[Congressional Record Volume 141, Number 28 (Monday, February 13, 1995)]
[Senate]
[Pages S2538-S2564]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
resume consideration of House Joint Resolution 1, which the clerk will 
report.
  The bill 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:
       Reid amendment No. 236, to protect the Social Security 
     system by excluding the receipts and outlays of Social 
     Security from balanced budget calculations.

  Mr. HATCH. Mr. President, the problems I have already outlined in 
this debate are not the only objections I have to the proposed 
exemption. The attempt to insert a reference to a mere statute into the 
Constitution raises serious questions of constitutional and legal 
policy which argue against including such a reference.
  This amendment exemption proposes to take particular statutes of the 
United States and graft them onto the Constitution of the United 
States. This is unprecedented. It may have the effect of giving future 
statutory enactments constitutional significance. In other words, this 
amendment seems to establish a sort of quasi-constitutional device 
whereby Congress and the President--or Congress alone if it overrides a 
Presidential veto--can do something of constitutional significance by 
enacting a mere statute.
  This amendment would exclude from the general definitions of receipts 
and outlays in the balanced budget amendment the receipts and outlays 
of the Federal old-age and survivors insurance [OASI] trust fund and 
the Federal disability insurance (DI) trust fund.
  This amendment would constitutionalize the OASI and DI trust funds on 
the date of enactment and forever thereafter, however amended. This is 
no small point.
  The entire Social Security Act has been amended hundreds of times. 
The key section that establishes the old age survivors insurance trust 
fund and the disability insurance trust fund, or title II of the Social 
Security Act, has been amended over 20 times, or about once every 3 
years. The pace of amendment has increased in recent years. Twelve of 
these amendments have been made since 1980, or almost once per year.
  This amendment is not restricted. There is no limit on the subject 
matter of future amendments. It will constitutionalize every program or 
policy that future Congresses add to title II, whether or not related 
to the original purposes of those trust funds.
  Of course, the pace of amendments to title II will likely increase 
rapidly because this amendment provides an incentive for adding 
extraneous items: Once in title II, the additional receipts and outlays 
will be off budget and exempt from the strictures of the balanced 
budget rule.
  Under this amendment, future amendments to title II
   may have constitutional significance. If this provision were added 
to the constitution, any amendment to title II, no matter how narrow or 
minute, would have some constitutional significance.

  For example, section 201 of the Social Security Act was most recently 
amended on October 22 of last year by section 3(a) of the Social 
Security Domestic Employment Reform Act of 1994. Had the provision 
offered today been in the Constitution at that time, the language on 
this chart would have had some kind of constitutional significance. 
Just look at it:

       Sec. 3(a) Allocation With Respect to Wages.--Section 
     201(b)(1) of the Social Security Act (42 U.S.C. 401(b)(1)) is 
     amended by striking ``(O) 1.20 per centum'' and all that 
     follows through ``December 31, 1999, and so reported,'' and 
     insert ``(O) 1.20 per centum of the wages (as so defined) 
     paid after December 31, 1989, and before January 1, 1994, and 
     so reported, (P) 1.88 per centum of the wages (as so defined) 
     paid after December 31, 1993, and before January 1, 1997, and 
     so reported, (Q) 1.70 per centum of the wages (as so defined) 
     paid after December 31, 1996, and before January 1, 2000, and 
     so reported, and (R) 1.80 per centum of the wages (as so 
     defined) paid after December 31, 1999, and so reported,''.--
     P.L. 103-387, Sec. 3(a), 108 Stat. 4074-75, Oct. 22, 1994.

  Could you imagine what that would mean to the Constitution?
  This is not the sort of soaring language proclaiming broad and 
timeless principles we usually associate with the Constitution. But it 
is the kind of language that will be given at least quasi-
constitutional status by this proffered amendment by those who are 
offering it. I would think anyone who reveres the Constitution would 
want to avoid cluttering up the Constitution and the constitutional 
order by adopting this amendment and giving such legislative language 
some new para-constitutional status.
  The language of the Reid amendment, like the slogans surrounding it, 
may look or sound simple, but it has extraordinarily complex 
implications. The amendment is short because it uses titles, but using 
simple labels does not simplify the legal ramifications.
  This amendment refers to the Federal old-age and survivors insurance 
trust fund and the Federal disability insurance trust fund, but they, 
together with their legislative histories, take up some 300 pages in 
the United States Code. You can find it at title 42, United States Code 
sections 401-433. I am citing the 1988 edition and supplement V of 
1993. There are also volumes of relevant judicial opinions and agency 
rules and adjudications which could be affected. This amendment's 
implications are a little clearer if restated with elaboration, as 
shown on this chart.
  Again, is this the kind of constitutional language we want to put in 
the Constitution?
  Look at this next chart:

       The receipts (including attributable interest) and outlays 
     of the Federal Old-Age and Survivors Insurance Trust Fund--

  By the way, those are the receipts and outlays mentioned in the Reid 
amendment.

     and the Federal Disability Insurance Trust Fund [comprising 
     Title II of the Social Security Act, 42 U.S.C. Sec. 401(a)-
     (m), Sec. 402(a)-(x), Sec. 403(a)-(l), Sec. 404(a)-(e), Sec. 
     405(a)-(r), Sec. 405a, Sec. 406, Sec. 407, Sec. 408, Sec. 
     409, Sec. 410(a)-(q), Sec. 411(a)-(i), Sec. 412, Sec. 413(a)-
     (d), Sec. 414(a)-(b), Sec. 415(a)-(i), Sec. 416(a)-(l), Sec. 
     417(a)-(h), Sec. 418(a)-(n), Sec. 420, Sec. 421(a)-(k), Sec. 
     422(a)-(d), Sec. 423(a)-(i), Sec. 424(a)-(h), Sec. 425(a)-
     (b), Sec. 426(a)-(h), Sec. 426-1(a)-(c), Sec. 426a(a)-(c), 
     Sec. 427(a)-(h), Sec. 429, Sec. 430(a)-(d), Sec. 431(a)-(c), 
     Sec. 432, Sec. 433(a)-(e) (1988 ed.), as amended, where 
     relevant, and comprising tens of thousands of words, together 
     with all relevant judicial decisions and agency rules and 
     adjudications, comprising millions and millions of words] 
     used to provide old-age, survivors, and disabilities benefits 
     shall not be counted as receipts or outlays for purposes of 
     this article.

  Additionally, title II of the Social Security Act is referred to in 
numerous other sections of title 42 of the United States Code, and it 
is also referred to in titles 2, 5, 7, 10, 12, 14, 22, 26, 29, 30, 38, 
45, 49 appendix, and 50 appendix of the United States Code.
  Mr. President, there are further complications raised by the drafting 
of this attempted statutory exemption. The drafters of the Reid 
exemption amendment have attempted to narrow the scope of their 
exemption from previous incarnations by adding an attempt at limiting 
language. This attempt to paper over the gaping, and hugely elastic 
loophole created by this amendment only serves to further clutter the 
constitutional subtext and confuse the 
[[Page S2539]] constitutional implications of this provision. The Reid 
exemption states that it only applies to funds which are used for ``old 
age, survivors, and disabilities benefits.''
  But it fails to define those terms. The other way you can find the 
definition is through the statute. The Social Security statute which 
does attempt to define some of these terms does little to put me at 
ease about the vagueness. Just look at some of the definitions of that 
act on these posters. Let us take these two posters behind me and see 
what I mean about constitutional confusion. This is ``Constitutional 
Language?'' Again with a question mark. ``42 U.S.C. section 306, 
definitions.''
  Section 306 defines ``old age assistance'' in the first sentence of 
the section. But it does not end there.

       For the purposes of this subchapter, the term ``old age 
     assistance'' means money payments to, or if provided in or 
     after the third month before the month in which the recipient 
     makes application for assistance, medical care in behalf of 
     or any type of remedial care recognized under State law in 
     behalf of, needy individuals who are 65 years of age or 
     older, but does not include any such payments to or care in 
     behalf of any individual who is an inmate of a public 
     institution except as a patient in a medical institution. 
     Such term also includes payments which are not included with 
     the meaning of such term under the preceding sentence, but 
     which would be so included except that there are made on 
     behalf of such a needy individual to another individual, who 
     (as determined in accordance with standards prescribed by the 
     Secretary) is interested in or concerned with the welfare of 
     such needy individual, but only with respect to a State whose 
     State plan approved under section 302 of this title includes 
     provision for * * *.

  That alone shows the problems of writing a statute into the 
Constitution. But let me read the rest because I think it is worthwhile 
to the people of this country so see how really absurd this becomes, if 
we adopt the Reid amendment.
  No. 1:

       Determination by the State agency that such needy 
     individual has--can you imagine what ``needy individual 
     means''--by reason of his physical or mental condition--can 
     you imagine what that means--such inability to manage funds--
     can you imagine what ``managed funds'' means--that making 
     payments to him would be contrary to his welfare--do you know 
     what ``welfare'' means--and, therefore, it is necessary to 
     provide such assistance--what does ``assistance'' mean--
     through payments--what does that mean--described in this 
     sentence.

  That just gives you a little bit of an idea what writing a statute 
into the Constitution means.
  No. 2:

       Making such payments only in cases in which such payments 
     go will under the rules otherwise applicable under the State 
     plan for determining need and the amount of old age 
     assistance to be paid and in conjunction with other income 
     and resources meet all of the needs of individuals with 
     respect to whom such payments are made.

  Just the word ``needs'' gives you heartburn. That could be defined in 
many different ways. But every word in there can be defined.
  No. 3:

       Undertaking and continuing special efforts to protect the 
     welfare of such individual and to improve, to the extent 
     possible, his capacity for self-care and to manage funds.

  Can you imagine what they could do with this language?
  No. 4:

       Periodic review by such State agency of the determination 
     under paragraph 1 of this subsection to ascertain whether 
     conditions justify such determination still exists and 
     provision for termination of such payments, if they do not, 
     and for seeking judicial appointment of a guardian or other 
     legal representative as described in section 1311 of this 
     title, if and when it appears that such action will best 
     serve the interests of such needy individual; and * * *.

  Let us read No. 5:

       Opportunity for a fair hearing before the State agency on 
     the determination referred to in paragraph 1 of this 
     subsection for any individual with respect to whom it is 
     made.
       At the option of a State if its plan is approved under this 
     subchapter so provides.

  So we have State plans brought into this. What does that mean? Can we 
have 50 different State plans? Of course, you can.

       Such term (i) need not include money payments to an 
     individual whose absence from such State for a period in 
     excess of 90 consecutive days regardless of whether he has 
     maintained his residence in such State during such period, 
     until he has been present in such State for 30 consecutive 
     days in the case of such an individual who has maintained his 
     residence in such State during such period, or 90 consecutive 
     days in the case of any other such individual, and (ii), may 
     include rent payments made directly to a public housing 
     agency in on behalf of the recipient or a group or groups of 
     recipients of assistance under such plan.

  Can you imagine if this is written into the Constitution--which it 
will be because receipts and disbursements will be written into the 
Constitution--can you imagine what just these paragraphs will do? These 
are only some of the 300 pages of legislation that come under the title 
of what is trying to be excluded from budgetary considerations under 
the balanced budget amendment. You can see why some of us feel that is 
not the way to approach this problem. It is not the way to protect 
Social Security because I can give you at least 3,000 different ways 
right off the top of my head if I had to--it would take us a few days--
as to how all those terms can be interpreted, or probably 100,000 
different ways given enough time. Once that starts, Social Security is 
going to be the first to be bombarded by every special interest group 
in the country under needy, those who are needy, those who are elderly, 
those who live in housing projects, those who have any number of these 
qualifications listed just in these few paragraphs. Like I say, we have 
300 pages of the Federal Code on this. That could not even begin to 
touch the thousands and thousands of pages of regulations pertaining to 
it.
  Section 306 right here defines old age assistance in the first 
section of this section. But like I say, it does not end there.
  The next sentence says:

       Such term also includes payments which are not included 
     with the meaning of such term under the preceding sentence, 
     but which would be so included except that they are made on 
     behalf of such a needy individual to another individual who 
     (as determined in accordance with standards prescribed by the 
     Secretary)--in other words, the Secretary can prescribe the 
     standards. That becomes constitutional, or at least 
     constitutional as long as it is law.
       * * * is interested in or concerned with the welfare of 
     such needy individual, but only with respect to a State whose 
     State plan approved under section 302 * * *.

  This goes on and on.
  Mr. President, this is not language which belongs in our 
Constitution. This is legal double-talk, not the consistent, clear 
statement of principles which we have come to associate with the 
Constitution.
  Remember, since this definition is only in a statute, that statute 
can be easily amended as we already mentioned. Future Congresses can 
dramatically alter this definition and thereby change the whole meaning 
of the constitutional language.
  The statutory definition of ``disability'' is even more convoluted. 
Just look at it here on this next poster. It goes on for no less than 
four pages in the United States Code. It has six subsections, and eight 
sub-subsections.
  Both the definition of ``old age assistance'' and this definition are 
subject to change through regulations issued by the Secretary. That 
means that the Secretary of Health and Human Services can amend the 
Constitution without any action by the Congress. Let me repeat that. 
The Secretary of Health and Human Services, an appointee of the 
President, who at best is going to be a temporary occupant of the White 
House, whoever the President is, that means Secretary Shalala and her 
successors will be empowered to define constitutional terms for 
bureaucratic rulemaking. As I have said before, here we are in this new 
Congress trying to reduce the power of the bureaucracy, and here we 
have an amendment which is trying to ``constitutionalize'' it. This is 
a constitutional abomination.
  Let me make that case again. ``Constitutional Language?'' and a 
question mark. Title 42 United States Code, section 423, disability 
insurance benefit payments. This is just one of the definitions that 
can be changed. Any word can be changed, any paragraph, any phrase, any 
sentence. Anything in here can be changed by a mere change of statute. 
But this amendment writes this into the Constitution, which means that 
although it becomes part of the Constitution, should there be enough 
votes for it, it can be changed any time anybody wants to change it. 
Look at this. Look how difficult it is. Disability defined:

       [[Page S2540]] The term ``disability'' means, paragraph 
     (a), the inability to engage in any substantial gainful 
     activity by reason of any medically determinable physical or 
     mental impairment which could be expected to result in death 
     or which has lasted or can be expected to last for a 
     continuous period of not less than 12 months, or, (b), in the 
     case of an individual who has attained the age of 55 and is 
     blind within the meaning of blindness as defined in section 
     416(i)(1) of this title, inability by reason of such 
     blindness to engage in substantial gainful activity requiring 
     skills or abilities comparable to those of any gainful 
     activity in which he has previously engaged with some 
     regularity and over a substantial period of time.
  Now, they can add another whole alphabet of provisions there and 
paragraphs if they want to in future Congresses and all of that becomes 
part of the Constitution.
  Let us go to paragraph 2.

       For the purposes of paragraph 1(a). (A) An individual shall 
     be determined to be under a disability only if his fiscal or 
     mental impairment or impairments are of such severity that he 
     is not only unable to do his previous work but cannot, 
     considering his age, education and work experience, engage in 
     any other kind of substantial gainful work which exists in 
     the national economy--

  Can you imagine the loophole there?

     regardless of whether such work exists in the immediate area 
     in which he lives or whether a specific job vacancy exists 
     for him or whether he would be hired if he applied for work. 
     For the purposes of the preceding sentences with respect to 
     any individual, work which exists in the national economy 
     means work which exists in significant numbers either in the 
     region where such individual lives or in several regions of 
     the country.

  As you can see, it is legal doublespeak--nevertheless important. But 
is it important enough to put into the Constitution? I just cannot 
imagine why anybody would want to do that.

       3. For purposes of this subsection, a ``physical or mental 
     impairment'' is an impairment that results from anatomical, 
     physiological, or psychological abnormalities which are 
     demonstrable by medically acceptable clinical and laboratory 
     diagnostic techniques.

  Can you imagine how that could be amended?

       4. The Secretary shall by regulations prescribe the 
     criteria for determining what services performed or earnings 
     derived from services demonstrate an individual's ability to 
     engage in substantial gainful activity.

  Boy, talk about giving the Government control of our lives. Put that 
into the Constitution and, my gosh, it is going to be unbelievable. It 
is bad now; can you imagine what it would be like if we put it into the 
Constitution?

       No individual who is blind shall be regarded as having 
     demonstrated an ability to engage in substantial gainful 
     activity on the basis of earnings that do not exceed the 
     exempt amount under section 403(f)(8) of this title which is 
     applicable to individuals described in subparagraph (D) 
     thereof. Nothwithstanding the provisions of paragraph (2), an 
     individual whose services or earnings meet such criteria 
     shall, except for purposes of section 422(c) of this title, 
     be found not to be disabled.
      In determining whether an individual is able to engage in 
     substantial gainful activity by reason of his earnings, 
     where his disability is sufficiently severe to result in a 
     functional limitation requiring assistance in order for 
     him to work, there shall be excluded from such earnings an 
     amount equal to the cost (to such individual) of any 
     attendant care services, medical devices, equipment, 
     prostheses, and similar items and services (not including 
     routine drugs or routine medical services unless such 
     drugs or services are necessary for the control of the 
     disabling condition) which are necessary (as determined by 
     the Secretary in regulations) which are necessary (as 
     determined by the Secretary in regulations) for that 
     purpose, whether or not such assistance is also needed to 
     enable him to carry out his normal daily functions; except 
     that the amounts to be excluded shall be subject to such 
     reasonable limits as the Secretary may prescribe.

