[Congressional Record Volume 141, Number 21 (Thursday, February 2, 1995)]
[Senate]
[Pages S2006-S2027]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

  The Senate continued with the consideration of the joint resolution.
  Mr. SHELBY. Mr. President, we are involved here in a truly historic 
debate. The proposed balanced budget amendment will decide the fate of 
America for years to come. Our decision will dictate whether our 
children and grandchildren will live free and prosper from the fruits 
of their labor or, on the other hand, live in a Third World economy 
subservient to the economic leaders of other industrialized nations in 
the world.
  Debtors are never free to choose. They are never free to choose. They 
are only subject to the dominion of their creditors. We all know this.
  Interest payments on the national debt now are expected to be $310 
billion this year. Interest payments on the national debt are expected 
to be $310 billion. Think of it. That comes out to be about $4,600 per 
family, or 52 percent of all individual income taxes collected in 
America this year. The national debt itself is over $4.75 trillion, 
going on $5 trillion. Gross domestic product is only about $6.5 
trillion.
  Combined, these numbers produce a debt-to-GDP ratio of 73 percent. As 
the debt continues to grow, so inevitably does the tax burden on the 
American people. Granted, Mr. President, we have gotten away with debt 
in the past, but the time to pay the bill is rapidly approaching. The 
global markets are beginning to experience a capital crunch. European 
economies are expanding and picking up steam. Southeast Asian markets 
are booming. Japan is calling on its reserves to rebuild infrastructure 
after the earthquake.
  In short, Mr. President, demand for capital is simply growing faster 
than can be supplied and, as a result, investors are being more 
selective about which markets they place their money in, as they should 
be.
  A very clear and primary concern of financial markets is a nation's 
poor economic policies and its debt structure. I submit here today that 
the lack of budget discipline we display here in the United States is 
not highly regarded among any investor in the world. Our current 
account stood at $104 billion in 1993. This means we either sold $104 
billion in assets to foreign entities, borrowed $104 billion from 
foreign entities, or a combination of the two.
  Although a current account deficit in and of itself is not a bad 
thing, the accumulation of persistent current account deficits, over 
time, leads to a great big external debt. These deficits identify a 
systematic shortfall of savings below investment, due to an expansion 
of consumption relative to income. The implication is that we borrow to 
finance current consumption expenditures that have no effect on 
economic growth or future income in this country. In other words, the 
Government is borrowing abroad to finance an excess of expenditures 
over income. We are living beyond our means.
  Projections of higher current account deficits run well into the 
foreseeable future. The former Chairman of the Federal Reserve Board, 
Paul Volcker, for whom we all have great respect, has warned of the 
current account deficit addiction, as he calls it.
  He said:

       * * * we simply cannot afford to become addicted to drawing 
     on increasing amounts of foreign savings to help finance our 
     internal economy. Part of our domestic industry--that part 
     dependent on exports, or competing with imports--would be 
     sacrificed. The stability of the dollar and of our domestic 
     financial markets would become hostage to events abroad. If 
     recovery is to proceed elsewhere, as we want, other countries 
     will 
     [[Page S2007]] increasingly need their own savings. Although 
     we do not know when, the process eventually would break down.

  Those are not my words. They are the words of Dr. Volcker. We cannot, 
Mr. President, continue to finance our debt through a balance of 
payments deficit unless we want to find ourselves in the same type of 
crisis as Mexico, or perhaps Canada.
  Mexico, as we all know, is in dire financial straits. The cause of 
Mexico's problems is based on large budget and current account 
deficits. Mexico tried to finance consumption by running a current 
account deficit at nearly 8 percent of the gross domestic product, 
living well beyond their means. Financial markets realized the risk of 
holding Mexican currency and proceeded in a widespread selloff of the 
peso. Mexico was virtually helpless in its ability to manage monetary 
policy due to what? Their structural debt problem.
  Now, Mr. President, private investors will not even prop up the peso 
without a guarantee from the United States or something similar to 
that, the President announced.
  If you look to our north, another neighbor is financially destitute. 
Canada's long-suffering dollar is at a 9-year low. Canada has the 
second highest ratio of debt-to-gross domestic product of any 
industrialized country, and 35 percent of all Federal revenues in 
Canada go to service the debt. In addition, Canada ran a $30 billion 
balance of payments deficit in this past year. Canada is in serious 
trouble. Some Third World countries have a better handle on their debt 
than our neighbor to the north.
  The fiscal order of Canada is forcing real budget decisions and real 
budget cuts. No fiddling around the edges, Canada is on the verge of 
becoming a Third World country if they do not take immediate and 
radical steps to address their debt problem.
  Mexico and Canada, for us, provide valuable, tangible lessons of what 
happens if a country does not address its debt. Some will agree but 
then point out that a balanced budget amendment is not the means to 
achieve fiscal restraint. We have heard it before. They say, ``All we 
need is the will to balance the budget.'' That is a common refrain. 
Unfortunately, Mr. President, the collective will is not present in 
this body.
  In a 1932 radio speech, President Franklin Delano Roosevelt said, 
``Any government, like any family, can for a year spend a little more 
than it earns. But you and I know that a continuance of that habit 
means the poorhouse.''
  Well, President Roosevelt knew what he was talking about. Our 
continued habit has produced deficits in 33 out of the last 34 years in 
this country. Can you imagine? In 33 of the last 34 years we have run a 
deficit. Presently, there is no end in sight. I believe every Senator 
has the will to balance the budget. What they will not agree on is the 
way to get there. The nature of this institution instills incentives to 
vote for additional expenditures and deficit financing.
  No one likes to take the heat for cutting specific programs. Indeed, 
many Senators do not vote to cut programs for that very reason.
 That is why we need a balanced budget amendment--to instill the 
individual will for action on the collective body. Planning strategic 
cuts over a period of 7 years will be much less painful than waiting 
until the debt collector is standing at our door.

