[Congressional Record Volume 141, Number 24 (Tuesday, February 7, 1995)]
[Senate]
[Pages S2233-S2242]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

  The Senate continued with the consideration of the joint resolution.
  Mr. BYRD. Mr. President, today we continue one of the most important 
debates in the history of the Senate. The debate involves whether to 
change the basic, fundamental, organic law of this Nation forever, and 
for the first time 
[[Page S2234]] to write fiscal policy into the Constitution of the 
United States--for the first time, amended only 27 times in its 
history. The Constitution of the United States is one of the most 
brilliant, uplifting, and inspired documents ever written by the hand 
of mere mortals. It has served as a model for other nations, nations 
that are struggling to emulate the American genius and ensure a 
government that allows maximum freedom for its people, and yet also 
fairly imposes the strictures of the rule of law.
  Such a document, with its carefully weighted checks and balances, its 
beautiful guarantees of freedom and liberty, its eloquent preamble of 
52 words, and its visionary flexibility has inspired and guided this 
great Nation of ours for generations.
  Now the decision to preserve it for our future generations rests with 
this body--100 men and women sworn to support and defend this marvelous 
Constitution against all enemies, foreign and domestic. And the 
decision rests with us. The buck stops here. I have taken that oath 13 
times in the last 48 years--to support and defend the Constitution 
against all enemies, foreign and domestic. I have administered the oath 
of office on a good many occasions to several of my colleagues, and I 
have considered it an honor and a privilege to do so.
  This body has a solemn responsibility to debate the proposed 
amendment carefully, fully, thoroughly and with diligence. Nothing on 
the Senate's agenda is as important as this proposal. It is the most 
important decision that will be made in this Senate this year. And if, 
which God avert, this amendment is adopted, it will prove to have been 
the most important amendment, the most important change to the 
Constitution since the Constitution became effective 206 years ago, and 
it will be the first time out of 27 times that an amendment has been 
adopted to damage this inimitable document.
  Nothing on the Senate's agenda, as I say, is as important as is this 
proposal. So I say that no politically crafted, so-called Contract With 
America--you have heard about that, the Contract With America, the so-
called Contract With America. Let me show you my contract with America. 
Here it is, the Constitution of the United States. It cost me 15 cents. 
There it is--15 cents. Any Senators who wish to get similar copies may 
do so from the Government Printing Office. It only costs a dollar even 
at today's prices.
  So this so-called Contract With America, which I did not sign on to, 
and which just sprouted up like the prophet's gourd overnight, during 
the last election, should not drive this debate or crowd out the 
thorough consideration of this proposed constitutional amendment.
  We have a duty to air all sides before the public, lest there be any 
misunderstanding about what is being proposed. If we are to adopt this 
most serious of alterations to our Constitution, let us not do so 
without telling the American people exactly what the change will mean 
to them. Let us not do so without telling the American people exactly, 
to the very best of our ability, what the change will be to them, the 
American people.
  The debate may be at times tedious. It deals with concepts and truths 
which are not usually on the public radar screen. But it is our 
responsibility to focus the public, if we can, on this issue which is 
so fundamental, so fundamental to the future of our Nation.
  And so it is my hope that the Senate and its Members will concentrate 
their fractured attention spans, clear the decks, and listen to and 
participate in this extraordinary debate. Now, this is no ordinary 
bill. It is no mere amendment to a statute. This is the supreme law of 
the land about which we are talking. We are talking about amending the 
supreme law of the land, the Constitution of the United States, the 
supreme law of the land, the guarantor of our freedoms and the freedoms 
of generations of Americans which we are considering here on this 
Senate floor. We are considering an amendment to write into the 
Constitution for the very first time language dealing with fiscal 
policy. That is a subject which the framers of the Constitution, in 
their wisdom, left for the decisions of the elected representatives of 
the people in this body and in the other body.
  I hope that we will be guided by at least a limited wisdom of the 
Framers. There is a kind of pretense that one can read between the 
lines in this amendment, namely that the statesmen of today are wiser 
than those Framers of the Constitution who acted 208 years ago to 
submit to the States for their ratification the great document. I hope 
that we will reread the solemn oath that we all took when we were sworn 
in. I hope that Members will listen to their consciences and resist the 
political winds that have already blown through the other body.
  Now is the Senate's time to shine. It can fulfill the task before us, 
with faithfulness to its purpose, by an exhaustive review of the impact 
of this proposal. Nothing we do during our collective service in the 
Senate will ever be more important than this task which is before us 
today, the task of examining, scrutinizing, dissecting, and hopefully 
rejecting this constitutional amendment.
  The people hopefully will remember one truth as they watch and as we 
engage in this historic debate; that is, that there is no disagreement 
over the goal of getting to a balanced budget by reducing the Federal 
deficit. This debate, however, is about tampering with the United 
States Constitution in such a way as to mandate a zero deficit each and 
every year for the life of this Republic--for the life of this 
Republic--not just for a few years, but for centuries. Who knows? This 
is an extreme and serious remedy, indeed.
  We can change a statute a month after it is enacted, 2 weeks after it 
is enacted, or a year after it is enacted. A statute can be repealed by 
the same Congress that originally enacted it. But not so with an 
amendment to the Constitution. Once this surgery has been performed, 
once the frontal lobotomy has been done, it will be very difficult to 
undo if we do not like the consequences.
  That is why as much should be known about this proposal as possible, 
including a blueprint for exactly how the proponents would get the 
budget into balance by 2002. If that blueprint cannot be produced, then 
the American people should be aware from the outset that the amendment 
may be a sham and a cruel hoax by politicians looking to curry favor by 
making promises that they cannot keep, and by using the Constitution--
this Constitution of the United States--as cover for their singular 
lack of courage.
  Public service should mean more than that. The welfare of the people 
should mean more than that. And the Constitution of the United States 
must surely mean more than that.
  Mr. President, I have heard the great name of Thomas Jefferson 
invoked time and time again during this debate by some of those who 
support this constitutional amendment on the balanced budget. Thomas 
Jefferson was not one of those at the Constitutional Convention. Thomas 
Jefferson was not one of the 39 signers of the Constitution. He was a 
Minister to France at the time that the Constitutional Convention was 
underway.
  We all know that a failure of the Congress under the Articles of 
Confederation to provide the Nation with a responsible financial system 
was the principal stimulus to the drafting of the Constitution. That 
was one of the things that was wrong with the Congress under the 
Confederation, one of the things that weakened the Continental 
Congress.
  The First Continental Congress met on September 5, 1774. The Second 
Continental Congress met in 1775, and it continued until 1781, in which 
year the Articles of Confederation were created, and the Congress under 
the Confederation continued to exist until 1789, when this Republic, 
created under the new Constitution, came into being.
  One of the principal reasons why it became clear that the Congress 
was ineffective under the Confederation was the fact that its financial 
system was really a paralyzed system, one in which the Congress had to 
depend upon the States for their good will and their support in coming 
up with the funds that were levied against them. The Congress had 
little power. It had to requisition moneys from the States, and the 
moneys were not always forthcoming.
  So, it was decided that there would have to be a new form of 
Government, 
[[Page S2235]] and a new Constitution was thus written. There were also 
problems with regard to commerce between and among the States. All 
those things came into focus and made clear the need for a new 
Constitution and a new form of Government. That Constitution, 
therefore, was written during those 116 days that occurred between and 
including May 25 and September 17, 1787.
  Jefferson did not help to write that Constitution. Jefferson was not 
at the Constitutional Convention. So why invoke his name? This notion 
that today's populace should not be able, by borrowing, to burden 
future generations with debt was never seriously considered by the 
convention. Such an amendment to the Constitution was never submitted 
to the people.
  Jefferson was President of the United States from 1801 to 1809. Why 
did he not suggest or recommend that such an amendment be submitted to 
the people by the Congress? He had the opportunity to do it. Why did he 
not do it?
  I think we have to recognize a limitation as to what we are willing 
to include in the Constitution by recognizing that there is a vast gulf 
between what might be considered a Utopian Constitution and what it 
might contain, and what a Constitution in the real world can achieve.
  One should never underestimate the price of making promises that even 
a Constitution might not be able to deliver.
  Thomas Jefferson took no part in the debates, as I have said, of the 
1787 Convention that produced the Constitution. He was in France. He 
did not return home until October 1789. The Constitution had already 
gone into effect on March 4, 1789.
  A month previous to his return home from Paris, Jefferson wrote the 
celebrated ``The Earth Belongs to the Living'' letter, and he wrote it 
to James Madison. In that letter, Jefferson argued that ``no generation 
can contract debts greater than may be paid during the course of its 
own existence,'' and Jefferson calculated such a period to be about 19 
years. We would calculate it to be a longer period these days.
  James Madison, though, is generally recognized to be the Father of 
the Constitution. Here it is in my hand, the Constitution of the United 
States. This is not the so-called Contract With America; this is the 
Constitution of the United States. That is my contract with America.
  James Madison is generally agreed to have been the Father of the 
Constitution of the United States. He continued to explain that ``the 
improvements made by the dead form a charge against the living who take 
the benefit of them.'' In other words, the improvements made by those 
of this generation, who years hence, would be dead. The improvements 
made by the dead form a charge against the living generations hence, 
who will take the benefit of those improvements. Continuing, Madison 
said, ``Debts may be incurred for purposes which interest the unborn, 
as well as the living''--This is not Robert C. Byrd talking; this is 
James Madison. I was not there when this Constitution was written. I 
did not have a thing to do with writing it. But it is my contract with 
America. Madison said: ``The improvements made by the dead form a 
charge against the living who take the benefit of them. Debts may be 
incurred for purposes which interest the unborn, as well as the living; 
such are debts for repelling a conquest, the evils of which may descend 
through many generations.''
  Madison's view, therefore, was that ``debts may be incurred 
principally for the benefit of posterity.'' Jefferson said, in essence, 
we should not pass debts on to our children and grandchildren. But 
Madison took the other view--the better view, in my judgment--that 
``debts may be incurred principally for the benefit of posterity.''
  I think greater weight should be given to Madison's view than to 
Jefferson's more abstract idea, written from the distant European 
shores. Particularly compelling is Madison's salient observation of the 
year 1790, namely, that ``the present debt of the United States''--in 
1790--``far exceeds any burdens which the present generation could well 
apprehend for itself.'' Even in 1790, the next year following the 
flowering of this new republic, under the new Constitution.
  Madison believed in the ``descent of obligations'' from one 
generation to another. ``All that is indispensable in adjusting the 
account between the dead and the living,'' he wrote, ``is to see that 
the debits against the latter do not exceed the advances made by the 
former.'' As I stated earlier, Jefferson later became President. Why 
did he not propose a constitutional amendment? Why did he not lead an 
effort to propose a constitutional amendment to carry out the ``Earth 
Belongs to the Living'' theory? Say what you want; he did not do it.
  To the contrary, in 1803, Jefferson encountered an unexpected offer 
from France to purchase the Louisiana Territory. Although he felt that 
he lacked clear constitutional authority to act, Jefferson accepted the 
offer--and I am glad that he did--and incurred a public debt to pay the 
required $15 million. Where did he get the money? He borrowed it from 
English and Dutch banks. Grappling with this contradiction now, 
Jefferson said in 1810 that the question was ``easy of solution in 
principle, but somewhat embarrassing in practice,'' and then Jefferson 
went on to suggest that the ``laws of necessity'' were sometimes higher 
than the written laws of government and concluded that it would be 
absurd to sacrifice the end to the means. I think he did the right 
thing.
  I have no doubt that, once the American people are better informed on 
this question before the Senate, the judgment of the American people 
will be sound.
  Talleyrand, who dominated the politics of Europe for 40 years--he was 
Prime Minister of France, who served under Napoleon--said there is more 
wisdom in public opinion than is to be found in Napoleon, Voltaire, or 
all the ministers of State, present and to come.
  (Ms. SNOWE assumed the chair.)
  Mr. BYRD. But, Madam President, it has to be an informed public 
opinion. It has to be an informed public opinion.
  And that is, more than anything else, why the Senate is the premier 
deliberative body of the world today. It is the forum of the States and 
the forum of minorities, and a forum in which there is unlimited 
debate, the right of unlimited debate, only to be shut off by a cloture 
motion adopted or by a unanimous consent agreement.
  I happen to believe that the American people are not fully
   informed as to the ramifications of this snake oil constitutional 
amendment which would mandate--mandate--a balanced budget every year 
from now until kingdom come; every year.

