[Congressional Record Volume 141, Number 20 (Wednesday, February 1, 1995)]
[Senate]
[Pages S1880-S1919]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
resume consideration of House Joint Resolution 1, which the clerk will 
report.
  The assistant legislative clerk read as follows:

       A joint resolution (H.J. Res. 1) proposing a balanced 
     budget amendment to the Constitution of the United States.

  The Senate resumed consideration of the joint resolution.
  Mr. HATCH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. HATCH. Mr. President, we are now on our third day on the balanced 
budget constitutional amendment. I think the debate has been 
interesting. There have been a lot of points made on both sides of the 
floor, and I can see there are people anguishing over which way to go 
on this amendment.
  I suggest that the American people are about fed up with the 
profligacy of Congress. They see us just spending this country right 
into bankruptcy. They see no real curtailment. They have seen a series 
of legislative approaches that were supposed to solve this problem, all 
of which bite the dust the minute 51 percent of the Senate and the 
House vote otherwise.
  It is clear that for all the good intentions that we have had through 
the Harry Byrd amendment, the Gramm-Rudman-Hollings legislation, and 
the current approach toward budgeting, nothing has worked because there 
is no mechanism in the Constitution that requires us to make priority 
choices among competing programs.
  It is really difficult because I see all over Capitol Hill today 
people from all over the country, from every State, arguing for their 
own special interest. That is the way the system should work, because 
the people ought to have a right to come see their elected 
representatives and argue for their own special interests.
  But some mechanism must be supplied to enable us to say to some of 
them: ``Your interest is worthy, but we don't have the money.'' And it 
is not as worthy as a whole raft of other interests that we have to 
take care of, among which would be Social Security, Medicaid, Medicare, 
veterans pensions, and the whole variety of entitlement programs that 
we think are so worthy that they automatically escalate every year, 
regardless of what we in Congress do.
  I think anybody sitting here ought to stop and think why this 
balanced budget amendment is a wise and good thing. And the number one 
reason I would say that it is is because it would force us to have to 
look at all programs, it would force us to be able to choose and make 
priority choices among programs on order of merit. It would not force 
us to go to a balanced budget, but it certainly gears us toward going 
to a balanced budget and provides different incentives that will lead 
us to a balanced budget.
  I have had a number of senior citizens come to me in my home State of 
Utah and as I have traveled all over the country, and they say: 
``Senator Hatch, we hope you'll protect Social Security.'' And they 
always start that way and they know that I will. And I assure them that 
virtually every Member of Congress will. But invariably, these seniors 
will say:
  ``But we know that in order for us to have protection of our ability 
to live, we have to consider our youth of today, we have to consider 
our budget problems, we have to consider what is right for America, we 
have to consider how we live within our means in our country or what we 
get will not be worth very much, and we will not be able to live on 
Social Security no matter how much it is.
  ``So, Senator, please as you try to protect Social Security, also 
give us protection against the Federal Government spending us into 
bankruptcy, spending beyond our means to pay for things we cannot 
afford.''
  Senior citizens are not dumb. They know what is going on. Most of 
them have lived through this life, most of them have had to pay their 
bills all their lives. Most of them understand what it is like, and 
most of them are worried that sooner or later there is going to come a 
reckoning unless we get our fiscal house in order.
  On the other side of that coin, I have had a lot of young people come 
to me, young college students, young people who are starting to think 
about what their futures are.
  Invariably, they say, ``Will our future be as good as yours was when 
you were in college, Senator Hatch?'' And for the first time in the 
history of this country a lot of parents are starting to become 
depressed because they realize we can no longer say that their children 
will have as much opportunity to progress and have better lives than 
they had, like our parents were able to say to us.
  These young people are not stupid. They know, taking Social Security, 
when it came into existence back in the forties, that there were about 
46 workers for every person on Social Security. They are not stupid. 
They know that is now down to just a little more than three workers for 
every person on Social Security, and that our senior citizens are 
living longer and growing in number. They know that we are going to 
that ratio reduced to probably two persons working for everybody on 
Social Security.
  Yet, what kind of a nation would we be if we did not take care of 
those who have worked so hard to build the Nation and who now cannot 
work, who are senior and who need to be cared for and helped, and who 
deserve to be helped because of their paying into the system all their 
lives?
  It does not escape these young people that their future is going to 
be very limited because the cost of Social Security, of course, with 
COLA's, keeps going up, and the work base keeps going down. They also 
know that complicating it all is a profligate Federal Government, a 
profligate Congress. Year after year, Congress after Congress, has no 
real incentives to get spending under control.
  I know Members of this body who are liberal, with whom I have served 
for the whole 19 years I have been here, who in that whole 19 years 
have never asked the question: Where are the revenues going to come 
from to pay for these programs? They never once, never once have 
considered that an important question. They continue to ignore that 
unless we have a balanced budget amendment, which would help us to put 
our fiscal house in order, help to solidify the value of the dollar, 
and help the future of our children and our young men and women, we are 
going to have to face our fiscal irresponsibility.
  I know some here who have never once said, ``Where are we going to 
get the funds?'' Would it not be better to support this amendment, 
rather than their favorite program, which is not as important, rather 
than to go into bankruptcy or to go toward a system where we ultimately 
monetize the debt, where the dollar becomes worthless, where inflation 
gallops, and where our senior citizens really are left high and dry, as 
well as our youth and their future?
  This last election was about these issues. I may not have articulated 
them very well, but I have tried to show that our senior citizens are 
not stupid. They understand that we have to, sooner or later, live 
within our means or their Social Security and their retirements will 
not be worth very much.
  Our young people are not dumb either. They know there is a 
diminishing work force and the whole burden of taking care of our 
senior citizens is going to be on their shoulders, and they want to do 
it. But will they want to in the year 2014 and 2020 if we do not get 
spending under control, and we keep loading them up with all kinds of 
other loads like we do?
  Why, the committee I used to chair, the Labor and Human Resources 
Committee, has over 2,000 Federal programs, some of them very 
duplicative. There are 154 job training programs that this wonderful 
series of Congresses has enacted over the years to show that they are 
really empathetic and considerate of those who need job training. Many 
of those programs are duplicative, many of them overlap. We ought to 
have one major program for job training, and it ought to work.
   [[Page S1881]] What about welfare? It has been estimated by some 
that by the time the billions and billions of dollars in welfare are 
laundered through the Federal bureaucracy, those on welfare only get 
about 28 cents out of every dollar. We eat it all up right here in 
Washington, DC.
  Is it not time to face this? This is what this last election was all 
about. It was 85 percent of the American people saying: We have had it 
up to here with Congress. We think it is time for Congress to start 
living within its means, and we are for a balanced budget amendment 
that will help Congress to live within its means.
  We are not asking for drastic measures here. We are saying that the 
budget must be balanced over a period of 7 years, to the year 2002, 
which everybody here knows could be done if we had the will to do it.
  It is nothing inordinate or difficult to do if we have some 
incentives to do it. But until we do, I guarantee you that those who 
never ask where the moneys are going to come from to pay for these 
excessive pieces of legislation, and they are in both parties, are 
going to continue to spend just the way they have always spent. I think 
they are more in one party than in the other, but nevertheless there 
are some in both parties.
  Mr. President, the greatest economic threat this country faces is 
out-of-control Federal spending. The single most useful thing this 
Congress can do is to enact a constitutional requirement that Federal 
spending not exceed Federal revenues each year, starting in the year 
2002. The only exceptions would be when a declaration of war is in 
effect--we all understand that--when the United States is engaged in 
military conflict causing an imminent threat to national security, or 
in those instances where three-fifths of the whole number of each House 
of Congress votes for a specific deficit but will have to vote, which 
is going to be a very important aspect of this amendment.
  Interest on the national debt is currently about $300 billion a year, 
amounting to approximately 20 percent of the total Federal budget. 
These deficits directly affect every American.
  For example, every dollar we must spend on interest payments on the 
national debt is one less dollar available to tax relief for 
hardworking citizens in Utah, Illinois, New York, California, and all 
across this country.
  As another example, continuous large Federal deficits force the 
Federal Government to borrow huge sums of money, keeping interest rates 
high and driving them even higher. Hard-working Americans looking to 
finance their first home or to buy a more suitable home face higher 
mortgage rates. As a result, fewer homes are sold. Home builders and 
their suppliers lose business and have to reduce their work forces. 
Businesses associated with the housing industry, from realtors to title 
researchers, are all similarly affected. These are not abstract matters 
we are talking about.
  Opponents of the amendment ask about the consequences of its passage. 
We are addressing those questions. I do not see how anybody could not 
understand that you cannot just continue to spend more than you take 
in. But these same opponents wish to ignore the consequences of failing 
to pass the amendment. The American people spoke in this last election, 
but the people here in the Senate, some of them, have not heard them 
yet. I think they need to speak more in each of these States.
  What are some of the other ways huge Federal deficits affect our 
constituents? The cost of consumer credit goes up. That includes the 
cost of everything from automobiles, washing machines, televisions, to 
even much smaller goods paid for with credit. Hard-working Americans 
work more but can afford less. And the slowdown in consumer spending 
will result in work force reductions in those consumer industries. We 
just cannot go on like this.
  The unwritten rule in this country until just a few decades ago was 
for the Federal budget to be balanced except in wartime. That was the 
unwritten rule. We abided by it for a century and a half. For much of 
our history, the legislative process reflected the norm of a balanced 
budget. But as the role and size of the Federal Government expanded, 
Congress became unable to control spending. New spending programs have 
been added over the years, many of them starting small but always 
growing larger, and even larger.
  Today, the problem is this: Every single spending program, no matter 
how small, has a divine set of beneficiaries. The beneficiaries of each 
spending program are able to make their voices heard whenever they 
sense a chance that their program may be cut or eliminated.
 Even Federal programs of a few hundred million dollars can generate 
intense lobbying by the program beneficiary. This occurs for dozens 
upon dozens, even hundreds of Federal programs.

  Taxpayers are rarely heard about in the spending on any given single 
program. They do not realize this is all going on. The cost to an 
individual taxpayer of even large Federal programs is diffused among 
the large number of all taxpayers. As a result, the interest of the 
taxpayer in cutting or eliminating a particular program is rarely heard 
as loudly or as often as that of the program's beneficiaries. The 
taxpayers are at an enormous disadvantage, the way things are presently 
set up, without this mechanism in the Constitution.
  This spending bias is the reason we need a structural change in how 
Congress does business, a change we must make to our fundamental 
charter in order for it to be effective. Only a constitutional balanced 
budget provision will impose fiscal discipline on Congress. Only a 
balanced budget amendment to the Constitution will force spending 
programs to compete against each other and hold down overall Federal 
spending.
  The other body for the first time in history has acted in a 
bipartisan manner. Our efforts here in the Senate, those who support 
this amendment, are bipartisan.
  I particularly appreciate the great leadership of our distinguished 
colleague from Illinois and his willingness to stand up on this issue, 
his articulation of why it is so important. I look forward to listening 
to him this morning as soon as I have completed these few remarks I 
have. We are working in a bipartisan way, and there are others. Senator 
Heflin, Senator DeConcini has worked very hard, Senator Bryan, a whole 
raft of Democrats have worked very hard on this amendment. We have many 
over here, from Senator Thurmond to Senator Craig, right on down the 
line to every one of our new Senators on this side.
  I think the Senate dare not act on the basis of politics as usual. We 
just cannot do that this time. I do not think we dare just favor the 
status quo, just continue spending with no mechanism to stop it, no 
mechanism to deter it, no mechanism to encourage us to do what is 
right. I urge my colleagues to vote for this change, the kind of sea 
change America voted for in this last election.
  I hope all our American citizens out there are listening to this 
debate because they need to get with their Senators. They need to get 
with their Senators and make sure they are going to support this 
balanced budget amendment. Nothing short of a public outcry, a public 
effort--phone calls, letters, meeting them in their offices, getting 
them at home, letting them know how you feel--is going to make the 
difference here. We think that is what has made the difference thus 
far. That is why we are here. That is why the House of Representatives 
has voted, for the first time in history, 300 to 132 for this 
amendment. That is why we brought up the House resolution which is 
identical, except for one comma, to our resolution that Senator Simon 
and I have brought to this body.
  I hope we will all vote for the kind of change the American people 
are calling for. I hope we will give our young people a future like we 
had. I hope we will give our senior citizens the protections they have 
earned and that they need. Let us quit demagoging this issue of Social 
Security and realize if we exempt Social Security we will open up such 
a loophole that they will change the definition of Social Security, and 
the Social Security trust funds will be raided day in and day out by 
these big spenders in Congress because it will be the only way they can 
continue business as usual, the status quo, the spending practices that 
have just about wrecked this country.
   [[Page S1882]] Mr. President, I really look forward to hearing my 
dear colleague from Illinois, who has been a great leader in this 
battle. So I yield the floor.
  The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Illinois.
  Mr. SIMON. Mr. President, while I have been engaged in some dialog on 
the floor on the balanced budget amendment, I have not spoken. I want 
to take this opportunity just to spell out clearly why we need this 
change in the Constitution.
  I thank Senator Hatch for his leadership, and also others on the 
other side, Senator Craig, who has been a real Rock of Gibraltar on 
this. Also Senator Thurmond through the years has been providing 
leadership.
  On our side I want to pay tribute to a former Senator, Dennis 
DeConcini, who was very helpful, Senator Heflin, Senator Bryan, Senator 
Graham, Senator Robb, Senator Kohl--I could mention others. I am 
grateful to them all.
  Leading the opposition is our colleague, Senator Robert Byrd. I want 
to make clear that, while he and I differ strongly on this issue, there 
is no lack of respect on my part for Senator Byrd. He is one of the 
most valuable Members of this Senate today, one of the most valuable 
Members in the history of the Senate. I agree with him on this, that 
this is an issue beyond politics. What we have to look to is the future 
of our country. Forget the polls, forget party affiliation, forget 
everything else. How can we best serve the country? I believe strongly 
we can best serve the country by passing this constitutional amendment.
  What is our problem? We have both an economic problem and a political 
problem. The economic problem, first of all, is very clear as you look 
at the history of nations. If we do not get a hold of this--and if 
everyone forgets everything else I say just remember this--the history 
of nations is you pile up debt and if there is no restraint then you do 
what the economists call monetize the debt. You start the printing 
presses rolling and you go from there. And that is where we are headed. 
As you look into the next century and you see the percentage of deficit 
versus GDP, that is unquestionably where we are headed. We can take a 
gamble that we can be the first nation in history not to follow that 
path, but it is a huge gamble on the future of our country.
  Listen to Adam Smith in his ``Wealth of Nations,'' published in 1776, 
the year of our Declaration of Independence. He writes:

       When national debts have once been accumulated to a certain 
     degree, there is scarce, I believe, a single instance of 
     their having been fairly and completely paid. The liberation 
     of the public revenue * * * has always been brought about by 
     a bankruptcy * * *. The raising of the denomination of the 
     coin has been the most usual expedient by which a real public 
     bankruptcy has been disguised * * *. The creditors of the 
     public are really defrauded. Almost all States * * * ancient 
     as well as modern, when reduced to this necessity have * * * 
     played this very juggling trick * * *. The Romans at the end 
     of the First Punic War reduced [the value of] the coin by 
     which they computed the value of all other coins * * *. The 
     [Roman] Republic was in this manner enabled to pay the great 
     debts which it had contracted with the sixth part of what it 
     really owed.

  In other words, your dollar, if I may use a current analogy, $1 
became worth one-sixth of what it was worth. What does that do to the 
Social Security trust fund? It just devastates it. What does it do to 
family savings? Devastates them. What does it do to the economy of the 
country? Devastates it. What does it do politically? It causes chaos. 
We do not know where we are headed on this.
  For those who say that just is not going to happen, do not take my 
word for it. Take a look at what the OMB put forward last year as part 
of the budget. This table is taken directly from there: ``Lifetime Net 
Tax Rates Under Alternative Policies.''
  I was born in 1928, so you go down here to this line--to 1930--and 
you see that before we passed the August 1993 budget reconciliation 
bill, I would have spent in my lifetime 30.5 percent on taxes. It is 
not changed much by the reconciliation bill, 30.6 percent; with health 
care reform I would spend 30.9 percent, or a lifetime of roughly 30.9 
percent with or without health care reform.
  But then look down here, to the line for ``future generations.'' The 
grandchildren of Robert Bennett and John Ashcroft and Paul Simon and 
the people who work here: future generations.
  What does it say about the budget reconciliation--spending 93.7 
percent of lifetime earnings in taxes? After budget reconciliation, 82 
percent of lifetime earnings, with health care reform, would have gone 
to 66 percent, or without health care reform, because it did not pass, 
75 percent. That is just not going to happen. No one is going to spend 
75 percent of their lifetime earnings in taxation. What you do is you 
start the printing presses rolling.
  One of the great fights early in our history was taxation without 
representation. Talk about future generations and taxation without 
representation--what we are doing is living on a huge credit card 
saying send the bill to our children and grandchildren, send the bill 
to the pages who are here, and send the bill to my three grandchildren, 
the oldest of whom turned 5 just the other day.
  Thomas Jefferson was the first person to advocate a balanced budget 
amendment to the Constitution. He was not here in the United States 
when the Constitution was written. He came back. And, when he came 
back, he said, ``If I could add one amendment to the Constitution it 
would be to prohibit the Federal Government from borrowing money.'' He 
had an absolute prohibition. We have some flexibility.
  We say with 60 percent growth you can have a deficit. But the history 
of nations is clear. There is a book written by a man named Michael 
Veseth, published by Oxford University Press, entitled ``Mountains of 
Debt.'' It goes into the history of modern city states, and starting in 
the early 15th century. He comments on Florence and other city nations 
at that point. He says:

       The fiscal imperatives caused by huge debt drain away the 
     capital that might have helped Florence adjust to the new 
     world economy and growth in the future. By 1494, the future 
     pattern of the Florentine economy was set, and Florence's 
     years of economic power and influence were over.

  Again, we can take a chance that we are not going to follow the path 
of Florence, of all the other nations since but we are taking a huge 
chance.
  This is what is happening in terms of our expenditures in inflation-
adjusted percentages. What has happened between fiscal year 1980 to 
fiscal year 1994 is that education--we all make speeches how important 
education is to our future, and the Presiding Officer and I were 
talking about that in committee the other day--education is down 13 
percent; transportation is down 2 percent; get over here to defense, a 
lot of people think that is the biggest growth item, 18 percent growth; 
entitlements have grown 50 percent largely because of growth in numbers 
and because of health care reform; get over here to gross interest, it 
has grown 120 percent.
  I do not care whether you are a conservative, liberal, Democrat, or 
Republican. The expanding increase in percentage of our tax dollar on 
interest just is not rational. We simply have to do better. What is 
happening to our country in terms of economic independence? If the 
Simon family gets too deeply into debt, you start losing your 
independence. The same is true for a nation. Right now we know, because 
we require public disclosure, that 17 percent of our debt, or a little 
better than $800 billion, is held by other countries, and people in 
other countries.
  In addition, many countries do not permit their citizens to hold 
foreign bonds. So there are some countries where the citizens use some 
other person as a front, and, in fact, hold U.S. bonds. So it is in 
excess of $800 billion. There was a time when people said about the 
deficit, ``We owe it to ourselves.'' That is no longer true.
  I can remember when I was in the House and I opposed an arms sale to 
Saudi Arabia. I can remember a Treasury Department official coming into 
my office saying, ``Please do not vote against this arms sale to Saudi 
Arabia because among other things Saudi Arabia holds a lot of our 
bonds.'' That is what is happening.
  Let me give you a bit of history that a lot of people have not paid 
attention to. In 1956--my colleague from Utah is old enough to remember 
1956 along with me--President Nasser of Egypt grabbed the Suez Canal, 
and just before the 1956 election when President Eisenhower was running 
for reelection, the British, the French, and Israelis ran through and 
seized the Suez Canal. 
[[Page S1883]]  They believed I think because they were our good 
friends and allies, and because it was just before the election, that 
the United States would not do anything. We did not send a soldier 
anywhere. Because the British were deeply in debt, we threatened to 
dump the pound sterling. And, without firing a shot, they withdrew. You 
lose your independence when you get too deeply into debt.
  Let me use a more practical illustration. Let us say Senator John 
Ashcroft was not a Member of the U.S. Senate but the president of the 
First National Bank in Carbondale, IL, and I went to him, and I said 
``Mr. President, I would like to borrow more money than I take in this 
year. Will you lend me some money?'' And he would do it for 1 year, and 
maybe 2 years, and maybe 3 years. But at some point a prudent banker is 
going to say I had better put my money somewhere else.
  We have gone to the international bankers for 26 years in a row 
saying we want to borrow some money because we want to spend more than 
we take in. And at some point prudent international bankers are going 
to start saying no. We do not know when that point is going to be 
reached.
  Lester Thurow, one of the Nation's great economists, says at some 
point international bankers are going to say no to us. He said the 
question is not if they are going to say no. The question is when they 
are going to say no.
  Alan Greenspan testifying the other day said:

       In today's more open and integrated international capital 
     markets, it is easier to finance investment abroad. But this 
     does not mean that we should view the pattern of U.S. 
     external deficits as sustainable in the long run. Looking 
     back at the history of the past century or more, the record 
     would suggest that nations ultimately must rely on their 
     domestic savings to support domestic investment.

  The New York Federal Reserve Bank did a study from 1978 to 1988 of 
what the deficit has, of what our lack of savings primarily caused by 
the deficit has cost us. They came to the conclusion that in that 10-
year period we lost 5 percent growth in GDP, in our gross domestic 
product; 1 percent, according to the Congressional Budget Office, is 
600,000 jobs.
  That means a loss of 3 million jobs. The General Accounting Office, 
in June 1992, issued a very significant report, in which it said if we 
do not get ahold of things, we are going to have a gradual decline in 
our quality of life and our standard of living. If, by the year 2001--
that was the year at which they put it, and this year we are talking 
about 2002 for balancing but it basically holds--if by the year 2001 we 
balance the budget, then by 2020 the average American will have a real 
growth in quality of life and income of 36 percent. Those are huge 
numbers.
  If we do not adopt this balanced budget amendment, we are headed 
toward continual decline. We did, to the credit of President Clinton 
and, I think, to the majority in this body and the other body, pass a 
budget reconciliation bill in August 1993 that has helped. Our 
colleague Senator Robert Kerrey described it as a modest improvement.
  I am going to switch charts here. It shows clearly that we have 
reduced the deficit here, but it is also clear we are headed way, way 
up, far beyond anything we have known in terms of deficits. Let me 
quote just a few sentences from the GAO, and these sentences are taken 
from different parts of the report. But, I am not, I believe, taking 
anything out of context and distorting what they say.

       Early action to reduce the deficit pays huge dividends in 
     lower interest costs. Must come from program cuts or revenue 
     increases. The more rapidly interest costs can be brought 
     down, the less sacrifice is required.

  They also say,

       To prevent stagnation in the living standards for future 
     workers, if deficits are not reduced, the Government will 
     have no fiscal flexibility to increase its investment in 
     better infrastructure, technology and skills. Large and 
     continued deficits are likely to seriously inhibit the growth 
     of the economy under current and present foreseeable economic 
     conditions. Inaction is not a sustainable policy.

  They predict ``a deteriorating American economy, if we do not get 
ahold of it. Action that is stronger and taken sooner yields greater 
long-range benefits.''
  They include a study of Japan, Australia, Germany, and the United 
Kingdom. They all had deficits, along with the United States, in 1981. 
All but Australia's was significantly greater than the United States 
deficit. By 1989, Japan, Australia, and Germany had surpluses. Great 
Britain had a deficit about 2 percent of ours, while ours had grown 
substantially.
  Eliminating the budget deficit and, if possible, achieving a budget 
surplus should be among the Nation's highest priorities. Because of the 
accumulating burden of interest and the mounting public debt, it is 
important to move rapidly.
  Take the report we got a few days ago from Data Resources, Inc., one 
of the two most prestigious econometric forecasters in the Nation. I 
will quote a little bit:

       A balanced budget would be a major boost to the long-term 
     growth of the U.S. economy.
       Over a 5-year period--

  We are talking really about a 7-year period now.

     this can be done with few problems. Today, when the Fed is 
     trying to slow the economy anyway, would be a good time to 
     start. Balancing the cuts would require real interest rates 
     to drop to their lowest levels since the 1970's.

  They predict a drop of 2.5 percent in the interest rates if we move 
on this. The Wharton School, the other prestigious group, predicts a 
drop of 4 percent. I do not know who is right, but even if it is half 
those figures, that is tremendous.
  Mr. BENNETT. Will the Senator yield for a comment?
  Mr. SIMON. I am pleased to yield to my colleague from Utah.
  Mr. BENNETT. Mr. President, I have taken to writing out a simple 
equation for my colleagues on this side, and I would be delighted to 
have the Senator adopt this on the other side. I take a piece of paper 
and I write simply ``1 percent equals $48 billion.'' People say, ``What 
does that mean?'' I say, ``When you have a national debt of $4.8 
trillion, 1 percent of $4.8 trillion is $48 billion. If we lower the 
cost of funding that $4.8 trillion debt by 1 percentage point in 
interest rates, we save $48 billion every year.''
  The Senator has just told us, Mr. President, that the balanced budget 
amendment could lower the interest rates by anywhere from 2 to 4 
percent. We are talking, if the Senator's information is correct, 
anywhere from $100 to $200 billion a year in savings on the interest 
rate alone. I think it should be stressed that the Senator has touched 
a point here that often gets overlooked. We talk about spending cuts, 
we talk about tax increases. Do you know how painful it will be in this 
body if we say we have to increase taxes $200 billion a year to balance 
the budget? Or that we have to cut spending $200 billion a year to 
balance the budget? If we can get somewhere between $100 to $200 
billion a year in savings simply on the interest rate alone, we will 
have done more than a good day's work.
  I thank the Senator for raising that issue of the impact of interest 
rates on the Federal economy.
  Mr. SIMON. I thank my colleague. Just to buttress what he has said, 
Data Resources, Inc., said this, and I will read the full paragraph:

       The positive elements of balancing the budget become clear 
     in the longer run. The elimination of the deficit would 
     relieve strain on financial markets, allowing lower interest 
     rates and bond yields. The lower interest rates and reduced 
     borrowing would cut interest costs for the federal 
     government; in fact, by 2002 half the savings [that we are 
     talking about we need] in our budget simulations come from 
     lower interest costs.

  And in addition, you would have, according to their projections, 2\1/
2\ million more people working. You are going to have more housing 
starts, more industrial investment, and everything else.
  Alan Greenspan, again, testifying the other day, said:

       But the influence of a fiscal imbalance of the federal 
     government on capital formation is broader than inflation. 
     The federal deficit drains off a large share of a regrettably 
     small pool of domestic private saving, thus contributing 
     further to the elevation of real rates of interest in this 
     economy.

  It is very clear. I have to acknowledge that Dr. Reischauer has 
testified against the balanced budget amendment. But in his testimony 
of June 17 of last year, I will quote a few things:

       [[Page S1884]] * * * we and other economists can see 
     clearly that national saving is too low, no matter how it is 
     measured, and that federal deficits contribute significantly 
     to low saving. It is equally clear to us that reducing 
     federal deficits offers the most reliable way to remove the 
     threat that low national saving poses to the growth of living 
     standards.
       * * * history has shown repeatedly that sustained growth in 
     living standards is achieved most reliably through national 
     saving.

  And then they have a chart on what is happening in national savings, 
our savings rate. From 1960 to 1969 we average an 8-percent savings 
rate; from 1970 to 1979, 7.1 percent; from 1980 to 1989, 3.8 percent, 
and going down. No other industrial country has anything like that in 
the way of savings rates that bad.

       The main cause of the decline in the national savings rate 
     is rampant Federal deficits after the 1970's * * * federal 
     deficits could be responsible for between one-half and two-
     thirds of the decline in the national savings rate, depending 
     on how they are measured, with a reduction of private saving 
     accounting for the rest of the decline.

  And so it goes on. Here is one other quote in here I wanted to give 
you:

       * * * deficits will soon rise again and keep national 
     saving too low to prevent further slowdown in the growth of 
     living standards.

  I will show you one other chart. This is what happened in the deficit 
over the years. We are down here, and you will see 2 years in a row 
where it is being reduced, and it comes back up here a little bit, and 
then it goes down off the chart. It is going to go beyond the floor. We 
are not going to put that one on the chart. That is what is happening 
in our country.
  Some of us had the chance to work with Roger Porter when he worked in 
the White House. He is now is a professor of government at Harvard.
  He says:

       The second reason for passing the balanced-budget amendment 
     is moral. Persistent public borrowing, largely for the 
     purpose of current consumption, is analogous to one 
     generation throwing a party and saddling the next generation 
     with the bill. We view such behavior on the part of 
     individuals with disdain and contempt. One is hard-pressed to 
     find moral justification for such behavior, whether 
     individual or collective.

  Roger Porter is correct.
  I heard about the Louisiana Purchase, that we cannot pass this 
because we could not have had the Louisiana Purchase. First of all, it 
is interesting that in Jefferson's first term, he cut the Federal debt 
in half.
  But the Louisiana Purchase was signed May 13, 1803, in Paris--and, 
frankly, they did not have any authorization to do anything like that--
and 2 months later, in July, we learned about it here in Washington, 
DC. It was for $15 million at 5 percent.
  Do you know what the main complaint of Secretary of the Treasury 
Albert Gallatin was at that point? He complained because the bonds were 
such that they could not start paying them back for 15 years. That was 
the big complaint.
  We say, you can have a deficit if you have a 60-percent vote. What 
was the vote in the Senate and in the House on the Louisiana Purchase? 
There were two votes in the Senate, 24 to 7 and 26 to 6, far more than 
the 60 percent. In the House, it was 90 to 25, far more than the 60 
percent.
  There is simply no justification for saying we could not have done 
something like the Louisiana Purchase.
  And then, my friends--and I feel strongly about this--we are having a 
squeeze on social programs. This fiscal year, we will spend $339 
billion on interest; next year, $372 billion.
  I might add--and I give credit to my colleague, Senator Fritz 
Hollings, for teaching me this--in only one area do we subtract the 
earnings of the Government. Administrations like to come up with net 
interest. It does not look so bad. The real figure is gross interest.
  It is like the Department of Justice subtracting all the money 
collected from their total bill, or the IRS doing that. That is just 
not the way we do it.
  But what does $339 billion mean? It means that this year we are 
spending 11 times as much on interest as education. Oh, we make great 
speeches about education, but we are not funding it like we should. In 
fiscal year 1949, we spent 9 percent of the Federal budget on 
education. This year, we will spend 2 percent of the Federal budget on 
education. Interest is squeezing out our response.
  I heard Senator Bennett Johnston yesterday say that in an exit poll, 
when people were asked what the Federal Government spends money on, 27 
percent thought the big item was foreign economic assistance. We will 
spend this year 22 times as much on interest as on foreign economic 
assistance. We will spend almost twice as much on interest as on all 
the poverty programs combined.
  Listen to what my House colleague, Congressman Joe Kennedy, who is 
one of the cosponsors of this legislation, said in the House. This is 
on January 25.

       Mr. Chairman, I rise today in strong support of the 
     balanced budget amendment. I have been for the balanced 
     budget amendment for the last several years, because I do not 
     believe that we can find the will to make the necessary cuts 
     to save the future generations of this country without the 
     support of the American people through a balanced budget.

  And then, he says, people come up to him and say:

       Listen, Joe, you are a liberal Democrat, how can you 
     possibly be for a balanced budget amendment? It is going to 
     cut the very programs that much of your family and others 
     have stood for generations.

  And here is Congressman Kennedy's response:

       I say to them that those very programs that stand up for 
     the working people and the poor and the senior citizens of 
     this country have suffered the worst cuts over the course of 
     the last 15 or 20 years in this country as a result of budget 
     deficits.
       Look at the housing budget. Cut by 77 percent over the 
     course of the last 15 years. Look at those who have press 
     conferences that say they want to protect fuel assistance for 
     the poor. Look at what has happened to the fuel assistance 
     program. Cut by 30 percent.

  And then he goes to some other things. This is his final line, and I 
hope we remember it:

       Do we see the bellies of our poorest children filled as a 
     result of interest payments on the national debt?

  Let me repeat that:

       Do we see the bellies of our poorest children filled as a 
     result of interest payments on the national debt?