  I think I am making the case. Those who are arguers for this or 
proponents of it are saying all we are asking for is that the receipts 
and disbursements be put off budget. It is not as simple as that. We 
all know that every word in the Constitution has resplendent meaning. 
Every word can be interpreted by the courts in different ways. Every 
word can be interpreted by Congress in different ways and by the 
President in different ways. So when you put this into the Constitution 
and it is a statute, a mere statute at that, albeit important, then you 
are just asking for it because that becomes a loophole for which you 
can drive anything you want to drive.
  Mr. President, the Framers used only a few thousand words. You can 
read the Constitution in a half hour from beginning to end, including 
the amendments. It took a few thousand words, or less than 2,500 words, 
I think, to create the U.S. Constitution. Title II of the Social 
Security Act, on the other hand, is comprised of tens of thousands of 
words and hundreds of pages and thousands of regulations. Many of those 
are going to have some constitutional significance if the Reid 
amendment is accepted. Is this what we want to add to our Constitution?
  I would like to point out that none of these issues that I am raising 
can be solved by more elegant drafting. The constitutional problems 
raised by the unprecedented step of attempting to incorporate a mere 
statute into the Constitution are simply insuperable. No variations on 
the theme presented in this amendment can be fixed by an alternative 
rendering. This amendment and all variations on it are simply 
unacceptable and wholly inappropriate for a constitutional amendment.
  Mr. President, this is not simple stuff we are doing here. This is 
not a simple amendment. This is not a constitutional amendment, the way 
they have drafted it. It is placing a statute and all that that statute 
means and may mean and will mean in the future into the Constitution 
where they could write anything into it they want. Under the guise of 
trying to do something good--that is, protect Federal and old age 
survivors insurance, their trust fund and the Federal disability trust 
fund, the Reid amendment would constitutionalize those trust funds on 
the date of enactment or ratification and forever thereafter, however 
amended. Like I say, that is no small point. The Social Security Trust 
Act--both of these trusts have been amended a number of times. I am 
very concerned if we put language like this into the Constitution.
  Let me just spend a few minutes on why is this language essential. 
Last Friday, we had the pictures of young kids whose future depends on 
whether we pass the balanced budget amendment or not, whether we are 
going to get spending under control, or whether we are going to get 
serious about it, or whether we are going to have a mechanism in the 
Constitution to help us to get serious about it.
  It is no secret to anybody that because of voting power, our seniors 
now have some of the most massive power in our country today. We keep 
putting more and more money into our seniors and more and more children 
are left behind. That is not a reason not to help our seniors. But I do 
caution everybody that we have to worry about helping our children, 
too, because they are the future generations who have to pay the price 
so that the seniors can get their Social Security. But it still does 
not negate my point.
  My point is that the seniors are one of the most powerful voting 
blocks in our country today and, rightly so; I find no fault with that. 
They should exercise their voting power. On the other hand, are we not 
shortchanging the children if we just worry about the seniors, when 
they have the power to compete very well with every other item in the 
Federal budget? If we pass the constitutional amendment without the 
Reid language, everybody knows that the Congress of the United States 
is going to have to take care of the seniors because of the voting 
power and because it is the right thing to do.
  On the other hand, are we going to do that to the exclusion of 
everybody else in our society, to the exclusion of children, who are 
continually getting less and less of the Federal pot in comparison? 
Well, I hope not. But the only way you can balance these things up is 
not by writing one special interest group into the Constitution when 
they have the power and the most massive power in our country today to 
get their will done anyway. Our seniors and Social Security and most 
every program pertaining to seniors will complete excellently against 
all other spending programs of the Federal Government. There is no 
doubt in my mind about that, and I do not think there is any doubt in 
anybody else's mind.
  In conclusion, Mr. President, I see that the distinguished Senator 
from New York is here and may want to speak on this subject. The 
biggest threat to Social Security is our growing debt and concomitant 
interest payments. Debt-related inflation hits especially hard those on 
fixed incomes, and the Government's use of capital to fund 
[[Page S2541]] debt slows productivity and income growth.
  The way to protect Social Security benefits is to support the 
balanced budget constitutional amendment and balance the budget so that 
the economy will continue to grow. Senior citizens know this. That is 
why a recent poll shows that an overwhelming 91.8 percent of senior 
citizens favor a balanced budget amendment. They know it is simply the 
best way to protect their children and grandchildren and the best way 
to ensure that runaway deficits do not lead to runaway inflation, which 
hurts those on fixed incomes especially hard.
  Being a supporter of both the balanced budget amendment and Social 
Security, I believe this exemption raises major concerns. The proposal 
before us now, to exempt Social Security, will not only destroy the 
balanced budget amendment but will cause the Social Security trust fund 
to run out of money sooner than it would under a clean balanced budget 
amendment. And I believe that the Senate has already voted on a better 
way to protect Social Security, which would protect Social Security 
from benefit cuts and tax increases to balance the budget.
  Let me repeat in no uncertain terms that the best way to protect the 
Social Security program in our country is to pass a clean balanced 
budget amendment. This is the best and most appropriate way to protect 
Social Security for our seniors and for all other generations, and to 
provide for a future for our children and our grandchildren, those who 
are going to have to work very hard to pay for our Social Security.
  I do not know how anybody can read that amendment that is the current 
pending amendment before this body and not be concerned about writing a 
statute into the Constitution and about opening loopholes through which 
you could drive spending trucks bigger than any trucks we have every 
driven through spending loopholes in the history of the Congress, and 
do it in a way that totally negates and makes feckless the balanced 
budget constitutional amendment.
  With that, I yield the floor.
  Mr. REID addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, when in doubt, wave your arms, scream and 
shout.
  Now, my friend from Utah has not been screaming and shouting because, 
in his mild manner, that is not how he speaks. But it appears clearly 
that those who are looking for a way to oppose this amendment to exempt 
Social Security are in doubt. That has to be the case, based upon the 
argument we have just heard.
  Mr. President, I have here a copy of the Constitution of the United 
States. Let us flip over to----
  What do we pick? Let us pick amendment No. 16. Amendment No. 16 is 
the amendment that allows this country to collect an income tax. I do 
not know how many thousands of books--not words or paragraphs, books--
are in our statutes and codes regarding IRS. Now, using the logic of 
the manager of this bill, the 16th amendment is inoperable.
  We could take the 14th amendment. We know the spate of litigation and 
legislation that has ensued following the passing of this very 
important amendment, that dealing with equal rights, due process under 
the law. How many thousands of words are in our statute books regarding 
due process? Does that mean it is not a good amendment or it is an 
unworkable amendment? The obvious answer is no.
  Mr. President, what about the 19th amendment? This is the amendment 
giving people in our country, regardless of sex, equal rights. How many 
statutes, how many pages in our code books are relating to the 19th 
amendment?
  I say, respectfully, that the argument of the manager of this bill 
indicates to me that there are grave reservations on their behalf that 
their position is valid. Otherwise, how could they come up with 
anything as ridiculous as reading statutes that apply to a particular 
part of the constitutional amendment?
  My friend from Utah used a couple of terms that I think are 
reversibly applicable, ``legal doubletalk.'' Well, I am not sure legal 
doubletalk is really clear enough. It is at least 10 or 12 times more 
than doubletalk. Another statement made by my friend from Utah is, ``I 
think I am making my case.'' With all due respect: Sorry, case not 
made.
  I see a member of my staff walking in here. I sent him out just a 
minute ago to see what he could grab close by that were code books 
relating to the 16th amendment. These are just a couple at random that 
were grabbed right outside the doorway here.
  I do not know, Mr. President, how many pages we have here. This book 
has about 1,600 pages; this book about 1,200 pages; this book about 
1,700 pages. These are just a few. These are all my staff could lug in 
for illustrative purposes.
  So we have been through this argument on a previous occasion that the 
problem that we now have----
  I did not write it. Somebody drafted a constitutional amendment to 
balance the budget. I say, we have a tremendous amount of precedent on 
this floor that indicates that we, as a Congress, want to keep Social 
Security out of our general revenues.
  The balanced budget amendment does just the opposite. The language of 
the balanced budget amendment--I will go into this in more detail later 
on--but the language of the balanced budget amendment, House Joint 
Resolution 1, says: ``Total outlays shall include all outlays of the 
United States Government.'' That is what it says. I did not write it.
  And I want to simply state that this amendment keeps out of the 
general revenues of this country Social Security. That is what this 
amendment does. It very simply and concisely does that. Social Security 
should rise or fall on its own merits.
  Mr. President, we have heard a lot here this morning, really not too 
much, that we do too much for senior citizens; we have to worry about 
our children. I believe we do not do too much for senior citizens. In 
fact, if you will look at the State of Nevada as an example, you will 
find that, in Nevada, the average retired worker gets $680 a month.
  That is really not a lot of money. I ask anyone within the sound of 
my voice--and there are plenty of them--who do try to live on $680 a 
month, how difficult it is.
  But most people that are living on $680 a month are seniors. They do 
not qualify for welfare. Why? Because they are Social Security 
recipients.
  So we do not really overpay senior citizens who are recipients of 
Social Security. In fact, Mr. President, it is quite the opposite. They 
are not welfare recipients. They receive benefits from Social Security 
that they paid into while working and their employer paid into. That is 
now 12.4 percent of their monthly income.
  This Nation was founded based on a core belief that governments are 
instituted and exist not as rulers but as servants of the people.
  The American people are good masters. They are tolerant of mistakes 
and waste which would have most employees, perhaps, out on the street. 
But like all employers, the American people have a characteristic that 
they will not tolerate, and that is dishonesty.
  As the servants of the people in 1935, this body and the Government 
of which we are a part, made a promise to the Nation that we would 
create a separate insurance trust fund paid for, Mr. President, out of 
working people's pockets, to provide for the widowed and the aged, the 
orphaned, and the infirm.
  As servants of the people, we radically overhauled the fund in the 
early 1980's, substantially raising the tax burden that people had to 
bear in order to secure the Nation's solvency and the system's 
solvency. That overhaul worked, Mr. President.
  The Social Security trust fund now pulls in a substantial surplus to 
provide for the future when America's graying baby boomers need their 
promised retirement. There are those, however, who would raid that 
account to pay for the mess created by the reckless deficit spending in 
the general fund.
  During the past few weeks, I have urged each Senator not to violate 
the Social Security trust fund in the name of a balanced budget. This 
would be like going out of your home to go grocery shopping, and when 
you get there someone has picked your pocket.
  [[Page S2542]] To violate Social Security, Mr. President, would not 
resolve the central problem of this Government, created over the last 
decade and a half, that we have spent more than we have taken in, and 
at a very reckless pace, but would create a new and wholly illusory 
source of revenue which would encourage more spending, not the 
reductions we so desperately need to put in place.
  It would also do something even worse. It would dishonor a promise we 
made to the American people when we completely overhauled the Social 
Security system. It would prove this Government unworthy of the only 
thing it has which really matters: the trust of the American people. It 
would shred the Social Security contract created by the legislators and 
presidents of yesteryear, and it would justify the cynical rejection of 
our core values, which is already so badly infecting many of our young 
people.
  There was a time in this country when honor was an individual's most 
important possession. There was a time that as a people, we looked to a 
national honor as our most honored birthright. There was a time when 
one's word was his bond.
  So, my colleagues, my fellow Senators, is that time passed? Have we 
become such little men and little women, of such low morals and such 
easy virtue, that we can disregard our solemn vows to those whom we 
serve, to the oaths that we made, to the values we espouse? I think 
not.
  Sixty years ago, this body made a promise to the American people that 
we would not touch the Social Security trust fund for any other 
purpose. This promise was reaffirmed by President Reagan, Speaker of 
the House, Thomas ``Tip'' O'Neill, Claude Pepper, and the chairman of 
the Aging Committee, my friend, the senior Senator from New York, who 
was in on the program to bail out Social Security.
  They did it because it was the right thing to do. We should do this 
because it is the right thing to do. Keep that promise, because it is 
the plaintive plea of the American people: This Reid amendment is not 
only for senior citizens, it is for all Americans, so Social Security 
will protect them.
  Mr. President, I see on the floor, the senior Senator from New York 
and the senior Senator from Florida. I have some questions I want to 
ask the Senator from Florida. How long will the Senator from New York 
speak?
  Mr. MOYNIHAN. Mr. President, I would like to speak for approximately 
10 minutes to make a point in support of the Senator from Nevada.
  Mr. REID. Mr. President, I yield the floor.
  Mr. MOYNIHAN. Mr. President, I am happy to have this opportunity to 
make a point which I will summarize first, which is that the analyses 
of the effect of the balanced budget amendment that have been prepared 
in the Department of Treasury, for example, have typically been static 
estimates of the reduction of Government programs and Government 
transfers that would be required to reach a balanced budget by the year 
2002. I think the familiar figure is about $1.2 trillion, and we will 
get that much less in the way of highway funds and this much less in 
the way of some other program.
  I would like to introduce not a new thought but a parallel--and in my 
view, much more important--point which is that we put in jeopardy with 
a balanced budget amendment everything we have learned in the 60 years 
since the Great Depression about Government's capacity, through fiscal 
policy and monetary policy, to restrain the business cycle and put the 
economy on a steady path of economic growth.
  The Senator from Nevada speaks of the Social Security trust funds. 
They are in surplus. In 1977 we moved from a pay-as-you-go system which 
was purely intergenerational. Persons paid into system and moneys were 
received by people who had left the system, or retired. We went to a 
partially funded basis in anticipation of the baby boom retirement. We 
put in place a surplus which would--just to give a sense of the 
dimension--would buy the New York Stock Exchange.
  But we have not saved it. It was used to run or pay down the public 
debt, which translates into an increase in investment. We have used it 
for general fund purposes as the Senator from Nevada has said.
  All should be on notice that that surplus, that cash surplus, runs 
out in the year 2012. Thereafter, the increasing portions of the Social 
Security payments will have to be brought out of the economy generally, 
not from the payroll tax. The year 2012 is not that far in the 
distance. I would be closer to 2012 than I would be from the time that 
I entered the U.S. Senate.
  Therefore, the great issue is to maintain the economic growth of the 
past four decades, which marks a great change in our understanding of 
this subject. How to maintain more or less steady growth without the 
panics and depressions that have preceded it for a century and brought 
the great crisis of capitalism as it was understood to be in the 
1930's.
  Here is a chart with one of the most remarkable bits of line drawings 
we will ever see. Here is the real growth, percent change of real GDP--
which is gross domestic product--from 1890 up to 1945. Look at that 
graph. Up, down; up, down; up, down. Three distinct times in that 60-
year period there is a drop in GDP of 5 percent; twice there is a drop 
of 10 percent; once a drop of 15-percent. That 15-percent drop was the 
1930's. If you liked the 1930's, you would like what came out of the 
1930's--war. World war, with horrors still shaping citizens.
  It was thought, what could be done? Classical economics taught us 
that markets clear, prices change, and we always get the full use of 
resources.
  In the 1930's, an economics developed that we associate with John 
Maynard Keynes, however, he is not the only one that said, ``No, no, 
you can have an equilibrium with large proportions of capacity in the 
work force and capital unused.''
 That was the great insight of the 1930's.

  And now, Mr. President, if I may say, I speak about what I saw. I 
came to this city in the Kennedy administration. I became Assistant 
Secretary of Labor for Policy Planning and Research. The Bureau of 
Labor Statistics provided the data on which our economic policies were 
based. We had in 1958 the first real recession in the postwar period. 
Unemployment reached 6.8 percent. Then a recovery began in 1959 and 
1960. Then it stalled, and President Kennedy came in and unemployment 
was 6.7 percent.
  What to do. The analysis, and a correct one, which followed through 
three Presidencies, was that the revenues of the Federal Government 
were greater than its outlays. We kept running a surplus. In 
consequence, you had fiscal drag. You never reached full employment.
  The Kennedy advisers thought of anything that came to mind. They 
moved the annual dividend on the veterans' affairs life insurance up 
one-quarter, which brought $300 to our household. Then inspired, they 
doubled the dividend, which actually brought us enough money to reach 
$1,000, which was a downpayment on the farm we still live in at 
Pindar's Corner in New York. Walter Heller, with the aid of Joseph 
Pechman at the Brookings Institution, thought about revenue sharing; if 
we could give money to the States, they would spend it, and you would 
not have the fiscal drag of surpluses.
  President Johnson's people ascribed to this approach to fiscal policy 
and followed it pretty much. They did not quite deal with the 
inflationary aspects brought on by spending in the Vietnam war. 
President Nixon had to bring that down, but then he had to stimulate it 
up again.
  George Shultz, one of the great public men of our age, as the first 
Director of the Office of Management and Budget, put in place a 
balanced full employment budget which he defined as one in which actual 
outlays did not exceed revenues that would come in at full employment. 
We built in a deficit to increase employment. It is a little arcane but 
not so arcane. Your average high school graduate can understand it. It 
is just if you have been out of high school a long time, it is a little 
harder.
  Look at that performance--up, down; up, down; up, down; prices, 
panic, depression, and since 1945, a steady growth. This represents 
real growth, increases in GDP each year, a little tick in 1958, a 
little tick in 1961, another tick in 1979. The only real recession was 
1982, when GDP dropped about 2 percent. Otherwise, steady growth. A 
great achievement in social learning. I 
[[Page S2543]] do not know the equivalent in modern times. And we put 
it directly in jeopardy with this amendment. A balanced budget, for 12 
months; if you think about it, it is an agricultural cycle. We do not 
live on an agricultural cycle, Mr. President. We live on a 5-year 
cycle, or something like that.
  I would like to go back to the Smoot-Hawley tariff, which was another 
idea on this floor in 1930. At that time, 1,028 economists pleaded with 
Herbert Hoover not to sign that bill. He signed it. Within a year, the 
British had gone off free trade into imperial preference. The Japanese 
went to the Greater East Asian Prosperity Sphere. In 1933, with 
unemployment at 25 percent, Adolf Hitler became Chancellor of Germany 
in a free election within the Parliament. This is what we climbed out 
of in the way of knowledge and what we are plunging back into in our 
ignorance.
  In 1979, I asked Charles Schultze, then Chairman of the Council of 
Economic Advisers, would he run the 1975 recession on a computer down 
at the Council with a balanced budget amendment. He wrote me that the 
computer blew up--GDP dropped 12 percent.
  Just now, Dr. David Podoff, the former chief economist of the 
Committee on Finance--and now minority chief economist--who studied 
under Robert Solow, Paul Samuelson, and Franco Modigliani, three Nobel 
laureates, simulated a drop in the 1995 economy if some--I use a big 
term--exogenous shock came along, oil prices doubled, Mexico 
defaulted--you can name a lot of things--and unemployment went up by 3 
percentage points. Using Okun's law, as to what a rise of 1 percentage 
point in the unemployment means, a drop of about 2.5 percent in GDP, he 
comes up with a new equilibrium of 18 percent below GDP's potential 
because of this amendment. Unemployment 12 percent. The last time we 
had 12 percent unemployment was 1937.
  That is why, just as the economists tried to warn in 1930, last week 
Robert Solow of MIT came here with other economists, and read a 
statement opposing the balanced budget amendment that he and Paul 
Samuelson, both Nobel laureates, had written. The petition--circulated 
by Mr. Jeffrey Faux made a number of points about this proposal. But 
No. 2 is this:

       Even if economic forecasting could be done with pinpoint 
     accuracy--

  As the Senator from Nevada knows, it cannot be done and as he was 
saying--

     requiring balanced budgets in each fiscal year, regardless of 
     prevailing economic circumstances, is bad public policy. The 
     Federal Government, unlike State and local governments or 
     individual households, has a special responsibility to 
     finance its operations in a way that helps balance economic 
     activity in the entire economy. When the private economy is 
     in recession, a constitutional requirement that would force 
     cuts in public spending or tax increases could worsen the 
     economic downturn, causing greater losses of jobs, 
     production, and income.