  Madison, in Federalist Paper No. 63, said:

       * * * so there are particular moments in public affairs 
     when the people, stimulated by some irregular passion, * * * 
     or misled by the artful misrepresentations of interested men, 
     may call for measures which they themselves will afterwards 
     be the most ready to lament and condemn.

  Now he was talking about the Senate. That is what Madison was talking 
about. Go look at the Federalist Paper No. 63. He was talking about the 
Senate.
  ``In these critical moments,'' he said, ``how salutary will the 
interference of some temperate and respectable body of citizens in 
order * * * to suspend the blow meditated by the people against 
themselves until reason, justice and truth can regain their authority, 
over the public mind.''
  Madison was talking about the Senate.
  ``What bitter anguish'' he said, ``would not the people of Athens 
have often escaped if their government had contained so provident a 
safeguard against the tyranny of their own passions? Popular liberty 
might then have escaped the indelible reproach of decreeing to the same 
citizens the hemlock on one day and statutes on the next.''
  That was Madison, the father of the Constitution, talking about the 
Senate. William Ewart Gladstone--who was prime minister four times 
under Queen Victoria--referred to the U.S. Senate as ``that remarkable 
body, the most remarkable of all the inventions of modern politics.''
  Madison was talking about the Senate, referring to it as a body of 
``temperate and respectable'' citizens who might interfere and 
``suspend the blow meditated by the people against themselves'' in a 
time of partisan political 
[[Page S2236]] passion, ``until reason, justice, and truth can regain 
their authority over the public mind.''
  That is why we have the Senate. That is why we are here to debate 
these issues.
  Madam President, for more than a week now I have listened with great 
fascination as some of the proponents of the balanced budget 
constitutional amendment have laid out every conceivable reason as to 
why we should adopt this measure. If I did not know better, if I did 
not certainly think I knew better, I might be convinced by all of the 
rhetoric that the amendment is the silver bullet cure-all for 
everything that ails the country. But I do know better, and, more 
importantly, the American people will know better, too, if only they 
can be fully informed on the matter.
  Unfortunately, left unsaid in all the pro-amendment talk has been one 
of the most important parts of this, what it will really amount to, 
what it really amounts to in my judgment will be an immense fraud: the 
people's right to know how implementation of the amendment will affect 
them. How will the adoption of this amendment affect you, Mr. and Mrs. 
America, you and your children and your grandchildren?
  And, contrary to what some may think, the public does have a right to 
know how they will be affected. The people have a right to know how 
spending cuts on the magnitude of $1.5 trillion over the course of a 7-
year span will impact their lives and the lives of their children.
  The fact that the public is beginning to understand that they are 
going to be hit and hit hard can be seen in the results of a recent 
nationwide survey. Last week, the American Association of Retired 
Persons released a poll, conducted by the Wirthlin Group during the 
last week of January, which showed that 75 percent of the American 
people want to know the details of what will have to be cut to balance 
the budget before the amendment is voted on. Notice, I said ``before 
the amendment is voted on.''
  So, as will be seen by this chart here, the American people are 
saying, ``Spell out the cuts.'' Spell out the cuts.
  Three out of four Americans, according to this poll that was released 
by the American Association of Retired Persons last week, three out of 
four Americans want to know, Madam President, where, oh where, we 
intend to come up with $1.5 trillion and they want to know it before 
the vote on this fiscal pie-in-the-sky proposal takes place.
  Even more amazing than those overwhelming numbers, though, is that 
the support for the radical idea of knowing the details ahead of time 
runs across party lines.
  The chart to my left plainly states that 68 percent of the 
Republicans polled by the Wirthlin Group want to know what will be cut 
first before Congress passes the balanced budget amendment. Seventy-
seven percent of the Democrats want to know. Eighty-three percent of 
the independents want to know. Want to know what? What will be cut 
first?
  They want to know first, before we adopt any such amendment, they 
want to know the figures that will be cut.
  These results of the poll show that the argument over the people's 
right to know is not a partisan argument. It is not, as some have 
suggested, simply a way of delaying a vote on the balanced budget 
amendment. Sixty-eight percent of the Republicans polled do not believe 
that it is simply a way of delaying the vote. Seventy-seven percent of 
the Democrats polled do not believe it is just a way to delay the vote. 
They want to know what is in the amendment. Eighty-three percent of the 
independents do not believe it is just a way to delay the vote. They 
want to know what is going to be cut.
  It is not, as some have suggested, simply a way of delaying a vote on 
the balanced budget amendment. On the contrary, the people's right to 
know is a very real issue that must be confronted. In reality, Madam 
President, none of the Members should be surprised by the poll results 
because the American people are not reckless.
  People know, for example, that before they buy a house, they need to 
ask whether or not the roof leaks. They know that before they buy an 
insurance policy, they should read the fine print to see exactly what 
it covers. And they know if they want to cut the amount of fat and 
cholesterol in their diets, they should read the label on the foods 
that they buy at the supermarket.
  The people take the time to think about what they are being asked to 
buy. They consider all of the pluses and all of the minuses of what 
they are judging. They do not run out willy-nilly and lay down their 
money without asking for the details of what they are about to 
purchase. They do not take it on faith that what they are being told is 
the full story. They ask questions. They ask questions. They expect to 
be given clear and honest answers to their questions.
  Now that the American people are asking questions, now that they are 
asking the details of the $1.5 trillion magic pill that will shrink the 
deficit without pain or suffering, are they going to be ignored? Is the 
American people's right to know going to be ignored? By refusing to 
honor the public's right to know, the proponents will, in effect, be 
telling the American people that we here in Washington know what is 
best.
  ``Take it on faith,'' is what the American people are being told. 
``Trust us. Trust us. Do not press us. Do not press us for all of these 
messy details.'' Is that what Senators think the public was telling 
Members last November? Do Senators honestly believe the message out of 
the last election was that the American people want Members to pass 
legislation in such a hurry that we do not tell the American people the 
ramifications?
  Does anyone think that the public is happy with being kept in the 
dark on this $1.5 trillion scam? In my view that is what it is, unless 
we tell them, let them look under the hood, unless we tell them what is 
on the label, unless we at least put a label on this bottle. If anyone 
thinks that, then they should think again. The American people have a 
right to know the details behind this amendment. They have a right to 
know whether or not their children are going to be able to get a 
student loan, whether or not the national parks in their State will be 
closed, whether or not the National Institutes of Health will be able 
to continue with breast cancer research, whether or not they will see 
fewer cops on the beat in their cities, whether or not the Federal 
Government will continue to offer financial help with highways and 
water treatment plants in their communities. People have a right to 
know.
  Nearly everyone is making promises, as I listen, promises that Social 
Security will not be cut under the balanced budget amendment. There 
will be amendments offered to exempt Social Security, we hear, and 
promises made to protect Social Security from cuts. I do not want our 
senior citizens to be misled. Taking the Social Security trust fund off 
the table does not totally ensure our elderly citizens from the 
devastation of this amendment. Taking the Social Security trust fund 
off the table simply means that even more pressure for cuts falls on 
Medicare and on other programs that help the elderly, such as Meals on 
Wheels.
  Moreover, there are backdoor ways, backdoor ways of getting at Social 
Security even if it were to be taken off the table. One such idea which 
is being explored, I believe by our Republican friends, is to 
recalculate the way we measure cost-of-living increases in order to 
help to reduce the deficit. That proposal, that recalculation, would 
actually mean a reduction in inflation adjustments for taxpayers' 
standard deductions and personal exemptions on their income tax form. 
Those changes, then, would result in both a cut in Social Security 
benefits and a tax hike to the recipients of Social Security benefits. 
So Social Security recipients should not rest easy, even if the trust 
fund were to be exempted.
  Social Security recipients will not be protected. The mammoth cuts 
that will have to be made under this balanced budget amendment, even if 
Social Security were to be taken off the table, will mean that state 
taxes and local taxes will likely go through the ceiling so that States 
can pay for some of the essential services which the Federal Government 
no longer will be able to provide.