  Well, the answer is obvious. Oh, we are talking about welfare reform, 
and I am not optimistic we are going to get genuine welfare reform. I 
hope I am wrong. But it is interesting, welfare payments from 1970 to 
1993, when you take in the inflation factor, have been reduced about 40 
percent. That is because of the squeeze of interest.
  Or take a look at New York City. New York City went bankrupt, or for 
all practical purposes bankrupt. They had to cut programs for poor 
people by as much as 47 percent. But New York City had the advantage of 
having an umbrella called the United States of America and we rescued 
New York City.
  There is no umbrella big enough to rescue the United States of 
America. If we go down the tube, the programs for poor people and the 
programs that we need in education and other things are just going to 
be devastated.
  It is also interesting that in New York City, they still have a mayor 
and city council, but for any significant expenditure they make, do you 
know who has to approve it? They have a little group of bankers and 
bond holders that has to approve anything like that. New York City has, 
to a great extent, lost its independence.
  We may be able to put something together if and when the time arrives 
that we have difficulties, but it is going to be at the cost of losing 
a great deal of our independence.
  Back maybe 2 years or so ago, I had an illustration of why it is 
important not only for the poor in our country but for the poor in 
other countries.
  The IMF had asked for a $12 billion guarantee from the United States. 
I received an invitation to have breakfast with the Director of the 
International Monetary Fund. I thought, well, he is reaching down 
pretty far on the Foreign Relations Committee to talk to someone, 
because I am about halfway down there.
  I went over and he did not want to talk about the guarantee. He 
wanted to talk about what we are doing fiscally. He said--and I do not 
know if he was speaking in a slight exaggeration or not, but Alan 
Greenspan tells me he was not--``If you had a choice of getting hold of 
your deficit or cutting out the entire foreign aid program''--and I 
certainly do not favor that--``If you 
[[Page S1885]]  had a choice, if you want to help the poor people in 
the world, get rid of your deficit. What you are doing is borrowing and 
sending up the costs of borrowing for the poor nations of the world.''
  In terms of social programs, it is very clear what we are doing. When 
we talk about spending $339 billion this year, we are talking about a 
massive redistribution of wealth. Who pays the $339 billion? By and 
large, Americans of limited means. Who collects the $339 billion? By 
and large, those who are more fortunate, who hold the T-bills, and 
increasingly those beyond our borders.
  We hear a lot about the trade deficit. This is very interesting. I 
asked the Congressional Research Service, what does a budget deficit 
have to do with the trade deficit? They came in, 37 to 55 percent of 
the trade deficit is caused by our budget deficit. What it does is 
escalates the value of the dollar. It makes it more profitable for 
industries to put their investment in other countries, and makes it 
more costly for them to put their investments here.
  It is very interesting that as our deficit has gone up and our 
interest payments have gone up, we have been losing relative to other 
countries. As late as 1986, the average American working in a 
manufacturing location was being paid more money than in any other 
country. Now there are 13 nations on the face of the Earth where the 
average manufacturing wage is greater than ours. That is, in large 
part, because of the budget deficit.
  We have a political problem, too. I hear the speeches on the floor, 
``We can do it without a balanced budget amendment. All it takes is 
political will.'' We heard those same speeches in 1986 when this failed 
by one vote to pass the U.S. Senate. In 1986, the deficit was $2 
trillion. Now, 9 years later, that deficit is $4.7 trillion. And we 
hear the same speeches. If we should show the poor judgment not to pass 
this, then 5 years from now, 10 years from now, we will hear the same 
speeches.
  What would have happened to our country if, in 1986, that had passed? 
We would have millions more people working; we would have lower 
interest rates; we would have more housing in our country; we would 
have more revenue for the Federal Government; we would have a higher 
standard of living for our people; and we would have a lower trade 
deficit. If we pass this, we will move in that direction.
  Then the argument is made, and I have heard it several times already, 
but what if there is a recession? Listening to what the National Bureau 
of Economic Research in Cambridge had to say, in a report made by two 
professors in the department of economics at the University of 
California:

       Discretionary fiscal policy does not appear to have had an 
     important role in generating recoveries. Fiscal responses to 
     economic downturns have generally not occurred until real 
     activity was approximately at its trough.

  Or listen to an article written by Bruce Bartlett in the Public 
Interest, and I ask unanimous consent that this full article be placed 
in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the Public Interest, summer 1993]

                    How Not To Stimulate the Economy

                          (By Bruce Bartlett)

       Shortly after taking office, President Clinton began 
     pushing for a stimulus program to end the country's 
     recession. But according to the National Bureau of Economic 
     Research, the recession was already over. It began in July 
     1990 and ended in March 1991. Since that time the U.S. 
     economy has expanded continuously. By the end of 1992, in 
     fact, the economy was growing at an annual rate of 4.7 
     percent--almost twice the postwar average.
       Fortunately, Congress was less persuaded of the need for 
     stimulus than Clinton. His proposal was withdrawn. But months 
     later the administration was still pushing for a scaled-down 
     stimulus bill, even as the unemployment rate continued to 
     decline.
       Probably the best defense of Clinton's action is that he 
     was simply doing what our last ten presidents all did. All 
     these presidents, regardless of party or ideology, ultimately 
     endorsed public works programs to combat recessions that were 
     already over.
       This article will review the results of this curious 
     phenomenon. Without exception, stimulus programs have failed 
     to moderate the recessions at which they were aimed, and have 
     often sowed the seeds of the next recession. These programs 
     have not been simply worthless, but harmful. It would have 
     been better to do nothing.


                          keynesian economics

       The idea of using public works to jump-start the economy is 
     not a new one. Since at least the late nineteenth century, 
     governments have attempted to use public works in a 
     countercyclical manner. But until John Maynard Keynes, 
     governments felt constrained by the need to keep their 
     budgets in balance. Since recessions invariably shrink tax 
     revenues, few governments could afford to increase spending 
     on public works as a countercyclical measure. Keynes, by 
     preaching the efficacy of deficit spending, relieved 
     governments of this constraint.
       Keynes also freed governments of the need to fund public 
     works projects that were useful. In The General Theory, he 
     wrote that pyramid-building, earthquakes, and even wars ``may 
     serve to increase wealth.'' He suggested that people be paid 
     to dig holes in the ground, and even proposed burying bank 
     notes in mine shafts to encourage the digging.
       Although it is widely believed that the public works 
     projects of the New Deal played a major role in ending--or at 
     least mitigating--the Great Depression, such programs 
     actually played a very limited role. It was World War II and 
     monetary policy, not the New Deal, that ended the Depression. 
     Unfortunately, policymakers have convinced themselves 
     otherwise. And so, whenever another slowdown has occurred, 
     they have turned to the same programs they believe ended the 
     Great Depression.
       This over-reliance on fiscal policy has given the U.S. 
     massive deficits and debt, which requires even greater 
     payments for interest. Large deficits also crowd out private 
     borrowers, raising interest rates, and reducing investment, 
     growth, and productivity. Finally, deficits put pressure on 
     the Federal Reserve to increase the money supply, which leads 
     to inflation.
       For an illustration of these points, let us take a brief 
     look at the postwar economic experience.
               the truman and eisenhower administrations

       The first recession of the postwar era began in November 
     1948. Initially the Truman administration was oblivious, as 
     were most private economists. In mid-December, for example, 
     Treasury Secretary John Snyder said the economy ``is at 
     present in a basically sound condition, and shows encouraging 
     signs of stability in the vicinity of the present high 
     levels.'' A survey of private economists found similar 
     optimism: 59 percent expected business to expand; only 41 
     percent expected a decline. And this was after the recession 
     had already begun!
       It was not until eight months later that President Truman 
     asked Congress to pass an antirecession program. Congress did 
     eventually pass the Advance Planning for Public Works Act, 
     and it took effect in October 1949--the very month the 
     recession ended.
       The first of three recessions under President Eisenhower 
     began in July 1953, shortly after he took office. There is no 
     evidence Eisenhower was even aware a recession had begun. 
     Later, when signs of a slowdown became unmistakable, 
     Eisenhower supported a small increase in highway spending. 
     But no significant action was taken to counteract the 
     recession, which ended three months later.
       Eisenhower confronted a second recession in August 1957. 
     Again, there is no evidence he saw it coming. In July, 
     Treasury Secretary George Humphrey told the Senate Finance 
     Committee, ``I don't see any significant recession or 
     depression in the offing.''
       Although the Eisenhower administration did not put forward 
     any antirecession legislation, it did acquiesce in 
     congressional efforts. Congress passed and Eisenhower signed 
     bills to increase grants to states for highway construction, 
     and to increase federal spending on rivers and harbors. The 
     highway bill became law in April 1958, and the rivers and 
     harbors bill was signed in July. The recession had ended in 
     April.


                       the kennedy administration

       The third recession under Eisenhower began in April 1960, 
     and it contributed to the election of John F. Kennedy. Upon
      taking office in January 1961, Kennedy moved quickly to 
     enact antirecession legislation. A key element of his 
     program was the Area Redevelopment Act (ARA), which sent 
     federal aid to areas with high unemployment. It was signed 
     into law on May 1, although the recession had ended in 
     February.
       An early assessment of the ARA by Sar Levitan, a professor 
     of economics at George Washington University, found that 40 
     percent of its funds went simply to reimburse other 
     government agencies. Moreover, almost any project undertaken 
     in a depressed area was eligible for ARA funding, even if it 
     would have been undertaken anyway. Thus while 7,100 miles of 
     ARA-funded roads were built in depressed areas. Levitan 
     notes, the Federal Highway Administration ``could not point 
     to a single mile of road which was constructed as a result of 
     priorities accorded to depressed areas.''
       In 1962, Congress passed more antirecession legislation--
     the Accelerated Public Works (APW) program, Subsequent 
     analysis shows that the peak employment created by this 
     program did not come until June 1964--thirty-nine months 
     after the end of the recession. Spending was so drawn-out 
     that expenditures were still being made nine years later.
        [[Page S1886]] A follow-up report by the General 
     Accounting Office (GAO) found that the number of jobs created 
     by the ARA and the APW had been overstated by 128 percent. 
     Another GAO study found the overstatement to be 94 percent. 
     The GAO also found that only 55 percent of the jobs created 
     by the APW went to workers living in the areas where the 
     projects were located, and that most of the jobs went to 
     contractors' regular employees rather than unemployed local 
     persons. Partially as a result of such criticism, Congress 
     abolished the Area Redevelopment Administration (which 
     administered the ARA and APW) in 1965.


                   the nixon and ford administrations

       The country's next recession began in December 1969 and 
     ended in November 1970. Antirecession legislation, however, 
     was not enacted until August 1971. That legislation--the 
     Public Works Acceleration Act--funded public works in 
     designated areas of high unemployment. It was predicted by 
     the Economic Development Administration that the program 
     would create 62,000 man-months of employment in the first two 
     years, with 75 percent of
      the jobs going to the previously unemployed. A Commerce 
     Department study, however, found that only 39,000 man-
     months of employment were created, and that only 22 
     percent of the jobs went to the unemployed. The average 
     job lasted just four weeks.
       The next recession was the worst of the postwar era. It 
     began in November 1973, following the OPEC oil embargo. Yet 
     antirecession legislation, in the form of a tax rebate, was 
     not enacted until March 1975, the month the recession ended. 
     THe $22.8 billion legislation gave taxpayers a 10 percent 
     rebate on their 1974 tax payments (with a maximum rebate of 
     $200). The bill also extended unemployment benefits, 
     increased the investment tax credit from 7 to 10 percent, and 
     made various other tax changes. All this was intended to pump 
     up demand by putting dollars into people's pockets. 
     Subsequent analysis, however, shows that most of the money 
     was initially saved, not spent. The bill had no significant 
     stimulative effect.
       During the following year, Congress determined that the 
     lingering effects of the recession justified further 
     antirecessionary action. Over the veto of President Ford, 
     Congress established the Antirecession Fiscal Assistance 
     Program (ARFA), and the Local Public Works Program (LPW). The 
     LPW increased funding for public works by $2 billion. The 
     ARFA program increased revenue-sharing by $1.25 billion.
       As late as 1977, in fact, Congress was still enacting 
     legislation to deal with the aftermath of the 1973-75 
     recession. The Local Public Works Capital Development and 
     Investment Act of 1976 added another $4 billion to the LPW 
     program. The ARFA program was also extended for another year 
     and its funding increased by another $1.75 billion.
       Subsequent analysis shows that these program were failures. 
     A Treasury Department study of the ARFA program found that 
     because the funds were not disbursed until well after the end 
     of the recession, they failed to provide assistance when it 
     was most needed and probably contributed to inflationary 
     pressures during the economic expansion. The study also found 
     that, rather than spend federal money immediately, state and 
     local governments tended to save it. Thus state and local 
     government budget surpluses increased, mitigating the 
     stimulative effect of the federal programs. Another study, by 
     the GAO, found that ARFA grants
      often went to areas unaffected by the recession, and 
     concluded that the program was not particularly effective 
     as a countercyclical tool.
       The LPW program was also ineffective. Although the 
     recession ended in March 1975, 20 percent of the program's 
     funds were spent in 1977, 61 percent in 1978, 18 percent in 
     1979, and 1 percent in 1980. In a study commissioned by the 
     Commerce Department, Chase Econometrics estimated that the 
     cost per direct job created was $95,000.
       Chase and the Commerce Department found other problems. 
     Between 25 and 30 percent of LPW funds paid for projects that 
     would have been funded by state and local governments anyway, 
     and another 9 percent of LPW funds crowded out private 
     expenditures that would otherwise have occurred. In addition, 
     only 12 percent of workers on LPW projects were previously 
     unemployed, and half of those had been unemployed less than 
     five weeks. The average job lasted just 2.6 months. Finally, 
     due to the Davis-Bacon Act, workers on LPW projects were paid 
     more than before--for the same work.
       The LPW program has also been severely criticized by 
     University of Michigan economist Edward Gramlich. He argues 
     that because the program had no allocation formula, required 
     no matching funds, and funded only projects that could be 
     started within 90 days, it virtually guaranteed that the only 
     projects funded would be those that would have been built 
     anyway. He has also noted that since the Commerce Department 
     received some $22 billion worth of project applications for 
     just $2 billion in federal funds, the LPW program apparently 
     postponed $22 billion worth of construction spending, thus 
     reducing GNP by $30 billion. Instead of stimulating the 
     economy, the LPW program was actually contractionary.


                  the carter and reagan administration

       Despite the many problems of the LPW program, one of the 
     Jimmy Carter's first acts upon taking office was to push for 
     its expansion. The Congressional Budget Office argued that an 
     expansion would have no impact on the economy for at least a 
     year, but Carter proceeded anyway. He signed the expansion 
     legislation on May 13, twenty-six months after the end of the
      recession.
       Another recession developed in 1980, as a result of 
     Carter's ill-considered imposition of credit controls. 
     Although the recession was over by mid-year--after the 
     lifting of controls--Carter continued to press for money for 
     antirecessionary public works. It was then revealed that some 
     $100 billion was already available from previous programs--
     fifty times more than Carter was asking for. According to 
     analyst Pat Choate, these funds were held up by a combination 
     of incompetence at the state and local level, and federal 
     regulations that made it difficult to get money released.
       Even the Reagan administration, despite its general 
     aversion to such policies, adopted two antirecessionary 
     programs. They were designed to attack a recession that began 
     in July 1981 and ended in November 1982. The first of the 
     programs was the Surface Transportation Assistance Act of 
     1982, which raised the gasoline tax by five cents a gallon, 
     and increased spending for highways and mass transit by $33.5 
     billion over five years.
       With some exceptions, the provisions of the act that 
     created jobs did not go into effect until after the tax 
     increases to pay for them. Thus, in the short run, the 
     legislation was contractionary rather than stimulative.

        TABLE 1.--SURFACE TRANSPORTATION ACT RECEIPTS AND OUTLAYS       
                        [In billions of dollars]                        
------------------------------------------------------------------------
                    Fiscal year                      Receipts   Outlays 
------------------------------------------------------------------------
1983..............................................        1.7        0.6
1984..............................................        3.8        2.9
1985..............................................        3.9        5.6
1986..............................................        3.9        7.3
------------------------------------------------------------------------

       There is also evidence that the act led state and local 
     governments to pull back on their own public works spending 
     in anticipation of new federal funds. Furthermore, many state 
     and local governments ``piggy-backed'' gasoline tax increases 
     on the federal increase. Between 1982 and 1984, twenty-nine 
     states increased their gasoline taxes. The result was a large 
     increase in state and
      local government budget surpluses, which offset much of the 
     stimulative impact of the federal spending.
       President Reagan predicted the transportation bill would 
     create 320,000 jobs, but subsequent analysis shows otherwise. 
     In the year following passage of the legislation, employment 
     in highway construction actually grew at a lower rate than 
     did total employment (although wages for highway construction 
     workers did rise sharply.)
       Interestingly, at the very time that President Reagan was 
     pressing hard for passage of the transportation bill as a 
     jobs program, his Office of Management and Budget produced a 
     study which showed that increases in federal aid for public 
     works actually reduce overall public works spending, because 
     state and local governments respond by cutting back their own 
     spending. Of course, this and other studies had little 
     effect. Both Congress and the administration were under 
     irresistible political pressure to appear to be doing 
     something about the recession, even though it had ended four 
     months earlier.
       The ink was barely dry on the transportation bill, in fact, 
     when Congress pressed ahead with another antirecession bill, 
     the Emergency Jobs Act of 1983. This act was little more than 
     a grab-bag of pork-barrel projects, most of which just 
     happened to be in the congressional districts of 
     Appropriations Committee members.
       A GAO study of the act in 1986 noted that it was not passed 
     until twenty-one months after the beginning of the recession. 
     A year and a half after passage, only one-third of the bill's 
     funds had been spent; two and a half years after passage, 
     half of the funds still had not been spent.
       Job creation peaked in June 1984, but the number of jobs 
     created at that point totalled just 1 percent of the private 
     jobs created since passage of the bill.


                  the bush and clinton administrations

       Like its predecessors, the Bush administration adopted an 
     antirecession program after a recession. The $151 billion 
     Intermodal Surface Transportation Efficiency Act was signed 
     by the president in November 1991--eight months after 
     recession's end. Congressional supporters of the bill 
     estimated it would create 2 million jobs. The Bush 
     administration, ``eager to embrace
      the bill as a job creator on the eve of an election year,'' 
     according to Congressional Quarterly, doubled the estimate 
     to 4 million. More than a year later, however, 
     transportation planners told the New York Times that ``the 
     law has neither stimulated the economy nor created many 
     jobs.'' One of the major reasons was the slow pace of 
     construction, which has been attributed to an increase in 
     federal standards for air quality, access for the 
     disabled, and public participation. In the end, the bill 
     did nothing to alleviate the recession or to aid Bush's 
     reelection hopes.
       As noted earlier, the Clinton administration quickly came 
     forward with a $16 billion stimulus program, despite data 
     showing the 
     [[Page S1887]]  economy to be strengthening. Although the 
     program was promoted as an insurance policy to keep the 
     economy going, the evidence indicates that few, if any, jobs 
     would have been created in the short run. Instead, the main 
     effect of the legislation would have been simply to fund 
     traditional Democratic programs. As Newsweek observed:
       ``Administration officials concede privately that much of 
     the money will go into highway and transportation projects 
     that won't actually get underway until 1994 or 1995. A good 
     chunk of the rest will raise spending on programs Clinton 
     proposes to expand permanently, like Head Start and infant 
     nutrition. By boosting outlays right away instead of waiting 
     until the next fiscal year starts in October, Clinton can 
     label those initiatives `stimulative.'''
       A Republican analysis of the cost per job of the Clinton 
     stimulus program found that the average cost was over 
     $89,000, with the cost of some jobs reaching into the 
     millions.


                               doing harm

       In 1980, Sen. Lloyd Bentsen, now secretary of the Treasury, 
     held a hearing before the Joint Economic Committee on the 
     effectiveness of countercyclical public works programs. At 
     that hearing, President Carter's Office of Management and 
     Budget presented a study that reviewed the postwar experience 
     with such programs. Its conclusions:
       Public works programs cannot be triggered and targeted in a 
     sufficiently timely manner to compensate for cyclical 
     fluctuations in unemployment and economic activity.
       Even if it were possible to properly time a countercyclical 
     program, the time it takes to construct public works would 
     lead to a significant overlap of job generation and economic 
     stimulus with periods of economic recovery.
       Public works programs have had minimal impact on the 
     unemployed. This is partly because the programs are not 
     labor-intensive, and partly because many of the jobs created 
     require skills the unemployed do not have.
       The duration of employment for individual workers is too 
     short to provide meaningful economic relief, to maintain 
     skills and work habits, or to provide on-the-job training.
       Public works are extremely costly. The cost of generating a 
     construction job for one year ranges from $70,000 to 
     $198,000.
       Later Bentsen issued a unanimous report from the Joint 
     Economic Committee which concluded that by the time a 
     recession is recognized, it is too late to be treated. 
     Efforts to do so are destabilizing. The committee recommended 
     avoiding short-term countercyclical actions, and instead 
     focusing on factors that contribute to long-run growth. This 
     was good advice then, and good advice now.
       Even Lord Keynes, the father of countercyclical policy, 
     eventually recognized its limitations. Toward the end of his 
     life he wrote:
       ``Organized public works . . . may be the right cure for a 
     chronic tendency to a deficiency of effective demand. But 
     they are not capable of sufficiently rapid organization (and 
     above all cannot be reversed or undone at a later date), to 
     be the most serviceable instrument for the prevention of the 
     trade cycle.''
       The U.S. economic experience provides ample confirmation.

      TABLE 2.--DATES OF RECESSIONS AND ANTI-RECESSION LEGISLATION      
------------------------------------------------------------------------
                                                       Antirecession    
       Beginning                   End                  legislation     
------------------------------------------------------------------------
November 1948..........  October 1949...........  October 1949\1\       
August 1957............  April 1958.............  April-July 1958\2\    
April 1960.............  February 1961..........  May, 1961\3\          
                                                  September 1962\4\     
December 1969..........  November 1970..........  August 1971\5\        
November 1973..........  March 1975.............  March 1975\6\         
                                                  July 1976\7\          
                                                  May 1977\8\           
July 1981..............  November 1982..........  January-March 1983\9\ 
July 1990..............  November 1991..........  November 1991\10\     
                                                   April 1993\11\       
------------------------------------------------------------------------
\1\Advance Planning for Public Works Act, P.L. 81-352 (October 13,      
  1949).                                                                
\2\Federal Aid Highway Act of 1958, P.L. 85-381 (April 16, 1958); River 
  and Harbor Act of 1958, Flood Control Act of 1958, and Water Supply   
  Act of 1958, P.L. 85-100 (July 3, 1958).                              
\3\Area Redevelopment Act, P.L. 87-27 (May 1, 1961).                    
\4\Public Works Acceleration Act, P.L. 87-658 (September 14, 1962).     
\5\Public Works and Economic Development Act Amendments, P.L. 92-65     
  (August 5, 1971).                                                     
\6\Tax Reduction Act of 1975, P.L. 94-12 (March 29, 1975).              
\7\Public Works Employment Act of 1976, P.L. 94-369 (July 22, 1976).    
\8\Local Public Works Capital Development and Investment Act of 1976,   
  P.L. 95-28 (May 13, 1977).                                            
\9\Surface Transportation Assistance Act of 1982, P.L. 97-424 (January  
  6, 1983); Emergency Jobs Appropriations Act of 1983, P.L. 98-8 (March 
  24, 1983).                                                            
\10\Intermodal Surface Transportation Efficiency Act of 1991, P.L. 102- 
  240 (November 27, 1991).                                              
\11\Emergency Supplemental Appropriations Act of 1993.                  

  Mr. SIMON. Mr. Bartlett writes:

       Without exception, stimulus programs have failed to 
     moderate the recessions at which they were aimed, and have 
     often sowed the seeds of the next recession. These programs 
     have not been simply worthless, but harmful. It would have 
     been better to do nothing.

  Then he writes:

       President Carter's Office of Management and Budget 
     presented a study that reviewed the postwar experience with 
     such programs.

  And they reached the same conclusion. Then, listen to this:

       Later, [Senator Lloyd] Bentsen issued a unanimous report 
     from the Joint Economic Committee which concluded that by the 
     time a recession is recognized, it is too late to be treated. 
     Efforts to do so are destabilizing. The committee recommended 
     avoiding short-term countercyclical actions, and instead 
     focusing on factors that contribute to long-run growth.

  ``This was good advice then,'' the author writes, ``and good advice 
now.''

       Even Lord Keynes, the father of countercyclical policy, 
     eventually recognized its limitations. Toward the end of his 
     life, he wrote:
       ``Organized public works . . . may be the right cure for a 
     chronic tendency to a deficiency of effective demand. But 
     they are not capable of sufficiently rapid organization (and 
     above all cannot be reversed or undone at a later date), to 
     be the most serviceable instrument for the prevention of the 
     trade cycle.''

  ``The U.S. economic experience provides ample confirmation,'' the 
author of the article says.
  Fred Bergsten, who serves as Assistant Secretary of the Treasury and 
one of our Nation's really fine economists, recommends that we build in 
a small surplus. He is suggesting a 2-percent surplus, and then 
authorizing the President to move quickly with programs when we have 
unemployment above a certain level in any area, whether it is Missouri 
or Illinois or Michigan or Ohio, or wherever it might be.
  Alan Greenspan has said much the same thing. Interest reduction is a 
far greater stimulus than any kind of stimulus that we might provide. 
But we have extended unemployment compensation and people say, well, we 
could not even do that.
  We will take a look at the record. The only time I can find where we 
have not had 60 votes for that was in 1982. But let me start with 1991. 
Passed extension of unemployment compensation; passed the Senate 91-2, 
far more than the 60 percent required. Later that year, by voice vote, 
another voice vote. In 1992, 94-2; 1992, another voice vote; later in 
1992, 93-3. In 1993, 66-33; also, in 1993, 76-20.
  Clearly, we can get the 60 votes to do that.
  I also ask unanimous consent to have printed in the Record, Mr. 
President, an article from Investors Business Daily.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

           [From the Investors Business Daily, Jan. 25, 1995]

 A Balanced Budget Myth Bared: Economy Cycles Unlikely to Worsen Under 
                                  Plan

                           (By John Merline)

       A balanced budget amendment will either restore fiscal 
     sanity to a town drunk on deficit spending or lead the 
     country toward economic ruin.
       Those, at least, are the stark terms typically used by 
     supporters and opponents of a constitutional amendment 
     outlawing deficit spending.
       And, while passage of a balanced budget amendment is almost 
     a sure thing this year, debates over its merits remain 
     fierce--with critics from all sides of the political spectrum 
     lobbing grenades at it.
       Democrats don't like the rigidity it imposes while 
     conservatives fear it may bias Congress towards tax 
     increases.
       One of the principal criticisms of the amendment is that it 
     would short-circuit the federal government's ability to fight 
     recessions, either with ``automatic stabilizers'' or with 
     stimulus spending like temporary tax cuts or spending hikes. 
     Yet there is little evidence to support this view.
       ``When purchasing power falls in the private sector, the 
     budget restores some of that loss, thereby cushioning the 
     slide,'' said White House budget director Alice Rivlin in 
     testimony before the Senate Judiciary Committee earlier this 
     month.
       ``Unemployment compensation, foodstamps and other programs 
     fill the gap in family budgets--and in overall economy 
     activity--until conditions improve,'' she said, defending the 
     budgetary ``automatic stabilizers.''
       In addition, because of the progressive income tax code, 
     tax liability falls faster than incomes drop in a recession, 
     slowing the decline in after-tax incomes.
       The result, however, is typically an increase in the 
     deficit.
       Mandatory balanced budgets would, she argued, force 
     lawmakers either to raise taxes or cut spending in a 
     recession to counteract increased deficits.
       ``Fiscal policy would exaggerate rather than mitigate 
     swings in the economy,'' she said. ``Recessions would tend to 
     be deeper and longer.''
       Other economists agree with Rivlin.
       Edward Regan, a fellow at the Jerome Levy Economics 
     Institute in New York, argued that the amendment would 
     ``restrict government efforts to encourage private sector 
     activity during economic slowdowns.''
       [[Page S1888]] The assumption, of course, is that these 
     automatic stabilizers actually work as advertised, an 
     assumption not all economists share.
       ``If anything, I think the government has made economic 
     cycles worse,'' said James Bennett, an economist at George 
     Mason University.
       Bennett, along with 253 other economists, signed a letter 
     supporting a balanced budget amendment introduced last year 
     by Sen. Paul Simon, D-Ill.
       Ohio University economist Richard Vedder agrees. ``If you 
     look at the unemployment record, to use that one statistic, 
     it was more favorable in the years before we began automatic 
     stabilizers than in the years since,'' he said.
       Much of the countercyclical programs were implemented in 
     the wake of the Great Depression.
       Unemployment data show that in the first three decades of 
     this century the average jobless rate was roughly 4.5%.


                           prolonging slumps

       In the four decades since World War II, the rate averaged 
     5.7%. And, from 1970 to 1990, it averaged 6.7%.
       In addition, some of the stabilizers may actually keep 
     people out of the work force for longer periods of time, 
     possibly prolonging economic slumps.
       A 1990 Congressional Budget Office study found that two-
     thirds of workers found jobs within three months after their 
     unemployment benefits ran out--suggesting that many could 
     have found work sooner had they not been paid for staying 
     home.
       Other data suggest that, at most, federal fiscal policy has 
     had only a small stabilizing effect on the economy, despite 
     the sharp increase in the economic role played by government.
       A study by economist Christina Romer of the University of 
     California at Berkeley found that economic cycles between 
     1869 and 1918 were only modestly more severe than those 
     following World War II.
       Romer corrected what she said were serious flaws in data 
     used to suggest that the pre-war economy saw far larger 
     swings in economic cycles.
       The finding runs contrary to conventional wisdom--which 
     posits that government fiscal programs enacted after the 
     Great Depression have greatly reduced the magnitude of boom 
     and bust cycles.
       ``I think there are plenty of arguments against the 
     balanced budget amendment,'' said Christina Romer in an 
     interview. ``I would not put much emphasis on taking away the 
     government's ability of having countercyclical * * *.
       Finally, some economists note that the stabilizers Rivlin 
     points to don't have to be a function of government.
       Private unemployment, farm or other insurance could provide 
     needed cash during economic downturns, they say, replacing 
     the government programs as the provider of these funds.
       While the effectiveness of automatic stabilizers is doubted 
     by some, straightout antirecessionary stimulus spending has 
     few outright backers--for one simple reason.
       Every major stimulus package since 1949 was passed after 
     the recession was already over.
       These packages typically consisted of temporary tax cuts or 
     spending hikes designed to boost economic demand and 
     artificially stimulate growth.
       The problem has been that, by the time Congress recognizes 
     the economy is in a slump and approves a package, it's too 
     late.


                         too little, too late?

       Clinton's failed stimulus package, for example, was 
     proposed nearly two years after the 1990-91 recession ended, 
     and half of the money wouldn't have been spent until 1994 and 
     1995.
       A study of the 50-year history of stimulus packages by 
     Bruce Bartlett, a senior fellow at the Arlington, Va.-based 
     Alexis de Tocqueville Institution, concluded that ``without 
     exception, stimulus programs have failed to moder- * * * 
     would have little bearing on the government's ability to 
     pursue these policies during recessions.
       First, the amendment allows Congress to pass an unbalanced 
     budget, as long as it can muster 60% of the votes.
       And, lawmakers could avoid that by simply running a budget 
     surplus during growth years.
       ``The best technique is to aim for a modest budget surplus, 
     of about 2% of GDP, over the course of the business cycle,'' 
     Fred Bergsten, director of the Institute for International 
     Economics, told the Judiciary Committee.
       ``This would permit the traditional `automatic 
     stabilizers,' and perhaps even some temporary tax cuts and 
     spending increases, to provide a significant stimulus to the 
     economy,'' he said. Interestingly, Rivlin herself made 
     similar arguments in her book, ``Revving the American 
     Dream,'' which was published shortly before she joined the 
     Clinton administration.
       In that book Rivlin said that the federal government should 
     run annual budget surpluses--increasing national savings and, 
     in turn, economic growth.
       At the same time, Rivlin said the federal government could 
     strengthen federal ``social insurance'' programs designed to 
     mitigate economic swings.
       To accomplish this, she proposed shifting whole blocks of 
     federal programs down to the states, including education, 
     welfare, job training, and so * * *.
  Mr. SIMON. This is the lead story. The headline says: ``A Balanced 
Budget Myth Bared,'' in which the article talks about the fact that, in 
fact, we just do not act promptly enough to move in a recession, so to 
stop the balanced budget on that basis just does not make any sense. 
The article quotes James Bennett, an economist at George Mason 
University:

       If anything, I think the government has made economic 
     cycles worse.

  I hear this: What about floods, earthquakes? We have an emergency in 
Michigan or Missouri, or someplace, and we have had them in Missouri 
and Illinois recently in our floods.
  First of all, I will say that I favor creating a special emergency 
fund. We should not create a deficit every time. We ought to create an 
emergency fund of $5 or $10 billion every year, where we can tap into 
that for emergencies that will occur almost every year.
  Take a look at the votes on these things. They say, well, we will be 
prevented from helping in natural calamities. Starting in 1991, I have 
not been able to find a single time when, in an emergency, we declined 
helping people. Now, there have been times when, years later or 
sometime later, we come back and they want help and they have been 
declined. In March 1991, 92 to 8; March 1991, 98 to 1. May 1991, voice 
vote. November 1999, 75 to 17. September 1992, 84 to 10. April 1992, 84 
to 16. May 1992, 61 to 36. August 1992, voice vote. June 1993, voice 
vote. August 1993, 86 to 14. February 1994, 85 to 10. These are all 
more than 60 percent.
  Then the argument is made, well, we will have the courts in this 
massively. What is the reality? Well, section 6 of this article says.

       The Congress shall enforce and implement this article by 
     appropriate legislation which may rely on estimates of outlay 
     and receipts.

  The only example you have of a Federal court acting is in the case of 
the State of Missouri, the Jenkins case, and there it was the Federal 
court acting, in terms of a State situation, under the 14th amendment, 
but we had no legislation and so you have a very, very different 
situation.
  Second, we can say who has standing. I think we ought to say it takes 
10 Senators or 30 House Members or 3 Governors to go before the courts. 
So we limit who can go before the courts.
  And then, finally, the reality is we have a very good enforcement 
mechanism: You cannot increase the debt ceiling without a 60-percent 
vote. I think the likelihood that we are going to go before the courts 
is very, very slim, and the experience of the States is--and 48 of the 
50 States have some kind of provision--the experience of the States is 
that it is rare for any kind of litigation. I remember when this came 
up--and Senator Abraham will recall this--Senator Hank Brown said in 
the history of the State of Colorado, which has such a provision in its 
constitution, there has been no litigation. This idea that we are going 
to be massively in the courts is just not true.
  Then some say, ``Well, you are going to give the President 
impoundment authority and the President is going to increase taxes.'' 
If I thought there was any possibility of that happening, I would favor 
an amendment. I had my staff research this very carefully. And I want 
to pay tribute to Aaron Rapport of my staff who has really done a 
superb job, but my staff has researched this and it is very clear, 
there is no impoundment authority. Anyone who looks at the legislative 
record will know that, and we will make it clear through implementing 
legislation.
  Then I hear people say, ``It is going to hurt my program, it is going 
to hurt my State, we are getting these letters from the Department of 
Defense and all the other departments.'' If you total up what everyone 
says is going to hurt and what is going to be taken out, we will have a 
huge surplus in this Nation.
  Obviously, these figures are largely phony, and if the President of 
the United States had made a different decision, we would be getting 
all these letters from people saying what a great thing this is and 
this is going to be the salvation of our program.
  I think you have to ask all these agencies and the States what is 
going to happen if we do not alter the present path. And the answer is, 
interest is 
[[Page S1889]]  going to continue to squeeze out our ability to respond 
to States, interest rates are going to continue to go up, and 
eventually we will monetize the debt.
  Then I hear about Social Security, and we are going to have an 
amendment on that on the floor. I suggest we listen to Bob Myers, chief 
actuary for Social Security for 21 years, in which he says the only 
protection that we need that is desperately needed is a balanced budget 
amendment so we do not monetize the debt. That is the only way to 
protect senior citizens.
  Groups like the AARP, and others who are saying that we should not 
pass this are looking short term. They are not looking long term. We 
have to protect Social Security, and it is true it is running a surplus 
now, and I would love to balance the budget without that surplus, but 
starting in the year 2012 or 2013, it starts going in the red. We have 
an obligation to face this problem.
  President Gerald Ford said:

       Unless we, as a Nation, face up to the facts of fiscal 
     reality and responsibility and the sacrifices required to 
     restore it, the economic time bomb we are sitting on will do 
     us in as surely as any sudden enemy assault. We cannot go on 
     living beyond our means by borrowing from future generations 
     or being bailed out by foreign investors.

