[Congressional Record Volume 141, Number 24 (Tuesday, February 7, 1995)]
[Senate]
[Pages S2218-S2230]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

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

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

  The Senate resumed consideration of the joint resolution.

       Pending:

       Daschle motion to commit the resolution, with instructions 
     to report back forthwith, with Daschle amendment No. 231, to 
     require a budget plan before the amendment takes effect.
       Dole amendment No. 232 (to instructions to commit), to 
     establish that if Congress has not passed a balanced budget 
     amendment to the Constitution by May 1, 1995, with 60 days 
     thereafter, the President shall transmit to Congress a 
     detailed plan to balance the budget by the year 2002.
       Dole amendment No. 233 (to amendment No. 232), in the 
     nature of a substitute.

  Mr. HATCH. Mr. President, I would like to just continue where I was 
yesterday. I appreciate the comments of my dear friend from Wisconsin 
and the leadership he is providing on the balanced budget amendment as 
well.
  Yesterday I brought up a Balanced Budget Act debt tracker, and you 
can see by this tracker that since we have been debating--we are now in 
our ninth day--since we have been debating the balanced budget 
amendment, each day the national debt has gone up $829,440,000. That 
was day one. As you can see, each day that we are debating this 
amendment, the deficit that the American taxpayers are owing is going 
up by that amount. It is a steady climb. As of yesterday, we were up to 
$6,635,520,000. As of today, the ninth day of our debate, we are now up 
to $7,464,960,000.
  The trend line is straight up and we have only debated this 9 days. 
The President's budget does not do anything about that. As a matter of 
fact, his budget is going to go on at about $200 billion a year in 
deficits.
  Today I added this other bar to this balanced budget amendment debt 
tracker. The debt, as I said, is now increased by $7,464,960,000 in 
just the 9 days we have been on this balanced budget amendment. A staff 
member told me this morning, regarding the balanced budget, in an 
attempt to balance his own budget at home he spends $50 a week for 
groceries. This $7.4 billion that we have just spent in 9 days, putting 
us into more bankruptcy--that $7.4 billion would buy that staff member 
groceries for 2,871,138 years at $50 a week. So you can see how big 
this really is. If you look in the Wall Street Journal yesterday there 
is a very clever article related to the debt.
  I ask unanimous consent it be printed in the Record at this point.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, Feb. 6, 1995]

          If You Bought 2 Trillion Copies of This Paper * * *

                           (By Stephen Moore)

       Today, President Clinton releases his fiscal 1996 budget. 
     Already the Associated Press is reporting that officials 
     claim the budget ``proposes to abolish or consolidate 
     hundreds of government programs, reducing federal spending by 
     $144 billion over the next five years.'' No doubt the 
     president will firmly insist that this is the most tight-
     fisted, penny-pinching budget in 20 years.
       Why is this so predictable? Because this is what every 
     president since Richard Nixon has said. But 20 years ago the 
     federal budget was $370 billion. Today, Mr. Clinton will 
     request almost $1.6 trillion. Even adjusting for inflation, 
     the federal budget is twice as large as it was during the 
     last years of the Nixon presidency. Besides, without the 
     sleight of hand of baseline budgeting, President Clinton's 
     new budget calls for a $50 billion increase in spending from 
     the current budget. And that was $70 billion more than was 
     spent the year before that. Yet the budget-busting news is 
     bound to be greeted with a national yawn of unconcern.
       Why is there more public outrage when we learn that 
     Washington wastes $100 on Al Gore's famous ashtray than that 
     it wastes nearly $1.6 trillion on everything else? Much of 
     the problem seems to be that 1\1/2\ trillion is an 
     incomprehensibly large number. So here are some simple ways 
     to picture how enormous the U.S. government is today:
       One trillion dollars--$1,000,000,000,000.00. That's 12 
     zeroes to the left of the decimal point. A trillion is a 
     million times a million. It would take more than 1\1/2\ 
     million millionaires to have as much money as is spent each 
     year by Congress.
       One of the highest-paid workers in America today is 
     basketball superstar Shaquille O'Neal, who reportedly earns 
     about $30 million a season in salary and endorsements. He is 
     rich beyond our wildest imaginations. But he'd have to play 
     33,000 seasons before he earned $1 trillion. It would take a 
     Superdome full of Shaquille O'Neals to have enough to pay all 
     of Congress's bills each year.
       Here's an experiment. What if we were to try to pay off the 
     $4 trillion national debt by having Congress put one dollar 
     every second into a special debt-buy-down account? How many 
     years would it take to pay off the debt? One million seconds 
     is about 12 days. One billion seconds is roughly 32 years. 
     But one trillion seconds is almost 32,000 years. So to pay 
     off the debt, Congress would have to put dollar bills into 
     this account for about the next 130,000 years--roughly the 
     amount of time that has passed since the Ice Age.
       Even if we were to require Congress to put $100 a second 
     into this debt-buy-down account, it would still take well 
     over 1,000 years to pay the debt down.
       Try this one on for size. Imagine a train of 50-foot 
     boxcars crammed with $1 bills. How long would the train have 
     to be to carry the $1.6 trillion Congress spends each year? 
     About $65 million can be stuffed in a boxcar. Thus, the train 
     would have to be about 240 miles long to carry enough dollar 
     bills to balance the federal budget. In other words, you 
     would need a train that stretches the entire Northeast 
     corridor, from Washington, through Baltimore, Delaware, 
     Philadelphia, New Jersey, and into New York City.
       Former Office of Management and Budget Director Jim Miller 
     calculates that if a military jet were flying overhead at the 
     speed of sound and spewing out a roll of dollar bills behind 
     it, the plane would have to fly for more than 15 years before 
     it reeled out 1.6 trillion dollar bills.
       Here's a challenging one: If you laid $1 bills from end to 
     end, could you make a chain that stretches to the moon with 
     1.6 trillion? Answer: without a sweat, with billions and 
     billions of dollars left over. In fact, they would stretch 
     nearly from the Earth to the sun.
       The newspaper tabloids report that O.J. Simpson is paying 
     some $55,000 a day in legal fees. The trial would have to 
     last 26 million days, or almost 100,000 years, before the 
     lawyers earned $1.6 trillion.
       This year the White House want to spend three times as much 
     as America did to win World War I, which cost roughly $500 
     billion in today's dollars. Adjusted for inflation, the 
     combined cost of defeating the Nazis and the 
      [[Page S2219]] Japanese in World War II and winning World 
     War I was $4.5 trillion. This is what Washington will spend 
     in peacetime in just the next three years to continue losing 
     the war on poverty, drugs, illiteracy, homelessness and so 
     on.
       So far, we've just been counting the amount Washington 
     spends each year. When state and local expenditures are 
     included, total annual government spending now surpasses $2.5 
     trillion. That's more than $23,000 of government for every 
     household in America. In constant dollars government spends 
     twice as much per household as it did in 1960--though most 
     Americans believe that government services have deteriorated 
     since then.
       With the $2.5 trillion government spends each year, you 
     could purchase all of the farmland in the U.S. (market value: 
     $725 billion), plus all of the stock of the 100 most 
     profitable U.S. corporations today ($1.6 trillion). You would 
     then still have just enough money left to pay the advance on 
     Newt Gingrich's book deal.
       All of this points to one conclusion: The budget that Bill 
     Clinton is presenting today is not lean; it is not efficient; 
     it is not frugal. It is a monstrosity. It should be greeted 
     with heaps of ridicule and scorn. No matter how you stack it, 
     $1.6 trillion is a whole lot of money--even in Washington.
  Mr. HATCH. That article lists how much $1 trillion really is.
  As I look at the President's recent budget, the way deficit cuts are 
calculated by the administration is like a 200 pound man claiming he 
lost weight when he weighs in at only 300 pounds because he thought he 
would be 400 pounds. Only in Washington can an increase be called a 
cut, and that is precisely what is happening.
  The Daschle motion to recommit has rightly been called the right-to-
stall proposal. It purports to put off the requirement of a balanced 
budget until Congress actually achieves a balanced budget, by adopting 
such a budget plan.
  Mr. President, this proposal purports to give Congress a 
constitutional right to stall the requirement of a balanced budget by 
mere failure to balance the budget. Mr. President, the very reason we 
need a balanced budget amendment is because Congress has failed to 
balance the budget for decades. The Daschle right-to-stall amendment 
would make that abject failure of responsibility the explicit condition 
of avoiding the acceptance of that responsibility. If there is a better 
manner to lock in business as usual, a better way to constitutionalize 
or borrow and spend status quo--our ever-steeper slide into the debt 
abyss--I admit I cannot think of it.
  Think of it, Mr. President, the proponents of the right-to-stall 
amendment want to use Congress' historical inability to balance the 
budget as a reason--a constitutional reason--to deny the American 
people, to deny future generations, the requirement they want to force 
Congress to act responsibly, get its fiscal house in order, and live 
within its means. Talk about a recipe for inaction. The right-to-stall 
proponents say ``if Congress cannot balance the budget, they should not 
have to.'' They say, ``if Congress has been and is unable to
 balance the budget in the absence of a balanced budget requirement, we 
should not impose a balanced budget requirement on it.'' Is this what 
the American people want? Do they want Congress' failure to fulfill its 
responsibility to be a reason to drop the requirement? Does this even 
make any sense?