  Currently, 48 States possess one sort of a balanced budget 
requirement or another. For them, these restrictions provide a source 
of discipline throughout the budget process. It is an extremely 
aristocratic notion to believe we are better than the States and do not 
need such forced discipline to help us balance the budget, because we 
all know better. Congress has proven we cannot balance the budget on 
our own, and we will not.
  Canada and Mexico are wake-up calls. I do not want the United States 
to be like Britain in the 1970's or New Zealand in the 1980's. Both had 
to call in the International Monetary Fund to stabilize its falling 
currency. We had a scare last year and unless we pass this amendment, 
we may very well experience far worse in the future.
  Government deficits reduce national savings. As a result, the economy 
accumulates less domestic capital and fewer foreign assets. The lack of 
Government investment means that borrowing is not being used to finance 
increased productivity and therefore will not provide a foundation for 
future repayment of the debt. Federal Government surpluses are 
pertinent to the repayment of the public debt. Some will say we can 
raise taxes. I, for one, will not support an increase in taxes. It has 
been proven time and time again, higher taxes do not eliminate the 
deficit. Instead, experience suggests Congress will spend all tax 
revenues plus the highest deficit markets will accept.
  The accumulation of debt will cause our children and grandchildren to 
have lower standards of living, because they will inherit a smaller 
capital stock and because they will have to pay more interest to 
foreign investors. This reduction in future living standards reflects 
the true burden of Government debt.
  To vote against this amendment is to disregard the obligation we have 
to protect and serve not only this country but the children that we 
bequeath this burden to.
  Mr. President, I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. Mr. President, I rise in support of the passage of the 
balanced budget amendment. I could not think of a single issue--not 
one--that is more central nor more tied to what the American people 
were saying in these past elections than the balanced budget amendment.
  It is interesting to me that in the President's speech on the state 
of the Union, he said something to the effect that the American people 
were not singing to us, they were shouting at us. On that point, the 
President is absolutely correct. They were shouting at Washington and 
they were demanding change in the way we govern ourselves. Eighty to 
eighty-five percent of the American people have indicated support of 
the passage of an amendment to the Constitution to balance the budget.
  The President said he heard the shouting, but apparently he has not 
because if you heard what they were saying, you would be in front of 
the train trying to bring the change that they are asking for here to 
Washington and he would be leading the charge for passage of the 
balanced budget amendment.
  The President is going to be submitting his budget next week and we 
will see what kind of glidepath or pattern he sets toward approaching a 
balanced budget by the year 2002.
  I want to repeat, Mr. President, in the last election, there was no 
greater centerpiece than the issue of passage of a balanced budget 
amendment. None. That election had a profound effect on this 
administration, which is obvious. It has found itself in deliberation. 
It is talking about reinventing, the President rereading the speeches 
of 1992, trying to understand where a disconnect occurred. I would 
suggest that the administration need not go no further than to read 
what America is saying about the passage of a balanced budget 
amendment.
  Very often those who speak in opposition to the passage of the 
amendment will cite various sectors of our society and suggest harm 
will come to them if we exercise the discipline of balancing our 
budget. I would suggest the complete reverse.
  Mr. President, if we do not take charge of our financial health, the 
various constituencies--children, the poor, the aged, whatever--of our 
Nation will be the first victims of a Nation so financially unhealthy 
that it cannot take care of its critical needs. It is exactly those 
constituencies.
  There is an article in my home paper, the Atlanta Constitution, that 
suggests that a balanced budget amendment could only be achieved on the 
backs of children. How absurd.
  The balanced budget amendment is exactly for children, for the 
future, for guaranteeing a country that has sufficient financial 
strength to defend itself, financial strength to care for itself. Have 
we ever known a family, Mr. President, or a business or a community 
that was able to function if it was financially unhealthy? I mean, are 
bankrupt companies able to do what they are supposed to do? Absolutely 
not. If a family is charged too much on a credit card, what happens? 
They are in trouble. It often leads to even breakup of the family. A 
country without 
[[Page S2008]] having secured financial health cannot care for itself.
  Mr. President, we are engaged in a defining moment in the history of 
this Nation and specifically on the issue of a balanced budget 
amendment. This is a clarification of exactly where we stand. Are we 
for changing the way we govern ourselves in this country in Washington 
or are we for leaving everything just the way it is?
  Mr. President, America has already made up her mind. She has said 
just as loudly as she can--the President is correct, shouting at us--
``change.''
  One of the reasons I think the President had difficulty in the last 
midterm election was that they thought that was what he was going to 
do, fight for change, and they came to know that he would not. And he 
has defined the next 2 years of his administration by saying that he 
will not support a balanced budget amendment.
  Mr. President, as I said, this is a defining moment. You either stand 
with the country that called for change, we change the manner in which 
we govern our finance, or you reject the elections, you reject what the 
American people have called for and you become a defender of Washington 
just the way it is. It is just that clear. Are you for change or do you 
want it to stay the way it is?
  America is calling for change. This is the chance to answer the call.
  Mr. President, I yield the floor.
  Mr. LAUTENBERG addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I rise in strong support of cutting 
wasteful spending and closing tax loopholes. I also rise in opposition 
to this balanced budget amendment to our Constitution. I rise in strong 
support of fiscal discipline, but in opposition to a fiscal 
straitjacket that could cripple our economy and possibly even cause a 
depression.
  I rise in strong support of balancing our operating budget, but in 
opposition to using the Social Security trust fund to do it.
  I rise in support of a pay-as-you-go approach to the Government's 
operating expenses, but in opposition to an amendment that ignores the 
fundamental principles of capital budgeting under which virtually all 
businesses and States operate.
  And I rise in strong support of holding Congress accountable for 
deficit spending, but in opposition to giving unelected judges the 
power to raise taxes and to cut Social Security benefits.
  Mr. President, I know that very deep public concerns have led to the 
consideration of this amendment. The American people have made it quite 
clear that they want to do more to cut wasteful spending, and I agree. 
We have made some progress, but there is still far too much waste from 
top-heavy Government bureaucracies to farm subsidies, the B-2 bomber, 
star wars, the space station, and a variety of special interest tax 
loopholes. We should do better.
  Americans have every right to be angry about the deficits and the 
waste that contributes to it. Unfortunately, the balanced budget 
amendment is not a magic bullet that is going to kill the deficit. I 
only wish it were. We must be frank with the American people. This 
amendment will not cut a dime of spending or close a single tax 
loophole.
  As many of my colleagues have urged on this floor, it is critical 
that before this amendment is approved, its proponents should tell the 
American people how this is going to get the job done. Unfortunately, 
so far, we have seen very little inclination to do so.
  Proponents do not want to tell the people that taxes for ordinary 
Americans could skyrocket. They do not want to tell the people that 
Social Security benefits could be slashed. They do not want to tell the 
people about lost Medicare services or fewer FBI agents or fewer border 
guards, or weakening of immigration enforcement.
  Mr. President, are these kinds of drastic consequences really likely? 
Let us just take a look at the numbers. Proponents of this amendment 
claim that they can balance the budget while increasing military 
spending and cutting taxes for the very wealthy.
  But according to an analysis by the staff of the Budget Committee, to 
accomplish that and meet the Government's existing commitments to 
retirees and Medicare, you would have to cut everything else literally 
50-percent. Think about that for a moment, Mr. President: A 50-percent 
cut in law enforcement, a 50-percent cut in education, a 50-percent cut 
in immigration enforcement, a 50-percent cut in job training.
  The people in my State of New Jersey would pay a very high price for 
this amendment, especially if it is adopted in conjunction with other 
items in the so-called Contract With America.
  According to a study by the Department of Treasury, New Jersey would 
lose almost $1 billion annually for programs like education, job 
training, environmental protection, and housing. We would lose another 
$200 million for highways. And to make up for these and other cuts, 
State taxes would have to increase by 17.5 percent across the board, 
17.5 percent.
  Our Governor has been working very hard to reduce the tax burden on 
the citizens within our State. Her target is 30 percent. And with this 
change, we could be looking at a 17.5 percent increase in taxes.
  The balanced budget amendment also could wreak havoc on our State's 
economy. There is a study by a well-respected organization, the Wharton 
econometrics group, or WEFA, as they are known, which analyzed how the 
amendment would affect the economy in the year 2003.
  According to WEFA, the amendment would mean that more than 178,000 
people would lose their jobs and the unemployment rate would increase 
by almost 5 percent and personal incomes would decline by about 12 
percent.
  Again, Mr. President, these are figures from a well-respected, 
nonpartisan research organization and they should at least give us 
serious pause.
  I wonder if the American people have any idea that we are talking 
about these kinds of drastic steps. I doubt it. And one reason is that 
amendment proponents have kept the public in the dark. They refuse to 
say what will be necessary if this amendment passes.
  Why? Because the public would turn it down and it would remove this 
kind of hide-and-seek cover that is being used to present this 
deception, to suggest that the way we are going to solve our problems 
is by some formula change to our Constitution which has as its 
structure the separation of powers and the responsibility for each one 
of those divisions of Government.
  No, Mr. President, what we are trying to do is escape by this the 
responsibility that each of us took when we took our oath under the 
Constitution to protect our public and the Constitution of the United 
States. What we are doing is we are seeing a duck-for-cover tactic that 
I do not think, in the final analysis is, A, going to work and, B, 
going to answer the problems.
  Unfortunately, by the time the public learns what this amendment will 
really do, it may be too late. That, in fact, is the admitted strategy 
of its proponents, and it is outrageous and abhorrent as a way to 
debate an amendment to the Constitution of the United States.
  We should be honest not only about the cuts and tax increases that 
are likely to result from this amendment, but also about the way the 
amendment would hamstring critical efforts to stimulate the economy 
during serious recessions.
  When the economy suffers a cyclical downturn, tax revenues go down, 
and spending for unemployment benefits and other items go up. So the 
deficit increases. Under this amendment, Congress would then have to 
make up the difference with measures that will stifle the economy even 
further.
  That is not good economic policy, and it will have extremely serious 
consequences for ordinary Americans. It will mean lost jobs and lost 
wages and, quite possibly, could send us into another Great Depression 
before we would know what hit us. Having lived through the Depression 
as a child, I can tell you, that is something to avoid like the plague.
  Let me discuss another aspect of this amendment that will take us 
backward. The amendment proposes to balance the budget by raiding the 
Social Security trust fund. Social Security represents a sacred trust 
between the Government and our citizens. Often, it is the mainstay of 
retirees. We have made a commitment, virtually a contract, with the men 
and women who 
[[Page S2009]] have been paying into that trust fund. And so it is 
critical that we keep it off budget.
  If Congress spends too much on welfare or the military or farm 
programs, or if we give too many tax breaks to the wealthy, why should 
Social Security beneficiaries have to suffer as a result? They earned 
their benefits. They paid into that fund, and it is wrong to make them 
pay for Congress' overspending.
  Just as it is wrong to include Social Security in the budget, it is 
also wrong to commingle the capital and operating budgets.
  Mr. President, how many times have we heard the same line: ``If 
ordinary Americans can balance their family budgets, if State 
governments can balance their budgets, and if businesses can balance 
their budgets, why can't the Federal Government?''
  It is a good question. The real answer is that families, States, and 
businesses balance their operating budgets most of the time.
  But they also borrow for long-term investments. Families borrow to 
buy a house. They borrow to buy a car. States borrow for capital 
projects that will benefit future generations. Every day, individuals 
borrow to invest in their future by taking student loans. Every day, if 
they did not, most would have no future, especially in today's 
increasingly technological age. That is why they do not balance all 
receipts and expenditures. They balance only their operating budgets.
  By contrast, Mr. President, this amendment lumps the capital and 
operating budgets together and makes no distinction between investments 
and operational expenses. This ignores the basic standards of budgeting 
under which virtually every business in America operates. As a former 
CEO of a major public corporation, Mr. President, I can attest to that. 
Commingling the capital and operating budgets threatens to rob us of 
investments that are critical to our Nation's future.
  Mr. President, investments are necessary in our Nation's roads, in 
our bridges, in our airports, in our air traffic control systems, 
investments in the information superhighway, and the technology of 
tomorrow. To ignore these kinds of investments is to ignore our own 
future.
  We hear it said many times that if we do not have the balanced budget 
amendment, we are delegating to our children and future generations 
huge obligations to repay debt, interest, and principal. Mr. President, 
as all know, if you do not make investments in tomorrow, that really 
deprives our children and our grandchildren of opportunities to learn, 
to earn, to work, to develop. That is when the real penalty to our 
children and grandchildren is going to come into place. And we can do 
something about it. We can reduce our spending, and we can proceed to a 
closer balance of our budgets.
  We have seen in the last few years, with the President's leadership, 
we have been able to substantially cut our annual deficit, somewhere 
around a half-trillion dollars over the 3-year period as contemplated.
  This amendment also violates a fundamental principle upon which our 
Nation was founded, and that is the principle of no taxation without 
representation. The balanced budget amendment is intended to encourage 
the Congress and the President to agree on measures to eliminate the 
deficit, but what happens if the two branches disagree? What happens if 
notwithstanding the amendment the budget is still not in balance? The 
answer most likely at least as presently designed is that the courts 
eventually would step in to implement the constitutional requirement. 
That could mean not only cuts in Social Security, Medicare, and other 
Federal benefits but substantial tax increases.
  Some proponents of a balanced budget amendment may say that that is 
not their intent, but the courts will not be able to rely on such 
claims. First, there is real disagreement among amendment proponents, 
and some insist the courts must enforce the amendment. More 
importantly, there is nothing in the amendment itself that seeks to 
preclude the courts from enforcing the amendment's provisions. This 
contrasts starkly with other versions of a balanced budget amendment. 
And so the obvious question for the courts will be if the amendment is 
not intended to preclude judicial enforcement, why does it not include 
an explicit statement to that effect?
  Mr. President, the court's power to interpret and enforce the 
Constitution has been well established since the famed case of Marbury 
versus Madison. That long established power is not likely to be 
relinquished. So, Mr. President, the threat of judicial taxation under 
a balanced budget amendment is not hypothetical; it is very real. And 
that is not just my opinion. Legal experts of all political stripes 
agree.
  For example, Harvard law professor Laurence Tribe has testified that 
``Judicial enforcement of the proposed balanced budget amendment would 
necessarily plunge judges into the heart of the taxing, spending and 
budgetary process.''
  Similarly, the conservative former Supreme Court nominee, Robert 
Bork, who also opposes the balanced budget amendment, has warned that 
the amendment could lead to tax increases mandated by unelected, 
lifetime-tenured judges. In his words, ``The judiciary would have 
effectively assumed a considerable degree of control over the fiscal 
affairs of the United States. That outcome cannot be desired by anyone, 
including the courts.''
  Mr. President, over 200 years ago, this country was born after 
citizens were burdened with stiff tax increases imposed by distant 
elite rulers who did not represent the people and who were 
unaccountable to them. The rallying cry of our oppressed forefathers 
was clear and compelling, and that same rallying cry applies to this 
amendment--no taxation without representation. I say it again: No 
taxation without representation. It is permanently embedded in the 
earliest of our schoolchildren. They know about that episode in 
American history. They know the impact that had in the creation of this 
wonderful democracy of ours.
  Mr. President, it is bad enough that ordinary Americans are now 
paying an unfair portion of the tax burden, but that burden may get a 
lot heavier when judges inherit the task of balancing the budget. After 
all, the judiciary is the branch of Government that by design is most 
insulated from the public. In fact, judges are supposed to ignore 
public opinion.
  Mr. President, if we think the American people are angry today, just 
wait. Wait until they get hit with a huge tax increase by a district 
court judge who they have never heard of, never voted for, and they 
will never be able to vote out of office. The reaction will make the 
famous Boston insurrection look really like a tea party.
  I know that some amendment proponents are convinced that the courts 
will not intervene to enforce this amendment. Some have pointed to the 
doctrines of standing or justiciability and conveniently assume that 
these old doctrines would apply to a newly adopted constitutional 
amendment. But supporters of the amendment cannot have it both ways. If 
this amendment really will force Congress to reduce the deficit, who is 
going to force us if not the courts?
  After all, Congress has already passed laws to force itself to 
balance the budget, but without an effective enforcement mechanism we 
simply sidestepped our own law. And now amendment proponents assure us 
that the same evasion will not be possible under a constitutional 
amendment. But just as prohibition did not stop drinking because it was 
unenforceable, a balanced budget will not stop spending if courts are 
impotent to enforce it.
  I find it absolutely astounding to hear amendment proponents argue 
that the courts would never enforce this amendment. We are talking 
about an amendment to the Constitution of the United States, not a 
sense-of-the-Congress resolution. Can the proponents really believe 
that the balanced budget amendment is nothing more than a meaningless 
scrap of paper that cannot be enforced? Could they really be that 
cynical? I do not think so, Mr. President. And I do not think the 
courts will either. As Laurence Tribe and Robert Bork concluded, the 
courts will not presume that this is a meaningless and utterly 
unenforceable scrap of paper. To the contrary. And that is why the 
threat of judicial taxation is so real.
  Mr. President, there is no need to rely on the judiciary to reduce 
the deficit. Congress could do it. We could 
[[Page S2010]] start now if we had the political will. In fact, we have 
already made significant progress which I have talked about earlier.
  Consider what happened over the past 15 years. In 1981, the deficit 
was $79 billion, but then President Reagan's huge military buildup, 
combined with tax cuts for the wealthiest Americans, led to massive 
borrowing on an unprecedented scale. By 1992, Republican policies had 
increased the deficit from $79 billion to $290 billion. Since President 
Clinton began to reverse those policies, however, there has been a 
dramatic improvement. The deficit this year will be about 40 percent 
smaller than in President Bush's last year. For the first time in a 
decade we will have reduced the deficit for 3 consecutive years. The 
number of Federal employees is the lowest since the Kennedy 
administration. And though much remains to be done, we have shown that 
it does not take a constitutional amendment to reduce the deficit in a 
meaningful way.
  The irony, Mr. President, is that passing the balanced budget 
amendment actually will make it far less likely that Congress will 
balance the budget any time soon. This amendment does not require a 
balanced budget until the year 2002. Meanwhile, Members who vote for 
the amendment will be able to point to their vote as evidence of their 
supposed commitment to fiscal discipline. I called it a coverup, and I 
use the same term now. What do you want from me? I voted for a balanced 
budget. Yes; I did not do my share by cutting expenses properly or 
balancing revenues with expenses, but I did vote after all for a 
balanced budget amendment. It is hide and seek. Hide the mission and 
seek the culprit.
  Meanwhile, Members who will have voted for the amendment can draw a 
degree of satisfaction, not for the job done but for escaping 
responsibility. If you can say that you voted for a balanced budget, 
why bother to antagonize constituents by cutting their benefit programs 
or raising taxes? There is far less incentive to make those hard 
choices.
  Mr. President, we should not play games with the American people. We 
do not want to shift, or should not shift, the burden of our 
responsibilities to the judiciary. Let us not put off the hard 
decisions for another 7 years. Let us take personal responsibility for 
the problem and make those tough choices now.
  In conclusion, Mr. President, I strongly support cutting wasteful 
spending and reducing our deficit. I want to work with my colleagues to 
actually cut the spending and close tax loopholes. This balanced budget 
proposal does not help reach that goal. Its proponents refuse to spell 
out what steps they would actually take to reduce spending. Whose 
benefits will be cut and whose taxes will go up? But one thing we do 
know for sure. The impact on our Nation could be disastrous. It could 
hamstring our ability to respond to economic and other emergencies, 
undermine our entire Social Security system, rob us of investments for 
our future, and allow unelected and unaccountable judges to impose huge 
tax increases on ordinary Americans.
  Mr. President, this amendment could go down as one of the most tragic 
mistakes ever made by this Nation. I hope that my colleagues will face 
up to the reality of the situation. As has been said before, you can 
run but you cannot hide. That is what happens if we pass this amendment 
without detailing how it is that we are going to balance their budget 
and how it is that we are going to deal with the responsibility and 
maintain it where it belongs, in the House and in the Senate.
  I urge my colleagues in the strongest possible terms to reject it.
  I yield the floor.
  Mr. BYRD addressed the Chair.
  The PRESIDING OFFICER (Mr. Abraham). The Senator from West Virginia.
  Mr. BYRD. Mr. President, I thank my distinguished colleague, Mr. 
Lautenberg, for his excellent statement. He has very eloquently stated 
the clear and present dangers with which this amendment is fraught.
  Mr. President, I thank the Chair for momentarily indulging me.
  I have listened to the claims of the proponents of the constitutional 
amendment for several days now. I compliment them on their dedication 
to their cause as they see it. I respect their viewpoints. I respect 
their sincerity. I realize that not everyone will agree with my 
viewpoint.
  I commend the distinguished Senator from Illinois [Mr. Simon] for his 
steadfast adherence to the belief that the way to get our deficits 
under control and lower the interest on the debt and reduce the debt is 
to adopt a constitutional amendment on the balanced budget. I respect 
his viewpoint. I differ with it. But we can differ as friends and we do 
differ as friends.
  I also speak with respect to the distinguished Senator from Utah, 
[Mr. Hatch] the chairman of the Senate Committee on the Judiciary who, 
likewise, is a very formidable and principled supporter of the 
proposal.
  I think they are wrong. They think I am wrong. But it is the people 
out there that we hope to try to persuade as to which viewpoint is the 
right one under the circumstances that obtain.
  So, I have listened to the claims of the proponents of the 
constitutional amendment for several days now. As I listen, it seems to 
me that the proponents are selling this amendment very much as the 
oldtime peddlers sold tonic and liniments, kidney pills and snake oil. 
To hear the proponents tell it, this amendment will cure everything 
that is wrong with America today. Just take a good swig of this magic 
tonic, Mr. and Mrs. America, and your problems will disappear. Your 
head will stop aching, your arthritis will clear up, your fingernails 
will grow long and strong, your taste buds will tingle, your hearing 
will become more acute, you can throw away that old hearing aid, your 
eyesight will sharpen--you can just pitch those glasses out in the 
garbage can, your dandruff will cease if you have any hair, and if you 
do not have hair, it will grow hair, and your teeth will whiten, and 
your marriage will probably improve. Well, never mind what is in the 
bottle, Mr. and Mrs. America. Truth in labeling does not apply here. 
Truth in advertising has no place in this debate. Just swallow this 
magic elixir and all will be well.
  The American people are usually good consumers. They are smart 
consumers. They read the labels on the grocery store shelf to get the 
fat content of the food they purchase. They read the labels on the cans 
of food that they buy. I know that I do. I want to find out how much 
fat there is in the contents, how much sodium, how much cholesterol, 
and how much by way of proteins and carbohydrates, and so on. They look 
under the hood of cars that they buy. They kick the tires. They squeeze 
the cantaloupes and the cabbage heads and the other vegetables that 
they buy. They read the fine print. And by law that fine print has to 
be placed on those labels.
  But, I do not believe that the U.S. Senate is helping the people to 
exercise their prowess as good consumers with the debate so far on this 
floor.
  We are not discussing national priorities. We are not spelling out 
the contents of this snake oil amendment. We are not talking about what 
should or should not be on the chopping block for cuts. We are not 
debating the impact such an amendment might have on the economy. We are 
not talking about the hard choices that will have to be made by 
somebody if we enact this amendment.
  The proponents have steadfastly refused to lay out a plan to get to 
balance. Take it on faith, America. It will be good for the Nation. I 
ask the American people this question. How will you know if this 
amendment will be good for the Nation, if you do not know what cuts 
will be made, how much each State, how much each county, how much each 
municipality across this land will have to absorb as a result of the 
cuts, how much your State taxes will rise as a result of Federal cuts, 
what will happen to Federal aid to education, what will happen to 
Medicare, what might happen to our ability to compete with other 
countries in the global marketplace, what the amendment might mean in 
terms of clean water, clean air, veteran's pensions, the national 
defense? In short, what is good for the Nation cannot be determined 
without these critical details. To claim otherwise is simply untrue. 
The American people are entitled to more than a wink and a nod and an 
empty promise. We cannot treat the American people like children. If 
they 
[[Page S2011]] want us to balance the budget, we must honestly try to 
do it, but we must also honestly tell them what it will take and that 
it will mean radical changes in their personal lives. We owe the people 
that. To do less is to betray their faith in sending us here.
  It is puzzling to me that after the results of this election, when 
the people said that they were tired of Washington politicians telling 
them what to do, we come right out of the box with this proposed major, 
major, major change in our organic law and with the proponents claiming 
that the people do not need details. In other words, once again, we in 
Washington know what is good for you, Mr. and Mrs. America.
  This balanced budget amendment is good for you. You do not need to 
know the details. Take the tonic. Swallow the snake oil. Do not read 
the label. There is no label to read. Take our word for it.
  Well, if the American people let us get away with that dodge, then 
they have done themselves a giant disservice.
  If they swallow this quack medicine without being sure that it will 
not be toxic to the system, they surely may regret the results.
  If the Governors and the mayors and the State legislators do not 
demand to know just exactly what we have in mind when we talk about 
balancing this budget in 7 years, then how can they have an informed 
debate if and when the matter rests squarely on their doorsteps? How 
will they explain to their own constituents what the amendment means?
  If I were a Governor contemplating the enactment of this amendment, I 
would be very, very nervous about any promises that I had made to lower 
taxes. I know that I have heard some of the Governors throughout the 
land boast about how much they have cut taxes in the States. They want 
the Senate to adopt this balanced budget amendment, and they talk about 
how much they, the Governors, have cut taxes in their States. I heard 
the Governor from New Jersey speak about how many taxes she had cut and 
how much more in taxes she proposes to cut. Well, I have news for you, 
Governor, if this amendment is adopted, you will not be cutting taxes, 
you will be raising taxes--and remember that.
  With the magnitude of cuts that will have to be made to get a 
balanced budget by 2002, the States are going to have to pick up an 
awful lot of slack. Essential services will have to continue. 
Unemployment, dirty air, dirty water, hazardous waste, hungry children, 
natural disasters--all of these problems will still be with us. A 
balanced budget amendment will not change any of those things. Not one. 
State and local officials should know what we here in the Congress 
propose to do before they are asked to buy this pig in a giant poke. We 
do not even know if there is a pig in that poke. We cannot even get a 
squeal out of that pig. If State and local officials do not trust the 
Federal Government to make decisions involving the States, how in the 
world can they sit on their hands and trust us with the mother of all 
decisions? That is what we are talking about. How in the world do we 
dare to ask the people and the Governors and the mayors and the State 
legislators to make this giant leap of faith?
  What will the people do if they do not like the plan that emerges? 
What if we adopt this amendment without laying out the plan? Well, it 
will be too late then. The contract with evasion will have been signed, 
sealed, and delivered, right to your doorstep. Once the amendment is in 
the Constitution, the politicians do not have to listen to the people's 
voices on the matter anymore. The politicians can cut and run. They can 
say we have to cut Medicare, whether you like it or not, because the 
Constitution has this new amendment in it and it says we have to; we 
have to do that. The politicians can say to the States, you have to pay 
for these services now with hikes in your own taxes. You told us to 
balance the budget in 7 years, so we have to cut money to the States. 
Or the politicians can commit the ultimate act of evasion and say we 
cannot do this, Mr. and Mrs. America. We told you that we could, but it 
is too harsh and we will not do it. The President will have to do it. 
He will have to impound funds, or the courts will have to order us to 
balance the budget, and they will also have to tell us which taxes to 
raise and which programs to cut.
  What then will we have done to our country? What then will we have 
done to the Constitution, as written by the Framers 208 years ago? It 
has been in effect now for 206 years. What then will we have done to 
representative democracy?
  We must not treat the people as children. We must tell them the 
truth, even though it is inconvenient for us politicians to do so. What 
kind of Senators are we if we simply pass this amendment without 
ourselves knowing what it means? We say that the American people ought 
to know what it means. We, as their representatives in this great 
assembly, have a right to know what it means and have a duty to ask 
what it means before we vote. What kind of representation are we giving 
to our people if we do not demand to know the details of this proposal 
before we vote on it? We as Senators cannot say, ``Let this cup pass 
from me,'' vote on the amendment and then let us tell the people what 
is in it. We cannot say, ``Let this cup pass from me.'' We cannot say 
that we shall wash our hands of it. We have a duty to those 
constituents who send us to this forum of the States to know what we 
are doing, what we are buying onto, and what we are about to perpetrate 
on the people, before we cast our votes. I say we will not be giving 
the people very worthy representation unless we insist on it. I say we 
ought to feel like backing up to the pay window if we cannot do better. 
The American people pay us very well. We ought to be willing to do what 
they pay us to do, which is to make intelligent, well-informed 
decisions in their behalf and in their best interests. We cannot do the 
job they sent us here to do if we are simply going to be stonewalled by 
the proponents and prevented from knowing what we are about to do to 
our country.
  Talleyrand, who was Napoleon's foreign minister, and who dominated 
politics in Europe for 40 years, said, ``There is more wisdom in public 
opinion than is to be found in Napoleon, Voltaire, or all the ministers 
of state, present and to come.'' And that is true. But there is wisdom 
in public opinion only if the public is informed, if the public is duly 
and well informed about the subject on which a judgment is to be made. 
Woodrow Wilson said that the informing function is as important as is 
the legislative function of a legislative body. Inform the people who 
send us here.
  At this point in time, this amendment is nothing more than a slogan. 
It has no teeth at this point in time. Its impact is unknown. It is 
nothing more than an empty promise. Many of the Members who will vote 
on it will not even be here when it has to be fulfilled. It is, in that 
sense, a fraud. It is a fantasy created for children, and the American 
people are not all children. It is an illusion without substance. It is 
cotton candy for the public mind. It is Tinkerbell on wings of 
gossamer. Disneyland has really come to Washington after all. But the 
American people are not children and Senators are not elected to simply 
pacify the American people with fairy tales.
  Let us demand to know the proponents' plan to achieve a balanced 
budget by 2002 before we ask the States to decide and before we graft 
this pneumatic excrescence, this wart filled with wind onto our time-
tested Constitution.
  Mr. President, if this amendment is adopted, it will likely mean 
massive cuts in Federal spending over the next 7 years.
  As the chart to my left states, the Congressional Budget Office 
estimates that a balanced budget amendment would require a cut of $1.2 
trillion in Federal spending by the year 2002. To make matters worse, 
the so-called Contract With America; which I did not sign onto, Mr. 
President. I carry my contract right here over my heart. Alexander the 
Great idolized ``The Iliad'' and he kept a copy under his pillow at 
night. I keep a copy of my contract with America--right here, here it 
is--over my heart, the Constitution of the United States of America. It 
is a contract that was signed 208 years ago, not something that just 
blew up out of the wind before last year's election.
  To make matters worse, the so-called Contract With America calls for 
tax cuts--tax cuts; what a folly--tax cuts along with balancing the 
budget. This 
[[Page S2012]] would require a cut of $1.5 trillion in Federal spending 
by the year 2002.
  How much is $1 trillion? Count it at the rate of $1 per second--
32,000 years.
  Now, you may ask, what will get whacked? What will get whacked? What 
will get whacked?
  CBO tells us that if we were to cut all Federal spending across-the-
board, except interest on the debt, it would require a
 13-percent cut in all programs in the year 2002 alone. That means 
cutting defense, Social Security, Medicare, Medicaid, veterans' 
pensions, veterans' compensation, veterans' medical care, prison 
construction and operations, environmental cleanup, civilian and 
military pensions, housing, education, all student loan programs, 
infrastructure investments on transportation projects, water projects, 
locks and dams, the FBI, national parks, food stamps, WIC, and the list 
goes on and on--all will have to be cut 13 percent across-the-board. 
But, there are a number of Senators who want to take Social Security 
off of the deficit-cutting table. If we do that, everything else will 
have to be cut 18 percent.