  He is absolutely right. We have, and some will argue we have shown in 
1993 we can do something. We did and to the praise of President Clinton 
we did do something. But you had an unusual confluence of things. You 
had a brand-new President in his honeymoon period, you had a Congress 
of both Houses that was in his party, and you had a President who had 
the courage to do something. What happened? Interest rates came down, 
even with the small gesture that we made at that point.
  Listen to the lead witness against the balanced budget amendment 2 
years ago before the House Budget Committee, Professor Laurence Tribe, 
of Harvard. I want to make clear he still opposes a balanced budget 
amendment: Listen to what he said:.

       Despite the misgivings I expressed on this score a decade 
     ago, I no longer think that a balanced budget amendment is at 
     a conceptual level an ill-suited kind of provision to include 
     in the Constitution. The Jeffersonian notion that today's 
     populace should not be able to burden future generations with 
     excessive debt does seem to be the kind of fundamental value 
     that is worthy of enshrinement in the Constitution. In a 
     sense, it represents structural protection for the rights of 
     our children and grandchildren.

  People say, ``Well, let's just do it with statutory action.'' I voted 
for Gramm-Rudman, but as soon as it started to squeeze too much, we 
changed the law. It is just too easy. For people who say, ``Well, we're 
not going to pay attention to the Constitution''--John Ashcroft when 
you took that oath of office right over there, you took only one oath, 
to uphold and defend the Constitution. I cannot imagine any Senator, no 
matter how extreme, standing up and saying, ``Let's ignore the 
Constitution.'' That just is not going to happen. We are going to pay 
attention to it.
  The language that we have devised, that we have cleared with a great 
many people, is constitutional in nature, and those who say we are 
violating the spirit of the Constitution by requiring more than a 
majority vote ignore the fact that eight times in the Constitution it 
requires more than a majority vote to prevent governmental abuse. Have 
we had governmental abuse in this area? I do not think anyone can say 
anything to the contrary.
  I also hear, ``Oh, this is just a gimmick.'' I was in a press 
conference with Olympia Snowe, our new colleague in the Senate, when 
she was in the House, and a reporter said, ``Isn't this just a 
gimmick?'' And she responded, unfortunately with too much accuracy, 
``If it was just a gimmick, Congress would have passed it a long time 
ago.'' And I am afraid there is some truth to that.
  If it were just a gimmick, my friend--and he is my friend--Senator 
Robert Byrd, would not be working so hard against this. The reality is, 
this has teeth. That debt increase means something.
  People say, ``Well, we have to show how we are going to do it. If 
they are talking in broad principles, I am all for, once this passes, 
spelling it out.
  Let me give you one option, and that is we follow the present limits 
we set forth in our agreement through 1998 and then a combination of 
the Bush program for reducing the deficit and the Clinton program, 
something somewhat similar, neither of which did any great harm to 
anyone, that will do it by the year 2002.
  I say to my colleagues who oppose this, who make these great 
speeches, ``We can do it without a balanced budget amendment,'' they 
insist we spell out what we are going to do, and I am for spelling it 
out in broad terms. But I think there is a responsibility on the part 
of those who say we can do it without a balanced budget amendment to 
spell it out.
  We save at least, by the most conservative estimate, about $140 
billion in interest and some people say as much as $600 or $700 billion 
in interest. But there is that substantial savings. There is not that 
savings on the other side.
  Finally, Mr. President, let me just give you one illustration why we 
need this. Two or 3 years ago, I introduced a bill for long-term care, 
a problem that is going to escalate in this country. I had with it a 
half-percent increase in Social Security to pay for it. Two of my 
colleagues in the Senate, one of whom is still in the Senate, came to 
me and said, ``We really like your bill for long-term care. If you will 
just drop the taxes to pay for it, we would like to cosponsor the 
bill.''
  My friends, that is our problem. Nothing is there to restrain us from 
doing that. Now, my colleague from Michigan and my colleague from 
Missouri may differ with me on whether or not we ought to have the 
program. That ought to be a legitimate area of debate. There should not 
be a debate that if we have the program, we have to be willing to pay 
for it, and if we are unwilling to pay for it, we cannot have the 
program. That is what it is all about. We need pay-as-you-go 
Government.
  I hope this body will take a look not just at all the pressure groups 
that are coming at us right now, but take a look at future generations, 
take a look at those pages, take a look at your children and your 
grandchildren and ask: How do we best protect them?
  Deficit reduction is a tax cut for future generations.
  Do I make a little sacrifice myself so that my three grandchildren 
can live better? That is the real question. I do not have a hard time 
answering that. Are we going to have to make some unpopular decisions 
if we pass this? You bet. If it was easy, we would have done this a 
long time ago. That is why we need a constitutional amendment.
  So I hope my colleagues will do the right thing--not politically but 
for future generations. The right thing clearly I think is adopting 
this balanced budget amendment.
  Mr. President, I yield the floor.
  Mr. ABRAHAM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. I thank the Chair.
  I rise today in strong support of the balanced budget amendment to 
the Constitution, and I would like to preface my remarks by extending a 
compliment to the Senator from Illinois for his extensive work over 
many years on this issue. Thanks to his leadership, we are already 
moving in the House and here in the Senate toward adoption of this 
after many years of debate.
  In my judgment, the amendment would change the way Congress makes 
budgetary decisions by severely limiting the option to borrow money. 
Currently, when faced with demands for more spending, the Congress 
makes the easy choice to borrow money. Under the balanced budget 
amendment, Congress would be forced to make the tough choices, to 
either raise taxes or reduce spending elsewhere, unless it mustered the 
necessary supermajorities required to deficit spend.
  With last week's historic vote in the House of Representatives to 
approve the balanced budget amendment by a bipartisan margin of 300 to 
132, the American people sent a clear and powerful message to the 
Senate: It is time to restore fiscal control of the Federal budget and 
prevent politicians from increasing Government spending.
  In my view, the balanced budget amendment to the Constitution 
embodies the spirit of the electorate that voted for a Republican 
Congress for the first time in 40 years last November, 
[[Page S1890]]  and I believe that we in the Senate must not let them 
down.
  When I was out on the campaign trail in Michigan in this most recent 
campaign, I encountered people all over the State. It did not matter 
where they lived. From Detroit to the Upper Peninsula, from Grand 
Rapids to Saginaw, north to south, and east to west, they all said the 
same types of things about the way Congress does business. They were 
totally perplexed and incapable of understanding why the Congress of 
the United States could not operate the way they did in their families 
or the way businesses did in trying to meet a bottom line of staying in 
the black.
  I was constantly asked, ``Why is that the case? Can you make a 
difference?'' The one thing that was a clear note of consistent opinion 
across the spectrum was that the best and surest way to get the Federal 
Government under control was by adoption of a balanced budget 
amendment. The attitude in my State was not one of asking us to come up 
with a fancier bookkeeping way of handling Federal spending. They did 
not want me to come down here and say, ``Well, we will have a balanced 
budget amendment, but we will leave exceptions for this or that 
program; we will put something off budget and make you feel better 
about the bottom line.''
  They said, ``Why can't you go down and do what we have to do every 
day in our lives here in Michigan?'' And that is what I came here to 
do.
  Now, I have heard some people say in the course of the debate in the 
Judiciary Committee and already in the Chamber that this is not the way 
people behave. The families of the people of Michigan do not operate 
really in the black. They buy a house, and when they buy a house they 
have a debt. And if you put that debt into consideration, at the end of 
the year they still have that debt. They just make payments on the 
debt. And to them balancing the family budget really means that the 
amount of income they have is equal to the payments they make for the 
goods and services and the debts they encounter.
  My response to those people, as I responded in the campaign was, 
``But wait a minute. There is a very simple distinction here. Those 
people are spending their own money and we are spending the taxpayers' 
money.''
  If people choose in their own lives to buy a house, I do not think 
that is the Federal Government's business. But if the Federal 
Government and those of us entrusted with the responsibility of 
spending over $1.5 trillion a year do not keep the public's interests 
in mind, I think we have made a huge mistake. And so in this campaign I 
got a clear message. It was a message that I should come here, that I 
should fight as hard as possible to put this country on a course to 
bring about a balanced budget as fast as possible and that the surest 
way to do it was with a balanced budget amendment. And so today I wish 
to speak about why that is so critical.
  I believe that requiring a balanced Federal budget should no longer 
be a question for serious debate. For the past 25 years, the Congress 
has demonstrated its inability to manage effectively the Nation's purse 
strings. The national debt now stands in excess of $4.7 trillion. The 
Federal Government currently owes more than $13,000 for every man, 
woman, and child in America.
  One of the major reasons for this explosion in Government spending 
and debt is that we have abandoned the implicit balanced budget 
requirements established by the Nation's Founding Fathers. Indeed, the 
Founding Fathers recognized that persistent Government deficits and the 
unfettered growth of Government had consequences for the long-term 
stability of our democracy and threatened our individual freedoms. The 
reason the Founding Fathers did not include a balanced budget 
requirement in the Constitution is because they felt it would be 
superfluous. Balancing the budget and reducing the outstanding debt 
were considered the highest priorities of Government. I think Thomas 
Jefferson summarized it best when he said that:

       The public debt is the greatest of dangers to be feared by 
     a republican Government.

  Because of this implicit balanced budget requirement, Government 
spending remained low, rarely exceeding 10 percent of our national 
income, for the first 150 years of this Republic. But starting in the 
mid 1930's, the rise of Keynesian economics gave politicians an 
economic rationale to increase Government spending. As a result, fiscal 
discipline was abandoned. Today, Federal spending as a share of our 
national income stands at 22 percent. Deficit spending has now become 
the fiscal norm. The purpose of the balanced budget amendment is to 
restore fiscal discipline upon the Congress by placing the balanced 
budget obligation in the supreme law of the land. Absent such an 
amendment, the Congress has proven itself incapable of making difficult 
spending decisions, given its free and easy access to deficit spending.
  The amendment would contribute to a balanced budget by transforming 
the critical questions asked by Members of Congress who confront 
spending interests. Instead of asking merely, ``Is this a desirable 
spending measure or program?'' they will instead have to ask, ``Is this 
spending measure so desirable that we should either reduce spending for 
some other spending measure or raise taxes on the people to pay for 
it?''
  The psychology of the budget process will also be transformed. No 
longer will spending interests be competing against the taxpayer for a 
portion of an unlimited budget. Rather, they will be competing against 
each other for a portion of a limited budget. No one doubts that 
Governors of States with balanced budget requirements will propose 
balanced budgets because they are obligated to do so. When the Congress 
is also obligated to do the same, I believe they, too, will propose 
balanced budgets. The details will inevitably be fought out in the 
budget process, where they should be. Without a balanced budget 
amendment, this Nation could be looking at Federal deficits in the 
trillions of dollars within 15 years.
  All the opponents of the amendment want to talk about is the cost of 
reducing spending programs for special interests. But what about the 
economic costs of running high deficits and high levels of Government 
spending and taxation on the general public? The weight of economic 
evidence from around the world strongly suggests that as the size of 
government increases as a share of national income, the rate of 
economic growth and job creation declines. I was sent here by people 
who think it is time to put the welfare of the general public ahead of 
the special interests.
  The proposed amendment does not read into the Constitution a mandate 
for any particular economic policy outcomes. It only restores the 
historical relationship between levels of public spending and available 
public resources. National solvency is not, nor should it be, a 
partisan political principle. It should be a fundamental principle of 
our Government.
  Mr. President, I would like to spend a few moments on the question of 
judicial enforcement of the balanced budget amendment.
 There are many provisions of the Constitution that are effective in 
achieving their purposes, yet which do not require judicial 
enforcement. For example, the Senate does not introduce revenue bills 
despite the Court's refusal to involve itself in such political 
questions. The moral power of the Constitution itself serves as an 
enforcement mechanism.

  The balanced budget amendment is largely self-enforcing and self-
monitoring. Congress and the President are to establish procedures for 
compliance. Congress and the President are to monitor the actions of 
each other, and actions by the Congress and the President will be 
subject to even more effective monitoring by the public.
  I would argue that the balanced budget amendment is already working, 
despite the fact that the Congress has not yet passed it. Indeed, the 
mere prospect of the congressional approval of the amendment has 
already forced congressional leaders to seriously consider a 7-year 
plan to reduce the growth rate of Government spending and balance the 
budget. Does anyone truly believe that this debate would be occurring 
in the absence of the debate over the balanced budget amendment?
  Once the amendment is actually approved by both Houses of Congress, 
we will be under enormous political pressure to produce a balanced 
budget plan which achieves balance by the year 2002.
  As the debate over the balanced budget amendment proceeds in the 
[[Page S1891]]  Senate, I will address in more detail why we should not 
exempt any special areas of the budget from the balanced budget 
requirements. In essence these efforts are, in my judgment, nothing 
more than escape valves designed to alleviate the pressure on lawmakers 
to spend in different areas of priority than would otherwise take 
place. These exemptions violate the whole point of having a balanced 
budget amendment.
  The Nation believes we already have enough tax revenue to balance the 
budget. In fact, the Congressional Budget Office projects that tax 
revenue collected by the Government will naturally increase from the 
$1.36 trillion in 1995 to $1.88 trillion in the year 2002. I know the 
people in Michigan, and I think most people across this country would 
agree, that $1.88 trillion is more than enough to run the Federal 
Government.
  Finally, I am a strong supporter of the proposed supermajority 
requirements to limit tax increases. I think the inclusion of the tax 
limitation language would help avert the bias in our current system 
toward higher taxes. Although I am concerned about a balanced budget 
amendment that does not simultaneously place an explicit limit on 
taxes, I believe this can be accomplished through other means, not the 
least among them the wrath of an overtaxed electorate. Further, I 
believe that to truly limit the tax burden on the American people we 
must explicitly limit the total size of Government. It is for this 
reason I strongly support either legislation or a constitutional 
amendment to limit to a fixed percentage of our national income, except 
in times of emergency, the spending level of Government. Limiting total 
spending limits total taxes.
  In my State of Michigan we have a similar government spending 
limitation in our State constitution called the Headlee amendment. 
Under that amendment, the size of State government is limited by 
holding State tax revenue to the same fraction of personal income that 
it was when the amendment passed in 1978. A blue ribbon commission 
appointed by Gov. John Engler to study the Headlee amendment recently 
concluded that it had been effective in limiting the growth of our 
State government.
  This spending limitation proposal offered by Senator Jon Kyl does 
essentially the same thing as the Headlee amendment. It requires that 
the Federal Government only grow in size relative to the size of the 
national income. I think such a spending limitation concept ought to be 
a key ingredient as we proceed to the subsequent implementing 
legislation to balance the budget.
  In conclusion, before we begin the necessary task of limiting the 
growth rate of Government spending, we ought to be able to assure the 
American people that any consequent pain will not be for naught, that 
cuts in spending will finally translate into reduction in the Federal 
deficit. A balanced budget amendment to the Constitution would restore 
a necessary, basic, and broad governing principle for our country; 
namely, that Government should spend no more than it takes in.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. FEINGOLD. Mr. President, I rise today to oppose the proposed 
balanced budget amendment to the U.S. Constitution. I also rise as a 
person who I hope can be described as one of the strongest advocates of 
actually balancing the Federal budget. I believe the American people 
really want a balanced budget more than they want a balanced budget 
amendment. Although this may seem strange to a lot of people--and it is 
going to be very important to make this point both here and across 
America as we have this debate--I think passing the balanced budget 
amendment will make it less likely rather than more likely we will 
actually achieve a balanced budget in the next few years.
  A number of respected authorities have raised a variety of 
significant points of concern with regard to the amendment itself. Some 
say the problems related to the role of the courts and the power it 
might confer on unelected judges to set our national budget policy is a 
reason not to vote for this.
  Some talk of the damage the proposal could do to Social Security 
unless some changes are made to the current draft. I think that is a 
very, very important issue.
  Others say there will be unintended changes to the Presidential 
impoundment authority. That is something we have to look at.
  And still others say that unnecessary and possibly dislocating 
restrictions on our ability to establish capital or investment budgets 
will be a problem, producing the very surprising result that the 
Federal Government could end up being the only government anywhere that 
we know of that does not have a distinction between a capital and 
operating budget.
  These are all very serious concerns and there are other ones as well 
that are being discussed and will be discussed in the coming weeks as 
we consider the balanced budget amendment.
  My principal objection to the proposed balanced budget amendment is 
that it will most likely damage our efforts to reduce and eliminate the 
Federal deficit. I believe strongly in eliminating the Federal deficit. 
Along with health care reform, that was the issue on which I focused my 
campaign for the U.S. Senate, and it is the issue on which I focused 
the greatest amount of my time during the 2 years I have been here. But 
there is evidence that suggests strongly that this proposed 
constitutional amendment will only undercut the work I have had a 
chance to do, the work that others have done to bring down the deficit 
and clean up the mess that was created throughout the 1980's.
  First, consider the basic argument of those who support the proposed 
amendment. The essence of the arguments made by supporters of the 
amendment is the assertion that a constitutional amendment is 
absolutely necessary in order to spur lawmakers into making the tough 
decisions they are otherwise unwilling to make. The amendment's 
supporters maintain that once the constitutional requirement is in 
place, lawmakers will suddenly make the tough decisions because they 
will be able to say this to their angry constituents: I am sorry I cut 
your program, but the Constitution made me do it.
  I find it hard to believe that kind of conversation is going to 
really occur, but that is in effect what is being suggested, that 
Members of Congress will suddenly do what they must do and should have 
done a long time ago because they will be able to say, ``My hands are 
tied. I am going to have to hurt you by cutting this program.''
  The notion that lawmakers require the Constitution of the United 
States to provide political cover is the defining rationale for the 
supporters of this proposed amendment. After all, if a constitutional 
refuge were not required, then the need for this amendment would 
vanish.
  This assessment of our political process, I believe, ignores a basic 
political reality, that those who require political cover in order to 
make tough decisions under our current rules may end up being the very 
same people who will find a way not to make the tough decisions even if 
the balanced budget amendment is passed by this Senate and even if it 
does become a part of our Constitution.
  As the distinguished economist Herbert Stein noted in his testimony 
before the Judiciary Committee:

       Objection to a balanced budget amendment is not an 
     objection to balancing the budget. It is, instead, objection 
     to using an appeal to a traditional symbol as a smokescreen 
     behind which to hide unwillingness to face our real problems.

  The only way we can balance the Federal budget is by enacting 
specific legislation that spells out a series of individual spending 
cuts that add up to sufficient cuts to eliminate that deficit. But the 
proposed constitutional amendment does not contain one single spending 
cut. The sponsors of it do not have to put their name on the line for 
any cut in order to go about their States and say: I fought to balance 
the budget.
  I am not sure the people of the country realize this. I think what 
they are saying is: Balance the budget. I think many folks think the 
balanced budget amendment will also include the identification and, in 
fact, requirement of a series of cuts to achieve that. But there is 
nowhere in the balanced budget amendment where any of the courage that 
is required to identify specific 
[[Page S1892]]  cuts is demonstrated. It is just the reverse.
 It is just the reverse. In fact, in many ways, it is the easiest vote 
in the world.

  Mr. President, this raises a second point. Many of the supporters of 
the proposed constitutional amendment are unwilling to outline those 
spending cuts they would pursue in order to balance the budget. The 
majority leader of the other House, Richard Armey, a strong proponent 
of the constitutional amendment, has been quoted as saying that if 
Members of Congress knew what it took to comply with the proposal 
``their knees would buckle.''
  That is a candid statement, but a very disturbing one. Majority 
Leader Armey is also reported as saying that:

       Putting together a detailed list beforehand would make 
     passing the balanced budget amendment virtually impossible.

  Mr. President, this second point is a natural outflow of the 
underlying political view held by the amendment's supporters. That view 
I think is based on cynical assumptions about the American public and 
our democratic process. It implies that, if the people realized what it 
would take to balance the budget, they would just refuse to support 
such action.
  Let us consider for a minute what this reasoning suggests. I think it 
assumes a very low opinion of the American people, the electorate. 
Supporters suggest that, rather than deal honestly with the people, we 
should evade, delay and dissemble. Mr. President, in my view that 
perception of the American people is a good example of the politics as 
usual that got us into this mess in the first place, and which I 
believe voters have been rejecting, not just on November 8 of last year 
but for the past several years where we have had two monumental 
elections.
  Mr. President, I mentioned that I ran on the issue of deficit 
reduction in 1992, and, as a matter of fact, so did all of my three 
opponents in that race. I strongly believe that one of the reasons for 
my victory was that I spoke specifically with the voters about the 
deficit issue. While others supported the balanced budget amendment, 
they generally refused to specify how they would reduce the deficit. I 
opposed the balanced budget amendment but presented a specific 82-point 
plan--that has grown since--that pointed to exactly all the different 
ways we could cut the Federal budget which would add up to the 
elimination of the Federal deficit over 5 years.
  Mr. President, despite the statements that nothing has been done here 
in the last couple of years, and that this institution is incapable of 
cutting spending without a balanced budget amendment, I can tell you 
that during the past couple of years many of those specific cuts that I 
had identified--and that many others had identified--were included in 
the President's deficit reduction package in 1993, passed, and became 
law. Why did the balanced budget amendment advocates refuse to even 
take seriously the progress that has been made in reducing the deficit 
during the past 2 years? Well, maybe it is not good politics. But it is 
unfair to the American people to continue to tell them that nothing has 
been done, that no effort has been made, that no progress has been 
made, and that no tough votes have been taken, because they have.
  I regret that no Member of what is now the majority party chose to 
participate in either the other House or this House in trying to help 
us make those specific cuts. But that does not take away from the fact 
that those cuts were made. Why are we not out here telling the folks 
across America that, for example, we significantly cut hundreds of 
millions of dollars out of overseas broadcasting, Radio Free Europe and 
Radio Liberty? Why are not we telling the American people that we 
finally had the guts to get rid of the superconducting super collider, 
and the wool and mohair subsidy? My constituents say, ``These 
agriculture programs are eating us alive.'' The truth is we eliminated 
a program like that. It was not always fun for me with several thousand 
wool farmers in Wisconsin. But that was done here in this body in the 
last 2 years, and we are not telling the American people something that 
they need to hear.
  This week I was informed that one of the cuts that we achieved, one 
of the changes we made, is actually working out better than the CBO 
estimated. I believe the estimates were that the FCC spectrum auction 
would achieve $7 billion. I hear now it may end up being $10 billion 
that we are now able, through a more sensible proposal, to use and to 
help reduce the Federal deficit. That story is not being told out here 
because, if that story were being told out here, the advocates of the 
balanced budget amendment would have an awful hard time saying what 
they always say; that is, there is no way to reduce the deficit and 
balance the budget without a balanced budget amendment.
  I find it amazing that this is glossed over. And I believe that it is 
our obligation, as we go through this debate of the balanced budget 
amendment, to say that during the past 2 years--although certainly I 
would not describe it as the Camelot of deficit reduction--it was a 
very good start, and it helped our economy. And it reduced the deficit 
significantly. Now it just a question of finishing the job, and we have 
the power to do that today. And that is what we should be focusing on, 
not a balanced budget amendment that simply gives political cover.
  So, Mr. President, I think it is interesting to realize that the 
ratification of the proposed constitutional amendment itself may be 
threatened by the failure of its supporters to be specific and direct 
to the American people about how it is going to be achieved. More 
importantly, even if the proposed amendment is ratified, the cause of 
fiscal prudence and deficit reduction could be severely jeopardized if 
we do not have the broad-based support of the Nation and of the people 
of this country. In the end without that support, without the support 
of the American people, an unpopular plan would be overturned, and we 
would be left with the balanced budget amendment that only serves to 
degrade and undermine the authority of our laws, and even worse the 
authority of our Constitution.
  Mr. President, it should be reiterated that a majority of those 
supporters of the proposed amendment who were here in 1993 opposed the 
President's deficit reduction package. That package included many 
difficult provisions, including significant cuts to very popular 
programs. But this is precisely the kind of specific reduction package 
that will have to pass in this body, if we are ever going to really 
have a balanced budget, not a balanced budget amendment.
  (Mr. COATS assumed the chair.)
  Of course, if we are going to have what the American people really 
want, which is a balanced budget, I think one certainly can favor 
reducing the deficit but oppose a specific plan. But, Mr. President, 
many of the supporters of the proposed balanced budget amendment oppose 
any specific plan. In their best of all worlds, you do not propose a 
plan and identify the cuts, but you say that you supported the balanced 
budget amendment and you have done your job. You can go home and start 
focusing on other issues.
  On another matter, some supporters of the proposed constitutional 
amendment promised to offer a specific plan of action but they promised 
to do it only after the joint resolution is adopted by both Houses of 
Congress after it is sent out to the States but before it is ratified 
by the States. But, if we apply those folks' own test, this would doom 
the proposed constitutional change because what it means is, even 
though it may have passed the House and the Senate and it is sent out 
to the States, the plan would be revealed before ratification. The 
specifics would come out, those same specifics that would make our 
knees buckle and that would make it impossible to pass the proposed 
amendment in Congress presumably would be so terrible and so upsetting 
to the States that they would not pass the balanced budget amendment.
  Perhaps the supporters of the constitutional change would just keep 
the specifics secret throughout the whole ratification process. Taking 
this argument to its logical conclusion--the argument that we should 
not lay out the plan as we passed this amendment--the reasoning of the 
supporters of the proposed constitutional amendment dictate that a 
specific plan apparently could not be offered until after the States 
had ratified the amendment.
  In fact, under this argument, no plan could be offered until the 
first year the article was to take effect which, of 
[[Page S1893]]  course, is fiscal year 2002 at the very earliest, for 
not until the constitutional mandate is in force would the needed 
political cover be in place to protect those lawmakers that amendment 
supporters maintain are too hesitant to act without that protection.
  Is this what the balanced budget amendment supporters want? Is that 
what they are saying? We are going to keep a tight lip in 1995, 1996, 
1997, 1998, 1999, 2000, and 2001, and then suddenly in the year 2002 we 
are going to magically present this plan that will eliminate the 
Federal deficit, at which point, I assure you if we do this, will dwarf 
the deficit that we have now? Political cover will have made sure that 
this institution did not have to act during that time period, and it 
will not act. It will simply stand back and wait for the States to 
decide whether to pass this amendment.
  This reasoning produces the absurd result that Congress would be 
paralyzed to act to reduce the deficit until the first balanced budget 
is required, which again is fiscal year 2002 at the earliest.
  Mr. President, we know any delay in acting to eliminate the deficit 
only makes future action that much more difficult and politically 
distasteful. Waiting clearly makes it harder. In the world depicted by 
the amendments supporters, delay could be fatal for efforts to balance 
the budget as legislators would be confronted with an increasingly more 
difficult task and increasingly more difficult choices.
  Thus, Mr. President, even using the reasoning of the balanced budget 
amendment supporters, adoption of the amendment would make it more 
difficult to actually balance the budget. I think that kind of delay is 
a tremendous disservice to our economy, and especially to our children 
and our grandchildren. As a result of this action by the Congress, the 
States will end up with a bigger debt and a bigger deficit. The 
specific plan to reduce the deficit must be passed before a 
constitutional amendment is sent to the States for ratification.
  A budget plan is not only a safeguard against later inaction, it 
ensures that Congress deals with the American people honestly. I know I 
have not been the only Member of the Senate to propose a specific plan. 
I believe my colleague on the other side, the Senator from Colorado 
[Mr. Brown], has put together a similar kind of specific plan to 
eliminate the Federal deficit. I was delighted to work with him during 
the past 2 years on a bipartisan basis, and with Senator Kerrey of 
Nebraska, to craft that kind of a proposal. We signed onto it and we 
signed onto the specifics. No, we did not succeed in the vote on the 
floor, but we worked together to identify the cuts. That kind of 
approach is the only way we are going to reduce the deficits, not by 
letting Members of the Senate off the hook by providing them with the 
political cover of adopting a constitutional amendment that does not 
say one single thing about what should be cut and when and who should 
get hurt.
  Professor Stein, in his testimony before the Judiciary Committee, 
commented on this very point. He testified:

       I believe it is basically improper and unfair to propose a 
     balanced-budget amendment without revealing how the balance 
     would, or might, be achieved--by what combination of 
     expenditure cuts and tax increases. I do not think the 
     American people should be asked to commit themselves to a 
     constitutional limit on their future decisions without 
     knowing what would be involved.

  Mr. President, a specific plan of deficit reduction is the only way 
the budget will be balanced.
  Passing a specific plan before the proposed amendment is sent to the 
States helps preclude delay and evasion. Without it, Congress could 
adopt the proposed amendment, declare victory, and do absolutely 
nothing. It is a great formula for politicians who have to run for 
reelection. They can sit back and say: Let the States do it; it is not 
my problem. I voted for the balanced budget amendment. It is up to the 
States now to worry about the Federal deficit.
  That is what might be called a free pass. In fact, I think it is the 
equivalent of a politician winning the lottery. To not even have to 
talk about what cuts, to be able to say for the next 7 years it is up 
to the States to ratify the constitutional amendment, is like the 
political jackpot, because you do not have to say where the cuts should 
come from. That is what is going on here. It is punting to the States. 
It is leaving it up to the elected State legislatures instead of the 
people sent here, who took an oath to solve the Nation's problems 
themselves. That is what this balanced budget amendment is about.
  Mr. President, equally as important, before the voters and local 
governments and State legislatures are asked to ratify the amendment, I 
think they are entitled to know what the supporters of the balanced 
budget amendment mean to do, before they modify the Constitution of the 
United States to endorse that action. I believe the Constitution is our 
great national contract. Before the people are asked to support a 
change in that contract, they are entitled to read the fine print.
  Mr. President, there is at least one other issue that should raise 
serious doubts in the minds of Members. That is this clamor for a 
middle-class tax cut or an across-the-board tax cut by many of the same 
people who are saying they are dedicated to a balanced budget amendment 
and to the balanced budget. I think it is obvious to almost any 
American that this makes no fiscal sense. To give a big tax cut now, 
either to the middle class or across the board, and to maintain you can 
have a balanced budget amendment in the coming years is flim-flam, 
voodoo mathematics. The American people do not believe that we can have 
a tax cut and balance the budget.
  I will have more to say on this subject later in the debate.
  For now, I only want Members to note this obvious inconsistency and 
to consider that the two apparently contradictory positions really 
share one thing in common: They both flow from the politics of the free 
lunch.
  In closing, let me add a brief personal note about one of the 
principal sponsors of the amendment, the senior Senator from Illinois 
[Mr. Simon]. Unlike many who support the proposed amendment, he has 
consistently fought for deficit reduction and has taken tough stands in 
that effort, including voting for the President's deficit reduction 
bill. That vote, obviously, was essential, as was the vote of every 
Senator who voted for it, including, of course, the Vice President of 
the United States.
  Senator Simon has joined with a number of us who are questioning the 
wisdom of the tax cut bidding war that has started. So I want to say, 
out of great respect for the Senator from Illinois, that the supporters 
of the proposed amendment could have no greater champion than Senator 
Simon. Though he and I differ on this issue, I regret very much his 
decision not to seek reelection.
  I yield the floor.


           The Taxpayers Deserve a Balanced Budget Amendment

  Mr. ASHCROFT. Mr. President, when our ancestors were on the verge of 
a revolt against the British Government, Edmund Burke rose in the House 
of Commons to urge his fellow Members of the House of Parliament to 
refrain from using force to impose taxes on those in the United States, 
which were then Britain's American Colonies. Burke had the courage and 
the wisdom to speak for conciliation. He foresaw what no one else did--
that if England persisted in taxing this country, it would lose its 
empire and would fight a long war for a bad cause. Burke told the 
Members of Parliament that in attacking America through taxation, they 
were really attacking their own British liberties.
  As we discuss the balanced budget amendment, we usually talk about 
the impact of runaway spending on our economy and on our future. Those 
are our fundamental considerations. But we also must not lose sight of 
considerations that are far more fundamental and profound. Protracted 
deficit spending empowers the central Government with the means to 
undermine our basic liberties.
  We hear it said in this Chamber, and by the media, that the American 
people are selfish because they want the benefits of Government without 
the cost of taxes. We forget that the power to impose taxes is a 
standing threat to freedom.
  Mr. President, the acknowledgment that we can only control Government 
by controlling its capacity to take our money is as old as the idea of 
democracy. Money was--and is--the source of 
[[Page S1894]] the Government's basic power. The tale of history bears 
testament to this truth. The Magna Carta prescribed that the King could 
not impose taxes except through the consent of the Great Council. 
Charles I was executed because he tried to govern without seeking the 
consent of Parliament in spending public money. Let us not forget that 
the American Revolution itself was rooted in the relationship between 
taxation and representation.
  Congress today does not have to vote to raise more revenue in order 
to spend more money. Instead, our legislature takes the debtor's path: 
Spend and beg; spend and plead; spend and borrow. Our current system 
lets the Government spend on credit and sign the taxpayers' name on the 
dotted line. When the credit card bill comes due, it is the American 
people who are confronted with the dilemma. They can either send more 
money to Washington to pay the bill or default on the debt incurred in 
their name.
  When the American people express the belief that Government is out of 
control--as they did in this past November's election--they, indeed, 
are correct. For too long, this body has assembled to satisfy the 
appetites of narrow interests at the public's expense. The American 
people are fed up with a Congress that spends the yet unearned wages of 
the next generation.
  Mr. President, deficit spending is not only a threat to our 
prosperity and our children's future, it is the method by which 
Washington's imperial elite has circumvented the public, the law, and 
the Constitution. Deficit spending allows beltway barons to run this 
country without regard for the people. Whether it is pork projects or 
political payoffs, the Washington elite know how to play the game.
  That must end. A balanced budget amendment will compel the Members of 
this body to raise taxes if they want to spend more money. What better 
way to restrain spending than that?
 A balanced budget amendment will make it clear to all that the special 
interest is rewarded when the citizen is penalized and that we should 
refrain from penalizing citizens to reward special interests.

