weapons, by the thousands. And we
are hoping they will dismantle them, but they are still there. There
are statements from Russia, Ukraine, Georgia, and elsewhere daily
saying maybe there will be a civil revolution there in the not-too-
distant future. At least the free world and America sits there
wondering when we will get that neutralized.
I now want to comment on what we have done to our military. It is
unequivocal that defense is the only thing we have cut on the
discretionary side of the American budget in all of the appropriations.
The only thing we have cut, since 1990 through the President's
proposals and for the next 4 years of the President's tentative budget
proposals, is defense.
I know Americans do not believe that. They must be saying that cannot
be; we heard so much about restraint, about cuts. Well, frankly, I sent
a little simple chart up there. Discretionary spending of the United
States on the domestic side has gone up. It will go up every year from
now to the 5-year program that the President has in place, and defense
will come down each year, such that in real terms the Defense
Department will have been cut 50 percent since 1985 in real terms. That
means if you had no inflation to the numbers, just year after year, it
has been cut 50 percent.
I am not going to go through what all that means in terms of
divisions that are down, procurements that are down, how many airplanes
do we really have today, how many divisions are already cut. Let me
tell you in real terms, when you cut defense 50 percent since 1985 you
have done something to the defense of this country.
So I repeat, that whatever the numbers are in the top line of this
budget resolution, which show the President's numbers for defense, just
remember that down below there is another number that says we have to
distribute $4.7 billion in outlays, $6.7 billion in budget authority
back through this budget. And I surmise that unless the Congress says
we will spend the same amount that the President asks, we will get an
allocation from the Appropriations Committee that cuts defense well
below the President's numbers.
Is the President of the United States asking for too much in defense?
After we had the Bush cuts coming from the 5-year plan that came after
the Andrews Air Force Base 1990 summit, the President asks for another
$60 billion on top of that, and we are on that path. He finally says,
``Do not cut below that; that is enough.''
So, I do not think the Senator from New Mexico and some Democrats and
most Republicans, who are concerned about that aspect of this budget
and of the trend line that is moving in that direction, we are trying
to spread fear. I think we are trying to say that history will probably
reveal once again that we are right and that we ought not to
dramatically cut defense; certainly not much more than we have done
because we will live to rue the day just like we did after the First
World War and immediately after the Second World War. I have gone
through what these numbers reveal earlier this morning in terms of how
much lower they are going to be, so I will not repeat them.
The reason I asked if I could borrow the charts of my good friend
from Florida is, if I were a Democrat and I said that about our
distinguished chairman this morning, and then I will say it about
Senator Boxer from California, I would come to the floor and say to
Senators and to whomever is listening, it is the President's deficit
reduction plan that has caused all these good things to happen in our
economy. I would say that it is the economic plan that has been adopted
that is putting people to work. I would say that it is what caused
interest rates to come down. I would say it is what is going to cause
us to get our deficit down dramatically over time.
But essentially I think that, while that is said on that side of the
aisle, that it behooves someone on this side of the aisle--and I choose
to do it--to say: ``But I have another version. There is another set of
facts that everybody should know something about.''
So let me just move up here to these long-term interest rates, which
is interesting. Let us go back to 1993, the year after the President's
election. We will find that in August of that year--that is about
here--we passed a tax and alleged deficit reduction package right here.
Is it interesting that by that point in time--that is why this is
intriguing me so much--at that point in time the long-term interest
rates had almost gotten as low as they have been in this period of
time.
We can just go up a couple more and find October.
So it is August, September, October, 3 months after the plan is
adopted, the interest rates are at an all time low for this period of
time.
Now, while I am very pleased that the economy is doing well--I hope
we are on the right track; I hope it continues--I would just like to
share with everybody here, there is no economist, nobody who would look
at the American economic scene who would say that that tax-and-cut
package--and I will keep saying ``alleged'' cut package--that in 2
months it would cause the interest rates of the United States to come
down--no one. Almost everybody would say it takes a year to a year and
a half for any impact to occur.
Interestingly enough, now, of course, some will stand up and say it
is the Federal Reserve that jinxed this package. But 2 months after it
passed, the long-term interest rates reached their low, and they
started back up, so that they are on a path up for all of the time
since. So that the interest rates, starting 2 months after adoption of
that package, are starting back up again, and they are up here to--
April is the latest date we have here, and they have gone up from 6
percent to 7.1 percent.