  Mr. President, we know this, we have shown it, we have done it, and 
they will curse this generation in times come if we ever inflict this 
abomination on the Constitution of the United States.
  We will not have the resources to pay Social Security benefits. The 
economy will be stuck at 80 percent of capacity, 15 percent 
unemployment--whatever it will be. It will not get better because there 
will be no way for it to get better. The courts will dither and the 
monetary authorities at the the Federal Reserve will ask what is its 
capacity. You could cripple the American economy. Just to get 
reelected? No, Mr. President, there are things more important than 
getting reelected.
  I hope we understand what is at issue: Social Security and the 
American economy and the extraordinary achievement of economic 
understanding of the last half century. Nothing less, Mr. President, 
and we will ignore this to our disgrace if it should pass.
  I yield the floor, and I thank my friend from Nevada for allowing me 
to speak.
  Mr. REID addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, one of the pleasures I have had in serving 
in the Senate of the United States is to be able to serve on a 
committee with the distinguished Senator from New York who has just 
spoken. I think one of the two or three highlights of my congressional 
career is when a few years ago we did the highway surface bill. We had 
a real tough time in the committee, we had a difficult time on the 
floor, and a real tough time in conference.
  But we came up with a bill which I am proud of and I think was the 
beginning of a new surface transportation philosophy in this country. 
We have come to the realization in this country, as a result of the 
input of the distinguished Senator from New York, that more highways is 
not necessarily the answer to all of our problems; that we need 
incentives to keep people from driving their automobiles.
  I could go on at some length about the statement just made by the 
Senator from New York, but one point is that all Senators who were on 
the floor during this particular time moved to listen to him.
  I appreciate the statement of the Senator from New York.
  Mr. MOYNIHAN. I thank my friend.
  (Mr. GRAMS assumed the chair.)
  Mr. REID. Mr. President, I indicated earlier that I saw the Senator 
from Florida come to the floor. I am wondering if I could engage in a 
colloquy with the Senator from Florida. I have some questions based on 
a previous statement the Senator gave, the answers to which I think the 
Senator could impart his thoughts and views and I believe wisdom to the 
Members of the Senate.
  I would first ask Senator Graham if he could review the structure of 
the Social Security trust funds. Will the Senator do that?
  Mr. GRAHAM. Mr. President, I appreciate the question that has been 
asked by my friend and colleague from Nevada, and it follows on very 
appropriately after the comments that have just been made by Senator 
Moynihan, who was here for the restructuring of Social Security.
  As Senator Moynihan indicated, up until the late 1970's, Social 
Security was like most Federal trust funds, a pay-as-you-go system. It 
took in enough money each year to meet the obligations for that year. 
But beginning in the late 1970's, it became apparent that as 
demographic changes were occurring in our country, it would be 
necessary to change the structure of Social Security.
  What were those demographic changes? Demographic changes were not a 
new phenomena. They occurred throughout man's history and our national 
history, that is, the rate of births is influenced by historic, 
economic, and social factors.
  I do not know the exact birth date of the Senator from Nevada, but I 
believe that he and I are approximately the same age, which means we 
were both born during the period of the Depression. If that is correct, 
that would indicate both of us were born at a time of relatively low 
birth numbers in the United States. There were not a lot of parents 
having children in the period of the 1930's. So we represent a small 
percentage of the total population of the United States.
  Conversely, in the period immediately after World War II, large 
numbers of persons who had suffered through the Depression and then 
World War II came back, formed families and large numbers of children 
were born from the late forties up until the mid-1960's, the so-called 
baby boom era.
  Those demographic highs and lows are going to have significant impact 
on the demand of the Social Security system. When Senator Reid and I 
retire, if we do, at around 65, we and our cohorts and aides will not 
be putting too much of a demand on Social Security because there are 
not that many of us.
  Conversely, when our children retire, they will be putting a very 
substantial demand on Social Security because there are so many of 
them. So beginning in the late 1970's and particularly with a revision 
of the Social Security System that occurred in 1983, Social Security 
shifted from a pay-as-you-go system to a surplus system, and the theory 
was that amounts beyond those necessary to meet immediate demands would 
be raised primarily through the payroll tax for Social Security and 
would build up surpluses until you reached the point that the large 
number of persons who were born in the post-World War II period reached 
retirement, and they would then draw upon those accumulated surpluses 
to meet their needs.
  And so this first-blue-then-red line indicates the structure of the 
Social 
[[Page S2544]] Security system as outlined under a surplus plan.
  This structure is not a mistake. It is not an aberration. It is not 
something where part of the machinery went bad. This is the way it is 
supposed to operate. And so the system is that this year we will have a 
surplus of revenues in the Social Security over expenditures of 
approximately $80 billion.
  Mr. REID. Could I ask the Senator another question then?
  Mr. GRAHAM. Yes.
  Mr. REID. I think the Senator has done a good job of reviewing the 
structure of Social Security. How does that surplus affect our ability 
to bring the rest of the Federal budget into balance?
  Mr. GRAHAM. Well, it does in a very dramatic way. If Social Security 
were on a pay-as-you-go basis, it could be melded easily into the rest 
of the Federal budget because each year you would be taking in 
approximately the same amount that you would be expending.
  However, with Social Security, since it is structured to have large 
surpluses followed by enormous deficits, it will have a very distorting 
effect on the rest of the Federal budget if you attempt to arrive at a 
balanced Federal budget.
  Let me just pick a couple of years as an example. In approximately 
the year 2010, the Social Security system will be running a surplus of 
close to $200 billion a year. Now, under the way in which the Federal 
budget is constructed today and in which this amendment will 
constitutionally require it to be constructed for all times, all 
Federal revenues and all Federal expenditures are merged together. That 
is, a dollar spent on Social Security and a dollar spent on paper clips 
has exactly the same impact on the Federal deficit.
  Now, the consequence of that is that the $200 billion of surplus that 
Social Security will be running in approximately 15 years effectively 
becomes a subtract factor from the rest of Federal expenditures, that 
is, the Federal Government can run a deficit of up to approximately 
$200 billion in the year 2010 and it will not have any effect in terms 
of a balanced Federal budget because you will be able to subtract the 
Social Security surplus against the deficit that you are running in the 
rest of the budget and it ends up at zero. Therefore, you have met the 
constitutional requirement of a balanced Federal budget.
  Let us just take another year, 10 years further down the stream in 
the year 2025, when we will be running not a surplus in Social Security 
but a deficit of approximately $400 billion.
  Let me just point out to my colleagues that the structure of this 
surplus plan is that at a point in about 2019 we will reach a maximum 
surplus of $3 trillion plus or minus, and then in a period of 10 years 
we will spend that $3 trillion. Every one of those dollars represents a 
contribution to an enhanced Federal deficit. So our colleagues who will 
follow us here in the year 2025 will start their budget deliberations 
$400 billion in the hole because that is the amount of expenditures 
over income in the Social Security system in the year 2025.
  I submit to my friend and colleague from Nevada that the Social 
Security pattern of surplus and then spendout is incompatible with its 
amalgamation with the rest of the Federal expenditures. It is such a 
large and such a distorting factor and its structure is so antithetical 
to the rest of the Federal budget that in my opinion it will be 
impossible to balance the Federal budget during this period from the 
year 2019 to 2029 if we mandate Social Security be integrated with the 
rest of the Federal budget.
  Mr. REID. If I could ask my friend another question, it would seem to 
me from the picture the Senator has painted here the last few minutes 
that Social Security should rise or fall on its own merits; it is such 
a large numerical part of our Government that whatever happens to 
Social Security should be handled alone, separate and apart from the 
general revenues of this country.
  Mr. GRAHAM. The Senator has made a very good point, Mr. President. 
Let me just put some approximate numbers behind that. This year the 
Federal Government will spend approximately $1.6 trillion--$1.6 
trillion.
  Of that $1.6 trillion of expenditures, approximately $320 billion 
will be Social Security expenditures. So Social Security represents, 
more or less, 20 percent of all Federal expenditures.
  In terms of Federal income, the Federal Government will take in this 
year approximately $1.4 trillion--the difference being the $200 billion 
of deficit that we are currently scheduled to absorb this year. Of that 
$1.4 trillion of income, Social Security represents $400 billion. So 
Social Security represents well over 25 percent of our income into the 
Federal Government. It represents 20 percent of our outgo. So it is an 
enormous proportion of our Federal fiscal activity.
  That large scale and this peculiar spending pattern--which is 
dictated by demographic considerations, the surge of births in the 
population over generations--are the factors that, in my opinion, not 
only justify, but mandate that Social Security be removed from the rest 
of the Federal Government and treated as it should be, as a separate 
fund representing a special trusteeship responsibility between the 
American Government and the American people.
  Mr. REID. Mr. President, I ask my colleague, Senator Graham, are 
there other policy considerations relating to whether Social Security 
is included in the Federal budget or off budget, as the Reid amendment 
proposes?
  Mr. GRAHAM. In my opinion there are some very powerful 
considerations. Let me just mention a few of them.
  One is the fact that Social Security, as the Senator from New York 
indicated, is going to have some serious challenges in and of itself. 
As an example, there is an assumption among many Americans that the 
surplus that we have been building up is being invested in some type of 
security that will be sacrosanct, will be protected, will be prudently 
managed so that when we need the money--beginning in approximately the 
year 2019--the Social Security administrators will be able to go to a 
third party and say, ``Here is the money that I invested in you way 
back there in 1995. We need the money now in order to pay off the 
rights, the aspirations, the expectations of our current generations of 
retirees. Would you please liquidate this instrument so we can make 
these payments?''
  Well, the person to whom that question is going to be asked--``Ask 
not who that person is, because he and she is us.'' We are spending 
that money now, not investing it prudently for future years' needs. We 
are spending it to finance the deficit. There is no pool of money that 
is being prudently managed. So when the year 2019 comes, the Social 
Security Administrator is going to come to us, those who will be in 
these seats, and say: I need approximately $40 billion, which is the 
amount beyond what we will take in this year in order to meet our 
obligations. Please write us a check for $40 billion.
  We are going to have to either raise taxes or cut spending somewhere 
another $40 billion, or some combination, in order to meet those 
obligations. That is a very serious issue. We need to be able to deal 
with that issue. We need to be able to deal with it, in my opinion, as 
a separate, discrete issue, not commingled with the question of whether 
we are trying to do it, really, as an under-the-rug way of balancing 
our Federal budget demands this year.
  I think as long as we have Social Security integrated with the rest 
of the Federal budget, we are going to be frozen in our capacity to 
deal with some of the real, fundamental issues facing Social Security 
because there will be this cloud of suspicion that we are doing it, not 
to protect and solidify and make more reliable Social Security, but are 
just doing this as a means of balancing the Federal budget on the back 
of Social Security.
  So I think that is just one policy reason why we ought to remove 
Social Security from the rest of the Federal budget as it relates to 
this constitutional amendment to require balancing and be able to treat 
with the real needs of the Social Security system as an independent 
trustee would do, not as politicians subject to the cynical charge they 
are doing it in order to balance the rest of the Federal budget on the 
savings of our Social Security beneficiaries.
  Mr. REID. I have a subsequent question I would like to ask the 
Senator.
  [[Page S2545]] What would be the Senator's answer if a question were 
asked, which I am asking: If this amendment, the Reid amendment, is not 
agreed to and Social Security becomes again part of the general 
revenues of this country, what is the future of Social Security?
  Mr. GRAHAM. Mr. President, I think the future of Social Security, if 
it is held within this balanced budget amendment as part of an 
integrated Federal budget, will mandate major change. For instance, I 
think we will have to go back to a pay-as-you-go approach to financing 
Social Security. In my judgment it is incompatible to have a 
combination of, one, a surplus approach to financing Social Security 
and, two, a constitutional mandate that Social Security revenues and 
receipts be integrated, commingled with everything else that the 
Federal Government does and, third, that the result of that Federal 
budget is an equilibrium, a balance of expenditures and revenues.
  Those three principles are, in my judgment, incompatible. So I think 
we will have to go back to a pay-as-you-go Social Security system and 
therefore will face, as the Senator from New York stated, intensified 
intergenerational conflicts as we are going to be 
asking a smaller and smaller pool of Americans--particularly after the 
year 2019--to be paying for the costs of a larger and larger group of 
American retirees.
  Mr. SIMON. Will my colleague yield?
  Mr. GRAHAM. I would, but----
  Mr. REID. I have the floor.
  Mr. SIMON. I apologize.
  Mr. REID. I ask, will the Senator wait until I finish the colloquy 
with the Senator from Florida?
  Mr. SIMON. Sure. I did not realize the Senator from Nevada had the 
floor.
  Mr. REID. I see the Senator has some other visual aids here that he 
wanted to go over. Is that right?
  Mr. GRAHAM. I do. These really relate, not specifically to the Social 
Security issue, but rather to the general question of should we have a 
constitutional amendment requiring that we balance the Federal budget, 
a proposition that I support. We should have it.
  Mr. REID. As does this Senator.
  Mr. GRAHAM. We should have such amendment. But it should be a 
thoughtful, sensitive--frankly, a smart amendment, not one that is just 
a mindless sledgehammer. And I believe part of that intelligence is to 
use a scalpel and remove Social Security from the balanced budget 
amendment, treat it as a separate item, and then balance the remainder 
of the Federal budget.
  Mr. REID. Has the Senator from Florida not also suggested that one of 
the avenues would be to extend the time out for a few years until you 
balance the budget? Will the Senator explain that?
  Mr. GRAHAM. Yes. I have indicated one thing that I think we are going 
to have to do if we do not agree to the Reid amendment; that is, we are 
going to have to go away from a surplus system of Social Security to a 
pay-as-you-go, which I think would be a serious step backward and will 
put in political, if not economic, jeopardy the future of Social 
Security because of the generational conflicts that it will create.
  One of the purposes of this surplus system was to avoid exactly those 
generational conflicts. The people who are going to be benefited after 
the year 2019 are paying the taxes that are building the surplus. So, 
essentially, they are making a payment for themselves. I do not believe 
we can continue that system if we require a balanced budget which 
integrates Social Security with the rest of the Federal budget.
  I believe if the Senator's amendment is adopted that a change that we 
should make would be to rethink the year that we should attempt to 
reach balance. Currently, we are going to be reaching balance in the 
year 2002. We do that in large part because we have these significant 
Social Security surpluses to take into account.
  My calculations are that if we adjusted that from 2002 to 2005 or 
2006, we would be in exactly the same economic position as we will be 
with the year 2002, minus the distorting effect of these Social 
Security surpluses, and we will be able to reach balance in a prudent 
period of time that will not cause unexpected shocks to the economy. No 
one wants to be part of passing a constitutional amendment and then 
find out that we are charged with having contributed to a national 
recession or depression because of the too-rapid pace in which we tried 
to bring a 30-year, out-of-control spending pattern into balance.
  So if we do not agree to the amendment, I think we are going to have 
to move away from the current pattern of financing Social Security. If 
we do agree to the Senator's amendment, which I strongly urge my 
colleagues do, then I think we should adjust the date from 2002 to 2005 
or 2006.
  Mr. REID. Mr. President, I say to my friend from Florida, he has been 
a long supporter of the balanced budget amendment. We need to do a 
better job of matching our spending with our receipts.
  Does the Senator feel that a Social Security exemption, taking Social 
Security out of the balanced budget amendment, in effect, is a more 
sound way of arriving at a balanced budget, working with the unified 
budget of this country?
  Mr. GRAHAM. Absolutely. The reason is because there will be so much 
distortion in Federal expenditures and receipts because of the size of 
Social Security today--20 percent of expenditure and 25 percent of 
income--and even more so because of the way in which those revenues and 
expenditures are taken in and disbursed based on the desire to meet a 
generational shift in demographics.
  Mr. REID. I would also ask my friend this question. It seems to me 
that those people who are calling for a balanced budget would have a 
much easier time, in the first few years of balancing it, if they can 
use this money which is not theirs, so to speak.
  Mr. GRAHAM. I am afraid of that. There are some, such as the Chair of 
the House Judiciary Committee, who in fact spoke about the reason that 
he opposed taking Social Security out of the rest of the Federal 
budget, which was for exactly that reason. It is going to make our task 
in the next few years more difficult if we are not able to unmask the 
extent of the deficit by these Social Security surpluses. He is 
absolutely right. It will make our task more difficult. That is one of 
the reasons I am suggesting that we extend the period by 3 or 4 years. 
But I do not believe the purpose of this ought to be to meet our 
comfort level in the next decade.
  I think it is interesting--and I know the Senator is aware of this 
because we discussed it last week--there have been, I believe, some 27 
amendments to the U.S. Constitution since it was first adopted, and 
only one of those amendments has ever been repealed once adopted. That 
was prohibition. What that says to me is that we are about very serious 
and long-term business. When the first 10 amendments, the Bill of 
Rights, were written, people were not thinking about, ``Well, what kind 
of right of assembly or what type of right of freedom of the press do I 
want to have for the next 10 years, because I am running a newspaper 
and I want to protect myself for the next decade?'' They were thinking 
for the indefinite future. And we are the beneficiaries, 200-years-
plus-later, of their vision.
  We need to think in the same way about what we are doing here this 
day, this week, this month, this year; that is, if we pass a balanced 
budget amendment, we should assume that it is going to be part of the 
Constitution of this country for the indefinite future, and should 
attempt to structure it in a way that best meets those long-term needs 
of our Nation.
  Mr. REID. I appreciate the answers to the questions.
  Mr. GRAHAM. I thank the Senator very much.
  Mr. REID. Mr. President, did the Senator from Illinois still have a 
question of the Senator from Nevada?
  Mr. SIMON. Mr. President, if my colleague will yield just for 5 
minutes, I would like to respond.
  Mr. REID. I have a statement to make. If the Senator has a question.
  Mr. SIMON. I do not have a question. I ask unanimous consent that I 
have the floor for 5 minutes following the statement.
  Mr. REID. Mr. President, reserving the right to object, there are a 
number of other people coming. I do not think 
[[Page S2546]] there will be a problem in the world. I withdraw my 
objection.
  The Senator from Illinois, as I understand the unanimous-consent 
request, desires 5 minutes when I finish.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. That is reasonable.
  Mr. President, I received over the weekend two letters which I want 
to share with this body. One letter is from the National Committee to 
Preserve Social Security, wherein the president of that organization, 
Martha McSteen, said among other things the following. The letter is 
directed to me:

       This is in response to the Republican Policy Committee 
     analysis of your amendment to exclude Social Security from 
     the balanced budget amendment.

  I say as an annotation to this that the Republican Policy Committee 
came out with a paper as to why this amendment was not good. Martha 
McSteen is responding to that. She said:

       The first option presented in the paper makes clear once 
     again that supporters of the balanced budget amendment intend 
     to continue using the Social Security trust fund surpluses to 
     mask the general fund deficit. The analysis under option 1 
     reminds lawmakers that, if the amendment to exclude Social 
     Security is adopted, the Government will no longer be 
     permitted to use the surplus to mask the deficit and would be 
     forced to cut spending or increase taxes . . . Of course, 
     this is precisely what must happen if the Congress is serious 
     about dealing with the deficit. Continuing to use Social 
     Security surpluses to mask the deficit only allowed the 
     continuation of deficit spending in the general fund. The 
     Republican policy paper notes that excluding Social Security 
     would ``make it harder to achieve a balanced budget.'' But 
     although it is a more difficult path, it is the only fiscally 
     responsible path towards balancing the Federal budget.

  This is exactly what my friend, the senior Senator from Florida, just 
said on this floor.
  Ms. McSteen continues:

       A balanced general revenue budget which does not rely on 
     borrowing from Social Security is a budget which will foster 
     the savings necessary to create jobs and to increase 
     productivity. This ultimately is what is necessary to finance 
     retirement of baby boomers. Excluding Social Security 
     receipts and outlays under a balanced budget amendment is an 
     accounting system used by employers and State governments all 
     over the country to balance their budgets without counting 
     the returns of funds as revenues.
      These entities all recognize that these funds are collected 
     for the purposes of retirement, not general fund 
     financing. The Federal Government should be held to the 
     same standard of fiscal integrity.

  I think that says volumes, Mr. President, about option one of the 
Republican Policy Committee.
  Option 2: She says:

       Reid argues there is a potential loophole for Congress to 
     redefine other spending programs as Social Security. Of 
     course, the implementing legislation which supporters contend 
     can deal with any problem with the balanced budget amendment 
     could certainly deal with this problem. At any rate, we 
     believe that Americans would not tolerate such a plainly 
     deceptive practice which would undermine Social Security 
     while increasing the deficit.

  We have said in this debate, Mr. President, that it would take a 60 
vote supermajority to allow any other programs to come into the 
program. So for this and other reasons, Mrs. McSteen is right.
  Third option: Mrs. McSteen complains that

       Without a constitutional requirement to soundly finance the 
     Social Security system, Congress would deliberately create a 
     deficit in the trust fund. This argument ignores nearly 60 
     years of history with Social Security. Since the inception of 
     Social Security, Congress has acted repeatedly to keep Social 
     Security solvent, without any constitutional requirement to 
     do so. The discipline of the trust funds' approach has 
     required Congress to maintain a system on a sound financial 
     basis. After all, if the trust funds would run out of money, 
     the Government could not pay the benefits, including Social 
     Security and consolidated budget under the balanced budget 
     amendment, destroys this trust fund discipline, and creates 
     the gravest threat to the future of Social Security.
       The fourth option raises a serious problem with the 
     balanced budget amendment. The balanced budget amendment 
     changes the definition of Federal debt under the relevant 
     debt limit. Currently, debt for the purposes of the debt 
     limit is defined as ``debt held by the public and debt held 
     by trust funds.'' The balanced budget amendment changes the 
     definition and limits it to only the debt held by the public 
     under this new definition. The debt, at the end of fiscal 
     year 1994 would be $3.4 trillion, not the $4.6 trillion 
     statutorily defined in the Federal debt. Enactment of this 
     balanced budget amendment would wipe out $1.2 trillion in 
     debt owed to Social Security and other Government trust 
     funds. It is this accounting system which is bizarre and the 
     policy paper analysis for option 4, if the amendment is 
     adopted, Congress will not get away with this budgetary 
     sleight of hand. In conclusion, the nearly 6 million members 
     and supporters of the national committee remain committed to 
     your amendment to exclude Social Security as the only way to 
     preserve the integrity of Social Security under the balanced 
     budget amendment.

  Mr. President, I also have here a letter from the American 
Association of Retired Persons. It says, among other things:

       The AARP thanks you for your leadership in trying to 
     protect Social Security in the proposed constitutional 
     amendment requiring a balanced budget. Your efforts, 
     particularly on the Senate floor, underscore the program's 
     importance and the potential impact of the balanced budget 
     amendment on the over 42 million people of all ages who 
     receive Social Security benefits and the 138 million workers 
     who contribute to the system and expect to receive Social 
     Security.
       Specifically exempting Social Security recognizes that 
     Social Security is a self-financed program, based on 
     contributions from employers and employees that are credited 
     to Social Security Trust Funds. Social Security currently has 
     over $400 billion in reserves and is not contributing 1 penny 
     to the deficit. The reserve is projected to grow by about $70 
     billion this year alone, and raiding the trust funds would be 
     devastating to both current and future beneficiaries and 
     would further undermine confidence in this Nation's most 
     important program.
       A specific exemption in the balanced budget amendment for 
     Social Security is the only way to protect the program from 
     being misused in the name of deficit reduction. Anything less 
     than this exemption is not binding on future Congresses. 
     Older Americans agree that the deficit is a major threat to 
     our Nation's future and that deficit reduction must be a high 
     priority for Congress and the President.

  Signed by Harold Deets, president of the American Association of 
Retired Persons.
  Mr. President, the Center on Budget Policy Priorities, of which the 
executive director is a man named Robert Greenstan, has put out a paper 
on February 10, where they analyze what the Joint Committee on Taxation 
says about the Contract With America and other programs now being 
initiated here in Congress. The final paragraph of this paper says:

       The potential for large tax cuts to be enacted and paid for 
     only for 5 years suggest the Nation could be placed on a 
     course in which very large deficits would remain as we get 
     close to the year 2002. If a balanced budget amendment has 
     been approved and ratified, this could create a 
     constitutional crisis. In that crisis, it would be extremely 
     difficult for the largest Federal program, Social Security, 
     to be shielded.