  Mr. President, I do not think so. If someone borrowed money from you, 
would you forgive the debt simply because they had not repaid it or had 
no plan to do so? I do not think so. If someone were dangerously 
overweight, would you suggest they not resolve to go on a diet because 
they did not yet have a full and particularized diet plan? I do not 
think so. When the Framers established the Congress in article I of the 
Constitution, did they first require that all subsequent legislation be 
disclosed before ratification? I do not think so.
  Mr. President, the ``right-to-stall'' amendment confuses the 
difference between choosing rules and making choices within the rules. 
This distinction was elaborated by Prof. James M. Buchanan, a Nobel 
Prize-winning economist in a letter to the editor in yesterday's Wall 
Street Journal. I would like to quote it because I believe it points up 
a basic fallacy in the reasoning of the objection of the right-to-stall 
proponents. Professor Buchanan says:

       The essential argument [of the Daschle amendment 
     proponents] against the balanced budget amendment reflects a 
     basic misunderstanding of the difference between a choice of 
     rules and choices made with rules. The Clinton-Democratic 
     argument suggests that proponents of the amendment should 
     specify what combination of spending cuts and revenue 
     increases are to be implemented over the seven-year 
     transition period. This argument reflects a failure to 
     understand what a choice of constitutional constraint is all 
     about and conflates within-rule choices and choices of rules 
     themselves.
       Consider an analogy with an ordinary game, say poker. We 
     choose the basic rules before we commence to play within 
     whatever rules are chosen. Clearly, if we could foresee all 
     of the contingencies beforehand (for example, how the cards 
     are to fall), those of us who know in advance that we shall 
     get bad hands would not agree to the rules in the first 
     place. Choices of rules must be made in a setting in which we 
     do not yet know the particulars of the within-rule choices.
       Applied to the politics of taxing and spending, the 
     constitutional amendment imposes a new rule of the game, 
     under which the ordinary interplay of interest groups-
     majoritarian politics will generate certain patterns of 
     taxing-spending results. By the very nature of what rules-
     choices are, outcome patterns cannot be specified in advance.
       The opponents of the proposed balanced budget amendment 
     should not be allowed to generate intellectual confusion 
     about the difference between choices among vs. within rules. 
     There are, of course, legitimate arguments that may be made 
     against the amendment, but these involve concerns about the 
     efficacy of alternative rules, including those that now 
     exist, rather than a specific prediction of choices to be 
     made under any rule or choices made during the transition 
     between rules.
  That was James M. Buchanan's letter to the Wall Street Journal on 
February 6 of this year.
  Mr. President, Professor Buchanan is right. Proponents of the 
balanced budget amendment recommended a rule change. Opponents argue 
against the amendment on the basis of either possible choices under the 
new rule which could hurt well-organized special interest groups or the 
failure to specify which well-organized special interest groups will be 
hurt under the new rule. Either objection is, as Professor Buchanan 
points out, intellectually confused as an objection to the new rule. 
The proponents do not advocate any particular outcomes, just a new way 
of making those choices. That is what we proponents feel. The right-to-
stall motion offered by the Democrat leader does not move the debate 
forward.
  In fact, Mr. President, the Daschle right-to-stall amendment is 
nothing more than a way to stop Congress from adopting the resolve to 
force itself to act responsibly and balance the budget and live within 
its means in the future.
  Now, the opponents point to President Clinton's tax plan of 1993 as 
the great epitome of budgetary courage we should follow. But, Mr. 
President, that was no plan to balance the budget. I would ask my 
colleagues, did the 1993 tax bill balance the budget? Does the 
President propose a path to a balanced budget? Just look at the 
President's budget released this week. It projects $200 billion yearly 
budgets as far as the eye can see--and that is the best case scenario 
with the most optimistic assumptions. There is no budget balancing 
leadership here.
  As a matter of fact, there are pundits now saying in the press that 
the reason the President has done that is because he wants the 
Republican Congress to have to make the cuts so that he can then 
criticize them for making them. I certainly hope Congress will pass a 
balanced budget constitutional amendment. We will have to.
  Those who offer the right-to-stall proposal seek to distract us and 
the Nation from the clear principle of a balanced budget requirement by 
starting the budget battle before the rules are established. They 
either seek to divide the strong coalition who supports the principle 
by the implementing details which can and should change with the 
national priorities over time; or they hope to be able to say, once 
such a budget plan is adopted, that we no longer need the amendment. 
Either way this is simply a distraction tactic to stall the amendment 
and protect the status quo.
  Mr. President, those who say we can balance the budget without the 
balanced budget amendment are the ones who should show us how they 
propose to do it. They are the ones who say, regardless of history, we 
can balance the budget now, without a rules change.
  The President has not done it, and he is against the balanced budget 
amendment. And neither will those who are 
      [[Page S2220]]  against it here on the floor. But I continue 
     to ask in vain, how do they propose to do it, Mr. President? 
     Why should we trust they will do better under the status quo 
     than they have for the last 26 years?
  Mr. President, I ask again: What is their budget plan to reach a 
balanced budget? If you read this one, the administration recent 
budget, it just throws in the towel and says there will be $190 
billion-plus deficits every year for the next 12 years. Is this the 
plan that they want?
  Mr. President, their plan is no plan at all. Their plan is more of 
the same. it is preservation of the status quo. It is the old order. We 
are saying it is time for a new view, a new order, where we start 
living within our means. The only way we are going to get there is if 
we change the rules of the game so that there are incentives to get 
there.
  The beauty of this balanced budget amendment is it does not force us 
to get there, but it gives us the incentives to get there. That is 
something we need to do.
  Mr. President, the administration's type of budgeting will not do. Is 
this their plan? Mr. President, their plan is no plan. Their plan is 
more of the same.
  We should adopt the binding resolve to accept our responsibility, and 
then fulfill it. We should not avoid responsibility on the ground that 
we have so far failed to act responsibly. We should not be able to deny 
the American people and future generations the responsible rule of 
fiscal discipline on the grounds of our historical lack of discipline. 
And, Mr. President, the correct way to proceed is the way of the Dole 
need-to-need proposal, which suggests that if President Clinton and his 
allies succeed in defeating the balanced budget amendment once again, 
they should have to show us how to balance the budget without the 
amendment.
 And if they are going to make this argument that we ought to show them 
before we set the rule in place, then where are their ideas on how to 
do it without the rule in place?