I am not presently complaining about the interest rates. I think the
Federal Reserve Board is doing right. I believe they want this recovery
to last longer, and they are worried and it is getting cut short. But I
am merely making the point that if there is an American economic plan
that is built around all of these words, like it is going to increase
productivity, it is going to increase jobs, it is going to lower
interest rates, then it seems to me that we ought to at least recall
that maybe something else was going on in this economy long before that
package was passed that brought much of this into fruition.
I believe that is the case. As a matter of fact, I believe the
Federal Reserve Board, for about 2\1/2\ years before George Bush was
defeated, put us on a money supply course that has a great deal to do
with this positive recovery. It just did not come soon enough for
President George Bush. The business cycle did not quite reach bottom
and start back up. And I think if one were to take this long term and
go beyond January 1993, where my good friend from Florida started it,
that you would find the long-term interest rates were on a path down
for 3 years prior to adoption of the August package which I believe had
something to do with fueling this recovery.
Now, my friend from Florida, and my neighbor, Senator Graham from
Florida, puts up this chart. This is an interesting one also. I will
use it for two purposes.
First, Madam President, here is when this new budget that we are
talking about today comes into play. There is a great euphoria about
how well we have done at deficit reduction and, frankly, I remind
everybody that the deficit starts back up and I do not know that I
agree with this number. I would think this may be higher. But recall
that in a decade the deficit will be back higher than it was when
President Clinton took office. And we constantly look for reduction of
this and we say we are going to get that when we restrain entitlements.
More particularly, most people say we are going to get this down when
we get health care reform in place. Yet, Madam President, there is no
plan for health care reform that costs the Government less than we are
now spending other than the one I introduced yesterday. And I purposely
mandate that some of the savings go to deficit reduction. So there is
nothing left unless it is more defense and more taxes to get this to
come down.
Now I use it for a second point. And I have told my staff the next
time we talk about this subject we will have this graph, but we will
have another line in it. What we will do is, we will show how much of
this reduction--the red line--is attributable to the deficit reduction
package that passed in August 1993. That is a very heralded date. It is
quite right that not a single Republican voted for it. Some Democrats
did not. But the President got, by just the narrowest of margins,
enough votes for it.
We need another line in here to show that for the years 1994 and
1995--this delta here--almost all of that deficit reduction had nothing
to do with the deficit reduction package. Nothing. About $13 billion to
$14 billion of the reduction over 2 years may have come from economic
assumptions that might be prompted by this. All the rest is taxes and
technical reassessments, such as the Resolution Trust Corporation
costing less, such as Medicare-Medicaid inflation coming down, none of
which, in the opinion of the Congressional Budget Office or anybody
that I have asked, has anything to do with the deficit package that was
passed.
I only do that because, obviously, just as something was happening in
the American economy prior to that August date, in fact, on the
American economy it may have been happening for 5, 6 or 7 years, and
perhaps--perhaps--foreign countries had more to do with making it
better than anybody else, because American business for 7 or 8 or 9
years decided that they were going to have to get this economy more
productive, that they had to be more competitive. I think all of that
was churning around during this period of time preceding the passage of
the so-called deficit reduction package.
So we will make another line to show how much of this reduction is
attributable to causes that have nothing to do with the deficit
reduction package and maybe we will make another that shows the deficit
reduction that is all attributable to taxes.
Having said that, I want to repeat, hopefully, this recovery is a
good, solid one. Hopefully, we are on the right track.
And if I were either President Clinton or a Democrat that voted for
the package, I would be down here and wherever anybody would listen
around the country, saying that package deserves full credit for all
the good things that are happening in the economy. But I would not
expect that to go unanswered, and I do not assume they do.
I assume that people are beginning to understand--and we will help
that along--that there are at least two or three reasons, one of which
is the business cycle. We have not fixed it yet. It was down. It
started up slightly before President Clinton was elected, and it is now
moving into a very positive part of the business cycle that we have had
regularly at very short intervals since the First World War.
I yield the floor at this point.
Madam President, I suggest the absence of a quorum and ask unanimous
consent that it be charged to both sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. BROWN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Who yields time?
Mr. BROWN. Madam President, I yield myself 5 minutes from Senator
Domenici's time.
The PRESIDING OFFICER. Without objection, the Senator is recognized.
Mr. BROWN. Thank you, Madam President.
I rise in concern over the budget report that is now before our body.