  The so-called Contract With America--which I did not sign. This is my 
contract with America, the Constitution of the United States. I have 
sworn 13 times to support and defend that Constitution over the last 48 
years--13 times.
  But it calls for increases, not cuts, in defense spending. If we 
exempt interest, if we exempt Social Security, if we exempt defense, 
then everything else will have to be cut 22 percent. And the so-called 
Contract With America calls for tax cuts which, if they are enacted, 
will increase the across-the-board cut to 30 percent--30 percent.
  This next chart to my left shows the Federal budget for fiscal year 
1995. That is all we have to go on as of now. The President will send 
us up his proposed budget next week. In the upper left-hand corner, we 
see that total spending for 1995 equals $1,531 billion; in other words, 
$1.531 trillion. Of that amount, 22 percent, or $334 billion, will be 
spent on Social Security; 18 percent, or $270 billion, will be spent 
this fiscal year on defense; net interest on the national debt will 
take up $235 billion, or 15 percent of the whole budget; Medicare will 
take up 11 percent, or $176 billion; State and local grants will take 
up $231 billion, or 15 percent of the total; and all other Federal 
spending in fiscal year 1995 will equal $286 billion, or 19 percent of 
the Federal budget.
  What is it that could be cut from this and future budgets if this 
constitutional amendment requiring a balanced budget is put in place? 
Well, as I have said, there is strong interest in exempting Social 
Security--they want to exempt Social Security--so let us take that 
slice out of the pie. Then, the so called Contract With America says we 
cannot cut defense, so let us take that slice out of the pie. Then, as 
we all know, we cannot cut the interest on the debt--we all agree on 
that--so out comes that piece of the pie. So, lo and behold, what do we 
have left? All that we have left to cut are: Medicare, State and local 
grants, and the rest of the Federal Government, all of which total less 
than half of the Federal budget. We have, therefore, exempted 55 
percent of the budget from cuts--Social Security at 22 percent, plus 
defense at 18 percent, plus net interest at 15 percent--and the $1.5 
trillion in budget cuts would have to come from this remaining 45 
percent of the budget.
  That is all there is. There ``ain't'' any more.
  Now, let us look at what this means when we have to take the cuts all 
from this remaining 45 percent of the budget. Let us take a look at 
what this means.
  How do the States get stuck? How do the States get stuck?
  This chart to my left sets out the Federal spending that will be 
subject to cuts, if one excludes Social Security, defense, and net 
interest. For fiscal year 1995, the total spending that would be 
subject to cuts is $693 billion.
  This pie represents Federal spending subject to cuts, once defense is 
taken off, once Social Security is taken off, if it is, and once 
interest is taken off the table, which it has not been taken off the 
table. All three of these categories of Federal spending shown on this 
pie chart will have to be cut across-the-board by 30 percent--by 30 
percent--in the year 2002 if we exempt Social Security, defense, and 
net interest from any cuts and if we enact the tax cuts being called 
for in the so-called Contract With America. This includes unemployment 
benefits, veterans' benefits, education programs, the FBI and the 
Justice Department, including prison construction and operations, the 
Judiciary and the Courts, infrastructure, health programs, safety 
programs, health and safety programs for our food and water, aviation 
safety--including air traffic control--civilian and military 
retirement, all agriculture programs--all of them--national parks--
national parks, I say that to the West in particular--highways, 
transit, environmental cleanup, NASA, research and development, the 
NIH, and on and on and on. If we want to exclude any of the spending 
shown on the pie chart, then everything else will have to suffer an 
even larger cut than 30 percent. If we exclude Medicare, for example, 
then the cut that would be required for everything else would rise from 
30 percent to a cut of 46 percent. Can you imagine the devastation this 
would cause throughout the Nation?
  Now, let us examine the effects that this level of cuts would have on 
the States. This is the forum of the States. Let us examine the effects 
that the cuts would have on the States.
  Which States get the sharpest stick by the knife? Which States get 
the sharpest stick by the knife? And that is some knife, I want to tell 
you, and they will know when they are stuck with that knife. They are 
going to bleed.
  This chart sets out the total Federal dollars that will go to the top 
20 States. I have set aside that chart for the moment. But 
nevertheless, it would set out the total Federal dollars that would go 
to the top 20 States in 1995 for 149 grant programs.
  The top prize goes to the State of New York, which will receive 
$22,261,068,000 in Federal grants. That is the total amount of dollars 
in Federal grants that the State of New York will receive this year. 
That is 10.8 percent of the total grants for all States.
  Second prize goes to California. That State will receive this year 
$21,661,615,000, or 10.5 percent of the total Federal grants to States 
for 1995.
  Third prize goes to Texas, $12,292,605,000, or 5.9 percent of the 
total. And these top three are followed by Pennsylvania, 
$8,232,634,000, or 4 percent; Florida, No. 5, $8,067,751,000, or 3.9 
percent.
  Ohio is No. 6, with $7,837,289,000, or 3.8 percent. Illinois is next, 
$6,858,553,000, or 3.3 percent of the total. Michigan, $6,745,979,000, 
or 3.3 percent; New Jersey, $5,523,542,000, or 2.7 percent; 
Massachusetts with $5,400,302,000, or 2.6 percent; Louisiana, 
$5,300,141,000, or 2.6 percent; North Carolina, $4,741,842,000, or 2.3 
percent; Georgia, $4,638,039,000, or 2.2 percent; Indiana, 
$3,945,534,000, or 1.9 percent; Tennessee, $3,889,558,000, or 1.9 
percent; Washington, $3,517,731,000, or 1.7 percent; Wisconsin, 
$3,407,554,000, or 1.6 percent; Missouri, $3,381,960,000, or 1.6 
percent; Minnesota, $3,010,222,000, or 1.5 percent; Kentucky, 
$3,004,724,000, or 1.5 percent.
  These are the top 20 States in terms of receiving Federal grants in 
this fiscal year. I hope that these 20 States--and all other States--
recognize that these grants are going to be cut dramatically in the 
coming years if the balanced budget amendment goes into effect, and 
those cuts will affect people. Those cuts will affect people in every 
State throughout the land.
  Mr. President, I ask unanimous consent that the table to which I have 
just referred be printed in the Record.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

  FEDERAL DOLLARS TO THE STATES--FISCAL YEAR 1995 FUNDING FOR 149 GRANT 
                                PROGRAMS                                
------------------------------------------------------------------------
                                                                 Percent
                  State                           Amount        of total
------------------------------------------------------------------------
New York.................................      $22,261,068,000      10.8
California...............................       21,661,615,000      10.5
Texas....................................       12,292,605,000       5.9
Pennsylvania.............................        8,232,634,000       4.0
Florida..................................        8,067,751,000       3.9
Ohio.....................................        7,837,289,000       3.8
Illinois.................................        6,858,553,000       3.3
Michigan.................................        6,745,979,000       3.3
New Jersey...............................        5,523,542,000       2.7
Massachusetts............................        5,400,302,000       2.6
Louisiana................................        5,300,141,000       2.6
North Carolina...........................        4,741,842,000       2.3
Georgia..................................        4,638,039,000       2.2
Indiana..................................        3,945,534,000       1.9
Tennessee................................        3,889,558,000       1.9
Washington...............................        3,517,731,000       1.7
Wisconsin................................        3,407,554,000       1.6
Missouri.................................        3,381,960,000       1.6
Minnesota................................        3,010,222,000       1.5


                                                                        
[[Page S2013]]
  FEDERAL DOLLARS TO THE STATES--FISCAL YEAR 1995 FUNDING FOR 149 GRANT 
                           PROGRAMS--Continued                          
------------------------------------------------------------------------
                                                                 Percent
                  State                           Amount        of total
------------------------------------------------------------------------
Kentucky.................................        3.004,724,000       1.5
------------------------------------------------------------------------
Source: OMB, Budget Information for States--Fiscal Year 1995.           

Mr. BYRD. Mr. President, now let us explore what these Federal grants 
to the States consist of. What do the States use this money for? What 
do the cuts mean to you, Mr. and Mrs. America, and your children? What 
do the cuts mean to you and your children?
  This next chart sets out what these grants to State and local 
governments consist of in fiscal year 1995, ``Grants to State and Local 
Governments in Fiscal Year 1995.'' The largest amount goes to the 
States for Medicaid--$102 billion, or 44 percent of the total. Then, 
going counterclockwise on the chart, we see that transportation grants 
to the States equal $24 billion, or 10 percent of the total. Next, we 
have income security programs which total $54 billion in grants to the 
States for such things as AFDC, Section 8 and other housing, school 
breakfast and lunch programs, and WIC. Then we come to grants for 
education, training, employment, and social services, which total $35 
billion in fiscal year 1995. Finally, there is the category designated 
``all other,'' which equals $16 billion, or 7 percent of the total. 
This category includes grants to the States for community development, 
health, water infrastructure, disaster assistance, justice assistance, 
including law enforcement programs such as ``cops on the beat'', and 
the Federal payment to the District of Columbia.
  A large part of all of these programs will obviously have to be 
picked up by the State and local governments if the balanced budget 
amendment goes into effect. What will that mean to the budgets of the 
various States?
  I say to the State senators out there--and I once was one--I say to 
the members of the House of Delegates in West Virginia and the lower 
houses in other States--and I was once one of those members--what will 
that mean to your budgets, the budgets of the various States? Will 
Governors and State legislators have to increase State taxes in order 
to continue to provide adequate services for these programs that we 
have been talking about here? According to the Treasury Department they 
surely--surely--will.
  They will have to increase State taxes in order to continue to 
provide adequate services for these programs.
  The chart to my left was prepared based on information provided by 
the U.S. Treasury Department to the National Governors Association. It 
is the Treasury Department's opinion that State taxes would have to be 
raised by the percentages shown on this chart if States are to fully 
replace the reductions in Federal grants that will occur if the 
balanced budget amendment goes into effect under the terms I have 
previously stated.
  State legislators in Alabama would have to increase their State taxes 
by 16.4 percent; Alaska, 9.8 percent; Arizona, 10.4 percent; Arkansas, 
16.5 percent; California, 9.2 percent; Colorado, 11.8 percent; 
Connecticut, 11.2 percent; Delaware, 7.2 percent; District of Columbia, 
Lord knows how much, but the Treasury Department says 20.4 percent; 
Florida, 10.2 percent; Georgia, 12 percent; Hawaii, 6.8 percent; Idaho, 
9.9 percent; Illinois, 11.6 percent; Indiana, 13.8 percent; Iowa, 10.9 
percent; Kansas, 13 percent; Kentucky, 14.5 percent; Louisiana, 27.8 
percent; Maine, 17.5 percent; Maryland, 9.9 percent; Massachusetts, 
12.6 percent; Michigan, 13.2 percent; Minnesota, 9.4 percent; 
Mississippi, 20.8 percent; Missouri, 15.5 percent; Montana, 19.8 
percent--up go your taxes; Nebraska, 13.3 percent; Nevada, 6.2 percent; 
New Hampshire, 17.6 percent; New Jersey, 12.7 percent; New Mexico, 12.9 
percent; New York, 17.4 percent; North Carolina, the State in which I 
was born and whose motto is ``to be rather than to seem, 11.1 percent; 
North Dakota, 19.7 percent; Ohio, 14.4 percent; Oklahoma, 12.4 percent; 
Oregon, 12.2 percent; Pennsylvania, 12.7 percent; Rhode Island, 21.4 
percent; South Carolina, 14.3 percent; South Dakota, 24.7 percent; 
Tennessee, 19.5 percent; Texas, 14 percent; Utah, 11.4 percent; 
Vermont, 17.4 percent; Virginia, 8.2 percent; Washington, 8.4 percent; 
West Virginia, 20.6 percent; Wisconsin, 10.3 percent; and Wyoming, 18.7 
percent.
  Mr. President, I ask unanimous consent that the table to which I 
referred showing these tax increases be printed in the Record.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

                  TAX INCREASES TO OFFSET SPENDING CUTS                 
------------------------------------------------------------------------
                                                                Required
                                                               State tax
                            State                               increase
                                                               (percent)
------------------------------------------------------------------------
Alabama......................................................       16.4
Alaska.......................................................        9.8
Arizona......................................................       10.4
Arkansas.....................................................       16.5
California...................................................        9.2
Colorado.....................................................       11.8
Connecticut..................................................       11.2
Delaware.....................................................        7.2
District of Columbia.........................................       20.4
Florida......................................................       10.2
Georgia......................................................       12.0
Hawaii.......................................................        6.8
Idaho........................................................        9.9
Illinois.....................................................       11.6
Indiana......................................................       13.8
Iowa.........................................................       10.9
Kansas.......................................................       13.0
Kentucky.....................................................       14.5
Louisiana....................................................       27.8
Maine........................................................       17.5
Maryland.....................................................        9.9
Massachusetts................................................       12.6
Michigan.....................................................       13.2
Minnesota....................................................        9.4
Mississippi..................................................       20.8
Missouri.....................................................       15.5
Montana......................................................       19.8
Nebraska.....................................................       13.3
Nevada.......................................................        6.2
New Hampshire................................................       17.6
New Jersey...................................................       12.7
New Mexico...................................................       12.9
New York.....................................................       17.4
North Carolina...............................................       11.1
North Dakota.................................................       19.7
Ohio.........................................................       14.4
Oklahoma.....................................................       12.4
Oregon.......................................................       12.2
Pennsylvania.................................................       12.7
Rhode Island.................................................       21.4
South Carolina...............................................       14.3
South Dakota.................................................       24.7
Tennessee....................................................       19.5
Texas........................................................       14.0
Utah.........................................................       11.4
Vermont......................................................       17.4
Virginia.....................................................        8.2
Washington...................................................        8.4
West Virginia................................................       20.6
Wisconsin....................................................       10.3
Wyoming......................................................       18.7
------------------------------------------------------------------------
Source: Department of the Treasury, Jan. 12, 1995.                      

  Mr. BYRD. Mr. President, I hope that my remarks today will have 
helped to shed light on the devastation which will take place if we do 
not muster up the courage to say no to the balanced budget amendment 
now before the Senate. It does not make any difference, Mr. President, 
if you have a vocabulary of 10,000 words, make it 20,000, make it 
30,000. If you cannot say no, then all of that vast vocabulary will not 
amount to a great deal. We have been elected by the people to come here 
and to work hard to develop and enact legislation that is in their best 
interest--not in ours as politicians, not what will get us votes in the 
next election or the next one or the next one, but in the best interest 
of the people. Surely we can screw up our courage to the sticking place 
to stay the course and continue to cut the Federal deficit in 
responsible doses. We cannot afford to risk the economic security of 
this Nation by passing this unseen pig in a very large poke.
  I remind the Governors, Mr. President, that the devastation to the 
States, as shown through these charts, is going to happen irrespective 
of the recently passed, highly touted unfunded mandates legislation. 
Congress will brush that aside. It only takes a majority vote. That is 
not binding on the next Congress, not even binding on this one, if 
Congress chooses to brush it aside. That bill is not going to protect 
one single State from the costs and responsibility of dealing with 
their problem absent Federal dollars. If State officials are leaning on 
the weak reed, the flimsy reed of the unfunded mandates bill, they are 
badly mistaken. It will be as a straw in a hurricane; as a leaky boat 
in a tidal wave.
  I say to the American people, no one--no one, no one--is going to 
escape the wrath of the balanced budget mandate.
  We cannot run to the mountains and pray that the rocks will fall upon 
us, put us out of our misery. No one can come to this floor and, in all 
honesty, tell the people of America that they will escape real pain 
under the amendment.
  Finally, I remind my colleagues that the American people have a right 
to know what is going to happen to them as a result of the balanced 
budget amendment, if it is riveted in the Constitution.
   [[Page S2014]] A new poll, in fact, underscores the people's demand 
to know what will happen to them at this time shows overwhelming public 
support for the ``right to know.''
  This poll, released just this morning, Mr. and Mrs. America, my 
colleagues on the right and on the left, this poll released just this 
morning by the American Association of Retired Persons and conducted by 
the Wirthlin Group, shows that support for the ``right to know'' cuts 
across party lines: 68 percent of the Republicans, 77 percent of the 
Democrats, and 83 percent of the independents want to know what will be 
cut. And they want to know what will be cut before Congress passes a 
constitutional amendment to balance the budget. Not afterwards. Before.
  In addition, 85 percent agree that Social Security should be exempted 
from the amendment. But under House Joint Resolution 1, Social Security 
is not exempt. It is on the chopping block no matter what anyone says.
  If this amendment is passed, what will Senators say to their 
constituents? How will Senators explain the fact that, despite the 
public's desire to know beforehand what cuts will be made, Senators 
took it upon themselves to substitute their wills, our wills for the 
will of the people out there. Talk about arrogance. That is the height 
of arrogance.
  So I implore my colleagues to heed the wisdom of the people. Let us 
tell the American public what is involved here. Tell them and tell them 
now. That is what the people in the poll want to know. Let us not 
continue this vow of silence. Let us not close out the sunshine. Let us 
not pull the shutters on the windows and shut out the scrutiny of the 
public.
  Mr. President, Shakespeare, in ``Timon of Athens'', said it best:

       The devil knew not what he did when he made man politic; he 
     crossed himself by't: and I cannot think but, in the end, the 
     villainies of man will set him clear.

  Chief Justice Marshall in McCulloch versus Maryland said:

       We must never forget, that it is a Constitution we are 
     expounding.