  Mr. President, I further say that the amendment that was passed here 
last Friday is meaningless. I talked about it then. We know that 
section 7 of the constitutional amendment that is before this body 
mandates that Social Security trust funds be part of the effort to 
balance the budget. It is not only in the written English language of 
the proposed constitutional amendment, but the Judiciary Committee 
which put the bill on the Senate floor also said specifically that 
Social Security trust funds will be part of the moneys used to balance 
the budget. It cannot be any clearer than that.
  We know that any enacting or enabling legislation could not supersede 
the language of the Constitution. So amendments like that which passed 
on Friday are as worthless as the paper they are written on. It was a 
meaningless amendment in every form of the word.
  We have had many statements, Mr. President, in support of Social 
Security. When the balanced budget amendment passed in the House, we 
had Members of that body saying we are going to protect Social 
Security. The balanced budget amendment will not use Social Security. 
Their words could fill up more than these statute books on the Internal 
Revenue Code and what the Internal Revenue Service has done. Stacks and 
stacks more of words. They mean nothing, because the constitutional 
amendment now before this body mandates that those trust funds be used 
to balance the budget. Those statements were made only to divert.
  The only way to show the sincerity to protect Social Security is to 
vote for my amendment. It is very simple. You either exempt Social 
Security through voting for this amendment or place the Social Security 
trust fund into a pot to 
[[Page S2547]] be used for aid to families with dependent children, 
foreign aid, farm subsidies, peacekeeping missions to Rwanda, Iraq, to 
buy B-1 and B-2 bombers. That is what the Social Security trust funds 
will be used for. The only way to show one's sincerity about protecting 
the Social Security trust fund is to vote for the Reid amendment.
  Mr. GRAHAM addressed the Chair.
  The PRESIDING OFFICER. Does the Senator yield the floor?
  Mr. GRAHAM. Mr. President, I ask the Senator if he would yield for a 
question.
  Mr. REID. I will yield for a question.
  The PRESIDING OFFICER. The Senator has that right.
  Mr. GRAHAM. the Senator has raised a point in his last comment, in 
reading from one of the letters he had received, that I do not think 
has received adequate attention as relates specifically to Social 
Security. Let me state my concern and see if I have accurately 
understood him.
  Section 2 of the amendment, which is the section that will require 
that a three-fifths vote of the whole number of each House--that is the 
whole number of persons elected--will be required in order to change or 
to increase the debt limit of the United States held by the public. And 
the key phrase is ``by the public''.
  It is my understanding that today when we deal with the debt limit, 
we are dealing with the debt limit of the United States and all of 
those persons or entities which may hold a portion of that debt, 
including the Social Security trust fund, which today holds 
approximately $400 billion of the debt of the United States or a shade 
under 10 percent of the debt.
  Mr. REID. The Senator from Florida is correct.
  Mr. GRAHAM. So this would say, for the future, we would ignore that 
portion of the debt that is held by Social Security and for other 
similar governmental trust funds and that would not count in terms of 
what the limit on the Federal debt would be.
  Mr. REID. That is what the specific language of the proposed 
constitutional amendment says.
  Mr. GRAHAM. That would seem to me, then, to create a situation in 
which, if this and future Congresses wanted to borrow money, it would 
be more appealing to borrow money from the Social Security trust fund 
or other funds like it than it would to borrow money from the general 
public, corporations, or other potential lenders, since borrowing from 
the public would require a three-fifths vote to do, whereas we could 
borrow without limit from the Social Security trust fund without such a 
restraint.
  Mr. REID. The Senator is correct. All these moneys, all these 
excesses which, as the Senator pointed out earlier, will reach about $3 
trillion, we could borrow against those and it would not even show on 
our balance sheet--``we,'' the Federal Government.
  Mr. GRAHAM. In answer to one of the Senator's questions earlier when 
he asked some of the policy implications of having Social Security 
integrated with the Federal budget, I said that one of those was that 
it was going to make it more difficult to deal with some of the real 
problems Social Security has because there will be this cloud of 
suspicion that we are doing it not to help Social Security but to raid 
Social Security. And I suggested that one of those real problems is 
that the Social Security funds today are invested in U.S. Treasury 
instruments, for which there is no prudent plan of investment, and 
essentially the Social Security fund is going to have to come to the 
Congress in about 25 years, hat in hand, asking that these IOU's be 
converted into real dollars that can be used to pay the Social Security 
benefits to real Americans.
  My own feeling is that we ought to be looking for ways in which to 
reduce that level of dependence on Federal Government borrowing, as, I 
might say, collaterally, have most of the countries which have a social 
security system analogous to the United States, such as in Europe and 
Canada. They are using a broader investment pool than just their 
national treasury.
  It seems to me that this language is going to make it politically 
much less attractive for us to consider those other alternatives to 
strengthen Social Security, because we are going to have a strong 
incentive to want to borrow every dollar we can from Social Security, 
since those dollars do not have to be subject to a debt limit, whereas 
the dollars that were borrowed from virtually everybody else are 
subject to a debt limit.
  Mr. REID. I say to my friend from Florida that he is absolutely 
right. We have been through, here in this body, the savings and loan 
debacle. That would appear as nothing on the radar screen, literally 
nothing, the billions of dollars that we had to come up with to make 
whole the savings and loans and those people that made deposits in 
those institutions. It would be nothing compared to what we would have 
to do if these moneys are gone when we start delving into the Social 
Security trust fund which, in effect, would be nonexistent at that 
time.
  Mr. GRAHAM. I say to the Senator, I will just conclude by saying his 
responses to my questions and his analysis of this, I think, raises 
even further reasons why it is so critical that we adopt his amendment 
and treat Social Security as a trust fund, as a contract, as a sacred 
responsibility between the American people and their Government and not 
have it mindlessly commingled with the rest of the Federal budget.
  Mr. REID. I agree with the Senator from Florida.
  I yield the floor to my friend from Illinois.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Illinois is recognized.
  Mr. SIMON. Mr. President, I start off from the same premise as my 
friend from Nevada and my friend from Florida. The reality is, we have 
a contract with Social Security recipients.
  And I started--I say to my colleague from Florida, if I may have his 
attention here--I started off precisely where he is for some of the 
same reasons. If you check back about 10 or 12 years ago, I introduced 
a balanced budget amendment that excluded Social Security. I want to 
protect Social Security.
  We have today only 11--I should not say ``only,'' because it is still 
too high--but 11 percent of those over the age of 65 who live in 
poverty. And those who say, ``Well, since we have 23 percent of the 
children who live in poverty, somehow this is wrong,'' the reality is, 
Social Security has worked, it is a contract that has worked. We have 
to protect it. And we ought to deal in other ways to protect the 
children.
  But my reason for not including it, as we worked on the language, in 
those outyears is because I want the Federal Government to feel that it 
has an obligation not just when there is a surplus, as there is today, 
but in those outyears that go down. And some projections have it 
earlier than the year 2019.
  I think if this is agreed to, what leaders of Congress should do--and 
my friend from Florida has been a real champion in the whole area of 
senior citizens and protecting them--I think people like Senator Graham 
and others ought to sit down with the AARP, with other senior groups 
and say, ``How do we protect this in the long run?'' I do not want an 
exclusion where we say, ``Well, Social Security is off by itself,'' and 
then in another couple of decades or three decades it starts going down 
the tube and Congress can say, ``Well, that is excluded from the 
Federal budget. We don't have a constitutional responsibility here.''
  I think we ought to protect Social Security. I have voted statutorily 
for many years to balance the budget without including that surplus, 
and I know my friend from Florida has also.
  But, I think if the constitutional amendment passes--and I would add 
the great threat to Social Security is the monetizing of the debt; that 
we are just going to start the printing presses rolling. That is the 
huge threat. That is what Bob Myers has talked about. This is a 
judgment call. I respect my friend from Florida and my friend from 
Nevada and others who are going to vote on the other side of this.
  But if this amendment loses, let no one have any doubt about it, that 
the best way to protect Social Security is to protect the value of the 
dollar so that those bonds are meaningful. And that is why we have to 
agree to the amendment.
  But I think then we are also going to have to review a lot of things 
that we have not reviewed up to this point.
  Just as one example--I do not know the right answer here--I think is 
the immigration law. We may very well, as 
[[Page S2548]] you look at the demographical studies of our population, 
we may very well have to say in the future we are going to give 
priority to younger people as immigrants because of this situation, 
things that we have traditionally not done before.
  But I agree completely that we have to protect the system. I do not 
want to go on a pay-as-you-go system. I think that would be 
devastating.
  And I have to say, I am not convinced we should follow the path of 
other nations in terms of private investments. But this amendment does 
not change that. I think we have to be cautious as we move in that 
direction.
  But I just wanted my colleagues from Florida and Nevada to know that 
those of us who will vote against the amendment also believe very 
strongly that we have to protect Social Security.
  Mr. GRAHAM. Mr. President, would the Senator from Illinois yield?
  Mr. SIMON. Mr. President, I would be pleased to yield.
  Mr. GRAHAM. Mr. President, this may appear to be tangential to the 
issue before the Senate, which is the question of whether Social 
Security should be removed from the calculation of the balanced budget 
amendment. But I think that it does, in fact, go to the ability to deal 
with some of the fundamental problems of Social Security.
  Section 2 of the amendment which talks about the Congress having to 
vote by a three-fifths margin to raise the debt limit specifically 
restricts that vote to raising the debt limit for debt held by the 
public. In the committee report it clarifies that is meant to exclude 
borrowing from the Social Security trust fund or from other Federal 
trust funds.
  I am curious as to what is the rationale of that restriction on only 
debt held by the public being required to be subjected to that higher 
than majority vote of the Congress.
  Mr. SIMON. Mr. President, the idea here is simply that we have to 
have some kind of an enforcement mechanism. So to increase the debt, we 
have to have the three-fifths.
  Now the point that my colleague makes that would make it more 
difficult to shift to a different way of utilizing the funds of Social 
Security, that is accurate. I would agree with his point, though I have 
to add that every committee of Congress that has ever studied this, to 
my knowledge, has come to the conclusion that it would be a great 
mistake for the Social Security funds to be used for private 
investment.
  Mr. GRAHAM. Mr. President, my concern is that it seems to me if we 
are concerned about the amount of debt that the Federal Government is 
undertaking, we ought to be concerned about the amount of debt without 
regard to who the lender of those funds happens to be.
  I am concerned that by saying that we can borrow from Social Security 
with a majority vote, would require a three-fifths vote to raise the 
debt limit where it relates to borrowing from the public, that we will 
create a political imbalance which will be more attractive to borrow 
from Social Security.
  Mr. SIMON. Mr. President, I think my colleague misreads the amendment 
here. We are not talking about treating those funds held by Social 
Security--the bonds held by Social Security--as any different than the 
bonds held by the Senator from Florida.
  Mr. GRAHAM. That is not what the committee report says. The committee 
report specifically states that the purpose of the phrase ``debt of the 
United States held by the public'' is to differentiate between 
indebtedness which is held to private individuals, corporations, 
nonpublic institutions, State and local governments, are all part of 
the category of ``The public''--those that are excluded that are the 
Federal Government trust funds of which Social Security is by far the 
largest.
  So, it seems to me we are setting up a system here in which we create 
a clear political preference for borrowing from nonpublic entities, for 
example, Government trust funds, primarily Social Security, as opposed 
to borrowing from other sources.
  I do not understand what the public policy rationale of that is and, 
more so, what the rationale is of putting that in the Constitution.
  Mr. SIMON. Mr. President, I yield to my colleague from Idaho, and 
then I will yield the floor, Mr. President,
  Mr. CRAIG. I appreciate the Senator from Illinois for yielding and I 
appreciate the question of the Senator from Florida.
  Last week, the Senator from California and I got involved in a 
similar discussion, what the committee report reflects is the current 
law. What the Senator is reading is the current law. The current law of 
the Social Security system requires that the Federal Government borrow 
the reserves. No one can borrow them. They cannot be invested outside 
of Government.
  What the Senator is reflecting, and what the committee report 
reflects, is the current law. I think it is clear in that report. What 
would have to happen for it to do as the Senator is suggesting might be 
done, we would have to go in and change the Social Security laws of our 
country. That is not what this Senate is about to do in any sense, nor 
does it want to.
  Ever since Social Security was created, the reserves that build up 
could only be loaned to the Federal Government, and because that is a 
current and constant process, that is what the report reflects.
  Now, outside borrowing by the sale of Government securities, is a 
separate and different item. Of course, this report reflects that kind 
of statement. That is what the report of the committee is intended to 
reflect. I believe if we read it we can read that into it. Clearly, 
that is what was intended.
  I have been involved with this for a long time. As we began to look 
at Social Security, we knew that the Social Security law was sovereign. 
Nobody wanted to change it. We did not have a majority vote to change 
it, did not want to. Nor could we, by crafting an amendment, change the 
nature of that statute. It was not intended.
  Mr. SIMON. Mr. President, I yield the floor.
  Mr. REID. Mr. President, I know the Senator from Idaho has the floor, 
but I would like to ask the manager of the bill a question.
  I have had a number of people come over here and then have had to 
leave the floor because of other meetings taking place. I want to meet 
the concerns of the Republican leader and finish debate on this as 
quickly as possible. Would it be possible when the Senator from Idaho 
completes his statement, that we then go to the Senator from 
California, who has been waiting here for a considerable period of 
time? She desires 20 minutes. Then the Senator from South Carolina [Mr. 
Hollings] has come to the floor three times, seeking the floor. I think 
it would be good to have him finish his statement, and he said he had 
20 minutes. And I see the Senator here from West Virginia who desires 
10 minutes, so he could follow the Senator from California and then the 
Senator from South Carolina.
  Mr. HATCH. Mr. President, I ask unanimous consent that the three get 
permission to speak following the Senator from Idaho, as soon as he has 
concluded, in that order and for those amounts of time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAIG. Mr. President, I will talk briefly this afternoon about 
the Reid amendment.
  As the Senator from Florida leaves, there is one comment I would like 
to make about a question that he asked the Senator from Nevada, and an 
ensuing dialog that they had that I felt was very insightful and 
extremely important as we address the issue of the inclusion of Social 
Security and its trust funds inside a balanced budget amendment, as the 
Senator from Nevada is proposing.
  After an analysis by the Senator from Florida--and I am only 
paraphrasing from memory--I believe he concluded that one of the real 
problems that put the Social Security trust funds at risk, based on the 
Social Security law that those reserves must be borrowed by the Federal 
Government and exclusively by the Federal Government, is that we had to 
stop the Federal Government or slow down the Federal Government's 
ability to borrow.
  I believe that is what he said. That is one of the great threats. And 
he is absolutely right. I agree with it totally. The debt of our 
Federal Government is the threat to Social Security. The borrowing of 
the Federal Government is the threat to Social Security--not a 
[[Page S2549]] balanced budget amendment. The very accumulative 
activities that this Congress has been involved in for the last few 
decades.
  The Senator from Florida is absolutely right--borrowing is the 
problem. It is what put Social Security at risk. It is what has 
consumed the trust funds, in a legal way, in an interest-bearing way. 
But when the day comes that those trust funds must yield for the 
purposes of paying the recipients of the Social Security system, what 
do we do?
  This is what Bob Myers said, who was the actuarial of Social 
Security: Stop the debt creation. That is exactly what a balanced 
budget amendment is intended to do.
  If we pass a balanced budget amendment and if we follow, then, the 
organic law of the land, the Senator from Florida's worries will begin 
to decrease. So what he is doing if he will support us in the balanced 
budget amendment is he will work to protect the Social Security system.
  You just do not set it off to the side and continue to borrow the 
money away from it without some day having to ask the citizens of this 
country to raise the FICA tax to such a level that it would be 
confiscatory to the average working person in this country. That is 
what puts Social Security at risk; not a balanced budget amendment in 
the year 2002, but an empty trust fund in the year 2020. It is the 
borrowing of our Federal Government that has created or is creating 
this risk.
  Gross interest is a product of the borrowing of the Federal 
Government. Right now, that gross interest figure is approaching one-
fifth of our total spending. It is the second largest spending item in 
the Federal budget today. As debt grows, the logic is very simple: So 
does the interest charged grow. Therefore, I believe the logic that has 
been put forth by those who are the knowledgeable accountants and 
economists of the Social Security system is so sound, and that is that 
the debt is the threat, not the balanced budget amendment, but the very 
debt that we are all here trying to address and trying to resolve 
through this new mechanism, and that is the changing of the organic law 
of our land.
  If we do nothing, and my guess is that if we vote the balanced budget 
amendment down we will do nothing again, because this Congress has 
demonstrated no political will to be fiscally responsible. What we are 
trying to do is to rearrange our institutional biases toward a fiscally 
responsible attitude and away from the pressures of the special 
interest groups that force us to borrow or cause us to borrow on a 
regular basis that has created the debt structure that we have.
  So I am absolutely amazed when somebody wants to take Social Security 
and put it in the constitutional amendment and protect it in a way that 
does not allow the board of directors--the Congress of the United 
States--to manage it in a responsible way that will maintain its 
sovereignty and its solvency as we near those critical years of 2020 
and 2030.
  According to the Kerrey-Danforth entitlement commission, we saw the 
figures of what would happen by the year 2030 in their own projections:
  Total Federal spending will top 37 percent of the gross domestic 
product, if we keep this Government on the auto pilot that it has been 
on for the past couple of decades; net interest will exceed 10 percent 
of the gross domestic product of our country, and the deficit will be 
19 percent of the gross domestic product.
  It does not take a lot of good common sense to understand that if we 
do not deal with this issue now, Social Security is going to be in 
desperate trouble at that time.
  You can almost argue that all of the money of the Federal Government 
will go to interest on debt and Social Security payments. What about 
the pressures to fund some of the other programs? That is the risk to 
Social Security, not the debate on the floor today, not the idea of 
putting it in the amendment. We are not going to do that. The Congress 
knows better than to do that and to put it on auto pilot. It will not 
work. You cannot manage a system that must be managed as Social 
Security has been over the years.
  The statistics and the facts that bear up under the current spending 
structure and the nature in which Congress now utilizes by borrowing 
the reserves of the trust funds of Social Security tell us very clearly 
that it is the debt that is the threat, not an amendment to the 
Constitution. It is the amendment that we are debating today and will 
vote on, hopefully, this week or next that will begin to move the 
Social Security system into a much stabler and fiscally sound economic 
environment of the Federal budget.
  So I am always amazed at the idea that somehow we can wave magic 
wands. It does not work; it never has worked. What we are talking about 
here is a balanced budget amendment, and there is nothing magic about 
this. It just forces an entirely new responsibility and discipline. But 
the tough choices, as they have always been, will always be right here 
on the floor of the U.S. Senate and in all of the committees of 
authority and responsibility. We cannot pass go; there is no easy out.
  But for the first time, we will not be able to just simply shrug our 
shoulders and go borrow a little more money. We will have to make the 
tough decisions, and in making those, we will have stabilized the 
economy of our Government, our country and, in my opinion, strengthened 
the Social Security system tremendously.
  Mrs. FEINSTEIN addressed the Chair.
  The PRESIDING OFFICER (Mr. Inhofe). The Senator from California is 
recognized, under a previous unanimous consent order, for 20 minutes, 
to be followed by the Senator from West Virginia for 10 minutes, to be 
followed by the Senator from South Carolina for 10 minutes.
  Mr. REID. Mr. President, the Senator from South Carolina was 20 
minutes.
  The PRESIDING OFFICER. The Senator is correct. The Senator from South 
Carolina will be recognized for 20 minutes. The Senator from 
California.
  Mrs. FEINSTEIN. I thank the Chair.
  Mr. President, I would like to confine my remarks to four specific 
areas of concern. I have spoken on the Reid amendment twice before, and 
there are four specific areas that I want to discuss today.
  The first is the committee report and its exemption of the 
everything-is-on-the-table concept.
  The second is the floor discussion, centering around the concern that 
we are putting a statute into the Constitution.
  The third area is the Dole figleaf amendment.
  The fourth area is the point that Senator Graham, the Senator from 
Florida, just made in his comments about section 2 of the balanced 
budget amendment as presented to this body.
  Let me begin with my first point, the committee report and the 
exemption of the everything-is-on-the-table concept in this committee 
report.
  Last Thursday, I mentioned that on page 19 under the section marked 
``Total Outlays'' of the Judiciary Committee report for this 
legislation, the language states that among the Federal programs that 
would not be covered by S.J. Res. 1 is the electric power program of 
the TVA.
  And then in the course of our floor discussion, it became clear that 
not only was the Tennessee Valley Authority excluded, but the 
Bonneville Power Authority was excluded as well. In other words, the 
electric power programs of this Nation took a higher priority than did 
the Social Security of some 42 million Americans today.
  As I began to take a look at the Bonneville Power Authority, the 
point was raised, ``Well, these are not quasi-Federal authorities,'' 
and I must dispute that. They are, in fact, quasi-Federal authorities.
  I refer this body to the General Accounting Office report entitled 
``Bonneville Power Administration, Borrowing Practices and Financial 
Condition,'' dated April 1994. The facts from this GAO report are as 
follows:
  The Bonneville Power Authority's plan for fiscal years 1993 to 2001 
relies on Treasury for about 90 percent of its borrowing, 76 percent 
from bonds and 14 percent from appropriated debt.
  Second, the accessibility of low-interest Treasury financing plays a 
substantial role in Bonneville Power Authority's approach to financing 
capital projects.
  Third, Bonneville Power Authority is more heavily leveraged than 
other utilities.
  [[Page S2550]] Fourth, the Bonneville Power Authority faces 
significant operating and financial risks because of its heavy reliance 
on borrowing, recent operating losses, and various uncertainties.
  Fifth, the Bonneville Power Authority's long-term debt in fiscal year 
1991 was equal to 96 percent of its total assets, while the figures for 
public utilities, investor-owned utilities, and the Tennessee Valley 
Authority were 67 percent, 37 percent, and 79 percent, respectively.
  And finally, Bonneville Authority's projected debt for fiscal year 
2001 is $17.9 billion.
  It was said on the floor that, if the Bonneville Power Authority got 
into trouble, this body would then have to consider whether we are 
going to pick up its debt or not. However, this Government would have 
no choice but to bail it out because the Bonneville Power Authority 
depends on the Treasury for 90 percent of its borrowing.
  The point I am trying to make is that we are excluding a heavily 
leveraged power authority from the balanced budget amendment, but we 
are not excluding Social Security.
  To me, that is a mistaken list of priorities.
  I was also told on Thursday that I would receive a list of the other 
items that are excluded from the balanced budget amendment. I have not 
received such a list, but it is clear that everything is not on the 
table in the balanced budget amendment as has hitherto been reported.
  I must assume that if the wording on page 19 of this report says, 
``Among the Federal programs that would not be covered by Senate Joint 
Resolution 1 is the electric power program of the TVA authority,'' that 
there are also other programs excluded from the balanced budget 
amendment.
  Now, I do not know whether the progams excluded are some Senators' 
pet programs, or some House Members' pet programs, or a group's pet 
programs, or this body's pet programs. But the point I wish to make is 
it is clear, crystal clear, in black and white, that programs are 
excluded from the balanced budget amendment. Not ``everything,'' as the 
distinguished Senator from Illinois says, is on the table.
  This report indicates to me that everything is not on the table. I 
think those of us who are concerned about Social Security have a right 
to know what other programs are being excluded from the balanced budget 
amendment that we are not being told about.
  Let me go on to my second point. The floor discussion that has just 
taken place, in essence, says that we should not put a statute in the 
Constitution. There is a certain iambic pentameter to the amendments of 
the Constitution of the United States that would not lend itself to 
anything as crass as protecting old age survivors and benefits trust 
fund moneys and that it should not be in the Constitution of the United 
States.
  And then, second, the concern is expressed, well, if it is written 
into the Constitution of the United States, there are sure to come a 
large number of statutes.
  Well, that is correct. However, let us take a look at the 14th 
amendment to the Constitution of the United States, a very major 
amendment to the Constitution, an amendment which guarantees civil 
rights. There are 20 volumes of statutes defining this amendment, and 
they are right here--20 volumes of the United States Code Annotated. It 
goes on and on, statute after statute, that has flowed from the passage 
of the 14th amendment to the Constitution of the United States.
  That is well and as it should be because constitutional amendments 
need enabling action. That constitutional amendment, in fact, even says 
that there will be enabling legislation. So, frankly, that argument 
does not hold much water with me.
  Let me go on to point No. 3, the Dole figleaf amendment. One of the 
things that is most disturbing to me about this debate is that the 
Senate must do just what the House has done. Suddenly we are the 
second-rate body. Just because the House of Representatives has passed 
an amendment, we must pass an identical amendment. There cannot be a 
conference committee to remedy differences.
  Suddenly, the highest policymaking body in the United States of 
America is relegated to an also-ran body. We must do things just as the 
House of Representatives has done.
  I do not accept that argument, Mr. President. People have often said 
that the House of Representatives and the Senate are like a cup of 
coffee and a saucer. The House is the cup of coffee, and you drink the 
coffee out of the cup. The Senate is the saucer into which you pour the 
coffee to cool it, and to discuss it, and to have it stand the test of 
time.
  If this, in fact, is true, there is ultimate precedent for the Senate 
to take another course and to fashion its own balanced budget amendment 
recognizing the concerns of tens of millions of young Americans who are 
paying FICA taxes today to save funds for retirements tomorrow. These 
funds may not be available for their retirements.
  Now, the Dole amendment. Why is it a figleaf? Why is it a figleaf 
that does not even cover the parts that a figleaf would normally cover?
  Let me try to explain. The Congressional Research Service in an 
opinion dated February 6 very clearly states that if the amendment is 
ratified as drafted, Congress would be without the authority to exclude 
the Social Security trust funds from the calculations of total receipts 
and outlays under section 1 of the amendment.
  The figleaf simply stated that we refer this to the Budget Committee, 
and we say, ``Budget Committee, at your leisure consider this and 
present back to the Senate at some later time how to achieve a balanced 
budget without increasing the receipts or reducing the disbursements of 
the Federal Old Age and Survivors Insurance Trust Fund and the Federal 
Disability Trust Fund to achieve that goal.'' It is whole cloth. It 
will not make any difference because this esteemed body, number one in 
the United States of America, would have passed an amendment which 
enshrines language into the Constitution of the United States that the 
Dole figleaf is absolutely unable to amend or change in any way. And 
yet we did it because the House of Representatives did it.
  So what passes the House of Representatives is good, and we then must 
be in lockstep and also pass?
  I do not believe that is right. I do not believe that is why the 
people of the United States elected people to the Senate, to say OK, 
you say jump and we will say just how high?
  We have our own minds, our own voices, our own constituencies that 
reach deep across the United States of America and involve entire 
States.
  I do not believe that the working men and women of this country are 
well served if we impose, as this body and the other body have, a FICA 
tax to pay for their retirements and then we take those moneys and use 
them to balance the budget. That is wrong. It is dishonest. It masks 
the debt. It betrays people. And it violates a compulsory tax act which 
every one must pay.
  If we are going to misuse these FICA taxes, then we ought to cut the 
FICA tax. If we are going to run surpluses in Social Security of more 
than $700 billion between now and 2002, then we should save them, not 
use them to finance the deficit and to balance the budget. That is what 
we who support the Reid amendment say is wrong, is dishonest, and 
should not be done.
  I would also like to point out that the National Committee to 
Preserve Social Security and Medicare, representing 6 million 
Americans, has written stating that clearly this is the case.
  I will once again have that letter of February 1 printed in the 
Record, if I may, Mr. President. The Dole amendment, or S. 290, which 
was at the desk prior to the Dole amendment, are really only fig 
leaves; they cannot countermand a balanced budget amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mrs. FEINSTEIN. I pointed out, for 58 percent of all working 
Americans, the employees' share of FICA and the employer's share of 
FICA put together are more than they pay in Federal income taxes. It is 
a big-ticket item for working Americans. Because it goes into a trust 
fund--and this trust fund is like an annuity. It is like buying an 
insurance policy. What you put in you 
[[Page S2551]] believe you will get back when you retire--we should 
protect that trust fund. We should protect that annuity.
  The Reid amendment protects that trust fund and protects that 
annuity, and I am proud to support it and vote for it.
  The vote on this issue will be very close. The balanced budget 
amendment may have 67 votes without the Reid amendment. It may not.
  There is, however, enough support in this body to pass a balanced 
budget amendment with Social Security excluded. So if my colleagues 
want to take a gamble to try to pass a balanced budget amendment 
without the Reid amendment because they want to misuse Social Security 
funds, they can do that. But, they have an opportunity to pass a real 
and honest constitutional balanced budget amendment that protects 
Social Security. I know this Senate could pass it, and I hope it does. 
It will be nobody's fault, but their own if the constitutional 
amendment goes down because they took this gamble.
  Finally, I want to address my remarks to the concern that just came 
up about section 2 in the budget report. It was the argument made by 
the distinguished Senator from Florida. That budget report, right in 
the very beginning of section 2, points out that to utilize funds from 
Social Security for purposes of this amendment would only take a 
majority vote. Votes for other than this program would take a three-
fifths vote.
  To run a deficit, the Federal Government must borrow funds to cover 
its obligations. Section 2 removes the borrowing power from the 
Government, unless three-fifths of the total membership of both Houses 
vote to raise the debt limit.
  However, the point that was made by Senator Graham, which is well 
taken, is that in the case of Social Security this vote would be a 
simple majority. That is wrong.
  To sum up, I would like to commend the Senator from Nevada. I would 
like to commend the coauthors of this amendment. Many of us have said, 
if the Reid amendment is agreed to, we will vote for a balanced budget 
amendment. We have said so for good and just reasons. There is a need 
for the castor oil of a constitutional amendment to force the body to 
do some of the things it has been loath to do.
  However, without the Social Security amendment, I believe the 
balanced budget amendment is, indeed, a slippery and treacherous slope. 
I believe it jeopardizes the retirements of future generations and it 
jeopardizes a trust that these bodies have put in place with purpose 
and with specific financing. We should not do that. We should not break 
that trust with the American people.
  I yield the floor.
                               Exhibit 1