  Let us take the first step first. Let us get our house in order by 
adopting the balanced budget amendment.
  Finally, let me go back to this chart one more time. This red line 
happens to be our current national debt, $4.8 trillion. These green 
blocks represent how much that debt has now gone up above the $4.8 
trillion each day that this debate has been going on. We are now in our 
9th day of this matter and we have gone from an $829,440,000 increase 
in this $4.8 trillion deficit on the 1st day to the 9th day, where we 
are at $7,464,960,000. So every day that this debate goes on, and every 
day that we do not have a balanced budget amendment, we are going to 
continue to increase the debt.
  Last but not least, with the President's budget, over the next 5 
years we will have the deficit go up $1.3 trillion more.
  So you have the idea. It is time for this fiasco to end, for us to 
pass a rule called the balanced budget amendment that will put some 
mechanism in place to get us to move in the right direction so that we 
can save this country. We cannot allow this country to go into a fiscal 
bankruptcy through monetizing the debt and paying off our debts with 
worthless dollars. We have to pass this balanced budget amendment now. 
I hope our colleagues will do it.
  I notice the distinguished Senator from Vermont has been waiting. I 
yield the floor.
  The PRESIDING OFFICER. The Senator from Vermont [Mr. Leahy] is 
recognized.
  Mr. LEAHY. Mr. President, the Senator from Utah, of course, was a 
trial attorney, as was I and the distinguished occupant of the chair. I 
listened to his debate. I recall some of the trials that I was in. I 
recall some where we were ending up having long trials on contracts. 
Usually, what brought us there was the fact that somebody had said at 
one point, ``Sign this contract. You do not have to read all of the 
print in it. Let us hurry up and get this going because time is 
wasting.''
  Then, later on, of course, we were in a long trial trying to figure 
out just what somebody had signed away.
  Basically, my good friend from Utah is saying that time is wasting. 
Sign this. He, of course, says it is a rules change. It is a lot more 
than that. We are amending the Constitution.
  We are the most powerful nation on Earth. We are also the most 
powerful democracy history has ever known.
  No other country has achieved, in economic or military power, the 
diversity the United States has. No other country has even come close 
to such a clear and concise Constitution as we have. We have only 
amended it 17 times since the Bill of Rights.
  Yet, in the past few weeks, since the elections last fall, we have 
had 75 proposals to change the Constitution. Can you imagine, Mr. 
President? We were able to keep on somehow as a country for 200 years, 
amending the Constitution only 17 times since the Bill of Rights; but 
somehow America has so changed in the last 4 months since the elections 
in November that we have to have 75 new constitutional amendments? I 
really cannot accept that.
  I say to my good friend from Utah that when he speaks of the amount 
the debt has gone up, and that if we pass this, somehow the suggestion 
is that it would stop--well, the balanced budget amendment, which is 
far more than a rules change, which does not say how we are going to 
get there, says that in the year 2002, whoever might still be standing 
will somehow come up and miraculously balance the budget. It does 
nothing to stop this increase in debt.
  In fact, I point out that during the 1980's, incidentally, during the 
6 years that the party of the chairman of the Judiciary Committee 
controlled the U.S. Senate, they, along with the President, nearly 
quadrupled the national debt, more than the debt that had been piled up 
over in the previous 200 years, including two world wars. During that 6 
years, they were in control and quadrupled the American debt.
  In fact, when you look at how much the debt is piling up today, 
virtually all of it is interest on the debt they piled up during those 
6 years. We spend nearly $500 million every working day just on 
interest on the debt that was piled up during those halcyon days of the 
1980's.
  President Clinton was the first President since I have been in the 
Senate who actually had a budget which, 3 years in a row, has cut the 
deficit. President Clinton is the first President to cut the deficit 
for 3 years in a row since President Truman. He would actually have a 
balanced budget if he was not having to find money to pay for the 
interest on the debt run up by his two Republican predecessors. I do 
not say that to be partisan but simply to set the record straight.
  In fact, one of the local dailies in Vermont, the Burlington Free 
Press, has a cartoon in today's paper. It shows a rather rotund person 
flying through the congressional Chambers, little wings flapping away. 
He is smoking a big cigar, and he has a thing on his shirt that says 
``Balanced Budget Amendment.'' And here are all these eager, young 
Members of Congress clapping and clapping, saying, ``If you believe in 
fairies, keep clapping, keep clapping.''
  That is what the balanced budget amendment is about.
  Frankly, Mr. President, I would like to know more of what we are 
going to do if this passes. We can look at how much debt is piling up. 
This debt will keep piling up to the year 2002, I am afraid, even if we 
pass this, unless we have the will to vote to actually cut the deficit. 
The only Presidential budgets that have cut the deficit have been those 
President Clinton has submitted in the last couple of years--with no 
votes on the Republican side of the aisle to actually bring down the 
deficit. The Republican side of the aisle voted to quadruple the debt 
when they were in control of the Senate and when they had the 
Presidency. Not one of them voted to bring it down.
  We overwhelmingly passed a bill against unfunded mandates. But the 
balanced budget amendment may be the biggest unfunded mandate of all 
time. It ignores the two fundamental principles underlying the reasons 
we are against unfunded mandates: The Federal Government should not 
shift burdens onto the States without paying for them; and to protect 
against such shifts, we have to examine the unintended consequences of 
Federal actions on State and local governments.
  The nonpartisan Congressional Budget Office has estimated that 
Congress has to achieve $1.2 trillion in deficit reductions if we are 
going to balance the budget by 2002. If we are going to do that, all of 
us know it is going to affect local and State governments.
  Unless we carefully balance the budget, the balanced budget 
constitutional amendment could be a disaster for the States. I do not 
support the balanced budget amendment, but I assume it is going to 
pass. I worry about what it will do in my own State. If we look at some 
of the ways we could have cuts, we can do across-the-board spending 
cuts, for example, and that avoids having to make the choices needed to 
balance the budget. [[Page S2221]] 
  But the Treasury Department looked at this, in answer to a question 
from Governor Dean of Vermont. They said that assuming Social Security 
and defense cuts were off the table--and the Republican majority said 
they are--then the Treasury analysis predicts cuts in Medicaid, highway 
grants, welfare, and other Federal grants in Vermont that would total 
$200 million. If we wanted to offset these losses, Vermont would have 
to increase State taxes by 17 percent.
  They also looked at other States. New York would lose over $8 billion 
in Federal grants, resulting in a State tax increase of 17 percent to 
make up the difference. California would lose $7.7 billion in Federal 
grants, resulting in a State tax increase of 9 percent to make up the 
difference. Texas would lose over $4 billion in Federal grants, 
resulting in a State tax increase of 14 percent to make up the 
difference. Louisiana would lose $2 billion, resulting in a State tax 
increase of 27 percent to make up the difference.
  In another study, the Center on Budget and Policy Priorities 
estimates that by 2002, Vermont would have cumulative cuts in Federal 
aid to the State and local government of $1 billion due to the balanced 
budget amendment. We are a very small State; others would lose a great 
deal more.
  The Children's Defense Fund has estimated what the balanced budget 
amendment would do to children. Children do not vote, children do not 
have PAC funds, and children do not have political influence; but 
children are going to really feel it. In Vermont, 4,850 babies, 
preschoolers, and pregnant women would lose infant formula under the 
WIC program; 13,900 children would lose subsidized school lunches; 
13,750 children would lose Medicaid health coverage. The other 49 
States would, of course, have similar losses.
  So House Joint Resolution 1, the balanced budget amendment, may 
become the super silent unfunded mandate. I know what is going to 
happen in my State. We will do everything possible in our churches, our 
synagogues, our private organizations, to pick up the difference, but 
the State will ultimately have to pick up a great deal of it. It may 
not pick up all of it. To do so would require 17 percent in higher 
taxes. I do not believe that would happen. We would find a lot of the 
children, pregnant women, and others left off the rolls. At the same 
time, Vermont taxes would go up.
  Basically, it is the ultimate budget gimmick. It is the easy, feel-
good budget gimmick. We do not have to make any hard choices. We can 
just pass this and say we did our bit, and guess what? In the year 
2002, a Senate and House full of angels will stand up here and somehow 
do everything that we are unwilling to do and, of course, what they 
will do is simply pass it on to the States and the local communities.
  We have passed the buck to the States before. Federal aid to State 
and local governments fell sharply in the 1980's, at the same time we 
were quadrupling the national debt. In fact, during that time, in my 
State of Vermont--I suspect as in most other States--State and local 
taxes went up to make up the difference.
  So let us talk to the States and tell them exactly what is in here. I 
support Senator Daschle's amendment. We should let the States know what 
the details are; and if they know what the details are, then those who 
do support this balanced budget amendment can work in conjunction with 
them to ratify this constitutional amendment.
  What I am afraid of is we are going to pass this, and everybody is 
going to go home and say, ``Look what we did,'' and instead of the 
checks in the mail to the States, the bill will be in the mail.
  I would note that almost every weekend when I go home, I have a lot 
of people come up to me when I am pumping gas in my car, shoveling 
snow, in the grocery store or just walking down the street to pick up a 
paper, people come up to me and say they favor this amendment, but only 
if they know what is going to be in it. They want to know the effect of 
this constitutional amendment before it is passed.
  And in Vermont, we are no different than the rest of the country. CNN 
did a poll that said 74 percent of those surveyed support the right to 
know. The Los Angeles Times found it was 80 percent. They surveyed the 
whole Nation. Eighty percent of Americans want what Senator Daschle is 
suggesting in his amendment. Let us know what is in the balanced budget 
amendment.
  I said before that when I practiced law and a client would come in 
with a contract that had some big type and a whole lot of little type, 
I would say: You go ahead and read the big type. You do not need a 
lawyer for that. You need a lawyer to read the small type. That is the 
``gotcha'' kind of type. The effect of this amendment are the small 
type, the ``gotcha. The big type is the balanced budget amendment. We 
could put that on a bumper sticker. ``We balanced the budget,'' whoop-
de-do. It means that someone in the next century, the next millennium, 
will then stand up and make the hard choices.
  But what we should do is say we are going to at least tell you what 
is involved in this amendment, where the cuts are, what the states are 
going to have to do. Then, if the Congress and the States want to amend 
the Constitution for the 18th time in nearly 200 years after the Bill 
of Rights, then go ahead and do it. If it is that important, then do 
it.
  But do not sell the American people on the idea that suddenly, if we 
just tamper with this Constitution, the real contract with America, we 
are going to solve all our budget problems. Do not tell the American 
people that after 200 years of the most powerful, diverse democracy in 
history, a democracy that has existed with only 17 amendments to the 
Constitution since the Bill of Rights, that suddenly we need these 75 
amendments, including this one, to make us a real democracy.
  We are the envy of the rest of the world. Every emerging democracy 
looks at our Constitution to see how to do it. And we should not allow 
that to change.
  So does the debt rise each day, even as we debate? Of course, it 
does.
  But I would point out there are a lot of people who stood on this 
floor during the 1980's, when the other party controlled the Senate, as 
they do now, and voted for one huge--one huge--deficit after another. 
President Reagan proposed them and then President Bush did. They 
quadrupled the national debt.
  There are only seven of us left in this body who voted against that, 
and I am one of them. Ironically, had we been listened to, we would 
have a balanced budget today. Instead, our deficit today is about what 
we are paying for the interest, legally obligated interest, on that 
debt of the 1980's.
  So next time we talk about doing this by slogans, let the reality at 
least come up even with the rhetoric, and the reality is a lot 
different than the rhetoric.
  Mr. President, I yield the floor.
  Mr. BRADLEY addressed the Chair.
  The PRESIDING OFFICER (Mr. Kyl). The Senator from New Jersey is 
recognized.
  Mr. BRADLEY. Mr. President, I thank the Chair and I thank the 
distinguished Senator from Vermont for his statement. I also thank the 
manager of the bill for yielding the floor at this time.
  Mr. President, I intend to take the next hour or so, maybe a bit 
longer, to try to lay out the case for at least letting the people know 
what might be entailed in a balanced budget amendment.
  But let me try to put this balanced budget amendment in a broader 
context. We will shortly get into a lot of numbers, because if you are 
going to deal with the balanced budget amendment, you have to get into 
numbers. However, before we get into those numbers, let me try to 
establish what I think is the proper context for the balanced budget 
debate.
  During the 1992 campaign, the Clinton campaign had a theme song by 
Fleetwood Mac, called ``Don't Stop Thinking About Tomorrow.'' This 
song 
 [[Page S2222]] represented a kind of theme for the campaign--change, 
hope, ``don't stop thinking about tomorrow''; tomorrow is coming, think 
about it, it is important.
  Yet, if you actually thought about that song and you thought about 
what has been happening in the country, it is clear that we have not 
been thinking about tomorrow and we have not been thinking about 
tomorrow for a long time.
  Every speaker needs a text, or theme, for his or her statements. I 
would like to take as the text for my remarks today one of Aesop's 
fables. It is an old fable. All of us knew it when we were children. 
This is about the grasshopper and the ant. The fable goes like this:
  It was wintertime. The ants' stored grain had gotten wet and they 
were laying it out to dry. Along came a hungry grasshopper and asked 
them to give him something to eat. One of the ants said, ``Why didn't 
you gather food in the summer like us?'' The grasshopper replied, ``I 
didn't have any time. I was busy making sweet music.'' The ants laughed 
and said, ``Very well, then, since you piped in the summer, now dance 
in the winter.''
  The moral of the story: In everything, beware of negligence if you 
want to escape distress and danger.
  Now, that is the Aesop fable. It is a pretty clear message: If you do 
not work in the summer and put the food away, you are not going to have 
the food in the winter.
  And I think that it basically is saying that not thinking about 
tomorrow means being negligent, acting like the grasshopper instead of 
the ant. Too many of us, I think, have been grasshoppers for too long, 
not thinking about tomorrow.
  Let me just give you a couple of examples. Let us just think about 
urban America. Each year it gets poorer, more violent, more populated 
with families in distress. If we stopped to think about this reality, 
the reality that is there, we would be compelled to act because of the 
morality. If you are your brother's keeper, you have to walk your talk. 
Because of self-interest, I mean, we are never going to compete and our 
living standards will be lower with a larger and larger unskilled 
population on our collective backs.
  And as for world leadership, how are we going to lead the world by 
the power of our example after the events that occurred in Los Angeles 
a couple years ago which popped across television screens from Tokyo to 
London? Or where 40 percent of the people in America who wanted to vote 
were denied this basic right because they were not registered.
  Clearly, on this issue, Mr. President, we have not been thinking 
about tomorrow. If we were thinking about tomorrow, we would see the 
human and national tragedy that is building in our cities and we would 
act to change those conditions. But we have not.
  Like the grasshopper, we have been playing our sweet music in the 
suburbs, while things have just gotten worse in the cities.
  Then, Mr. President, there is the plight of our children. Not just 
poor children, but all children. How can we say that we are thinking 
about tomorrow but continue to neglect our children?
  In 1975, one-third of married couples with children had both spouses 
working. By 1993, that percentage had doubled, as nearly two-thirds of 
all married couples with children had both spouses working. It is no 
mystery as to why that is the case. Without the second paycheck, many 
families just would not make it. Yet with it, their children are often 
alone and without supervision from an early age.
  Parents in this Chamber and in this institution know the pressures. 
Certainly I know the pressures. Certainly the distinguished Member from 
Vermont in the Chair knows the pressure. Certainly the staff knows the 
pressure. Certainly those who are listening know the pressures. If 
parents are lucky, they have a loving relative living in the 
neighborhood who can help take care of the children. If you are upper 
income, you can hire somebody to provide full-time care. If you do not 
have a relative in the neighborhood or you do not have enough money, 
then it becomes a little more difficult.
  There are only a few possible answers to this. For a spouse of either 
gender to have the option of staying at home, the salary of the spouse 
that continues to work outside of the home has to be a lot higher than 
it is now, or companies are going to have to give family leave that is 
measured not just in weeks but in years, or everyone will have to pay 
more taxes so Government can subsidize day care at the company, union, 
neighborhood center, the church, the synagogue or the mosque.
  Those seem to me to be the options. The only given, the only 
imperative, is that someone has got to provide loving care for our 
Nation's children. Too often, this does not happen. We have not given 
child care a priority. Like the grasshopper, we have been dancing 
toward winter. Not facing the reality that is staring everyone in the 
face. We have not been thinking about tomorrow.
  So, Mr. President, there is urban America, the plight of our 
children, but by far, probably the best obvious example of our failure 
to think about tomorrow is the enormous debt that we have amassed over 
the last 12-14 years. It is not only public debt. Between 1980 and 1987 
consumer credit increased 90 percent. People under economic stress did 
not consume less, they borrowed and consumed more. And they borrowed 
and in some cases to speculate. However, in 1989, 1990, 1991, the 
bubble burst and it was over. People cut back, businesses started to 
pay debt down and, gradually, the private sector began to come back.
  Here in Washington the bubble has never burst. It just keeps getting 
bigger and bigger. The national debt went from about $800 billion in 
1980 to about $4.5 trillion by the end of 1994. Over the next 5 years, 
unless we change our ways, the debt will exceed $5.5 trillion. Over 58 
percent of all personal and corporate savings go to finance the 
interest on this debt.
  It is as though in 1980 you owed about $10,000 on the credit card and 
now you owe $43,000 and the interest you have to pay is money that you 
do not have to spend on your kids' college education, to buy a house, 
to buy a car, to put an addition into your factory and hire more 
workers. People do not have the money and they cannot borrow it because 
it is being sucked up by the Government to pay interest on the debt.
  In other words, Mr. President, we have placed the burden of our 
irresponsibility on the backs of our children. Someone once said 
democracies are pretty good dealing with today's problems, but 
sometimes they are not very good thinking about tomorrow. By amassing 
this debt and passing this burden onto our children, I believe we have 
shown that we are not very good thinking about tomorrow.