  Mr. President, if I might add my own modest footnote, we must not 
forget that it is a Constitution that we are amending.
  Mr. President, I am prepared to yield the floor unless a Senator 
wishes to ask me a question.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Thompson). The Senator from Utah.
  Mr. HATCH. Mr. President, there are very few people in this body who 
have more respect, in fact I do not think there is anybody who has more 
respect for the distinguished Senator from West Virginia than I have. I 
learned early in my Senate career that he is very, very formidable. And 
he is, I think, one of the people who is the most dedicated to this 
body and to what the Senate means in the United States of America.
  I might mention that I believe that he is as dedicated to the 
Constitution as anybody I know. And I also believe that he is, without 
question, without peer with regard to Senate rules and procedure. I 
have had personal experience of being on the wrong side of the 
distinguished Senator from West Virginia and I admire him and care a 
great deal for him. I do not know when I have heard a more interesting 
set of remarks than he has just given to the Senate this day. I think 
we should all pay heed to what he has said. I think his comments are 
important.
  But I also think the Senator is wrong. If I did not believe that I 
would not be out here fighting for a balanced budget amendment. He 
knows that. And he knows that I believe this very deeply, as he 
believes his position. And I respect him for his commitment to his 
position.
  He has taken a goodly amount of time, but not enough, perhaps, to 
explain his position. I think it is critical that the American people 
see the two sides of this subject and I do not know of anyone in the 
body who could have articulated his side any better.
  I think a lot of this great Senator and, when histories of the Senate 
are written to include his time here, certainly he will be shown to 
have played a pivotal and very important role in the history of this 
institution.
  But let me just see if I can respond to some of the things my friend 
and colleague has said. First of all, the American people are not 
stupid. They know that this Federal Government is a money eating 
machine. They know that billions, hundreds of billions of dollars are 
eaten up right here in Washington, without much care for the American 
taxpayers.
  They also know that we have built the most gargantuan bureaucracy in 
the history of the world. Keep in mind, our Founding Fathers wanted to 
have a central Government that was limited, not all-embracing; where 
the people in the States do not just look to the Federal Government to 
solve all their problems, but where they solve them for themselves for 
the most part. The Federal Government as originally intended was to be 
a limited Government to take care of our national security interests, 
to do the few commerce things that should be done by the Federal 
Government: To watch over the public welfare.
  I think our Founding Fathers would be absolutely devastated if they 
saw the state of the Federal Government today. If they saw the 
domination of the States by the Federal Government that we have going 
on today, if they saw the way the Federal Government soaks up the 
public's money today, if they knew--as some argue very eloquently, 
maybe not as eloquently as my friend from West Virginia--that of all 
the public welfare money that we spend through the Federal Government, 
this wonderful stuff we do for the States--when it comes to welfare 
only about 28 percent of every dollar gets ultimately to the people who 
need it.
  We in the Federal Government act like we know more about what people 
need than they do, so we study things, we build bureaucracies, we hire 
sociologists and Ph.D.'s and other specialists and experts and we use 
up the people's money here like it is going out of style while the 
people who need it--the people we are supposedly helping--get 28 
percent of it. That is what is wrong with a bloated Federal Government. 
That is what the Founding Fathers were trying to guard against. 
Avoiding this was the work of Madison and Jefferson and Washington.
  I might have a number of others who are maybe not quite as well 
known, but certainly well known by my friend from West Virginia, who is 
a great scholar of history, and especially the history of this country. 
We know the Federal Government right now means a lot to the States 
because they cannot make a move without its consent.
  We also know that if we pass a balanced budget amendment, every 
dollar will become more valuable. If we pass a balanced budget 
amendment that stops this continual drop into the abyss of deficit 
spending, which we have been doing now for 60 years, certainly 26 of 
the last years in unbalanced budgets, and in recent years because of 
Great Society programs, these reasonable--reasonable is not the word--
this overwhelming desire by everybody to do everything good for 
everybody in our society.
  We now have deficits that, after the turn of the century, are going 
to be over $300 billion a year, and the interest against the national 
debt has now become the second highest item in the Federal budget. And 
it is going up exponentially with compound interest. We all understand 
compound interest, do we not? The interest just starts to multiply like 
you cannot believe. If we do not get control over the spending of this 
all-eating, voracious, money-grubbing Federal Government, if we do not 
bring it to heel, then all of these gifts and grants to the States that 
the distinguished Senator has so eloquently spoken about are not going 
to be worth anything anyway, assuming that we can afford to make any 
more of them. They are going to look to us and say, ``You people did it 
to us. You did not have the guts to balance the budget.'' Let me just 
say this about my friend from West Virginia. He has the guts. I believe 
in him with regard to his comments that he would balance the budget. He 
would find ways to do it. I think he would do everything in his power 
to. I believe that. I have faith that he would do that.
  But when he was majority leader, he was not able to do that, not 
because he did not try. He could not. People in both parties spent us 
right down the 
[[Page S2015]] drain. He tried as President pro tempore, certainly one 
of the most dignified and knowledgeable people in this body, if not the 
most dignified and knowledgeable. He could not do it then, and neither 
could I. Neither could the Senator from Illinois. Neither could a lot 
of us who want to get this tremendously expensive Federal Government 
under control.
  We have reached a point really of no return, that if we do not do 
what is right now, all this money, these hundreds of billions, 
trillions of dollars that the distinguished Senator from West Virginia 
is talking about that go to the States over the years are not going to 
be worth anything. Then what happens to those who need health care? 
What happens to women and children who need women's, infants', and 
children's programs? What happens to food stamps? Will we be able to 
pay for them? If so, are they going to be worth anything? We know a lot 
of them are being picked up by the Mafia in exchange for drugs and 
booze, and then they make a lot of money cashing in those food stamps 
at a tremendous cost to the American taxpayer.
  Let me tell you something. I enjoyed the comments of the 
distinguished Senator about magic potions and elixirs and snake oil. I 
know a lot about those things because I have been watching the Congress 
for these last 18 years as I have sat here. You talk about snake oil. 
You talk about magic potions and elixirs. You can find them here every 
day in budgetary matters because Congress is not willing to do anything 
about deficits and spending.
  I have heard people time after time say this, and they are courageous 
in standing up here and saying we have to do it; we have to get control 
of this thing, and we have to balance the budget, and it stops here 
with us. The problem is for all of my 19 years, it has never stopped 
once. It is not going to, either, without a mechanism in the 
Constitution that encourages us to do it.
  By the way, this balanced budget amendment does not cut all of these 
things out. It does not say that we have to balance the budget. We do 
not have to balance the budget under this amendment if we do not want 
to. The only difference is instead of playing games here on the floor 
of the U.S. Senate and in the House with voice votes and a lot of ways 
of hiding so the American people do not know who is voting to spend all 
of this money, we have to vote if we do not want to balance the budget. 
If we are going to have a deficit, we are going to have to give a 
three-fifths vote to do it. I am not saying that is insurmountable. I 
have seen debt ceilings lift where we did not need a three-fifths vote, 
not many. But from this point on, I have to say it will be money in the 
bank for the American people because they will know who did it to them 
from this point on, if this amendment is adopted and ratified.
  By the way, if we want the President's solution for deficit 
reduction, which is to increase taxes like he did last year, with the 
largest tax increase in history, which some have praised here on the 
floor during this debate, by gosh, we can do that. All we have to have 
to do that is a constitutional majority here on the floor of the Senate 
and on the floor of the House.
  What does that mean? If we have 51 Senators here, we have a quorum. 
We could vote on anything, by and large, or should I say most anything, 
by a majority vote. We could have 26 votes for and 25 against and, by 
gosh, it passes. With a constitutional majority, you cannot do that. It 
is not a mere majority of those voting. It is a majority of the whole 
number of both Houses. You have to have 51 votes in the Senate, 218 in 
the House.
  Mr. BUMPERS. Will the Senator yield for a question?
  Mr. HATCH. Sure.
  Mr. BUMPERS. I did not utter one word yesterday on the balanced 
budget amendment. But I want to serve notice that I am going to.
  Mr. HATCH. Does the Senator want to do that now? I will be happy to 
conclude this. I do want to make a few more points.
  Mr. BUMPERS. I really apologize for interrupting the Senator. I do 
want to say I am not so concerned about the requirement of a 
constitutional 60 percent, three-fifths vote in the Senate to balance 
the budget. That will almost certainly happen.
  I had my staff do a study of all the appropriations bills for fiscal 
year 1995. Last year, the average vote for all of the 13 appropriations 
bills was 84.5 votes in the Senate. So I expect it is not going to be 
too difficult to get 60 votes to override the amendment. But my concern 
is not that. My concern is the potential damage that can be done by 41 
obstreperous ideologues who care more about their ideology than they do 
the future of the country.
  Let us assume we are in a recession headed for a depression, and 
every economist in the country tells us the only way in the world you 
can head off massive unemployment and massive social and cultural 
disaster is for the Government to create job-producing projects. And 41 
Senators, far fewer than a majority, can say, ``We don't care what the 
economists said. We are for a balanced budget. And we are not going to 
stand for allowing 60 Senators to unbalance this budget.'' So the 
country goes right into the tank.
  That is my real concern. I am interested in the reaction of the 
Senator.
  Mr. HATCH. That is a good question, and I think one deserving of an 
answer.
  First of all, you will never get all the economists to say the 
Government has to help us solve the employment problem or that make-
work jobs are going to get us there.
  Mr. BUMPERS. Again, just so we make this point, I am one of the 
people in this body, along with the distinguished Senator from West 
Virginia, who remembers well the Depression. I was just a child. We 
were very poor. There was no snob value in it. Everybody in town was 
poor. But I can remember.
  The reason I still believe in Government is that the Government did 
some good things and created jobs at the same time. They helped us pave 
our streets where we choked to death on dust and mud. We lived a block 
from Main Street, and you could not get there when it rained. I can 
remember when we got an indoor john for the first time. We were rich. 
Before that we had a ``two-holer'' out back. Most people just had a 
``one-holer.'' We got running water, clean water. People quit having 
typhoid fever and the farmers got low-interest loans. As a matter of 
fact, the Government built houses for them.
  I could go on about rural electrification, which saved my father's 
business. He was a small hardware merchant. As a result of rural 
electrification he was able to sell refrigerators, radios, ranges, all 
of those things.
  So I think Government does some things well. And we could face a time 
like the Depression again if we have 41 obstreperous Senators saying, 
``No; that does not fit with my philosophy.''
  The distinguished Presiding Officer comes from a State where we built 
TVA power, and the people of Tennessee enjoy very low rates as a result 
of TVA power. I promise you, he does not think Government is all bad, 
either.
  All I am saying is, if those things happen--and they most certainly 
will at some point--what happens? I do not believe in Government by 
minority rule. That is what we will have.
  Mr. HATCH. Neither do I.
  Mr. SIMON addressed the Chair.
  Mr. BYRD. Mr. President, may I ask the Senator to yield? He mentioned 
my name.
  Mr. HATCH. Let me yield first to the distinguished Senator from 
Illinois, and then I will be happy to yield.
  Mr. SIMON. Yes. I would like to respond to my friend from Arkansas. 
First of all, I believe that Government can do very good things. I 
believe it more than my friend from Utah does. I am for a WPA program 
right now. I put in the Record yesterday an article by a distinguished 
economist, as well as a couple of other things by other economists, 
saying that the evidence now is that because of the heavy debt we have, 
we simply are not responding.
  You can remember when the President of the United States, when he 
first came in, asked us for $15 billion for a jobs program, but because 
of the deficit, we could not do it. Fred Bertston, a former Assistant 
Secretary of the Treasury, whom you know, has said, if you had asked 
him 10 years ago would he be for a constitutional amendment requiring a 
balanced budget, he would have said absolutely not. He says, ``Now I 
think it is essential.'' The only 
[[Page S2016]] way he says you are going to have a response to 
recessions that is adequate is to build up about a 2-percent surplus, 
give the President the authority to respond with certain specific 
programs when unemployment goes above a certain level in various 
States.
  I would say, finally, to my friend from Arkansas, where we have 
responded is in the extension of unemployment compensation. I went back 
over several decades when we have extended unemployment compensation. I 
could find only one time--in 1982--when we did not have more than 60 
votes to respond to that. So the reality is that we are frozen by this 
huge deficit from responding adequately now. We can build in a system 
where we can respond much more adequately to recessions than we now do.
  Mr. HATCH. If I could add something to that. I agree with the 
distinguished Senator from Illinois. I am not fighting with the Senator 
from Arkansas. There is no question, the Government can play a role. 
Where you have valid social programs, I do not think you would have a 
rough time getting a three-fifths vote.
  We are talking about a bigger picture than that. The force of this 
amendment is that you have to vote, you have to vote. You are going to 
have to have a three-fifths vote to increase the deficit as a whole. 
You are going to have to make priority choices among competing 
programs. I remember the depression, too. I was born and we lost our 
home right after I was born. We also did not have indoor facilities for 
many of the early years of my life. It has been said of me that I never 
pass a bathroom. Having to walk 100 yards in the mud was no fun for me, 
and I did that all too often.
  But the fact of the matter is that we are talking about a much bigger 
picture here than any single program. We do not even have to balance 
the budget under this amendment, but it does point us in the right 
direction, it does give incentives, and it makes us vote on whether we 
are going to have deficit spending or whether we are going to increase 
taxes or whether we are going to do both. I am not saying we cannot do 
both. I think under strenuous times, such as war, severe depression, or 
recession, we are going to get the votes.
  I also believe if there were obstreperous minorities of 41, they are 
going to find a rough time at the ballot box if that is what happens. 
It is the same with those who always want to spend regardless of 
whether we have the money. They can do it if they get control of the 
Congress and if they have a constitutional majority vote to raise 
taxes, but they are going to pay a price at the polls.
  Those are just some of the values of this amendment. I said I would 
yield to my dear friend and colleague from West Virginia. I did not 
mean to say so much before I yielded.
  I yield to the Senator from West Virginia.
  Mr. BYRD. I thank the Senator. He always treats me with the utmost 
courtesy.
  Mr. HATCH. Deservedly so.
  Mr. BYRD. I heard the Senator say, I believe, that this amendment 
does not require that the budget needs to be balanced.
  Mr. HATCH. It is not required.
  Mr. BYRD. This amendment is being sold to the American people as a 
way to balance the budget. Is that not a bit misleading?
  Mr. HATCH. Not at all, because if we required you to balance the 
budget every year, that would fly in the face of the right to do 
something when we have exigent and difficult times.
  The fact of the matter is, what this amendment always represented 
itself to be, and what it always will be, is an amendment that says, 
hey, Members of Congress, the game is over. You are going to have to 
vote if you want to increase the deficit. You are going to have to vote 
if you want to increase taxes. Both votes are more significant than a 
majority vote. And you are going to have to have a three-fifths vote. 
If you want to increase the deficit, you are going to have to have a 
constitutional majority to increase taxes.
  My personal belief is that it will be much easier to get that three-
fifths vote to increase the deficit than to get a constitutional 
majority to increase taxes. I have no doubt in my mind about that. But 
both of them point us in the right direction by saying, look, we have 
to work on making priority choices. We just cannot fund everything 
anymore, and anybody with any modicum of sense knows that. We cannot 
fund everything anymore. We have to make priority choices and keep the 
best programs we can, and we might have to wait for a few years to get 
some of these less important programs.
  Mr. BYRD. I thank the Senator. My friend, the Senator from Utah, is 
now telling the Senate and the American people that this amendment does 
not require a balanced budget.
  Mr. HATCH. That is right.
  Mr. BYRD. That is precisely what this amendment is being sold as. The 
American people are being told--and I have heard it said by many of the 
proponents on the floor this week already--that this is the way to 
balance the budget. ``We have to have something to force us to balance 
the budget.''
  The distinguished Senator from Utah is saying that this amendment 
does not require a balanced budget. I think we ought to tell the 
American people that.
  Mr. HATCH. I have.
  Mr. BYRD. I read this in the first section: ``Total outlays for any 
fiscal year shall not exceed total receipts for that fiscal year.''
  I know there are some loopholes whereby we might vote by three-fifths 
of a majority of each House, about which I will express myself at 
another time. But this amendment, we are now being told, does not 
require a balanced budget.
  Let me ask the Senator this: He also said in his statement that we--
meaning the Congress--are unwilling to do anything about it--meaning 
these massive deficits; we are unwilling to take the courageous action 
that is needed to bring them under control. We are unwilling to do it.
  Mr. President, I remind my friend that we in the Congress were 
willing in 1990, under the agreement that was achieved at the so-called 
budget summit, where the representatives of the Bush administration 
sat, and the leadership on both sides of the aisle in this body and the 
leadership on both sides of the aisle in the other body were present. 
We agreed on a package that would reduce the deficits over a period of 
5 years by something like $482 billion. And then in 1993, working with 
President Clinton, the Democratic Congress enacted legislation that, 
over a period of 5 years, reduces the budget deficit by $432 billion. I 
know it really cuts, because we froze domestic discretionary spending, 
and because of that package, we are presently operating under a freeze. 
So we really cut discretionary spending, which includes both defense 
and domestic.
  Mr. President, I say to my friend that when the time came to vote on 
that package, where was the courage? The Congress, under Democratic 
control in both Houses, demonstrated the courage to do something about 
it. We enacted that package, cutting $432 billion over a period of 5 
years. We enacted that package, but without the help of a single vote 
from my friend's side of the aisle. Not one Republican Senator from 
these 50 States, not one Republican House Member from these 50 States, 
screwed up the courage to vote for that package, which cuts deficits, 
over a period of 5 years, by $432 billion.
  And so, it was the Democrats in the Senate and in the House who 
demonstrated a willingness--I refer to the Senator's statement, when he 
said we are unwilling to do anything about it--it was the Democratic 
Senators and Democratic House Members under Democratic leadership and 
working with a Democratic President who demonstrated a willingness to 
cast a hard vote and to make some hard choices in the 1993 
reconciliation bill.
  So let it not be said that Congress does not have the courage to do 
it. I say why do we not do it again? Why do we not do it, I say to my 
friend? Why do we not do it again?
  If the proponents of this amendment have--pardon me for imposing on 
the time; I will just say this and I will sit down--but if the 
proponents of this amendment have two-thirds of the vote to adopt this 
constitutional amendment in the House, and two-thirds of the vote in 
the Senate to adopt this constitutional amendment, meaning they have 
290 votes in the House and 67 votes in the Senate, if they have the 
[[Page S2017]] votes to adopt this constitutional amendment, why do 
they not get on with passing bills now? It only takes a majority of 
each body to pass bills, not two-thirds. Why do we not get on with it 
now? Why wait 7 years?
  Mr. HATCH. Mr. President, I think that is a legitimate question. But 
keep in mind, both the 1990 bill and the 1993 bill were tax increase 
bills. And there is only so many times you can increase taxes on the 
American people.
  What this amendment does is--yes, it does not require a balanced 
budget--it just says that it should be the rule and we have to work to 
get there. And if we do not want to get there, we are going to have to 
vote not to and the American people will know who did it to them. That 
is the difference. It will take a supermajority vote of three-fifths, 
if you want to increase spending beyond our revenues, and a 
constitutional majority, no less than 51 in the Senate and no less than 
218 in the House, if you want to increase taxes.
  And I have to tell you, one of the reasons we believe this has to 
happen is because for the last 26 years we have not reached a balanced 
budget with all the tax increases we have had.
  I remember back in 1982, when we increased taxes under Reagan, on the 
assumption that for every dollar in increased taxes we get $2 in 
deficit reduction. We increased taxes and we spent $1.32 more for every 
dollar, and now we are spending almost $1.90 more for every dollar we 
increased in taxes.
  Now I know the distinguished Senator from West Virginia, if he had 
his way would be able to do this, to balance the budget, and I would 
help him; at least I would try. I might not want to increase taxes to 
do it, but I would help him balance the budget.
  But, I have to say, he is singular in getting it done. Now, I respect 
him. And I have no qualms about saying I think he would do that if he 
could. If he was a dictator or even a Talleyrand, he might get it done. 
But he is one of 100, in fact, one of 535. And it has not been done. 
And it is not going to be done, not without some mechanism in the 
Constitution to give us the incentives to do it.
  Now, does this amendment guarantee we are going to go to a balanced 
budget? I think over time it does, because I think the American people 
are going to know who is doing it to them because we will be standing 
up and voting, rather than playing games around here.
  Does the Senator have a question?
  Mr. SIMON. Mr. President, I would simply like to respond briefly to 
my friend from West Virginia--and he is my friend and I have great 
respect for him.
  Mr. HATCH. Mine, too.
  Mr. SIMON. In what he has had to say.
  Let me, in response to his last question to my colleague from Utah, 
say my colleague from Utah and I do not agree on how we ought to 
balance the budget. We have some strong philosophical differences, as 
Senator Byrd knows. We do agree, however, that we have to do it, and we 
need the discipline of a constitutional amendment to force us to do it.
  I would differ also with respect to my friend when he talks about the 
heavy tax burden. I am not suggesting that we are going to solve this 
primarily through taxes. I do not think that is the case. I would add, 
of the 24 major industrial nations we are 24th in the percentage of our 
income that goes for taxation. We do not have a value-added tax. Most 
of the countries in Western Europe have that. We have the lowest tax on 
a gallon of gasoline of any country outside of Saudi Arabia; the lowest 
taxes on a package of cigarettes, and you could go on and mention other 
things. But, having said that, there is no question we are going to 
primarily do this through restraining growth in spending.
  And the Senator is right, I say to Senator Byrd, when he says we are 
going to have to make hard choices.
  But it is very interesting--and we were just given at the Democratic 
caucus today a poll by the Wirthlin group on the balanced budget 
amendment--79 percent of the people favor a balanced budget amendment 
and 53 percent of them believe they are going to have to sacrifice in 
order to achieve it. They are willing to, the American public is 
willing to.
  I take the choice of sacrificing a little bit so my three 
grandchildren can have a better future. And I do not have a difficult 
time making that choice at all, and I do not think the American people 
do.
  Mr. President, I see my colleague on his feet, and I am pleased to 
yield to my distinguished colleague.
  Mr. HATCH. I believe I still have the floor.
  Mr. SIMON. I am sorry. I thought my colleague had yielded the floor.
  Mr. HATCH. No, I am still retaining my right to the floor, but I am 
happy to yield to my friend.
  Mr. BYRD. I am trying to remember precisely how the Senator said it 
when he spoke of his children and grandchildren.
  Mr. SIMON. Mr. President, I said what I am required to do, if we pass 
this, is to sacrifice a little bit myself so they can have a better 
future.
  The GAO says if we continue down the present path we are going to 
have a gradual declining standard of living. But if we, by the end of 
the century or 2001 in their original study, now it will be postponed 
to 2002, have a balanced budget by the year 2020, the average American 
will have, in inflation adjusted terms, an increase in the standard of 
living of 36 percent. That is a huge increase for those three 
grandchildren.
  Mr. BYRD. Will the Senator yield?
  Mr. HATCH. I am happy to yield.
  Mr. BYRD. I ask unanimous consent that I may engage in this colloquy, 
with the Senator from Utah retaining his right to the floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BYRD. Mr. President, the distinguished Senator from Illinois has 
made a startling revelation. And I love him. I think he is Mr. Fair and 
Square around here, and I believe he is Mr. Fair and Square. He always 
has a smiling face and a shining countenance and that upbeat spirit 
about him that is so infectious. And I am going to miss him.
  Mr. SIMON. I can see how you got elected in West Virginia, Senator 
Byrd.
  Mr. BYRD. Well, that goes back a long way, I say to the Senator.
  I believe he said that, ``If this amendment is adopted, then I would 
be willing to sacrifice so that my children and grandchildren can have 
a better future.''
  Is he also saying that if this amendment is not adopted, he is 
unwilling to sacrifice for his children and grandchildren?
  I say, Mr. President, we need to sacrifice for our children and 
grandchildren, whether or not this amendment is adopted. And we do not 
need an additional bit of print in the Constitution to fortify us with 
the courage and the discipline and the will to take a strong stand now 
in order to sacrifice for our country or our children and our 
grandchildren.
  Mr. President, if I do not have the courage now to take a strong 
stand, if I am unwilling now to take a strong stand on behalf of my 
children and grandchildren and their children, there is no amount of 
ink that can put into that Constitution that will give me any more 
backbone, any more spine, any more courage, any more strength of will 
than I already have. It just cannot be done. I say that with all due 
respect to my friend.
  He may wish to comment on my remarks.
  I ask that the Senator from Utah yield for that purpose.
  Mr. HATCH. I am happy to yield for that purpose.
  Mr. SIMON. I am willing to sacrifice right now, and I know the 
Senator from West Virginia and the Senator from Utah are, too. 
Unfortunately, we have 26 years in a row of history that, as a body, we 
have rarely been willing to do it.
  Oh, in 1993, you and I voted for what Senator Bob Kerrey called a 
modest step toward reducing the deficit. I was pleased to do that.
  Mr. BYRD. Modest enough. It did not get a single vote on the other 
side of the aisle in either House.
  Mr. SIMON. The Senator is correct. Economists are virtually unanimous 
in saying that that was a good thing. It is to the credit of President 
Clinton that we did that.
  I think history clearly shows we need outside discipline. We can even 
say it is a little more print in the paper of the Constitution. But as 
I said yesterday-- 
[[Page S2018]] and I think our Senator from Tennessee was presiding 
then, too--I said all of us went right over there and we took but one 
oath, to defend the Constitution. That has meaning for Senators. And I 
think that is true for any Senator. I think we are going to live by 
that.
  Mr. BYRD. Mr. President, before the Senator adds those points, and if 
the Senator from Utah is willing to yield, the distinguished Senator 
referred to the oath. I have taken the oath 13 times in 48 years: In 
the West Virginia House of Delegates, the West Virginia Senate, the 
United States House of Representatives and in the United States Senate. 
I know what it means.
  Mr. President, we should be willing to bite the bullet now. We have 
not been 26 years in the building of this colossal--these deficits to 
the extent that they are triple-digit billion dollar deficits. For 182 
years we ran up something like $1 trillion debt.
  Then when Mr. Reagan came into office--he was in office 8 years, Mr. 
Bush 4 years--we more than tripled that debt. And as my grandson used 
to say, ``You know what,'' I helped Mr. Reagan to triple that debt. 
Because I voted for his tax cut in 1981. And I have regretted it. I 
voted for his massive military buildup. I urged upon him that he could 
not balance the budget, mount such a massive defense buildup, and cut 
taxes in 3 successive years, 5 percent the first year, 10 percent the 
next year and 10 percent the third year. I urged upon him that he wait 
until after the first year or after the second year.
  And as the minority leader at that time, I offered an amendment on 
this floor to require that we not have 3 years of successive tax cuts 
all in one bill; that, instead, we have 2 years and then wait and see 
what was happening to the economy, the deficits and so on, before we 
institute another, the third tax cut. But President Reagan would not 
listen. I voted with Mr. Reagan. I supported him on that tax cut 
because many West Virginians told me to give him a chance. I supported 
him on the defense buildup.
  As to those triple-digit billion-dollar deficits, we never had one 
before Mr. Reagan was in office. Never did we have one triple-digit 
billion-dollar deficit. Never. They all started under his 
administration. I know a lot of people blame Congress for the deficits, 
but I will show sometime during the next few days that going back 45 
years the total accumulated appropriations over the period of 45 years 
under the various Presidents, the accumulated appropriations are less 
than the accumulated budget requests submitted by those Presidents to 
the Congresses during that period of time. The figures will not lie. 
Liars can figure, but figures will not lie. The laws of mathematics do 
not change, whether it is the old math or the new math.
  I say to my friend, this talk about needing something in the 
Constitution to force Members to discipline Members, to force Members 
to take the positions to make the tough votes and the tough choices. 
Something to force us. What are we, children? Mr. President, we will 
dodge that bullet when it comes because under this amendment, do you 
know who will enforce this balanced budget amendment? Congress will, 
according to this amendment language. Congress. Congress will enforce 
it. The same Congress which lacks the discipline now, to use the 
Senator's words, in essence.
  I was thinking of Darwin and his theory of the survival of the 
fittest. I do not think that the men and women who come to this body in 
2002, 2003, or 2004 will have had sufficient additional time to benefit 
from Darwin's theory anymore than we, with our ancestors stretching 
back over thousands upon thousands of years, have already benefited. 
Discipline cannot be put into the bloodstream of man by a needle. He 
cannot be inoculated with faith and discipline and courage, backbone 
and spine. It has to be inside him to begin with. I say that with the 
greatest respect for my friend, the happy warrior, the happy warrior, 
from the great State of Illinois.
  Mr. HATCH. Mr. President, if I could take back my time.
  Mr. SIMON. Mr. President, the Senator from Utah has the floor and 
when he is through I want to get the floor just to respond very 
briefly.
  Mr. HATCH. Without losing the right to the floor, take that time to 
do so.
  Mr. SIMON. Mr. President, let me say that there is no absolute 
guarantee that this will work. I think what we can virtually guarantee 
is if we do not pass this, we are continuing down the same slippery 
slope and we are not going to get things done.
  In 1981 I was in the House. I was not in the Senate. But in the House 
we ended up with a bidding war between President Reagan and the 
Democrats on a tax cut. I voted against both the Reagan tax cut and the 
Democratic tax cut because the numbers just did not add up. We were 
saying by 1984 we will have a balanced budget. Third grade arithmetic 
told you that was not true.
  Just a few other quick comments. One is the details of where we are 
heading. Concord Coalition put together a package. By the time this 
debate is over we will have a rough idea. One way to do it, for 
example, is to live within the limits that we have established right 
now through 1998, and then make some policy decisions that would 
combine the total of the Bush package, I think it was 1991, and the 
Clinton package, 1993. Not that onerous. People are being told, ``This 
is going to hit every group.'' Senior citizens are being told it will 
come out of your Social Security.
  I had a man this morning, a hospital executive, tell me, We have been 
told $500 billion of this is going to come out of hospitals. Every 
group is being told that. It just is not true.
  Second, I say to my friend, who is, I think--and I am not one to 
exaggerate on the floor of the Senate, even though we all have a 
propensity to do that occasionally--I think it is correct to say that 
there has been no Senator in the history of the Senate who has been as 
much of a historian as Robert Byrd. His sweeping knowledge of history 
is impressive. I have written a few books in the field of history, but 
I do not pretend to have his knowledge of history.
  The only historian who would even come close would be Albert 
Beveridge who served Indiana around the turn of the century who did a 
three volume biography of Abraham Lincoln. But he had nowhere near the 
comprehensive knowledge of Senator Byrd.
  But it was interesting to me this great historian did not get into 
the economic history of nations, and that economic history is very 
clear. As nations pile up debt, they keep on piling up debt, and what 
do they do eventually? They monetize the debt. They start the printing 
presses rolling. That is the history of nations, and we cannot avoid 
that.
  Now, my friend from West Virginia had all what is going to happen to 
the various States. What is going to happen in those States if we do 
not pass the balanced budget amendment?
  Mr. BYRD. Will the Senator yield, with the indulgence of the Senator 
from Utah? Why do we not do it now? We need two-thirds vote in each 
body to adopt this amendment. Why do we not just use a majority now to 
take whatever actions are necessary to continue to bring that budget 
into balance? It only takes a majority. Why wait 7 years? Darwin's 
theory of natural selection will not make me any more courageous in 7 
years or 9 years or 90 years. I have only the courage that God gave me 
and the courage and the will and the determination and the faith that 
were inculcated into me by the people who raised me and by the genes 
that my father and mother and their ancestors gave me. That 
Constitution will not give me any more courage. Let us do it now. Why 
not now? Why not start now?
  Mr. SIMON. I say to my friend from West Virginia, if we had 51 Robert 
Byrds in the U.S. Senate, we could do that. We do not. That is the 
simple reality.
  Mr. BYRD. No, no, I say to the Senator, you are flattering me now. We 
have lots of men and women in this Senate who have the courage to do it 
now. It is not just the Robert Byrds. We have enough men and women in 
the Senate to do it now. Let us be honest with those people out there 
who are watching through that electronic eye. We have just heard our 
friend on the other side of the aisle say this constitutional amendment 
does not require a balanced budget. Let us start now.
  Mr. HATCH. If I could----
  Mr. SIMON. I do have some other points, but I will make them on some 
[[Page S2019]] other occasion and I return the floor to my colleague 
from Utah.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. BYRD. Mr. President, I thank both Senators.
  Mr. HATCH. Mr. President, I thank both sides. I think it has been an 
interesting colloquy between my two colleagues. I agree with the 
distinguished Senator, why do we not do it now? This is why we are 
going to get it done because we are going to put a mechanism in the 
Constitution to help us to do it, and that is what this requires.
  Let me also say this--President Reagan, of course, cannot defend 
himself at this particular point--but I do not think anybody should 
fail to note that when John F. Kennedy was President of the United 
States back in 1962, the military budget was 49 percent of the total 
Federal budget. The highest it ever got under Reagan, as I recall, was 
26 or 27 percent of the total Federal budget, about half of what John 
F. Kennedy was willing to spend and the Congress was willing to spend 
for the military at that time. Forty-nine percent.
  How is it that when Reagan helped to increase military spending that 
brought down the Iron Curtain and ended the cold war with only 26 
percent of the budget, that it was he who caused this grand spending 
boom when we used to spend 49 percent because the national security 
interests of this country were the single most important interests of 
the Federal Government?
  I will tell you why. Because John F. Kennedy cut taxes 10 percent and 
the economy boomed, because more people were making more money, paying 
more taxes, more businesses were created, more jobs were created, more 
people were working. John F. Kennedy cut taxes, spent 49 percent of the 
Federal budget on the military, and we had a very low deficit at that 
time.
  He was succeeded by Lyndon Johnson who decided he was going to take 
care of everybody, and he came up with what was called the Great 
Society programs, and from those programs we have a proliferation of 
Federal Government control over all of our lives and a proliferation of 
spending where now 70 percent of this Federal budget is entitlement 
spending. That means it goes up and up and up automatically and nobody 
stops them.
  In defense of President Reagan, and I do not mean to get too much 
into this because I think people who really understand economics and 
understand the history realize that he was not the one who created 
these huge deficits. Certainly tax cuts sometimes wrongfully given can, 
over the short term cause us to have less money in the budget. But over 
the long term, they generally produce more jobs, more businesses, more 
people employed, more people working, more people paying into the 
system, more revenues to the Federal Government.
  By the way, the Reagan tax cuts created 9 years of economic 
expansion, the longest peacetime economic expansion in the history of 
the country, and it was the tax cut that did it. But what was not said 
is that in order to get his tax cut in 1982 and his tax cut of marginal 
tax rates in 1986, he had to agree to all kinds of entitlement 
expenditures.
  Today, entitlements are 70 percent of the budget. They were not that 
during the time of President Kennedy; 50 percent of the budget was for 
the military, and that is not an entitlement program. It is important, 
and the distinguished Senator from West Virginia made it clear that it 
was important.
  Constitutionally, it is Congress which must balance the budget. Even 
if President Reagan pushed some of the ideas enacted at that time and 
people on the other side of the aisle love to blame him for it, it was 
Congress that passed these bills, according to the Constitution it is 
Congress that controls the purse strings. Congress cannot avoid that 
responsibility. It was Congress that kept increasing spending. It was 
Congress that came up with more and more Federal programs.
  Look, I used to be chairman of the Labor Committee. My ranking member 
was none other than Senator Kennedy. When I became chairman of that 
committee, it was the most liberal committee in the Congress. There 
were between 2,000 and 3,000 Federal programs created by that committee 
that are currently in existence. Imagine that. And that is just one 
committee in Congress.
  Constitutionally, it is our responsibility, not the President's, 
although I think he or she has a responsibility, too, to balance the 
budget.
  Reagan's tax cuts raised revenues during those years--raised $1 
trillion during the Reagan administration--$1 trillion in additional 
tax revenues. Under Reagan, 20 million new jobs were created. But 
Congress spent $1.4 trillion during that same time.
  Had we stuck with the tax cuts and not had Congress dictate the 
increased spending side of those tax bills, we would not have nearly 
the problems we have today, although we still would have problems 
because of the entitlement programs.
  This body is gutless when it comes to doing anything about 
entitlement programs, and with good cause, because unless you have 
Presidential leadership and congressional consensus to do something 
about them, then in the next election, accusations will be made that 
those who talked about doing something about entitlement programs are 
trying to do away with them.
  So it is going to take Presidential leadership and congressional 
leadership. And what we do with the balanced budget amendment is we get 
a mechanism in place that encourages and creates the incentives for 
balancing the budget rather than spending more and more and forces 
Congress make priority choices among competing programs in order to do 
so.
  We have runaway spending in this country. I appreciate the 
distinguished Senator from West Virginia saying why he thinks we should 
not do it now. I believe he probably would act to balance the budget. 
But he is one of a very few in the whole Congress who, if he would, 
would actually do it without a balanced budget amendment. But if as he 
argues we can do it now, and we do not need the increased pressure of a 
constitutional mandate, then why have we failed up until now? Then why 
have we not balanced the budget for the last 26 years? Why have we not?
  My friend from West Virginia has been one of the leaders in the 
Senate. He was both majority and minority leader. He had tremendous 
power during that time and still does without being the leader of the 
Senate. During those years, I know he worked hard to try to do it and 
he could not with his own side of the floor. And I have to say it is 
not just Democrats that have caused this; Republicans have, too, 
because the incentives are not there in the Constitution right now. 
Jefferson saw the problem. But he never thought that we would reach the 
state of morass that we are in today where nobody is willing to fight 
to resolve budgetary problems--or I should not say nobody. I should say 
where the majority are unwilling to do what is in the best interests of 
this country.
  We have a destructive welfare system. Everybody says we have to do 
something about it. Maybe we will this year. On the other hand, should 
we not have to make priority choices there as well?
  We have an antisavings Tax Code. It discourages savings. Maybe we 
will come up with a Tax Code that will work, where people do not feel 
nearly as badly about paying their taxes as they do today with the 
oppressive antisaving Tax Code that we have.
  We have a Washington bureaucracy that is out of control, partly built 
because we have so many of these programs, not all of which are needed 
but all of which are well intentioned, I will acknowledge that, but not 
all of which are needed and certainly not all of which rise to the same 
dignity as the important programs do. But they exist and get funding 
because we do not have to make priority choices among competing 
programs.
  People in this last election said the old ways are not working. The 
old ways are not working. This country is not working the way it 
should. And for the first time in 40 years, they allowed the 
Republicans the privilege of being in control of the House of 
Representatives, and they gave us the privilege once again to be at 
least the majority in the Senate.
  Now, we have no illusions about having complete control here. If you 
look at ideology, a majority in the Senate are liberal, at least 51 of 
the Senators 
     [[Page S2020]] are what you would call primarily liberal, who 
     do not want to cut anything; who do not want to do anything 
     to balance the budget, at least in the sense of spending 
     cuts. They will increase taxes. They will do that until the 
     American people scream, and they are screaming now.
  (Mrs. HUTCHISON assumed the chair.)
  Mr. HATCH. In the House of Representatives, it may be about the same. 
So nobody has any illusions that just because the Republicans have 
taken control, we can do whatever we want to do. We cannot. As a matter 
of fact, the American people did not mean this to be a mere Republican 
revolution. They said, look, we are willing to try anything to get 
spending under control. And the polls do show that they believe 
Republicans will do a better job of getting spending under control.
  I believe one of the reasons why they believe that is a vast majority 
of Republicans in both bodies, almost every Republican in the House, 
almost every Republican in the Senate, is willing to vote for this 
balanced budget amendment and they knew it would be one of the first 
things we would bring up.
  But having said that, there were 72 courageous Democrats in the House 
of Representatives who voted for this amendment who are probably more 
moderate to liberal than most Republicans who voted to pass the 
balanced budget tax limitation constitutional amendment.
  That amendment is what we are debating right now. For the first time 
in the history of the country, the House of Representatives has voted 
to put into the Constitution a fiscal mechanism that will help us to 
reach a balanced budget. And I have to say we need about 15 to 17 
courageous Democrats in the Senate or it will not pass by a two-thirds 
vote. All we need is, let us say, 17. That means 30 of them can vote 
against it, if they want to, and we can still pass it.
  The fact is that is what we need. We just need a few Democrats to 
stand up here, like a few stood up in the House. They were the minority 
of the Democrats in the House. Let me tell you, those who do stand up 
are going to be heroes to me because there is tremendous pressure on 
them to keep the old order, where we can keep spending and reelecting 
ourselves, where we can tax and spend and reelect.
  So whoever votes with us from the Democratic side of the aisle is 
going to be a hero to me, I have to tell you. And there are some real 
heroes, not the least of whom is the distinguished Senator from 
Illinois. We do differ ideologically. He is liberal; I am conservative. 
But he also acknowledges that something has to be done. I praise him 
for it, and I admire him for it because it is not easy when so few on 
his side are willing to do anything about this.
  If this goes down to defeat, I do not think the American people are 
ever going to get over it because for the first time in history, the 
House of Representatives has voted for a balanced budget amendment. 
What a historic vote that was. Would it not be awful if the Senate, 
which was the first body to ever vote for a balanced budget tax 
limitation amendment, the one we brought to the floor in 1982, when I 
was chairman of the Constitution Subcommittee, would it not be awful if 
the Senate voted it down because we cannot find 17 Democrats to vote 
with us? Would it not be awful? Would not people on the other side of 
the floor feel terrible about that? I think they would at the polls, 
because I do not think the American people are going to forget it.
  This is the most important constitutional issue, it seems to me, 
aside from the Religious Freedom Restoration Act, that we passed a few 
years ago overwhelmingly, on which this body is going to vote in the 
lifetime of the Members of this body. There are other extremely 
important constitutional issues that may rise to this dignity, but this 
is the most important of all of them because we are talking about the 
future of the country now. And when I see anybody coming to the floor 
and saying look at all these programs we are going to lose if we pass 
the balanced budget amendment, I see an argument for more of the same--
more of the same of the last 26 years. If we will not do anything we 
will face it in the future. Sometime we will have to get this under 
control.
  I know there is sincerity among some who make those arguments, but 
history does not back it up. History does not back it up and our 
experience does not back it up. I have heard talk about our children's 
future. Let me tell you, nobody is more concerned about our children's 
future than those of us who have a lot of children and grandchildren. 
Elaine and I have 6 children, and we will have our 15th grandchild here 
in another month or two. I have to tell you, we love each and every one 
of them, and I am worried that their future is going fast. We are not 
giving them the future we had because we are spending their legacy 
away, and we are not willing to do anything about it.
  And yet we keep getting these same old tired arguments against doing 
anything. My gosh, why do we not do it now? I have heard those same 
arguments ever since I have been here.
 And I have no doubt of the sincerity of the distinguished Senator from 
West Virginia. But it is amazing to me, if you make the correlation of 
those who say, ``Let us do it now, we do not need a balanced budget 
amendment,'' why it is almost everybody who is going to vote against it 
who says we do not need a constitutional directive to balance the 
budget. And most of them have been here as long as I have, or at least 
a pretty lengthy time in the Senate, and never once have we balanced 
the budget.