  What will a balanced budget amendment mean? It will mean 
accountability to the Constitution and restraint on our spending--in 
short, it will mean integrity in Government. It will rightly return the 
power of the purse to the people.
  Two centuries ago, in a nation across the sea, Edmund Burke reminded 
his fellow Members of Parliament of a fundamental principle. Burke 
said:

       * * * the people must in effect themselves * * * possess 
     the power of granting their own money, or no shadow of 
     liberty [can] subsist.

  Mr. President, if we truly wish to preserve the liberties first 
inscribed into the Magna Carta and then brought to these shores--and 
preserved through the blood of revolutions on two continents--it is 
imperative that we return to the people the power of the purse.
  We must take the American Express card away from the Congress and 
eliminate the expense account of the beltway barons. We must make the 
Members of this body accountable to the taxpayers--not to the 
lobbyists. We can do this if we have the will.
  The balanced budget amendment is not a quick fix. But it is real 
reform and it will be felt. I know--from my service as Governor of one 
of the States--that 49 States, in effect, require a balanced budget. It 
is not a gimmick. We balance the budget.
  I balanced budgets 8 years in a row while I was Governor. As a matter 
of fact, we put into place a cash operating reserve fund of several 
hundred millions of dollars. We established a rainy day fund--such as 
the emergency fund that the senior Senator from Illinois has suggested 
we have for the Federal Government--because we knew there would be 
episodes of fiscal crisis and financial difficulty in the future that 
we would need to meet. And we knew, since we were required by our 
constitution to have a balanced budget, that we would need to prepare 
for it in advance.
  So, Mr. President, let me say it again for emphasis. A balanced 
budget requirement is not a gimmick. It is not a quick fix either, but 
it is real reform. It will reestablish the responsibilities observed in 
this country for decades--prior to the last two or three--that we would 
have balanced budgets except in time of war.
  A balanced budget is a political reform that will be felt first and 
foremost by the imperial elite who have long run this town. It will be 
felt by a brood of beltway barons--both elected and unelected--who are 
robbing the next generation of their inheritance. And, most 
importantly, it will be felt by the American people who will have 
succeeded in restoring their right to self-governance.
  There are those in this body, Mr. President, who suggest to us that 
we somehow have to forecast the next 7 years of priorities in spending 
for the United States of America in order to give allegiance to a 
balanced budget amendment. Nothing could be further from the truth as 
far as I am concerned.
  I know of no State which tries to lock itself into a 7-year budget 
which would deny subsequent legislatures the opportunity to adjust to 
priorities, to respond to circumstances, and to create budgets which 
meet the real needs of the individuals in the jurisdiction at the time.
  When President Kennedy came before the United States of America--and 
before the House and Senate--and suggested that we as a nation, adopt 
and embrace an aspiration to put a person on the Moon as an expression 
of our ability to expand our technological and scientific awareness, he 
did not have every answer for every way in which everything would 
happen, but he expressed it as an aspiration--an aspiration toward 
greatness.
  The desire to climb a mountain does not always contain in it all the 
plans and processes and procedures, but you commit yourself to the 
objective and you launch your endeavor and you work your way toward the 
objective. And it is essential that we do that at this time.
  The suggestion that our aspirations regarding Federal spending can be 
accomplished without a balanced budget amendment to the Constitution 
calls history a liar. For decades and decades, the United States of 
America has conceded the necessity--but never developed the 
discipline--to get this job done. It is time now that we make this 
commitment to a noble objective, to protect the birthright of a 
generation of Americans yet to come, to protect the opportunity for 
productivity and competitiveness for the next generation. It is time 
that we made this commitment for ourselves --and for those who follow 
us.
  Mr. President, I am grateful to have had this opportunity to address 
this body on these issues. I note that Senator Heflin desires to speak, 
so I yield the floor.
  Mr. HEFLIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. HEFLIN. Mr. President, I rise again to express my support for a 
constitutional amendment requiring the Federal Government to achieve 
and maintain a balanced budget. The time has finally come to pass this 
legislation and send it to the States for ratification. This amendment 
is not a gimmick, nor is it chicanery; it is good common sense.
  We have seen in the House, on January 26, overwhelming, bipartisan 
support and passage of a balanced budget amendment. The vote in the 
House 300 to 132, 12 more than the two-thirds majority required for 
passage of a constitutional amendment, proves that the time for action 
is now. This momentum, shown by the House, is one which I believe will 
only grow as the Senate and eventually the State legislatures debate 
and vote to pass this vital amendment to our Constitution.
  I commend the Members of both parties in the House, who formed an 
alliance to produce the vote, which was a culmination of over 10 years 
of House deliberation and debate. I applaud all for their determination 
to see this legislation succeed, as well as the many House Democrats 
who have worked unceasingly toward this victory.
  And, as the waves of this tide roll into the Senate we should be 
aware of where the original swell began, the American people.
  Since I first came to the Senate in 1979, every Congress I have 
introduced legislation proposing a constitutional amendment to balance 
the Federal budget, and I have dedicated myself to many years of work 
with my colleagues to adopt a resolution which 
     [[Page S1895]] would authorize the submission to the States 
     for ratification of a constitutional amendment to require a 
     balanced budget.
  For much of our Nation's history, a balanced Federal budget was the 
status quo and part of our unwritten constitution. For our first 100 
years, this country carried a surplus budget, but in recent years this 
Nation's spending has gone out of control. Indeed, the fiscal 
irresponsibility demonstrated over the years has convinced me that 
constitutional discipline is the only way we can achieve the goal of 
reducing deficits.
  As you know, in 1982, the Senate did pass, by more than the required 
two-thirds vote, a constitutional amendment calling for a balanced 
budget. There were 69 votes in favor of it and that time. It was sent 
to the House of Representatives, where, in the House Judiciary 
Committee it was bottled up. The chairman would not allow it to come up 
for a committee vote, in order that it might be reported to the floor 
of the House of Representatives.
  In order to bring the measure up for a vote in the House of 
Representatives, it was necessary to file a discharge petition. This is 
a petition that has to be signed by more than a majority of the whole 
number of the House of Representatives, and then it is brought up and 
voted on without amendment. The Senate-passed amendment failed to 
obtain the necessary two-thirds vote that was required in the House of 
Representatives at that time.
  In the 99th Congress, after extensive debate, passage of a balanced 
budget amendment by the Senate failed by one vote--but got 66 votes. 
During the 101st Congress, I supported a measure which passed the 
Judiciary Committee, but it was never considered by the full Senate. In 
the 102d Congress, the Judiciary Committee favorably reported a 
balanced budget bill, but since an amendment failed to pass the House 
of Representatives by the necessary two-thirds vote, this killed the 
possibility of favorable action by the Senate.
  In the 103d Congress, the Senate narrowly defeated an amendment, 
which I cosponsored, by a vote of 63 to 47--4 votes short of the 67 
votes needed for passage.
  All the while, there has been considerable debate, various articles 
have been written in numerous publications, and editorials have 
appeared
 in countless newspapers. Many speeches have been made on the floor of 
the Senate, and I have made numerous speeches advocating the adoption 
of a constitutional amendment requiring a balanced budget.

  Mr. President, I hope the time has come to finally adopt this long-
overdue amendment and begin to move toward our goal of a balanced 
Federal budget.
  Section 1 of the amendment requires a three-fifths vote of each House 
of Congress before the Federal Government can engage in deficit 
spending. A 60-percent vote in the Senate is a very difficult one to 
obtain. This requirement should establish the norm that spending will 
not exceed receipts in any fiscal year. If the Government is going to 
spend money, it should have the money on hand to pay its bills.
  Section 2 of the amendment requires a three-fifths vote by both 
Houses of Congress to raise the national debt. In addition to the 
three-fifths vote, Congress must provide by law for an increase in 
public debt. As I understand it, this means presentment to the 
President, where the President has the right to veto or sign. If the 
President chose to veto the bill, it would be returned to Congress for 
action to possibly override the veto. It is also important to note that 
section 1, regarding the specific excess of outlays over receipts, 
contains this same requirement that Congress act by law.
  Section 2 is important because it functions as an enforcement 
mechanism for the balanced budget amendment. While section 1 states 
outright that ``Total outlays * * * shall not exceed total receipts'' 
without the three-fifths authorization by Congress. Therefore, section 
2 will require a three-fifths vote to increase the national debt. This 
provision will increase the pressure to comply with the directive of 
this proposed constitutional amendment.
  In my judgment, section 2 puts teeth into the constitutional 
amendment. We have had many statutory enactments that say we are going 
to have a balanced budget. We have a procedure under this 
constitutional amendment that makes it more difficult to engage in 
deficit spending. This is a procedure by which, if there is an excess 
of outlays over receipts--and that means deficit spending during a 
fiscal year--we must approve that specific amount by a three-fifths 
vote of the whole membership of both Houses. That in and of itself is 
fine, but it is largely directory. It does not have an enforcement 
procedure. An enforcement procedure is provided by section 2 of the 
amendment, which is the public debt provision.
  The public debt provision makes it more difficult for Congress to 
vote a deficit. It means that if we vote a deficit and fail to increase 
the public debt, then Government will come to a halt. If we do not 
increase the public debt, eventually, we run on a balanced budget.
  Therefore, section 2 has the intention of making it more difficult. 
So I say it is not for the purpose of making it harder to pay our 
debts, it is to make it harder to go into deficit spending and to give 
an enforcement procedure--a process, a mechanism that is so important 
because it is not just words that we could pass by and ignore.
  Other than just being directory, the amendment, by way of section 2, 
has some teeth and that is what is so important if we are going to do 
away with deficit spending and operate so that we do not spend any more 
money than the amount coming into the Government. That is what we are 
trying to achieve here.
  Section 3 provides for the submission by the President of a balanced 
budget to Congress. This section reflects the belief that sound fiscal 
planning should be a shared governmental responsibility by the 
President as well as the Congress.
  Section 4 of the amendment requires a majority vote of the whole 
number of each House of Congress any time Congress votes to increase
 revenues. This holds public officials responsible, and puts elected 
officials on record for any tax increase which may be necessary to 
support Federal spending.

  Section 5 of the amendment permits a waiver of the provision for any 
fiscal year in which a declaration of war is in effect. This section 
also contains a provision long-supported by myself--that of allowing a 
waiver in cases of less than an outright declaration of war--where the 
United States is engaged in military conflict which causes an imminent 
and serious threat to national security, and is so declared by a joint 
resolution, which becomes law. Under this scenario, a majority of the 
whole number of each House of Congress may waive the requirements of a 
balanced budget amendment.
  I firmly believe that Congress should have the option to waive the 
requirement for a balanced budget in cases of less than an outright 
declaration of war. Looking back over the history of our Nation, we 
find that we have had only five declared wars: The War of 1812, the 
Mexican War, the Spanish-American War, the First World War, and the 
Second World War.
  The most recent encounters of the United States in armed conflict 
with enemies have been, of course, undeclared wars. We fought the gulf 
war without a declaration of war. In addition, we fought both the 
Vietnam and Korean actions without declarations of war.
  This country can be faced with military emergencies which threaten 
our national security, without a formal declaration of war being in 
effect. Circumstances may arise in which Congress may need to spend 
significant amounts on national defense without a declaration of war. 
Congress and the President must be given the necessary flexibility to 
respond rapidly when a military emergency arises.
  In the future, there could be a war like the Vietnam war--which went 
on for 11 years. Without a waiver for situations regarding less than an 
outright declaration of war, each year you would have to waive the 
constitutional amendment pertaining to a balanced budget by a three-
fifths vote. We might look back and we would see that the vote to 
withdraw the troops from Vietnam carried by only eight votes. The 
difference between a majority and a three-fifths vote is a difference 
between 51 and 60, which is 9 votes.
  [[Page S1896]] As I previously stated, the United States has engaged 
in only five declared wars, yet the United States has engaged in 
hostilities abroad which required no less commitment of human lives or 
American resources than declared wars. In fact, our Nation has been 
involved in approximately 200 instances in which the United States has 
used military forces abroad in situations of conflict. Not all of these 
would move Congress to seek a waiver of the requirement of a balanced 
budget, but Congress should have the constitutional flexibility to 
provide for our Nation's security.
  Twice since the end of the Second World War, first in Korea and then 
in Indochina, this Nation has been heavily engaged in armed conflicts 
abroad. In other instances, American troops have been sent to foreign 
countries in times of crisis--Lebanon in 1958, and the Dominican 
Republic in 1965. Other critical situations, including the 
confrontation in the Formosa Straits in 1955, and the Cuban Missile 
Crisis in 1962, have been met by use of American military forces.
  I think it is wise to look at some of the other instances in which we 
have had undeclared war and to see how serious they were. During 1914 
to 1917, a time of revolution in Mexico, there were at least two major 
armed actions by United States forces in Mexico. The hostilities 
included the capture of Vera Cruz and Pershing's subsequent expedition 
into northern Mexico.
  In 1918, Marines landed at Vladivostok in June and July to protect 
the American consulate. The United States landed 7,000 troops which 
remained until January 29, as part of an allied occupation force. In 
September 1918, American troops joined the allied intervention force at 
Archangel and suffered some 500 casualties.
  In 1927, fighting at Shanghai caused American naval forces and Marine 
forces to be increased. In
 March 1927, a naval guard was stationed at the American consulate at 
Nanking after national forces captured the city. A United States and 
British warship fired on Chinese soldiers to protect the escape of 
Americans and other foreigners. By the end of 1927, the United States 
had 44 naval vessels in Chinese waters, and 5,670 men ashore.

  When a pro-Nasser coup took place in Iraq in January 1958, the 
President of Lebanon sent an urgent plea for assistance to President 
Eisenhower, saying Lebanon was threatened by both internal rebellion 
and indirect aggression. President Eisenhower responded by sending 
5,000 marines to Beirut to protect American lives and help the Lebanese 
maintain their independence. This force was gradually increased to 
14,000 soldiers and marines who occupied strategic positions throughout 
the country.
  The most recent military involvement of the United States in an 
undeclared war is, of course, the Persian Gulf war. Although the actual 
gulf war lasted just over a month, this country had a peak strength of 
541,000 troops. In addition, the Department of Defense estimates the 
cost of operation Desert Storm at $47 billion.
  We should recall the circumstances which occurred on January 12, 
1991, when the Senate, agreeing with the House, voted by a slim margin 
of 52-47 to approve the use of force to stop Iraqi aggression against 
the State of Kuwait. This slim margin illustrates how difficult it 
would be without such a provision, to achieve the needed 60 votes to 
take a budget into deficit posture in order to finance the gulf war. 
Thus, circumstances may arise in which Congress may need to spend 
significant amounts on national defense without a declaration of war. 
Congress and the President must be given the necessary flexibility to 
respond rapidly when a military emergency arises.
  Section 6 of the amendment permits Congress to rely on estimates of 
outlays and receipts in the implementation and enforcement of the 
amendment by appropriate legislation.
  Section 7 of the amendment provides that total receipts shall include 
all receipts of the United States except those derived from borrowing. 
In addition, total outlays shall include all outlays of the United 
States except those for repayment of debt principal. This section is 
intended to better define the relevant amounts that must be balanced.
  Mr. President, the future of our Nation's economy is not a partisan 
issue, which was proven with the recent vote of the House. Furthermore, 
the problem of deficit spending cannot be blamed on one branch of 
Government or one political party. Similarly, just as everyone must 
share part of the blame for our economic ills, everyone must be united 
in acting to attack the growing problem of deficit spending. I 
recognize that a balanced budget amendment will not cure our economic 
problems overnight, but it will act to change the course of our future 
and lead to responsible fiscal management by our national Government.
  Mr. President, I yield the floor.
  Mr. KOHL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. KOHL. I thank the Chair. I will not be long.
  I come here this afternoon to speak in favor of the balanced budget 
amendment. This is not a surprise to my colleagues. I have been in 
support of a balanced budget amendment now for quite some time. I wish 
to add my voice to the voices in support of those who have up to this 
point indicated their support for the balanced budget amendment.
  I would like to give one or two arguments that I believe are very 
important as we consider this very important amendment to our 
Constitution.
  There is no question that we should not amend our Constitution very 
often and unless the reason is very, very important. We have only had 
27 amendments to our Constitution over our history, so when we consider 
an amendment to our Constitution we clearly have to consider whether or 
not that amendment is of great importance. If it is not, we should not 
amend the Constitution.
  In this case, we have to ask ourselves whether or not financial 
responsibility, however it is defined, is a very important measurement 
and indicator of how our country is functioning at the Federal level 
and whether those who are entrusted with the responsibility of 
presiding over the Federal Government have a responsibility to be 
financially responsible.
  I think the answer is clearly yes. I do not think any of us, whether 
we favor or oppose the balanced budget amendment, would argue that we 
have a responsibility to exercise control and good judgment over our 
Nation's finances.
  In my opinion, one need not look very far back in our history to 
conclude that enough time has gone by during which time we have not 
exercised financial responsibility to argue very strongly of the need 
for the balanced budget amendment.
  Let us not forget that from 1789 to 1978, we had accumulated a total 
of less than $1 trillion of debt. In all the years, almost 200 years of 
history, our country had accumulated less than $1 trillion of debt.
  In the 16 or 17 years since then, we have gone from less than $1 
trillion to almost $5 trillion. I do not think anybody in the Senate 
would argue that the past 16 or 17 years is an indicator of financial 
responsibility; that there is no need to pass a balanced budget 
amendment because the Congress and the administrative branch of 
Government have been acting in a responsible way.
  I do not think that argument can be made. In fact, any economist who 
would look at our present level of debt, which is about two-thirds to 
70 percent of our gross national product, would argue that this is a 
very unhealthy and dangerous level of debt for our country to be in. So 
in terms of our history over the past 15 years, 17 years, there is no 
indication that we are prepared to exercise financial responsibility 
absent something more than what we have on the books now, which is 
basically nothing, by way of constraint.
  I do not think any of us would argue that we are not in the process 
now of leaving to our children an enormous debt which will cloud their 
lives, make their lives less happy, make them less able to take care of 
their needs and their generation. We are head over heels in the process 
of adding to the debt and providing to our children that kind of a yoke 
around their neck. We should not do it. We are not able to stop 
ourselves. And so I think that argues for the need for a balanced 
budget amendment.
  Oh, yes, there are those who say, ``Well, look at what we have done 
over 
[[Page S1897]] the past several years.'' I voted for the budget that is 
now in the process of reducing our debt. But we all know it is a quick 
fix or a short fix. We all know that what we voted for is not going to 
bring down our deficit to a proper level, not even going to bring us 
within hailing distance of a balanced budget in the foreseeable future 
and that, indeed, after these 3 years of reducing the Federal deficit, 
our deficit is going to start to increase in the outyears.
  There is nobody suggesting we are prepared to make the hard decisions 
that will be required to bring what will be an increasing deficit into 
balance without something more than what we have on the books now, 
which is basically nothing, by way of restraint.
  So I think it is clear that we have demonstrated we need more on the 
books, more restraint, more legal mechanisms, and, if you will, a 
constitutional amendment for a balanced budget.
  Now, there are those who say, ``But this amendment is draconian. This 
amendment is something that will tie our hands. This amendment that we 
are considering right now, although it does lay on the books in the 
Constitution a requirement to balance the budget''--and that is a good 
idea in concept--``we do not like.''
  That is fine. Let us come down here now and try to change that 
amendment. Let us come down here now and try to improve that amendment.
  There are those who say we have to get Social Security out of that 
constitutional amendment consideration. I agree. And I support that. So 
let us see if we can argue it through and get to an elimination of 
Social Security as part of this constitutional amendment to balance the 
budget.
  There are those who say we need some provision for capital outlays 
every year, that States that have balanced budget requirements in their 
constitutions have a provision for capital outlays. So, fine, let us 
work to get that in this constitutional amendment.
  There are those who say that we should not be required to balance our 
budget every year, that that would not be a smart economic move. Fine. 
Let us see if we cannot get, instead of the 60-vote requirement, which 
does exist in this constitutional amendment, which would allow us to 
unbalance the budget in any year for any reason if we can muster a 60-
percent vote in either House of the Congress--to those who say that is 
draconian, let us try to amend that to 55 percent, 51 percent of the 
vote.
  If you do not believe in that, if you do not believe in coming down 
here to try to amend this amendment to the Constitution so that it more 
nearly conforms to what your ideas of what the balanced budget should 
look like, if you do not want to even argue that, then I would conclude 
that you do not want a balanced budget; that you do not believe in 
balanced budgets; that you do not believe we have a responsibility in 
normal years to balance our books.
  If you do not believe that, then you ought to come down and say, 
well, that is the way I would argue it and this is the way, and maybe 
you can convince us and the American public that you are right.
  I do not think it is fair to say, ``I believe in balancing our books 
but I do not believe in a balanced budget amendment, regardless of what 
it looks like.''
  That to me is a specious argument, and I think it deserves to be 
pointed out. I think those people who believe that we should not have 
an amendment to balance this country's books should come down and 
really say why. If the fact is they do not like this amendment, I would 
like to see how they would tailor an amendment they could accept to the 
concept that we have a responsibility to balance the books of this 
country, if not every 1 year, every 3 years.
  Bring that to the floor of the Senate and let us argue that. But do 
not say, ``I believe in a balanced budget, but I do not believe in a 
balanced budget amendment.'' To me that is a very difficult argument to 
make.
  So I come down here to lend my support to those who believe we need 
to have an amendment to see that we exercise financial responsibility 
in the Congress. I look forward to this debate. I know it will be 
vigorous. It is very important. Undoubtedly, it will take more than 
just a few days, and it should take more than just a few days. I am 
looking forward to having that discussion with my colleagues.
  I thank the Chair.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER (Mr. Abraham). The Senator from Maine.
  Ms. SNOWE. Mr. President, I rise in strong support of the legislation 
before us: a balanced budget amendment to the Constitution of the 
United States.
  Mr. President, this year marks an important anniversary in our 
national history: the 50th anniversary of the end of World War II. But 
as we celebrate the victory of one struggle, this year we also mark the 
anniversary of a loss in another battle--one whose fiscal implications 
are almost as prophetic as the battles of 50 years ago.
  But this anniversary is one that Congress has in fact marked each 
year since 1969--26 years of continually running budget deficits.
  This is one of the longest losing streaks in Congressional history. 
It is a fiscal losing streak that every American citizen has had to pay 
for over the past generation.
  But let us be sure of one thing--this debate is not about yesterday. 
It is not really even about today--1995. But it is most assuredly about 
America's future; it is about our children's future. As one American 
said when he was asked about his concern for our tomorrow, ``Of course 
I am concerned about the future. It is where we will spend the rest of 
our lives.''
  Yet, tragically, we are squandering our future in spiralling debt--
mortgaging our children's future down a vacuum of debt as we selfishly 
avoid the challenge of balancing our Federal budget.
  Now we have another remarkable opportunity--an historic opportunity--
to pass this amendment to the Constitution. I would like to commend our 
leader, Senator Bob Dole, for bringing this legislation to the floor at 
such an early date.
  I would also like to especially thank the sponsors of this bill--the 
Senator from Utah [Mr. Hatch], for providing exceptional leadership on 
this issue, and the Senator from Illinois [Mr. Simon] for providing 
bipartisan support for this measure--as well as the Senator from Idaho 
[Mr. Craig] for his ongoing efforts on this critical amendment.
  An early debate in this session of Congress is gratifying for many of 
us who have been working for more than a dozen years for a balanced 
budget amendment. We have already seen our efforts produce positive 
results--just recently, a requisite two-thirds majority in the other 
Chamber passed a resolution calling for a balanced budget amendment to 
the Constitution. The decision our colleagues made on that vote to pass 
this legislation for the first time, Mr. President, presents us with a 
renewed opportunity to act--and pass--this amendment in this Chamber, 
getting the requisite two-thirds majority.
  We in Congress are at a precipice--a crossroads--in our relationship 
with the American people. We can either rise to the occasion and meet 
their expectations, or, we can merely do nothing and uphold the 
economic status quo.
  Congress' focus on this measure comes after the American people cast 
resounding votes for change in November. By pulling the lever for 
action and progress, they also issued a call for an end to the 
economics-as-usual, an end to recurring deficits. An end to trillion-
dollar debts and an end to fiscal irresponsibility and reckless 
spending.
  In this debate, we have another opportunity to show the American 
people that, yes, we did listen to them, and we do get it.
  And, perhaps most importantly, they voted to make Congress 
accountable for its actions. Thus far in this session we have taken 
great strides toward that responsibility. We passed legislation on 
congressional accountability, mandating Congress to abide by the same 
laws that we have passed onto the American people. And we passed 
legislation that will curb unfunded Federal mandates on State and local 
governments, which is presently being debated in the House of 
Representatives.
  [[Page S1898]] Now, we have the historic opportunity to send another 
message of accountability to the people by passing the balanced budget 
amendment. We will demonstrate our commitment to the American people. 
We will balance our budget, and put our Nation's fiscal house in 
order--permanently.
  I am confident that this is the right thing to do: Every American 
family must balance their budget; they are not at liberty--as the 
Federal Government has been--to simply run annual household deficits. 
They play by the rules. They live by the rules. And Congress should not 
be living by any other standards.
  For too long, we have spent without regard to our income, and in the 
process, we have squandered our children's future. How can we support 
the fiscal status-quo of increasing national debts and bequeath misery 
on the next generation of Americans?
  We can begin a new regimen this year by facing up to our 
responsibilities. This is what accountability is all about.
 We must set our priorities within our income. We must stop borrowing 
against our children's future.

  Without question, these will be difficult decisions, but we are not 
alone in facing these decisions. Nearly every State, every small 
business, every family, and every citizen faces similar choices each 
year in keeping spending under control.
  I have seen firsthand the tough choices that must be made. For the 
past 8 years, my husband served as Governor of Maine. Like the 
Governors of 48 other States, he was required to balance our State's 
budget, irregardless of economic conditions or the State's financial 
status.
  This means that Congress will have to make tough choices. But, with 
discipline these decisions are as possible as they are necessary. And 
lest anyone think that the States do not consider a balanced budget 
worthy of being a part of the U.S. Constitution, 49 States already 
require a balanced budget.
  If accountability and discipline work at the State level, we can and 
should make it work at the Federal level. Congress should be able to 
confront the economic realities and challenges that 49 States--and 
every American--face as well. They have made the difficult choices even 
with declining revenues and a declining economy.
  When we speak of interest payments, deficits, and the debt--we throw 
around numbers in the millions, billions and trillions. We paint a big 
picture that sometimes obscures the direct impact this issue has on 
each and every American family. We must now focus on exactly what these 
numbers mean in terms of people's daily lives.
  There is little doubt that deficits and debt place a crippling burden 
on hard-working families in my home State of Maine and across our great 
land. An analysis compiled by the Concord Coalition, for example, 
suggests that the deficit takes an alarming toll in national 
productivity. In real terms for American families, increased 
productivity would mean an average American family income of $50,000 
annually, instead of the current $35,000 a year. Lost income of $15,000 
and untold costs, Mr. President: our constituents do not deserve this 
injustice.
  How many children, I wonder, go without a proper education because of 
that missing $15,000?
  How many couples or single parents forego proper, safe child care 
because of these numbers? How many Americans make difficult choices on 
health care coverage because they do not have these funds to provide 
coverage to their spouses or children?
  Is this what has become of the American Dream when, by ignoring the 
deficit, we deny American families the opportunity to prosper 
financially, or survive economically?
  But even more devastating for our workers looking for stable jobs 
with a good wage, the Federal deficit has had an alarming impact on our 
Nation's economic growth and job creation. The New York Federal Reserve 
Bank attributes a reduction in savings to the deficit, and says that in 
the 10 years from 1979 to 1989, this reduced growth in the gross 
national product and in personal income by 5 percent. This has a 
devastating effect on jobs in our Nation: 3.75 million jobs in 10 
years--650,000 for every percentage point in the GNP--lost because of 
the deficit, according to a study by the Congressional Budget Office.
  That is an astounding cost for our inaction that rests on the 
shoulders of every American worker.
  Unfortunately, the statistics and examples of the burden our debt and 
deficit inflicts on each American continues to be staggering: Since 
1980, our national debt has grown from $1 trillion to $4.7 trillion. 
This is expected to grow to $6.3 trillion by 1999--a 453-percent rate 
of growth since 1980. During the same timeframe, the annual interest we 
pay on our growing national debt has ballooned out of control, rising 
from $117 billion in 1982 to almost $300 billion in 1994 to $373 
billion in 1999, or a 219-percent growth rate between 1982 and 1999. 
These numbers mean that in the next 5 years, the burden of this debt 
for every man, woman, and child in the United States will rise from 
$17,938 to $22,909--growing by about $5,000 in just 5 years. Just in 
1\1/2\ years that per capita debt had increased by $1,300.
  As the distinguished Senator from New Mexico [Mr. domenici] has 
emphasized, our national debt represents the most unfair tax ever 
imposed. The Office of Management and Budget has already estimated that 
if we continue our current spending spree, future generations will be 
forced to suffer a tax rate of 82 percent in order to pay our bills. 
Those same generations have no say, no voice, and no vote.
  But the prices of our inaction do not just come on an annual basis. 
Every day, we add $819 million of daily interest to the national debt.
  One would think that, in the face of this track record
   that Congress would have mustered the courage long ago to meet the 
challenge of a balanced Federal budget, stopping short of an amendment. 
That is a major debate here as to whether or not we should have a 
constitutional amendment or a statutory approach.

  It is interesting to note in the last 15 years in the Congress we 
have had seven opportunities to consider a constitutional amendment to 
balance the budget. Time and time again we heard from critics of such 
constitutional approach that we can do it, we do not need a 
constitutional amendment. All we need is to have the will and the 
courage and the discipline to make those choices. We have learned 
otherwise from that approach.
  Mr. INHOFE. Will the Senator yield?
  Ms. SNOWE. I will be happy to yield.
  Mr. INHOFE. I thank the Senator from Maine for yielding, but I could 
not help thinking, when she was talking about what was going to happen 
to future generations, about people who keep coming up with this idea, 
saying, ``Where are you going to cut?'' And they try to single out all 
the programs to show that the individual who is trying to do this 
somehow lacks compassion. Yet, as the Senator pointed out, future 
generations, if we do not do something today and stay on the track 
where we are today, are going to have to pay for everything we are 
doing today.
  If it gets down to a discussion of compassion, then why would we not 
be in a position to say that, if you really want to be compassionate, 
let us bite the bullet today? Let us do it.
  I think the CBO and others have come up with the figures projecting 
out where we would be in the next 10 to 20 years if we do not make a 
change. If we do not pass something like this immediately, it gets down 
to a very personal basis. I have two grandchildren, ages 20 months and 
21 months. It works out, if we do not do something and we continue on 
this trend that we have right now, that during their lifetimes they are 
going to have to pay 75 percent of their lifetime income just to 
service the debt.
  So I guess I would ask the Senator from Maine if this is not really 
the most compassionate route to take, to go ahead, bite the bullet now 
and be responsible now?
  Ms. SNOWE. Absolutely. I think the Senator makes an excellent point 
about that because clearly what we are doing is just deferring to 
future generations for payment of the bills. There is no doubt about 
it. I think the Senator from Oklahoma recognizes, having served in the 
House of Representatives over the years, as well, that it is 
institutionally incapable of making those decisions.
  Ironically, the only time we had a lower deficit was back when we had 
the 
[[Page S1899]] Gramm-Rudman-Hollings legislation. That was because that 
was a tool to force the Congress to meet certain targets. But I know 
that many times in which I have been engaged in deficit reduction 
efforts as a member of the House Budget Committee in the last Congress, 
and previously back in the mid-1980's, I offered specific budget cuts 
on the floor in conjunction with some of my colleagues so that we could 
reach a balanced budget statutorily. And on each and every occasion, we 
had people objecting to every cut. There was a reason. For one, we 
could not cut any program.
  So there are always those who have to make some tough choices. But I 
think the American people can do it fairly and prudently, and to 
prioritize and decide. What can we afford or can the American people 
afford? I think the American people have lost confidence in this 
institution, in the fact that their hard-earned taxpayer dollars are 
being spent wisely, because we have never been forced to make any 
choices here other than to spend and spend and tax and tax.
  As the Senator from Oklahoma will recall, in the last Congress, we 
provided specific line-item reductions in numerous programs that we 
offered as Republicans in the House Budget Committee, and with the 
support of the Senator and all other Republicans on the floor. Those 
specific line-item cuts were ignored. We ultimately got the largest tax 
increase in the history of this country. Ironically, the CBO just 
indicated that we will get lower-than-anticipated revenues from those 
tax increases.
  Mr. INHOFE. If the Senator will yield further, she has hit upon 
something that is very significant; that is, we cannot do it any other 
way. We served together for 8 years in the House of Representatives, 
and she was there before that. And I am sure what was going on before. 
But we tried again and again to do it from a statutory perspective, and 
it did not work.
  I am a little embarrassed to say that it was one of the Members of 
the House from the State of Oklahoma that challenged in the courts the 
Gramm-Rudman approach to balancing the budget, which was an excellent 
approach. It was ingenious. However, apparently it did cause the 
administration to infringe upon legislative powers and there was some 
constitutional problem with it.
  But those same people who took that to court and were able to strike 
it down so that we did not have to comply with the targets are the ones 
who say we do not want a balanced budget amendment in the Constitution 
because that is our job to do it. I say yes. I agree in this case with 
those who object to it. It is our job to do it. But we have clearly 
demonstrated for 40 years that we are incapable of resisting the 
insatiable appetite to spend the money that we generate from future 
generations.
  Ms. SNOWE. Mr. President, I say to the Senator that 25 years ago was 
the last time we had a balanced budget. The Senator from Oklahoma will 
probably agree that we are hearing today, ``We will produce a 7-year 
budget to achieve the balanced budget amendment.'' We know it is a 
give-and-take process. But more than that, I say the burden of proof is 
on those opponents of the balanced budget amendment because the 
statutory approach has failed. They have had an opportunity, let us 
say, over the last 15 years, when they objected to a balanced budget 
amendment, to come up with a statutory approach. We have had statutory 
remedies, all of which have failed.
  So now we are at the point of deciding the future of this country. Do 
we enact a constitutional amendment? There are those who will probably 
fundamentally disagree with having a balanced budget whatsoever. They 
disagree in principle. I happen not to. I think it is most important 
that we do it for the country, as the Senator does. But I think it is 
ignoring the choices that we are required to make. I think that this is 
the only way in which we are going to make those tough decisions on 
what exactly is affordable and acceptable to the American people.
  Mr. INHOFE. Mr. President, if the Senator will yield further, I think 
it is a significant point to make that if it is not going to be done 
their way, it is not going to be done at all. I do not know of one 
person who goes out and campaigns for office and says: Elect me, 
because I want to increase your deficit. I honestly do not think they 
really want to increase the deficits. But there is the temptation to 
get these programs today, saying, ``Well, there is nothing wrong with 
it. We are borrowing from ourselves.'' They do not stop to think and 
realize sometimes what they are doing to the future generations.
  I would also ask the Senator if she might stop and think about how 
long we have been looking at this. There was a very outstanding Senator 
from Nebraska by the name of Carl Curtis, many years ago. In 1970, I 
was in the State senate in the State of Oklahoma. At that time, just to 
remind you how far we have come, I can remember that the National 
Taxpayers Union had an advertisement that they showed on television. 
They said: Do you really want to know how bad the debt in this country 
is? Mr. President, they said: If you want to know how bad the debt is, 
if you took $100 bills and stacked the $100 bills on top of each other, 
by the time it reached the height of the Empire State Building--that 
was a tall building in those days--it would be the amount of our debt, 
which is $400 billion. Now, look where it is today.
  Back in 1972, this Senator from Nebraska, Carl Curtis, had a 
brilliant idea. He was the author of the Senate budget balancing 
amendment at that time. So he called me up one day. I was a State 
senator. He said, ``Inhofe, if you would just try something new here. 
Let us break down the resistance in the U.S. Senate and in Congress, 
because these people up here live in their ivory towers, and they don't 
have a sense of what is going on at home.'' He said, ``Why don't you 
present a budget balancing amendment out in the State of Oklahoma?'' I 
said, ``Well, that is an ingenious idea.'' His thought was that if he 
could get 38 States to do that, it would indicate there was grassroots 
support for a balanced budget amendment.
  Keep in mind this is 1972. So in 1972, I introduced and got passed in 
the State of Oklahoma a ratifying resolution. And I remember that there 
was a guy named Anthony Kerrigan, a syndicated columnist, who wrote an 
article entitled ``A Voice in the Wilderness.'' Way out in Oklahoma, 
there is a State senator that is going to figure out a way to balance 
the budget. Here it is now, a couple of decades later, and we still 
have not done it. But we found in that short period of time that there 
is such a ground swell for support, when you get closer to the people, 
that we are willing to do it. And we had commitments from 38 States in 
1972 to ratify such a resolution.
  Ms. SNOWE. Mr. President, I say to the Senator, look where we are 
today in terms of the level of debt since that period of time. The 
Senator mentioned that he was a State senator. I, too, was a State 
senator in the State of Maine. We had to balance our budgets. We have 
had to balance our budgets in some very difficult economic times 
regardless of the downturn in the economy, which certainly has been the 
case in New England and in the State of Maine, where we have had the 
most difficult downturn since the Depression. They have had to balance 
the budget. They made tough choices.
  I know in the debate on the floor in the House of Representatives, 
the Senator will recall in the last Congress and back in 1992, Members 
of the House said, ``How can we possibly and accurately estimate 
revenue projections? How can we estimate inflation rates or interest 
rates or unemployment rates?''
  That is going to be a very difficult and taxing responsibility. That 
is what every State has to do in the country, and every local 
government, every business, and each family does, in the final 
analysis. They have to make those projections and they have to correct 
those projections. So they have made those choices. They do not live in 
fiscal fantasyland like we have here in Congress.
 I think the American people have recognized that, and that is why they 
are demanding this most important and fundamental change.