Budget reports and conference reports are not new to the Senate. We
have had them for many, many years. Long-term plans are not new. They
have been around for many, many years.
What is unique about this budget and about this conference report is
that it is a long-term plan for financial insolvency.
Let my be very clear. This is a long-term plan with specific numbers,
specific figures, and specific programs to lead this country into
bankruptcy. Members should be aware when they vote on this that they
are voting to reduce savings, to reduce jobs, and to make this Nation
insolvent.
Those are strong words and strong charges. Let me be specific.
One need only look at the resolution itself. The deficit, under this
measure, rises from $174 billion to $190 billion in 1997, to $187
billion in 1998, and to $198 billion in 1999.
Let me be specific. The deficit is significantly higher in 1999,
according to this plan, than it is in 1995.
Madam President, that assumes that we meet all of the goals and
guidelines included in the budget, which we have never done. It assumes
that there are no emergencies that break the budget, and we have always
had them.
It assumes we do not overspend the budget, and we have done that
averaging almost $20 billion a year of overspending the budget. It
assumes we meet all the targets in terms of the assumptions, and I do
not think I need to remind the body but the facts are these budget
projections have always been wildly optimistic. If you accept the
budget projections, if you assume there is no overspending the budget,
if you assume there is no emergency that breaks it, and if you assume,
fourth of all, that none of the loopholes carved into the budget are
taken advantage of, even then the deficit rises and that is just in the
first 5 years.
CBO's budget projections for the next 5 years for all of these
indicate an exploding of the deficit as the obligations come forward.
The simple fact is this. This is a long-term plan for insolvency. You
do not have to take my word for that. All you have to do is take a look
at the report and the numbers in the report. It shows a deficit curve
where the deficit begins to go further and further up the farther and
farther out you go. That is in dramatic contrast with budgets we have
had through most of the budget cycle. They may allow a deficit in the
year they brought the budget to the floor, but they always at least
assume it will go away by the end of the 5-year cycle. First it was 1
year out, then 2 years out, then 3 years out, then 4 years out, then 5
years out. This budget has a deficit going on forever and rising. It
shows a huge explosion of the national debt. It shows a dramatic and
continuing increase. Madam President, it will be much worse than these
figures.
This is a prescription for financial disaster for this Nation. Those
who will vote for it today must report to their constituents that they
voted for a long-term plan that will destroy the financial integrity of
this Nation. It is a sad day.
Let me simply add one other comment. Some who vote for this may
excuse themselves because they claim you can solve this by future tax
increases. I do not think future tax increases are a healthy or good
idea for this economy but many Members here do. And some in good
conscience will vote for this budget, assuming higher taxes will
relieve the problem. In the President's own budget is an analysis of
generational accounting. That shows that someone being born today will
have to bear a tax burden that is in excess of 80 percent of his or her
income to be able to fund the obligations that are already on the
books.
Madam President, that is not my figure. Those are the figures brought
to us by the President in his own budget. Someone born today will face
tax rates in excess of 80 percent of what their whole income will be.
That is inexcusable. Anyone who votes for this budget assuming that
future tax increases are going to bail out the problem simply has not
taken the time to do his or her homework. The fact is many in this
country can have 100 percent of their income taken in future years and
it will not be enough to meet the obligations that we lay on the
taxpayers of this country already. It is a tragedy that we would,
facing this problem, choose to react with a budget of this kind--a
budget which simply says to the future that America's financial future
is one of insolvency. That is what this budget is. It is a burden on
the men and women of this country. It is a burden on the working people
of this country. It is a burden on future generations. What we need is
a budget that faces the problems and controls spending.
The PRESIDING OFFICER. The time of the Senator has expired. Who
yields time?
The Senator from Tennessee.
Mr. SASSER. Madam President, our distinguished friend from Colorado
makes the point that this budget before us is different, in the sense
that it shows growth in the deficits in the far outyears. Indeed it is
different in that respect because this is the second truly honest
budget that this Chamber has seen in 12 years.
In the times of David Stockman and in the times of Richard Darman, of
course there was no growth in the deficit in the outyears--although we
all knew it was there. It was not there, Madam President, because the
books were cooked--that is why it was not there.
But what we have before this body today is a true representation of
what is happening in the fiscal affairs of the Government of the United
States of America and that in itself is refreshing and novel for a
change. I want to commend the President and Chairman of the Office of
Management and Budget, Mr. Panetta, for bringing that to us. We have a
new era of budgeting now in this country that I hope will persevere
beyond this administration and I suspect there are others on the other
side of the aisle who share this view, that we will tell ourselves the
truth about where we are with the deficit.