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

  Mr. HATCH. Mr. President, the Senator from California dragged a 
number of volumes of the United States Code down here to the floor to 
show us all how much legislative language Congress has passed pursuant 
to the 14th amendment. The Senator from Nevada has alluded to this 
theme as well. The Senators from California and Nevada seem to be 
attempting to respond to my criticisms of the Reid amendment's attempt 
to insert a statute into the Constitution. No matter how many volumes 
of legislation are brought to the floor, they do not make these 
arguments responsive to mine.
  Mr. President, the entire body of legislation--every and all volumes 
of the United States Code--are written and passed pursuant to the grant 
of legislative authority to Congress by the Constitution. But nowhere 
in the Constitution has any piece of that legislation been incorporated 
by reference into the constitution text as the Reid amendment attempts 
to do.
  The 14th amendment, like many other grants of power, allows for 
legislative application. The balanced budget amendment itself grants 
Congress power to enforce and implement the amendment by legislation. 
But application of constitutional principles by the legislature is 
wholly different from grafting a mere statute onto the Constitution. 
Putting a statute into the Constitution by reference has never been 
done before, and with good reason. Such a reference would place that 
statute in a twilight zone of some type of quasi-constitutional status. 
It is unclear what such status would mean. Apparently the statute 
referred to, and any amendments thereto, would have constitutional 
implications--that is, a mere statutory change could alter the meaning 
of the Constitution, or perhaps we would need to go through a 
constitutional amendment procedure in order to effect a statutory 
change in the incorporated statute. It is simply unclear, because it 
completely unprecedented.
  But what is clear is that the Constitution has never referred to 
statutes, and we should not start now. Other statutes enacted pursuant 
to constitutional grants of power are simply inapposite to the 
discussion of this issue, and they provide no precedent for the radical 
and unjustifiable step of grafting statutes into the text of the 
Constitution.
  I urge my colleagues to defeat this unprecedented, ahistorical, and 
unjustified step toward constitutional confusion. I urge them to defeat 
the Reid exemption.
  The PRESIDING OFFICER. The Senator from West Virginia is recognized 
to speak for up to 10 minutes.
  Mr. ROCKEFELLER. Mr. President, when the roll is called on this 
amendment, the Reid amendment, every American will begin to get a much 
clearer picture of how a constitutional amendment to balance the budget 
will in fact affect them as individuals. Only by adopting the Reid 
amendment now before us will the U.S. Senate prove that Social Security 
is safe--prove that it is safe. And that is why I urge its adoption.
  I must be honest with my colleagues. Even though I intend to vote 
against the constitutional amendment before us, I will vote for the 
Reid amendment to protect Social Security and the promise that has been 
made to the people of my State and to the people of America. If the 
Reid amendment is rejected or dropped along the way--and, of course, 
there is a real possibility that it could be accepted and then dropped 
in conference, something of that sort--it will be the equivalent of 
posting a danger sign in front of every household that counts on Social 
Security, not only in my State of West Virginia but all across the 
country.
  Our colleagues promoting this balanced budget amendment can promise 
in every way they can possibly think 
[[Page S2552]] of--get on their bended knee and promise they will leave 
Social Security alone, they will not touch it after they get the 
amendment ratified--but unless the Constitution also reminds them of 
their promise, I think the pressure to nip, to tuck, and to do much 
more to Social Security could be unstoppable. This constitutional 
amendment for balancing the budget is not just a statement of support 
for the idea; it is a plan to put the Federal budget on a speeding 
train. It will require something in the neighborhood of $1 trillion in 
spending cuts over 7 years.
  Just imagine what Congress will have to consider when the clock on 
those 7 years starts ticking. All the theorizing will be gone and the 
budget cutting will start. You can just hear the talk already. ``Social 
Security,'' they say, ``will have to be on the table.''
  ``No, we did not want it to be on the table. We just had no idea that 
would happen. But it has just come about that it has to be on the table 
because we have to cut this $1 trillion, or $1.3 trillion. How are we 
going to cut all these entitlements? How are we going to do all this 
without Social Security and without Medicare and without benefits for 
disabled veterans?'' That is what will happen.
  Mr. President, I actually do not know how this will come about. I 
believe the worst part of this constitutional amendment is its very 
proponents do not know how they will rush their way to its destination. 
They defeated the right-to-know amendment. They did that very 
decisively and deliberately. And because I see Social Security as just 
one of the sacred trusts that might get torn up on the way, I do not 
trust them in their budget-cutting zeal. I do not trust their sense of 
priorities.
  But the Reid amendment is one way to keep the Social Security train 
off the track that could very well plow down any number of things 
important to people's lives, to their hopes, to their expectations--
from vaccinations of children, to home health care for seniors, to the 
way we repay our debt to disabled veterans.
  I mentioned disabled veterans and I will again and again and again, 
because the people who were wounded in our wars, we have an obligation 
to them. We pay pensions to them. We have obligations that we must pay, 
and I fear those obligations will be compromised.
  Why do I say that? Because I believe that.
  As my colleagues think about the underlying legislation and the more 
immediate vote on the Reid amendment to protect the Social Security 
trust funds, I urge you to look at letters from seniors in your State 
and get a sense of what is at stake.
  I have done that and I assume that other Senators have, too. Skip the 
impersonal postcards generated by interest groups, skip all of the form 
letters when people's names come rolling out of computers. We all 
understand that game. But take the time to pick up some of the personal 
letters with the kind of very scrawled handwriting from seniors who are 
truly frightened about what will happen to them if the Social Security 
trust fund is unprotected and this balanced budget amendment passes.
  I have hundreds of such letters. Let me paraphrase the style. Take a 
letter that I got that starts with:

       I am 69 years old and worked every day of my life until I 
     had to retire. I paid into the Social Security fund since the 
     beginning. I collect $600 to $800 in Social Security a month, 
     but my bills are more than that.

  So she has done everything right all of her life, paid into the fund. 
She gets Social Security that does not cover her bills. The woman does 
not live ostentatiously. West Virginia is not one of the richest States 
in our country. People do not have the luxury of living ostentatiously. 
When somebody says they cannot pay their bills, I am inclined to 
believe them because over the last 30 years, I have seen so many people 
in that condition.
  I have letters where seniors from my State painstakingly list their 
monthly expenses, their rent, their heat, their food, and their 
prescriptions. They ask me what they can do. In fact, what will they do 
if Social Security or Medicare is cut? They do not know. They are not 
hostile to a budget amendment. They are not hostile to cutting the 
budget. They just do not know what is going to happen to them. They 
honestly do not, and they are honestly afraid.
  Mr. President, I tell you that there are 9 million senior citizens 
who live all by themselves in this country, many of whom do not have 
daily contact with others, except sometimes home health care agencies 
check in on them. They do not know what they are going to do if this 
comes to pass. They are afraid. Where can they turn in their twilight 
years for help? I do not know what to tell them when they ask me the 
question. I do not know how to answer that question.
  I ask my colleagues who support the balanced budget amendment and who 
oppose the Reid amendment, what do you tell the senior citizens of your 
States? I can only tell West Virginians that I keep fighting to uphold 
the promise made to them. The benefits they earned by contributing to 
the Social Security system throughout their working years and careers 
are theirs. It is not a program; it is a trust fund. It is theirs.
  Over 250,000 West Virginia citizens rely on Social Security benefits. 
Nationwide, almost 30 million senior citizens get their benefits that 
way, 30 million people. For many, their monthly Social Security check 
is the difference between poverty and so-called independence, the 
difference between buying groceries or going hungry.
  Thirty-eight percent of senior citizens are not living in poverty 
today, Mr. President, thanks to Social Security. It has made that kind 
of a difference. This is a tremendous achievement that we can be proud 
of.
  So our challenge, as I see it, is, one, to protect Social Security 
now for the seniors living on fixed incomes; and, two, to plan ahead to 
ensure that Social Security is there when the young workers who are now 
contributing over 7 percent of their wages are ready to retire, which 
will come quicker than they think.
  Passing this constitutional amendment to balance the budget without 
the Reid amendment is one way to guarantee that we will fail to meet 
either of the challenges that I listed. We must protect the Social 
Security trust funds from becoming a pawn in a political debate over a 
politically attractive balanced budget amendment which sounds so 
reasonable and sounds so simple. That is why so many Americans support 
it. It sounds so easy.
  Here is an example of where the devil in fact really does lie in the 
details--the details that the proponents refuse, I might say, to spell 
out, where the right-to-know amendment was rejected. We were told in no 
uncertain terms that we were all to strap ourselves onto the speeding 
train and to stop worrying about what and who gets trampled along the 
way. This does not say that over the next decade, the Social Security 
system will not need change. It will, for its own sake.
  A recent report of its trustees clearly shows that long-term solvency 
problems threaten the Social Security trust funds. That is amply spoken 
about on the floor. If changes are not made, the trust funds will be 
exhausted in the year 2029. We have to begin working on solutions to 
the danger facing Social Security to restore its integrity, just as 
courageous Members of this body did, Senator Moynihan being one, in the 
past; in fact, in bipartisan legislation in 1983. But any change made 
to Social Security should be designed to strengthen the trust fund, not 
to surrender to the speed chase started recklessly by the 
constitutional balanced budget amendment.
  This balanced budget amendment--I am sorry; I just have to say it, 
because I believe it--is a game. It allows politicians to promise to be 
deficit hawks without requiring one single act on their part or one 
single clue on what they will actually cut. In my book, that is a game. 
And because I fear for the people of my State, which is vulnerable to 
the hidden agendas in this amendment, I support this proposal to make 
absolutely sure that Social Security is left alone.
  I thank the Presiding Officer. I yield the remainder of my time.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. Under a previous unanimous-consent request, 
the distinguished Senator from South Carolina is recognized to speak 
for up to 20 minutes.
  Mr. HOLLINGS. Mr. President, I thank the distinguished Chair.
  [[Page S2553]] Mr. President, it is hard to make sense out of the 
debate in this town. We suffer through tremendous frustrations in 
trying to balance the budget, trying to pay the bills, trying to put 
the Government on a pay-as-you-go basis. Every State has to do that. 
Every city has to do it. I, as a Senator, participated back in 1969 
when the Congress voted and the President signed into law a balanced 
budget. As chairman of the Senate Budget Committee, I participated in 
President Carter's efforts to cut government spending and leave his 
successor with a smaller deficit than he had inherited. We have seen 
the successes of President Clinton's $500 billion deficit reduction 
plan, and have known the tremendous struggle and frustration--the 
partisanship whereby there was not a single Republican vote in the 
House or in the Senate. Instead, Members predicted that the economy 
would stall, the deficit would rise, and everything was going to happen 
in the next hour.
  Now comes what the distinguished Senator from West Virginia calls a 
game. I call it outright fraud, because I know they know better.
  Here we are, trying to balance the budget without raiding Social 
Security, but all we are given is a constitutional amendment that uses 
these surpluses. This very minute, we have a statutory law on the 
books--section 13301 of the Budget Enforcement Act of 1990--signed into 
law on November 5 by President George Bush, which in effect says: 
``Thou shalt not use Social Security funds.'' That is the formal 
statutory law; that is what we should be following today with or 
without the Dole amendment.
  If we are serious about trying to balance the budget, we should 
recognize that a constitutional amendment alone is not balancing the 
budget at all. It is a delay. It says you have to pass a joint 
resolution through both of these Houses, and then send it, and 
hopefully have 37 States ratify it in the next few years.
  So before we pat ourselves on the back for all our good work on 
balancing the budget, we should be mindful that a balanced budget 
amendment may not give discipline but rather may inspire creativity.
  We have seen that in circumvention of the Byrd amendment which 
statutorily required Congress to balance the budget, in talk about 
capital budgets and about off-budget exercises, and in eliminating the 
fixed deficit targets of Gramm-Rudman-Hollings as they did in the 1990 
budget summit.
  Rather than recognize these shenanigans, the media in this town are 
smitten by the Contract With America and eagerly joins in this fraud.
  Taking our streets back is not going to balance the budget. The 
Personal Responsibility Act is not going to balance the budget. The 
Family Reinforcement Act is not going to balance the budget. The 
American Dream Restoration Act is not going to balance the budget. The 
National Security Restoration Act is not going to do it. The Senior 
Citizens Fairness Act is not going to balance the budget. The Job 
Creation and Wage Enhancement Act is not going to balance the budget. 
Common-sense legal reform is not going to balance the budget, and the 
Citizens Legislature Act and constitutional amendment to limit 
congressional terms will not balance the budget.
  So I come to this session of the Congress, having worked 28 years now 
in the vineyards trying to pay the bill and put the Government on a 
pay-as-you-go basis. Mr. President, we can put the Contract With 
America into law this afternoon. No budget is balanced, but that is 
exactly what we need in this land.
  On Friday, we got another creative maneuver. We voted on the Dole 
amendment which said:

       Strike the Dole amendment. Strike all after the first word 
     and insert the following: ``For the purpose of any 
     constitutional amendment requiring a balanced budget, the 
     Budget Committee of the Senate shall report forthwith H.J. 
     Res. 1 in status quo, and at the earliest date practicable 
     after February 8, 1995, they shall report to the Senate how 
     to achieve a balanced budget without increasing the receipts 
     or reducing the disbursements and the Federal old age and 
     survivors insurance trust funds and the Federal disability 
     insurance trust fund to achieve that goal.''