  Mr. INHOFE. If the Senator will yield further, going back to our 
years as State senators--and probably the same thing was true in Maine 
as in Oklahoma--people yell and scream about it. They do not like it. 
There are members in the house and senate in 
[[Page S1900]] Oklahoma who, every year, try to figure out ways to 
either inflate projections of income and revenues or minimize 
expenditures to circumvent this thing; yet, in the final analysis, they 
know that we have a type of sequestration that sets in. If they do not 
do it, they are going to have to bite the political bullet of all those 
people who have their programs cut by 1 or 2 percent, whatever it 
takes. And it works.
  People in this body quite often talk about the States that have a 
balanced budget amendment. Look at the cities. I was mayor of the city 
of Tulsa--a major city--for three terms. In our charter, we had the 
same thing. There are always people on the city commission who want to 
circumvent that and somehow want to spend more money than comes in, but 
they have not been able to do it. For all those individuals who say 
this is different, the Federal Government should not be like States or 
should not be like the cities and the other subdivisions, they have yet 
to come up with any logical justification for that statement. If it 
works at the State level in almost all of the States and it works in 
almost every city charter, it would work in the Federal Government.
  Ms. SNOWE. I think the Senator makes outstanding points, and I think 
we agree. What is more fundamental than providing fiscal order, 
especially for the future of this country, in making those kinds of 
choices, albeit difficult, but ones that are compelling and ones that 
need to be made? I thank the Senator for the points he has made.
  In conclusion, Mr. President, might I just say, in terms of what we 
can expect for future deficits, it is disturbing to note the trend. The 
Congressional Budget Office, in fact, testified before the Senate 
Budget Committee recently and indicated that according to their 
recalculations, the deficit will increase by $25 billion over the next 
5 years. So we can expect more debt over the next 5 years than we 
originally anticipated because of interest rates and, in fact, lower 
than anticipated revenue from the income tax increases and other tax 
increases of 1993. Between now and 2002 we will add a cumulative total 
of nearly $2 trillion to the existing debt if we make no changes in 
fiscal policy.
  One further point. The CBO, in their testimony, indicated that, 
obviously, one of the positive benefits of a balanced budget would be 
to increase productivity because of less debt, but also, most 
importantly, increase the amount of personal savings in this country. 
And if you look at the testimony that was provided by Mr. Greenspan, 
that is clearly essential for the future, because the personal saving 
rate, in his words, has been running at its lowest level in nearly half 
a century. He said,

       If we were a high-saving nation, we might be in a position 
     to better tolerate the Federal fiscal imbalance. But, as you 
     can see in the chart, the Federal deficit has generally been 
     absorbing half or more of the available domestic saving since 
     the early 1980's.
       Looking back at the history of the past century or more, 
     the record would suggest that nations ultimately must rely on 
     their domestic savings to support domestic investment.

  He went on to say,

       The challenge for the United States over the coming decade 
     is clear. We must sustain higher levels of investment if we 
     are to achieve a healthy increase in productivity and be 
     strong and successful competitors in the international 
     marketplace. To support that investment, we shall need to 
     raise the level of domestic saving. Absent a rise in private 
     saving, it will be necessary to eliminate the structural 
     deficit in the Federal budget.

  So that is what it is all about--making choices, increasing the 
standard of living, not only for the present but for future 
generations, by improving productivity, job creation, and finally, I 
should say, improving the way in which we approach our budgetary 
process.
  There was some testimony presented to the Budget Committee by Mr. 
Fosler, President of the National Academy of Administrators, saying we 
should have performance-based budgeting. This is an idea whose time has 
come, is long overdue, and in fact was proposed at the beginning of 
this century. I hope we will take these creative and innovative 
approaches as we begin the historic debate on a constitutional 
amendment to balance the budget.
  Let me close with words of hope for a brighter future for our entire 
Nation. As Winston Churchill said in the days of World War II: ``This 
is not the end. This is not even the beginning of the end. But it is, 
perhaps, the end of the beginning.''
  I hope that will be the case, because if you say ``no'' to a 
constitutional amendment to balance the budget, you are saying ``yes'' 
to the economic status quo, ``yes'' to the continued levels of deficits 
of $200 to $300 billion. I assure you, that is not an answer the 
American people want to hear, and it is one they do not deserve to 
hear.
  I yield the floor.
  Mrs. FEINSTEIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from California [Mrs. Feinstein] 
is recognized.
  Mrs. FEINSTEIN. Mr. President, I voted for the balanced budget 
amendment last year. I also voted for the Reid amendment to exempt 
Social Security, take it off budget, last year. I want to state for the 
Record--and it is my intention--that I want to vote for a balanced 
budget amendment.
  There are two reasons I want to vote for a balanced budget amendment. 
The first is my own life experience. The year I was born, 61 years ago, 
the entire Federal debt amounted to just $25 billion. When my daughter 
was born, the entire Federal debt amounted to about $225 billion. And 2 
years ago, when my granddaughter, Eileen, was born, the entire Federal 
debt was 150 times greater than when I was born; it was nearly $4 
trillion. My life experience shows me that, with business as usual, the 
Congress is not going to be able to balance a budget that, in 61 years, 
has gone from $25 billion to $4 trillion in debt.
  So, in a nutshell, I want to support a strong balanced budget 
amendment. But I want to support the right balanced budget amendment.
  In my first 2 years as U.S. Senator, I have had the opportunity to 
observe the standard operating procedure of the Senate--the budget, 
authorization, and appropriations processes--and I have become 
convinced that a balanced budget amendment is in order. The American 
people are sitting on a debt time bomb. It jeopardizes the economic 
security of my daughter, my granddaughter, and even generations to 
come, because if it continues to be business as usual, the Nation's 
path is one toward bankruptcy and that, quite frankly, is not 
acceptable.
  I have listened to a lot of arguments about why we should not require 
a balanced budget amendment to the Constitution. In theory, certain of 
these have a great deal of merit. But historical and present day 
practices often demonstrate the wide variation between theory and 
practice when it comes to dealing with the Federal budget.
  In theory, the Government might run deficits in times of recession to 
stimulate the economy, or in war simply to pay its bills, and surpluses 
in times of prosperity because revenue increases and unemployment 
decreases. In fact, though, that has not happened. In the last 35 
years, the Federal Government has balanced its budget exactly twice--
once in 1960, a surplus of $300 million, and again in 1969, a surplus 
of $3.2 billion.
  In the last quarter of a century, the Federal Government has run up 
this $4 trillion in debt without once balancing the budget. And during 
this time, the Nation has experienced war and peace and economic booms 
and recessions. Yet, never was this Government able to balance the 
Federal budget, let alone run a surplus.
  As mayor of San Francisco, I balanced nine budgets, and I know it is 
tough to do so. I support this amendment, and I support a line-item 
veto, because I know that failing to balance the budget is a choice 
that this Nation can no longer afford, for the reasons so stated.
  Let us talk for a moment about two charts which, when I came here, 
convinced me--and I regret that these are so small; we thought we had 
them enlarged, but we do not. These two charts, I think, are very 
instructive. If you can see them, Mr. President, in 1969--these are 
Federal outlay charts--military spending consumed 45 percent of our 
Federal outlays. In 1994, about 19 percent of our Federal outlays were 
military. So military spending has gone from almost one-half to just 
slightly under a quarter.
   [[Page S1901]] In 1969, entitlements--Medicare, Medicaid, Social 
Security, and AFDC--consumed about 27 percent of Federal outlays.
  In 1994, they consumed almost 50 percent of Federal outlays. There is 
the rub. In 1969, interest on our debt consumed slightly less than 7 
percent. In 1994, interest on the debt had doubled to nearly 14 percent 
of total outlays.
  What is left? Discretionary spending--education, health, environment, 
Commerce, Interior, all those departments--in 1969 consumed 21 percent 
of Federal outlays. In 1994, 18 percent; actually down. Discretionary 
spending has gone down, military spending has gone down dramatically.
  What has gone up? Interest on the debt and entitlements. And there is 
the rub. There is the answer I believe to the right to know. That is 
the road that lies before us. If we really want to make the budget 
balanced, those are the hard choices: What to do about interest on the 
debt--which today net interest consumes 40 percent of every person's 
tax dollar--and how do we control entitlements, Medicare, Medicaid, 
Social Security, and so on?
  The Federal Government now spends $226 billion just on interest on 
its nearly $5 trillion debt. Our interest payments alone are $59 
billion greater than the projected deficit of $176 billion for the year 
1995. This means that if we did not have to service the debt, there 
would be no deficit this year. If we did not have to service our debt, 
there would be no deficit. As a matter of fact, there would be a small 
budget surplus. That is the irony of the problem that we have.
  So if current policy continues, the CBO estimates that net interest 
payments will reach $387 billion by the year 2004, or roughly 58 
percent of the amount that is expected to be spent on all discretionary 
programs, $669 billion will go by the year 2004 just to pay for 
interest on the debt. That is not for Commerce. That is not for 
Interior. That is not for an education program. That is not for a 
health program. That will not purchase a tank or an aircraft carrier or 
a battleship. It will be just paper to service the debt.
  Today, every dollar in personal income taxes collected west of the 
Mississippi is used to pay for nothing more than interest. And that is 
the sad story, because the interest is growing and we need to stop it.
  So what has 35 years of accumulated deficits meant on our committee? 
According to a study by the New York Federal Reserve Board, the low 
national savings rate, now under 3 percent--and it is the lowest of any 
major industrialized power--is mostly attributable to large Federal 
deficits. And it has resulted in a net loss of 5 percent of national 
income during the 1980's. That impacts interest rates, it impacts jobs, 
it impacts the ability to buy a home, a car, to afford an education. It 
impacts the job base. It impacts everything we do every day in our 
life.
  And as it gets worse, I think what the Senator from Maine was saying 
is it impacts our children's destinies and our grandchildren's 
destinies as well.
  So for all of these reasons--and I want my chairman on the Judiciary 
Committee to understand this--I want to vote for a balanced budget 
amendment because I do not believe we can make the hard choices without 
it. And as I have said, they are all in that 50 percent--Medicare, 
Medicaid, Social Security, AFDC--and then that 15 percent which is 
interest on the debt for the most part.
  Now, I do not think Congress should push through just any amendment, 
no matter what. It has to be an amendment which balances the budget 
wisely and honestly.
  And that is the rub for me. This is where we come to Social Security. 
Let me be frank. I do not want to speak in detail because we will go 
into this later.
  But because of a statement I made yesterday indicating my position--
and I am particularly delighted that my chairman is on the floor so 
that he can hear this. I consider the greatest flaw in the amendment 
that we have before us is the fact that it places moneys placed in 
reserve through the FICA tax to pay for retirements in the future. It 
places those revenues on budget. And I believe that that is not an 
honest way to balance the budget.
  I believe that this puts Social Security essentially on budget. It 
reverses congressional action and it undermines the integrity of the 
Social Security system.
  Now between its creation in 1935 and 1969, Social Security was always 
off budget. Then in an attempt to cover the cost of the Vietnam war and 
to mask the growing deficit, Social Security was put on budget by this 
Congress. This was a misuse of the Social Security trust fund.
  In 1990, 2 years before I came to this place, the Congress saw that 
and they put an end to it. They declared as follows:

       Notwithstanding any other provision of law, the receipts 
     and disbursements of the Federal Old Age and Survivors 
     Insurance Trust Fund and the Federal Disability Insurance 
     Trust Fund shall not be counted as new budget authority, 
     outlays, receipts, or deficit or surplus for purpose of:
       (1) the budget of the United States Government as submitted 
     by the President,
       (2) the congressional budget, or
       (3) the Balanced Budget and Emergency Deficit Control Act 
     of 1985.

  In this body, that vote was 98 to 2. So clearly, Members said we must 
not use Social Security revenues held in trust for retirement to 
balance the budget. And, boom, the right thing was done and it was 
taken off budget.
  What this amendment does is put it back on budget again.
  This would clearly include Social Security. It would overturn both 
the historical treatment of Social Security and Congress' recent 
decision to affirm the off-budget status of Social Security. Worse, it 
would allow the misuse of Social Security funds to continue.
  The important point is, Congress has already debated this. They have 
taken it off budget. It is not a loophole. This amendment is not meant 
to be an escape hatch.
  I know that there is an amendment at the desk called S. 290. I 
reviewed that amendment. That amendment is flawed because that 
amendment deals with benefits. It does not deal with the moneys that 
are taken from the FICA tax paid by employees and employers and held in 
trust for retirees.
  Now, even without this balanced budget amendment, just for one short 
moment let us look at what happens with Social Security now off budget.
  Here we are today in 1995. Social Security is generating surpluses.
  As a matter of fact, Social Security will generate these surpluses, 
up to the year 2002. In 1995, $69 billion; 1996, $142 billion. It 
climbs and it climbs. In 1999, it is $394 billion. It goes up to $705 
billion of surpluses from the FICA tax held in trust to pay retirements 
for the baby boomer generation that is now, alas, beginning to retire.
  What happens? What happens is this: There is $3 trillion by the year 
2015 in revenue surpluses. Then they plunge. They go down to the year 
2030, $700 billion negative. Negative. Now, here is the rub with this 
amendment. It takes all of these revenues and it puts them on budget. 
So these revenues are used to balance the budget. The way to avoid $705 
billion in 2002 when this becomes relevant is to create a surplus of 
$705 billion. Nobody here believes we will be able to create a surplus 
of $705 billion to protect Social Security.
  So what is the answer? The answer is, in an honest amendment, take it 
off budget. Do not allow those revenues to be used.
  Now, I would like to have printed in the Record a letter I received 
today from Martha McSteen, the president of the National Committee to 
Preserve Social Security and Medicare. She says:

       I am writing with regard to S. 290, introduced recently by 
     Senators Kempthorne, Dole, Thompson and Inhofe. The fact that 
     the sponsors of S. 290 believe that it is necessary to take 
     action to protect Social Security under a balanced budget 
     amendment is, in my view, proof that it is imperative that 
     the Senate adopt your amendment to exclude Social Security 
     from the balanced budget amendment.

  The pending balanced budget amendment reverses the 1990 law removing 
Social Security from a consolidated budget and put Social Security back 
on budget as part of the Constitution. This represents a serious 
problem for Social Security which cannot be addressed by S. 290 or any 
statutory measure. Sponsors of S. 290 cannot bind future Congresses to 
their legislation or, for that matter, ensure that this Congress will 
not modify or overturn this legislation while Social Security 
[[Page S1902]] would remain on budget as part of the Constitution.
  I also note that while S. 290 attempts to prohibit Congress from 
increasing Social Security revenues or reducing benefits to balance the 
budget, it will allow Congress to continue using the surplus in the 
Social Security trust fund to conceal the deficit. This only confirms 
our understanding that the proponents of the balanced budget amendment 
intend to continue this budgetary charade, thereby avoiding balancing 
the budget well into the next century.
  I ask unanimous consent that the letter in its entirety be printed in 
the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    National Committee to Preserve


                                 Social Security and Medicare,

                                 Washington, DC, February 1, 1995.
     Hon. Dianne Feinstein,
     U.S. Senate, Washington, DC.
       Dear Senator Feinstein: I am writing with regard to S. 290, 
     introduced recently by Senators Kempthorne, Dole, Thompson 
     and Inhofe. The fact that the sponsors of S. 290 believe that 
     it is necessary to take action to protect Social Security 
     under a balanced budget amendment is, in my view, proof that 
     it is imperative that the Senate adopt your amendment to 
     exclude Social Security from the balanced budget amendment.
       The pending balanced budget amendment reverses the 1990 law 
     removing Social Security from a consolidated budget and puts 
     Social Security back on budget as part of the Constitution. 
     This presents serious problems for Social Security which 
     cannot be addressed by S. 290 or any statutory measure. The 
     sponsors of S. 290 cannot bind future Congresses to their 
     legislation, or for that matter ensure that this Congress 
     will not modify or overturn this legislation while Social 
     Security would remain on budget as part of the Constitution. 
     I also note that while S. 290 attempts to prohibit Congress 
     from increasing Social Security revenues or reducing benefits 
     to balance the budget, it will allow Congress to continue 
     using the surplus in the Social Security trust funds to 
     conceal the deficit. This only confirms our understanding 
     that the proponents of the balanced budget amendment intend 
     to continue this budgetary charade thereby avoiding balancing 
     the budget until well into the next century.
       The nearly six million members and supporters of the 
     National Committee to Preserve Social Security and Medicare 
     strongly oppose this practice of using the surplus generated 
     by the Social Security payroll tax to fund deficit reduction 
     or mask the true size of the general fund deficit.
       Let's not forget that the continued borrowing from the 
     Social Security trust funds will only create huge debts for 
     the next generation which will be forced to redeem the bonds 
     through massive tax increases.
       The only way for proponents of the balanced budget 
     amendment to live up to the many promises not to harm or 
     undermine Social Security is to explicitly exclude it from 
     the text of S.J. Res. 1.
           Sincerely,
                                                Martha A. McSteen,
                                                        President.

  Mrs. FEINSTEIN. Mr. President, I earnestly implore my committee 
chairman, the key is simply to exclude the revenues from balancing the 
budget in an amendment to this amendment, and that would be presented 
next week. I believe it is the only way to have an honest amendment. I 
also believe that it makes sense.
  There are 40 million people today on Social Security. By the time 
this amendment is ratified and the first balanced budget is prepared, 
there will be 80 million Americans on Social Security. Young people 
working today can expect that the money will not be there to pay for 
their retirement, and yet they are paying FICA taxes. That is not 
right. They should not have to pay if the money is not going to be 
there. If the money is used to balance the budget, it just brings the 
crunch to Social Security that much sooner. I do not think that that 
should be a by-product of a balanced budget amendment. More 
fundamentally, I believe it is a flaw that will cause its 
nonratification by enough States to make it the law of the land.
  What I want to say, the bottom line is if we can adopt the 
amendment--and I just read the amendments to the Constitution again 
this morning--I think if we are going to have monetary policy in the 
Constitution, it is fitting, just as there are technicalities in other 
amendments on double jeopardy and that kind of thing, that there be an 
amendment which simply exempts the revenues from the trust funds that 
hold the FICA taxes.
  As I said yesterday, absent those, absent that amendment, I cannot 
vote for a balanced budget amendment. With that amendment, I can vote 
for a balanced budget amendment. So I say these things today, for 
whatever help it might be to my chairman in considering where this 
matter rests.
  Mr. President, in the year that I was born, the Federal debt amounted 
to less than $25 billion. In the year my daughter was born, the Federal 
debt was about $225 billion--10 times greater. My granddaughter Eileen 
was born 2 years ago. At the time of her birth, the Federal debt was 
more than 150 times greater than it was when I was born--nearly $4 
trillion.
  That, in a nutshell, is why I am a strong supporter of a 
constitutional balanced budget amendment. The path we are on is 
unsustainable. We do not have another generation to allow this problem 
to fester. The time for action is now.
  In my first 2 years as a U.S. Senator, I have had the opportunity to 
observe the standard operating procedure of the Senate--the budget, 
authorization, and appropriations processes. I am convinced that 
without a constitutional amendment, this body will simply be unable to 
balance the budget.
  Let me share what I see the problem to be.
  The American people are sitting on a debt time-bomb jeopardizing the 
economic security of generations of Americans to come and I believe 
that without the imposition of an amendment such as this, it will 
continue to be business as usual. In my opinion, business as usual just 
isn't acceptable.
  Although amending the Constitution is strong medicine, I am convinced 
that without this strong medicine, America's fiscal health will not 
improve.
  I have listened to the various arguments about why we should not 
require a balanced budget amendment to the Constitution. In theory, 
certain of these arguments have merit. But, I am afraid that historical 
and present day practices often demonstrate the wide variation between 
theory and practice with regard to the Federal budget.
  In theory, the Federal Government might run deficits in times of 
recession to stimulate the economy or in war simply to pay its bills, 
and surpluses in times of prosperity because revenue increases and 
unemployment decreases. In fact, that has not happened.
  In the last 35 years, the Federal Government has balanced its budget 
exactly twice. Once in 1960, a surplus of $300 million and again in 
1969, a surplus of $3.2 billion.
  In the last quarter of a century, the Federal Government has run up 
more than $4 trillion in debt without once balancing the budget. During 
this time, this Nation has experienced war and peace and economic booms 
and recessions. Yet, never did this Government balance the Federal 
budget, let alone run a surplus.
  As mayor of San Francisco, I balanced nine budgets in a row. I know 
how difficult it is to do. But that is why we are elected--to make 
those tough choices. I support this amendment and the line-item veto 
because I know that failing to balance the budget is a choice that this 
Nation cannot afford.


                          interest on the debt

  The Federal Government now spends over $226 billion annually just to 
pay the interest on its nearly $5 trillion debt. Our interest payments 
alone are $59 billion greater than the projected deficit of $176 
billion for fiscal year 1995. This means that if the United States did 
not have to service this enormous debt, there would be no deficit this 
year. In fact, we would have a small budget surplus.
  If current policies continue, the Congressional Budget
   Office estimates that net interest payments will reach $387 billion 
by the year 2004 or roughly 58 percent of the amount that is expected 
to be spent on all discretionary programs--$669 billion will go just to 
pay for interest on the debt.

  Today every dollar in personal income taxes collected west of the 
Mississippi is used to pay for nothing more than interest on America's 
staggering Federal debt, or put another way, that's 40 percent of each 
taxpayers' tax dollar. This money is not used to build new highways, 
planes, or ships, provide medical care to a child or grandparent, or 
education to our Nation's students. Americans receive no services, no 
public infrastructure, no investment for these interest payments. They 
get 
[[Page S1903]] nothing for 40 percent of their taxes. Left alone, that 
will become 50 percent, then 60 percent, and on and on till bankruptcy.
  What has 35 years of accumulated deficits meant to our economy? 
According to a study by the New York Federal Reserve Board, the low 
national savings rate, now under 3 percent--the lowest of any major 
industrialized country--mostly attributable to large Federal deficits, 
and it has resulted in a loss of 5 percent growth in our national 
income during the 1980's. Now that's a big deal. Let me tell you what 
it means.


                           issues of concern

  For all those reasons, I believe the time has come to pass a 
constitutional balance budget amendment. I recognize, however, that 
amending the Constitution of the United States is very serious 
business. It has been amended just 17 times since 1791.
  Congress should not push through just any amendment that says just 
balance the budget no matter what. We must pass an amendment which will 
let us balance the budget honestly and wisely.


                       social security amendment

  I must be frank. I don't believe that legislation before us is the 
best constitutional amendment. Its greatest flaw is that it continues 
the process of misusing Social Security funds. Let me explain how:
  First, this amendment would put Social Security on-budget, thereby 
reversing congressional action and undermining the integrity of the 
system.
  Between its creation in 1935 and 1969, Social Security has always 
been off-budget. In an attempt to cover the costs of the Vietnam war 
and later to mask growing deficits, Social Security was put on-budget.
  This was a misuse of the Social Security trust fund. In the 1990 
Budget Enforcement Act, Congress put an end to this by declaring Social 
Security funds off-budget. The act states:

       * * * the receipts and disbursements of the Federal Old-Age 
     and Survivors Insurance Trust Fund and the Federal Disability 
     Insurance Trust Fund--which together make up the Social 
     Security Program--shall not be counted as new budget 
     authority, outlays, receipts, or deficit or surplus for 
     purposes of--
       (1) the budget of the United States Government as submitted 
     by the President;
       (2) the congressional budget, or
       (3) the Balanced Budget and Emergency Deficit Control Act 
     of 1985.

  An amendment in the Senate to exclude Social Security from budget 
calculations was passed in the 101st Congress by a vote of 98 to 2. 
Every Member there that served in the 101st Congress voted for that 
amendment.
  The joint resolution before us now requires total outlays not to 
exceed total receipts for any fiscal year. This would clearly include 
Social Security and thereby overturn both the historical treatment of 
Social Security and Congress' recent decision to affirm the off-budget 
status of Social Security. Worse, it would allow the misuse of Social 
Security funds to continue.
  The important point is, Congress has already debated this matter and 
decided to take Social Security off-budget. This is not a loophole. It 
was an informed decision to budget honestly. Now this constitutional 
amendment will reverse that. This amendment would enshrine this abuse 
of Social Security in the U.S. Constitution.
  This debate is not about who wants to protect Social Security and who 
does not. It is about who wants to be honest with the American people 
in our budgeting and fiscal policy and who does not. To be honest, 
Social Security must remain off-budget. Including Social Security in 
the budget calculations would be the enormous loophole. It is not the 
Federal Government's money and should not be used as if it is.
  Second, Social Security is not like other Government programs and 
should not be treated like other Government programs.
  Social Security is a publicly administered, compulsory, contributory 
retirement program. Through the Federal Insurance Contributions Act 
[FICA], workers are required to contribute 6.2 percent of their 
salaries to Social Security. Employers are required to match that 
amount. This 12.4 percent contribution funds the Social Security 
system. By law, these funds are required to be held by the Federal 
Government in trust. They are not the Federal Government's funds, but 
contributions that workers pay in and expect to get back.
  Third, Social Security does not contribute to the Federal deficit.
  In fact, the Social Security trust fund surpluses are masking the 
true size of the deficit. In 1995 Social Security will take in $69 
billion more than it will pay out in benefits. By 2001, Social Security 
will be running surpluses of more than $100 billion a year. By 
including Social Security in the constitutional balanced budget 
amendment, Congress would obfuscate the true deficit problem.
  Fourth, the failure to save Social Security's surpluses could 
undermine the system's viability.
  In the late 1970's and early 1980's, Congress changed the way the 
Social Security system was financed. Recognizing the large demand on 
the system that would be created by the retirement of the baby boomer 
generation early next century, the Social Security system was changed 
from as pay-as-you-go system to a system that would accumulate large 
surpluses now to prepare for the vast increase in the number of 
retirees later.
  Rather than saving these large surpluses, however, Congress has used 
them to finance the deficit. That means beginning in 2019, when Social 
Security is supposed to begin drawing down its accumulated surpluses to 
pay for the benefits of the vast numbers of retiring baby boomers, 
there will be no money saved to draw on.
  Congress will be forced to either raise taxes, cut benefits, or cut 
other spending programs to meet the obligations workers are paying for 
now. In short, the American workers will have to pay twice for the 
retirement of the baby boomers because we are not saving
 what they contribute now.