The truth is that this budget proposal that is before us today, that
carries on where the budget proposal of last year left off, will reduce
the deficit in the neighborhood of over $650 billion over the next 5
years. To give an example of the honesty of the projections that are
used in this calculation, last year we were projecting a deficit
reduction figure of slightly under $500 billion. But we find now that
the legislation we enacted into law last year, because of increased
economic activity, because of savings in a number of areas that were
not anticipated, because we were not giving ourselves the benefit of
the doubt in certain entitlement programs like Medicare and Medicaid--
no rosy scenario, Madam President--we find now the hard reality is not
that we overestimated our savings in years past. It is good news that
we underestimated our savings. So what we are finding now is the
deficit will come down not by $500 billion--I say to my friend from
Alabama--but by $650 billion over the next 5 years. These deficits will
be cut in half as a percent of gross domestic product.
I told the body this morning that during the decade of the 1980's,
the deficits had soared to some 4.2 percent, on the average, of gross
domestic product. We see that this budget before us will carry on the
program of reducing the deficits to about 2.3 percent of gross domestic
product, even lower than the average of the 1970's, when if memory
serves me correctly, it was about 2.5 of GDP.
So we are bringing these deficits down by any measurement you want,
either in actual dollars or as a percentage of GDP. To complain that in
the outyears of 1999 or the year 2000, the deficits are going up and we
ought to reject this, and this is a phony measure--well, Madam
President, that stretches the limits of credulity.
Madam President, I simply wanted to take this opportunity to rebut
some of the statements I have heard here today from the other side of
the aisle. But the good news for the American people in this budget
proposal for us today is not just that it is reducing the deficits, it
is that it is reducing the national debt as a percent of the gross
domestic product. We will be seeing the national debt as a percentage
of the GDP, the gross domestic product, come down and start down for
the first time in almost a quarter of a century and that is going to be
a result of this deficit reduction effort we made last year which is
carried out and carried on by this budget before this body here today.
So, Madam President, I think those who vote for this budget that is
before this body today--and those who voted for this deficit reduction
effort last year, some at great political cost to themselves because
they put the interest of their country ahead of political interest--I
would say to them that they can hold their heads high and they are
doing the work that we were sent here to do.
Madam President, I yield the floor.
Mr. LOTT addressed the Chair.
The PRESIDING OFFICER. Who yields time? The Senator from Mississippi.
Mr. LOTT. Madam President, I yield myself 15 minutes under the time
of Senator Domenici.
I just listened to the remarks of the distinguished chairman of the
Budget Committee. I found them to be very interesting.
There is no question that in this budget resolution we have before us
the deficit projections are lower, but are they real? First of all, we
still have large deficits. But second, I question whether or not this
is a real, honest budget projection. What is alarming about the
projections that we have here is that they do not include funding for
health care. We have heard Chairman Danny Rostenkowski, chairman of the
Ways and Means Committee in the House, saying the health care reform
package could cost $40 billion or more. He has suggested not once, but
repeatedly, that what we need is a new, broad-based tax increase to pay
for it. But even the President has indicated he probably does not want
to go along with that, although he did not reject the idea of a new
broad-based tax increase completely. He just said he did not think it
would be necessary for health care reform.
If we do not have the tax increases and we have a health care plan
passed this year that costs $40 billion, clearly, it would add to the
deficit. We do not know what that is going to be yet, and I know it is
hard to project that.
Additionally, welfare reform is not included. Obviously, welfare
reform is something we should try to do this year; we need a more
responsible program. Many of the crime initiatives are not provided for
in this budget resolution. We are probably going to adopt a major new
crime conference report this year, and there are going to be costs
associated with it. Many of these costs are not included in these
budget projections before us.
Furthermore, there are no funds for GATT or for Superfund. There is
also a significant Bottom-Up Review shortfall for the defense of the
country, and there is no provision for that. We have unfortunately
experienced a lot of natural disasters recently. While the Federal
Government has repeatedly offered financial assistance, this budget
contains no provision for disaster relief.
I have named a number of major programs that are going to have
increased costs this year that are not included in these projections.
So if, in fact, the deficit is projected in this budget to be between
$175 billion and $200 billion in the next fiscal year, in reality it
will probably be considerably higher.