  But having the Budget Committee report how to balance the budget 
obscures what the law already says that the Congress must do. Instead, 
we have these creative put-offs that the media covers like they would 
an athletic contest. On Saturday morning, we see the headline ``Senate 
Resolution Bars Congress from Dipping into Social Security.'' 
Absolutely false. There is no bar to Congress dipping into Social 
Security. The folks that write these stories have been covering the 
Congress and they keep writing it the way the majority wants it 
written, not the way the facts are. They ought to expose this nonsense. 
They say it is called a fig leaf, but they do not say why. Why it is a 
fig leaf is absolutely important. The Dole amendment does not change 
the Constitution. But the constitutional provision that they want us to 
vote on after all of the amendments is ``total receipts shall include 
all receipts of the United States Government except those derived from 
borrowing''. That constitutionally mandates the inclusion of Social 
Security funds. That is the whole point here. You cannot talk sense in 
this town; no wonder you can't get anything done.
  My good friend, the distinguished former Vice President, was on 
``Meet the Press'' this past Sunday. He said, ``These are the types of 
things that we ought to look at, but when you have amendments in the 
Senate right now that we are going to put in the Constitution that you 
cannot touch Social Security, this is ridiculous.'' Those are the words 
of Vice President Quayle. But the Reid amendment does not say that at 
all. You can touch Social Security. We touched it the year before last 
in the budget.
  This particular Reid amendment does not say do not touch it; it says 
do not include it in your receipts and your outlays and disbursements. 
That is all it says. The Republicans want to use the $636 billion in 
Social Security surpluses--that is the whole point here. If they kill 
that Reid amendment, then they have $636 billion in their pocket that 
they do not have to cut in order to put us on a pay-as-you-go basis. 
That is the intent of the Concord Coalition which has done some good 
work. I wish they would get that digital clock that has the running 
tally of the national debt and put it into the parking lot in front of 
the Capitol so we could see it every morning when we come to work. But 
I wish they would not put forth this subterfuge about entitlements, 
entitlements, entitlements. Social Security is a trust fund; it is paid 
for. Do not give me 2029. Let us worry about today.
  I have said time and again that it is like the 49ers, going down to 
Miami and running into the stands hollering ``We want a touchdown.'' 
Get down on the field and score the touchdown. That is what the 49ers 
did. We are the Government. The Republicans on the other side of the 
aisle are in the majority. They have control. They have the Supreme 
Court, they have the House of Representatives, and they have the U.S. 
Senate. Let them act like they have some responsibility. But do not 
give me this hit and run driving. All of this is process, process, 
process.
  Nothing is real. Nothing gets done. No budget is balanced. They want 
to use these Social Security funds.
  Mr. President, a few years ago I had a conference with the former OMB 
Director, Dick Darman at the insistence of President Bush. Later he 
enumerated in public exactly what he told me in the office. They want 
to get entitlements. They will not say the word ``tax'' even though 
they know that you have to have tax increases as well as spending cuts 
to balance the budget. Yes, you have to do something about Government 
spending on entitlements, but Social Security is paid for, so why break 
the trust? You are going to try your best with welfare, you are going 
to try your best with health. If you cut health back from a 10-percent 
growth rate to 5 percent, you will be a magician. You will get the good 
government award.
  President Clinton has already gone a long way in this regard. They 
say he did not have the courage, but I get letters of thanks for his 
bringing up health reform last year. The chairman of the board of one 
of the largest employers in the State of South Carolina recently told 
me ``Keep on pouring on the coals. For the first time, I got my 
insurance coverage for the employees instead of going up, it went down 
10 percent.''
  [[Page S2554]] Why? Because President Clinton had the courage to 
bring up health reform. And for that, they ridicule him and the First 
Lady. They criticized him last year for his proposed cuts in Medicare 
and Medicaid. Now they are running around here, bumping over desks and 
talking about no courage, taking a walk, putting up the white flag, and 
all that.
  Where has any Republican put up their budget? They will not do it 
because they do not want to show senior citizens that they want to use 
the moneys in the Social Security trust fund. At least the Concord 
Coalition has the decency to say so. This crowd goes around, like the 
distinguished majority whip, the distinguished Senator from 
Mississippi, who says, ``No one--no Republican, no Democrat, no 
conservative, no liberal, no moderate--is even thinking,'' he says, 
``about using Social Security.''
  That is all they are thinking about. Why the big debate?
  There is already one exception in the language of the constitutional 
amendment. Their amendment says, ``Total receipts shall include all 
receipts of the U.S. Government except those derived from borrowing.'' 
And the Reid amendment says, ``except Social Security trust funds.'' 
Now what is the matter with that? Don't give me all this gobbledygook 
about legislating in a constitutional amendment. They got an exception 
in here. You cannot hide from this.
  What did old Joe Louis tell Billy Conn? ``You can run, but you cannot 
hide.'' They cannot hide on this one. It is crystal clear and we tried 
to show that in the Record. Some say we are trying to defeat the 
balanced budget amendment. I voted three times for it; I will vote for 
it again if you get the Reid amendment in there. But I am not going to 
breach the trust. I am not going to violate the contract that we made 
with America in 1935.
  I yield the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I want to thank Senator Hatch for 
finding a few moments for me. I was not part of the unanimous-consent 
agreement. I say to Senator Hatch, whenever it is somebody else's turn, 
if he will just advise me. I cannot be here longer than 10 minutes in 
any event.
  But I come to the floor to suggest to the senior citizens of this 
country that, if they want to protect Social Security, they should not 
adopt the Reid amendment. Quite to the contrary, what he thinks he is 
propounding, and those who think it is to be off budget, off the 
constitutional amendment, I believe seniors ought to pay attention, 
because I believe it will be easier to spend Social Security money on 
things that are not Social Security if it is outside the budget than if 
it is within.
  Let me give you some examples, as I see it. First of all, if Social 
Security revenues and outlays are outside of the balanced budget 
requirement, you can be sure that Congress will look for ways to move 
costs into Social Security and out of the rest of the budget.
  The Reid amendment says Social Security is excluded from the balanced 
budget amendment only if the revenues and outlays are, and I quote, 
``used to provide old-age, survivors and disability benefits.'' Social 
Security recipients might think that is only them. But this does not 
say that. It says ``old-age, survivors and disability benefits.'' So 
this amendment is saying all of those purposes are now outside of the 
budget.
  And let me give you a couple of examples of what is going to happen.
  For instance, the supplemental security income, the SSI Program, as 
Senator Hatch well knows, going through this debate provides income 
support for the poor, elderly, and disabled Americans, most of whom 
also get Social Security benefits. This program is part of the Social 
Security Act. In fact, it is title 16, and is administered by the 
Social Security Administration.
  But, Mr. President, fellow Senators, and senior citizens who are 
concerned about this debate, this program is financed out of general 
revenues of $24 billion in 1994, not the Social Security trust fund. In 
other words, Congress budgets out of regular taxes $24 billion that 
goes into the trust fund to pay for SSI.
  Why could not Congress, when it gets pushed in the balanced budget, 
why could not Congress cut the SSI to balance the budget and fund 
exactly the same benefits out of Social Security to protect the 
beneficiaries? There is no question that Congress can say, ``This trust 
fund is protected. Why don't we just not put the $24 billion in from 
the outside. Why don't we just use the trust fund to pay for the SSI?''
  I believe it is legal. I believe it is just as possible as any horror 
or scare story about leaving it on budget.
  Now let me proceed. Is that not doing that to ``old age'' or 
``disability'' benefits? You bet. So the definition used by my good 
friend from Nevada includes what I am speaking of under the rubric of 
Social Security, but clearly there is a $24 billion easy loophole to 
charge the trust fund for SSI and there is nothing illegal about it.
  Now, let me move on and then insert some things in the Record.
  First of all, I want to move quickly to another notion. Supporters of 
the amendment of my friend from Nevada, Senator Reid, may argue that 
current law provides a firewall around Social Security requiring 60 
votes to raid it.
  Now, I do not know if it has been argued, but I think it should be 
put on the table. Frankly, I had a lot to do with it. It is a Domenici 
amendment, a Domenici proposed firewall. I helped direct that despite 
objections from some who wanted to raid the trust fund. That firewall 
is very important.
  But Congress can change it by changing our internal budget rules. In 
fact, we saw it happen in the 1993 reconciliation bill.
  Let me tell you what happened. The President proposed to increase 
income taxes on Social Security benefits and instead of giving that 
revenue to Social Security--I say to my friend--as required by the 1983 
bipartisan solvency package--he put the money in Medicare, a pretty 
healthy chunk of money.
  In effect, if the Reid amendment passes, the paradox is it will take 
60 votes to run a deficit, but only 51 votes to raid Social Security. 
Let me make sure everybody understands. Right now, the internal law of 
this Congress--and I believe it will be there for a long time--permits 
raiding on 51 votes. But if--if, in fact, you have a balanced budget 
amendment--and remember, it is enforced by a 60-vote rule--if, in fact, 
you are overspending, it takes 60 votes.
  I assume part of the way to overspending would be to raid the trust 
fund. If you raid the trust fund, to go out of balance, it will take 60 
votes; whereas, if you do not have the constitutional amendment, even 
with the firewall and all the other things, it will take only 51 votes 
to raid the trust fund.
  Now, frankly, I believe the second thing we ought to make sure 
everybody knows, the Social Security fund is in danger not by the 
threats that have been posed by those who essentially, I believe, want 
to kill the balanced budget amendment--I mean, to me it seems like 
those who are saying put Social Security outside of the balanced budget 
clearly understand that many who are for the balanced budget amendment 
would leave that side of support and say we should not even have a 
constitutional balanced budget if everything we spend on is not on it.
  So, what do I think is the most important thing for Social Security 
in the future? I believe the best way to protect Social Security, Mr. 
President, is to balance the Federal budget.
  There is no doubt that if you ask economists, those who are familiar 
with the fund, those who are familiar with its idiosyncrasies, they 
will say the most important thing to do to protect it is to balance the 
budget.
  If we continue to run budget deficits as we have been for two 
decades, we will sap all of our already meager national savings, which 
leads to lower investment and slower productivity growth.
  Ultimately, let me tell Members what that means. Lower productivity 
and slower growth and lack of investment ultimately means stagnant 
wages. Stagnant wages ruin Social Security trust funds. Lower payroll 
taxes come from stagnant wages. Stagnant wages come, as I indicated, 
from spiraling deficits, without national savings, which make long-term 
interest rates go up, and the Social Security recipient is doomed.
  [[Page S2555]] Already we see the deficit in Social Security way out 
there in about 2\1/2\ decades, finally arriving again, because of 
demographics. And clearly if we have on top of that--without major 
reform in Social Security in the way out years on top of that--a slower 
wage growth base, we will never be able to afford the Social Security 
system.
  That gets back to what is best for the seniors. What is best is a 
balanced budget. What kind of balanced budget? One that is real, one 
that is true to valid spending processes, that excludes nothing. That 
excludes nothing.
  I want to repeat the fact that because I am here saying the Reid 
amendment should fail does not mean that this Senator or that 
Republicans on this side or Democrats on that side that are with the 
balanced budget amendment and do not want to take the Reid amendment, 
do not want to vote for it, we are not against Social Security.
  Anybody that has taken the floor here and says this is calculated to 
harm Social Security, listen carefully. We are absolutely convinced 
that to take it off budget lends itself to more mischief and more 
robbing of the trust fund than if it is on budget. We are firmly 
convinced of it and we gave only two little examples today. But they 
are big. One is over $39 billion, the one on taxes; and one is $24 
billion, just 1994. They will come up like mushrooms. The way is to 
make it more solvent but not bite the hard bullets of getting the 
deficit under control. That is No. 1.
  No. 2, make it clear. Social Security and pensions and seniors' well-
being is more predicated upon wage growth, productivity increases and 
economic prosperity than any other commitment of our Government. What 
is more apt to make those commitments viable and solid? A balanced 
budget where we spend within our means and live within our revenues.
  We do not want to kill the constitutional amendment. Seniors do not 
want Members to kill a constitutional amendment on an amendment that 
says it will protect while all the time we are assured that it will 
kill the balanced budget amendment which is intended to protect 
seniors, which everybody knows will protect seniors, which everybody 
knows is a necessity.
  I yield the floor.
  Mr. REID addressed the Chair.
  The PRESIDING OFFICER (Mr. Craig). The Senator from Nevada.
  Mr. REID. Mr. President, I appreciate the statement of the Senator 
from New Mexico. I do say, however, that no matter how loud the Senator 
talks, or how many examples the Senator gives that are not relevant, 
the fact of the matter is that the only way to protect Social Security 
is through the Reid amendment.
  Mr. President, the Senator from New Mexico did not deny--nor has 
anyone, as a matter of fact--that this amendment, House Joint 
Resolution 1, includes in the general revenues of this country Social 
Security. There is no question about that.
  In addition to that, Mr. President, the report that came to this body 
from the Judiciary Committee which reported the amendment says that 
Social Security shall be counted in the general revenues of this 
country. There is no question about that.
  House Joint Resolution 1, section 7, if it passes, it will have 
passed with 67 votes. We do not have to worry about 60 or 50 votes. If 
the constitutional amendment passes and does not have the Reid 
amendment it will include Social Security revenues. Clear as that. No 
question about that.
  My friend from New Mexico said on this floor the best way to protect 
Social Security is to balance the budget. The best way to protect 
Social Security, according to my friend from New Mexico, is to use 
Social Security trust funds. That is what this debate is about.
  The debate on this amendment is whether or not we should exclude from 
the language of this underlying constitutional amendment Social 
Security receipts. I say yes. There are those in this body who 
disagree. They believe that Social Security funds should be used to 
balance the budget. I do not. I think that is wrong.
  We can go back, Mr. President, to a history of Social Security. We 
hear a lot in this body and in the other body about a Contract With 
America. Let me remind everyone again that the real contract with 
America is not something that has to be passed in 100 days. The real 
contract with America was that contract that was negotiated by the 
Members of the House and the Senate and the President back in 1935.
  They set up a trust fund that would be funded by employers and 
employees so that people when they reached the magic age of 65, they 
would be able to draw moneys from that trust fund that had been 
accumulated as a result of their paying into the trust fund with their 
employers. It is a contract. It is the original contract with America.
  We, as Members of Congress, have a fiduciary relationship with the 
people of this country--not only senior citizens, but the people of 
this country--to protect moneys. This is for me, my children and my 
grandchildren. That is what this is all about. We have an obligation to 
protect those moneys.
  We must remember that Social Security moneys come from taxes that are 
paid. Social Security has not contributed one penny to the 
multitrillion-dollar debt we have in this body. Not one penny. Why 
should it be used to help balance the budget?
  Mr. President, we know it has been the intent of this body to exclude 
Social Security from the general revenues of this country. We know that 
because there is a law that says that. This is a section of our 
statutes.
  This amendment was offered, among others, by the junior Senator from 
South Carolina who recently spoke on this floor. It says there will be 
an exclusion of Social Security from our general revenues--our budget. 
It says that. This was not a real close vote, although we did have a 
vote on that.
  In fact, Mr. President, by a vote of 98 to 2, this law was passed: 98 
yeas; 2 nays. It was the decision of the Senate and the House, and this 
was signed into law by the President, that we should exclude Social 
Security trust funds from deficit calculations.
  Now, it seems rather unusual to me that we would come along just a 
few short years later and say, well, that was all wrong, the vote did 
not really mean that much, and with House Joint Resolution 1, the 
underlying constitutional amendment that is now pending in this body, 
it says we are going to include total outlays. I repeat, if it is not 
graphic enough for everyone, look at the report language that we have. 
It is a report that came from the Judiciary Committee that included 
language that says we are going to include Social Security in the 
general revenues of this country.
  There could be no mistake made that this underlying constitutional 
amendment will take Social Security trust funds and use them to balance 
the budget.
  There have been very few objections raised to excluding Social 
Security. I heard the Senator from North Dakota say on a number of 
occasions: ``Give me a reason why you would not want to exclude Social 
Security from the deficit reduction problems we have in this country. 
Social Security does not add to the deficit.''
  So why should we?
  Some of the reasons that have been raised are, No. 1, we are going to 
take care of things by using implementing legislation to exempt Social 
Security from the balanced budget amendment. We know that if the 
underlying constitutional amendment passes, it will have section 7 in 
it. This would be part of the Constitution. I have a copy of the 
Constitution in my hand, Mr. President, and this amendment will become 
part of this Constitution. If I am not mistaken, it will be amendment 
No. 28. If it is part of our Constitution, you cannot pass a statute 
that says the Constitution does not really mean what it says.
  If the underlying constitutional amendment passes and you try to pass 
a law that says the Constitution does not mean what it says, it is 
obviously unconstitutional. So how could anyone accept the proposition 
that we will pass a law that will change the Constitution? That is what 
we are hearing around here.
  ``We will use implementing legislation to exempt Social Security from 
balanced budget calculations''--it is irrational; it is impossible to 
arrive at any conclusion that would make that possible. Attempts to 
exempt Social Security through implementing legislation would be 
futile.
  [[Page S2556]] I repeat, once the Constitution is amended, to 
include, as the chart shows behind me, ``Total outlays shall include 
all outlays of the U.S. Government except for those for repayment of 
debt principal,'' in effect what we want to put here, in addition to 
``repayment of debt principal,'' is ``Social Security.'' That is what 
this amendment is all about. You cannot change the Constitution with 
simple implementing legislation.
  Senator Heflin has said this means that there will be a 
constitutional requirement that Social Security funds be considered on 
budget. I point to this for the third time; that is what it says.
  ``If the balanced budget amendment,'' Senator Heflin continues, ``is 
adopted as presently worded, it would prohibit Congress from 
legislatively taking Social Security funds off budget and would nullify 
the provisions of the 1990 Budget Enforcement Act which would require 
Social Security funds to be considered off budget.''
  He is not the only one who has said this. It is not as if Senator 
Heflin, who is, I think, one of the leading legal scholars in this 
body, does not have any support. We have an opinion from the 
Congressional Reference Service that says:

       Under the proposed language, it would appear the receipts 
     received by the United States which go to the trust fund and 
     the Federal Disability Trust Fund would be included in the 
     calculations of total receipts, and that payments from these 
     funds would similarly be considered in the calculation of 
     total outlays.
       Thus, if the proposed amendment was ratified, then Congress 
     would appear to be without the authority to exclude the 
     Social Security trust funds from the calculation of total 
     receipts and outlays under section 1 of the amendment.