  So, Mr. President, this brings us to the question, ``What do we 
actually do about this debt?'' I will not talk about remedies for urban 
America or child care. This is a balanced budget amendment debate, a 
debate about Federal spending. Therefore, today I would like to focus 
the rest of my remarks on the Federal budget and what do we can do 
about this debt. I would also like to point out how facing reality 
means actually facing the numbers in this budget.
  First, Mr. President, we will take the analogy that we often hear--
that is, the family household. Every family manages its income and the 
Federal Government has things way out of whack. A giant deficit--that 
does not happen in a family, at least not for very long. However, 
before we begin with this analogy, we need to think about what a budget 
is. A budget is not a snapshot of what happened yesterday. It is a 
guess about what is going to happen in the future. It is not a picture 
of what happened last year with respect to spending or taxes, it is a 
guess about what will happen in the future on spending and taxes.
  We will take it to the household level. You sit around the kitchen 
table, trying to figure out what will your budget be for the coming 
year. What is the first thing you do? You figure out what is your 
income likely to be. Some basic questions come up. Are you going to 
work? Am I going to work? Is he going to work? How many people in the 
household are going to work? How many incomes are we going to count? Do 
we count the husband and the wife? How about the teenage son? Is that 
the family income? Do we count the husband, the wife, and the wife's 
older sister who is living with the family? Is 
 [[Page S2223]] that counted as income? What is the income? That is 
fairly central to devising a budget. What is the income that we can 
count on?
  Second, there is the issue of growth. Well, do you anticipate, will 
there be bonuses in the year? Will you work overtime? Will you get a 
raise? Will the company, because it is doing well, give you a 15 
percent increase? All of these would provide more income. Each family 
has to figure these out in an effort to decide what is likely to 
happen. Each family also has to figure out where are prices going. What 
can we afford? What should we spend our income on? Last year you might 
have spent x on food; what will it be this year? What will the price of 
food be? If there is inflation, if there is a crisis in the coffee 
market and you have to buy coffee and it goes up three times from the 
cost of last year, suddenly you have to deal with inflation. It 
increases prices. It also has the effect of increasing taxes, often. It 
pushes you into a higher bracket. Less so at the Federal level, but 
more so at the State level.
  Then there is interest. How do you calculate your interest 
expenditure? You could say well, I have a variable rate mortgage. I got 
that variable rate mortgage at 9 percent and during the last couple of 
years interest rates had been going down. Interest rates were down 
around 7 percent. However, in laying out a budget, each family has to 
think about how much it will pay next year. Maybe interest rates will 
go back up. If the Federal Reserve continues on its current path, 
clearly the interest rates will go back up and that means more pressure 
on the family budget. With a variable rate mortgage, the family will 
have to pay more in interest charges to pay back the bank.
  So every family, Mr. President, when it makes a set of budget 
decisions, has to figure out what is the income coming in, and what it 
is going to spend money on. The income depends on how many people are 
working and depends on whether you think times are good or times are 
bad. Will you get a raise? Are interest rates going up? What is the 
inflation rate going to be? How much can I actually spend? How much can 
I actually buy? These are factors in any kind of household decision.
  Mr. President, these types of factors apply equally to the Federal 
budget. Let us assume that you miscalculated on your variable rate 
mortgage and you have to pay 1 percent more in interest because the 
rates have gone back up. Well, if you are the Federal Government and 
you miscalculate your interest on your projected budget, you add $20 
billion to the deficit that year alone.
  If a family is counting on the income of one of its members, that 
family will have a big problem if that family member loses his or her 
job. Similarly, in the country as a whole, if a number of people 
unexpectedly lose their jobs, we will have a big problem: a much bigger 
deficit. Just a 1-percent increase in unemployment, adds $60 billion to 
the Federal deficit.
  What about growth? Let us assume that our economy grows 1 percent 
less than we predicted. This small change in the assumptions adds $32 
billion to the deficit. These are aspects of budget policy that change 
in the course of a year. If unemployment is higher, that costs the 
Government more. If inflation is higher, that costs the Government 
more. If interest rates are higher, that costs the Government more. If 
growth is lower, fewer people have a chance to work, less money is 
earned, and the Government receives less revenue and pays more in 
benefits. All of this adds to the deficit.
  So let us begin this by simply laying these points out that when you 
do a budget, you are basically making a projection and the projection 
is affected by things that are out of your control in your household. 
For example, there are plenty of people in this Congress who know the 
Federal Reserve's efforts to raise interest rates are out of our 
control. These things, over time, will have an impact on your family's 
budget, just as they have a dramatic effect on the Federal budget.
  Let us discuss for a few moments what is the Federal budget. What I 
want to do today is to lay out clearly what is the Federal budget. What 
do we spend taxpayer's money on, and where do we get these funds. Every 
year we debate a budget resolution, 50 hours equally divided. Our 
colleagues get up, read their opening statements, and a couple hours 
are already gone already. As a result, despite the debates, I am not 
sure that the American public gets an opportunity to fully understand 
what is in the Federal budget. If we are going to consider balancing 
the budget, I think the American public should know what is in the 
budget. They are entitled to know what things are likely to be cut or 
what taxes will be increased. You cannot decide what things will be cut 
or what taxes will be increased until you know what is in the budget 
and how the Government raises the money to pay for its spending.
  So let us go with the basic point, a very basic point. The 
expenditures of the Federal Government in 1994 were roughly $1.5 
trillion. The revenue, the total of all taxes that have been collected, 
are $1.3 trillion. Because the $1.3 trillion in revenue was less than 
what was spent, we ended up with a deficit, an annual deficit, of $200 
billion.
  It would be important to know what are the taxes? Where does the 
Federal Government get its $1.3 trillion? Who pays the $1.3 trillion? 
Taxes are broken down into the following categories:
  The individual income tax is, in total, 43 percent of all revenues, 
and it raised $545 billion in 1994. Now remember, we spent $1.5 
trillion. The individual income tax raises $545 billion.
  The next largest set of taxes is what are called social insurance 
taxes. Those are the Social Security taxes, the FICA tax, and 
unemployment insurance collections. Of the $460 billion that was raised 
with social insurance taxes, $430 billion of that was the Social 
Security FICA tax. Everybody has it deducted from their wage statement 
each pay period. The total of that is $430 billion. Unemployment 
insurance taxes made up the remaining $30 billion.
  So you have individual taxes, social insurance taxes, and corporate 
taxes. Corporate taxes raise $140 billion a year. All of the 
corporations in America pay in total $140 billion a year.
  And then you have a category called other, which totaled $60 billion. 
That consists of essentially estate taxes. You die, you pass on your 
estate, you pay a tax on that; customs duties, you import something 
into the United States, you pay a tariff or a duty. Those taxes equal 
$60 billion.
  And then finally, the smallest amount of total taxes are the excise 
taxes, like the gasoline tax and the cigarette tax, which raise 
approximately $55 billion.
  So in total, the U.S. Government raised $1.3 trillion in 1994 --$545 
billion come from the individual income tax; $460 billion come from the 
Social Security and unemployment insurance taxes; $140 billion from all 
of the corporations in America; $60 billion come from estate and gift 
taxes; and $55 billion come from the gasoline tax, cigarette tax, and 
other excise taxes.
  So that is it, that is where the money comes from. That is the money 
that the Federal Government has to spend from taxpayers. Total: $1.3 
billion.
  Now the question is, What do we spend this money on? Well, first, I 
would like to give you a quick overview, and then I will provide a more 
detailed explanation.
  Broadly speaking, there are three big categories of Federal 
expenditures.
  In total, the expenditures are $1.5 trillion. One of the three main 
types of Government spending is on what are called mandatory 
expenditures. Mandatory expenditures are really expenditures for which 
Congress does not appropriate a specific amount of money every year. 
Instead, we write into the law certain eligibility rules and benefit 
levels. For example, if you are over 65 and have made certain minimum 
payments into the system, you are entitled to Social Security benefits. 
If you are poor, you may qualify for certain benefits to help you meet 
a minimum income level. Or, if you are a veteran, you may be entitled 
to other benefits. These are mandatory expenditures that automatically 
flow to eligible recipients. The total amount of mandatory expenditures 
is $790 billion. In other words, nearly half of the Federal budget is 
for mandatory expenditures.
  Next are the discretionary expenditures. These total about $545 
billion. This amount includes spending on things such as national 
defense, education, housing, transportation--$545 billion. These are 
discretionary expenditures, meaning that Congress, if 
 [[Page S2224]] it wants to, every year can change that amount. It does 
not have to appropriate that amount of money, unlike a mandatory 
spending which occurs almost automatically. A discretionary expenditure 
is the Federal Government deciding whether it wants to spend a 
specified amount each year on national defense or education.
  The third category after mandatory and discretionary spending is 
interest--interest on the national debt. Last year, we paid roughly 
$205 billion in interest on the national debt. As the debt has grown--
especially since 1980--the more we have paid in interest, because the 
more you have to borrow, the more people you have to pay interest to 
those who have loaned you, the Government, money.
  Now, an interesting caveat about interest is that when the Government 
collects all of those taxes, the first call on these funds, the first 
place that money has to be spent is not defending the Nation or feeding 
children or providing for education or building highways or sending 
money to Social Security recipients. The first place that money has to 
be spent is to pay those bondholders who have loaned us money. So right 
off the top, $205 billion goes to people in this country--and others--
who buy Government debt, people who have enough money to buy Government 
securities, Treasury bills, Treasury bonds, people who are not spending 
all of their money every year just to get by, but rather people who 
have enough money to buy Government bonds. The more we have to pay in 
interest, the more that interest flows to those bondholders.
  So in terms of total expenditures, you have $790 billion in mandatory 
spending, $540 billion in discretionary spending, and $205 billion in 
interest payments.
  Mr. President, this is a rough overview of the Federal budget: where 
the revenues come from and where they go. What I would like to do on 
the spending side--because we are discussing a balanced budget 
amendment, and the American public should know how this budget is going 
to be balanced--is to take a closer look at Federal spending so that we 
can determine what Federal spending must be cut in order to balance the 
budget.
  First, let us look again at the mandatory spending programs, again 
about half of all Federal spending. These funds go to eligible 
recipients at preset benefit levels--at a total of $790 billion worth 
of benefits.
  Well, what is this $790 billion spent on? First, we need to make one 
distinction on the mandatory programs. Some mandatory spending programs 
flow to everybody who is eligible. Others flow only to those who have 
lower income; in other words, means tested and non-means tested. Take 
the biggest mandatory program, Social Security. Social Security is not 
means tested. Everybody in America who meets certain age and 
contribution requirements, gets Social Security. If you are a 
millionaire and you worked 30 years and paid into Social Security, you 
receive these benefits, just as the guy that worked in the GM plant in 
Detroit or in the neighborhood drugstore who paid Social Security for 
30 years. In fact, these folks all probably get the same amount. It is 
not a means tested program.
  The next largest mandatory program, Medicare, is the same thing. If 
you are over 65, you are eligible for Medicare. The Federal Government 
will pay your health costs under the provisions and rules of the 
system. If you are a multimillionaire and you check into a hospital and 
you stay several days and you have a hospital bill of $10,000, send it 
to Medicare. It is a non-means-tested program. This means that a 
millionaire gets the same amount of money as somebody, a husband or 
wife, who worked for 30 years, gets sick, goes to the hospital, and 
needs that same $10,000 treatment.
  Then there are other mandatory programs. You take $25 billion in 
unemployment benefits. If you are unemployed in the United States, you 
are eligible for unemployment compensation. We have had that in place 
for 50 years or more. It is one of the things we learned from the Great 
Depression. Because we have an automatic stabilizer, we are less likely 
to have as deep of a recession. We are all better off if we have an 
automatic stabilizer, this one being unemployment compensation, because 
the economy then will not go down so far. People will at least have 
enough money to buy some food or begin to keep themselves until they 
get another job.
  We also spend $70 billion automatically each year for the civilian 
and military pension and disability systems. Every member of the 
military, every member of the Federal Government who has a retirement 
plan pays into that plan, and that plan then pays benefits. Last year, 
those benefits were $70 billion.
  Then there is Medicaid. Medicaid is a means-tested program. This 
means that if you are dirt poor in America and you get sick and you go 
to the hospital, somebody is going to take care of you. And because 
somebody takes care of you, somebody has to pay, and the Federal 
Government will chip in its share if the State agrees to pick up some 
part of the cost as well. But it is a mandatory spending program based 
on income, and it accounts for roughly $80 billion in annual spending.
  Now, in this category of other mandatory spending are such things as 
food stamps--again, means tested. If you are poor, you are eligible for 
this type of assistance. This is $25 billion.
  Supplemental security income, again, goes to the poorest, 
overwhelmingly elderly, overwhelmingly female population, who just 
cannot get by without some assistance. In addition, there is child 
nutrition which totals about $7 billion.
  So the mandatory portion of the Federal budget is the amount of money 
that flows simply because of certain eligibility criteria--you are over 
65 and eligible for Social Security, you are over 65 and eligible for 
Medicare.
  Thus, $460 billion of mandatory expenditures, nearly one-third of the 
whole budget, goes to people over 65 who have paid into the Social 
Security and Medicare systems throughout their lifetimes. You are 
eligible, regardless of income, if you have paid into the system. The 
other areas of mandatory spending are Medicaid, food stamps, 
supplemental security income, retirement, and unemployment benefits.
  So when we talk about cutting the Federal budget and we decide that 
we are not going to touch any entitlements--meaning the mandatory 
spending--we have to realize that this leaves a much smaller portion of 
the budget and this remaining portion will have to cut a lot more to 
balance the budget. But to cut those mandatory expenditures, we would 
have to change the eligibility rules and we would have to change the 
benefit levels. We could say that you have to be poorer to get food 
stamps or Medicaid, or we could say that you have to pay more, if you 
are above a certain income level, for Medicare. But we would be 
changing the rules. That is the way that entitlements would be cut.
  Mr. President, let us look for a moment at the next biggest chunk of 
Federal expenditures. First, we have mandatory expenditures. Now we 
have approximately $545 billion of discretionary expenditures. This is 
the money that the appropriations committees appropriate every year. 
The tax dollars come in. The appropriations committees meet, and they 
decide that this program or that program merits funding. What do the 
appropriations committees spend $545 billion on? Overwhelmingly, the 
money in discretionary programs is spent on the national defense. It is 
$280 billion a year out of the total of $545 billion which is spent on 
discretionary programs.
  What are the other big discretionary expenditures in addition to 
national defense? You have $40 billion for education, training and 
social services. This includes education for the handicapped--it used 
to be that if you had a child that was autistic, the child had no 
chance of getting into any school anywhere, and had no chance of going 
to the public school. Now because of a Federal program for handicapped 
education, we are able to challenge that child and develop that child's 
potential.
  In addition, there is transportation spending, primarily for mass 
transit, highways, and airports. There is spending for income security 
which is essentially housing assistance.
  There is also spending to support Government activities which cost 
$30 billion. This amount is basically what it costs to run the Federal 
Government. Of this $30 billion, the Congress 
 [[Page S2225]] accounts for $2.5 billion. The other Government 
activities include running the Department of the Interior, the Park 
System, the FBI, keeping guards in our prisons, and making sure that 
the IRS collects taxes. Some people do not like that. But spending for 
these, and other, Government activities represents what it costs to run 
the Federal Government, $30 billion out of $1.5 trillion.
  In addition to all of this is foreign aid. Foreign aid--for both 
humanitarian and security assistance--represents $20 billion out of 
$1.5 trillion.
  So discretionary spending is divided among defense, education, 
training, social services, transportation, income security, Government 
activities, foreign aid, and other domestic non-defense programs.
  Mr. President, there is a point that should be made on discretionary 
spending. I have implied that discretionary spending is whatever the 
appropriations want to spend money on. That is true. Yet, since 1991 
this spending has been capped. We have said by law that the Congress 
and the Government cannot spend above a certain amount. It has been 
capped. As we discussed earlier, inflation is not capped. Inflation 
continues to eat away at the purchasing power of American families, and 
it continues to eat away at the purchasing power of Government.
  So when you cap spending programs, all $545 billion in discretionary 
spending, that means it will buy less. Essentially the caps on 
discretionary spending shrink in real terms what this will buy, by 
about 9 percent between now and 1998.
  There are no caps on mandatory spending; no caps at all. How could 
there be? You do not know how many people are going to be unemployed. 
You do not know how many people are going to be poor. You do not know 
how many people are going to qualify for the mandatory spending 
programs. However, for those things that the Congress and the 
Government have direct control over, there has been a cap since 1991. 
You can argue the caps should be lower. But there has been a cap.
  With the next chart I would like to demonstrate how Federal spending 
has changed over the years. Back in 1963, a long time ago, 
discretionary spending represented 70 percent of what the Federal 
Government spent.
 Entitlements--the so-called mandatory expenditures, such as Social 
Security--represented 22 percent. Net interest represented 6 percent. 
In 1965 we added in Medicare and Medicaid, and in 1972, we indexed 
Social Security. In 1973, discretionary gets a little smaller, 
entitlements get a little bigger. In 1983, entitlements have grown to 
45 percent of the budget and discretionary has dropped. But 1983 was, 
of course, 2 years after the Reagan defense buildup and tax cut and the 
start of gigantic deficits. So interest rates and the amount we spent 
on interest are higher.