The estimates are that the Federal deficit will decline to an
estimated $175 billion in 1995, remain unchanged at about $174 billion
in 1996, and then trend upward to nearly $200 billion, in 1999 under
the assumptions of this resolution.
The debt, by the end of fiscal year 1993, was $4.4 trillion. By 1999,
it will be $6.3 trillion. So for the fiscal years 1994 through 1999,
the projected growth in the national debt is $1.954 trillion.
In addition to that, interest rates are continuing to rise. The
Government's interest rates, and their payments on this debt, will
increase, raising the deficit and the debt even higher. In fact, the
gross interest on the debt in fiscal year 1994 is approximately $300
billion; in fiscal year 1995, it will increase to $311.8 billion.
So under this budget resolution that is praised for holding down the
level of increase in the deficit, the fact of the matter is the deficit
continues to go up and, therefore, the debt goes up every year. So you
can see what will happen by the end of this decade: There is a steady
increase every year in the debt and, therefore, of course, the interest
we pay on that national debt. The red line on this chart tells the
story, and that is why this budget resolution does not accomplish
nearly what it should.
Let me go back and make out some of the points that need to be, I
think, emphasized as to why this conference report is not the right
thing to do.
Spending will grow by 2.4 percent between fiscal years 1994 and 1995
to $1.5 trillion. The problem is we only have $1.3 trillion in revenue
estimated to be coming in. So you have the $200 billion gap there.
When the resolution was considered by the full Senate, we passed the
Exon-Grassley amendment. It was adopted by the Senate, and it would
have cut discretionary spending outlays by $26 billion over 5 years.
You would have thought we were trying to just destroy the Federal
budget with that amount of additional cuts.
So, in conference, that was reduced to $13 billion. This is only 0.15
percent of the total outlays! So the Exon-Grassley amendment just made
a little bitty scratch on the surface of trying to control spending.
And I emphasize again, the problem is not insufficient revenue--we have
$1.3 trillion in revenue--the problem is still too much spending. On
the discretionary side, the budget increases funding for the Legal
Services Corporation by 26 percent. It increases funding for the Civil
Rights Division of the Justice Department by 32.3 percent. It also
increases funding for the Environmental Law Division at the Justice
Department by 15.3 percent.
I acknowledge, as many of the appropriators point out, that the
deficit is not caused just by domestic discretionary spending. Much of
it is driven by entitlement increases. But I do feel that we should
have maintained the Exon-Grassley cuts, and we should not be adding new
programs.
As a matter of fact, this budget resolution adds at least 6 new
entitlements. So while we say we are trying to control spending--and
much of the problem is in the entitlement areas--we still find
entitlement programs are being added. This budget assumes entitlement
spending increases of over $5 billion relative to the CBO baseline,
including additional spending for the agriculture crop insurance
program, and others.
So you have significant increases in some of the discretionary
programs, some new entitlement programs, and significant increases in a
number of old entitlement programs.
Another point that should be emphasized about this budget resolution
is that taxes also go up. There will be an increase, a growth in taxes
from $1.338 trillion in fiscal year 1995 to $1.630 trillion in fiscal
year 1999; a 7 percent increase in taxes.
I want to emphasize with regard to the Exon-Grassley amendment, this
language should not be applied to defense. Defense has already been cut
too much, and that point has been raised by the distinguished Senator
from New Mexico, by the chairman of the Armed Services Committee in the
Senate, by the chairman of the Defense Appropriations Subcommittee in
the House, Chairman Murtha.
The real decisions on the defense budget will likely be made through
the appropriations bills. The President made a pledge not to cut
defense below the request he had made. As a matter of fact, if the cuts
of Exon-Grassley are applied or disproportionately applied to defense,
certainly that would bring the number down to below what the President
asked for. I assume the President will resist that very aggressively.
If the cuts do not come from defense, defense spending will still
decline from $270.7 billion in fiscal year 1995 to $257.6 billion in
fiscal year 1999. The President's 1995 request is 35 percent below the
1985 level and represents the tenth straight year of real cuts to
defense budget authority.
There is another thing I found very interesting in this conference
report. It includes a provision that increases funding in excess of the
fiscal year 1999 discretionary spending caps for IRS compliance
initiatives, $405 million in BA and outlay beyond the caps in fiscal
year 1995. Paying for a program ``off-budget" under the claim it will
save money, in my opinion, is certainly a dangerous precedent.