  As the chart next to me illustrates, the Social Security surpluses 
will decline and then plunge dramatically into deficit. The deficit 
will reach $700 billion a year by 2029.
  Between 1995 and 2002, Congress will essentially steal $705 billion 
from the Social Security trust fund. That is the amount of surplus that 
is supposed to be saved over that period, but instead will be used to 
balance the budget. If we are to save that money, the budget would have 
to run a surplus of $705 billion and we know that will not happen.
  By the year 2018, the Federal Government will owe the Social Security 
system $3 trillion. Those who say that Social Security is not on the 
table with this amendment are incorrect. It is--bigtime; to the tune of 
$3 trillion of reserves for retirement that will be involved unless our 
amendment is passed.
  Clearly, unless we begin saving the Social Security surpluses and 
addressing the long-term needs of the system, we will be spearheading a 
financial Armageddon for Social Security.
  The only way to save the Social Security surpluses to pay for future 
retirements is to balance the budget exclusive of Social Security.
  The impact of this, of course, would be that the Federal Government 
would run a unified budget surplus--a balanced Federal budget and a 
surplus in the Social Security trust fund. In this way, we would cut 
the Federal debt and save Social Security funds, not just watch the 
debt keep growing. That is what the amendment Senator Reid and I are 
offering would do--it would require a balanced Federal budget exclusive 
of Social Security.
  Social Security system does have a long-term financing problem. In my 
opinion, an expert advisory board should be formed to advise Congress 
on how to adjust the system to restore balance and make the system live 
within its means.
  The point, however, is that Social Security changes should be made to 
shore-up the long-term solvency of the Social Security system, not for 
any other reason. By keeping Social Security in this amendment, 
Congress would continue the shell game.
  My support for maintaining the integrity of the Social Security 
system reinforces my support for the balanced budget amendment. But, a 
balanced budget amendment that uses Social Security funds is not truly 
balanced.
  I support a constitutional balanced budget amendment that is honest, 
but I cannot support a balanced budget amendment which would enshrine 
the 
[[Page S1904]] theft of Social Security trust funds in the U.S. 
Constitution.
  If my vote is needed to pass this amendment, then Social Security 
will have to be exempted.
  Mr. HATCH. Will the Senator yield?
  Mrs. FEINSTEIN. Mr. President, I yield.
  Mr. HATCH. Mr. President, I personally understand what the 
distinguished Senator from California is saying and trying to do.
  Keep in mind that although that curve goes up and down, in the year 
2030, it starts going into a deficit. If the balanced budget amendment 
is in play, it will not be allowed to go into the deficit. It is one 
way we can protect Social Security.
  Under the Senator's approach, it would go into the deficit. The only 
way to protect it is to increase taxes. Now, under the Senator's 
approach, there is no limitation on increasing taxes on Social 
Security. They can just go up every year. There is no way to stop it. 
With a balanced budget amendment, when that heads into deficit, we have 
to balance that account.
  Now, I might also mention that the distinguished Senator knows that 
every penny of surplus of Social Security is being used to buy 
Government instruments now. Every nickel of that so-called surplus is 
being used to buy Government instruments; in other words, pieces of 
paper that say the U.S. Government owes the Social Security fund so 
much money. By the year 2030, it goes into deep deficit. The Senator is 
absolutely right on that. The balanced budget amendment forbids it from 
doing that because we cannot allow it to go into deficit.
  The fact of the matter is that during this whole time, while that 
curve goes up and then down, all of that money is gone anyway, because 
they have purchased Government bonds, which if we do not get spending 
under control and if we do not get this economy under control, which 
only a balanced budget amendment can do, none of that surplus is going 
to be there when we need it, anyway. That is why we have to have a 
balanced budget amendment.
  Now, I have listened to my dear friend and colleague from California. 
She said she wants to support a balanced budget amendment. I do, too. 
If I had the sole authority to write this amendment, it would 
undoubtedly be different. I did not have that luxury. Neither does my 
friend from California. As much as the Senator is sincere in trying to 
protect Social Security this way, she is not protecting it. If I had 
the sole authority, I would write it differently. I think the Senator 
from California would, also.
  Let me just end this one thought. We have worked on this for 12 
years--Democrats, Republicans, liberals, conservatives, moderates, 
people from all over the country. This is it. This is the best we can 
do. It is good. It is not perfect; nobody claims that it is. But it is 
as near perfect as we can get it, with the many varying viewpoints and 
differences that divide Members on both sides of this Capitol Hill and 
in both parties. So this is it.
  If we do not pass this balanced budget amendment, then all the 
sincerity in the world that the distinguished Senator from California 
has in trying to protect the Social Security Trust Fund --and I am with 
her on that, and I will do everything in my power to help her 
throughout her whole Senate career to get there--everything she is 
arguing for will go down the drain for sure.
  Because interest rates are going to go higher, the debt is going to 
get bigger, our children's future is going to be mortgaged away, and we 
are all going to wind up without the funds anyway because there will 
not be any way the Government can pay the instruments of debt that it 
is signing everyday on Social Security.
  So I urge my colleague to really think this through because it is 
going to take both sides of the floor to really save Social Security 
from what really is a voracious Federal Government, a powerseeking 
monster that does not seem to care what the future is all about.
  If we do not take this and seize this one opportunity to put through 
this bipartisan consensus amendment, which both Democrats and 
Republicans have worked on, and we let this go, I guarantee you--I 
guarantee you--that if we ever put through another one, it will be a 
lot tougher and a lot worse than this one, in the eyes of most people 
from the more liberal persuasion.
  That is, if we get one at all, and if we do not get a balanced budget 
amendment at all, there will be no fiscal mechanism to force us to make 
priority choices among competing programs. I am willing to continue 
this dialog with my friend because I value her viewpoint, I value her, 
the distinguished Senator from California.
  I know the sincerity that she has on this, and I know what she is 
trying to do. I am there with the Senator, but we will never get there 
without a mechanism called a balanced budget amendment in the 
Constitution. We all know it. I do not think anybody doubts it.
  The fact of the matter is, this is it. There is nothing we can do to 
make it any better and keep the very close votes that we have to have 
to pass it. I might add, the distinguished Senator from California is a 
critical vote in this matter. We value that vote. Even though the Reid 
amendment went down last time, the distinguished Senator from 
California voted with us because it was the best we could do.
  I have to say, as a Senator from Utah and as somebody who has worked 
on this for years who really, really, really has given everything he 
has to try and get this done, that I wish it could be otherwise. I wish 
we could solve every problem there is, but there is no way we can do it 
in this context, there is no way we can do it in this Congress. But we 
can move ahead by solving a lot of the problems and, I think, in the 
process protect Social Security better than it is protected today 
because we will be protecting the economy which, after all, is what 
Social Security depends upon.
  If we reach a point where the debt has to be monetized, where we use 
cheap and worthless dollars to pay off the debt to get it off our 
backs, and inflation shoots up dramatically, which it will, 250-
percent-plus range and we become like most of the Third World countries 
that are presently going through those problems, where is Social 
Security going to be at that time? Where are our seniors going to be? 
Where are the young people going to be? Where is the future?
  The greatest country in the world is going to go down because we do 
not have the fortitude and the strength of mind and presence of mind 
and the guts to do the only thing that we can do right now. Look, there 
are people on my side who feel like killing because they are not 
getting a three-fifths vote requisite to increase taxes. They are just 
beside themselves. We saw 252 of them over in the House just beside 
themselves. I told them at the beginning of this Congress there is no 
way they can get more than 260 votes over there. We certainly do not 
have the votes here unless somebody tries to manipulate others, who do 
not want the amendment anyway, into voting that way.
  (Mr. THOMPSON assumed the Chair.)
  Mr. JOHNSTON. Will the Senator yield for a question?
  Mr. HATCH. Yes.
  Mr. GRAMM. Mr. President, the Senator does not control the floor.
  Mr. HATCH. The Senator from California controls the floor. I am 
trying to make this one point: I know what the Senator is trying to do. 
I appreciate it. I want to help her, and I will help her all the time 
that I am here in the Senate because I do not want to see the Social 
Security trust fund compromised in any way. I believe everybody on this 
side will help her. But if her point of view becomes--well, it will not 
become because there is no way we will have a balanced budget amendment 
if she insists that this has to be there and enough people do that we 
do not have the votes, there is no way we can have a balanced budget 
amendment.
  But if her point of view becomes the law, then come the year 2028, 
2029, 2030, we are going to be in a tremendous deficit, that is if we 
make it that far. In the interim time, of course, our debts are going 
to mount up, our interest rates will go off the charts, our economy is 
going to go bust and all those debt instruments that are supposed to 
pay this surplus to help people on Social Security are going to 
default, or else--we would never let them default--they would be paid 
by cheap dollars, by dollars that are worthless and people on Social 
Security will not be 
[[Page S1905]] able to buy the food, clothing, the shelter that they 
need under those circumstances.
  So the best thing we can do right now, if we are really concerned 
about it, is pass a balanced budget amendment, get this mechanism in 
place, make us make priority choices among competing programs, have us 
live within our means, and keep this trust fund strong and keep Social 
Security strong well into the next century and beyond the year 2030.
  I wanted to make those points. I am willing to work with the Senator 
from California. I am willing to line up with her and try and help 
solve these problems. It is just there is so much we can do on this 
balanced budget amendment. This is it. It depends on the good faith of 
all of us here whether we are going to pass it or whether we are not 
going to pass it. I believe we will in the end, but it is going to take 
an awful lot of effort by all of us, and I suspect it is going to be a 
long, hard debate.
  I hope the distinguished Senator from California will keep an open 
mind and work with us on it, and I promise I will try to help her in 
her goals and her desires to make sure this trust fund is protected for 
everybody in our society.
  Mrs. FEINSTEIN. I thank the Senator.
  Mr. JOHNSTON. Will the Senator from California yield for a question?
  Mrs. FEINSTEIN. Yes.
  Mr. JOHNSTON. Mr. President, we had a discussion yesterday on the 
floor about the authority of the courts with respect to a balanced 
budget amendment, whether they would have authority to enforce that, 
and the distinguished Senator, Senator Hatch, responded to that in 
part. I will have more to say about that later.
  Mr. President, my question today has to do with the authority of the 
President with respect to the balanced budget amendment. I wonder if 
the Senator from California can tell me when the President, on 
Inauguration Day, raises his hand and swears to uphold the Constitution 
of the United States, which at that time, let us assume, includes this 
amendment, my question is, what authority or what duty does the 
President have under this amendment to balance the budget if the 
Congress, in fact, has not balanced that budget?
  Mrs. FEINSTEIN. I cannot answer that with specificity, but it would 
seem to me that if Congress fails to balance the budget that the 
President would have some authority, and whether this automatically 
confers a line-item veto or whether we do it separately, it would seem 
to me that the President should be a player and a dominant player in 
being able to assure that the budget is balanced.
  Mr. JOHNSTON. If the Senator assumes that this amendment gives to the 
President that line-item veto, I assume that the Senator also assumes 
that that power is without limitation; that is to say, if the President 
has the authority under this amendment to balance the budget if 
Congress has failed to do so, then the President can take whatever part 
of the budget he wants and impound it without limitation. He can 
impound Star Wars, he can impound Social Security, he can impound 
railroad retirement, or any part to any degree of the Federal budget. 
Would the Senator agree with me on that?
  Mrs. FEINSTEIN. Not necessarily, I say to the distinguished Senator 
from Louisiana.
  If I might refer this to the chairman of the Judiciary Committee, I 
think it would be most interesting to have his response to this 
question.
  Mr. HATCH. I am sorry; I was not listening.
  Mr. JOHNSTON. Yes. The question I had, Mr. President, was to what 
extent does the President of the United States have a duty or authority 
under the Constitution, which he is sworn to uphold, to balance this 
budget if the Congress has failed to do so?
  Mr. HATCH. Well, every President has a duty to do his best or her 
best, to try to bring our fiscal house into order. But for the last 26 
years no President has been able to really submit a balanced budget to 
the Congress. They may have once or twice.
  Mr. JOHNSTON. What I really have in mind is what is the limit of the 
President's impoundment authority under this amendment?
  Mr. HATCH. He has no authority at this point.
  Mr. JOHNSTON. Under this amendment, if this amendment passes?
  Mr. HATCH. That is right. Do you mean under the balanced budget 
amendment?
  Mr. JOHNSTON. If this constitutional amendment passes and becomes the 
law of the land and the President takes the oath to uphold this 
Constitution----
  Mr. HATCH. There would be no impoundment authority under this 
balanced budget amendment. Under Senate Joint Resolution 1, or House 
Joint Resolution 1, there is nothing in either amendment, either the 
House or the Senate version--and they are both identical except for one 
comma----
  Mr. DODD. Will the Senator yield?
  Mr. GRAMM. I ask for the regular order.
  Mr. HATCH. Under either version, there is no right to impound. It is 
not the intention of this amendment to grant the President any 
impoundment authority.
  The PRESIDING OFFICER. The regular order is that the Senator from 
California has the floor.
  Mr. HATCH. As I understand it----
  The PRESIDING OFFICER. And may only yield for a question.
  Mr. HATCH. As I understand it, she wanted me to answer these 
questions.
  Mrs. FEINSTEIN. That is right.
  The PRESIDING OFFICER. That would take unanimous consent.
  Does the Senator yield?
  Mrs. FEINSTEIN. Yes, I yield.
  Mr. JOHNSTON. Mr. President, I would like to pose the question.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. JOHNSTON. Then let whoever wishes answer it. I think it is a very 
serious question. And I do not think it is answered by the terms of the 
amendment or by the legislative history here. After all, we have a 
Budget Control and Impoundment Act, but this is the Constitution we are 
expounding. I think it is at least arguable, if not persuasive, that 
this constitutional amendment would overrule that Budget Control and 
Impoundment Act and would return us to the days of President Nixon 
where he felt that he had the inherent power to impound. Indeed, he 
might feel as if he had the inherent duty to impound. I think we better 
find the answer to that and, if it is not clear under the amendment, 
make it clear.
  I might say to my friend from California that I propose later on to 
make it clear what the authority of the courts is by an amendment which 
I am working on, and I would like to also make it clear what the power 
of the President is. These are fundamental constitutional questions 
with overriding importance to the country, and before we pass a 
constitutional amendment we need to know whether it is enforceable and, 
if so, by whom.
  So I hope the Senator will work with us and will withhold some 
judgment. Assuming she can get her Social Security issue successfully 
solved, I hope she will also understand the gravity of the question of 
enforceability and the absolute necessity to clear up what is an 
overhanging ambiguity in this amendment. It is an ambiguity so great 
that it is almost impossible to fly through that fog, and I hope she 
will work with us in trying to get that cleared up.
  Mr. HATCH. Will the Senator yield?
  Mrs. FEINSTEIN. I thank the Senator. I do yield.
  Mr. GRAMM. Mr. President, I must raise a point of order. Under the 
rules of the Senate, you cannot yield for comments. You cannot yield 
through the person who holds the floor for someone else to ask 
questions. We have people who are waiting to speak. We have an order 
under which they speak. And I think if people want to speak, they 
should wait, be recognized, make their point, raise these profound 
questions about what happens if we do not do what the American people 
want us to do. The debate here is about how we do what the American 
people want us to do.
  The PRESIDING OFFICER. The Chair is going to enforce the rules of the 
debate. The Senator may only yield for a question.
  Mr. HATCH. May I ask a question----
  The PRESIDING OFFICER. The Senator from California.
   [[Page S1906]] Mr. HATCH. Of the Senator from California. Then I 
will bring this to a close.
  Mrs. FEINSTEIN. Absolutely.
  Mr. HATCH. The question I have is would the Senator like me at this 
point to answer the question of the Senator from Louisiana?
  Mrs. FEINSTEIN. That would be helpful.
  Mr. HATCH. Mr. President, I wish to respond to the impoundment 
argument that Senator Johnston has just raised. In each of the years 
the balanced budget amendment has been debated, I have noticed that one 
specious argument is presented as a scare tactic by the opponents of 
the amendment. This year the vampire rising from the grave is 
Presidential impoundment. Supposedly, a President, doing his best 
Charles I of England impersonation, when faced with the possibility of 
budgetary shortfalls after ratification of the balanced budget 
amendment, will somehow have the constitutional authority--nay duty--to 
arbitrarily cut social spending programs or even raise taxes. Well, 
Charles Stuart literally lost his head when he claimed as a prerogative 
the powers of the Commons. So too, a President may not claim authority 
delegated by the Constitution to the people's Representatives. The law 
is our Cromwell that will prevent impoundment.
  I want to emphasize that there is nothing in Senate Joint Resolution 
1 that allows for impoundment. It is not the intent of the amendment to 
grant the President any impoundment authority under Senate Joint 
Resolution 1. In fact, there is a ripeness problem to any attempted 
impoundment: indeed up to the end of the fiscal year the President has 
nothing to impound because Congress in the amendment has the power to 
ameliorate any budget shortfalls or ratify or specify the amount of 
deficit spending that may occur in that fiscal year.
  Moreover, under section 6 of the amendment, Congress must--and I 
emphasize ``must''--mandate exactly what type of enforcement mechanism 
it wants, whether it be sequestration, rescission, or the establishment 
of a contingency fund. The President, as Chief Executive, is duty bound 
to enforce a particular requisite congressional scheme to the exclusion 
of impoundment. That the President must enforce a mandatory 
congressional budgetary measure has been the established law since the 
19th century case of Kendall v. United States ex rel. Stokes, 37 U.S. 
(12 Pet.) 542 (1838). In Kendall, Congress had passed a private act 
ordering the Postmaster General to pay Kendall for services rendered. 
The Supreme Court rejected the argument that Kendall could not sue in 
mandamus because the Postmaster General was subject only to the orders 
of the President and not to the directives of Congress. The Court held 
that the President must enforce any mandated--as opposed to 
discretionary--congressional spending measure pursuant to his duty to 
faithfully execute the law pursuant to Article II, section 3 of the 
Constitution. The Kendall case was given new vitality in the 1970's, 
when lower Federal courts, as a matter of statutory construction, 
rejected attempts by President Nixon to impound funds where Congress 
did not give the President discretion to withhold funding. E.g., State 
Highway Commission v. Volpe, 479 F.2d 1099 (8th Cir. 1973).
  The position that section 6 implementing legislation would preclude 
Presidential impoundment was seconded by Attorney General Barr at the 
recent Judiciary Committee hearing on the balanced budget amendment. 
Testifying that the impoundment issue was in reality incomprehensible, 
General Barr concluded that ``the whip hand is in Congress' hand, so to 
speak; under section 6 [the] Congress can provide the enforcement 
mechanism that the courts will defer to and that the President will be 
bound by.''
  What we have here then, is an argument based on a mere possibility. 
Under the mere possibility scenario of an impoundment we would have to 
include any possibility, however remote, in the amendment. The 
amendment would look like an insurance policy. Why place something in 
the Constitution that in all probability could never happen, especially 
if Congress could preclude impoundment by legislation?
  Mrs. FEINSTEIN. I thank the Chair. I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I am going to get to the issue of Social 
Security toward the end of my speech, but I think it is very 
interesting that the focal point of the debate here is what would 
happen if we did not do what the American people want us to do, after 
we have amended the Constitution to require that we do it. It seems to 
me that the focal point of debate ought to be how do we do what the 
American people have demanded in overwhelming numbers that we do. That 
is, how do we balance the Federal budget?
  Mr. President, there are a lot of issues about which I wish to talk. 
I certainly want to speak about Social Security because one of the 
things that I believe many people watching this debate do not know is 
that because of a profound election result on November 8, if every 
Democratic Member of the Senate were to vote the way that Senator did 
when we voted on the balanced budget amendment to the Constitution the 
last time, we will adopt it--the House has already adopted it--it will 
go to the States; it will be ratified; and it will become the law of 
the land.
  So it is of some profound importance when Senators who voted for this 
very amendment in the last Congress now raise a multitude of objections 
against the very amendment that they voted for in the last Congress 
when there was no chance of it being adopted, when we were not shooting 
with real bullets, because now we are in fact shooting with real 
bullets and we have the opportunity to change the Constitution and to 
change the history of the United States of America.
  Mr. President, I wish to begin by pointing out that, while I am sure 
there are a lot of people who believe this debate on the balanced 
budget amendment to the Constitution is driven by the tax and spend 
history of our country in the last 40 years, a history of runaway 
Government spending, of the explosion in growth of the Federal 
Government, of an explosion in the tax burden, in reality we are 
engaged today in an old debate and not a new debate.
  In fact, no less of an authority than Thomas Jefferson, when he first 
saw the Constitution, raised his concern about the absence of a 
provision which in essence is the provision that we are debating today. 
If some of you will remember, Thomas Jefferson was the Minister to 
France when the Constitution was written, and he is one of our Founding 
Fathers who did not attend the Constitutional Convention.
  When Jefferson had an opportunity to read the Constitution and to 
understand its provisions, he talked in a letter about one change that 
he would like to make. Some of us are familiar with this quote, but 
many engaged in the debate are not, and I wish to read it. Here is what 
Jefferson wrote:

       I wish it were possible to obtain a single amendment to our 
     Constitution. I would be willing to depend on that alone for 
     the reduction of the administration of our government to the 
     genuine principles of its Constitution. I mean an additional 
     article taking from the government the power of borrowing.

  So, Mr. President, there is no doubt that we are here today debating 
a balanced budget amendment to the Constitution because of the utter 
failure of the Congress and the President, Democratic Presidents and 
Republican Presidents, primarily Democratic Congresses, but both to get 
the job done. But this is not a new debate. Thomas Jefferson recognized 
at the beginning of the Republic that it was desirable to put into the 
Constitution a limit on the ability of government to borrow money, and 
in a sense we are correcting a problem in the Constitution that 
Jefferson recognized from the beginning.
  While I am on the subject of Jefferson, it is important to note that 
we see each day, I believe, in the numbers that we look at on the 
deficit, a debate which Jefferson engaged in with John Adams. Jefferson 
and Adams were political enemies during their careers, but once they 
had retired they became close friends. They engaged in correspondence. 
And part of that correspondence has become famous as the Jefferson-
Adams debate.
  It is more than I will outline, but the essence of the debate was as 
follows. 
[[Page S1907]] Adams, ever the pessimist, argued that people would 
discover that they could use Government to redistribute wealth and that 
once they made the discovery that Government power could be used to 
redistribute wealth, Adams argued that it would reward indolence, that 
it would impose a burden on productive behavior, and that democracy 
would fail.
  Jefferson, ever the optimist, argued that people would make the 
discovery--they would discover that Government, through taxing and 
spending, could be manipulated by special interests and that it could 
be used to take the fruits of the labor from the laborer and give it to 
people who were not equally productive or who were more powerful 
politically. But Jefferson argued that the American people would always 
be so committed to broad-based opportunity that they would recognize 
that what the Government could take from someone else today and give to 
them, they could take from them and give to someone else tomorrow, and 
Americans would therefore reject Government as an instrument for 
redistributing wealth.
  In a very real sense, today we are immersed in the Jefferson-Adams 
debate. While I believe that Jefferson is right, the debate as it is 
now structured is biased in favor of the Adams argument. Let me give a 
practical example.
  I guess my first experience in budgetary politics was after I was 
elected to Congress in 1978 as a Democrat. In 1979 and 1980 the country 
got into trouble. We had 13.5 percent inflation, we had 21.5 percent 
interest rates under President Carter, and President Carter in 1980 
withdrew his budget, in an extraordinary action, and he sent to the 
Congress, as best I can remember, about a $6 billion savings package. 
Most of the package was phony. Some of it supposedly saved money by 
spending money sooner rather than counting it in the future year. We 
have all seen that happen and some have practiced it. He also moved 
some spending to a future year. But there was $1 billion of real 
savings that he proposed by denying Government retirees a twice a year 
cost-of-living increase.
  That saved $1 billion by giving Government retirees a once a year 
cost-of-living increase instead of a twice a year cost-of-living 
increase. At the time, 98 percent of all private retirees had no cost-
of-living increase, but my purpose is not to debate the merits.
  When we voted on the Carter budget revision, over 250 Members of 
Congress voted with the President to try to save the $1 billion. I was 
one of them. And then, when a conservative Republican, as it turned 
out, offered an amendment to force us to vote straight up or down on 
the twice a year cost-of-living increase rather than voting on the 
general concept of dealing with the deficit, as I recall there were 
about 50 brave souls in the House who stayed with the once a year cost-
of-living increase and I was one of them. I was up for reelection at 
the time. I was running against a candidate who, at least initially, 
appeared to be a potential challenge. So I was doing a poll. It is a 
very small poll but it made a very big impression on me and I wanted to 
share it with my colleagues and with the people who are interested in 
this debate.
  I asked in that poll: ``How many people knew that we had a vote on 
the twice a year cost-of-living increase for Federal employees and how 
many people did not know?'' Interestingly enough, not one person that I 
polled in my district who was not a Federal employee or a Federal 
retiree even knew the vote had occurred. But every Government employee 
and every Federal retiree that we polled knew it. In addition, on the 
second question, ``Knowing it, how did it affect your support in the 
upcoming election?'', every person who knew it planned to vote against 
me because of the vote. There is nothing wrong with that. The essence 
of democracy is accountability.
  But here is my point. The reason the system is biased in favor of 
spending is because we vote on individual issues and every time we vote 
on spending money we have special interest groups--and we are all part 
of them--looking over our left shoulder, sending letters back home 
telling people whether we care about the old, the poor, the sick, the 
retired, the bicycle riders--and the list goes on and on.
  Nobody is looking over our right shoulder telling people back home 
whether we care about the people who do the work and pay the taxes and 
pull the wagon in America, or whether we care about our children and 
their future.
  I remember in 1979 we were going through a fairly boring period in 
Congress. As a young freshman Member I tried to keep up with real votes 
we cast. Not votes on big bills that cost billions of dollars where the 
vote would be 380 to 20, but actual amendments. In my little casual 
empiricism I made a discovery. The discovery basically was this. The 
average little amendment add-on we were voting on cost about $70 
million. The average beneficiary, as best I could estimate, got about 
$1,000 to $1,500 apiece. And since there were 100 million taxpayers the 
average taxpayer was paying about 70 cents. You did not need a Ph.D. in 
economics to understand that a few people are willing to do more to get 
$1,500 than a lot of people are willing to do to prevent spending 70 
cents.
  My conclusion was that only if we change the way we spend money do we 
have any chance of gaining control of spending, because what tends to 
happen--and our colleague in the Chair is a new Member here, but as he 
will discover--what tends to happen is the only people who ever know 
how you vote on spending issues are the people who wanted the money and 
they remember most when they do not get it. It is like in a religious 
sense saying if you do good that when you get to the Golden Gate and 
Saint Peter opens the books that there is not going to be anything 
written down; no record of it. You are asking people to be responsible 
simply because that being responsible is the right thing to do.
  The problem is, the Lord did not make many zealots. And that is why 
we have consistently, vote after vote, year after year, been losing the 
battle on Government spending. And as a result the Government has 
become bigger and bigger and bigger, more and more distant, more and 
more hostile, more and more burdensome. And that is why we are here 
debating this issue today.
  In trying to deal with this problem we passed what was called the 
Gramm-Rudman law. On the day it passed, I stood up and said in that 
debate that the bill was the engagement but the balanced budget 
amendment to the Constitution was the marriage; that the problem with 
the Gramm-Rudman law was that it was a law, and what Congress could 
make, Congress could unmake.
  I did not realize, when I was saying that in 1985, that exactly that 
was going to end up happening. What happened under the law is that we 
were able, in the 4\1/2\ years it was in place, to lower the deficit 
burden on the economy by about 42 percent. We were able to limit the 
growth of Government spending to 1.4 percent a year while the economy 
grew by 3.1 percent a year and the Government actually got smaller 
relative to the economy for the first time in the postwar period of the 
country.
  But what happened is when the hill got steep from the recession and 
S&L bailout, then Congress bailed out on the Gramm-Rudman law, gave the 
new President the power to suspend it, and the first official act of 
Bill Clinton was to suspend the Gramm-Rudman law.
  What is the problem we are looking at in terms of the deficit? I have 
some charts. Let me just basically go through them. We are engaged in 
an intensive debate here on what happens if we balance the budget but 
with relatively little attention paid to what happens if we do not. 
This chart is basically the question of when are we going to do it? But 
all of this red shows going back to 1969. The one time in the last 34 
years, since 1961, that we have actually had a tiny little surplus was 
in 1969. From that point on, every year, we have run a Federal deficit. 
And right here is where we are headed if we do not adopt a balanced 
budget amendment to the Constitution and if we continue business as 
usual.
  This next chart is a projection from the Congressional Budget Office. 
If you look at the last 34 years, this is what it looks like. Starting 
in 1961, we ran a deficit. We ran a deficit every year to 1969. That 
year we had a tiny little surplus, which is a lot of money for anybody 
but Ross Perot; $3.2 billion. But in the big scheme of things, it is a 
fairly 
[[Page S1908]] small surplus. But every year thereafter, since 1970, we 
have run a cumulative deficit which has raised the debt by $3.4 
trillion.
  Given current projections, nobody can honestly anticipate, short of a 
balanced budget amendment to the Constitution, that we will balance the 
budget anytime in the next 15 years. I ask my colleagues, is it 
possible for a country, year after year after year for half a century, 
to spend more money than it takes in and to pile up these debts so that 
the interest on the debt in the year 2005 will be greater than the 
total level of Government spending in 1975?
  If we do not pass a balanced budget amendment to the Constitution, 
given the bills that are already the law of the land, given the 
spending that we are already committed to, by the year 2005, 10 years 
from now, we are going to be spending $334 billion a year simply paying 
interest on all of this debt. That is more money than we spent on 
Social Security, defense, discretionary spending, and every other 
single program of the Government in 1975. In fact, there are a number 
of Members of this body who were Members of the Senate in 1975. We are 
not talking about that long ago.
  What happens if we do not balance the budget has to do with real 
people and real families. People talk about the difficulty of balancing 
the budget and the supposed excruciating pain that is presumed to 
result from what we are going to have to do, but I hear relatively 
little discussion about the excruciating pain that is going to occur if 
we do not do something about the deficit. Let me talk about that very 
briefly.
  In 1950, the average family in America with two children sent $1 out 
of every $50 it earned to Washington, DC. Today, that average family is 
sending $1 out of every $4 it earns to Washington, DC. And if we do not 
pass a single new law in the next 20 years, if we just pay for the laws 
that are already on the books, if we just pay for the Government that 
we have already thrust upon the American people, that average family is 
going to be sending $1 out of every $3 it earns to Washington, DC. That 
is the cost of doing nothing.
  The General Accounting Office has estimated that, if we pass a 
balanced budget amendment and we enforce it, the impact of balancing 
the budget will mean that our children can expect their family income 
to be 36 percent higher than if we do not eliminate a situation where 
government is borrowing 50 cents out of every $1 available meaning that 
50 cents out of every $1 saved in America does not go to build a new 
home, a new farm, a new factory, to generate new economic growth; it 
instead all goes to pay for Government deficit spending.
  The last time that we had a sustained period of a balanced budget so 
that the Government was not borrowing 50 cents out of every $1, 
mortgage rates were 3.5 percent. In fact, in the history of this 
country, whenever we have had any kind of prolonged period where the 
Government was living within its means, long-term interest rates have 
been down around 3 percent. The average home in America would have a 
mortgage payment of $500 a month less today if we had the fruits of a 
balanced budget.
  So when we are talking about all of the excruciating pain that is 
held out, about what it would mean if the Government had to do what 
families and businesses have to do every year, I think it is important 
to ask ourselves what is going to happen if we do not do it.
  A couple of other points: I just mentioned that over the next 10 
years, the interest payment on the debt, at the rate at which we are 
piling up new debt, is going to rise by $134 billion. We are going to 
be paying an additional $134 billion a year in 10 years on interest 
payments because we are not balancing the Federal budget.
  Do you know what we could do with $134 billion a year? The Senator 
from California got up and talked about Social Security. With $134 
billion a year put into the Social Security trust fund, we could 
guarantee that we could finance the retirement of the baby boomers. 
With $134 billion a year, which we are going to be squandering on 
interest while we debate whether the world will come to an end if we 
have to live within our means, if we took that $134 billion a year and 
used it to cut taxes, we could double the personal exemption and have a 
flat tax rate of 17 percent.
  We are talking about a tremendous ability to let working families 
benefit from their own creativity, from their own hard work. But what 
is going to happen if we do not do it? What is going to happen if we do 
not do it is that $134 billion is not going to go to Social Security. 
That $134 billion a year is not going to be returned to families to 
invest in the American dream. That $134 billion is going to be 
squandered the way the $200 billion a year we are spending this year is 
being squandered in paying interest on a debt that we have run up 
because this Congress and others like it have refused to say no to any 
organized special interest groups.
  How would we balance the budget? This is a much discussed issue. We 
have heard some of our colleagues on the other side of the aisle make 
an argument that runs basically as follows: We have not balanced the 
budget since 1969. We are out of practice. We do not know how we would 
do it. How could we commit to do something when we cannot tell you 
exactly how we are going to do it?
  I am going to talk about how to do it for a moment. But let me submit 
that is not the way people operate in the real world. In the real 
world, we commit to do things all the time even though we cannot tell 
you going in exactly how we are going to get the job done.
  If, in the real world, you had to be able to say exactly how you were 
going to achieve something down to the finest detail, before you 
committed to a good and worthy goal, no one would ever commit to one.
  If you had to know how you were going to pass all those courses when 
you went off to the university, nobody would ever go off to college. If 
you had to outline exactly how you were going to make your business 
work in good times and bad, nobody would ever start a business. If you 
had to figure out how you were going to make a marriage successful 
before you got into it, how you were going to deal with the 1,001 
problems that you know are going to come up, nobody would ever get 
married.
  After my wife-to-be turned me down for the second time and I got down 
on one knee in San Antonio and said, ``If you will marry me, I will 
spend the rest of my life trying to make you happy,'' my wife did not 
look down at me and say, ``Well, how are you going to do it?'' She 
looked at me and tried to gauge how much I was committed to it, and 25 
years later I am still working on it. So forgive me if I feel a little 
bit cynical toward my colleagues who say, ``How can we commit to 
balancing the budget if we cannot sit down and write out in the 
greatest detail how we are going to do it,'' knowing that if anybody 
wrote out the detail, then they would stand here and say the world is 
coming to an end if we have to do these things.
  I hope when people hear this debate, they will always remember these 
numbers--and nobody disputes these numbers. The White House, the 
Congressional Budget Office, nobody disputes these numbers. What I have 
here on this chart is a projection of Federal Government spending, 
which is the line in red, and then Federal Government revenue, which is 
blue. One thing that is clear, if you look at this chart, is that both 
of them have been growing. Both of them have been growing very rapidly. 
The problem is that the spending has been growing more rapidly. What 
has happened is that, since 1969, spending has been growing by an 
average of 8.7 percent a year. In fact, spending by the Federal 
Government has been growing 2\1/2\ times as fast as spending by the 
American family has been growing. I think that is a real index of our 
problem.
  Revenues have been rising, but they have not been rising as fast as 
spending has been rising. So if you look here, in 1995, where that red 
ends and the yellow begins, that is where we are.
  The Office of Management and Budget and the Congressional Budget 
Office project that over the next 7 years, the economy is going to 
grow--not as fast as it is growing now, but at a fairly modest rate 
compared to the kind of growth we had in the 1950's and 1960's.
  [[Page S1909]] If we could limit the growth of Government spending to 
no more than 3 percent a year, where we are spending only 3 percent 
more next year than we spent this year, we would balance the budget by 
the year 2002, which is what we are calling for in this balanced budget 
amendment to the Constitution.
  Here is my point. I know that there are many people who say we cannot 
balance the budget, that it means hard choices, and that we have a 
Congress that in 40 years has not said no to any organized group with a 
letterhead. Obviously, it is a self-fulfilling prophecy. But I think if 
you go to main street America and you say to the people, ``Would you 
want the Government to balance the budget, to eliminate the kind of 
debt burden and taxes that we are looking at in the future if we do not 
do it, if it requires that the total growth of Federal spending be 
limited to no more than 3 percent a year for 7 years?'' my guess is 
that 95 percent of the people in this country would say ``yes.'' The 
other 5 percent are the people who understand this well enough to know 
that they are getting the 7 percent a year spending increase, and that 
they do not want it balanced; even if it mortgages the future of the 
country, it is worth it to them to get this extra spending.
  I am not saying this is easy. I have worked on the budget as long and 
as hard as any person who has served in the Senate in the period of 
time I have been here. Limiting the growth of Government spending to 3 
percent means you have to reform welfare, which we need to do anyway; 
it means you have to reform Medicaid; it means you have to reform 
Medicare.
  When the average insurance policy in the private sector did not go up 
in price last year, and Medicare went up by 10.5 percent, and the 
Government is paying for it and our senior citizens are paying for it, 
we ought to go back and look at it and we ought to be reforming it. It 
also means you have to go through discretionary spending, because there 
are some parts of it that are going to grow, and that should grow, and 
you have to set priorities and cut spending elsewhere.
  The point is, how many families in Illinois last year, or in 
Tennessee, or Texas, had to deal with budgets that were tougher than 
limiting their growth in spending to 3 percent? On almost every street, 
on almost every block in the Nation, there were families that had to 
make tough decisions last year. They did not like it, but they did it. 
They had to say ``no,'' not to strangers but to people they love. They 
did not want to do it, but they did it. How many businesses in America 
have had to restructure their business in the last 10 or 20 years, 
compared to which living within a 3 percent growth rate would look like 
child's play? Literally hundreds of thousands of them. What is the 
difference? Families and businesses live in the real world, and the 
Federal Government does not. The balanced budget amendment to the 
Constitution is an effort to bring it into the real world.
  I now want to address the Social Security issue. First of all, there 
are profound questions that have to be answered if you are suddenly 
deciding that you want to not count the second-largest Federal revenue 
flow and the second-largest outlay flow as transactions of the Federal 
Government.
  We heard the distinguished Senator from California talk about 
protecting Social Security. But the reality is that taking Social 
Security out of the budget in no way protects Social Security. In fact, 
when we ran into trouble with Social Security in 1982, what did we do? 
What we did is we started shifting money from trust funds; we started 
shifting money from among the various trust funds, and we took money 
out of general revenue and we saved Social Security, and we went back--
finally, when we were shamed into it, when our parents were about not 
to get a check--on a bipartisan basis and we made the changes we needed 
to make. Had we had this provision in place, we would not have been 
able to do that.
  But there is a more profound question. If you balance the budget and 
you did not count Social Security's revenues or the expenditures, you 
would be, today, running a surplus of about $80 billion. Do we want the 
Federal Government to run a surplus of $80 billion? We have done that, 
by the way. From 1867 to 1879, the Federal Government, as a policy, 
took in more than it spent. And what happened is, it imposed a 
deflationary pressure on the economy, prices fell, on average, 1 
percent a year, and we resumed our gold payment at $20.67 an ounce, 
which is what it had been in 1860. That was the objective of the 
Government, but it achieved it by pushing prices and wages right 
through the floor. Is that a policy we want to undertake? My view is 
that if we do, it is something we need to make a fundamental decision 
about. The reality is that we have always lived up to our commitment 
under Social Security. We have always kept the promise on Social 
Security without any constitutional requirement. But we have not 
balanced the budget in a quarter of a century and with no realistic 
prospect of doing so any time in the next decade, we clearly have an 
urgent need for a constitutional requirement to do so.
  I also have to admit that I am somewhat amazed at this sudden desire 
of our Democratic colleagues to protect Social Security, because I 
remember that last year when we had the Social Security tax increase go 
into effect, one of our own colleagues--I believe Senator McCain--
offered an amendment that said that the Social Security tax increase 
had to be dedicated to the trust fund,
 and his amendment was defeated on a partisan vote.