  In 1993, suddenly entitlements are up to 47 percent. Discretionary 
expenditures are down to 39 percent. It is projected that if current 
law continues, by 2003 mandatory spending--those things we talked about 
earlier, such as Social Security, Medicare, income security--will eat 
up almost 60 percent of the budget, and interest will be almost 14 
percent. And all of the rest of the money that the Government spends, 
such as for transportation, education, and defense, will be 28 percent 
of the budget.
  So, Mr. President, what clearly we see is that over the years those 
mandatory portions of spending have increased dramatically. So 
dramatically that, by 2003, interest payments on the debt will equal 
almost half of all discretionary spending.
  Mr. President, I think that it is important here to talk about 
another kind of spending, and that is essentially what I call off-
budget spending through the Tax Code. You have $1.5 billion of Federal 
expenditures. We talked about that already. And we raise $1.3 billion 
through all taxes. If you recall, we raise $545 billion from the 
individual income tax. But, of course, the income tax does not apply to 
everybody in the same way. You would think that under an income tax 
system the same rules and rates would and apply to everybody. No, no, 
no, not the case.
  Over the last several years, much to my own distress, we have 
returned to aggressive spending through the Tax Code, meaning we tell 
people that if they simply do this activity, they will pay less in 
taxes. Some of these activities that we tell people will lower their 
taxes have been long established in the Tax Code. If you buy a house 
and pay mortgage interest, that interest is deductible, so you pay less 
taxes because you have mortgage interest. If your employer pays health 
insurance premiums for you, those premiums are not included in your 
taxable income. If you have a pension plan that builds up, or 
investment income building up, you do not pay taxes on those. If you 
pay State and local taxes, like property taxes and State income taxes, 
you deduct those and you do not pay Federal taxes on them. The more 
taxes you pay, or the bigger your pension plan is, or the more generous 
your employer-paid health benefits are, or the bigger your mortgage 
interest is, the less you pay in taxes.
  Those are some of the well-known, biggest tax expenditures. And then 
there are, of course, the little special ones that are not used by the 
vast majority of Americans. These are not in the Tax Code because of a 
particular public policy reason--whether flawed or not--but because a 
lobbyist had a way to insert into a tax bill a special exclusion for a 
particular category of people. For example, I do not know how many 
people in America know that if you rent your home for 2 weeks a year, 
you do not pay any income tax on that income. That is a special 
exclusion. It costs $50 million a year in foregone income. How did that 
happen? Well, the story goes that a guy who had a big house close to 
the Masters Golf Tournament also had a friend on the Finance Committee. 
During one of those late night sessions, the friend slipped in an 
amendment to a bill which said if you rent your house for 2 weeks a 
year, you do not pay any income tax on that income. This is not going 
to help me and probably will not help a lot of other people, if they 
are living in your house. But if you have a big house next to a big 
international event, you might make a little money.
  How about the $12 million a year that we use to essentially subsidize 
the production of some of the most toxic chemicals and minerals in the 
world? On the one hand, you have the Federal Government telling people 
to take asbestos out of the schools and workplaces. We have ads on 
television about lead contamination telling how it makes our children's 
intelligence lower than it otherwise should be. Meanwhile, you have the 
Tax Code telling people that if you mine asbestos or if you mine lead, 
you pay less tax.
  Mr. President, the point is that $545 billion is raised from personal 
income taxes. But that Tax Code that sets rates is riddled by 
exceptions to those rates. And because of all those exceptions, the 
people who use those exceptions end up paying less tax and the rest of 
us end up paying a higher rate of tax than we otherwise would have to 
pay. And the question is raised, since this is a balanced budget 
amendment debate, how much would revenues be if we did not have any of 
those loopholes? We have had a little debate about a flat tax led by 
Congressman Armey on the other side. If we did not have any of those 
loopholes, how much more money would the Federal Government raise? The 
answer is $455 billion a year. In 1986, we trimmed this amount back 
dramatically. Since then, it has exploded. It is one of the fastest 
growing Government programs and accounts for $455 billion a year in tax 
expenditures.
  So, Mr. President, you can see if you had a deficit of $176 billion--
as is projected for 1995--if you simply trimmed a third off of the tax 
expenditures, you could eliminate the entire budget deficit. Earlier we 
talked about mandatory spending, discretionary spending, and interest 
on the debt. Now, we have seen that we also spend off budget through 
the Tax Code.
  Mr. President, if I could, I think that it helps to get a picture of 
how these deficits have changed over time. I have interns who come into 
my office thinking that the deficit is a little like oxygen. They would 
not know how to exist if the deficit did not exist. It has been there 
their whole lives.
  People say that the Federal Government has always run a deficit. Are 
politicians not always spending more money than they have? Are we not 
always living beyond our means as a 
 [[Page S2226]] Government? Well, the answer to that question is 
absolutely not. In the 1940's and 50's, Harry Truman had a few 
surpluses. Dwight Eisenhower had surpluses in a couple of years. In 
fact, Lyndon Johnson had a surplus in 1969. As hard as that is to 
believe, they collected more than they spent. No depressions occurred 
in the late 1940's and early 1950's. No depressions occurred in the 
mid-1950's. In the early 1960's when we had a tremendous economic boom, 
the deficit was minuscule, and the debt was minuscule, and policymakers 
were thinking about tomorrow.
  But the story changes in 1980. And we all know that story--defunded 
Government, dramatic tax cuts. A lot of the hotels in this town were 
built after 1980 because the Federal Government said in that tax bill, 
``If you build this hotel for $20 million, you can write $1.5 million 
off a year of income taxes.'' We gave depreciation in 15 years on 
structures that were going to last 30 and 40 years. So a lot of 
lobbyists decided they would become hotel investors and pay no tax.
  We also were going to trade tax benefits from one corporation to 
another corporation. We also gave dramatic individual income tax cuts, 
30 percent across the board, and defunded Government.
  At the same time, we began a massive defense buildup--not to say we 
should not spend more on defense--but unlike Lyndon Johnson in the 
1960's, Ronald Reagan in the 1980's did not finance his defense 
buildup. And as a result of these facts--a dramatic decrease in tax 
revenues, a dramatic increase in defense expenditures, and a continued 
growth of mandatory spending--the deficit took a dramatic turn for the 
worse.
  In the 1940's, 1950's, and 1960's, not much of a deficit; there was 
even a surplus in some years. But then what happened in the 1980's? 
Well, you can see what happened. Here is the passage of the tax bill, 
around August 1981. See what happens to the deficit? It starts going up 
and up, and soon becomes over $200 billion. It only took a couple of 
years for the national deficit to grow larger than the whole debt of 
the country in the previous 15 to 20 years.
  The deficit then dropped a little in 1984, came back up in 1985 and 
1986, and then dropped significantly for 1987 and 1988 due to cosmetic 
and process changes such as the Gramm-Rudman Act, which arguably kept 
things under control for a short while. But the deficit then exploded 
again after 1989, and kept rising until 1992. As a result, from 1980 to 
1992, the national debt of this country grew from $800 billion to $4.3 
trillion. Is that thinking about tomorrow? Hardly.
  Since 1992, what has happened? Because of the 1993 deficit reduction 
package, the national deficit has dropped dramatically.
  My point here is simply that these deficits have not always been a 
part of our history. They are a part of bad public policy, and they 
have placed a gigantic burden on the backs of our children. And if we 
do not face up to this burden all of our tomorrows will be darker than 
they otherwise would have to be.
  And it is also important to note that these deficit figures actually 
mask the seriousness of the problem. This is because we have been using 
the surpluses that are accumulating in our trust funds to hide the true 
size of the deficit in the rest of the budget. Because of changes we 
made to Social Security in the mid-1980's, this program now raises more 
funds than it pays out. Prior to 1983, Social Security was a pay-as-
you-go program. Money would come in, stay a few months, and immediately 
be paid out to eligible recipients. But in 1983, we changed the program 
so that it would start accumulating surpluses, so we could supposedly 
guarantee that there would be enough money there for my generation when 
we retired. But right now we are actually spending these surpluses, by 
borrowing them to pay for deficits in other parts of the Federal 
budget. And, Mr. President, if action is not taken to stop this 
practice, the Federal Government will borrow an additional $636 billion 
from the Social Security trust fund between 1996 and 2002. So let us be 
candid about that.
  So, once again, Mr. President, here is the history of our national 
debt. The situation was pretty good during the late 1940's and 1950's, 
with surpluses under both Truman and Eisenhower. Under Kennedy and 
Johnson we had solid fiscal policy. Under Nixon, Social Security was 
indexed and high inflation began. This inflation accelerated throughout 
the decade, and was accompanied by oil shock repercussions, but the 
deficit still remained relatively under control, with the national debt 
less than $1 trillion. But the 1980's heralded the sudden arrival of 
tax cuts, increased defense expenditures, and out-of-control mandatory 
spending, which have led to today's debt of nearly $5 trillion.
  Mr. President, that is a cautionary tale. What would the ant say to 
the grasshopper if at this point the grasshopper said, ``Let me come in 
from the cold into the house that you prepared, because you were not 
spending beyond your means''? The ant would say, ``Play your sweet 
music in the summer, dance in the winter. You're on your own.'' 
Unfortunately, this is the position we all find ourselves in as a 
result of this profligate activity.
  Mr. President, how do we make this situation real to people? How do 
we get them to understand? It is such a complicated issue. People do 
not want to think it through. They want to sound bite it. They want to 
have a quick answer. They want to believe if they vote for the balanced 
budget amendment they do not have to make any of these tough choices 
about cutting spending.
  Mr. President, that is the furthest thing from the truth.
  Think of it this way: If the average taxpayer's share of Federal 
spending and revenues were arranged in the form of a credit card 
statement, it would look something like this table entitled ``Uncle Sam 
Says Charge It.''
  Mr. President, the first line shows the balance due. Take the 
national debt, divide it by all the taxpayers in the United States, and 
the result is that every taxpayer in this country had a debt of $37,838 
at the start of this year. Each one of us. That is just to get to where 
we are right now. Each one of us has to pay that debt. And it is 
getting larger all the time. So the first line shows the outstanding 
balance. As you can see, at the start of 1994, it was $37,838.
  But what about Government spending during 1994? Well, we ran a big 
deficit again, about $200 billion, in that year. How did that break 
down for each citizen of the United States? Well, each citizen is 
spending about $4,000 per person on Social Security; about $2,400 for 
national defense; about $1,900 for income security and welfare; about 
$926 for health; about $389 for education, training, and employment 
programs; $313 for agriculture and natural resources; $320 for 
transportation; and $133 for the administration of justice.
  Now, that comes to a total of about $2,273.
  What about the money that we have taken in, per person? Well, 
average, this totaled about $4,700 in income taxes, $3,700 in Social 
Security taxes, and about $2,484 in other forms of payments to the 
Government, such as customs, estate taxes, and excise taxes. This comes 
to a total of $10,932 for each taxpayer. Compare this to total spending 
per taxpayer of $12,700. The result is $1,765 added to the credit card 
bill of every taxpayer--and remember that this is added on top of the 
$37,838 that every taxpayer owes from previous years.
  Now, Mr. President, what happens in this kind of situation? We cannot 
continue down this path. Something has to give. About 3 years ago, the 
distinguished chairman of the Budget Committee, the Senator from New 
Mexico, and I asked the General Accounting Office to tell us what would 
happen if we do nothing about this deficit situation. They came back 
with a report that said if we do nothing, every one of our income will 
be 40 percent less than it otherwise would be by the year 2020--40 
percent less.
  That is understandable, given all the money which must be sucked in 
from the economy just to pay interest to bondholders, in order to keep 
financing our $5 trillion in national debt. None of that money is 
available to create jobs, pay raises, buy cars, or purchase homes.
  Things have changed since that GAO report. If we recall the last 
graph, the deficit came down in 1993. We took action in 1993, passing 
the biggest deficit 
 [[Page S2227]] reduction package in history. But there is still an 
awful lot to do.
  So, Mr. President, having discussed what is in the federal budget, we 
now come to the more difficult part. We clearly need to reduce the 
deficit, but the question is, What are we going to do to cut spending? 
Let us start by asking how much spending cuts will be needed in order 
to balance the budget. If we do not implement the tax cuts that are 
included in the Contract With America, we would need to cut on average 
$922 for every resident of my State. If the contract tax cuts are 
enacted, then this number rises to about $1,265.
  What does this mean? These are vague numbers. All the budget debates 
eventually turn into numbers, and people turn them off. What is the 
real impact of cutting $922 or $1,265 per person in New Jersey, and of 
making similar cuts in other States? What does this mean in terms of 
the Federal spending that we have talked about?
  Given our current fiscal policies, balancing the budget would require 
a 13-percent cut in every spending program--13 percent. The question 
is, Are we willing to tolerate cuts in every one of those programs? Are 
we willing to take a 13-percent cut in Social Security? Are we willing 
to take a 13-percent cut in the national defense? Of course, we cannot 
take a 13-percent cut on interest. The bondholders get paid, 
regardless.
  However, if Social Security is off the table, and everybody in this 
Chamber has given speeches that have resonated across America promising 
that there will be no cuts at all in Social Security, then the size of 
cuts needed in all other programs goes up to 18 percent. Take Social 
Security off the table, and everything else is cut 18 percent. 
Medicare, defense, grants to State and localities, and all other 
spending--18 percent.