  I think the American people have our number. The American dream is 
fading for our children. We have to make the right decisions now to 
keep it alive for them. We cannot keep accepting these same old 
arguments for going on as we have in the past. How can it be said that 
every State is going to have to increase its taxes because we pass a 
balanced budget constitutional amendment--as if the States do not each 
have the ability to respond to a new fiscal environment in their own 
way. No, Congress is going to have to make priority choices among 
competing programs for the first time in the time I have served here, 
19 years. They are going to have to make the tough choices or they are 
going to have to stand up and vote not to. If they do, I think they are 
going to be thrown out of office in the next election, which is what 
should happen to those of us who do not do what is right. That is the 
ultimate and real enforcement, and it will work.
  We have to cut the waste. We have to cut the fat, and there is 
plenty. Anybody who denies or doubts that we have waste and fat in this 
budget just has not looked. They have not looked at the budget. They 
have not looked at what the Federal Government has done.
  Do not tell me we have to continue to pour everything through this 
bureaucracy when we get only 28 percent back out. Why do we not keep 
that money at home and get 100 percent for the people, the poor, the 
sick and elderly, and those who have difficulties in our society? Why 
launder it through the Federal Government? We are not the all-seeing 
eye, nor are we always right in our remedies. The Founding Fathers 
believed the Government closest to the people is better able to deal 
with such problems. It is a true belief, because people lose touch 
within this beltway.
  The same old order cannot continue. We have to do what is right for 
this society. This balanced budget amendment will give us the 
incentives to do so. And I agree with the Senator from Illinois, we 
take an oath to uphold that Constitution. I think most all of us take 
that oath very seriously. If this becomes a part of the Constitution, 
and I believe it will, then I believe we will take it seriously and I 
believe we will make great inroads over the next 7 years to do what is 
right for this country.
  It may be the only way to save this country from going into a total 
depression sometime in the future when our money becomes worthless, and 
when Social Security becomes worthless, and when our children's 
programs become worthless, and when all of these other programs we have 
been talking about become worthless as we continued to spend this 
country blind. If our Government or economy is destroyed by our current 
profligacy, we will not have any--any--of the programs we have been 
talking about, and which the opponents of the balanced budget amendment 
say will be cut if we balance the budget.
   [[Page S2021]] As you know, I say to my friend here today, I admire 
my friend from West Virginia. I admire the way he feels. I admire the 
way he gives extraordinary time to the Senate and why he is willing to 
stand out here and take the guff of Senators. He is willing to stand 
out here and fight for what he believes in.
  He is a quintessential Senator. I believe that. But he is wrong. He 
is wrong to think we can continue to go the way we are going and still 
solve the problems of this country. As sincere as people are, we can be 
sincerely wrong.
  Even Paul held the coats of the people who killed Stephen, the first 
Christian martyr, thinking he was right. He was sincerely wrong and he 
had to admit it later when he was blinded on the way to Damascus.
  And the voice said: ``Saul, Saul, why persecutest thou me?'' And he 
just stopped. And the minute Paul knew with whom he was talking he 
said, ``Lord, what wilt thou have me to do?'' And from that minute on 
he admitted he was wrong and went to do the job.
  We in Congress have to admit we have been wrong, spending this 
country into bankruptcy and this balanced budget amendment is one of 
the first steps we should take to right that wrong.
  The unfunded mandates legislation is one of the other steps to our 
redemption. We have to quit loading up the State and local governments 
with ridiculous unfunded mandates that take away their rights of self-
determination and so often actually do not even work. I think the 
unfunded mandates legislation we recently approved will work. Although 
I agree with the distinguished Senator from West Virginia, it only 
takes 51 percent, a majority vote to change it. But I think we are 
going to be loath to change it now that we have put it in place.
  I see the distinguished Senator from Tennessee is here. I know he 
wants to speak to this matter. There is a lot more I would like to say 
but I will let it go at this. I just hope everybody in this body 
recognizes what an important, significant, and historic vote this is 
going to be. I hope we vote down any and all attempts to change it 
because this is the amendment. This is our last, best chance. This is 
the chance to put some fiscal discipline that works into the 
Constitution, that will help us to do the job that we have not done 
before because we have not had a constitutional mandate to do it. It is 
a bipartisan, Democrat and Republican consensus amendment, the best we 
can do. It is not perfect but it is the most perfect thing we can do 
and I hope everybody realizes it. Most important, I hope our folks out 
there throughout this country realize that they have a role to play 
constitutionally. That role is to write and call and get with your 
Senators and get them to vote for this. We all know who needs to vote 
for it.
  With that I yield the floor for now and will speak more later.
 house joint resolution 1, the balanced budget constitutional amendment

