[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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