  Let us carry this a little further. I know no one in here wants to 
make the United States vulnerable, even in the post-cold-war world. So 
in addition to taking Social Security off the table let us take defense 
off also. And remember that interest is automatically off the table 
because we have to pay the bondholders. If we say that there are to be 
no cuts in any of these three areas, then the remaining programs are 
subject to across-the-board cuts of 22 percent. And if the tax cuts 
outlined in the Contract With America are implemented, then the level 
of cuts needed to balance the budget rises to 30 percent. That would be 
a 30 percent cut in all non-Social Security entitlements, including 
Medicare, and in every other existing program except Social Security 
and defense. That would mean a 30-percent cut in grants to state and 
local governments. It would require that we cut areas such as 
investment in infrastructure and unemployment compensation by 30 
percent.
  Now, Mr. President, it is not really likely we will cut 30 percent of 
the FBI or 30 percent of the Immigration Service or 30 percent of the 
Internal Revenue Service or 30 percent of Federal prisons or 30 percent 
of military pensions or 30 percent of veterans programs. To be honest, 
we will take certain things off the table in the same way that Social 
Security and defense will be off the table. We will have to take these 
other programs off the table as well.
  As a result, the cuts in the other programs are going to be even 
deeper. This means cuts of over 30 percent in Medicare, State and local 
grants, environmental programs, automatic stabilizers like unemployment 
compensation, and many other programs. What would cuts of at least 30 
percent mean to these remaining programs? Well, in 1993, Medicare 
payments to doctors were approximately 40 percent less than private-
sector payments. Imagine cutting them by at least another 30 percent. 
And cutting back on many of the other programs would be penny-wise and 
pound-foolish. We could cut back on programs for early childhood but 
end up paying more later for prisons.
  Mr. President, going to this next table, what if we decided to cut 
grants to State and local governments? We give them $200 billion a 
year. The Federal Government gives it right to the States, many of whom 
are advocating the balanced budget amendment. Well, going after those 
grants for States, what are they for? Highways, airports, and other 
forms of transportation spending total 11 percent, or over $20 billion 
in Federal spending. Then take education, training, employment and 
social services, such as the handicapped education program, special 
education, foster care. These total about $25 billion in Federal 
spending, or 16 percent of grants to State and local governments. Cut 
it. What about income security, welfare, section 8, school breakfast, 
WIC, nutrition, and related programs--these total 24 percent. Cut it. 
Medicaid is 40 percent. Cut it.
  So say that we cut all these programs that go to States, and in doing 
this we balance the budget. Then the State has to make the decision: 
Does it increase taxes, or does it forget about the education programs, 
the health programs, the housing programs?
  So, Mr. President, what would significant cuts to States and 
localities look like? As I said, grants to States and local governments 
totaled $200 billion in 1994. In New Jersey, we received about $6 
billion in Federal grants. This money funded a significant number of 
programs. Roughly 40 percent of the Federal funds went to health, 16 
percent to education, 24 percent to welfare, and 11 percent to fund 
transportation.
  On average--this is an important point--on average, Federal grants to 
support programs administered by States comprise 25 percent of all 
State revenues--25 percent. Remove those.
  This is money that Governors have to spend--States get more money 
from the Federal Government than they raise with the personal income 
tax, more money than they raise with the general sales tax, more money 
than they raise with any other kind of taxes. If the Federal Government 
eliminated this 25-percent contribution, it would either lead to a 
dramatic increase in State or local taxes or else essentially eliminate 
many of these programs.
  I think people have not really focused on what the impact of this 
will be. I know that people in this body have not focused on impact, 
but I guarantee you the State legislatures will. In my State of New 
Jersey, only about 20 percent of our State budget comes from the 
Federal Government. We have a diverse State, with a broadly based 
economy and rapid growth. New Jersey is quick to rebound from 
recessions, heavily export oriented, dramatically changed from 
manufacturing to services, and it has a very flexible work force with 
very talented people. The Federal Government gives us 20 percent of our 
State revenues.
  This percentage is a little different in other places: in Arizona, it 
is 30 percent; in Michigan, 30 percent; in California, 34 percent; and 
in Idaho, 32 percent. This raises a very interesting question. Your 
people send tax dollars to Washington. They get dollars back from 
Washington, in terms of Federal expenditures.
  My State has the second-highest income in the country. We pay a lot 
of taxes, because a lot of people with high income pay taxes. We do not 
have a lot of big defense expenditures in the State. We do not get back 
much relative to what we give the Federal Government, but a lot of 
other States do pretty well. For every dollar that New Mexico sends to 
Washington it gets back $1.96; Mississippi gets back $1.63; West 
Virginia gets back $1.45; North Dakota, $1.41; Virginia, $1.38. What do 
these figures mean? They mean that more Federal dollars are being spent 
in these States than are being sent to Washington from those States.
  So here we have the West, the site of some of the strongest 
supporters of the balanced budget amendment. In the West, the Federal 
Government still plays as big a role as the Governor plays; for 
example, in Arizona, 30 percent of State revenues come from the Federal 
budget; the percentage is 32 percent in Idaho; 34 percent in 
California. Some of these States are owned by the Federal Government. 
Ninety percent of the land in Nevada is owned by the Federal 
Government; 1 percent of the land in New York is owned by the Federal 
Government. I think 9 percent of the land in Michigan is owned by the 
Federal Government; 90 percent of the land in Nevada is owned by the 
Federal Government.
  So the point, Mr. President, is that if we are going to cut spending 
and we are going to do it across the board 30 
 [[Page S2228]] percent, then those States that are getting more money 
back from the Federal Government than they are contributing are going 
to be disproportionately cut. It is not only going to be poor people 
who are going to be affected. So you might want to look at some of the 
other ways to raise revenue.
  For example, right now we have public lands all over the West. Let us 
say I want to mine gold. Well, I pay about $500 to $1,000 max. I go in 
and mine the gold, and I do not pay the Government anything, I do not 
owe the Government anything. If we are asking individuals to pay more 
in taxes or we are cutting money to help them send their kids to 
college, do you think we might want to ask some of the mining companies 
to pay more if they mine minerals on public lands?
  So the advocates of the balanced budget amendment have to understand 
the disproportionate impact that these cuts or additional revenue 
increases will have on their respective States.
  So, Mr. President, I think that the analysis makes two points very 
clear, and they are that we have to balance the budget for the sake of 
our children's long-term economic prospects and that doing so is 
inevitably going to be very painful. What looks like a cheap move or an 
easy move here--cutting back that State and local Government transfer--
will translate into, in some cases, higher taxes in many States.
  Finally, as much as it is necessary to reduce the deficit--and it 
will be a bitter pill for the country--I think that it is absolutely 
essential that we do so. Trying to rush a balanced budget amendment 
through the Congress without a thorough discussion of how the budget 
will be balanced is, in my view, unfair and undemocratic.
  So a lot of those Western States are probably going to have second 
thoughts when they look at the numbers. Alabama, with about $2.38 on 
every dollar, is going to look at it and have a second thought. The 
amendment will have dramatic effects on the lives of American citizens 
and every one of these citizens has a right to know what these effects 
will be before their elected representatives are asked to vote on this 
issue.
  Mr. President, I have heard an awful lot of people saying, 
particularly States: Oh, you ought to balance your Federal budget; we 
want the balanced budget Federal amendment.
  And yet, Mr. President, Governors do not have to balance their 
budgets in the way we have to balance our budget here in Washington. 
Governors have the right to, and in many cases do, have capital 
budgets, which means that instead of raising taxes and spending money, 
they simply borrow from these bondholders that we are borrowing from to 
create a Federal deficit, except when they borrow, it does not count in 
their State because they have a capital budget. I do not know about all 
States, but if you look in total, public indebtedness has dramatically 
increased at the State level.
  So, increasingly, what the State governments are doing is the same 
thing the Federal Government did in the 1980's except they do not need 
a balanced budget amendment because they have simply defined the 
problem away. What if we had the same capital budget at the Federal 
level that exists in most States, mine included? Do you know what 
portion of the Federal budget would be included as a capital budget? 
And that includes all physical infrastructure, defense and non-defense, 
and all education programs. Do you know what that would be? $225 
billion. If we simply defined our Federal budget as most States do, in 
one stroke of the pen we would have no Federal deficit this year. We 
would have a $25 billion surplus.
  So when Governors tell me that they want to have a balanced budget 
amendment, I say to them: Give me the same capital budget. Give me the 
same capital budget you have, and we will have a surplus.
  So, Mr. President, I think before we get a vote on the balanced 
budget amendment, we ought to have the specifics. I have spent almost 2 
hours here today laying out what this budget is. The proponents of the 
amendment have not stepped forward and told us what they are going to 
cut. Which of the mandatory programs are they going to cut? Which of 
the discretionary programs are they going to cut?
  I have a suspicion that there might be another game going on here. I 
do not mean to cast aspersions on anyone, and I do not. But my guess is 
that the other side will not take my suggestion of defining the problem 
away with a capital budget. A capital budget would make a lot of sense. 
It would be like State governments. I mean it would be like most 
businesses that have a capital budget. It would be like most families. 
You have mortgage interest. You have a mortgage on your house. You are 
in debt. But you can make your debt payments. You do not have to pay 
the whole thing immediately. Everybody in America has debt. The 
question is how you manage the debt and, most importantly, how you 
structure the debt.
  Let us make a reform: a capital budget. Then we have a surplus. Then 
we have a surplus. That is a change that I could certainly support.
  I am concerned there is going to be another approach, though. I 
already see it rumbling out there. And that is going to be to redefine 
CPI, saying that the deficit is not as big as you think it is because 
we have exaggerated inflation. Inflation is really lower, and if you 
calculate it in this different way, we will save $150 billion over 5 
years just like that, so the deficit is much less.
  Well, to those who are contemplating this, I would simply say beware, 
because--I am almost inviting the people to do this--the result is you 
pay about $21 billion in higher taxes every year if you do that. Why? 
You pay $21 billion in higher taxes because we have indexed the rates. 
But if you understate what inflation is, then people are going to be 
pushed into higher rates and pay more taxes. And about $28 billion 
less, in terms of less benefits, will go out because the CPI is 
calculated at a lower level. That is my fear.
  If you really wanted to come out of this with significant reform that 
would be right to every legislator, it would be to implement a capital 
budget, take Social Security out and focus on the operating 
expenditures.
  My hope is that, before this is over, at least we will have a chance 
to think about that. If we are serious about cutting the budget, at the 
minimum why not do it on a basis of some principle as opposed to 
lobbyists mud wrestling? Why not say, look, here is the deficit. We 
looked at this gigantic budget deficit we have. We have to do something 
about it. We are tired of being grasshoppers. We want to start to be 
the ant. We want to start to think of our future. We want to start 
thinking of tomorrow.
  What we are going to do, maybe what we will say is, ``What principle 
could we use?'' Well, we have a principle for liberals and a principle 
for conservatives. If we join the two principles, we might actually 
have a way to proceed here. The principle for liberals would be, I 
would say, well, why not make income a principle? You get a Federal 
benefit up to a certain income level. Above that level you get less or 
you get none. Why should the millionaire who goes to the hospital get 
the same payment from Medicare as my struggling uncle who went to work 
every day in the lead factory for 40 years? Why should that happen? Why 
should a wealthy farmer who makes $3 million a year get the same farm 
subsidy or the same water subsidy that a struggling family farmer with 
600 or less acres such as in the great State of Iowa or even the cotton 
farmers in Arizona gets? Why should it be the same for the millionaire 
as for the average person? Well, that is one principle. Maybe make 
income a criterion.
  The other principle, for my conservative friends, would be to ask: 
How about the market? Everybody talks about the market. Yes, we want 
the market to allocate resources. Well, great, get the Government away 
from the market. Let the market allocate the resources. Cut the budget 
by eliminating all these subsidies that impede the function of the 
market.
  If we join those two, having a principle of income and a principle of 
no subsidies, then you would have a way to proceed and explain to 
people why we are cutting this and not that. Otherwise, it is going to 
be that the agriculture people are stronger than the mass transit 
people, who each have their lobbyists trying to figure what 
 [[Page S2229]] levels of subsidies are there going to be.
  So, Mr. President, as I tried to demonstrate today in this talk, it 
is not going to be easy to cut the Federal budget. It is not going to 
be easy at all to balance this budget. It is going to require bigger 
cuts in expenditures than anyone has heretofore contemplated. And as we 
proceed, if we proceed, I hope we will have not only a suggestion from 
the proponents of the amendment as to how they would balance the 
budget, but I think also those who oppose it might raise specific 
questions of how they would reduce the budget deficit. I believe that 
reducing the budget deficit is an imperative, second only to getting 
growth started in our economy. That is a big debate. What comes first, 
growth or deficit, savings or investment? I think you have to first get 
growth; second, reduce the deficit, and reducing the deficit has the 
potential of improving the prospects for growth.
 It requires some tough choices.

