[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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