[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]
FISCAL YEAR 1995 BUDGET RESOLUTION CONFERENCE REPORT
Mr. DURENBERGER. Mr. President, I rise today in opposition to the
fiscal 1995 budget resolution conference report.
While I oppose the conference report, I wish to acknowledge that the
conferees have taken some positive steps.
I am very pleased that the conferees heeded my advice to accept House
language which would provide sufficient funds to permit needed reforms
of a crop insurance system that just doesn't work. Agriculture
Committee Chairman Leahy, Senator Kerrey, and I have acted on that
opportunity by introducing the Federal Crop Insurance Reform Act of
1994, which largely follows crop insurance reform legislation I have
authored in the past two Congresses.
As a complement to the crop insurance funding, the Budget conferees
also provided that any future emergency appropriations for natural
disasters must be paid for by offsets rather than by our usual habit of
loading it on to the deficit. I have long opposed the concept of
emergency supplementals--and for good reason. Just a few months ago,
this Congress acted to provide much needed assistance to the victims of
the California earthquake. Yet we borrowed the money to do so. Even
worse, this free money was directed not only to the earthquake-ravaged
regions in southern California, but also to legislators' pet projects
located a continent away from the earthquake zone, adding many millions
to the crushing debt we are imposing upon our children. This was simply
indefensible. I am pleased the budget conferees have tied Congress's
hands so that in fiscal 1995 we can't use a natural disaster as an
excuse to add to this country's fiscal disaster--the Federal deficit.
Although the conference report makes some steps in the right
direction, it simply does not go far enough.
Mr. President, this is my last year of service in this body. I first
entered public life some 27 years ago, when I went to work for my law
partner, Harold LeVander, who had been elected Governor of Minnesota.
In that year, 1967, the Federal budget deficit was $8.6 billion--and
people were outraged because that figure had more than doubled from the
previous year. The national debt was all of $266.6 billion. By 1978,
when I was elected to the Senate, the budget deficit was $59.2 billion,
and the national debt--after the most intense period of our involvement
in Vietnam, after two oil price shocks, and after one of the most
severe recessions in our post-war history--was still only $607.1
billion.
Since then, we have run our national debt up to $4.7 trillion--that's
``trillion'' with a ``T.''
Numbers like that are hard to digest, so let's consider what it means
in real terms for the people who will have to pay off that $4.7
trillion debt--our children and grandchildren. According to OMB
projections, even after factoring in the effect of OBRA93, a child born
after 1992 will have to pay 82 percent of his or her lifetime earnings
in taxes. Mr. President, I ask that my colleagues stop to consider that
figure--82 percent of lifetime earnings. That's just not fair.
Mr. President, we in Government--on both ends of Pennsylvania Avenue
and on both sides of the aisle--got ourselves into this mess, and we
owe it to our children and grandchildren to act to get ourselves out of
it.
When Members of this body come forward to present responsible
proposals to cut Federal spending--like the Exon-Grassley amendment--
those measures should be enacted. Yet the conferees cut the Exon-
Grassley savings in half, and even that modest cut met great
resistance.
For some reason, the President and some conferees believe that we
should take a rest from significant deficit reduction this year. I
acknowledge that fact that a $173.5 billion deficit projection for
fiscal 1995 is a significant improvement from the $235 billion deficit
in fiscal 1994. However, we must bear in mind that that reduction is
due largely to the economic recovery which began under President Bush.
In addition, Mr. President, we must recognize that the 1995 figures
assume that interest rates on 10 year Treasury notes will hold steady
at 5.8 percent. Right now, those rates are at about 7.2 percent--and
rising. According to OMB, if inflation stays at current levels, even a
1 percent rise in interest rates--less than that which we have
experienced--would add over $13 billion to the 1995 deficit, and would
add a total of $127.5 billion to the deficit through 1999.
Even without the additional debt about to be heaped upon them, each
American family of four already is burdened with some $75,000 of debt
due to the past fiscal irresponsibility of the Federal Government. As a
consequence, in 1994 we are spending $294 billion in gross interest
payments on that debt--$50 billion more than all domestic discretionary
spending. What's worse, interest payments are still rising.
As former Federal Reserve Chairman Paul Volcker advised members of
this body in March, during periods of recovery we should strive for a
surplus. In other words, we should act now. I do not suggest that a
surplus like that advocated by Chairman Volcker is realistic in the
immediate future. But we must begin to work towards that goal. We
should not defer hard budget choices until later in the business cycle,
when general economic conditions may impair our ability to act.
Mr. President, reducing government spending has been a priority
throughout my Senate career. In 1984, I launched an organization called
Americans for Generational Equity which sought to make clear how our
reckless spending habits devastates future generations. That
organization worked hard to identify and achieve the reforms necessary
to cut the budget without harming important programs.