One thing we do not need is additional IRS agents. It is maintained
that if we increase the number of IRS agents, we will get more money,
but this has not been proven true. The IRS has seen an increase of over
40,000 full-time equivalents since 1982, roughly a 33 percent increase.
The conference report could constitute an increase of IRS personnel of
another 4 percent. I really question this procedure and also what
results we are going to get. I assure you, if you ask the American
people if they would support the idea of more IRS agents, they would
strenuously object to it.
While I do not believe any more IRS agents should be hired period,
there is no reason that this provision could not have been included in
the President's budget. We should not pass it off-budget.
Finally, this particular budget resolution does not contain any
economic growth incentives, which is the only way to create real,
lasting jobs. We debated that during the earlier Senate debate on the
budget resolution. We proposed a $500 tax credit for children and
incentives for individual retirement accounts. There were many
provisions in there that would have provided growth incentives and
created some jobs, but there is nothing in this budget resolution that
would really help to stimulate the economy.
The conference report also includes 12 reserve funds. While these
sound good because they require legislation be paid for, they basically
pave the way for tax increases.
You say, how could that be? It is because reserve funds essentially
exempt legislation that increases taxes to pay for higher spending from
Budget Act points of order. I think this is a very dangerous procedure
also. I do think it is a guarantee of one way that more taxes will be
raised and, therefore, more money spent.
So there are many problems with this budget resolution. I note that
in several instances this budget resolution is above what the President
has asked. It seems that we should at least stay within or under what
the President has asked. In international affairs, it is above what
President Clinton has asked.
I also note that in the energy function, the conference report
includes $1.6 billion in budget authority and $1.4 billion in outlays
above what the President has asked. I do not know to exactly what these
increases would be applied. It may be for good purposes, and I might
even be inclined to support them. But I do think as a general rule we
should at least hold spending down to under what the President has
asked.
So, Madam President, I will vote against this budget resolution. I
think there are many problems with it. And if you call this honesty in
budgeting, I have to say I really have reservations about it because I
think it is going to lead to tax increases, new entitlements, and more
spending. I do not think the American people want that in their budget
resolution.
I yield the floor, Madam President.
The PRESIDING OFFICER. Who yields time?
The PRESIDING OFFICER (Mr. Wellstone). Who yields time?
Mr. EXON. Mr. President, I yield myself such time as I shall consume
from the time under the control of the majority.
Mr. President, I rise today to express my support for the conference
report on the 1995 budget resolution. I want to first thank our
chairman for his leadership and cooperation throughout this process. I
recognize that it is very difficult to determine just what a majority
of the Senate wants to achieve with a budget resolution and this year
has, I believe, been more interesting than most in that regard.
As Members are well aware, Senator Grassley and I successfully
offered an amendment to the 1995 budget resolution during its markup by
the Senate Budget Committee. Our amendment cut proposed discretionary
spending by about $26.1 billion over the next 5 years. Although efforts
were made during floor debate of the Senate version of the budget
resolution to weaken the Exon-Grassley amendment, we were successful in
protecting the $26 billion in cuts.
The House of Representatives, however, did not go along with our
proposal. Although a motion to instruct their conferees to accept the
Senate numbers was offered, it was narrowly defeated. It failed over
there by a very few votes. As a result, the conferees were forced to
compromise and have returned a conference report that retains $13
billion of the Exon-Grassley cuts.
Mr. President, the facts are that cutting the whole $26 billion was
not in the cards. The House did not accept the Exon-Grassley cuts and
senator Sasser, Senator Hollings, and Senator Johnston responsibly
negotiated a final package. The House has already passed this
conference report and the responsible action for the full Senate at
this point is to support the conference report as well.
But, the good news is that $13 billion of the Exon-Grassley cuts
survived and that as a result we will continue to cut Government
spending this year. There have been a number of attempts as the record
clearly shows, to cut spending in recent months and many, if not most,
Senators have supported one or several of those attempts. Yet, since
passage of the deficit reduction bill last summer, we have not been
successful, until now, in achieving any additional deficit reduction
whatsoever.
It is important to keep in mind that the Exon-Grassley amendment
achieved its cuts by lowering our discretionary spending caps over the
next 4 years and by creating a point of order in the Senate should
those caps be exceeded. The conference report substantially retains
that language. In short, I believe the Exon-Grassley cuts will be
sustained in the coming years as they have created a new base for
discretionary spending.