  The elderly, along with everybody else in the Nation, will see their 
incomes eroded by higher taxes in the 
[[Page S2237]] States. The elderly will be hurt by this balanced budget 
amendment, whether or not the trust fund is exempted. And I say make no 
mistake about that.
  Additionally, I do not want to see a kind of generational and 
interest group warfare set up by the enactment of this amendment. There 
will be interest group and generational hand-to-hand combat the like of 
which we have never seen if this amendment is adopted, and the warfare 
and sniping will worsen if Social Security were to be exempted.
  A recent study shows that 26 percent of the children under 6 years 
old live in poverty in the United States. Do we want to set up a 
situation that forces Members to choose between helping the elderly and 
helping the children; helping the elderly and helping the grandchildren 
of the elderly?
  What about pitting the elderly against their grandchildren? What 
about pitting the elderly against the veteran? Certainly, we should not 
want to see that. Many senior citizens also receive veterans benefits. 
This amendment sets one American against another, one interest group 
against another, and would tend to force severe across-the-board cuts 
under the guise of fairness. Instead of using our judgment, instead of 
looking at what could and should be cut, Senators would likely buckle 
under competing interest group pressure, put the blindfolds on, and 
enact sweeping, meat-ax cuts on all programs.
  That would be bad public policy. But if that is to be the policy, 
then the elderly, the veterans, the mayors and Governors, the parents 
and grandparents of the children and everybody else in America, 
including the Members of this body, need to know now, in order to be 
able to make an informed choice about the wisdom, or the unwisdom, of 
this constitutional amendment.
  Did the Senator ask me a question?
  Mr. HOLLINGS. I thought you completed your comments. I will wait.
  Mr. BYRD. I say to my able friend, I will not go longer than another 
5 minutes at most. The Senator has been sitting here waiting. I did not 
see him sitting back there because this chart is between the two of us. 
If the Senator will indulge me just another 3 or 4 minutes.
  Mr. HOLLINGS. I have been enjoying it.
  Mr. BYRD. I thank the Senator.
  Mr. President, the American people have a right to know these things, 
and while many of them come to the floor to speechify on the need for a 
balanced budget amendment, over the past 5 years we here in the 
Congress have already cut more than $900 billion from the deficit. In 
the Budget Enforcement Act of 1990, Congress cut $482 billion from the 
deficit. We followed that effort with $432 billion worth of deficit 
reduction in 1993--without, I would note, the help of many of those who 
favor a balanced budget amendment. And each and every one of those 
dollars of deficit reduction, Mr. President, was cut without--without--
a constitutional amendment. What was required to do the job then, and 
what will be required to do the job in the future, was putting a budget 
plan out here on the Senate floor, getting down to business and 
discussing the pros and cons of the proposed cuts in full view of the 
American public, and then voting up or down.
  Yesterday, we were treated to several hours of bashing of the 
President's budget by the proponents of this constitutional amendment 
to balance the budget. But I hope that no one will be confused by those 
transparent attempts to obscure the central point of this debate. That 
point is that the American people need to know how the proponents 
intend to get to a perfect budget balance by the year 2002, and they 
need to know it before their Senators vote on the amendment. The 
President has submitted his budget. He does not support a 
constitutional amendment to balance the budget by 2002; therefore, it 
is not incumbent upon him to produce a budget that does so. He will not 
even have a chance to sign such an amendment or veto such, 
constitutional amendment, because that amendment goes straight to the 
States if we in the Congress approve it, God forbid. The President is 
largely a mere observer in this process. The decision to amend the 
Constitution is a decision that is reserved for the Congress and for 
the people of the several States.
  But the President's budget is a useful illustration of one thing. 
Budget balance, or even a continuing glidepath to deficit reduction, is 
difficult to achieve if tax cuts are part of the equation. Be that as 
it may, I believe that the President has given us an honest budget, 
even if I personally do not agree with it. I do not believe he has 
cooked the numbers. We have seen plenty of that in the past. He has 
held the deficit steady, even though health care costs will grow by 
more than 9 percent a year for the next 5 years. And I believe that we 
could have had a continuing glidepath of deficit reduction if the tax 
cuts had been dropped from the President's budget.
  But, the President has put his cards on the table. What about the 
amendment's supporters? They say that they are in favor of this so-
called constitutional amendment, but they refuse to show their cards. 
And, worse, they propose to start on the road to this constitutional 
amendment with a gigantic tax cut--one that dwarfs the administration's 
modest proposal, by something like three to one. Just last week, the 
staff of the Joint Committee on Taxation estimated that the revenue 
loss to the Treasury, if the Republican tax cuts are enacted, would be 
almost $205 billion over 5 years. Even that figure is somewhat 
misleading because the tax cuts which the proponents are suggesting are 
back-loaded. Taking the back-loading into account, in the fifth year 
alone, revenue losses would be some $69 billion.
  But, the proponents claim that, not only can they pay for these tax 
cuts with spending cuts; they can cut even further and get the budget 
to balance by 2002. So far, the proponents will only make vague 
promises about what they will not cut. They have listed Social 
Security, defense, and interest on the debt as items that will not be 
touched. Those three items together make up a little over one-half of 
the Federal budget. To get to budget balance by 2002, the proponents 
would have to cut the remaining Federal budget by about one-third. The 
largest category of spending in the half of the budget that is to be on 
the chopping block are the health care programs. Medicare and Medicaid 
amount to about one-sixth of all Federal spending. These same health 
care programs, Medicare for the elderly and the disabled, and Medicaid 
for the poor, are also the fastest growing programs in the half of the 
budget which the proponents propose to cut.
  So why do the proponents not stop talking about what they will not 
cut and tell the American people what they will cut? It is popular to 
say Social Security is off the table. But how about telling the 
American people what is left on the table? Medicare is on the table. 
State and local grants are on the table. Why not tell the Governors and 
the mayors and the elderly about the cuts that will be necessary for 
budget balance by 2002? Veterans pensions, civilian and military 
retirement pensions, highway grants, environmental cleanup, WIC, 
education--all those items are left on the table. Why do the proponents 
not show down? This so-called balanced budget amendment is their idea, 
not mine, not President Clinton's. So, let us hear how the proponents 
intend to deliver. Let us know how the proponents plan to enact giant 
tax cuts, protect Social Security from any cuts, protect defense from 
any cuts, pay the interest on the debt and still get the budget into 
balance by 2002. The silence from the proponents about the specifics of 
how we get to budget balance is positively deafening. Why is that? Will 
someone please tell the American people why we are not laying out a 
plan for their scrutiny? I can only say what I believe. I believe that 
we are hearing nothing from the proponents because it cannot be done, 
or because they will not do it.
  We are already required to project the deficits for at least 5 years 
out. Why can the proponents not project the plan for this amendment, as 
it will affect the American people, 7 years out? I believe that we are 
hearing nothing from the proponents because they don't really want the 
American people to know.
  Tax cuts, coupled with removing Social Security, defense, and 
interest payments from any consideration for spending reductions, make 
balancing 
[[Page S2238]] the budget by 2002 without totally devastating the 
economy of this Nation and the 50 States, is mission impossible.
  Let us not tell the patient that he is going under the knife for 
cosmetic liposuction--lipo comes from the Greek, l-i-p-o, meaning 
``fat''--when, in fact, we all know that he will wake up with most of 
his intestines and part of his stomach missing. Let us not sign on to 
this contract with evasion. We hear so much about the so-called 
Contract With America. This is a contract with evasion and deceit. 
Unless we tell the American people how we intend to get the budget to 
balance by the year 2002 before we vote, this amendment amounts to 
little more than a contract with deceit. The Senate would have to be 
infected with the virus of collective madness to adopt this contract 
with deceit and evasion.
  But as the poll shows, the American people have caught on to this 
unbecoming ruse, and they are not going to let us get away with it. 
Passing the buck is a political cop out. In the case of the 
constitutional amendment to balance the budget, the buck stops right 
here.
  Madam President, I ask unanimous consent to insert in the Record at 
this point an article from the Wall Street Journal of today, titled 
``GOP Tax Cuts Are Seen Costly Over 10 years,'' which states that the 
GOP tax cuts would cost $704.4 billion over the next decade.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, Feb. 7, 1995]