I have also been a part of numerous efforts within this body to
attack the deficit. In the early 1980's, I sponsored along with Senator
Gorton the Durenberger-Gorton bill to balance the budget. Since then, I
also have supported strongly such measures as the 1985 Gramm-Rudman-
Hollings Act, the Kassebaum-Grassley-Baucus proposal, the Boschwitz
spending freeze, the 1990 budget summit reforms, the 1992 entitlement
freeze, the 1993-94 Kerrey-Brown and Dole deficit reduction proposals,
and, most recently, the balanced budget amendment.
I supported those proposals because I believe that savings can be
achieved without harming our national security or compromising
important Presidential initiatives such as health care reform. But I do
not pretend that we can achieve those savings by deleting that much
maligned but unfortunately mythical line item in the budget titled
``waste and abuse.''
Mr. President, let me be clear. Meaningful savings cannot be achieved
if we are unwilling to take a hard look at entitlements. Simply put,
that's where the money is. In 1993, the Federal Government spent nearly
twice as much on payments for individuals as on everything else
combined except for interest, which--as much as we'd like to--we cannot
cut. I am deeply disappointed that neither the President's budget
proposal nor the Budget Act approved by the conferees touch
entitlements.
Moreover, Mr. President, we cannot achieve meaningful deficit
reduction unless we act to limit inequitable tax breaks. For example,
the current tax treatment of employment-based health benefits will cost
the Federal treasury about $90 billion in 1995. According to CBO, this
Government subsidy is worth an average of $1,910 to families earning
between $100,000 and $200,000 a year, but only $450 to families earning
one-tenth as much. Many working families do not benefit at all. That
isn't fair, and it needs to be fixed.
Mr. President, as I prepare to leave this body, I suppose I am
particularly mindful of the legacy we are leaving our kids. And I can't
help but conclude we have done them a terrible disservice by burdening
them with such a staggering amount of debt.
I've been here long enough to know that you make few friends by
fighting for deficit reduction. But the longer we wait, the tougher the
task will be, and the greater the burden our children and grandchildren
will be forced to bear.
Mr. President, I believe we must achieve greater deficit reduction--
this year. Therefore, I am compelled to vote against the fiscal year
1995 budget resolution conference report.
Mr. ROTH. Mr. President, today the Senate is considering the
conference report on the fiscal year 1995 budget resolution. This
budget is an automatic pilot budget--and the second installment of the
massive tax increases and spending plan narrowly adopted by the
Congress last summer.
In the Senate-passed budget, a $26 billion spending cut was adopted.
This was a small step in the right direction. But, alas, after the
conference with the House, only a $13 billion cut survived. That boils
down to a half a billion dollar cut in the 1995 budget. Not much,
considering the base from which we start. In a $1.5 trillion-plus
Federal budget only $500 million will be cut. This is a far cry from
President Clinton's campaign promises of slashing the deficit in half.
I strongly disagree with President Clinton's decision not to fight
for any deficit reduction this year. A deficit of over $175 billion in
1995, and over $200 billion in 1999 in the Democrats' budget is
woefully unacceptable to the American public and, therefore,
unacceptable to me.
Many grassroots citizen groups such as the Concord Coalition, United
We Stand America, Citizens Against Government Waste, and many others
have tried to impress upon the Congress and the President that action
is needed to reduce the deficit through meaningful and lasting spending
reductions. American families are forced to balance their budgets every
day and so should the Federal Government. Just a few months ago,
ignoring the will of the American people, both the Senate and House of
Representatives rejected the balanced budget constitutional
amendment at the President's urging.
I was pleased to see that the budget conferees accepted the Senate's
insistence upon funding for the Edward Byrne Anti-Crime Grant Program.
I cannot understand, however, the President's and the Democrats'
decision not to provide full funding for either the Senate- or House-
passed crime bills in the budget this year. Crime is one of the biggest
problems facing our Nation, and this budget does not adequately address
these problems squarely.
It is my hope, however, that the crime bill will eventually be fully
funded though salary savings realized by downsizing the Federal
bureaucracy by 272,000 positions, a funding source that this body
overwhelmingly voted for on several occasions.
The crime bill is not the only unfunded program in the budget
resolution. Welfare reform, entitlement reform, health care reform, and
Governmentwide reform or ``reinvention'' are all missing. While these
items are touted as priorities in our Nation, this budget blueprint is
silent on how to finance these priorities.
This spring, the Republicans in both chambers offered a comprehensive
budget including funding for the items just mentioned as well as a
middle class tax cut. The Republican alternative would have reduced the
deficit by $318 billion over the next 5 years. It offered incentives
that America needs right now to save and invest for the future. For
example, it offered a $500 tax credit for dependent children, and
expanded the use of individual retirement accounts, a proposal I
introduced with Senator Lloyd Bentsen back in 1991.