  In fact, if you look at your new IRS 1040 income tax form, which 
every American is about to get in the mail, you are going to find that 
on page 7 it has a new section. The new section says ``Social Security 
Benefits.'' And it says, ``If your income, including one-half of your 
Social Security benefits, is over $34,000 a year,'' and then it goes on 
and says you have to pay taxes on it.
  This Senate in the last Congress voted to dedicate those taxes not to 
the Social Security trust fund but to spend on social programs, which 
was the policy of the Clinton administration. Now we have the same 
people saying, ``Well, I voted for the balanced budget amendment in the 
last Congress, but now I do not know that I can vote for it because of 
Social Security.''
  My point is this: The way to protect Social Security is to deal with 
this deficit. If we do not deal with this deficit, if we let it 
continue to mount, we are not going to be able to fulfill our promises 
anywhere.
  If people are for protecting Social Security--which I am absolutely 
dedicated to and I believe that every Member of this Congress 
understands that it is a commitment that has been made. The Contract 
With America makes it clear that Social Security is not going to be 
tampered with as part of the deficit. There is a 60-vote point of order 
in the Senate for doing anything that lowers the solvency of the Social 
Security system. So we have a built-in protection.
  It is clear, when you look at the fact that, if every Democrat who 
voted for this amendment in the past votes for it again, and based on 
the election of 11 new Republicans, the balanced budget amendment is 
going to pass and subsequently become the law of the land. When we 
start having people say, ``Well, look, I am for this and I voted for it 
in the past, but before I vote for it again, you have to fix this, you 
have to fix that,'' it raises the specter that now because we are 
shooting with real bullets, and are actually on the verge of achieving 
something, we are starting to see the possibility that this whole thing 
could come apart. And I hope it does not.
  I think we have reached the moment of truth. I think we have to 
decide whether or not we want to force the Government to live on a 
budget like everybody else.
  I know that there are some of my colleagues who say, ``Well, what 
could a President do if you did not fulfill the Constitution?'' Well, I 
hope a President, who had put his hand on the Bible and sworn to 
uphold, protect, and defend the Constitution, would live up to the 
commitment.
  But I think we are asking the wrong questions. We are asking the 
wrong questions about what the President will do and what the courts 
will do. The question we should be asking is: What are we going to do?
  Everybody understands the current system is broken. Everybody 
understands the current system is not working. Everybody understands 
that if we stay on the road that we are on today, 
[[Page S1910]] in 20 years we are not going to be living in the same 
country that we grew up in. We are going to lose the unique opportunity 
that has been part of America--the opportunity for someone to grow up 
in Tennessee I say to my distinguished colleague in the chair and, from 
very humble beginnings, have an opportunity to go to college, to go to 
law school, to be successful, to become a Senator; the opportunity for 
people all over the country to do extraordinary things. That is what is 
on the line here. That is what this vote is about.
  A final point--and I have spoken a long time, but I wanted to be sure 
I addressed all these issues. This is not a new amendment that we are 
talking about. The Senator from Illinois and many people on our side 
and many people on his side have worked on this amendment for many 
years. I have been working directly or indirectly on this amendment for 
15 or 16 years. I have sat in on numerous meetings with Congressman 
Stenholm, who is a Democrat, with Senator Simon, who is a Democrat, and 
we have worked out an amendment that we can agree on.
  I would love to have a three-fifths vote requirement to raise taxes. 
I think the country would be better off if we had it. I want to deal 
with the deficit not by raising taxes but by cutting spending. But I am 
willing to fight it out. And I can tell you right now, if we impose a 
balanced budget amendment to the Constitution and if I am here or if I 
am involved in Government debate, I will not support raising taxes. I 
want to deal with this problem by controlling spending. I am sure there 
are others who feel differently.
  But the point is, I cannot get 67 votes for the three-fifths tax 
protection requirement. There are always things that we could do that 
would be improvements. But, as Benjamin Franklin said so long ago when 
the original Constitution was written, you come down to a point where 
you have to make a decision.
  If we want to alter American history, this is the amendment to alter 
it with. We have the votes to pass it. The House has already acted. The 
Nation is now looking to us to see if we have the will and the courage.
  And I know you could come up with 1,001 excuses for changing your 
vote. But I believe the American people will understand that this is a 
test about who is serious about forcing the Federal Government to live 
within its means, who is interested in changing politics as usual in 
Washington, DC.
  I am hopeful, prayerfully hopeful, that those on the other side who 
are now talking about changing their vote at the critical moment when 
we have the votes to pass the balanced budget amendment to the 
Constitution will engage in some prayerful deliberation and realize 
that, if they do that, we are going to lose a golden opportunity. We 
have no guarantee that the opportunity is going to come back and 
America's future is going to be permanently altered one way or another 
by what we do here. I hope people will look at this opportunity and not 
squander it.
  I yield the floor.
  Mr. DODD addressed the Chair.
  The PRESIDING OFFICER (Mrs. Hutchison). The Senator from Connecticut.
  Mr. DODD. I thank the Chair.
  Madam President, I rise this afternoon to address the issue of the 
balanced budget constitutional amendment.
  Madam President, my intention will be, over the coming days, to 
address this issue from several different perspectives. I am very much 
opposed to dealing with our serious fiscal problems using this 
approach.
  It has been pointed out in public survey after public survey that 
there is deep concern about the fiscal policies of the country and the 
direction in which we are headed. People are worried about whether or 
not we are going to be able to reduce significantly the size of the 
national debt and our deficits. I do not think there is any debate 
about that at all.
  Madam President, I arrived here in January of 1981. The deficit in 
that year was about $35 billion, and the national debt was under $1 
trillion. That debt had been accumulated over almost 200 years, through 
a Civil War and two World Wars, the Great Depression, and several 
smaller depressions.
  I was, I believe, the second Member of my side of the aisle to 
support the Gramm-Rudman-Hollings deficit reduction measure at that 
time. I thought that was an honest and strong effort statutorily to get 
our arms around what was then a very small problem by comparison today. 
Regrettably, that solution did not work, primarily, in my view, because 
an awful lot of exceptions were created to it.
  Gramm-Rudman-Hollings was to apply to, initially, the entire budget. 
And then, because of the way this institution has run for 200 years 
and, I suspect, will for as many more years as we are here we began 
creating exclusion after exclusion. One constituency group after 
another with major causes came before us and started to peel away the 
effects of Gramm-Rudman-Hollings so we were incapable of dealing with 
the budget deficit.
  I then offered a pay-as-you-go budget--I was in the minority in those 
days, as I am today. My proposal would have required that every 
increase in every aspect of the Federal budget had to be paid for it. I 
got 22 votes for that idea. Had my pay-as-you-go proposal been adopted 
we could have achieved a balanced budget by 1987. We did not, of 
course.
  I strongly urge my colleagues, if they have some time--and I guess 
they will in the next couple of weeks as we debate this issue--to read 
David Stockman's book where he described the economic policy decisions 
of the early 1980's.
  I present that, Madam President, as background. I have always 
supported strong deficit reduction measures, but I believe that a 
balanced budget amendment will not achieve those goals. Adopting a 
constitutional amendment is the easy part of this. Clearly the 
amendment is popular before you start talking about the cuts it would 
require. The amendment would change the organic law of our country to 
deal with a contemporary fiscal problem. It would incorporate an 
economic theory as to how we ought to address our current deficit 
problem.
  I have deep, deep, reservations about it based, first and foremost, 
on my concern that we ought not allow the organic law of the country to 
become a place where we deal with contemporary, perplexing problems 
that we face. I think there is a distinction between the organic law of 
a nation and a set of statutes and ordinances that allow us to come to 
terms with those questions.
  I am also concerned, Madam President, with the view that somehow 
by amending the Constitution of the United States 
a bolt of lightning will strike the Congress and we will depart from 
our historic pattern of finding the easy way out of problems.
  I noticed a moment ago the Senator from Texas was talking about a 
budget proposal here a year or two ago that included a tax implication 
dealing with Social Security, and Democrats were terrible people over 
here because we did that. There will be an amendment, I gather, offered 
that will take Social Security recipients and exclude their benefits 
from the constitutional amendment to balance the budget.
  I suppose it would not do me any good to offer an amendment that to 
exclude 6-year-olds, as well. I could make a pretty good case that 
being a child in America today, based on age and circumstances, is very 
difficult. I am not trying to minimize the problems that all our 
seniors face. I simply cannot imagine anyone wanting to write into the 
Constitution an exclusion for people based on age to avoid the serious 
fiscal problems we face. Yet, that is an example of what some have 
proposed we do to the Constitution.
  I have strong reservations about the constitutional amendment, and 
other ideas that would preclude us from facing all the difficult 
choices that we will be forced to confront.
  Madam President, just briefly this afternoon, I would like to focus 
on one particular concern I have about this amendment. It relates to 
this issue of what I would call the gimmickry associated with the 
constitutional amendment. My concern, Madam President, is that if we 
pass a constitutional amendment, Congress will use every imaginable 
gimmick, sleight of hand, and tool of evasion to get around the 
requirements of a constitutional amendment to balance the budget.
   [[Page S1911]] If this happens, in my view, we will first of all 
have done nothing to get our fiscal house in order. And we will have 
done a great deal of harm in undermining public faith in the U.S. 
Constitution by increasing the public cynicism that exists about our 
Government generally, and more specifically about the institution of 
Congress.
  My argument, Madam President, is not that Congress is somehow 
inherently dishonest or genetically programmed to cheat, but I do think 
if we showed some political courage and some bold leadership, we could 
honestly deal with our fiscal problems without resorting to gimmickry. 
In fact, what we are saying, in many ways, is that by writing a 
balanced budget requirement into the organic law of the Nation we will 
be precluded from coming up with other ideas to get around and 
circumvent our responsibilities. In some ways I wish that were true. 
But having served here for a few years, I am profoundly convinced that 
it will be untrue.
  The courage and the leadership, in my view, must come first. We will 
not create them by changing some words, even in the Constitution. If we 
simply change the law without mustering the will to do the right thing, 
then we will come up with ways, in my view, to get around the law.
  I think all Members know, Madam President, and experience should have 
taught us, who bears the greatest cost of this gimmickry. That is 
working Americans. When rosy scenarios lose their luster and the magic 
asterisks lose their magic, and the train wreck inevitably comes 
economically, it is always working Americans who are left to pick up 
the pieces and pay the price.
  Perhaps the boldest budget gimmick of all time was the so-called 
supply-side economic approach I mentioned earlier. I arrived here in 
1981 in the minority. President Reagan pointed to something called the 
Laffer curve and told all of us we could balance the budget, while at 
the same time cutting taxes and increasing spending. It was an Alice-
in-Wonderland view of economics where up was down and down was up, and 
tax cuts always increase revenue. President Reagan's first budget 
submission in 1981 projected a balanced budget by 1984 and a $28.2 
billion surplus by 1986. The budget confidently stated:

       The new policy of tax rate reduction is expected to expand 
     the economy's productive base, lower unemployment, and reduce 
     budget outlays. As a result, the decline in tax rates is 
     likely to generate both strong economic improvement and 
     impressive gains in receipts, paving the way for a balanced 
     budget.

  That was 1981. Well, that sure sounded very optimistic and nice but 
unfortunately, it does not bear much similarity to what actually 
happened. Let me tell Members what actually happened. In 1984, the year 
the supply-siders projected a balanced budget, we had a $185 billion 
deficit. The deficit went from $35 billion in 1981, to $185 billion by 
1984, 3 years later. By 1986, the year the Laffer curve was supposed to 
produce a $28 billion surplus, we were $221 billion in the red. That 
was 5 years after our national deficit was $35 billion. Madam 
President, it got worse and worse and worse.
  During those years, the national debt quadrupled. Today, every 
American--man, woman, and child--owes almost $13,500 on publicly held 
debt. In inflation-adjusted terms, that is 2.5 times more than what 
they owed in 1980. That is the legacy.
  Madam President, I do not fault President Reagan for trying. It was 
an idea. There were many people, Democrats included, who thought it 
would work. I had my suspicions. I was one of 11 Members here who voted 
against it. But the point is here, when it did not work, we could 
change it. We could change it, and we did. We paid a price. What we 
were doing is fooling with the appropriations of the country, the Tax 
Code of the country, the statutory law of the country. We made a 
mistake, an awful one, and it has cost us dearly, but it was a 
statutory mistake. A mistake in appropriations, a mistake in the Tax 
Code, is mistake that could be corrected with much greater ease than if 
these policies had been written into the Constitution.
  Imagine, however, in 1981, if we had incorporated in the Constitution 
of the United States an economic approach and then faced what David 
Stockman properly has pointed out, by good-intentioned and well-
intentioned people, similar demands for greater spending. A situation 
where the Secretary of Defense said, ``Wait a minute, not me. I 
understand you want to cut here, but we have serious problems. We have 
a stronger Soviet Union,'' and those here or not here made a strong 
case and prevailed. And a situation where others came and said, ``Wait 
a minute; not Medicare, not Social Security.'' People said, ``Not me.''
  Does anyone really believe here we will not face similar kinds of 
challenges? And the difference is that it will not be that easy to 
change now because it is written into the organic law of the country, 
an economic idea, a theory? Again, I do not fault, necessarily, 
President Reagan for having tried an idea. I think we need to do that, 
but not to write them into the Constitution.
  In fact, to his credit, to President Reagan's credit, there was a lot 
of pressure on him to push for a constitutional amendment to balance 
the budget. As most people know, maybe to the disappointment of some, 
it was not really pushed. I suspect, President Reagan had serious 
doubts and concerns about changing the Constitution of the United 
States to incorporate economic ideas from people whom he trusted and 
liked and believed in, but had his doubts about whether or not we ought 
to incorporate their ideas into the most fundamental document that 
outlines the principles and the values of our Nation.
  So, for those reasons, Madam President, I have serious reservations. 
I am willing to try some of the ideas that people have suggested. My 
colleague from Texas said maybe we just ought to cut across the board 3 
percent.
  I have my real suspicions about that approach, but it is an idea. And 
if we have 51 votes here and there is a majority in the House, it might 
be tried. If it did not work, it could be changed. I hope we will not 
want to incorporate that idea into the Constitution of the United 
States. It is economic theory. This is not a science. This is 
speculation.
  I am reminded of Harry Truman's wonderful old line that he wished he 
could find a one-armed economist, someone who talked straight to him, 
instead of saying, on the one hand, one idea and, on the other, 
something else. Economics is full of theories. No one can say with 
absolute certainty anything. If that was not the case, we would have 
many more millionaires in the country. Economists talk about the 
projections of the market and others trust it will work out that way.
  The point is, working Americans end up paying an awful bill when we 
substitute theories, gimmicks and cosmetic changes in law for good old 
courage and political will. At the end of the day, no matter how many 
times you change the Constitution, we are going to have to confront it. 
American workers will have to pay when we dodge and weave to get around 
the balanced budget amendment.
  Our Federal budget is a highly complex document, and we necessarily 
rely on projections to forecast spending and taxes. To preserve the 
integrity of the budget process, I think we should strive to keep 
politics as much as possible out of those projections and economic 
calculations.
  I will point out again that the potential for political abuse is 
huge, in my view. Last year, Stanley Collender, the director of Federal 
budget policy for Price Waterhouse, illustrated how effective altering 
such projections could be. Collender estimated a 1 percentage point 
drop in unemployment projections would reduce projected deficits by $37 
billion the first year and $57 billion the next. To paraphrase and 
modify the words of our late colleague, Everett Dirksen, of Illinois, a 
percentage point here and a percentage point there and pretty soon you 
are talking about, of course, real money.
  There is already some disturbing evidence that the authors of 
gimmickry are abroad, surviving and doing well in the land. The 
distinguished Speaker of the House of Representatives, and some others, 
have said they want to change the Consumer Price Index, which measures 
inflation, as a way of trying to cut spending and increase revenues. 
These advocates of the so-called ``contract'' know that their promises 
simply do 
[[Page S1912]] not add up. They cannot cut taxes, increase defense 
spending and balance the budget without draconian spending cuts, cuts 
they so far have been unable to spell out.
  So we already see people resorting to some of the gimmicks I worry 
about if this constitutional amendment is adopted to get the job done. 
One of the first was to try and cook the books with changes in the 
technical calculation of the CPI.
  I think there is a legitimate debate in the country as to whether or 
not the inflation figure is too high or too low. A lot of very sound 
economists debate that point. That is a legitimate discussion, and, in 
fact, if it has been too high, it can be brought down, then it seems to 
me we ought to examine that thoroughly and do so. But any changes must 
be based on sound economic reasons, not political ones.
  The distinguished Speaker, as my colleagues no doubt have heard, 
threatened to cut off the funding of the Bureau of Labor Statistics, 
not exactly what you would call a partisan agency or organization in 
town, within 30 days if they did not get it right with regard to 
inflation. I admit, there is a legitimate debate about inflation, but I 
do not think it serves anyone's interest to be threatening the budget 
of an independent agency on whom all of us rely to get some indication 
of what the Consumer Price Index ought to be. That is what I worry 
about.
  When people say, ``What do you mean by gimmicks,'' that is what I 
worry about. I worry about people beginning to fool with the numbers to 
make it all come out right and yet, at the end of the day it is 
otherwise and, of course, we are faced with terrible, terrible 
problems. So I worry about the gimmicks being used.
  Senator Dorgan, Senator Harkin and I offered a sense-of-the-Senate 
amendment in this body that simply stated that the CPI changes ought 
not to be politicized and economists ought to look at this and give us 
their sound judgment. The amendment was rejected, unfortunately. But I 
hope that my colleagues will discourage anyone threatening the budgets 
of agencies because we do not like the numbers we see.
  Another effort recently to monkey with the books goes by the name of 
dynamic scoring. Dynamic scoring would provide cover for Members of 
Congress whose economic plans for the country simply do not add up. 
They draw up a budget that balances on paper but bounces in the real 
world. This dynamic scoring idea is to try and put the most favorable 
light on tax cuts.
  I think it is important that we have accurate projections of what 
changes a tax cut may create. I recall opposing the tax cut on luxury 
automobiles and boats a few years ago. Those who offered that proposal 
projected there would be great revenue gains. It turned out quite the 
opposite. In fact, those provisions helped to destroy the boating 
industry in my part of the country. But they had rosy projections about 
revenues we were going to gain.
  Again, I think it is important that as Members of Congress, before we 
vote, we ought to have some idea about what the projections are apt to 
be in these areas. But do I think we ought to incorporate it as part of 
the budget process? Should we not, in fact, be more conservative as we 
look at these matters, hope they turn out better, hope that they will, 
in fact, produce the revenues?
  I never had anybody come to my office and say, ``You know, Senator, I 
would like you to support this tax cut and, by the way, let me tell you 
something, it is really going to cost the taxpayers some money.''
  Everyone who ever has come to my office in 14 years here with a tax-
cut proposal in mind has promised me--promised me--that this was going 
to produce revenues. In some cases they have. In many cases they have. 
But, not in all.
  So when we are looking at how to score tax cuts, I would think it is 
in our collective best interests here to look at it with the most 
conservative point of view in mind. If it does a lot better, we are all 
winners, but if we project it is going to produce some fantastic 
results and it does not, then you have run right back into the problem 
I am talking about.
  So, again, I think we have to be very, very careful as we look at 
these gimmicks. Hence, I come back to the point of why I am concerned 
about incorporating in the Constitution of the United States 
conclusions, demands that we will then be determined in our own way to 
try and reach through efforts that will be less than candid or up front 
with the American people.
  Going beyond such narrow projections in an attempt to measure the 
impact of tax changes on the overall economy is very difficult. If we 
are going to get into the game, we can just as easily measure dynamic 
effects in education, I suppose, or job training.
  I know there are those here who make the case that if we invest in 
education that we will get returns to the country. In health care, you 
can make a strong case, I suppose, that if we put all the money needed 
to eradicate some of the major diseases in the country, that would be a 
real net gainer for us in terms of the budget.
  I do not know anybody who would want to accept the notion that if we 
invest x amount of the taxpayers' money to cure a particular disease, 
that we ought to score that as a great savings to the American public. 
The same thinking ought to be applied when we talk about tax cuts. As 
much as we may hope that they will produce the desired results, if that 
becomes a part of the budget process, then I think we do ourselves a 
great disservice.
  The argument is often used that balanced budget requirements have 
successfully imposed fiscal discipline on our State governments. But 
the evidence on this is unclear as well. Gov. Lowell Weicker, a former 
Member of this body, testified in 1992 that Connecticut's $1 billion 
deficit came to pass in our State despite a balanced budget law that 
had been on the books for 53 years. The Constitution said balance the 
budget and yet we had, because of dreadful economic conditions, a $1 
billion deficit in our State. All of the language in the Constitution 
did not change the economic realities.
  Many States, of course, use creative budgeting now to comply with 
their constitutional requirements. Clever tools include: Delaying 
payments to suppliers. That happens all throughout the country.
  Accelerating tax collections. How many times have we heard that used?
  Shifting programs off budget. That is a great gimmick we use.
   Well, we will not count it as part of the budget. That is off 
budget. Somehow, miraculously, it does not end up in our accounting. 
Even though we are in the red, it has been pushed to a new category so 
it does not fit into the budgetary requirements.

  The gimmick of choice for Governor Whitman of New Jersey has been 
delaying State contributions to employee pension plans--it is legal and 
it certainly saves money in the short term. But at some point a future 
Governor, a future legislature is going to have to belly up and pay 
those costs, and the taxpayers are going to have to pay. So you get a 
rosy picture in the short term but the reality is you are faced with 
those expenditures down the road.
  Governor Whitman and others have also taken a lesson from the Federal 
playbook by shifting costs to more local units of government. In New 
Jersey there is going to be a State income tax cut of some $290, close 
to $300. Simultaneously, property taxes are going up in New Jersey 
about $1,000, a little more than that--roughly $1,000.
  Now, it is great news that State income taxes are getting reduced, 
but if, simultaneously, property taxes are going up almost four times 
that amount, a taxpayer is a net loser. They may see headlines that 
read, ``State income taxes cut.'' You shift the costs to the towns; the 
property taxes go up; and you the taxpayers are net losers.
  I do not think people are fooled by that in this country. Once again, 
we will have engaged in the kind of gimmickry people so detest and 
makes them so angry. We will have failed to confront head on the 
problems of getting our fiscal house in order.
  So, Madam President, if we pass this constitutional amendment, I fear 
we are going to borrow some of the clever tactics that have been used 
at the State level. If we mimic their balanced budget requirements, we 
may also mimic their tricks of getting around them. The balanced budget 
amendment is, of course, the grand gimmick that would spawn 100 lesser 
ones, I fear.A
  The amendment itself is a statement that we do not have the will to 
make the tough choices. If we did, we would not be confronting 
ourselves with changing the organic law of the country--if we did face 
up and do it.
  Let me point out here that for the first time now in almost 4 decades 
we have had 3 consecutive years of deficit reduction. The last 
President to submit a balanced budget was Jimmy Carter, and the last 
Congress and President to achieve a balanced budget was Lyndon Johnson 
in 1969. [[Page S1913]] 
  Now, if we can get back on track and keep reducing our deficits, 
create incentives for growth and for people to work, make the kind of 
intelligent investments that reduce long-term costs--then I think we 
can continue down that path and achieve the desired results.
  I would suggest to my colleagues and those who are listening that 
merely writing something into the Constitution, making it sort of a New 
Year's wish list, does not get the job done. Why not add, as I have 
said before, the eradication of ignorance, poverty, disease; all of 
these are desirable goals.
  If we are going to turn the Constitution into nothing more than a 
wish list, then we devalue the very document that we have relied on for 
200 years. It has only been amended 27 times in 11,000 efforts, by the 
way--11,000 amendments to the Constitution since 1789. We have gone 
through a Civil War, a Great Depression, two World Wars. We did not 
find it necessary when we confronted every contemporary crisis to 
resort to the Constitution as a way of solving the problem. We faced up 
to them and made the tough choices. Our predecessors did the job when 
confronted with crises that were far more serious than this one, as bad 
as it is.
  So I would urge my colleagues--and I know there are those who are 
weighing the benefits and the liabilities of approaching our fiscal 
problems by amending the Constitution of the United States--people do 
want to see us get our fiscal house in order, but I think they would 
like us to do it the old-fashioned way. That is, to make the cuts and 
to encourage the kind of growth that can get the job done, not to wait 
7 years and leave it to some future Congresses to grapple with.
  Madam President, I urge my colleagues to think hard and long before 
they go this route. My view is the States will very quickly ratify this 
constitutional amendment, if it is adopted here. It is very appealing. 
They will assume that someone at a later time will have to deal with 
the problem.
  The Constitution requires that we vote on the matter, that we do so 
here. I do not think it is proper or appropriate for us to just hope 
someone else might protect us and protect the document when we have the 
opportunity to do it as Members of the Senate.
  So I urge rejection of the amendment and hope that we would get about 
the business of doing the hard work of reducing the cost of Government, 
to shrink the size of Government, to make the proper investments and to 
get people back to work. Those are the kinds of things that I think 
will get us on a better fiscal path than what we have been on for far 
too long.
  Madam President, I yield the floor.
  Mr. HATCH. Madam President, we have had an interesting day here 
today. We have had a lot of interesting speakers. I particularly want 
to pay tribute to Senator Simon and his very extensive and good remarks 
that he made this morning. A lot of people feel he is a very unlikely 
person to be leading the fight on the balanced budget amendment, but I 
feel he is exactly the type of person who should do it because he 
understands the importance of our national spending decisions and he 
understands the importance of our taxing decisions and he understands 
the importance of fairness.
  There have been a number of other excellent remarks here today. I 
would like to pay tribute to each and every person who has spoken 
today, including persons on the other side. They have raised issues 
that have been raised before and that we think we have answered before 
and that we intend to answer throughout this debate.
  On the other hand, this has been an orderly and very sophisticated 
debate thus far. One thing I really want to make clear. That is, 
regardless of whatever arguments are brought against this amendment, 
this is the amendment. This is the best we can do. This has been worked 
out among Republicans and Democrats of good faith. It is the only hope 
I see for putting a mechanism into the Constitution or into the daily 
functioning of Congress--a mechanism that we cannot avoid--that might 
get us to make priority choices among competing programs. It is the 
only amendment that the House of Representatives has ever seen fit to 
pass by the requisite two-thirds vote, plus 10. It was a big victory 
over there. It was something that never happened before. And it took 
Democrats and Republicans to do it. Almost every Republican voted for 
it, and we had 72 courageous Democrats who stood up against the 
majority in their party and voted for it. And only 132 people were 
against it.
  Now, we have an opportunity to do something in the Senate that is 
absolutely historic. The Senate up to now has been the only body that 
has passed a balanced budget constitutional amendment by the requisite 
two-thirds vote until that House vote.
  Now, some people have had the temerity to say that the only reason 
the Senate passed the balanced budget amendment by 69 votes back in 
1982 and the only reason we had 63 votes last year was because some in 
this body voted for it knowing it would not pass the House.
  I do not believe that. I believe that people who voted for this voted 
for it for the right reasons. They voted for it because they knew it 
was the best we could do. They voted for it because they knew it was a 
bipartisan consensus amendment, and they voted for it because they knew 
it would work and they knew it would force Members of Congress to stand 
up and do what is right for a change.
  Now we are down to bait-cutting time. It may take us another 2 or 3 
or 4 weeks. I do not care how long it takes. I want this amendment to 
pass, and I am going to do everything within my power, physical and 
otherwise, to get this amendment passed. I hope everybody out there in 
this country will start working with their Senators, help them to 
realize this is it. This is our best chance to save this country.
  I hate to put it that dramatically, but that is what it comes down 
to, because if we do not do this, those who are concerned about Social 
Security are really going to have a reason to be concerned because we 
cannot continue to be the profligate spenders we are and run the huge 
deficits we do and have the interest rates go up the way they will and 
lose the jobs we are going to lose and have the interest against the 
national debt continue to exponentially go higher and higher without 
hurting Social Security, without hurting Medicaid, without hurting 
Medicare, without hurting welfare, without hurting veterans' pensions, 
without hurting everybody's pensions, and without reducing the value of 
our dollar to the point where all of us are going to have a rough time.
  If the United States starts to slide in this way, what about the rest 
of the world? There will be a worldwide recession or depression like 
never before. That is going to happen unless we bite the bullet and do 
what we have to do here.
  There is good reason why you cannot amend the Constitution easily or 
readily. There have only been 27 amendments to the Constitution and 
most, if not all, of them have been hard fought. But never in history 
has there been a more important amendment than this one at this 
particular time. This is the chance for us to do something that could 
save the country. And it will not happen--and I say this to every 
citizen of this country--it is not going to happen unless you get mad 
and you let the Senators in this body know that you want them to adopt 
this amendment. They need to vote for this and we need 67 votes to do 
it.
  The Founding Fathers made it very tough to amend the Constitution. 
That is as it should be. This amendment has been through 12 years of 
very tough treatment, very hard fighting, and very serious intellectual 
consideration. It is the best we can do.
  Everybody here would like to add something or take something away. 
But sooner or later we have to come down to the conclusion this is the 
best 
[[Page S1914]] we can do. We have always looked at anybody's ideas, and 
we will continue to see if there is some way we could find that will 
help to satisfy the distinguished Senator from California, Senator 
Feinstein, and others. But I have to tell my colleagues the more I 
think about it, the less inclined I am to make a change like that 
because of the loophole it would be, and because it will not solve the 
problem for Social Security anyway. The best thing we can do for Social 
Security is pass a balanced budget amendment that will keep our country 
strong. It will make us live within our means. It will make us treat 
budgetary matters in a fiscally responsible manner. That is the best 
thing we could do for Social Security, because no matter how much you 
pay people, if the money is worthless, it is not going to buy food or 
anything else.
  There are people today who suffer because of their poor economic 
situation who rely on Social Security. But they are relatively few, and 
we have to work on them and try to resolve their problems within our 
budgetary process. But there are millions who are getting by on Social 
Security and consider it their life's blood. They are not going to be 
able to if we do not put this constitutional amendment into the 
Constitution and force the Congress to live within its means.
  How can anybody doubt that the way we spend, the way we increase 
deficits, the way our interest against the national debt is 
exponentially rising, that that will affect everybody in this country 
at some time in the future unless we are forced to get serious about 
it?
  We talk about being serious. We have tried every statutory budget 
mechanism we possibly can and none of them have worked over time. All 
of them have failed. This amendment will force us to succeed. It would 
force us to get serious. It would force us to do the things that have 
to be done. And that would protect Social Security in the long run.
  I do not want to just look at things in the short run. I want to look 
at them in the long run, and this amendment will help us in the long 
run. If we put an amendment in that refers to a statute in the 
Constitution, and try to define in the Constitution what that statute 
means, I guarantee it will be a loophole through which you can fit any 
kind of spending program you want. All you have to do is call it 
``Social Security,'' call it ``the trust fund,'' or call it whatever 
fits the language of the statutory reference in the constitutional 
amendment and that is it, it is over.
  I know people are sincere and they are trying to do what is right 
here. But the place to deal with these issues is in implementing 
legislation. That is why we have implementing legislation. That is why 
section 6 says that the Congress has the power to implement this 
amendment. Through the implementing legislation we can resolve some of 
these problems and we can resolve them in a way that still forces us to 
make priority choices among competing programs, and Social Security 
will always fare well in competition with other spending programs in 
our budget. I do not think anybody doubts that.
  So let us not get into an issue that really is a phony issue. Let us 
keep constitutional amendments the way they should be. Everybody knows 
the game here. Everybody knows this amendment is written in a 
constitutional form. Everybody knows what it is intended to do.
  There will always be those who try to play games to get around a 
constitutional provision they dislike, but if we stand strong and we 
vote for this and we get it through, I guarantee it will work and it 
will go a long way toward resolving the problems of this country--which 
are not being resolved at the current time.
  I know the distinguished Senator from Nevada wants to speak, so I 
yield the floor at this point.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Nevada.
  Mr. REID. Madam President, probably the most famous bank robber of 
all time was a man by the name of Willie Sutton. After Willie Sutton 
got out of prison, after having spent many, many years there, he was 
asked why he robbed banks.
  He said, ``Because that's where the money is.''
  Madam President, Social Security is where the money is and that is 
why we must protect Social Security recipients, whether they be my 
granddaughters or whether they be me or the millions of people around 
this country who today depend on Social Security.
  The reason we must exempt Social Security from the balanced budget 
amendment is that is where the money is. This year the surplus in the 
Social Security fund will be some $70 billion. Shortly after the turn 
of the century the surplus in the Social Security fund will be $800 
billion. I say ``will be.'' It will be if we protect those moneys. If 
we do not, if we do not set aside those moneys from the balanced budget 
amendment, when people go to draw their Social Security, when my 
granddaughters go to draw their Social Security, or my children, there 
will be no money left. Because that is where the money is and that is 
how the budget will be balanced.
  There is no place else to get the money in those large sums. I 
offered a year ago on this floor an amendment to the balanced budget 
amendment that was then on the floor. In that amendment I included 
capital budgeting; I included as part of the amendment that, if in fact 
we were in a recession for a period of 3 years, we could waive the 
balanced budget amendment. Madam President, I have thought about this 
for the past year and I have come to the conclusion that what I need to 
do is focus on Social Security. Capital budgeting is important; 3 years 
of recession are important; but those are to one side. I now am 
focusing only on Social Security.
  As my friend, the senior Senator from Utah, knows, I am going to 
offer this same amendment again. I am going to offer this amendment 
with the support of Senators Conrad, Dorgan, Feinstein, Ford, Heflin, 
Harkin, Graham of Florida, Baucus, and Boxer, and I am sure there will 
be others. I am doing this because there has been a lot of talk during 
these past few months about a Contract With America.
  I think some of the things that have been focused during these past 
few months in the Contract With America are important. I have supported 
the two issues that have come through this body already. But I want to 
talk today for a few minutes, in preparation for the debate that will 
take place probably next week when we offer the balanced budget 
amendment, about the first contract, the real contract of this century 
with the American people.
  That contract was initiated in 1935 during the throes of the Great 
Depression when Members of this body and Members of the other body 
together with President Roosevelt got together and said we think we 
need to make a Social Security contract with the people of America, and 
they did.
  What was that contract all about? It said if you, the employee, pay 
into a fund along with your employers, during your golden years you can 
draw retirement, not welfare. You can draw retirement that you have 
earned, you have paid into this fund. That in fact is what the contract 
is all about.
  Madam President, what we have done is we have taken these moneys that 
are collected from the employees of America and the employers of 
America and put them into a trust fund. That word of art ``trust fund'' 
means something. It means that you have a very important fiduciary 
relationship. We, the people, who control this trust fund, have a 
fiduciary relationship with the people who will draw money from that 
trust fund, a relationship that we must do what we can to protect the 
integrity of that trust fund.
  I practiced law before coming to the Congress. I had a trust fund set 
up for my clients, a client trust fund. That money that I collected on 
behalf of my clients I could not make my car payments with, I could not 
buy myself a suit, I could not pay the law firm rent or the rent at 
home with any moneys out of that trust fund. If I in fact did that, I 
would be subject to disciplinary action by the State bar association 
and possibly by the criminal prosecutors in the State of Nevada. I 
could go to jail for violating the trust that I had in protecting my 
clients' money.
  The term ``trust fund'' that I used as a practicing attorney is not 
the same connotation as trust fund for Social Security. It is 
identical. We have an obligation to protect that trust fund.
  [[Page S1915]] My friend from Utah, the senior Senator, is someone 
that I have great respect for. But on his statements regarding Social 
Security, he and I disagree. I recognize, as I think we all should and 
certainly the people within the sound of my voice should appreciate the 
fact, that Social Security does not contribute one penny to the Federal 
deficit. Social Security, as I have already explained briefly here, is 
running in excess, a surplus. It does not contribute to the deficit. In 
fact, it has been used to erase the deficit in years past. We worked 
very hard to have the Social Security trust funds not be part of the 
general revenues of this country. We set up a separate fund for Social 
Security. We set up a separate agency. Social Security does not 
contribute to the deficit.
  We have heard statements, rightfully so, that the American public 
supports the balanced budget amendment. They do. Eighty percent of the 
people in Texas, Utah--I see my friend from Ohio coming onto the 
floor--and Nevada. It is about the same all over. About 80 percent of 
the people support the balanced budget amendment. But when those same 
people are asked, ``Do you want to balance the budget by taking Social 
Security surplus?'' the answer is 70 percent ``no.'' Only 10 percent of 
the original people who say they want a balanced budget amendment 
supported it if you say you are going to use Social Security. That is 
the original Contract With America of the century. That is the program 
that people want protected. They know Social Security is not welfare. 
This part of the Social Security fund that we are conducting deals with 
old age benefits. It does not deal with Medicare. It deals with the old 
age portion of that fund.
  There have been statements made on this floor that the amendment 
creates a large loophole. I respectfully submit that if we could argue 
this case to a jury of our peers, we would win because it does not 
create a loophole. Anything that changes the long-term actuarial plan 
of Social Security is subject to a 60-vote point of order before this 
body. If someone wanted to place education or aid to families with 
dependent children into Social Security, it would not work. You would 
have to get 60 votes. If you use that reasoning, Madam President, you 
can look at the amendment as it is written. The amendment as it is 
written--the one that is before this body now--has exceptions. Congress 
may waive the provisions of this article, says section 5, for a number 
of reasons. One reason is it can be waived is if there is a military 
conflict in which an imminent and serious military threat to national 
security is declared. Does that mean that, if this were in effect, 
taking the troops into Haiti would mean that we could waive the 
balanced budget amendment? It does not say to what extent it can be 
waived. It does not say it can be waived for the actual cost of the 
imminent danger or whether it could be waived to the tune of billions 
of dollars more.
  So let us stick with the facts. I do not think that this body would 
do that. I do not think that we would say that the event taking place 
in Haiti, or Rwanda, would be such that we could waive the balanced 
budget amendment that was in effect to the tune of billions of dollars. 
Having Social Security exempted from the balanced budget amendment does 
not--I repeat, does not--create a loophole. This is one of those 
figleafs that is being waived around this body so often on this 
amendment.
  A point of order, of course, means that the truth would be brought to 
bear on any form of legislative shenanigans. That is why the 60-vote 
point of order is in effect. My amendment is intended to safeguard an 
easily identifiable and narrowly defined program.
  There have been those in this body who have said, ``We will take care 
of this in implementing legislation.'' Let me explain to my colleagues 
and to the American public what this means. This means that there are 
people who recognize the danger of going where Willie Sutton said you 
need to go if you need money; that is, where it is. And that is why he 
went to the bank. The only place we can go is Social Security. But 
there are those who tell me that we are going to take care of this with 
implementing legislation. How? ``Well, we are going to pass a law when 
the balanced budget amendment passes that says we cannot touch Social 
Security.'' Boy, we should not fall for that one. I know that the 
senior groups in this country will not fall for that. The AARP and 
others are not going to fall for that because they know that a law 
which we could pass this morning--it is now 5 o'clock approximately in 
Washington, DC--this morning in Washington, DC, we could pass a law, 
and we could pass another law to take the place of that one at 5 
o'clock this afternoon. We could pass a law and pass another one to 
take the place of it that same day. Implementing legislation will not 
protect Social Security. We could pass implementing legislation this 
year and repeal it next year. It simply is no way to protect Social 
Security.
  Implementing legislation is another one of the figleafs that is so 
transparent that you should not wear it because it will not work. If 
you oppose raising the Social Security trust fund, you should support 
the simple amendment that I am going to offer with my colleagues which 
expressly prevents any looting of the Social Security trust fund.
  I was on this floor a year or so ago with Senator Moynihan, the 
senior Senator from New York. We were talking about the unfairness of 
collecting Social Security taxes, withholding taxes, when the moneys 
were not going to Social Security; they were going to help relieve the 
deficit.
  During the colloquy between the Senator from New York and the Senator 
from Nevada, we talked about the Social Security trust fund, and we 
talked about maybe it really was not a trust fund; maybe it had become 
a slush fund.
 Well, it has not become a slush fund yet. But if we allow the balanced 
budget amendment to pass and do not protect Social Security, it will no 
longer be a trust fund, it will be a slush fund.