               GOP Tax Cuts Are Seen Costly Over 10 Years


   new congressional analysis finds loss of revenue reaching $704.4 
                                billion

               (By Jackie Calmes and Christopher Georges)

       Washington.--Even as Republican lawmakers lambasted 
     President Clinton's budget for its failure to slash federal 
     deficits, a new congressional analysis put the cost of their 
     promised tax cuts at $704.4 billion over the next decade.
       That analysis yesterday from Congress' nonpartisan Joint 
     Committee on Taxation, whose estimates are the basis for 
     Republican legislation on taxes, closely parallels the 
     Clinton administration's own earlier finding, which many GOP 
     leaders criticized at the time. Now both have found that the 
     revenue loss from the proposed tax cuts would balloon in 
     later years far beyond the five-year estimates of $200 
     billion that Republicans previously have cited. The Treasury 
     Department last month put the cost of the Republican tax cuts 
     at $725.5 billion through fiscal 2005.
       Although Republicans in Congress have vowed to offset the 
     five-year cost through $200 billion in matching spending 
     cuts, the effort has proved such a struggle that the House 
     isn't expected to act on the package until at least mid-
     March. Only afterward will it turn to drafting a budget aimed 
     at slashing deficits. While Congress bases its budgets on 
     five-year outlooks, the new 10-year forecast for the tax cuts 
     is pertinent given the Republicans' current push for a 
     constitutional amendment mandating a balanced budget by 2002.
       Meanwhile, at a news conference on the president's budget, 
     Senate Majority Leader Robert Dole said ``the administration 
     has given up'' on the deficit, a realization that ``will 
     certainly help our cause to get enough votes for a balanced-
     budget amendment.'' The Senate is in the second week of 
     debate on the amendment.
       President Clinton and his advisers yesterday defended their 
     budget after it was released as one that would reduce the 
     deficit gradually if measured as a percentage of the gross 
     domestic product, the total value of goods and services 
     produced in the country. ``There is no magic amount of 
     deficit reduction that you need,'' Budget Director Alice 
     Rivlin told reporters. ``We now have a deficit that's under 
     control and coming down in relation to the size of the 
     economy.''
       ``The best way or the most obvious way to do additional 
     deficit reduction,'' Ms. Rivlin said, ``is the one that we 
     talked so much about last year, namely, controlling the out-
     year costs of health care.'' She described the 
     administration's decision to essentially ignore health-care 
     reform in this year's budget as a tactical one. The president 
     still wants to work with Congress to slow the growth in the 
     cost of health care and to improve access to health care, she 
     said.
       The budget projects a deficit of $196.7 billion, or 2.7% of 
     GDP, in fiscal 1996, which begins Oct. 1. If Mr. Clinton's 
     proposals were adopted by Congress and if the economy 
     performs precisely as the White House projects--two unlikely 
     outcomes--then the deficit is projected to be 2.7% of GDP the 
     following year and to fall to 2.4% of GDP in fiscal 1998. But 
     it would remain around $200 billion a year for the 
     foreseeable future.
       The new White House economic forecast published in the 
     budget shows that the administration thinks the Federal 
     Reserve is finished raising interest rates. The president's 
     economic advisers anticipated the increase of one-half 
     percentage point in short-term interest rates that the Fed 
     engineered last week, but they don't foresee any further 
     boosts, chief White House economist Laura Tyson said.


                            ballooning costs

       The congressional committee previously estimated that the 
     Republican tax-cut proposals would cost $203.9 billion in the 
     first five years. But over 10 years, the reductions would 
     cost the Treasury more than three times as much because the 
     cost of some proposals balloon in the future. GOP proposals 
     to reduce capital-gains taxes would lose $170.3 billion over 
     10 years--up from $53.9 billion in the first five years. The 
     Treasury projects similar revenue drains, of $60.9 billion in 
     the first five years, and $183.1 billion over 10.
       The similarity of the Treasury and Joint Committee 
     findings--and particularly those on the much-debated capital-
     gains proposals--provides striking evidence that the new GOP-
     controlled Congress hasn't significantly departed from 
     longstanding procedures for measuring the impact of tax 
     changes. For years, some Republicans had vowed to overhaul 
     those procedures to reflect their belief that tax cuts boost 
     revenues through economic growth, rather than lose revenues.
       Two GOP proposals that are shown to raise revenues over the 
     first five years would become revenue-losers after that 
     period, as Treasury had found. One, to liberalize the 
     existing deductions for individual retirement accounts, would 
     raise an estimated $2.2 billion through 2000 but then 
     increasingly lose revenue--for a total of $23.9 billion over 
     10 years. Early on, the new proposal would encourage 
     taxpayers to transfer existing IRAs into new ``American Dream 
     Savings Accounts,'' but they would have to pay taxes on the 
     amount transferred. After five years, however, savers could 
     withdraw money from the new accounts tax-free.


                          write-off provision

       The second provision, liberalizing write-offs for capital-
     intensive businesses' plant and equipment, would raise $16.7 
     billion over the first five years but lose $88.8 billion over 
     10 years. The early gain comes because the proposal would 
     create less generous write-offs for the first years of an 
     investment, in exchange for more generous write-offs later. 
     The Treasury found an even larger loss from this ``neutral 
     cost recovery'' provision--$120.4 billion over a decade.
       The Treasury says President Clinton's tax cuts for the 
     middle class would cost $62.7 billion over five years and 
     $171.2 billion over 10 years.
       Although many private forecasts anticipate further 
     increases in short-term interest rates, last week's 
     employment report has led some to conclude that the Fed won't 
     raise rates much more than it has already.
       ``They'll be wrong on interest rates, but not by much. 
     We'll get one more rate hike from the Fed this year,'' 
     Elliott Platt, an economist at Donaldson, Lufkin & Jenrette, 
     said of the White House forecast. The Fed has increased 
     short-term rates three percentage points in the past year.
       The economic forecast in the budget says the unemployment 
     rate, now at 5.7% of the work force, will climb to 6% by the 
     fourth quarter of this year. But the president's Council of 
     Economic Advisers has already changed its mind and now 
     predicts that unemployment will range between 5.5% and 5.8% 
     over the rest of the decade.