  Mr. President, to go back to the cautionary tale, we are living in a 
time when the grasshopper and the ant continue to look at each other 
across the great divide. The grasshopper says to the ant, the ant that 
has worked all through summer and put food away for the winter, 
``Please, please, Mr. Ant, let me come into your warm home in the 
winter.''
  And the ant says to the grasshopper, ``What did you do all summer?''
  ``I made sweet music.''
  ``If you make sweet music in the summer, you die in the winter, and 
you are on your own.''
  More and more are we saying that. And more and more have we acted as 
the grasshopper and not the ant. Less and less have we thought of 
tomorrow. As I hope the last hour and a half has made abundantly clear, 
less and less have we thought of tomorrow with regard to our urban 
centers, with regard to our children. It is about time we start 
thinking of tomorrow and tell the truth to the American people.
  I yield the floor.
                  reply to senators leahy and bradley

  Mr. HATCH. Mr. President, I would like to take this time to briefly 
respond to certain contentions made by Senators Leahy and Bradley 
regarding the balanced budget amendment. These contentions fall into 
several categories: First, that the balanced budget amendment does 
absolutely nothing to balance the budget; it is an unenforceable 
gimmick; second, that the deficit is the result of the Reagan 
administration; third, that President Clinton's deficit program 
effectively deals with the deficit program; and fourth, that the 
balanced budget amendment is the largest Federal unfunded mandate 
program to date and will be ruinous to the States because it forces the 
States to assume the cost of Federal social spending programs. Each of 
these contentions are either false or widely exaggerated.