  Mr. INOUYE. Madam President, as my constituents know, I do not give 
speeches on every issue addressed by the U.S. Senate. However, I felt 
that on a matter as significant to the American people as an amendment 
to United States Constitution, I had to share my thoughts. In no way is 
my speech delivered to stall these proceedings. I wish to address the 
Senate because I am genuinely distressed about several serious 
deficiencies in the balanced budget amendment measure now before the 
U.S. Senate, not the least of which is the fact that the American 
public, ourselves included, does not have a full and fair understanding 
of how this balanced budget amendment will truly impact our lives.
  While the proponents tell us that they will balance the budget, while 
cutting taxes, increasing defense spending and protecting Social 
Security, we are also told that to meet all these goals, the Congress 
will have to cut spending by $1.5 trillion before the year 2002. In 
addition, estimates by the Congressional Budget Office indicate that if 
Social Security and defense spending are not cut, all other programs 
must be cut across the board by 30 percent. I believe the people of 
America should be told in advance where these cuts will occur.
  The new leadership of the U.S. Senate is determined to pass this 
measure almost as expeditiously as the House of Representatives. With 
only 2 days of consideration on the House floor on House Joint 
Resolution 1, debate was, at best, limited. On a matter of this 
significance, the least we can do is not only fully acquaint ourselves 
with the matter before us and its effects, but also provide the same 
information to the citizens of this Nation so they may know its impact 
on their lives. This should not be part of a contest to see who can 
pass a bill faster.
  The proponents of this measure seem to wish to move with undue haste, 
without responsibility for the consequences of their actions, only to 
let the American people and the States unknowingly deal with the 
unpleasant realities at a later date. Our constituents have a right to 
know and understand the real impact of this balanced budget amendment.
  The concept of a balanced budget amendment to the Constitution is 
nothing new to this body. In 1980, the Senate Judiciary Committee 
rejected the proposed constitutional amendment by a vote of 9 to 8. In 
1982, the U.S. Senate actually passed a balanced budget amendment. That 
measure, Senate Joint Resolution 58, would have only allowed deficit 
spending or an increase in the Nation's debt ceiling upon a three-
fifths vote of the Congress. Though passed by the Senate, Senate Joint 
Resolution 58 died in the House of Representatives.
  Many of us in the U.S. Senate consider the balanced budget amendment 
before us with deep concern because underlying the measure is an 
implication or suggestion that we who are elected by our people are 
incapable of doing our work. I believe even a cursory study and 
analysis of the past 2 years will clearly assure the citizens of our 
Nation that we are capable of and are, in fact, doing our job.
  Our work together with the Clinton administration has produced 
significant accomplishments over the last 2 years that no one can 
dispute. Over 5.6 million new jobs have been created. The unemployment 
rate has dropped from 7.3 percent in 1992 to 5.4 percent as of December 
1994, the lowest rate in over 4 years. Inflation has dropped to 2.7 
percent, the lowest since 1986. Under the Omnibus Budget Reconciliation 
Act passed by the Congress in 1993, the Federal deficit has been 
reduced by $87 billion between 1992 and 1994. This is the first time 
the deficit has dropped 2 years in a row in over 20 years, and it is 
the largest 2-year drop in history. The deficit is projected to fall 
another $27 billion in 1995. Many of us, together with eminent 
economists, are convinced that the path we have laid will further 
decrease our deficit and improve our economy.
  The United States Constitution is a document of permanency. If sets 
forth the basic principles, ideals and philosophy of this country and 
our society. It is not a document which should be tinkered with 
lightly. The Constitution of this great Nation was signed on September 
17, 1787. Delaware was the first State to ratify the document on 
October 7, 1787. Other States ratified the Constitution during the 
course of 1788, and the Constitution took effect on September 13, 1788. 
There are currently 26 amendments to the Constitution. Since the 1st 
Congress in 1789, 10,736 Constitutional amendments have been proposed 
in the Congress. We have been rightfully very reluctant to pass 
Constitutional amendments.
  Measures of this magnitude and import must be approached with great 
care and consideration. It took the U.S. Congress somewhere on the 
order of 30 years to pass Medicare legislation. Medicare was first 
debated in Congress in the 1930's with the social reforms of the New 
Deal. Medicare was not considered seriously again until the mid 1950's. 
In 1960 Senator John F. Kennedy featured Medicare in his Presidential 
campaign. However, Medicare was not enacted by the Congress until 1965. 
Congressional debate to end the Vietnam conflict began in the early 
1960's, but the Congress did not set a date certain for the end of the 
war until 1973--the same year the War Powers Act was passed. The Family 
and Medical Leave Act was first introduced in the 99th Congress, vetoed 
by President Bush in both the 101st and 102d Congresses, and finally 
signed into law by President Clinton in the opening days of the 103d 
Congress. The Supreme Court's decision in Brown versus Board of 
Education of Topeka,
 ordering the racial 
[[Page S2022]] desegregation of our Nation's schools, was rendered on 
May 31, 1955. However, not until the Civil Rights Act of 1964 did the 
Congress give the Attorney General the power to initiate civil actions 
to achieve desegregation. The Civil Rights Act of 1964 was debated in 
the Senate for 83 days.
  Each of these measures was fully debated in both Houses of the 
Congress, and they were not even amendments to the Constitution of the 
United States. I submit that a proposed constitutional amendment 
demands a significantly higher level of scrutiny and debate wherein the 
American people are fully informed of all of the amendment's 
implications.
  Every household in our Nation tries its best to balance its 
individual family budget. However, in contemporary times this task is 
much more difficult than that faced by my grandparents. Now we have an 
innovation known as the credit care that allows us to buy now and pay 
later. As of November 1994, our citizens' revolving loan debt was 
$334.4 billion.
  Living with debt is part of the economy of every country. Such debt 
is generally categorized into the types of accounts: operating expenses 
and capital improvements. It is good fiscal policy for a country to 
work to keep operating expenses current. Similarly, the American family 
should try to stay current in its everyday expenses. On the other hand, 
very few Americans would be included to purchase a home with cash. That 
home is acquired with credit in the form of a mortgage loan. This is 
not so different from a government obtaining financing to fund capital 
improvements. Presently, the total amount of our Nation's home mortgage 
debt is $3.3 trillion. The supporters of this balanced budget amendment 
proposes to consider both operating expenses and capital improvements 
as one account, lumped together as debt. Economists will tell you that 
this is not sound fiscal policy.
  It is a relatively simple matter when balancing the family budget to 
be fully cognizant of what must be cut and what operational costs are 
essential and cannot be curtailed. Unlike this household budget 
balancing, the balanced budget amendment currently before the Senate 
intentionally and almost deliberately does not inform the American 
public of what is going to be done to achieve the goal of a balanced 
Federal budget. The American people have a right to know this 
information.
  Merely telling our constituents that we will increase defense 
spending, lower taxes, not touch Social Security, and hope that the 
economy is going to improve is simply not sufficient. In July of 1981, 
similar words were uttered by President Ronald Reagan, and the Congress 
adopted ``Reaganomics,'' also known as supply side economics. When this 
process began in July 1981, the Federal budget deficit amounted to $79 
billion. When Ronald Reagan left office in 1988, the Federal deficit 
had increased to $155 billion. Under the Republican administration's 
budget policies, the upward trend continued through George Bush's 
administration with the deficit topping out at $290 billion in 1992. 
Proponents of this balanced budget amendment refuse to acknowledge that 
the problems we address today began in July 1981.
  I believe that the American people have the right to know exactly how 
the Congress plans to put this balanced budget amendment to work. For 
example, health care costs currently amount to 14 percent of Federal 
spending. Every study indicates that by 1988, this figure will increase 
dramatically such that 24 percent of Federal spending will be on health 
care. One-half of that amount will be spent on Medicare alone. I would 
think that the people of this country would like to know now whether 
the balanced budget amendment will result in cuts to Medicare. Will 
Medicaid funding face reductions, and will research programs for the 
treatment of breast cancer, AIDS, heart disease, and mental illness be 
reduced or eliminated? How will highway funds, Aid to Families With 
Dependent Children, job training and veterans' benefits, and other 
grants to States be impacted? Further, if States felt that these 
programs were essential, I would think that our constituents would want 
to know just how much it would cost them as State taxpayers to continue 
these programs.
  I am also deeply concerned about the provision in House Joint 
Resolution 1 which provides that the balanced budget requirement may be 
waived if there is a declaration of war, or the United States is 
engaged in military conflict which threatens the national security of 
our country.
  Would the United States' humanitarian mission in Somalia come within 
this provision? What about United States peacekeeping efforts in 
Bosnia? What about Haiti, Desert Storm, Vietnam and Korea? Some would 
argue that the Korean war was a police action, not the result of a 
declaration of war, therefore, not a war.
  Further, how will we deal with the financial impact of natural 
disasters over which we have no control--Hurricanes Andrew, Iniki and 
Omar, floods in the Midwest and California, and the earthquakes in 
California, to name a few.
  The American people deserve to know the answers to these questions.
  At the request of the National Governors' Association, the U.S. 
Department of the Treasury recently prepared a report on the likely 
effects on the States of a balanced budget amendment alone, as well as 
accompanied by the tax reductions proposed by the Republican Contract 
With America. As proposed by the proponents of the balanced budget 
amendment, the Treasury Department assumed that there would be no cuts 
to defense or
 Social Security, not tax increases, and that deficit reduction would 
be achieved by the year 2002.