                           new or higher fees

       Nearly all the significant features of the president's 
     budget were leaked over the weekend. Among the details in 
     documents released yesterday are a number of new or higher 
     fees, including some on small-business loans and pesticide 
     registration. The president also proposes:
       To levy a border-crossing fee of $3 a vehicle and $1.50 a 
     pedestrian, with discounts for those who cross the border 
     frequently.
       To fund the Commodity Futures Trading Commission with a 10-
     cent fee for each round-turn transaction on commodity futures 
     and options contracts.
       To charge federal employees for parking, but only where the 
     agency heads decide to do so.
       To raise about $1 billion over five years by requiring the 
     Federal Deposit Insurance Corp. and the Federal Reserve to 
     assess fees from state-chartered banks they regularly 
     examine. The fees would be calculated according to the size 
     of the banks; those with assets of less than $100 million 
     would be exempt.
       To submit a plan to raise $4.8 billion over five years by 
     expanding Federal Communication Commission authority to 
     auction off more of the radio spectrum or to levy new user 
     fees.
       To collect fees from medical-device makers that are seeking 
     Food and Drug Administration product approvals, using the 
     money to hire more staff to speed reviews.

  Mr. BYRD. I yield the floor.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from South 
Carolina.
  Mr. HOLLINGS. I thank the distinguished Chair.
  Madam President, there is an old axiom in the court of equity that is 
he who seeks equity must do equity; he who comes into the court of 
equity must come with clean hands. We have 
[[Page S2239]] had many chants and claims in recent days calling on 
Members to submit a balanced budget.
  Two weeks ago, with that equitable axiom in mind, I did exactly that. 
I felt that I lacked standing in this so-called court of the U.S. 
Senate to demand that my colleagues submit a budget blueprint that I 
had not submitted myself.
  Two weeks ago, I included it in the Record and attempted to highlight 
certain realities of our present fiscal situation. The reality is that 
balancing the budget in a 7-year period requires $1.2 trillion in 
spending cuts.
  The other reality was that the savings from entitlement reform would 
not be enough to balance the budget. Clearly, we must try our best to 
slow health costs and reform our welfare system. Likewise, we can save 
some Federal dollars by reviewing supplementary security income as Mort 
Zuckerman suggested in last week's U.S. News and World Report.
  But putting these reforms in place costs money. Anyone who argues 
that they can set up a work program for welfare recipients, care for 
their children, and reap large savings is whistling Dixie. Likewise, in 
reforming in health care, our focus has been on slowing the growth of 
overall spending rather than cutting back on existing funds. President 
Clinton's commitment to health care reform has already led to 
marketplace reforms in my own State of South Carolina. In fact, not too 
long ago the chairman of the board of one of the largest employers in 
my State said, ``Fritz, you keep on debating that health reform package 
up there, because whatever happens is healthy. Rather than seeing 
increases, I am now getting a 10 percent decrease in premiums for 
coverage of my employees.''
  So while the President has done a magnificent job in encouraging the 
marketplace to make reforms, we are still a long way from getting on a 
realistic path to a balanced budget. In short, to stop the hemorrhaging 
in interest costs, spending cuts as well as taxes are necessary.
  I ask unanimous consent, Madam President, to include once again in 
the Record this particular document which lists the budget realities 
and a potential list of discretionary spending cuts.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                 Senator Hollings on Truth in Budgeting

       Reality No. 1: $1.2 trillion in spending cuts necessary.
       Reality No. 2: Not enough savings in entitlements. Yes, 
     welfare reform but job program will cost; savings 
     questionable. Yes, health reform can and should save some, 
     but slowing 10 percent growth to 5 percent--not enough 
     savings. No, none on social security; off-budget again.
       Reality No. 3: Hold the line budget on Defense--no savings.
       Reality No. 4: Savings must come from freezes, cuts in 
     domestic discretionary--not enough to stop hemorrhaging 
     interest costs.
       Reality No. 5: Taxes necessary to stop hemorrhage in 
     interest costs.

                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                   1996       1997       1998        1999        2000        2001        2002   
----------------------------------------------------------------------------------------------------------------
Deficit CBO Jan. 1995 (using                                                                                    
 trust funds).................        207        224        225         253         284         297         322 
Freeze discretionary outlays                                                                                    
 after 1998...................          0          0          0         -19         -38         -58         -78 
Spending cuts.................        -37        -74       -111        -128        -146        -163        -180 
Interest savings..............         -1         -5        -11         -20         -32         -46         -64 
Total savings ($1.2 trillion).        -38        -79       -122        -167        -216        -267        -322 
Remaining deficit using trust                                                                                   
 funds........................        169        145        103          86          68          30           0 
Remaining deficit excluding                                                                                     
 trust funds..................        287        264        222         202         185         149         121 
5 percent VAT.................         96        155        172         184         190         196         200 
Net deficit excluding trust                                                                                     
 funds........................        187         97         27         (17)        (54)       (111)       (159)
Gross debt....................      5,142      5,257      5,300       5,305       5,272       5,200       5,091 
Average interest rate on the                                                                                    
 debt (percent)...............        7.0        7.1        6.9         6.8         6.7         6.7         6.7 
Interest cost on the debt.....        367        370        368         368         366         360         354 
----------------------------------------------------------------------------------------------------------------
Note.--Does not include billions necessary for middle class tax cut.                                            

  Mr. HOLLINGS. Here is a list of the kinds of nondefense discretionary 
spending cuts that would be necessary now as a first step to get $37 
billion of savings and put the country on the road to a balanced 
budget:

                                                                        
------------------------------------------------------------------------
      Nondefense discretionary spending cuts           1996       1997  
------------------------------------------------------------------------
Cut space station.................................     2.1        2.1   
Eliminate CDBG....................................     2.0        2.0   
Eliminate low-income home energy assistance.......     1.4        1.5   
Eliminate arts funding............................     1.0        1.0   
Eliminate funding for campus based aid............     1.4        1.4   
Eliminate funding for impact aid..................     1.0        1.0   
Reduce law enforcement funding to control drugs...     1.5        1.8   
Eliminate Federal wastewater grants...............     0.8        1.6   
Eliminate SBA loans...............................     0.21       0.282 
Reduce Federal aid for mass transit...............     0.5        1.0   
Eliminate EDA.....................................     0.02       0.1   
Reduce Federal rent subsidies.....................     0.1        0.2   
Reduce overhead for university research...........     0.2        0.3   
Repeal Davis-Bacon................................     0.2        0.5   
Reduce State Dept. funding and end misc.                                
 activities.......................................     0.1        0.2   
End P.L. 480 title I and III sales................     0.4        0.6   
Eliminate overseas broadcasting...................     0.458      0.570 
Eliminate the Bureau of Mines.....................     0.1        0.2   
Eliminate expansion of rural housing assistance...     0.1        0.2   
Eliminate USTTA...................................     0.012      0.16  
Eliminate ATP.....................................     0.1        0.2   
Eliminate airport grant in aids...................     0.3        1.0   
Eliminate Federal highway demonstration projects..     0.1        0.3   
Eliminate Amtrak subsidies........................     0.4        0.4   
Eliminate RDA loan guarantees.....................     0.0        0.1   
Eliminate Appalachian Regional Commission.........     0.0        0.1   
Eliminate untargeted funds for math and science...     0.1        0.2   
Cut Federal salaries by 4 percent.................     4.0        4.0   
Charge Federal employees commercial rates for                           
 parking..........................................     0.1        0.1   
Reduce agricultural research extension activities.     0.2        0.2   
Cancel advanced solid rocket motor................     0.3        0.4   
Eliminate legal services..........................     0.4        0.4   
Reduce Federal travel by 30 percent...............     0.4        0.4   
Reduce energy funding for Energy Technology                             
 Develop..........................................     0.2        0.5   
Reduce Superfund cleanup costs....................     0.2        0.4   
Reduce REA subsidies..............................     0.1        0.1   
Eliminate postal subsidies for nonprofits.........     0.1        0.1   
Reduce NIH funding................................     0.5        1.1   
Eliminate Federal Crop Insurance Program..........     0.3        0.3   
Reduce Justice State-local assistance grants......     0.1        0.2   
Reduce Export-Import direct loans.................     0.1        0.2   
Eliminate library programs........................     0.1        0.1   
Modify Service Contract Act.......................     0.2        0.2   
Eliminate HUD special purpose grants..............     0.2        0.3   
Reduce housing programs...........................     0.4        1.0   
Eliminate Community Investment Program............     0.1        0.4   
Reduce Strategic Petroleum Program................     0.1        0.1   
Eliminate Senior Community Service Program........     0.1        0.4   
Reduce USDA spending for export marketing.........     0.02       0.02  
Reduce maternal and child health grants...........     0.2        0.4   
Close veterans hospitals..........................     0.1        0.2   
Reduce number of political employees..............     0.1        0.1   
Reduce management costs for VA health care........     0.2        0.4   
Reduce PMA subsidy................................     0.0        1.2   
Reduce below cost timber sales....................     0.0        0.1   
Reduce the legislative branch 15 percent..........     0.3        0.3   
Eliminate Small Business Development Centers......     0.056      0.074 
Eliminate minority assistance, score, Small                             
 Business Institute and other technical assistance                      
 programs, women's business assistance,                                 
 international trade assistance, empowerment zones     0.033      0.046 
Eliminate new State Department construction                             
 projects.........................................     0.010      0.023 
Eliminate Int'l Boundaries and Water Commission...     0.013      0.02  
Eliminate Asia Foundation.........................     0.013      0.015 
Eliminate International Fisheries Commission......     0.015      0.015 
Eliminate Arms Control Disarmament Agency.........     0.041      0.054 
Eliminate NED.....................................     0.014      0.034 
Eliminate Fulbright and other international                             
 exchanges........................................     0.119      0.207 
Eliminate North-South Center......................     0.002      0.004 
Eliminate U.S. contribution to WHO, OAS, and other                      
 international organizations including the U.N....     0.873      0.873 
Eliminate participation in U.N. peacekeeping......     0.533      0.533 
Eliminate Byrne grant.............................     0.112      0.306 
Eliminate Community Policing Program..............     0.286      0.780 
Moratorium on new Federal prison construction.....     0.028      0.140 
Reduce Coast Guard 10 percent.....................     0.208      0.260 
Eliminate Manufacturing Extension Program.........     0.03       0.06  
Eliminate Coastal Zone Management.................     0.03       0.06  
Eliminate National Marine Sanctuaries.............     0.007      0.012 
Eliminate climate and global change research......     0.047      0.078 
Eliminate national sea grant......................     0.032      0.054 
Eliminate state weather modification grant........     0.002      0.003 
Cut Weather Service operations 10 percent.........     0.031      0.051 
Eliminate regional climate centers................     0.002      0.003 
Eliminate Minority Business Development Agency....     0.022      0.044 
Eliminate public telecommunications facilities,                         
 program grant....................................     0.003      0.016 
Eliminate children's educational television.......     0.0        0.002 
Eliminate National Information Infrastructure                           
 grant............................................     0.001      0.032 
Cut Pell grants 20 percent........................     0.250      1.24  
Eliminate education research......................     0.042      0.283 
Cut Head Start 50 percent.........................     0.840      1.8   
Eliminate meals and services for the elderly......     0.335      0.473 
Eliminate title II social service block grant.....     2.7        2.8   
Eliminate community services block grant..........     0.317      0.470 
Eliminate rehabilitation services.................     1.85       2.30  
Eliminate vocational education....................     0.176      1.2   
Reduce chapter 1, 20 percent......................     0.173      1.16  
Reduce special education, 20 percent..............     0.072      0.480 
Eliminate bilingual education.....................     0.029      0.196 
Eliminate JTPA....................................     0.250      4.5   
Eliminate child welfare services..................     0.240      0.289 
Eliminate CDC Breast Cancer Program...............     0.048      0.089 
Eliminate CDC AIDS Control Program................     0.283      0.525 
Eliminate Ryan White AIDS Program.................     0.228      0.468 
Eliminate maternal and child health...............     0.246      0.506 
Eliminate Family Planning Program.................     0.069      0.143 
Eliminate CDC Immunization Program................     0.168      0.345 
Eliminate Tuberculosis Program....................     0.042      0.087 
Eliminate Agricultural Research Service...........     0.546      0.656 
Reduce WIC, 50 percent............................     1.579      1.735 
Eliminate TEFAP--administrative...................     0.024      0.040 
          Commodities.............................     0.025      0.025 
Reduce Cooperative State Research Service 20                            
 percent..........................................     0.044      0.070 
Reduce Animal Plant Health Inspection Service 10                        
 percent..........................................     0.036      0.044 
Reduce Food Safety Inspection Service 10 percent..     0.047      0.052 
                                                   ---------------------
    Total.........................................    36.941     58.402 
------------------------------------------------------------------------
Note.--Figures are in billions of dollars.                              

  Mr. HOLLINGS. Madam President, we have heard a lot in recent days 
about a simple way to balance the budget--the so-called 3 percent 
growth approach--which the Senator from Texas spoke of last week. But 
let's look at the facts. According to CBO, 
[[Page S2240]] the budget is growing annually at about 6.2 percent or 
by $94 billion. Thus, if you plan to cut that in half to 3 percent 
growth, that is $46 billion. But wait, we all agree Social Security is 
off the table and will grow by $18 billion next year. Similarly, we 
will have to pay the interest costs on the debt which will increase by 
$25 billion next year. Kick in the last $3 billion to try and hold the 
line on defense spending and you quickly see that there's not much left 
of that 3 percent. While seductively simple, this approach fails to 
spell out the impact on the American people. If the 3 percent is used 
up, what is the effect on Medicare and Medicaid programs, education, 
and law enforcement?
  The glidepath that I have put before the Senate requires $37 billion 
in spending cuts for the first year. It meets that target by listing 
some 80 spending cuts that I do not think for a minute would ever pass 
on the floor of the Senate. In addition to cuts in discretionary 
programs, I also included a list of possible entitlement programs to 
pick and choose from that was circulated earlier this year by Senator 
Gregg of New Hampshire.
  We tried such budget cutting exercises before. Give credit to Senator 
Domenici, who was chairman of the Budget Committee in 1986, when he 
offered an amendment to adopt President Reagan's budget cuts. Do you 
know how many votes they got? Fourteen, fourteen votes.
  Last year, on the House side, Congressman Solomon corralled together 
a list of cuts that had been recommended by various groups. He put them 
all together and came up with $700 billion in cuts over 5 years. Do you 
know who voted against it? Congressman Kasich. Do you know who voted 
against it? Speaker Gingrich. Do you know how many votes they got? 
Seventy-three out of four hundred and thirty-five.
  Madam President, you have to face the realities and I think one stark 
reality is the one stated by the House majority leader who feared that 
coming forward with specific spending cuts would cause members knees to 
buckle. That is the truth.
  I have come to the floor this afternoon to say a word about those who 
are blaming President Clinton for not doing anything about the deficit. 
If there is one fellow who had nothing to do with this deficit, it 
would be President William Jefferson Clinton. He came from Arkansas up 
to Washington, and he inherited fiscal chaos.
  I do not mean to sound rude. I mean to sound factual and to give you 
the reality of the situation. Yesterday, we honored our distinguished 
past President, President Reagan, on his birthday. We gave him a 
birthday present but he has given us a birthday present. That birthday 
present is an increase in taxes of a billion a day. It is the biggest 
tax increase in the history of this land.
  I constantly hear about the largest tax increase. We were there, this 
particular Senator, and Senator Mathias on the other side of the aisle 
at the birth of Reaganomics. Eleven of us voted against the massive tax 
cuts that some called a riverboat gamble. President Bush called it 
voodoo economics.
  But the fact of the matter is this Senator voted against the tax cuts 
of Reaganomics and for the spending cuts. Only three Senators who voted 
against the tax cuts but for spending cuts: Senators Bradley, Mathias, 
and myself.
  So we have positioned ourselves with some kind of credibility on 
trying to balance the budget. When they talk about the biggest tax 
increase in history, we only have to refer very quickly, Madam 
President to--and I was going to at length, but I only just refer to 
it--the article by Judy Mann in the Washington Post entitled ``Fiddling 
With the Numbers.''
  I ask unanimous consent that it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                       Fiddling With the Numbers

                             (By Judy Mann)