                balanced budget amendment is enforceable

  Senator Leahy's assertion that the amendment is an unenforceable 
gimmick that does nothing to balance the budget, is both wrong and 
misleading. Of course, the amendment does not balance the budget by 
itself. But neither does the first amendment protect free speech nor 
the free exercise of religion by itself. The balanced budget amendment, 
similar to most of the Constitution, establishes a process, a mechanism 
to effectuate governmental power and obligations. The amendment 
establishes a limitation on Congress' taxing, spending, and borrowing 
power that furthers the goal of a balanced budget.
  Moreover, the notion advanced by opponents of the balanced budget 
amendment that it is a paper tiger--that Congress will flout its 
constitutional authority to balance the budget--is simply wrong. First, 
the amendment has sharp teeth. It is self-enforcing. Because, 
historically, it has been easier for Congress to raise the debt 
ceiling, rather than reduce spending or raise taxes, the primary 
enforcement mechanism of House Joint Resolution 1 is section 2, which 
requires a three-fifths vote to increase the debt ceiling. This 
provision is a steel curtain that will shield the American public from 
an all ill-disciplined and profligate Congress.
  Furthermore, Members of Congress overwhelmingly conform their actions 
to constitutional precepts out of fidelity to the Constitution itself. 
We are bound by article VI of the Constitution to ``support this 
Constitution.'' I fully expect fidelity by Members of Congress to the 
oath to uphold the Constitution. Honoring this pledge requires 
respecting the provisions of the proposed amendment. Flagrant disregard 
of the proposed amendment's clear and simple provisions would 
constitute nothing less than a betrayal of the public trust. In their 
campaigns for reelection, elected officials who flout their 
responsibilities under this amendment will find that the political 
process will provide the ultimate enforcement mechanism.


                       whose fault is the deficit

  Both Senators Leahy and Bradley claim that the current deficit is the 
work of the Republicans--particularly former President Ronald Reagan. 
They claim it was the massive defense buildup of the 1980's along with 
the Reagan tax cuts that led to the present day deficits. In President 
Reagan's words, ``Well, there they go again.''
  In reality, one thing and one thing only has led to our massive 
deficits, Congress' voracious appetite to spend and spend. During the 
1980's, the Reagan tax cuts stimulated the
 economy and led to the largest peace time boom in American history. 
About 20 million new jobs were created and revenue increased by about 
$1 trillion. The problem was that Congress, whose constitutional 
authority it is to oversee and legislate the budget, spent $1.4 
trillion.

  In fact, it really doesn't matter whose fault it is. This is a 
bipartisan problem with fault enough for both sides of the aisle. Let's 
stop pointing fingers and work together.
  Senator Bradley, who presented a very detailed and erudite exegesis 
of the budget process--I wish more of my colleagues were present on the 
floor to see it--hit the nail on the head when he stated that the real 
problems of the budget shortfalls is the mammoth growth in entitlement 
spending and payments on interest on the debt. He even seemed at times 
to make a case for passage and ratification of the amendment since he 
must concede that Congress, without a balanced budget amendment, has 
been wholly ineffective in resolving the budgetary crisis.
  Furthermore, both Senators proudly point to President Clinton's 
deficit reduction plan as some kind of solution to the deficit problem. 
But they neglected to mention one simple thing--that after a small drop 
in the deficit for the first few years of the plan--the deficit 
continues to rise, surpassing $200 billion in 1996, reaching the record 
level of $297 billion in 2001, and topping $421 billion in 2005. Even 
the President's new budget plan fails to resolve the deficit problem as 
it averages about $200 billion deficits for each year of the budget 
plan.


            balanced budget amendment as an unfunded mandate

  Finally, both Senators Leahy and Bradley contend that passage and 
ratification of the balanced budget amendment will act as an enormous 
fiscally crushing Federal unfunded mandate, forcing the States to 
assume responsibilities for social spending that the Federal Government 
has shouldered for years. This statement is the mother of 
exaggerations. First of all, it does not take into account that many of 
these Federal programs come with inflexible bureaucratic strings 
attached and ofttimes hamper localities resolve economic and social 
problems. Indeed, many Governors, including Governors Wilson of 
California, Allen of Virginia, Whitman of New Jersey, and my own 
Governor, Governor Leavitt of Utah, have publicly stated that they will 
gladly take the decrease in Federal proceeds due to a Federal balanced 
budget for control over how moneys are spent in States and localities. 
I truly believe that the States and localities will be far more 
efficacious in how money is spent without Big Brother Federal 
Government looking over their shoulder.
  Of course, passage and ratification of the balanced budget amendment 
will require sacrifices, sacrifices from all of us. But the returns on 
a balanced budget are enormous--increased economic growth and more and 
better jobs. Indeed, as Senator Simon often cites, GAO estimates that a 
balanced budget in the late 1990's will result in a 33-percent increase 
in the standard of living in about 10 years. I bet Senators Leahy 
 [[Page S2230]] and Bradley did not take this into account.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER (Mr. Abraham). The Senator from Iowa.

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