  According to the Treasury Department, even if phased in gradually 
between now and the year 2002, deficit reduction cuts will be severe in 
2002. A balanced budget amendment will require reducing Federal grants 
to States, for programs such as Medicaid and highway funds, by a total 
of $71.3 billion in fiscal year 2002. Other Federal programs that 
directly benefit State residents, such as Medicare and housing 
assistance, would have to be cut by $176.5 billion in fiscal year 2002. 
However, these figures grow significantly if Republican-sponsored tax 
reductions in the Contract With America are taken into account. Cuts 
totalling $97.8 billion in grants and $242 billion in other programs 
that directly benefit State residents would be required in fiscal year 
2002 under a balanced budget amendment combined with the proposed 
Contract With America tax reductions.
  For the benefit of my constituents, I would like to highlight the 
impact on the State of Hawaii based upon an analysis prepared by the 
Treasury Department. I ask unanimous consent that a copy of the 
Treasury Department's analysis on the impact of the balanced budget 
amendment and Contract with America tax reductions be included in the 
Congressionall Record following my remarks.
  (See exhibit 1.)
  Mr. INOUYE. As the Treasury Department's analysis indicates, a 
balanced budget amendment alone would reduce annual Federal grants to 
Hawaii for Medicaid, highways, Aid to Families with Dependent Children, 
education, job training, environmental protection, housing and other 
programs by $328 million. Combined with the proposed tax cuts in the 
Contract With America, this figure rises to $450 million in lost 
Federal grants annually. Hawaii would also lose another $1 billion 
annually in other Federal spending for Medicare, housing assistance, 
student loans, veterans' benefits and other programs. The Treasury 
Department's analysis further shows that Hawaii State taxes would have 
to be increased by over 9 percent to make up for lost Federal funding 
and to continue these programs.
  The American public and our constituents have a right to know about 
the impact of the proposal before us on their lives. Without a 
provision setting forth the nature and amounts of budget cuts, the 
balanced budget amendment measure before us would be grossly unfair to 
our States and our taxpayers.
  Why are the Republican who are the authors of this balanced budget 
amendment afraid to let the people know? Don't they trust their fellow 
Americans? The logical and appropriate way to make decisions is to know 
all the facts. Our constituents--the American taxpayers--and our State 
legislatures should be entrusted with and have the benefit of the facts 
before this balanced 
budget amendment is considered for ratification.
  The Senate is unique because it is where ideas and concerns can be 
freely and fully expressed. I hope that every Member of this body will 
express themselves freely. I hope that all of us will participate 
openly in this debate.
  As this joint resolution stands today, I will most certainly oppose 
it and do everything in my power to defeat it.
                               Exhibit 1.

The Impact of a Balanced Budget Amendment and the Contract With America 
                       on the State of Hawaii\1\

       I. A Balanced Budget Amendment would reduce annual Federal 
     grants to the Hawaii state government by $328 
     million: [[Page S2023]] 
     \1\For all calculations, a balanced budget is achieved by FY 
     2002 through across-the-board spending cuts that exclude 
     defense and social security.

     Source: U.S. Department of the Treasury, January 12, 1995.

       $117 million per year in lost funding for Medicaid.
       $62 million per year in lost highway trust fund grants.
       $24 million per year in lost funding for welfare (AFDC).
       $125 million per year in lost funding for education, job 
     training, the environment, housing, and other areas.
       Hawaii would have to increase state taxes by 6.8 percent 
     across-the-board to make up for the loss in grants.
       II. A Balanced Budget Amendment combined with the 
     ``Contract with America'' tax cuts would require even deeper 
     spending cuts, thereby reducing annual Federal grants to the 
     Hawaii state government by $450 million:
       $161 million per year in lost funding for Medicaid.
       $85 million per year in lost highway trust fund grants.
       $32 million per year in lost funding for welfare (AFDC).
       $172 million per year in lost funding for education, job 
     training, the environment, housing, and other areas.
       Hawaii would have to increase state taxes by 9.3 percent 
     across-the-board to make up for the loss in grants.
       III. A Balanced Budget Amendment and the ``Contract with 
     America'' tax cuts would reduce other annual Federal spending 
     in Hawaii by $1.0 billion:
       $296 million per year in Medicare benefits.
       $716 million per year in other spending including housing 
     assistance, student loans, veterans' benefits, and grants to 
     local governments.

                                     TABLE 1.--SPENDING REDUCTIONS UNDER BALANCED BUDGET AMENDMENT, FISCAL YEAR 2002                                    
                                                                [In millions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Cuts in Grants to State Gvoernments                  Required       Cuts in other Federal spending   
                                    -----------------------------------------------------------------  State tax  --------------------------------------
               State                                                                                    increase                                        
                                        Total       Medicaid     Highway        AFDC        Other         (in         Total       Medicare      Other   
                                                                                                        percent)                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama............................        1,162          641           98           32          391         16.4        3,058        1,157        1,900
Alaska.............................          306           89           71           19          127          9.8          576           44          532
Arizona............................          919          519           78           68          254         10.4        2,397          949        1,447
Arkansas...........................          723          416           65           16          225         16.5        1,567          766          800
California.........................        7,708        3,944          442          960        2,362          9.2       20,321        9,101       11,220
Colorado...........................          755          387           79           36          253         11.8        2,764          721        2,044
Connecticut........................        1,008          587          105           63          253         11.2        1,843        1,089          755
Delaware...........................          158           70           18            9           61          7.2          383          176          207
District of Columbia...............          697          183           17           24          473         20.4        4,937          313        4,624
Florida............................        2,656        1,520          202          170          764         10.2        9,782        5,336        4,446
                                                                                                                                                        
Georgia............................        1,608          938          131          101          438         12.0        2,780        1,392        2,398
Hawaii.............................          328          117           62           24          125          6.8          737          216          522
Idaho..............................          254          118           33            8           95          9.9          855          218          637
Illinois...........................        2,576        1,354          174          155          892         11.6        7,532        4,092        3,441
Indiana............................        1,490          956          123           54          357         13.8        2,531        1,497        1,034
Iowa...............................          630          328           69           35          197         10.9        1,919          897        1,022
Kansas.............................          622          355           52           29          186         13.0        1,730          819          911
Kentucky...........................        1,157          690           69           56          341         14.5        2,111          952        1,159
Louisiana..........................        1,966        1,500           94           48          324         27.8        2,361        1,066        1,296
Maine..............................          452          279           28           24          121         17.5          717          385          331
                                                                                                                                                        
Maryland...........................        1,125          581           83           65          398          9.9        6,253        1,377        4,876
Massachusetts......................        1,915        1,073          248          135          459         12.6        4,683        2,449        2,234
Michigan...........................        2,477        1,355          140          229          753         13.2        4,988        3,333        1,655
Minnesota..........................        1,177          679          102           83          314          9.4        2,547        1,123        1,424
Mississippi........................          864          496           61           24          282         20.8        1,672          713          959
Missouri...........................        1,316          747          109           62          398         15.5        3,942        1,781        2,161
Montana............................          277          123           52           12           89         19.8          744          218          526
Nebraska...........................          388          192           44           23          129         13.3        1,213          482          732
Nevada.............................          227          116           32           11           68          6.2        1,005          258          747
New Hampshire......................          212          112           31           11           58         17.6          563          270          293
New Jersey.........................        2,476        1,500          141          129          705         12.7        4,653        2,894        1,759
New Mexico.........................          524          233           70           28          193         12.9        2,117          321        1,796
New York...........................        8,181        5,442          274          535        1,930         17.4       11,058        6,876        4,182
North Carolina.....................        1,697        1,025          136           95          441         11.1        3,217        1,432        1,785
North Dakota.......................          229          105           35            8           81         19.7          563          231          332
Ohio...............................        2,826        1,718          170          212          727         14.4        6,007        3,442        2,565
Oklahoma...........................          770          424           51           51          244         12.4        2,110          934        1,117
Oregon.............................          706          342           54           47          263         12.2        1,976          833        1,143
Pennsylvania.......................        3,057        1,767          211          178          901         12.7        8,555        5,120        3,435
Rhode Island.......................          430          255           42           23          109         21.4          619          347          272
                                                                                                                                                        
South Carolina.....................        1,033          644           68           31          260         14.3        2,217          682        1,536
South Dakota.......................          231          103           39            6           82         24.7          577          205          372
Tennessee..........................        1,537          989           78           60          411         19.5        3,845        1,349        2,496
Texas..............................        4,167        2,520          340          147        1,159         14.0       10,758        4,280        6,479
Utah...............................          422          190           49           22          160         11.4        1,078          235          842
Vermont............................          207           89           37           13           68         17.4          301          150          151
Virginia...........................        1,005          490           72           49          393          8.2        6,073        1,374        4,699
Washington.........................        1,318          730          117          126          346          8.4        3,569        1,107        2,463
West Virginia......................          765          488           45           32          199         20.6        1,209          600          608
Wisconsin..........................        1,250          694          111           96          349         10.3        2,480        1,503          977
Wyoming............................          218           55           38            8          118         18.7          286           96          191
                                    --------------------------------------------------------------------------------------------------------------------
    Total, State...................       70,172       40,271        5,093        4,480       20,328         12.6      172,792       77,199       95,593
Undistributed and territories......        1,127           43           83           28          973           NA        3,700          276        3,424
                                    --------------------------------------------------------------------------------------------------------------------
    Total, United States...........       71,300       40,314        5,176        4,506       21,301           NA      176,492       77,476      99,017 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: U.S. Department of the Treasury, January 12, 1995.                                                                                              


                                       TABLE 2.--SPENDING REDUCTIONS UNDER CONTRACT WITH AMERICA, FISCAL YEAR 2002                                      
                                                                [In millions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Cuts in grants to State governments                  Required       Cuts in other Federal spending   
               State                -----------------------------------------------------------------  State tax  --------------------------------------
                                        Total       Medicaid     Highway        AFDC        Other       increase      Total       Medicare      Other   
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama............................        1,594          879          135           44          536         22.5        4,195        1,688        2,608
Alaska.............................          420          123           98           28          174         13.5          790           60          730
Arizona............................        1,261          712          108           93          348         14.2        3,288        1,302        1,986
Arkansas...........................          992          571           90           23          309         22.7        2,150        1,052        1,098
California.........................       10,576        5,412          607        1,317        3,241         12.8       27.880       12,486       15,394
Colorado...........................        1,036          531          108           49          347         16.2        3,793          989        2,804
Connecticut........................        1,383          805          145           86          348         15.4        2,528        1,494        1,035


                                                                                                                                                        
[[Page S2024]]
                                 TABLE 2.--SPENDING REDUCTIONS UNDER CONTRACT WITH AMERICA, FISCAL YEAR 2002--Continued                                 
                                                                [In millions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Cuts in grants to State governments                  Required       Cuts in other Federal spending   
               State                -----------------------------------------------------------------  State tax  --------------------------------------
                                        Total       Medicaid     Highway        AFDC        Other       increase      Total       Medicare      Other   
--------------------------------------------------------------------------------------------------------------------------------------------------------
Delaware...........................          217           97           25           12           83          9.8          526          241          284
District of Columbia...............          956          252           23           32          650         27.9        6,774          429        6,345
Florida............................        3,644        2,086          277          233        1,048         14.0       13,421        7,321        6,100
                                                                                                                                                        
Georgia............................        2,206        1,286          180          138          601         16.5        5,200        1,910        3,290
Hawaii.............................          450          161           85           32          172          9.3        1,012          296          716
Idaho..............................          349          162           46           11          131         13.6        1,173          299          874
Illinois...........................        3,534        1,858          239          213        1,224         15.9       10,334        5,614        4,721
Indiana............................        2,044        1,312          168           74          490         18.9        3,473        2,054        1,419
Iowa...............................          864          451           95           48          270         15.0        2,633        1,231        1,402
Kansas.............................          853          487           71           40          255         17.8        2,374        1,124        1,249
Kentucky...........................        1,587          947           95           77          468         19.8        2,896        1,306        1,590
Louisiana..........................        2,697        2,059          129           66          444         38.2        3,240        1,462        1,778
Maine..............................          621          383           38           33          166         24.0          983          529          454
                                                                                                                                                        
Maryland...........................        1,543          798          113           89          543         13.5        8,579        1,889        6,690
Massachusetts......................        2,627        1,472          340          185          630         17.3        6,425        3,360        3,065
Michigan...........................        3,398        1,859          192          314        1,034         18.1        6,844        4,572        2,271
Minnesota..........................        1,615          931          139          113          431         13.0        3,494        1,541        1,954
Mississippi........................        1,185          681           84           33          387         28.5        2,294          978        1,316
Missouri...........................        1,806        1,025          149           85          547         21.2        5,408        2,444        2,965
Montana............................          380          189           71           17          123         27.1        1,021          298          722
Nebraska...........................          533          264           60           31          177         18.3        1,665          661        1,004
Nevada.............................          312          159           44           15           94          8.6        1,379          354        1,025
New Hampshire......................          291          154           43           16           79         24.1          773          370          403
                                                                                                                                                        
New Jersey.........................        3,397        2,059          194          177          968         17.5        6,364        3,971        2,413
New Mexico.........................          719          320           96           38          265         17.6        2,904          440        2,464
New York...........................       11,226        7,466          376          734        2,649         23.8       15,172        9,435        5,738
North Carolina.....................        2,329        1,406          187          130          605         15.2        4,414        1,965        2,449
North Dakota.......................          314          144           48           10          111         27.0          773          317          455
Ohio...............................        3,878        2,358          233          290          997         19.8        8,242        4,722        3,520
Oklahoma...........................        1,056          582           70           69          335         17.0        2,896        1,281        1,615
Oregon.............................          969          469           75           65          361         16.6        2,711        1,143        1,568
Pennsylvania.......................        4,194        2,424          290          244        1,237         17.4       11,738        7,025        4,713
Rhode Island.......................          590          350           68           32          150         29.3          849          476          373
                                                                                                                                                        
South Carolina.....................        1,378          883           94           42          357         19.6        3,042          935        2,106
South Dakota.......................          316          142           53            9          113         33.8          792          281          511
Tennessee..........................        2,109        1,357          107           82          563         26.7        5,275        1,850        3,425
Texas..............................        5,717        3,457          466          202        1,591         19.2       14,761        5,872        8,889
Utah...............................          579          261           68           31          220         15.6        1,479          323        1,156
Vermont............................          284          122           51           18           93         23.9          413          206          207
Virginia...........................        1,379          673           99           68          539         11.2        8,332        1,885        6,447
Washington.........................        1,809        1,001          161          172          474         11.5        4,897        1,518        3,379
West Virginia......................        1,049          670           62           44          273         28.3        1,658          824          835
Wisconsin..........................        1,716          952          153          132          479         14.2        3,402        2,062        1,340
Wyoming............................          300           75           52           10          162         25.7          393          131          262
                                    --------------------------------------------------------------------------------------------------------------------
    Total, State...................       96,278       55,253        6,988        6,147       27,891         17.3      237,075      105,919      131,155
Undistrict and territory...........        1,547           69          114           38        1,335           NA        5,077          378        4,698
    Total, United States...........       97,825       55,312        7,102        6,185       29,226           NA      242,151      106,298     135,854 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: U.S. Department of the Treasury, January 12, 1995.                                                                                              

