[Congressional Record Volume 140, Number 107 (Friday, August 5, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 5, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
      THE 1-YEAR ANNIVERSARY OF CLINTON DEFICIT REDUCTION PACKAGE

  Mr. DOMENICI. Mr. President, I am going to try my very best to take 
my share of this responsibility on this so-called anniversary of the 
deficit reduction and the American economic recovery. I am going to try 
to be brief, but I wish to make a couple of points.
  First, fellow Senators and Americans, if there has been a significant 
attack on deficit spending in the United States--and I do not believe 
there has been, but if there has been, maybe I just say, hold on to 
your hats because right around the corner is the largest new spending 
program in the history of America. The majority leader is trying 
diligently to get 51 votes in the Senate, to send something over to the 
House so that in the waning days of this session House and Senate 
conferees back in the back room can write a health care bill. The 
health care program that is being offered by Senator Mitchell, the 
majority leader, will contain more new entitlement spending all by 
itself than we have ever passed in the history of this country.
  Now, that is new spending. And there is a claim by leading Democrats 
today that we are celebrating a great deficit reduction package and the 
economic consequences of it 1 year after its passage.
  Now, I just want to talk about three or four things. You see a chart 
behind me. That line down at the bottom says, ``The promise.'' The 
promise was included in the first budget of the new President of the 
United States. It was not a budget but it was a vision statement. This 
was ``the promise,'' that by the year 2000 we would really have this 
deficit under control. You see this here, Mr. President--right here? 
``The promise.'' This line was the way we were going to get deficits 
under control when we finally controlled health care spending. That was 
what we were going to do, get to that promise.
  But now you see what is happening. While there was some bragging 
about a deficit reduction package that included spending cuts--and 
shortly I will tell you that thus far there are no spending cuts--that 
might come as a surprise. Let us look and see what was promised when we 
were going to get to the ``promised land.''
  If you will just take a quick look, you see the green line here. This 
green line has under it all of this orange, and that is the amount of 
money that we were going to save when we got health care under control. 
That was the amount of money when we got health care under control we 
were going to save.
  What has happened? Not only is that savings out the window with the 
``promised land'' of deficit reduction, but the new package of health 
care reform says we are going to gobble up all that savings, spend it, 
and spend some more. And the yellow is the new spending.
  So that all the promise of getting the deficit under control by the 
year 2000 is out the window. As a matter of fact, the deficit will 
start growing again in 3 years, and will start up slowly. And by the 
year 2000, we will be back up on a steep line of growth such that the 
American people, who are being encouraged today to be happy because we 
got the deficit under control, will have staring them in the face soon 
a new and larger deficit than the one we started with, unless--unless--
we decide to cut more from defense and the appropriated accounts of our 
country, or raise taxes.
  Frankly, I do not think we are going to cut defense any more.
  I see occupying the Chair in the capacity of the Vice President, one 
of the experts of the Senate. He is the head of a commission that is 
supposed to get entitlements under control.
  Let me tell the American people. If a health care plan is passed that 
is anything like the Mitchell plan or the President's original plan, we 
can do two things: We can take the pensions of the United States and 
decide where we are going to change them and save enough money to get 
the deficit under control--that is Social Security; pensions--or we can 
raise more taxes.
  So as I see it, instead of hitting the airwaves of America with the 
notion that we ought to be proud that we got the deficit under control, 
I submit this is a day to remind everyone that we ought to be careful 
about the so-called ``reform health care program,'' or we will put this 
Nation in the position where we will be about like Europe.
  Mr. President, Europe has the disease as far its economy is 
concerned. It has a nickname. It is called Euro-sclerosis. Euro-
sclerosis is a disease which means no new jobs in the private sector, 
no significant new growth, significantly higher interest rates than 
America, and higher unemployment. That is Euro-sclerosis.
  They are trying go to get around it by cutting government taxes, 
cutting burdens on business. And we are about to adopt the largest 
burden on American business and the American people for a new health 
care plan than we have ever put on this American economy.
  The second point is a very interesting one. The President and leading 
Democrats today are telling the American people that the President's 
so-called deficit reduction plan is what caused the American economy to 
start moving again. Mr. President, let me tell the Senate and those who 
are interested and listening, what most economists say caused the 
American economy to start to grow again and to add jobs and add some 
stability to our growth.
  Most economists today say that a phenomenon has occurred that has not 
occurred in any of the previous recoveries. That phenomenon is huge 
productivity increases. Mr. President, most economists say this 
recovery is a 90 percent productivity economy, growth economy.
  Anybody that knows anything about productivity growth knows that you 
do not get that in 4 months, you do not get that in 6 months, and you 
do not get that in 1 year. It is over a sustained period of time. And 
the American economy has been adjusting for 10 years to getting 
increased services and goods and industrial production out of a unit of 
time spent by an American worker. That is increased productivity. It is 
growing rapidly, has little or anything to do with the last year. And 
that is why America today has some sustained economic growth.
  The other reason is because a good combination of monetary policy 
from our Federal Reserve Board has brought interest rates down. But I 
might suggest that anybody that thinks the President's economic plan, 
principally taxes to this point, has caused this to happen, that is 
interest rates to have come down, just look at this chart: In 1990, the 
short-term interest rates and the long-term interest rates both start 
down. My recollection is that in 1992 we had an election. In 1993, one 
year ago, we passed the deficit reduction package.
  I ask, if lower interest rates is what we are proud of, when did they 
start? When did they end, and start going up? They started well before 
George Bush left office. Here they are coming down precipitously. In 
1992 they are at a low. In 1993, they are low. And here they are going 
back up, both short- and long-term.
  Mr. President, I want to close here today by suggesting that this 
economic recovery plan that the President boasts of results from 
factors beyond his control. I guess if I were on the other side of the 
aisle, I would have to find something to really brag about. And I think 
if I were part of the Administration I would probably say similar 
things, since there are more jobs and since the economy seems to be 
growing, to give us credit for it or give this plan credit for it.
  But I want to suggest the economic recovery situation in the United 
States is not the result of 1 year ago. The adoption of a so-called 
economic recovery plan that to this point in time is almost all taxes, 
with some slight little cut in defense spending--it is just not 
possible that an economic plan in this short a time, even if it was 
going to work, would cause the American economy to grow and prosper 
again.
  So before we get carried away, let us make sure we understand what is 
really happening. It is the American small and large businesses and 
American workers who, for a long period of time, have decided that they 
are going to get more for each dollar spent and more production for 
each hour worked, and that is causing America to grow again.
  So I am pleased to join my Republican leader today. We need to get 
more charts. I am sure the other side and the President and the White 
House will do much better than we have with charts today.
  But just so no one will think that it is automatic, that everybody 
ought to believe this message, that it was 1 year ago when we adopted a 
deficit reduction package, principally new taxes, at least to this 
point in this recovery, that that is what made this American economy 
prosper again. We have to make sure that does not become part of the 
lore in America. It just does not follow like day from night.
  I thank the chairman of the Appropriations Subcommittee for yielding.
  I yield the floor.
  Mr. DOMENICI. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. STEVENS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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