       Gov. Christine Todd Whitman, the Republican meteor from New 
     Jersey, had the unusual honor for a first-term governor of 
     being asked to deliver her party's response to President 
     Clinton's State of the Union message last week.
       And she delivered a whopper of what can most kindly be 
     called a glaring inaccuracy.
       Sandwiched into her Republican sales pitch was the kind of 
     line that does serious political damage: Clinton, she 
     intoned, ``imposed the biggest tax increase in American 
     history.''
       And millions of Americans sat in front of their television 
     sets, perhaps believing that Clinton and the Democrat-
     controlled Congress had done a real number on them.
       The trouble is that this poster lady for tax cuts was not 
     letting any facts get in her way. But don't hold your breath 
     waiting for the talk show hosts to set the record straight.
       The biggest tax increase in history did not occur in the 
     Omnibus Budget Reconciliation Act of 1993. The biggest tax 
     increase in post-World War II history occurred in 1982 under 
     President Ronald Reagan.
       Here is how the two compare, according to Bill Gale, a 
     specialist on tax policy and senior fellow at the Brookings 
     Institution. The 1993 act raised taxes for the next five 
     years by a gross total of $268 billion, but with the 
     expansion of the earned income tax credit to more working 
     poor families, the net increase comes to $240.4 billion in 
     1993 dollars. The Tax Equity and Fiscal Responsibility Act of 
     1982, by comparison, increased taxes by a net of $217.5 
     billion over five years. Nominally, then, it is true that the 
     1993 tax bill was the biggest in history.
       But things don't work nominally. ``A dollar now is worth 
     less than a dollar was back then, so that a tax increase of, 
     say, $10 billion in 1982 would be a tax increase of $15 
     billion now,'' says Gale. In fact, if you adjust for the 48 
     percent change in price level, the 1982 tax increase becomes 
     a $325.6 billion increase in 1993 dollars. And that takes it 
     the biggest tax increase in history by $85 billion.
       Moreover, says Gale, the population of the country 
     increased, so that, on a per person basis, the 1993 tax 
     increase is lower than the one in 1982, and the gross 
     domestic product increased over the decade, which means that 
     personal income rose. ``Once you adjust for price 
     translation, it's not the biggest, and when you account for 
     population and GDP, it gets even smaller.
       He raises another point that makes this whole business of 
     tax policy just a bit more complex than the heroic tax 
     slashers would have us believe. ``The question is whether 
     [the 1993 tax increase] was a good idea or a bad idea, not 
     whether it was the biggest tax increase. Suppose it was the 
     biggest? I find it frustrating that the level of the debate 
     about stuff like this as carried on by politicians is 
     generally so low.''
       So was it a good idea? ``We needed to reduce the deficit,'' 
     he says, ``we still need to reduce the deficit. The bond 
     market responded positively. Interest rates fell. There may 
     be a longer term benefit in that it shows Congress and the 
     president are capable of cutting the deficit even without a 
     balanced budget amendment.''
       Other long-term benefits, he says, are that ``more capital 
     is freed up for private investment, and ultimately that can 
     result in more productive and highly paid workers.''
       How bad was the hit for those few who did have to pay more 
     taxes? One tax attorney says that his increased taxes were 
     more than offset by savings he was able to generate by 
     refinancing the mortgage on his house at the lower interest 
     rates we've had as a result. The 1993 tax increase did 
     include a 4.3-cent-a-gallon rise in gasoline tax, which hits 
     the middle class. But most of us did not have to endure an 
     income tax increase. In 1992, the top tax rate was 31 percent 
     of the taxable income over $51,900 for single taxpayers and 
     $86,500 for married couples filing jointly. Two new tax 
     brackets were added in 1993: 36 percent for singles with 
     taxable incomes over $115,000 and married couples with 
     incomes over $140,000; and 39.6 percent for singles and 
     married couples with taxable incomes over $250,000.
       Not exactly your working poor or even your average family.
       The rising GOP stars are finding out that when they say or 
     do something stupid or mendacious, folks notice. The jury 
     ought to be out on Whitman's performance as governor until we 
     wee the effects of supply side economics on New Jersey. But 
     in her first nationally televised performances as a 
     spokeswoman for her party, she should have known better than 
     to give the country only half the story. In the process, she 
     left a lot to be desired in one quality Americans are looking 
     for in politicians: honesty.
  Mr. HOLLINGS. Madam President, I quote:

       The biggest tax increase in post-World War II history 
     occurred in 1982 under President Ronald Reagan.

  Because when you cut all the revenues on the one hand and then you 
increase all the spending on the other hand, rather than growth, 
growth--``growth.'' That is what they are trying to come up again with. 
It is the same act, same scene, same players, same disaster, in this 
Senator's opinion. When they come up with that growth, instead of 
growing out of the deficit, we have grown into the worst deficit and 
debt, saddling us with interest costs.
  Madam President, in 1981 the gross interest cost on the national debt 
with President Reagan--of course, he had nothing to do with that one 
because 
[[Page S2241]] that one was already made up by President Carter. But, 
incidentally, President Carter cut the deficit that he received from 
President Ford, and President Lyndon Johnson gave us a balanced budget. 
So I have been around when we have been cutting deficits and when we 
balanced the budget in this Government.
  But President Reagan came to town and he was elected on the promise 
that, ``I am going to put this Government on a pay-as-you-go plan.'' He 
said, ``I am going to do it in a year.'' When he got to town, he said, 
``Oops. This is worse than I ever thought. It is going to take 2 to 3 
years to do it.'' He cut back, and never increased that interest cost 
of $95.5 billion.
  I am listening to the other side of the aisle and the blame game on 
President Clinton about what he said and what he is doing. President 
Reagan said that he was going to balance the budget in a year and not 
add to the interest costs. Rather, he has the interest up to $339 
billion, according to CBO, and that does not take into account the 
increase by Alan Greenspan, the Federal Reserve, here this past week.
  So it is going to be about $350 billion, $352 billion--$1 billion a 
day. That is what it is. The interest cost cannot be avoided. It has to 
be paid. There are two things in life: Death and taxes. It has to be 
paid. But interest cost is interest taxes. You get absolutely nothing 
for it. The deficit this year is only conceived to be $176 billion by 
CBO. We would have a $67 billion surplus if President Ronald Reagan had 
not given us that birthday present of the biggest tax increase.
  So here they come to town and talk about ``taking a walk,'' ``white 
flag of surrender,'' and on ``life supports.'' I know Speaker Gingrich 
gives out to the troops the right expressions around here to make on 
the 7 o'clock news. But that does not take over the facts. The facts 
remain that we are in one heck of a fix financially, and you cannot do 
it without taxes.
  On that score, do not blame President Clinton. President Clinton came 
and struggled in his first year as a freshman President for a $500 
billion cut in the deficit, and there was not a soul talking about 
taking walks. They squatted, sat in the chair fixed, on both sides of 
the aisle, and would not move, would not give a vote. Then after he did 
that, he went about health care reform. And in health reform, yes, he 
recommended Medicare cuts. But he said, ``I have to get health reform 
with it.'' Now they blame him.
  Do you know why they blame him, Madam President? It is very 
interesting. Because they put out the alternative budget, the ``GOP 
Alternative: Deficit Reduction and Tax Relief.'' This was last year.
  You cannot get anything out of them this year except the blame game 
and the catchy phrases they are putting out here, and now the ``white 
flag of surrender'' and ``taking a walk.''
  ``GOP Alternative: Deficit Reduction and Tax Relief; Slashing the 
Deficit, Cutting Middle Class Taxes.''
  I ask unanimous consent that it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       The Republican Alternative Budget will reduce the deficit 
     $318 billion over the next five years--$287 billion in policy 
     savings and $31 billion from interest savings. This is $322 
     billion more in deficit reduction than the President proposes 
     and $303 billion more in deficit reduction than the House-
     passed resolution contains.
       Moreover, the GOP alternative budget helps President 
     Clinton achieve two of his most important campaign promises--
     to cut the deficit in half in four years and provide a 
     middle-class tax cut. The GOP plan:
       Reduces the deficit to $99 billion in 1999. This is $106 
     billion less than the 1999 deficit projected under the 
     Clinton budget.
       Even under this budget federal spending will continue to 
     grow.
       Total spending would increase from $1.48 trillion in FY 
     1995 to more than $1.7 trillion in FY 1999.
       Medicare would grow by 7.8-percent a year rather than the 
     projected 10.6-percent. Medicaid's growth would slow to 8.1-
     percent annually rather than the projected 12-percent a year 
     growth.
       It increases funding for President Clinton's defense 
     request by the $20 billion shortfall acknowledged by the 
     Pentagon.
       Provides promised tax relief to American families and small 
     business:
       Provides tax relief to middle-class families by providing a 
     $500 tax credit for each child in the household. The 
     provision grants needed tax relief to the families of 52 
     million American children. The tax credit provides a typical 
     family of four $80 every month for family expenses and 
     savings.
       Restores deductibility for interest on student loans.
       Indexes capital gains for inflation and allows for capital 
     loss on principal residence.
       Creates new incentives for family savings and investments 
     through new IRA proposals that would allow penalty free 
     withdrawals for first time homebuyers, educational and 
     medical expenses.
       Establishes new Individual Retirement Account for 
     homemakers.
       Extends R&E tax credit for one-year and provides for a one-
     year exclusion of employer provided educational assistance.
       Adjusts depreciation schedules of inflation (neutral cost 
     recovery).
       Tax provisions result in total tax cut of $88 billion over 
     five years.
       Fully funds the Senate Crime Bill Trust Fund, providing $22 
     billion for anti-crime measures over the next five years. The 
     Clinton budget does not. The house-passed budget does not. 
     The Chairman's mark does not.
       Accepts the President's proposed $113 billion level in 
     nondefense discretionary spending reductions and then secures 
     additional savings by freezing aggregate nondefense spending 
     for five years.
       Accepts the President's proposed reductions in the medicare 
     program and indexes the current $100 annual Part ``B'' 
     deductible for inflation. Total medicare savings would reach 
     $80 billion over the next five years.
       Achieves $64 billion in medicaid savings over the next five 
     years, by capping medicaid payments, reducing and freezing 
     Disproportionate Share Hospital payments at their 1994 level.
       Achieves additional savings through reform of our welfare 
     system totaling $33 billion over the next five years.
       Repeals Davis-Bacon, reduces the number of political 
     appointees, reduces overhead expenditures for university 
     research, and achieves savings from a cap on civilian FTE's.
  Mr. HOLLINGS. I will not read it all. I want to be accurate:

       The GOP plan:
       Accepts the President's proposed reductions in the medicare 
     program and indexes the current $100 annual Part ``B'' 
     deductible for inflation. Total medicare savings would reach 
     $80 billion over the next five years.

  And then:

       Achieves $64 billion in medicaid savings . . .

  So you see, that was $144 billion in savings that the President did 
not stand over them for to ride on.
  I saw my distinguished chairman of the Budget Committee on the House 
side throw a duck fit. Cover it. Oh, no. He got caught off base. He was 
the one in December, I say to the Senator from Utah, who said: ``We are 
on a roll. I have to meet the press, right here.'' He said: ``We have 
three budgets now. When that is done, Alan''--he is talking to Alan 
Murray. He says, ``at the same time, we are going to move onto the 
glidepath of zero now.'' Who is taking a walk? That was December, one 
for January, one of three budgets; we are moving, we are going, and 
where is his?
  That is what the Senator from West Virginia wants. That is what this 
Senator wants. I put up mine. We ask that they put up theirs. This 
rings in my ears when they say take a walk, when they talk about the 
largest tax increase in the history of the Government. We are suffering 
from the largest tax increase. That is why, with all the spending cuts, 
even in entitlements, on the SSI, some of the programs, and domestic 
discretionary, try it on for size. You are going to need tax increases 
in order to get on top of this monster. You are going to need tax 
increases.
  I recommended a 5-percent value added tax. I disagree with President 
Clinton. I think the need of the hour is just that, to get physically 
sound, put us on a pay-as-you-go basis and a Marshall plan for the 
United States. We have 40 million in poverty. We have 10 million 
homeless, sleeping on the streets of America. We have 12 million hungry 
children. We have the cities, dens of violence and crime; the land is 
drug infested. And we have the biggest deficit in the balance of trade. 
That age group between 17 and 24, 73 percent of that age group cannot 
find a job out of poverty. They are the hope of the land.
  We need now, with the fall of the Wall and the sacrifices to occur in 
order to keep the alliance together, to sacrifice for ourselves. We 
need a 5 percent value added tax; $180 billion could start paying down 
the deficit, the debt, take care of health costs, and get the country 
moving with respect to women and infants feeding, Head Start, and title 
I for the disadvantaged. Biotechnical research at NIH, they are 
[[Page S2242]] cutting. They are all going around being proud to cut. I 
do not believe in dismantling the Government.
  I got the first triple A credit rating of any State from Maryland 
around to Texas. So I have been down the road. We know how to pay our 
bills. I have said time and again we need more South Carolina-led 
Government than Washington Government in South Carolina.
  So I go along with my Republican colleagues on that particular score. 
But when they come around here now and they say, about welfare and 
pulling the wagon--that is another one. Pulling the wagon. The idea is, 
of course, that we here are pulling the wagon and the welfare people 
are all squatting in the wagon. We are all in the wagon and nobody is 
pulling it, except maybe the Japanese who are buying the bonds. Yes. 
Get trade policy, and try to go against Japan. If the Chinese want to 
get out of this soup that they are in on CD's, tell them to buy a few 
Treasury bills and the Secretary of Treasury will come over and say, 
``I am sorry. We didn't mean to talk. We have a special relationship.''
  We are in the hands of the Philistines because we have to sell those 
bonds to finance this debt. That is what is going on. They all know it. 
We are all in the wagon to the point of $1 billion a day, and nobody is 
pulling it. So let us get away from that particular expression. But 
they do not want Government and everything else.
  Another thing, then I will close. But I have to refer to this because 
I have the greatest respect for, and I have worked very closely with 
the distinguished Senate majority whip, Trent Lott of Mississippi.
  Senator Lott said, ``Nobody, Republican, Democrat, conservative, 
liberal, moderate, is even thinking about using Social Security to 
balance the budget.''
  Absolutely false. They are not thinking about it; they are working on 
it. When I was buddied up with the distinguished Senators from Texas 
and New Hampshire in Gramm-Rudman-Hollings, I talked to Senator Gramm, 
and the first page he gave me was an across the board cut entitlements 
including Social Security. I said, ``Phil, I can tell you now that is a 
nonstarter. You will not get a single Democrat, including me, that is 
going to vote for that one.'' So, we exempted Social Security and split 
it in half with entitlements and discretionary spending on one side and 
defense on the other. I knew he was particularly anxious to cut Social 
Security. I am particularly unanxious to cut any kind of Social 
Security because it pays for itself. If you want a contract for 
America, let us pull out the 1935 contract for the senior citizens of 
America. As a result of that agreement, taxes are paid, put in a trust 
fund, and they want to violate it.
  On July 10, I offered the Social Security Preservation Act before the 
Budget Committee. There were 20 yeas with the Senator from Texas [Mr. 
Gramm] voting nay. Then, the distinguished Senator from Texas came 
along last year and introduced his Balanced Budget Implementation Act 
on February 16, 1993, at page S1635, and I read: ``Exclusion from 
budget. Section 13301(a) of the Budget Enforcement Act of 1990 is 
amended by adding at the end thereof the following: This subsection 
shall apply to fiscal years beginning with fiscal year 2001.''
  I put section 13301 into the Budget Enforcement Act because I did not 
want to use the Social Security funds. We put it into statutory law by 
almost a unanimous vote on this floor. There were only two dissenters, 
but we had 98 others who supported it. But the Senator from Texas, in 
his own budget there, is proposing it.
  Madam President, it is against the law to cite the deficit using the 
Social Security trust funds, but Members of Congress and the White 
House violate it at every level. I cannot get them to enforce the law. 
I do not want to go along with any constitutional amendment that 
violates that law, because I am talking about truth in budgeting. That 
is how we passed Gramm-Rudman-Hollings.
  I could go on, Mr. President, but I want to yield. I will tell you, 
this off-Broadway show generalities and percentages fails to tell the 
American people the true facts about the fiscal crisis we face. I 
challenge them, or anyone on this side of the aisle, or on any aisle in 
any House, to give me a 1-year budget that only grows by 3 percent.
  Republicans can continue to give us the gamesmanship and the 
percentage arguments, but let us cut out this blame game. There is one 
thing we cannot charge William Jefferson Clinton with and that is the 
responsibility for the deficit. He came up with a plan to cut it $500 
billion during his first year. The second year he has proposed 
terminating 131 programs and consolidating 271 programs into 27. He has 
not left much for ``President'' Dole, if he ever takes over this budget 
in Government.
  I do not believe in dismantling the Government. I think we live in 
the real world and we have to come out here and quit dancing around the 
fire. Let's end the argument and provide the American people with a 1-
year budget that has only a 3-percent increase and puts Government in 
the black. They cannot do it without taxes.
  I thank the Senator from Minnesota for yielding time, and I thank the 
Senator from Utah.
  Mr. WELLSTONE. Mr. President, the distinguished Senator from Utah may 
want to speak.
  Mr. HATCH. I notice the Senator from Minnesota is trying to get to an 
appointment. So why do we not proceed. If I could ask some comity, I 
know the Senator from Arkansas is waiting, too. Senator Specter would 
like to speak. I will defer my remarks until later if we can go to 
Senator Specter for a few minutes after the distinguished Senator from 
Minnesota, and then to the distinguished Senator from Arkansas; is that 
OK?
  Mr. BUMPERS. Yes.
  Mr. HATCH. I ask unanimous that be the case--first the Senator from 
Minnesota and then the Senator from Pennsylvania and then the Senator 
from Arkansas and perhaps myself.
  The PRESIDING OFFICER (Mr. Grams). Without objection, it is so 
ordered.

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