I am, of course, disappointed that the entire Exon-Grassley cut was
not retained in our conference report. I remain convinced that we could
easily have cut the full $26.1 billion from discretionary spending over
the next 5 years, where total spending will be over $2.7 trillion over
that same period of time. President Clinton's own budget includes over
$113 billion of spending increases in discretionary programs. We could
have achieved the Exon-Grassley cuts merely by scaling back on the
increases that some programs will enjoy over the coming years as I have
proposed.
As for further reductions in defense spending, it is not my view that
such action should be taken. The Exon-Grassley cuts could easily be
made without reducing defense which has, as the Senator from New Mexico
has correctly pointed out, already been cut significantly over the past
few years. Yet, as I have often pointed out, our budget resolution does
not make binding recommendations for spending within our various
categories. That it is a task that has been left to the Senate
Appropriations Committee, as required by the rules.
This budget resolution is indeed a victory for those of us who want
to further cut spending in order to address our budgetary problems.
Although the Exon-Grassley cuts were certainly modest, they do send, in
my view, an important signal that Congress remains serious in its
concern over our annual deficit spending and over our enormous national
debt.
And, I would add that any Member who wants additional spending cuts
this year should support this budget resolution. If this resolution
fails to pass, I question whether additional spending cuts will be made
this year. In sum, a vote for this resolution is a vote for further
deficit reduction and is the responsible vote on this point in time.
I am also pleased that the conferees agreed to change the baseline so
that we pass a crop insurance reform bill this year. Although that
change does have the immediate impact of raising our projected deficits
over the next few years, it is important to keep in mind that the
increased spending reflected in this budget resolution for crop
insurance is to be offset by emergency spending on crop disaster
payments, spending that is not in our budget but that will raise our
deficits just as well.
In other words, the crop insurance proposal will offset on-budget
spending with what has normally been off-budget spending. The net
effect on our future deficits will likely be a wash, not an increase as
technically shown in this conference agreement.
In fact, by most accounts, the crop insurance reform proposal will
save money over the next few years and will actually decrease our
deficit spending--exactly the opposite of what must be detailed in the
budget resolution.
So, in conclusion, Mr. President, I want to once again thank Chairman
Sasser for his efforts and cooperation throughout the battle on the
budget. It has been a tough fight, and no one has emerged victorious on
every issue, and that is the way it should be. Yet, I am proud of the
cuts Senator Grassley and I have been successful in achieving. It is,
however, time for Congress to get our budget resolution behind us and
move ahead with the appropriations process, which will follow.
I intend to support the conference report, and I urge my colleagues
to do likewise. It is the only thing before us now, and not to accept
this report, I think, would cause untold difficulties, including
raising further the deficit that we are all very much concerned about.
Mr. President, I suggest the absence of a quorum and ask unanimous
consent that the time on the quorum call be charged equally against
both sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. GRAMM. 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. GRAMM. Mr. President, it is my understanding that we are going to
other business at 4:30. I have a bad angle on this clock. Is that 3
minutes or 2 minutes?
The PRESIDING OFFICER. The Senator has 2 minutes remaining.
Mr. DOMENICI. Mr. President, I yield the 2 minutes we have remaining
before getting off this measure for today to Senator Gramm.
Mr. GRAMM. Mr. President, if the distinguished Senator would just
respond to a question, we are going to go at 4:30 to the quotas and the
death penalty issue and then we are going to have a series of votes.
Will we come back to this tonight or will we come back tomorrow?
Mr. DOMENICI. The current request on the other side is that we come
back to it tonight and set a time certain tomorrow to vote.
Can the Senator come back this evening and take 10 minutes or
whatever he needs?
Mr. GRAMM. I can look at it. I obviously would rather do it tomorrow.
Given the time we have, I will just wait. We are getting ready to
shift over to the other issues. I have about 10 minutes of points that
I want to make about the budget. I can do that in the morning. Maybe we
can work out a unanimous consent request that we can come in in the
morning and maybe have a certain amount of time equally divided and
have a vote then and let the clock run down while we are gone tonight.
It seems to me that would be a productive use of our time and no damage
would be done on that basis.
Mr. DOMENICI. We will try to work on that basis.
Mr. GRAMM. Mr. President, I yield the floor.
Mr. D'AMATO addressed the Chair.
The PRESIDING OFFICER. The Senator from New York.
Mr. D'AMATO. Mr. President, might I inquire what the pending order of
business is?
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