  Again, I remind everyone here that people who are trying to balance 
the budget will go to where the money is; that is, Social Security. 
Remember, we are not talking about surpluses of a few thousand a year, 
a few million a year, a few billion a year; we are talking about 
surpluses that, after the turn of the century, will be in the trillions 
of dollars. Why do we need that much money in the trust fund? Because 
there is going to come a period of time when the outflow from the trust 
fund will be far in excess of what is coming into it. We need those 
surpluses.
  We have been told that placing a statute in the Constitution is 
unprecedented. Well, Madam President, it is unprecedented. My friend, 
the senior Senator from Connecticut, said it the way it is. We have had 
11,000 attempts to amend the Constitution of the United States. We have 
succeeded less than 30 times. This is the first time that we have tried 
to do an amendment to the Constitution fixing fiscal policy. So if we 
are talking about fiscal policy, should we not be concerned about one 
of the largest fiscal elements of our society, namely Social Security? 
Of course, the answer is yes. And we need to place it not in a statute; 
it would be part of the constitutional amendment. It would lose its 
statutory life and become part of the Constitution of the United 
States.
  We also certainly should not allow talk about future generations 
being protected if we lump Social Security into the balanced budget 
amendment--that is, that Social Security will be easy picking, prime 
pickings to balance the budget. That will not protect future 
generations. Quite the contrary.
  This debate is not about senior citizens versus children; this debate 
is about children who will become senior citizens and need their Social 
Security benefits. This is not an amendment that protects old people in 
America today. This is an amendment that protects all people in America 
today, because Social Security benefits are for the young and for the 
old because, if we are lucky, we all get old.
  In effect, safeguarding Social Security in this trust fund means that 
Government will not be able to continue to borrow from this trust fund. 
Ending this robbing Peter-to-pay-Paul practice will allow us to 
maintain the trust fund for future generations of Americans.
  Madam President, we have also heard last week on this floor that the 
Seniors 
[[Page S1916]] Coalition supports passing the balanced budget amendment 
and does not support my amendment. When I first heard of this 
organization, I was running for office. I was very concerned that a 
senior organization, after my work on the Aging Committee and doing a 
lot of things over the years for senior citizens, would not be helping 
me. Why would they oppose me? Well, what I have come to realize, Madam 
President, is that the Seniors Coalition has a history of employing 
exaggerations and falsehoods--which is a nice word for lies--because 
they want to make money from senior citizens by scaring them.
  According to a 1993 article in the National Journal--the founders of 
this particular group have sent letters out against most Democratic 
candidates running for public office on the Federal level. The National 
Journal said that the founders of this particular group have been under 
investigation for fraud by the FBI, two U.S. attorneys, New York 
State's attorney general, and the Postal Inspector. In 1980, Richard 
Viguerie, father of the direct mailing system for the Republican Party, 
or certainly one of the founding fathers of that organization, and a 
man by the name of Dan Alexander, started the taxpayers education lobby 
to raise money through appeals of school prayer and other conservative 
policies. In 1986, Dan Alexander was indicted for extorting kickbacks 
from school construction projects and he served 4 years in prison for 
doing this.
  In 1989, the Seniors Coalition was formed by his wife, a woman by the 
name of Fay Alexander, with help from Mr. Viguerie. In 1992, the 
coalition claimed to become independent of the taxpayers education 
lobby, though there remained a contract that paid Mrs. Alexander 
$20,000 a month, money seniors sent this organization, and paid her 
husband about $3,000 a month for consulting fees. Remember, this is the 
man that is in jail. In 1992, the board consisted of Fay Alexander and 
a business associate. For its first 3 years in operation, the 
coalition's president was Susan Alexander, the couple's teenage 
daughter. Mr. Alexander told the New York Times--and I am sure this is 
an understatement--that he hired his daughter because it was hard to 
find outsiders of any stature to serve on the board in view of his 
record. The coalition now has outside directors.
  I will not go into a lot more detail. But I do not think it would be 
a good idea to cite the Seniors Coalition, and we should not base any 
vote in this body on what they do or do not do. I may talk a lot more 
about them later if we hear a lot more about the Seniors Coalition, 
because I have a lot more to say in that regard.
  Let me say, Madam President, that the balanced budget amendment is 
something that should pass--if Social Security is protected. If Social 
Security is not protected, everyone should be very, very cautious and 
afraid in this body. But the fear generated from here should be for the 
people in America, those 70 percent of Americans who say you should not 
balance the budget on the backs of Social Security recipients, because 
if we do not exempt Social Security, as Willie Sutton has said, ``We 
will go where the money is,'' and we will balance the budget, which 
will be fairly easy to do if you use Social Security. That is what will 
happen, and that is too bad.
  I yield the floor.
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio [Mr. DeWine] is 
recognized.
  Mr. DeWINE. Madam President, I rise today as a person who has spent 
the better part of the last 4 years traveling my great State and 
listening to the concerns of the people of Ohio. One thing I have found 
is that people are more skeptical than they have ever been before. I 
have really heard it everywhere I went. Today, people measure 
politicians not by the promises that they have made, but rather by the 
promises that they have kept. Empty promises simply no longer work. The 
people of this country want concrete action, not just promises.
  Madam President, in 1992, people voted for change. But then there was 
not enough change, and so people did not see the concrete results. And 
then in 1994, they voted for change again. I ran in 1992. I ran in 
1994, and I can tell you that people are fed up with promises. They 
want change and they want action. For the American people, nothing 
symbolizes Congress' inability to change, to back up words with action, 
more than Congress' unwillingness to balance the Federal budget.
  Despite all the talk, year after year, Congress continues to run 
deficit after deficit. And if it is true that nothing symbolizes 
people's perception of Congress' inability to change more than our 
failure to balance the budget, I think it is also true that nothing 
will do more to restore people's faith in Congress, in the Government, 
in the country, than by passing a constitutional amendment that will 
mandate and compel a balanced budget.
  The balanced budget amendment to the Constitution does represent 
fundamental change. This, Madam President, is the change the American 
people demanded, demanded in 1992 and again in 1994.
  Over the last couple of days, we have had a somewhat academic debate 
about the balanced budget amendment. And I expect this debate will go 
on for a few more days, a few more weeks. The opponents of the balanced 
budget amendment tell us that we do not really need a constitutional 
amendment to balance the budget. They say all we really need is the 
political will.
  Well, Madam President, I suppose that is right. I suppose that is 
technically true. But is there really anyone in this Chamber, is there 
really any Americans who believe that Congress, without a balanced 
budget amendment, will balance the budget? Nobody I talk to believes 
that.
  Let us do a reality check. Let us look at the past.
  Madam President, we have not had a balanced budget since 1969--1969, 
the year I graduated from high school. We have had a deficit in 5 of 
the last 63 years. When we had a Republican President, we had a 
deficit. When we had a Democrat President, we had a deficit. When we 
had a Democrat Senate, we had a deficit. When we had a Republican 
Senate, we also had a deficit.
  The reason the American people, 80 percent of them in a recent poll, 
support the balanced budget amendment is that they simply do not 
believe Congress will ever balance the budget any other way. And I must 
say, Madam President, the past would indicate the American people are 
absolutely correct. For 25 straight years we have not balanced the 
budget; 25 budgets in a row.
  Madam President, what are the chances, without a balanced budget 
amendment, without the discipline that this will impose on this body, 
on the House, on the Congress, on the Government, what are the chances 
in the 26th year or 27th year or 28th year, 30th year, 35th year, we 
will not continue to do what Congress has done for the last quarter of 
a century and that is not balance the budget?
  Madam President, a lot of people say that Americans are cynical 
today. I am not sure that is really true. But Americans have watched 
Congress try to balance the budget in each of the last 25 years and 
Congress has failed every time.
  What the American people are saying is pretty simple. ``Let's try 
something else. Let's try something else and see if that works.''
  Madam President, I do not call that cynicism. I call it realism.
  You know, I do not think any of us who support the balanced budget 
amendment are really happy that we have to do this. It is a last 
resort. But really it is our only realistic hope. And I believe that we 
have to do it.
  (Mr. THOMAS assumed the chair.)
  Mr. DeWINE. Mr. President, the opponents like to talk about how the 
balanced budget amendment is a threat to our children; that it would 
devastate the investments we need to make in our children's future. Let 
us look at this and let us look at this argument because it is a very 
serious argument.
  Mr. President, the word ``cynical'' might be the most appropriate way 
to characterize that particular argument. To run up a colossal mountain 
of debt, $4 trillion and rising, a debt that threatens to leave our 
children's generation bankrupt is bad enough. But to use these very 
same children as an excuse for not biting the bullet on the budget 
deficit is just plain wrong.
  Again, Mr. President, let us face the facts. If we do not pass the 
balanced 
[[Page S1917]] budget amendment, we simply will not have the money for 
investment in our children.
  We are already paying over $235 billion a year in interest on the 
debt. As my colleague, the Senator from Illinois, pointed out earlier 
today, that is eight times what we today invest in education. It is 50 
times what we invest in job training. It is 145 times what we pay for 
early childhood immunizations.
  Every year we add to this mountain of debt and every year we are 
committing more of tomorrow's resource to pay for Congress' failures of 
today.
  What does the future look like for children if we do not balance the 
budget? Well, let me tell you. This, Mr. President, is what it would 
mean to continue with business as usual.
  If we continue with business as usual, next year the Federal budget 
deficit is set to start growing again. By the year 2003, just 8 years 
from now, spending on entitlements and interest alone, entitlements and 
interest alone, will exceed 70 percent of the whole Federal budget. If 
you take out defense, it leaves you just 15 percent of the budget for 
all the discretionary spending and domestic needs--15 percent out of 
entire budget.
  That means less than 15 percent for education--and these are 
cumulative for everything--less than 15 percent for education, for job 
training, for the Women, Infants, and Children Program, the WIC 
Program, for Head Start, for drug treatment, for employment training, 
for the environment, for housing, for all the other programs that help 
the American people here at home--just 15 percent of the budget for all 
these programs, all these programs, Mr. President, combined.
  And by the year 2012, just 9 years later, we will be looking back on 
that 15 percent as the absolute golden age of investment in our 
domestic needs because by that time, by the year 2012, just 17 years 
from today, there will be nothing left in the budget for these social 
needs--zero; no money for children--unless we change the direction we 
are going in. Every last red cent in the Federal budget will go to 
entitlements and interest payments. And 2012 is a year that has 
significance for my wife and I and for many other people, I am sure, 
because just a year before that, our grandson Albert, we hope, will 
graduate from high school; our daughter Anna will be in her first year 
of college--2012.
  This is the human cost of Albert and Anna, all our children and our 
grandchildren, will have to pay because of Congress' unwillingness to 
change.
  Mr. President, to hide these facts and then to hide behind these very 
children who will be hurt the most if we do not act is worse than 
absurd. I find it unconscionable.
  The American people no longer, Mr. President, care what we say. They 
are tired of excuses, evasions, rhetoric. They do not care if some of 
us say we can balance the budget. What they care about is what we do. 
They are not listening to what we say. They are watching what we are 
about to do.
  To say, Mr. President, that they are not happy with what Congress has 
done in recent years would certainly be a severe understatement. In the 
name of our future, in the name of our children, they are demanding 
change.
  Mr. President, I will vote to create the change. I will vote in favor 
of the balanced budget amendment. It is a vote for less government, 
instead of more government. It is a vote for responsible government, 
instead of a runaway spending machine.
  It is, Mr. President, the last hope of the American people for fiscal 
sanity and long-term solvency. This is the greatest gift we as Members 
of Congress can give to the next generation of Americans.
  Mr. President, I yield the floor.
  Mr. HATCH. Mr. President, I have been interested and I want to 
personally thank the distinguished Senator from Ohio for the excellent 
remarks he has made today. He has brought this whole matter into focus 
when he talks about the effects on his children and his grandchildren. 
I feel exactly the same. Elaine and I have 6 children, and our 15th 
grandchild is on the way. We have 14 now, but the 15th will be here in 
a couple of months, and who knows when there might be some others. We 
are not sure.
  The fact of the matter is we are very concerned about them. I am 
concerned about all the children, and grandchildren. The Senator from 
Ohio makes a good point. There will not be child care moneys if we do 
not get things under control. There will not be job training moneys. 
Forget about Job Corps. What about welfare? What money we have will not 
be worth anything. What about Social Security, if money becomes 
devalued through inflation and, therefore, worthless? How are people 
going to live? How are people going to live? There are people today in 
this affluent society who barely get by. Can you imagine what it will 
be like for the unlucky ones of the future? Such things should not 
happen. We ought to do something about it. But I will say, it will be 
everybody who will have trouble getting by if we keep going the way we 
are going.
  I am not just using scare tactics. It is true. Everybody knows it. 
People feel it. This is the first time in the history of this country 
where parents are fearful that their children will not have lives as 
good as they did, will not have opportunities as good as they have. The 
first time in history where parents feel that their children will not 
have the great opportunities for growth and advancement that they had. 
The reason that is so is because Congress does not have the fiscal 
mechanism in place to force Congress to do what is right.
  I want to thank the distinguished Senator from Ohio for his excellent 
remarks, and the other Senators today, especially our Senators who are 
here for the first time. They are here because of this issue, in part. 
People out there know this country is in trouble. They are here because 
people wanted them to vote for the balanced budget amendment. They are 
here because they make the difference.
  Each Senator here makes a difference, including those who voted for 
the balanced budget amendment before. But these new Senators make up 
the difference from last year. We lost by four votes last time. Four 
votes. We had seven people who were here who voted with us last time 
who are now no longer here. That is 11 votes. We have picked up 11 new 
Senators, all of whom are on the Republican side and are going to vote 
for this balanced budget amendment. All of them were elected on the 
basis that they would vote for this balanced budget amendment. All of 
them are part of this revolution in our society, not a Republican 
revolution, but a revolution of people who are sick and tired of the 
way things are, of the status quo, who want a balanced budget 
constitutional amendment, for the express purpose of saving this 
country. Well, we have such an amendment here. It is not perfect. But 
nothing around here ever is. It is as perfect as it can be, as 
developed by both parties.
  Now, let me just say a few words in response to the comments of my 
colleague from Nevada. And I do respect Senator Reid from Nevada. He is 
a very dear friend and colleague. I have a great deal of feeling and 
affection for him. He said the Social Security trust fund will be 
raided if the balanced budget amendment is passed. That could not be 
more wrong. It just could not be more wrong. It will be raided if we 
devalue the dollar and make the dollars that are paid out in Social 
Security benefits worthless. And that is where we are headed if we do 
not have a balanced budget amendment.
  The Social Security trust fund is not where the money is. This so-
called surplus the distinguished Senator from California was showing us 
earlier with that big loop in the chart that she had, that money is not 
in a trust fund. Why this year's $70 billion surplus will be used to 
buy Treasury bonds. There is no stash of cash waiting to be raided. It 
is already going to be taken out of that trust fund. And there is going 
to be a nice little Treasury bond piece of paper saying ``guaranteed by 
the Government of the United States of America.'' And we will take that 
$70 billion trust fund surplus and we are going to spend it on general 
budget items and spending programs.
  That money is gone. There is no question about it. There is no trust 
fund full of money. There is a trust fund of paper promises that will 
be valuable only if we pass the balanced budget amendment and get this 
country's spending profligacy under control. But that big pile of paper 
will be valueless if we do not.
   [[Page S1918]] The only way we will get spending under control is to 
pass this balanced budget amendment. There are some who think even if 
we do this we might not get there. I was looking at James Q. Wilson's 
article yesterday in the Wall Street Journal. He is one of America's 
leading political scientists. He is one who was never for the balanced 
budget amendment, but boy he is now. He said, in essence, ``I do not 
like it, but it is the only hope we have.'' I commend his reasons for 
now supporting the balanced budget amendment to my colleagues, and ask 
that the article be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, Jan. 30, 1995]

                     A Bad Idea Whose Time Has Come

                          (By James Q. Wilson)

       For yours I have been skeptical of a balanced budget 
     amendment to the Constitution for all of the reasons that 
     most of my colleagues in political science and many member of 
     Congress so clearly express. Now I am a reluctant convert, 
     not because I think the arguments against it wrong but 
     because I think them beside the point.
       There is no economic case for always having a budget that 
     is balanced or in surplus. One doesn't have to be a Keynesian 
     to know the occasional desirability of stimulating the 
     economy by spending more than one takes in or the necessity 
     of going into debt to make capital improvements. There are 
     even a few economists who claim that, if we do our accounts 
     properly, the budget is already balanced.
       The problem with the economic objections to balancing the 
     budget is that they fail to take into account the changed 
     character of the American people and their representatives. 
     From the time of George Washington to the time of Dwight 
     Eisenhower, budgets were almost never in deficit except in 
     wartime. But in those days the public expected rather little 
     from Washington. They did not expect a federal solution to 
     every problem--drugs, crime, education, medical care, and the 
     environment. Their representatives generally believed that 
     deficit spending was wrong, not simply imprudent, and to vote 
     for it was to risk not only electoral retaliation but public 
     censure.
       It is astonishing that this culture--one of limited federal 
     responsibilities and stringent fiscal prudence--should have 
     survived for so long. Politics offers citizens this deal: 
     Vote yourself big benefits now and let your grandchildren (or 
     better yet, somebody else's grandchildren) pay for them. If 
     you let the government borrow the money, you can get 
     something for nothing. Yet for more than a century and a 
     half, we turned down that deal. As a result, the annual 
     deficit amounted, as late as 1955, to only 6% of federal 
     outlays. Thirty-five years later, it was 18%.
       James Buchanan, the Nobel laureate in economics, concluded 
     from his study of our fiscal history that something akin to a 
     Victorian ethos had restrained our spending. Now that ethos 
     is gone, and with looming deficits in Social Security and 
     Medicare, matters can only get worse.
       There are serious political objections to the amendment as 
     well. Won't Congress somehow cook the books so as to comply 
     with the letter of the amendment but not with its purpose?
      Or if it doesn't cook the books, what is to prevent Congress 
     from simply appropriating in excess of revenues, no matter 
     what it had earlier resolved to do? For years Congress 
     found ways to circumvent or ignore the Gramm-Rudman 
     balanced-budget resolution.
       And if Congress evades the amendment in any of these ways, 
     how will it be enforced? Will a taxpayer sue the secretary of 
     the Treasury for writing checks based on deficit 
     appropriations? It is not obvious he or she would have 
     standing in the courts. And even if a court heard the case, 
     what would it do? Send U.S. marshals to arrest the Budget 
     Committees? Issue an injunction to shut down government?
       Many members of Congress have made these points publicly 
     and many more make them privately. But notice what they are 
     saying: You cannot trust us to do what you, the public, 
     wants. Your amendment will not give us any backbone. We will 
     evade and cheat. Therefore, do not enact such an amendment so 
     that we can ignore your will with complete impunity.
       And even those members of Congress who say they will comply 
     with it are unwilling to divulge what cuts they would make or 
     what taxes they would raise in order to comply. Critics love 
     to play the Social Security trump card: ``You won't discuss 
     Social Security or other entitlements, and yet you say you 
     favor a balanced budget. Shame!''
       Now we are at the heard of the matter, face to face with 
     the reason why the balanced budget amendment is a bad idea 
     whose time has come. Congressmen are elected by voters who 
     want lower taxes, no deficit, and continued (or even more) 
     spending. Almost every poll since the 1960s shows the same 
     pattern.
       The public has inconsistent preferences; the public wants 
     something for nothing. Of course members of Congress will 
     conceal their preferences, pretend that the public need make 
     no hard choices, and take Social Security and Medicare off 
     the table. To do otherwise is to court electoral disaster. 
     Some leaders will try to finesse the issue by saying to the 
     public that it can have lower taxes, no deficit, and more 
     spending if only Washington would eliminate ``waste, fraud, 
     and abuse.'' It was never true, and I doubt many people still 
     believe it.
       Voters are the problem. The balanced budget amendment is 
     aimed at them, not at politicians. When it is in place, the 
     electoral logic changes. Now challengers can run against 
     incumbents by saying, not simply that they didn't cut 
     spending or didn't fund a popular program, but that they 
     violated the Constitution. The enforcement of this amendment 
     will be political, not legal. It will be an imperfect 
     enforcement, but it will probably make a difference.
       For one thing, it will put Social Security (and Medicare 
     and everything else) back on the table. Congressmen will have 
     to go to the public and say something like this: ``What do 
     you want, I cannot deliver. I wish I could. But you have to 
     make some choices so that I can make some. What do you want 
     most--lower taxes, more spending, or no deficit? I can't kid 
     you anymore because the Constitution--and my opponent--won't 
     let me.''
       I am not sure what the public will say. But whatever it is, 
     it will be an improvement over its current free-lunch 
     mentality.

  Mr. HATCH. Mr. President, the Social Security trust fund will 
continue to invest any surplus in Treasury bills from here on in. We 
will have that mound of paper that will be worth something only if 
America is viable, but it will be worth nothing if we keep going the 
way we are going. And we will have sold Social Security recipients down 
the river. We can avert such problems only if we adopt and comply with 
the balanced budget amendment.
  I cannot, for the life of me, understand why people are so upset on 
the other side of this floor about the consensus balanced budget 
amendment. They know that if we do not do something to put a fiscal 
mechanism in place which will cause us to make priority choices among 
competing programs and get spending under control, that those trust 
fund Treasury bonds are not going to be worth the paper they are 
written on.
  In the year 2015 the trust fund will start to draw down this so-
called surplus by redeeming those Treasury bills. The only way to 
protect those funds is through a balanced budget amendment. If we did 
not pass this amendment we will not balance the budget. If we did not 
balance the budget, the Federal Government will have a tough, if not 
totally impossible job redeeming those bonds.
  In fact, if we do not pass this amendment and balance the budget, it 
is highly likely that the Federal debt will be monetized. Now, this 
will only reduce the value of the Treasury bonds held by the trust 
fund, but by monetizing the debt it means that we print more money, 
inflate the economy, reduce the value of our money, which might go down 
to zero, and we pay off the debt with worthless money, lose our credit 
standing in the world community in the process, and trigger a worldwide 
depression.
  Now, that is where we are headed. Make no bones about it. The only 
way to protect the Social Security trust fund and the Treasury bonds it 
buys, is to pass this amendment and balance the budget.
  Now, Senator Reid says we must exempt Social Security because what is 
where the money is. That just is not true. That is where the Treasury 
bonds are. There is no money there. There are only IOU's which will be 
valueless if we do not get spending under control.
  How do we protect Social Security? We who support this amendment know 
how, through good economics, and through a balanced budget amendment. 
It is the best protection we could give them. The Social Security trust 
fund is not where the money is. There is no money there. There are only 
IOU's there.
  We have already used the money to pay for other bills of the Federal 
Government and other spending items. The reason why we need a balanced 
budget amendment and why it should apply to Social Security is to 
ensure that the money is there to pay the IOU's to our seniors when 
those IOU's come due, and that those dollars they receive, when they 
get them, are worth something. Without a balanced budget amendment, 
there is some question whether we could repay our debt to our seniors, 
or whether the dollars will be worth anything at all. And Mr. 
President, the trust fund itself will run a 
[[Page S1919]] deficit in the future. And if it is allowed to run a 
deficit through an exemption in the balanced budget amendment there 
will be no incentive to balance the trust fund. But if the balanced 
budget amendment applies to Social Security, the Constitution will 
require Congress to have the money to pay our retirees. Real money. Not 
IOU's.
  Not paper promises. Not a mountain of mere good intentions.
  Well, I think it is very important that we understand these issues. 
If in the zeal to protect Social Security, such a proposed exemption 
defeats the balanced budget amendment, these folks in their zeal have 
will have actually killed Social Security, sooner or later.
  Mr. President, the Senator from Nevada and I disagree on the merits 
of this issue, on the best way to protect Social Security, seniors, and 
our country's future. Let me reiterate that I believe the only way to 
assure that our Government is able to meet its obligation to future 
retirees is through the balanced budget amendment. It will help us 
ensure that we will have dollars that have worth, and that we have a 
nation and economy and a government that is worth passing on to our 
future generations.
  That is what we are fighting for here. That is why I am spending this 
time and have for the last 18 years--now on the 19th year--spending my 
time trying to see if we can bring both sides together in a way that 
benefits this country, if not save the country.
  This amendment is the best we can do, and it is as perfect as we can 
make it. It has bipartisan support. I really applaud those Democrats 
who are willing to stand up for it. There are not very many of them, 
but we hope that there are enough to pass this balanced budget 
amendment. We only need 15 to 17 of them out of the 47 that are here. I 
do not think that is too much to ask. And, frankly, there are 
courageous Democrats who are standing with us on the floor each day, 
like Senator Simon, Senator Heflin, and others who are willing to pay 
the price to get this job done.
  I just want to personally pay tribute to them and tell them how much 
I personally appreciate it. I really appreciate those 72 Democrats over 
in the House who had the guts to stand up against the majority in their 
party, had the guts to stand up and do what is right for this country.
  Mr. President, I just want to make it very clear to everyone 
listening that if the American people do not get involved in this, if 
they do not realize that this is really bait-cutting time, if you folks 
out there do not start calling your Senators and letting them know how 
badly you feel about this and they had better support the balanced 
budget amendment, we may very well--we may very well--not get this job 
done.
  Right now I believe that we have the votes to get it done. I believe 
that Senators, when they are really faced with the realities of what is 
really happening, and what will happen if we do not adopt this 
amendment at this time--this one rare time in history--after the House 
for the first time passed the balanced budget amendment, if we do not 
get it done, it is going to be a disaster for this country. I think 
they will vote for this amendment. We are all counting on it. But they 
will not do it if the American people do not let them know they want 
this done.
  This is the time. We can no longer afford to spend beyond our means. 
We can no longer afford to not face the music. We can no longer afford 
not to enact implementing legislation pursuant to a balanced budget 
amendment that gets us on a glidepath to a balanced budget in the year 
2002, and we can no longer afford the phony arguments against this.
  For those who say, ``Well, you ought to outline every cut you are 
going to make,'' that is the most phony argument of all. It is 
ridiculous. It was said earlier that it is like trying to tell the 
weather each year 7 years from now.
  The fact of the matter is, during all the years of Democratic control 
of both bodies, they have never been able to come up in these last 26 
years with a balanced budget. Not once. And they know and we know that 
it is going to take all 535 Members of Congress working together on 
implementing the balanced budget amendment, over a period of a year or 
more, to come up with a glidepath that will get us to the result of a 
balanced budget in the year 2002.
  They also know that we will never get there if we do not pass the 
amendment which will force us to work together to get there.
  That is in spite of the sincerity of many people in both bodies who 
want to get there and are always talking about getting there and saying 
we ought to do it. But many of those who say that are the biggest 
spenders in Congress. We all say it, but many of those who are saying 
it and saying we do not need a balanced budget amendment--saying that 
we ought to just have the guts to do it--are those who are some of the 
biggest spenders in Congress, who never want a balanced budget 
amendment because they do not want their spending habits curtailed, 
because that is what they believe has reelected them time after time.
  Unfortunately, in some ways, that is true. But now that time is gone. 
We have to do what is right for America and get spending under control.
  Mr. President, we have had a good debate today, and I believe that we 
will keep plodding ahead until we get to the point where we all have to 
vote and we all have to show where we are going to be on this matter. I 
can live with whatever the outcome is. I have been through this so long 
that I can live with whatever it is. But it will be a tragic thing if 
we do not pass a balanced budget amendment. I believe we will if the 
American people will get involved.
  With that, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HATCH. 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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