Mr. THOMPSON. Madam President, first of all I compliment the Senator 
from Utah for his leadership in this regard. It has been a great 
pleasure for me over these last few days, and just recently as I 
presided, to listen to him articulate the problem, articulate the 
history leading to the problem, articulate the solution that is needed. 
I think, as usual, he hits the nail on the head.
  It was a great honor for me to sit here and listen to the debate that 
has gone on this afternoon with the Senator from Illinois, proving that 
this is indeed a bipartisan effort. We are all concerned about it. The 
Senator from West Virginia, who is indeed an institution within an 
institution, who swore me in less than 60 days ago, and whom I respect 
greatly and whose views I respect greatly--this is what to me the U.S. 
Senate ought to be about. Senators on the floor of the Senate, debating 
the great issues that affect this country. I wish more of our 
colleagues could have been here. I hope they are watching in their 
offices on television, to listen to these great Senators debate this 
great issue.
  Because I agree with the Senator from Utah that this is, if not 
``the,'' certainly one of the most important votes and decisions that 
will be made by the Senators in this body during their careers. I think 
we have to focus, from time to time during this debate, on exactly what 
we are about. I think it is nothing less than deciding whether or not 
we are going to take the necessary steps to protect the next generation 
from lower pay, from a lower standard of living, and ultimate 
bankruptcy of this country, or whether or not we are going to bow to 
those who keep demanding we do not have to cut back, insisting we do 
not, on current consumption, and are willing to let the next generation 
make the tough choices instead of ourselves.
  As I listened to the debate and listened to the comments of those who 
oppose this amendment, I hear that there are questions concerning what 
is the role of the Court? What is the role of the President going to 
be? Who is going to be cut? We debate whether or not it was this 
President's fault or that President's fault. We debate whether or not 
it is the institution of the Presidency or the institution of the 
Congress--whose fault is it? Where does the blame lie? How are we going 
to resolve the difference between those who advocate lower taxes and 
those who advocate lower spending? How is all that going to be worked 
out?
  Madam President, I think that is the debate that has been going on in 
this body, I suppose, for 200 years. That is the old debate. 
Unfortunately we still keep getting the old result, and that is a $5 
trillion debt that we are approaching in this country, spending 
ourselves into oblivion and bankrupting the next generation.
  Everybody is for a balanced budget. I have not heard anyone speak yet 
who was not for the concept of a balanced budget. I have not heard 
anyone speak yet who has not fought the good fight over the years to 
balance the budget and to show fiscal restraint and to show fiscal 
responsibility. I am not sure where the opposition really is. Everybody 
I have heard is for a balanced budget and has fought for it all these 
years. There must be some people lurking around here that we have not 
heard from yet because certainly we have not made any progress on it in 
the last two decades.
  That is the debate of the past. Whose fault is it, why are we here, 
are we going to raise taxes, are we going to cut spending, what 
combination of all of that--that is what we have been debating in the 
past and that is what we will have to debate in the future. But times 
are different.
  Madam President, I listened to the Senator from West Virginia talk 
about his career of 48 years in politics. It is a distinguished career 
in politics. I can never hope to achieve what he has learned in the 
time that he has been in government, both in the State of West Virginia 
and in the U.S. Congress and the U.S. Senate. I have much of a contrast 
with that.
   [[Page S2025]] I have been in politics for about a little less than 
60 days, so I have great disadvantage in terms of his background and 
his knowledge. But I also come with one advantage, because I feel just 
having spent so much time with the people of my State that I can relate 
to a certain extent what is on their mind and what they feel about 
certain things.
  I suspect it is not limited to the State of Tennessee. I think 
nothing less than a revolution is going on in this country and it is 
time this body picked up on it.
  We have 6-year terms here. We are not supposed to bend with every 
wind that blows, and that is good. But I think those who have not been 
out there among the people, talked to them, listened to them, and had 
to be judged by them recently are not fully aware that just within the 
last few years people's thinking has changed in this country. I think 
people today in the United States of America have decided that our 
generation is not going to be the generation that sees the United 
States of America go from the greatest country in the world to a 
second-rate power. I think that the people of this country have decided 
just recently that they are not going to stand for the proposition that 
ours is the last generation that can expect to do as well or better 
than their parents' generation, which is what a lot of people are 
saying now.
  I believe people feel a cynicism toward their Government, an 
alienation from their Government, a dissatisfaction with the U.S. 
Congress. That has never been before in this country. Perhaps some of 
it is unjustified. I submit to you that much of it is very much 
justified.
  As we debate these issues, and as we try to decide whose fault it 
was, and this bill that was passed, who voted for it, how many people 
on this side of the aisle and all of that, as we debate that, as we see 
the debt increase, as we see the deficit increase, as we are taxing 
those unborn out there who do not have votes, as we see all of that, we 
see a public opinion poll occasionally that shows that people in this 
country have a lower regard for the U.S. Congress than almost any 
institution in America. Seventy percent of the people in a recent poll 
indicated that they believe the U.S. Congress is more interested in 
perpetuating itself and the individual Members in office than it is in 
doing the right thing. People are seeing that and they are demanding a 
change. They are demanding that we turn away from this old debate, who 
shot John, whose fault it is, how we are going to work out the details, 
and make one fundamental commitment to ourselves and to the future 
generations. And that is that we are going to change the way we do 
business in this country, and we are not going to hand over a second-
rate power to this next generation, which is surely what we are doing 
as sure as I am standing here today.
  Why do they feel that way? Why do they feel that way? Are people 
whipping them into a frenzy? Are some clever politicians convincing 
them of things that are not really true? Are they overly impressed with 
attack ads on TV? What is the reason for that?
  I think it is more fundamental for that. I think the people out in 
the country and having to work for a living are the leading indicators. 
I think they are picking up on something, and they have something they 
understand much more so than a lot of people around here understand. 
They see and understand that we have gone from a country with one of 
the highest savings rate in the industrialized world to actually the 
lowest savings rate. We must have savings for investment.
  They see that we now have one of the lowest investment rates of any 
of the industrialized countries. They understand that you have to have 
investment to have growth. But with one of the lowest investment rates, 
our growth rate is slowing down. People talk about recent years, recent 
months. We are so short-term oriented in this country. We cannot see 
the forest for the trees.
  The fact of the matter is we have had a good growth rate recently. 
But when you compare it with other points in our history when we have 
come out of recessions, we are growing at a much slower rate coming out 
of a recession than ever before. The indicators are all over the place. 
They see the astronomical amount of money that we are having to borrow 
from foreign investors and our dependency on foreign investors. They 
pick up the paper and see what is going on with our neighbors south of 
the border and the trouble that they got into when the foreign 
investors decided that all of a sudden maybe it was not such a good 
deal after all.
  Many economists predict a credit crunch in this world in the not-too-
distant future. In 1993, we sent $41 billion in interest payments 
overseas. People talk about foreign aid. That is the largest foreign 
aid program we have in this country. That is larger than all the 
foreign aid programs put together plus the operation of our embassies; 
$41 billion we have sent out in interest payments because of the size 
of our debt.
  The reason for that? The debt keeps climbing, $4.8 trillion. The 
deficit is hovering around before long $300 billion, some say $400 
billion before long. Although we have made a little progress in the 
last few years, one could argue, and everyone acknowledges, that in 
1998 and thereafter it is going to go off the charts. Everybody knows 
that. We have seen charts in this body that show us going along. And 
along about that time, it is almost straight up.
  But we act like we have all this time and that the problem is not on 
us. But yet, instead of facing up to it, instead of realizing that, 
yes, we will have to put a straitjacket on ourselves because we have 
not been behaving the way we have to, we get scare tactics, we get 
charts about who is going to be hurt, and widows and children are going 
to be left in the street, and Social Security is going to be in danger, 
and all of these other things.
  We are urged to look to the short term. ``Don't worry about down the 
road. Let that situation take care of itself,'' while all the time we 
turn from the world's biggest creditor to the world's biggest debtor. 
We turn from a country that sometimes borrowed overseas for investment 
purposes to a country that now is borrowing larger and larger sums for 
purposes of consumption. All the time, while we are going from a 
country that has always had rates of investment and productivity that 
led the world to one that is among the lowest in the world now; from a 
country that used to invest in its children to a country that now is 
living off of its children and grandchildren and children yet to be 
born.
  So the American people see that. The American dream is darkening for 
many people. You hear young people. You ask them whether or not they 
expect to do as well or better than their parents. For the first time 
in the history of this country their answer is no. They understand that 
family income has been stagnant for 20 years in this country. What a 
lot of people do not understand is that for younger households income 
has actually fallen since 1973. For people who are starting families, 
working hard for a living, they understand that the middle class is 
actually shrinking.
  We are falling into a second-rate power before our very eyes. They 
understand that. They see all of that. They also see what will happen 
if we do not make some incremental adjustments now. That is what it is 
all about. Nobody is talking about slashing programs and making massive 
cuts. For the most part, the conversation you hear is about economists 
having to make some incremental differences, having to do with slowing 
down the rate of increase, those sorts of things.
  Yet the U.S. Congress, as of yet, has not even been willing to do 
that. We hear about all the dire consequences to all these programs, 
and individuals will have to cut back, and States will have to cut 
back. There will be some things that actually we might have to give up.
 And we will have to give up the political power that goes along with 
it, with the ability to dole out these things and buy the votes that we 
are used to buying in this country with the pork that we are used to 
doling out. Those times have to change.

  Those times have to change. The deficit in this country, and the 
interest we are paying on the deficit, as the Senator from Utah pointed 
out, is the second highest expenditure in this Nation. This year it may 
pass defense; it may become the greatest expenditure 
[[Page S2026]] we have in the entire budget. It is sapping our savings 
which, in turn, is lowering our investment which, in turn, is affecting 
our growth. If we are going to continue down that road, growth is going 
to slow, we will go into recession, the economy will become more 
stagnant, foreigners will own more and more of our productive 
capacities--we pay them more and more--there will be lower paying jobs, 
a lower standard of living, and fewer younger people supporting a 
growing elderly population.
  When we talk about these dire consequences and about the path that 
this Nation is on, we are experiencing the good news today, because the 
demographics are working in our favor. We have a very large working 
population--the baby boomers. We have more two-income earner families 
than ever before. But in about 2010, those demographics are going to 
change. As the baby boomers start to retire, we are going to have fewer 
and fewer people supporting more and more people in this country. That 
is right around the corner.
  If we do not start making some incremental adjustments now, we are 
going to have a situation in this country where these young working 
people are going to be paying 70 percent of their income in taxes. They 
are going to be driven right through the floor in terms of their living 
conditions and in terms of their wages, and taxes are going to go 
through the roof. If you read anything any person who has written 
recently on the subject--any person who is now out of Government--and 
we hear talk about the Concord coalition, a bipartisan group, and about 
Mr. Peterson, a former Secretary of the Treasury, who wrote a recent 
book about it. These are not debatable issues, I do not think. It is 
clear that that is going to be the situation. What is that young 
working group of people on whom we, hopefully, all will be depending--
and if we are alive, we will be--going to do?
  I predict that they are not going to sit still for that. They are not 
going to sit still for 70 percent in taxes. They are not going to sit 
idly by while they see all these dire things happening. The chances 
are, I think, if we do nothing now and we let that happen, these very 
programs that the opponents of the balanced budget amendment want to 
protect so greatly are going to be slashed, thrown on the floor, 
stomped, decimated, and we will go further than anyone would ever dream 
of going today in terms of cutting and doing away with the programs 
that all of us claim to want to protect today.
  Some people talk in terms of generational warfare. It will be the 
young folks against the old folks. Is that what we are headed toward? 
Are we not better than that, when we have the solution before us? Or at 
least an opportunity to put ourselves into a position to do something 
about it, because obviously we cannot under current circumstances.
  The Entitlement Commission people ask why do we not do something 
about it. The Entitlement Commission came out with a report last 
August, a bipartisan group, including Senator Kerrey from Nebraska, 
Senator Danforth from Missouri, two very thoughtful Members of this 
body, and they issued some rather startling reports. The one I remember 
is that in the year 2012, I guess, or thereabouts, we are going to run 
out of money, that a handful of programs and the interest on the debt 
in this country are going to take all of our tax revenues. We will not 
have money for national defense, infrastructure, schools, education, or 
anything else in this country. That is in 2012.
  What has been the result? We hear that all we need is the will to do 
the right thing and everyone purports to have it. Everyone says that 
they are in support of a balanced budget, the implication being if we 
will just put this amendment aside that they are fighting so hard, this 
time maybe we can do something about it.
  I was doing a little reading on the history of that. We have not been 
lacking in lip service. The Balanced Budget Act of 1921 required the 
President to recommend a balanced budget. The Revenue Act of 1964 said 
it was the sense of the Congress that the budget had to be balanced, 
and soon. The Revenue Act of 1978 stated that it was a matter of 
national policy to balance the budget of this Nation. The Humphrey-
Hawkins Act of 1978 prioritized a Federal balanced budget. The Byrd 
amendment--Senator Harry Byrd of Virginia--in 1978, was an amendment 
passed that basically said that in fiscal year 1981 outlays cannot 
exceed receipts. That was the law passed. What happened in 1981? We had 
a $79 billion deficit. My research has not taken me back far enough to 
find out what happened to that. Apparently, it was ignored and I think 
after a while it got embarrassing, so they took it off the books. But 
we had a law that basically said the budget had to be balanced, for a 
little while anyway.
  The Budget Act of 1974 is the foundation for the budgeting process 
today, and it requires annual budget resolutions. People said, ``We 
have it right this time. People will be afraid to vote for these large 
deficits when they have to come up with budget resolutions.'' The next 
year the deficit ballooned and, with few exceptions, it has ballooned 
ever since.
  Gramm-Rudman-Hollings, in 1985, mandated annual reductions in 
deficits, and it actually had an enforcement mechanism--sequestration. 
That lasted a little while until the shoe got a little tight and 
everybody apparently decided to take the shoe off. They revised the 
targets. They revised them again, and ultimately they became 
irrelevant.
  The 1990 budget deal, which I heard talked about a minute ago, is 
used as an example of our ability to come to terms with this deficit 
problem. From what I read at the time, this great bipartisan 
compromise, of course, involved increasing taxes, as it usually does, 
and the deficit increased. That was the budget deal that was supposed 
to get the job done. It had no affect as far as decreasing the deficit 
was concerned. Just the opposite. In 1993 came the latest budget deal. 
They are praising the President for that deal, which as I read is the 
largest tax increase in the history of the country, with major cuts in 
the military and promised cuts for the future, which we may or may not 
get.
  Putting that aside for a minute, because even before the 
administration's own estimates, with all the wonderful things we are 
doing, it adds over $1 trillion to the debt over the next 5 years. So 
this is being touted as a solution. This is being touted as an example 
of how good we can do. It adds $1 trillion to the debt over the next 5 
years.
  Why is it so difficult? Well, it is because we factionalize in this 
country so much. Everybody has their own special interest and everybody 
has people they have hired to come up here and descend on us. That is, 
of course, a large part of what all this detailing is about and, of 
course, everybody wants some kind of detail. There are more proposals 
to balance the budget floating around this town than you can count. 
CBO, I noticed, had a proposal they wrote to the chairman of the 
Judiciary Committee with ideas on how to balance the budget. The 
Concord coalition has one. Mr. Peterson came out with one in his book.
  What, really, I think, is desired by some folks is the ability to put 
something on the table so special interests can come in and put the 
pressure on to defeat the balanced budget amendment. So you have all 
the individuals who have been used to the gravy train, the pork barrel, 
and they do not want to give it up. The folks that are affected most 
are the kids at home, the little grandkids, and generations yet to be 
born, and in that kind of a battle, who do you think is going to win? 
Who has won in the past? It is going to be tough enough with a balanced 
budget amendment.
  Other nations have not really done much better than we have. Is there 
any hope to think that we can easily turn this thing around without 
drastic remedies, if you want to call it that? I think it is very 
modest. I wish it was tough.
  I agree with some of the opponents to this amendment that, you know, 
there will be efforts to try to get around it and in it, through it, 
under it, and all of that. But I think it really has a chance; it 
really has an opportunity. And it might be our last clear chance to do 
something really meaningful for the next generation. But how tough it 
is, how tough it is to turn around.
  The Senator from Utah is leading this fight for us to turn this 
gigantic force that is working against us, this 
[[Page S2027]] gigantic force that is working for more and more 
spending; putting off until tomorrow; let us consume today; let us not 
worry about it; get the votes today; hand out the pork today.
  Read Kennedy's ``Rise and Fall of the Great Powers,'' and Kevin 
Phillips recently came out with a book, ``The Arrogant Capital.'' I do 
not know how in the world he came up with a name like that but that was 
the title of his book, ``The Arrogant Capital.''
  They talk in these books about the history of the Nation and how the 
Spanish declined in the 16th century and how the Dutch went to great 
heights and declined in the 17th century and how the British went to 
great heights and declined in the 19th century. And they really sort of 
asked the question: Do we feel as though we in this country are immune 
to the laws of nature and the laws of gravity? They were unable to roll 
back the strong trends that were in their countries, pushing them to 
greater deficits, greater debts, higher taxes, slowing economy, a 
declining manufacturing industry, all the things that we are beginning 
to see in this country. So the battle is not an easy one.
  You know, as we talk among ourselves, and we hear it regardless of 
what the people want, people talk about majority rule and all. Look at 
any poll, answer your phone calls, read your mail. I do not think there 
is any question but the American people have decided: Enough is enough. 
We have to do things differently. We voted for a change. We have been 
wanting change for some time. Maybe we thought we were trying to get it 
2 years ago in the last Presidential election.
  A fellow from Texas that hardly anybody knew went from nowhere and 
just within a few short months he got into a position where, some 
people said, under a slightly different set of circumstances, he could 
have gotten the nomination and been President, from nowhere, because he 
was talking about changing the way we do business in this country.
  All that is going on out there. And yet we need a two-thirds vote in 
this body.
  And I understand there are even some people who voted for the 
balanced budget amendment last time who are now saying that they may 
vote against it this time. Last time, they were pretty sure it would 
not pass and maybe this time they are afraid that it might pass. So it 
is going to be difficult.
  I, again, commend the Senator from Utah, who is leading this fight 
and articulates this case so well. I think it is the most important 
vote we will have in a long, long time as far as this U.S. Senate is 
concerned.
  I only urge those within the sound of my voice to remain focused on 
what this is about. The patient--and maybe we are the patient--has been 
acting a little crazy over the last several years, and we have not been 
doing the right thing, and the thing we know that we are going to have 
to do to get better. It sure would be good to cure the patient. But we 
have been taking treatment and medicine for a long time, and it is not 
doing us any good.
  Maybe the time has come that we are going to have to impose a 
straitjacket on ourselves. It is not perfect. But until we show some 
inclination, absent getting hit over the head with a 2 by 4, to do the 
obvious and right thing that we ultimately have to do to protect this 
next generation, this is the way to go. We will worry about the details 
in terms of the implementing legislation, and we can have the debates 
that we have already started here today.
  But I think it is vitally important that we get about the business of 
passing this amendment and make a statement that we are not so selfish 
that we are going to sit idly by and debate these issues forever, using 
the moneys and the assets and the resources in the very country that is 
the birthright of the next generation; but we are going to take a step 
forward, say no to the vested interests, say no to those who want to 
continue to consume not just what they are consuming now but more and 
more and more, and say to everyone that we are all going to have to 
make some incremental change.
  Is there any more basic commitment that a human being has than the 
one that he has to his children? If we had our child standing next to 
us here, there is nothing that we would not do. And yet, we are so 
dispersed in our attention and we are so diverted in so many different 
ways, we have not been able to focus on what we are doing. This debate 
will focus on what we are doing.
  I commend the Senator from Utah and other colleagues in this great 
fight.
  Thank you very much.
  Mr. HATCH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Madam President, I ask unanimous consent that the 
distinguished Senator from New York be given the floor after I make 
very brief remarks about the great remarks of my colleague from 
Tennessee.
  The PRESIDING OFFICER. The Chair wishes to make two announcements and 
then will recognize the Senator from New York, following the remarks of 
the Senator from Utah.
  Mr. HATCH. Madam President, I want to compliment the distinguished 
Senator from Tennessee for his very, very welcome and important remarks 
on this issue.
  I think this new group of Senators is as good a group as I have ever 
seen come into the U.S. Senate. We feel particularly privileged to have 
four of them on the Judiciary Committee, not the least of whom is the 
distinguished Senator from Tennessee.
  In his own down-home Tennessean sort of way, he has laid out why we 
have to pass this balanced budget amendment. I personally just want to 
express my appreciation and my high regard for him. I believe that the 
distinguished Senator from Tennessee is going to make a whale of a 
difference here in the Senate, and already is making a whale of a 
difference on the Judiciary Committee, as I am sure he is on other 
committees. So I personally thank him for his kind remarks.
  If people have been noticing, these new Senators have been coming 
here and speaking on this amendment because they got the message. They 
know that is one of the reasons they are here. I personally appreciate 
their efforts in this matter.
  I yield the floor to my colleague.
  

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