  There has also been an allegation made that statutes never have been 
incorporated in the Constitution and this would be unprecedented, 
constitutionalizing a statute.
  As I have said before, Mr. President, if a statute is included in the 
constitutional amendment, it is no longer a statute. We have 
established through Senator Feinstein and the Senator from Nevada that 
every constitutional amendment has a spate of accompanying legislation 
that implements legislation, and that is why we talk about the 16th 
amendment, IRS.
  I think, more importantly, you should know though, this is the first 
time in the history of this country that we have attempted to affix 
fiscal policy in the Constitution. So if we are talking about fiscal 
policy, should we not be concerned about one of the largest fiscal 
elements of our society, namely, Social Security?
  We are also told if Social Security is put off budget, then Congress 
would have to raise taxes or cut spending to meet this year's deficit 
and future years'.
  That is the whole point of the amendment. We do not believe that the 
budget should be camouflaged as to its deficit component by Social 
Security surpluses, and that is what would be happening if this 
amendment is passed without exempting Social Security.
  The Senator from New Mexico and others have said on occasion that 
exempting Social Security in the constitutional amendment would create 
a loophole.
  Well, Mr. President, as I have stated briefly, after Senator Domenici 
spoke, in section 7 of this proposed constitutional amendment, Social 
Security receipts are lumped into the general budgets of this country. 
The only way that you could change Social Security, as Senator Domenici 
has said--he acknowledged our previous statement--is if in fact you get 
60 votes. So I think creating a loophole is a real stretch.
  Now, Mr. President, there are some other things that I desire to say, 
but I have been in the Chamber now for some time as the manager of this 
amendment, and I see two Senators in the Chamber. I would be happy to 
yield to them if in fact they desire to speak on this amendment. Could 
I inquire through the Chair if the Senator from Georgia and Oklahoma 
wish to speak on the pending amendment?
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. Mr. President, I do desire to speak on the amendment.
  Mr. REID. I am wondering, Mr. President--we have until 5 o'clock--if 
perhaps we could enter into some type of agreement--I know we did that 
earlier in the day--and save Senators hustling around. We have about 40 
minutes left. How long, may I inquire through the Chair, does the 
Senator from Georgia wish to speak?
  Mr. COVERDELL. I would only require 5 minutes.
  Mr. REID. And the Senator from Oklahoma?
  Mr. COVERDELL. He is not speaking today.
  Mr. REID. I would yield the floor to the Senator from Georgia.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. Mr. President, I rise to speak on the amendment as 
offered by my friend from Nevada and the language that has been 
embraced by the Senator from Colorado.
  Mr. President, throughout this debate and, for that matter, 
throughout the last several years as we talked about the balanced 
budget amendment I have watched Members of Congress, House and Senate, 
come before the American people and repeatedly say almost with 
abandon--and that may be the right word--they support a balanced budget 
amendment. In the President's State of the Union Address, he told us 
that he supported a balanced budget amendment. Of course, within a week 
he submitted a budget that nowhere approached a balanced budget and did 
not even make an attempt to move toward one. And of course, with all 
the statements that we have heard from both sides of the aisle, all 
across the board, Republican and Democrat, and for years that said they 
were for a balanced budget, I think the American people can come to the 
conclusion after 25 or 30 years that must not mean very much because we 
just do not produce balanced budgets.
  Worse yet, we have spent every dime we have--$5 trillion that we do 
not have, 30 percent of the property tax base of America through the 
egregious unfunded mandates, and now we are in the process of spending 
the Treasury, so to speak, of the children and grandchildren of 
America--in every corner we can find. So I do not believe that people 
of the country can take much comfort from a President who says he 
supports a balanced budget but does not offer one, or from the Members 
of Congress, no matter what side of the aisle, who come before us and 
say they are for balanced budgets but never produce one.
  Now, the Constitution is our conceptual law. It is an acknowledgment 
that to manage the affairs of this great Nation there must be core 
law--core law.
  So this idea that we can do this--and this does not need to be added 
to the Constitution--is a specious argument because there is no issue 
of greater concern to the health and the future of our country than its 
fiscal health. No family, no business, no community, State, or nation 
can conduct the affairs required of it if they are financially 
unhealthy. And the United States is on the verge of enormous financial 
destabilization.
  So it is absolutely logical that we now add to our core law a process 
by which we will govern and assure the people of the country sound 
financial fiscal law.
  With regard to the amendment, in my judgment, any amendment of 
exemption makes the law virtually moot because that exemption will 
ultimately be the vehicle by which all the pressures we have suffered 
this last quarter century will focus, whether it is 60 votes or a 
majority--all the pressures to keep doing what we are doing and to 
resist change will collapse with the full weight of the last 25 years 
on the exemption, no matter what it is.
  Now, we have focused on Social Security here time and time again. I 
have to say that I believe this is used to raise fear in our country, 
and it is used as a vehicle with which to block the concept of core law 
that will manage our financial affairs.
  Now, if you are for a balanced budget and keep saying so, then you 
would obviously vote for a balanced budget amendment. And if you are 
worried about Social Security--and everybody says they are on both 
sides of the aisle--then the first thing you have to do is to produce 
fiscal health. Otherwise, Social Security and every other meaningful 
program in our country will fall victim to a financially destabilized 
nation.
  Mr. President, I would just say that we are very dangerously close to 
being 
[[Page S2557]] the first generation of Americans that would be willing 
to turn over to the future of our Nation a country that is financially 
destabilized and unable to properly care for itself.
  Mr. President, I yield.
  Mr. INHOFE. Will the Senator yield for a question?
  Mr. COVERDELL. Mr. President, I would be glad to yield if I am within 
the time agreement.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. I thank the Chair.
  Mr. President, the Senator said something about how long we have been 
talking about the balanced budget amendment, and tomorrow I plan to go 
back and revisit an experience I had with Senator Carl Curtis, a former 
Senator, conservative Senator who was the father of the balanced budget 
concept way back in 1972.
  At that time, when his idea was to get three-fourths of the States to 
ratify, force Congress to do this instead of talking about it, he 
brought up at that time that every time it has been brought up it has 
been killed by someone who wanted to have an exception to it written 
into the Constitution, knowing full well that it will not work.
  Does the Senator think that after 22 years, people out there are now 
going to be in a position to demand that we quit talking about it and 
do it?
  Mr. COVERDELL. The Senator from Oklahoma is absolutely correct in the 
assertion of his statement. The American people want the balanced 
budget amendment passed. It was the centerpiece in the election just 
concluded; 70 or 80 percent, depending on whose poll you read, want 
this balanced budget amendment passed, and the reason is they have 
heard us say we are for a balanced budget time and time again--they 
heard the President say it just the other night--and then within hours 
in history reverse themselves and do nothing to produce it. And so they 
come to believe that the only way our system will be disciplined enough 
in the core responsibility of caring for the financial health is for it 
to be written in the core document that governs the United States, that 
is, the Constitution of the United States.
  Mr. INHOFE. Will the Senator yield for one more question?
  Mr. COVERDELL. I certainly will.
  Mr. INHOFE. Does the State of Georgia have a balanced budget 
constitutional amendment?
  Mr. COVERDELL. Yes, they do. It goes further than this one. If the 
Governor fails to meet it, he goes to prison.
  I remember very well when I first went to the State senate, within 
several years, we were going to exceed our revenues by some $120 
million. The Governor was forced, choosing this over prison, to call a 
special session, and we found a way to eliminate the expenditure of 
$120 million.
  Now, if that amendment, a requirement and discipline, I might point 
out to the Senator from Oklahoma, if it had not been in place, do you 
think we could have come into special session? Do you think we would 
have taken on the hard job of finding where to eliminate $120 million?
  The answer is no. It required a discipline built into our core 
governance, the Constitution of the State of Georgia, to force us to 
make the hard decisions, which we did. We fought about them. We set our 
priorities, made the decision, and went home. Some were happy, some 
were not, but we made the decision, Mr. President. We made the 
decision. And we kept the finances of the State of Georgia intact. I 
might add that the financial health of my home State is considerably 
improved over the financial health of our home nation.
  Mr. INHOFE. I appreciate the Senator yielding. I asked that question 
because in the State of Oklahoma, I went back and read extensively 
about our balanced budget amendment which we passed in 1941. The 
interesting thing is the same arguments that are being used today in 
this forum were used back then, saying that it would not work, and it 
has worked since 1941. It would not have worked if it had not been in 
the constitution.
  I thank the Senator for yielding.
  Mr. COVERDELL. I thank the Senator, and I thank the Senator from 
Nevada for yielding time.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I say through the Chair to my friends from 
Georgia and Oklahoma a couple things. First, I want the record to be 
very clear the majority leader, the Republican leader, has been 
entirely fair with this Senator and those of us sponsoring this 
amendment. Going into this I asked the senior Senator from Utah that we 
be given enough time, because of the importance of this amendment, to 
debate the issue. We have had that opportunity. It is my understanding 
the leadership is now working on a time sometime tomorrow that we will 
vote on this amendment. I think we have had an adequate time to debate 
this issue, for which I am publicly thankful to the majority leader.
  The point that I raise here is there has been no effort to stall 
this. We have had a full and complete debate. I do not think we have 
had a quorum call, to my knowledge, during the entire time that my 
amendment has been debated.
  I do say, however, in response to some of the statements raised by 
the Senator from Georgia that people are trying to raise the fear of 
Social Security recipients: Mr. President, I am not trying to raise the 
fear of Social Security recipients. I am trying to inform the Social 
Security recipients of the facts. And the facts are, if this amendment 
passes, the underlying amendment, Social Security will be included in 
the general funds of this budget. I do not know if that will cause fear 
to be instilled in senior citizens. If it does not, it should, because 
clearly the American public, who badly want a balanced budget 
amendment, do not want Social Security receipts to be part of the 
balanced budget amendment.
  My friend from Georgia said 70 or 80 percent of the people want a 
balanced budget amendment. That is true. But 90 percent of the people 
of this country want a balanced budget amendment that excludes Social 
Security.
  While it is not a big issue and not part of this amendment--and my 
support of the balanced budget amendment is not contingent upon a 
capital budget--I think it is fair to inform everyone that the States 
of Georgia and probably Oklahoma and I know Nevada have a balanced 
budget requirement but they exclude capital expenditures. We have a 
beautiful new building in Las Vegas, a State building. But that State 
building was paid for with bonds, or a considerable part of it. Bonds. 
That is moneys that are paid on time, so to speak, like when we 
personally buy a home or we buy a car personally, or a company buys a 
piece of equipment. Not often is cash paid for it.
  Mr. President, I see the distinguished Senator from Alabama here. 
Does the Senator wish some time?
  Mr. HEFLIN. Yes, I would appreciate some time.
  Mr. REID. Please proceed.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. HATCH. Will the Senator yield for a unanimous-consent request?
  Mr. HEFLIN. Certainly.
  Mr. HATCH. Mr. President, I ask unanimous consent, so we have some 
order, that when the distinguished Senator from Alabama completes his 
remarks in the time he desires, then we move to the distinguished 
Senator from Tennessee so we can keep some sort of an order here.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. I thank my friend.
  Mr. HEFLIN. Mr. President, I strongly support the resolution calling 
for a balanced budget amendment. I think it is long overdue. It 
provides the discipline that is absolutely essential if we are going to 
balance the budget and eliminate deficit spending. However, I do feel 
in a balanced budget resolution we ought to provide for the absolute 
truth as it would apply to deficit spending, at least to the extent of 
having Social Security off budget and not a part of the overall budget.
  When Social Security was created in 1935, it was created as a trust 
fund to be held separate and apart from the general operating budget of 
the Government. That was true up until 1969, when it was used to, 
really, hide the true deficits that were occurring as a result of the 
Vietnam war and some other matters that called for the expenditure of 
funds.
  In 1990, we attempted to take Social Security off budget and have 
truth in the budget. That was the intent but, 
[[Page S2558]] under some mechanisms and maneuvers, we do not really 
have it today.
  The amendment calling for a balanced budget would mean that we would 
have Social Security funds included in the budget process for the 
general operating budget, and this causes me concern. I have looked at 
figures of projections which the Social Security Administration has 
worked up relative to the amount of excess of receipts over outlays, or 
surpluses, that are occurring. In 1995, which is the present fiscal 
year we are in, the Social Security trust fund will have a surplus of 
$69 billion; in 1996, $73 billion; 1997, $78 billion; 1998, $84 
billion; 1999, $90 billion. In the year 2000, $96 billion.
  I do not have the figures, but as I understand it, they continue to 
grow and we will say, by the year 2001, it is in excess of $100 
billion.
  The present projected deficits, according to the President's budget 
and otherwise, indicate that at around the year 2001 we will have 
deficit spending around $200 billion. According to the Social Security 
Administration, the surplus in the Social Security trust fund in the 
year 2001 will be $951.8 billion. What happens to that surplus? The 
surplus is invested with the idea of drawing interest in order that 
that interest can compound the assets each fiscal year to make it grow. 
We hear the term that it is designed to make it more actuarially sound.
  So you have interest that is then growing, and in the year 2001, 
according to the Social Security Administration, they anticipate--and 
it is based on factors based largely on interest rates today--that the 
Social Security trust fund will yield about $63.3 billion in interest 
in the year 2001.
  So we have coming in $100 billion and $58 billion from interest, 
making approximately a total of $158 billion that will be coming 
available as surplus interest and surplus payments in the year 2001. 
The year 2001 is the year before 2002, which is the target date for 
balancing the budget.
  So you say if Social Security is a part of the budget, then in the 
year 2001, we will find--the projections on the deficit spending as of 
that year would be $200 billion--if you allocate toward the reduction 
of the deficit $158 billion, coming from principal that comes in to be 
paid plus $58 billion that would be drawn on interest on the surplus, 
it would leave $42 billion that you would have to cut in programs.
  It seems to me that if you were at the stage of that and you were 
attempting to balance the budget and to bring about a reduction of 
spending in unwise programs, you would not want to be in that position. 
But under the language here, under the definition of total receipts, 
the total receipts include all receipts of the Government except those 
that are obtained or derived from borrowing. So, therefore, it is 
mandatory that at least $100 billion of the principal has to be 
included on the receipts side relative to the balancing of the budget.
  This matter of attributable interest causes me concern. The 
definition of total receipts shall include all receipts of the U.S. 
Government except those derived from borrowing. Therefore, when the 
Social Security surplus, nearly $1 trillion in the year 2001, has been 
invested and you bring in the money that has been obtained from 
borrowing, it means, therefore, that the interest, the attributable 
interest, is not included. One would think it would be included from 
the borrowing. But when it comes to the outlays, it is excepted because 
of the fact that you cannot allow under the definition of outlays to 
pay back interest under the concept of the budget. So, therefore, you 
are in a situation where the total receipts shall include all receipts 
of the U.S. Government except those derived from borrowing. That means 
you include all receipts that the Social Security tax pays, and it is 
required that you have to do it.
  The money that is invested by Social Security funds can be paid back, 
and they will be paid back, because it says total outlays shall include 
all outlays of the U.S. Government except those for the repayment of 
debt principal--debt principal--but it does not guarantee necessarily 
that the interest will be included in the budget. Therefore, it puts it 
into a situation of uncertainty as to whether or not the interest will 
be repaid. But the debt principal, of course, is not included in the 
outlays and, therefore, you have a problem that arises in connection 
with that.
  I think that we ought to at least, if the Reid amendment is defeated, 
address the question of debt interest that is coming in regard to the 
Social Security Administration. This is sort of a complicated concept. 
But it ought to be that attributable interest is also kept off budget, 
and that we do not have to depend on the payment of interest to come 
from actual outlays that are appropriated under the general budget 
because it is a temptation. And it may well be that they will be 
repaid. But there is no guarantee that the debt principal interest, the 
interest that is grown, will be repaid relative to that matter.
  I think there are a lot of things pertaining to the Social Security 
amendment of Senator Reid that are very important. I think it is one of 
the most consequential votes of this young session of Congress that we 
have had.
  I want to rise to voice my strong support for Senator Reid's 
amendment exempting Social Security receipts and outlays from the 
budget. Social Security is the Federal Government's original contract 
with America. I believe Senator Reid used that word in one of his 
speeches. If the Reid amendment does not pass, then we will be breaking 
that contract, and we will ultimately be forced to balance the budget 
on the backs of hardworking Americans who have contributed toward their 
retirement with a portion of each paycheck.
  This provision says it is a protection for all Americans who pay into 
the program. There is no question that, under the language in the 
balanced budget amendment resolution now pending, the Social Security 
trust fund will no longer be completely safe for future generations.
  The Reid amendment seeks to correct the deficient language so as to 
uphold the original contract with America, one that has lived up to its 
intent like few other Government contracts have. The amendment is very 
simple. It protects the Social Security Program by excluding the 
receipts and the outlays in the system from the budget.
  Social Security is not causing the deficit. Its revenues and 
surpluses should not be used to mask the receipts, nor should its 
outlays be counted as part of expenditures. We should keep in mind that 
Social Security is a program self-financed from contributions by 
employers and employees, which does not contribute one cent to the 
deficit. In fact, in 1990, Congress included a provision in the Budget 
Enforcement Act declaring that funds off budget, much like our personal 
savings accounts, are not counted towards the budget.
  The current underlying resolution, if not amended, would clearly put 
Social Security on budget, and thus overturn the decision 5 years ago 
to affirm the off-budget status of Social Security.
  As we debate and develop the balanced budget amendment, we need to be 
certain that we protect the integrity of the Social Security System and 
maintain truth in budgeting. The protection of this self-funded program 
can only be accomplished by keeping it off budget and out of the 
balanced budget equation.
  This vote should be easy. The bottom line is that we are voting on 
whether or not to protect the true contract with America, Social 
Security. I urge my colleagues to vote in favor of protecting the terms 
of this sacred contract and covenant, and keep Social Security in its 
protected position as a trust fund separate and distinct from the 
Federal budget.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Tennessee is recognized.
  Mr. THOMPSON. Mr. President, we have been debating the balanced 
budget amendment now over a 15-day period--or about 11 days of debate. 
I think it is very important that we step back and reconsider the 
fundamental question that we are dealing with here, and that is whether 
or not we are going to take the steps necessary to put ourselves in a 
position of dealing with the problems facing the next generation, or 
whether or not we are going to go down the same old road and proceed to 
bankrupt that generation.
  There is nothing more fundamental in human nature than looking out 
for 
[[Page S2559]] one's offspring, for the people that we bring into the 
world. I am not sure we have done a very good job of that so far. We 
have an opportunity to do that with the balanced budget amendment.
  We have heard several amendments discussed over this 15-day period. 
Many of those amendments would defeat the balanced budget amendment if 
adopted. I respectfully submit that the Reid amendment under present 
consideration would fit that category and would defeat the amendment if 
adopted. Many good arguments have been made against this amendment. One 
is that it would be a loophole through which anything could be driven 
and will obviate the purpose of the balanced budget amendment.
  Senator Hatch from Utah this morning pointed out that the adoption of 
this amendment would put into the Constitution very complex language 
which would create a field day for lawyers, and it does not belong in a 
constitutional amendment. I believe the most important part is to 
understand the protection issue. This amendment is being set forth as 
protection for Social Security. Social Security, and the protection of 
it, is something we are all committed to. We have made that commitment 
by vote and we have made that commitment by voice in this body. We will 
continue to make that commitment.
  But the fact of the matter is that the safety of Social Security 
depends upon the commitments of this and future Congresses as we 
proceed, and not upon the language of this amendment. If this amendment 
is adopted, it will do nothing to prevent future taxes of Social 
Security. If this amendment is adopted, it will do nothing to prevent 
cuts in Social Security in the future. It is essentially a bookkeeping 
measure. The proponents of this amendment rightfully point out that at 
the present time the surplus in the Social Security trust fund does 
assist in making our deficit picture look a little better, as bleak as 
that is. That is a short-term consideration, Mr. President.
  The fact of the matter is that within a relatively few years, 
depending on how you calculate the Federal Government employer part of 
it, in 2010 or 2013 the Social Security trust fund is going to be in 
the red and the real protection for Social Security again is not in 
this amendment, which I think really in many respects would endanger it 
more than it already is. The real protection is in balancing the 
budget.
  I think it is important to keep in mind two factors that are driving 
this debate. One is the fact that the Social Security trust fund will 
be going into the red in the not-too-distant future. It is right around 
the corner. The second is the phenomenon of the interest on the debt.
  As you know, Mr. President, the interest on the debt right now 
constitutes--or will in a couple of years--the second highest 
expenditure of our Federal budget and will continue in that direction 
as far as the eye can see. Those two factors go on together. I submit, 
Mr. President, they constitute the real danger to Social Security. All 
programs are going to be squeezed if this scenario continues to play 
out in the current direction if we do nothing about it. All programs 
are going to be squeezed and those programs applying high expenditures, 
such as Social Security, will be high on the list and under close 
observation, Mr. President, if we come to that point.
  Let us consider separately those two factors I just mentioned. 
Interest on the debt. Interest payments on the debt are currently $235 
billion. They are expected to rise to about $5 trillion by the year 
2030 under current circumstances. This is according to the Commission 
on Entitlements. Interest payments on the debt currently accounts for 
approximately 22 percent of the general non-Social Security revenue. By 
the year 2030, Mr. President, interest payments on the debt will 
account for approximately 75 percent of general revenues.
  Let us consider the Social Security trust fund for a minute, the 
second part of that equation. We will start to go into the general fund 
to meet current Social Security liabilities by the year 2010, which is 
right around the corner. We will need an additional $850 billion in the 
year 2030 alone over anticipated Social Security receipts to meet 
current liabilities. That is an additional $850 billion if we proceed 
under current circumstances. So by the year 2030, we will have Social 
Security needing about an additional $850 billion, at the same time 
that interest payments on the debt are exceeding 75 percent of general 
revenue. You can see where that takes us.
  The sum of interest payments and Social Security equals just under $6 
trillion. General revenues are expected to be just over $6 trillion. 
Clearly, this is a catastrophe waiting to happen, Mr. President. We 
cannot sustain that trend.
  What else will be going on if this scenario plays out? These are just 
numbers. What is going to be going on in the real world? Our savings 
rate is going to decline even further. That, in turn, will cause our 
interest rates, now hurting, to decline even further. That, in fact, 
will hamper our growth rate; it will hamper the standard of living for 
every young couple starting out and trying to start a family. It is 
already going down. We hear a lot of talk that the real income of 
working Americans today has stagnated for some time now in this 
country. The other part of this story is that for younger Americans, 
since 1973, the real income for them has actually gone down. This 
economy is slowing down. We talk about what happened last quarter or 
the quarter before last, but if you take the long-term trend, this 
economy is slowing down. Our investment rate is slowing down. Our 
savings rate, which produces that investment, is slowing down. As 
interest takes a bigger and bigger chunk of the savings dollar, there 
is less there for private investment. Interest rates will go up and 
taxes will go up astronomically. We all know the demographics, and 
before long we are going to have a smaller and smaller working force, 
taking care of a larger and larger retired population.
  Some people even talk in terms of a generational war--a generational 
war, Mr. President. Surely we can do better than that. That is the real 
danger to Social Security. If that happens, if we get to that point, if 
we get to a 70-percent tax rate, if we get to an economy slowing down, 
if young working people see this is happening to them and these figures 
go out of sight, nothing is going to be safe, including Social 
Security. We must avoid that, and the only way to do that is by a 
constitutional amendment.
  We have already turned ourselves from a creditor nation into a debtor 
nation. We already have the lowest savings rate among all of the 
industrialized countries. We have now one of the lowest investment 
rates of any of the industrialized countries. We must be able to see 
the handwriting on the wall. The only other options would be to cut 
Social Security dramatically, raise taxes dramatically, keep raising 
the deficit, or not fund anything else, such as defense, 
infrastructure, Medicaid, or any of those things that we know we must 
fund.
  Had we balanced the budget in 1981, based on the law passed at that 
point--as the President recalls, the history is replete with instances 
of failed attempts to balance the budget. We have declared it to be a 
national priority. We have put it into law in 1979. But even the year 
we put it into law, there was a $79 billion deficit. Failed attempt 
after failed attempt, Mr. President. If we, in effect, had balanced the 
budget, as the law required in 1981, our interest payments today would 
be only $45 billion, compared to the $234 billion. And it is almost 
$200 billion less than we are paying today. Indeed had we balanced the 
budget beginning in 1981, interest payments would be so much lower that 
by this year we could have a balanced budget and still spend virtually 
the same amount as actually is being spent on noninterest spending.
  Therefore, I urge that we not lose sight of what we are about here. 
This amendment does not protect Social Security; in fact, it endangers 
it. The only true protection for Social Security is the passing of the 
balanced budget amendment.
  I yield the floor.
                           the reid amendment