In February, Senator Dole, myself, and 16 other Republican Senators
introduced the Government Downsizing, Performance and Accountability
Act of 1994. The plan contains 50 commonsense recommendations to save
the taxpayers money, streamline the Federal bureaucracy, and improve
the legislative budget process.
It reduced nondefense discretionary spending by $55 billion over the
next 5 years by incorporating several Grace Commission recommendations,
as well as improving Government accountability and performance. The
plan also contains a Presidential line-item veto, a requirement that
new programs may be authorized for a maximum of 5 years, and a super-
majority requirement for all emergency spending legislation.
Budget process reform is clearly needed. For many years I have
sponsored a bill to implement a 2-year budget cycle. Currently,
congressional reform efforts have included this budget reform in their
proposals. It is my hope that a biennial budget process reform can be
adopted this year.
Deficit reduction, however necessary, will not dominate the political
and policy discussions in Washington this summer. As we all know,
budgets drive policy decisions. Given the American public's demands for
further fiscal restraint, tax-and-spend policies are no longer
acceptable to those for whom we serve. It is a daunting task to tackle
the Federal budget. Spending cuts are difficult to swallow; however, I
stand ready and willing to make the hard choices for the benefit of our
children and grandchildren.
Mr. GORTON. Mr. President, the conference report on the budget
continues the fiction begun by the 1993 budget agreement passed on a
tie vote last summer. That fiction, perpetrated by this budget, is that
the deficit problem was fixed last summer and Congress and the
President are off the hook. It is because the Congress and the
President refuse to deal with the deficits that loom on the horizon
that I will vote against the conference report on the budget. I will
briefly review what I see as the problem we face with respect to this
conference report and the looming deficits.
First, and most disappointingly, the conference report contains only
half the modest Exon-Grassley cuts included in the Senate-passed
version of the budget. In effect, the refusal to make these minuscule
cuts assert that the Federal Government spends money so efficiently and
effectively that it cannot afford reducing expenditures by three tenths
of 1 percent over the next 5 years.
Clearly, that is a ridiculous assertion given the fact that the
economy is growing at such a pace as to reignite fears of inflation. If
the economy is at the point of overheating, reducing Federal spending
would certainly help both the budget deficit and the inflation outlook.
In other words, now is the time to cut spending even more than is
embodied in the Exon-Grassley amendment. Ducking this issue now while
the economy is growing will only make it harder in the future.
Second, this budget does nothing to stem the continued growth in
entitlement spending despite the realization by everyone that
entitlement spending must be limited to get our fiscal house in order.
I become more alarmed about the exclusion of entitlement reform given
the rhetoric of last year's debate on the issue of entitlement reform.
Then, when entitlement spending was raised as an issue the opponents
said now was not the time. The opponents pleaded that health care
reform would bring huge savings in entitlement programs.
Well, by CBO's estimates the President's health care reform plan will
not reduce entitlement spending. In fact, the CBO estimates the Clinton
Plan to increase the budget deficit by almost $100 billion--if
everything goes perfectly. The problem is that no health care reform
plan I know of will lead to overall lower spending on entitlements. The
conference report only further delays the day when we deal with
entitlement spending. Delaying entitlement reform will not solve the
budget deficit.
Third, the Democrats are making a big deal of discretionary spending
restraint embodied in this budget. But anyone familiar with these
numbers realizes that the spending restraint comes totally out of the
defense side of discretionary. Domestic discretionary spending actually
increases over the next 5 years. I oppose this conference report
because it does not really provide domestic discretionary spending
restraint. If defense spending can decline in real and nominal terms
there is no reason why domestic discretionary spending can not also be
so restrained.
I cannot support a budget that deals in the fiction that the budget
deficit is no longer a problem. I will not support a conference report
that implies that Federal spending is so effectively and efficiently
carried out that a three tenths of 1 percent reduction in Federal
spending is impossible. I will not support a conference report that
continues to put off the tough choices when it comes to mandatory
spending. And, I will not support continuing increases in domestic
discretionary spending while defense spending is declining in real as
well as nominal terms. This conference report fails to do what I
believe is important and therefore I will oppose this report.
Finally, although I oppose this conference report I must end on a
positive note. The chairman of the Budget Committee, Senator Sasser,
should be commended for successfully defending the Senate's position
with respect to the Edward Byrne Formula Grant Program. The program
funds badly needed multijurisdictional taskforces fighting crime and
drugs throughout this country. The chairman did wonderful work in
maintaining full funding for the program. I appreciate his hard work on
this program.
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