  Mr. WELLSTONE. Mr. President, I rise to support the Reid amendment 
which would make crystal clear that if a constitutional amendment to 
balance the budget does pass the Senate--I know it is going to be a 
very, very close vote. So it is very difficult to tell whether that 
will happen--that there will be language that will ensure that 
[[Page S2560]] Social Security and Social Security trust funds will not 
be used for the purposes of deficit reduction as spelled out in the 
balanced budget amendment goal.
  Mr. President, let me make clear in the beginning that I believe the 
Social Security trust fund, as we look well into the next century and 
really not that far into the next century, just in terms of its own 
trend lines and making sure that it is self-supporting, that reforms 
will be necessary, that there are steps that we are going to have to 
take, and difficult decisions will have to be made. But, Mr. President, 
the reason I feel strongly about the Reid amendment is this is a 
separate trust fund, and indeed, as other Senators have said, if we are 
going to be talking about contracts, Social Security is a contract with 
many Americans.
  So, Mr. President, there is no question in my mind that this trust 
fund should be kept separate, that when we look at Social Security--and 
we do this as a Nation and we take steps that we need to take to make 
this trust fund work well into the next century--we should do so. But 
that money should be kept separate. That issue should be kept separate. 
That should not be part of the effort to balance the budget by the year 
2002. I think the only way we live up to our commitment with older 
Americans and their children and their grandchildren is to make it 
crystal clear through this Reid amendment.
  The second point: There was a reason for passage of the Social 
Security bill in 1935. It used to be that in the United States of 
America, if you were to look to see where the vast majority of poor 
people lived and who they were, they were disproportionately the 
elderly. There is an obvious reason, which is after people became older 
and no longer were able to work, and employment earnings severely 
dropped and, therefore, many of our elderly citizens were destitute. 
The Social Security Program, because it is universal, because it is a 
sacred contract, has been, I think along with the GI bill of rights, 
one of our two or three most successful programs. And, as a matter of 
fact, poverty has dramatically declined among older Americans. It is no 
longer the case that we find the poverty disproportionate among the 
elderly within our country.
  The third point: I make the argument that it has been an extremely 
important program. As a matter of fact, Mr. President, this is truly a 
middle-class program. It is as if middle-class people and working 
families through their own sweat equity and their own work were able to 
in 1935 effect a huge accomplishment which changed our country forever, 
and for the better. That is Social Security.
  Mr. President, what I resent in some of the discussions about Social 
Security and Social Security recipients is this caricature that we have 
too many older Americans who are ``greedy geezers playing golf every 
day.'' That is simply not true. It is simply not true.
  Mr. President, as a matter of fact, there are many people--40 
percent--for whom Social Security is really their sole source of 
retirement income. I will never forget in a cafe called Wimpy's Cafe in 
Faribault, MN, two elderly women, not that long ago, said to me: 
``Senator, we receive, altogether, I do not know, like $440 a month. Do 
not cut our Social Security payment; it is what we depend on. Senator, 
we are terrified that is what you are going to do.''
  My colleagues on the other side of the aisle say we are not going to 
do that. If that is the case, then let us ensconce that as part of the 
constitutional amendment, make it a part of the constitutional 
amendment. That is what the Reid amendment says.
  Mr. President, the fourth point is that it bothers me no end that we 
continue to focus on--or at least some do--this kind of generational 
conflict. I have not been to one gathering of older Americans, of 
senior citizens in Minnesota, where people have not said to me that one 
of their top three issues are children, which in many cases are their 
grandchildren. It strikes me that this is a program that is sacred, 
this is a program that is a sacred trust, and this is a program that if 
we are going to make any changes, they ought to be made with the 
community and it ought to be made viewing Social Security as a separate 
trust fund and a separate program. We have to make sure that there is 
not a raid on the revenues of this program right now to be used for 
deficit reduction.
  Mr. President, let me make one or two final points. One has to do 
with what I said last week on the floor of the Senate. I just want to 
sound the alarm that each and every Senator, regardless of his or her 
party, is held accountable for the remarks we make on the floor of the 
Senate. I take any speech or remarks on the floor of the Senate very 
seriously, first of all, because of the honor of being here.
  Mr. President, when we look at this balanced budget amendment and we 
understand the projections on the amount of money that is to be saved 
by 2002, the amount of budget cuts that have to take place --and we are 
talking somewhere in the neighborhood of $1.3 trillion, and we are 
talking about cutting taxes. As I said the other day, there is an old 
Yiddish proverb that you cannot dance at two weddings at the same time. 
You cannot talk about cutting taxes and increasing the Pentagon's 
budget and paying interest on the debt and say Social Security is going 
to remain separate--what is left to cut? Medicare is much like Social 
Security. It is a sacred trust with the elderly in our country.
  Mr. President, in 1965, much like in 1935, our parents and our 
grandparents changed the United States of America for the better. And 
the Medicare program, imperfections and all, is a program that, for 
many elderly people, is the difference between being able to live the 
end of their lives with dignity as opposed to being destitute because 
of medical bills.
  Mr. President, we ought to be straightforward with people that there 
are going to be draconian cuts in Medicare and Medicaid. Fifty percent 
of Medicaid goes for elderly and nursing home care. I can tell you that 
in my State of Minnesota, doctors, clinics, hospitals and the elderly 
are very worried; some of them are downright terrified. It is not 
because people are using scare tactics; they have reason to be scared 
because there will have to be, on present course if this balanced 
budget amendment is passed, deep cuts in those medical programs.
  Mr. President, if there are deep cuts--and there will be--then I 
wonder why, as I said last week, the very Senators who, when it came to 
health care reform last session and when we were talking about 
universal coverage, were yelling and screaming about rationing and lack 
of choice, now when we are about to pass a constitutional amendment--
maybe, maybe not--but we do not list where the cuts are going to take 
place, because we know we are going to have deep cuts in Medicare--and 
some want to cut Social Security, and we know they want deep cuts in 
Medicaid--the very Senators who know that and know this is going to 
lead to rationing among the elderly, the poor and the disabled, are 
silent.
  That is what I find to be so disingenuous about this amendment and 
the failure on our part, as Senators, to step up to the plate and be 
clear with people as to where we are going to make the cuts, as to what 
our priorities are, as to what kind of choices we are going to make.
  So I think the Reid amendment is an extremely important amendment. I 
think if Senators believe that the Social Security trust fund should be 
kept separate, then they should vote for the Reid amendment. It is 
simple. In a sense, it is sort of like not separating the votes you 
cast from the words you speak.
  And, by the way, I think it is not just Social Security. It is also 
the very question of Medicare.
  Finally, because I think this is what this debate is all about, it is 
interesting to me that now what I see happening in Minnesota is a lot 
of the education people, not just the teachers or college presidents, 
but, all of a sudden, students are saying, wait a minute, you say you 
are for the middle class, and our understanding is that there are going 
to have to be significant cuts in Pell grant and on campus need-based 
low interest loan programs? If you are for the middle class, Senators, 
then do not cut the very programs that enable our children to have a 
chance to be able to afford their education.
  Mr. President, I find it interesting that Senators do not want to 
vote to keep the Social Security trust fund 
[[Page S2561]] separate--though I hope we win that vote--and are not 
willing to go on record saying we will do nothing that will create more 
hunger or homelessness among children. I lost twice on that amendment. 
They are silent as to all the rationing that is going to take place 
because of deep cuts in Medicare and Medicaid. They have not been 
forthright with the vast majority of Americans, who, all the time, 
wonder how they are going to be able to afford higher education for 
their children because we know we are going to be cutting some of those 
programs. But when it comes to subsidies for oil companies, 
pharmaceutical companies, insurance companies, all sorts of loopholes 
and deductions, adding up, I might add, to hundreds of billions of 
dollars, they are silent. I would think that would be part of the way 
in which we do deficit reduction. But none of us will know unless we 
are willing to lay out our budget plan before we vote for a balanced 
budget amendment. That is what is wrong about our approach.
  With those remarks, I yield the floor.
  Mr. ROCKEFELLER. Mr. President, when the roll is called on this 
amendment, every American will begin to get a much clearer picture of 
how a constitutional amendment to balance the budget will affect them.
  Only by adopting the Reid amendment, will the U.S. Senate prove that 
Social Security is safe. That's why I urge its adoption. Even though I 
intend to vote against the Reid amendment to protect Social Security 
and the promise that has been made to the people of my State and the 
rest of America.
  If the Reid amendment is rejected, or dropped along the way, it will 
be the equivalent of posting a danger sign in front of every household 
that counts on Social Security today or sometime in the distant future.
  Our colleagues promoting this balanced budget amendment can promise 
in every way they know how that they'll leave Social Security alone 
after they get the constitutional amendment ratified. But unless the 
Constitution also reminds them of their promise, the pressure to nip, 
to tuck, and do much more to Social Security could be unstoppable.
  This constitutional amendment for balancing the budget is not just a 
statement of support for the idea. It is a plan to put the Federal 
budget on a speeding train. It will require something in the 
neighborhood of $1 trillion in spending cuts over 7 years. Just imagine 
what Congress will have to consider when the clock on those 7 years 
starts ticking. You can just hear the talk already. Social Security has 
to be on the table. How can we get $1 trillion or more without all of 
the entitlements--without Social Security, without Medicare, without 
benefits for disabled veterans?
  Mr. President, I actually don't know how. I believe that the worst 
part of this constitutional amendment is the fact that its very 
proponents don't know how they will rush their way to its destination. 
And because I see Social Security as just one of the sacred trusts that 
might get town up on the way, I don't support this idea.
  But the Reid amendment is one way to keep Social Security off the 
track of a train that could very well mow down any number of things 
important to the lives, the hopes, the expectations of our people--from 
vaccinations for children to home health care for seniors to the way we 
repay our debt to disabled veterans.
  As my colleagues think about the underlying legislation and the more 
immediate vote on the Reid amendment to protect the Social Security 
trust funds, I urge you to take a look at letters from seniors in you 
State to get a sense of what is at stake. I have, and it is sobering.
  Skip the impersonal postcards generated by interest groups. Skip the 
form letters when people's names roll out of computers. But take the 
time to pick up the personal letters, with scrawled handwriting, from 
senior citizens who are truly frightened about, what will happen to 
them if the Social Security trust fund is unprotected and this balanced 
budget amendment passes.
  I have hundreds of such letters, and let me paraphrase the style. 
Take a letter I got that starts with:

       * * * I am 69 and worked every day of my life until I had 
     to retire. I paid into Social Security since the beginning. I 
     collect $600 or $800 in Social Security a month, but my bills 
     are more than that * * *

  I have letters where seniors from my State painstakingly list their 
monthly expenses--rent, heat, food, and prescriptions. They ask me what 
can they do if Social Security or Medicare is cut? Where can they turn 
in the twilight years of their lives?
  I don't know what to tell them. And I ask my colleagues who support 
the balanced budget amendment, and who oppose the Reid amendment, what 
do you tell the senior citizens of your States?
  I can only tell West Virginians that I keep fighting to uphold the 
promise made to them--the benefits they earned by contributing to the 
Social Security system throughout their working years and careers.
  Over a quarter of a million West Virginia senior citizens rely on 
Social Security benefits, and nationwide almost 30 million seniors get 
benefits. For many, their monthly Social Security check is the 
difference between poverty and independence; the difference between 
buying groceries or going hungry. Thirty-eight percent of senior 
citizens are not living in poverty, thanks to Social Security. This is 
a tremendous achievement that we can be proud of, and should protect 
and continue.
  Our challenge, as I see it, is No. 1, to protect Social Security now 
for the seniors living on fixed incomes, and No. 2, to plan ahead to 
ensure that Social Security is there when the young workers 
contributing over 7 percent of the wages are ready to retire. Passing 
this constitutional amendment to balance the budget without the Reid 
amendment is one way to guarantee that we will fail to meet either of 
these challenges.
  We must protect the Social Security trust funds from becoming a pawn 
in a political debate over a balanced budget amendment, which sounds so 
reasonable and so simple.
  Here is an example where the devil lies in the future details. The 
details that the proponents refuse to spell out. When the right-to-know 
amendment was rejected, we were told in no uncertain terms that we are 
all to strap ourselves into the speeding train, and to stop worrying 
about what and who get trampled along the way.
  This does not say that over the next decade that Social Security will 
not need to change--it will. A recent report of its trustees clearly 
shows that a long-term solvency problem threatens the Social Security 
trust funds.
  If changes are not made, the trust funds will be exhausted in 2029. 
We have to begin working on solutions to this danger facing Social 
Security, to restore the integrity of the trust funds just as 
courageous members of this body did in the past, most recently through 
bipartisan legislation in 1983.
  But any change made to Social Security should be designed to 
strengthen the trust funds--not to surrender to the speed-chase started 
recklessly by this constitutional balanced budget amendment.
  This balanced budget amendment is a game. It allows politicians to 
promise to be deficit hawks without requiring a single clue on what 
they will actually cut.
  And because I fear, for the people of West Virginia, what the hidden 
agendas are in this amendment, I support this explicit method for 
making absolutely sure that Social Security is left alone.
  There is no other way that the senior citizens can count on their 
benefits. There is no other way that the millions of working men and 
women who put aside part of their income every week, every month, every 
year for Social Security, can be sure that they will see a dime of it 
back when they retire.
  Mrs. MURRAY. I rise today in support of the Reid amendment to exclude 
the receipts and outlays of Social Security from the budget. I want to 
commend the Senator from Nevada for his work on this important issue.
  As Senator Reid noted last week, Congress ended the practice of 
masking our deficit by excluding the Social Security trust fund from 
the budget in 1990. That was a proper and necessary step then just as 
this amendment is a proper and necessary step now.
  The provision in 1990 was taken to ensure that the beneficiaries of 
the Social Security trust fund could trust that Congress would stop the 
practice of using the fund to mask the deficit 
[[Page S2562]] and to ensure that the money put in the system would be 
there when people retire.
  That means simply that everyone of us has a right to know that when 
our money is taken out of our check today, it is put into a fund that 
cannot be raided and will be there for us when we retire.
  Today as we have the serious proposal of passing a balanced budget 
amendment in front of us, Congress is being called on again to ensure 
some level of security for the beneficiaries of the trust fund. We have 
a responsibility to every person in this country who pays Social 
Security taxes to ensure that their Government required investment in 
their future will be there when it is supposed to be.
  I cannot emphasize this enough. We have a real responsibility to our 
current beneficiaries and to those in the future.
  The measures this body took in 1990 and before reaffirmed that 
responsibility, and with consideration of the balanced budget 
amendment, we once again are being called on to provide greater 
assurances to Social Security beneficiaries.
  Given that, how can we in good conscience tell the American people 
that they do not need to worry about their Social Security when we all 
know that if this bill passes without this amendment, we cannot promise 
anything. Social Security will be on the chopping block along with all 
other programs.
  I know we have to get our Federal budget in order. I have a 
commitment to work on that as a member of the Budget Committee. I also 
know we have to work on Social Security to ensure its long-term 
solvency. We cannot achieve either of those goals by violating the 
trust of the American people and going into the Trust Fund to balance 
the budget.
  Let me be clear. I believe we must work to balance our budget. I also 
believe that a constitutional requirement to do so is not sound policy, 
but if this body is going to impose the constitutional amendment on us, 
if we are going to admit we are not strong enough to reduce spending 
without being forced to, then we have to let the American people know 
at a minimum that our elderly will not have to bear a disproportionate 
burden in this process.
  We have to let the American people know that the Federal Government 
will keep its promises and ensure that the money they put in this 
system now will be there for them when they retire. This amendment 
ensures just that and I hope that my colleagues will support this 
amendment.
  Mr. JEFFORDS. I rise today in support of the balanced budget 
amendment.
  Mr. President, this vote has been described in historic terms. Only 
the historians can make that decision, but a brief description of our 
budget history might be instructive. In the heat of our arguments the 
past gets poorly presented.
  Thomas Jefferson was not in the United States when the Constitution 
was written. He was abroad representing the United States as our 
Minister to France. When he came back, he said, ``If I could add one 
Amendment to the Constitution, it would be to prohibit the Federal 
Government from borrowing funds.''
  His reasoning was simple. ``We should consider ourselves unauthorized 
to saddle posterity with our debts,'' he said, ``and morally bound to 
pay them ourselves.'' Thomas Jefferson, as in so many other areas, was 
ahead of his time. For two centuries, this moral contract bound our 
predecessors. While debt was accumulated in times of dire national 
emergencies, in 1975 the debt stood at but $629 billion.
  Since then, we have increased the debt by more than seven fold, 
standing at $4.7 trillion today. The track record of the past two 
decades, more than anything else, has led me to the point where I now 
reluctantly support amending the Constitution to impose a discipline on 
Congress which we all wish it had but know it lacks.
  I agree with critics of the amendment that this is not something to 
undertake lightly. Since 1791, there have been over 10,000 
constitutional amendments offered in Congress. During this time, only 
22 of these 10,000 amendments have been deemed important enough by 
Congress to be passed. Of these 22, only 17 have been ratified by the 
States and have become part of the Constitution.


                       interest spent on our debt

  What is the problem with our enormous debt today? The problem that 
exists today, Mr. President, is that the Federal Government owes more 
than $4.7 trillion. Therefore, we must spend over $800 million on 
interest every day--that's right, Mr. President, over $800 million on 
interest every day--and this does absolutely nothing for us to help the 
needs of all Americans. We send more to our bondholders in 3 days than 
we do to every man, woman, and child in Vermont over the course of an 
entire year, making Federal interest payments the second largest 
spending item in the budget.
  Mr. President, these interest payments are crippling our ability to 
adequately fund national priorities, such as education. We now spend 
five and a half times as much on interest payments than we do for all 
education, job training, and employment programs combined. We spend 
twice as much on interest payments than we do on all Federal programs 
for the poor.
  In 1950, the publicly held debt per family was $5,800, today the debt 
averages about $54,000 per American family. If we do not balance the 
budget by the year 2002, the debt burden per family will be a 
staggering $78,000.
  Interest on the debt is over $1,200 per person per year. At this 
rate, a child born today, living a normal lifespan of 75 years, will 
pay some $135,000 in interest on the debt. That assumes that no further 
debt is added and interest rates do not increase--both are highly 
unlikely.
  When I came to Congress in 1975, our gross interest expenditure 
totaled $49 billion. This year it is expected to be over $300 billion, 
meaning that today every dollar in personal income taxes collected west 
of the Mississippi is used to pay for interest on our national debt. 
The CBO estimates that in 10 years it will be over $650 billion and 35 
percent of the revenue of the Federal Government will go just for debt 
service. This assumes that there will be no increase in the current 
interest rates.
  Since 1975, our national debt has grown from $542 billion to $4.7 
trillion. It is expected to grow to $6.3 trillion by 1999--a 1,200-
percent rate of growth since 1975. It this is the best case scenario, 
we must get hold of this enormous problem as quickly as possible. The 
only way I feel that this can be accomplished is by a balanced budget 
amendment.
  Back in 1975, every man, woman, and child owed $2,500 because of the 
debt. That figure now stands at over $18,000. It is expected that the 
amount of national debt that every man, woman, and child owes will 
increase by $5,000 over the next 5 years to a staggering $23,000. The 
last time we balanced the budget in 1969--only 9 cents of every Federal 
dollar went to pay interest. Today, 26 cents of every Federal dollar 
goes to pay for interest on the national debt.
  Furthermore, projections for our debt are frightening. It is expected 
to double to $9 trillion over the next 10 years. That means if we do 
nothing to balance the budget over the next 10 years, our interest 
payments will double to almost $2 billion a day. It is quite obvious 
that this trend can not continue.
           the national debt jeopardizes our economic future

  Mr. President, the greatest economic threat this country is facing is 
out-of-control spending by the Federal Government.
  Recently, the New York Federal Reserve Board reported that the Nation 
lost 5 percent in GDP due to the deficits in the 1980's--in other words 
our national income did not grow by an astonishing 5 percent. According 
to the CBO, 1 percent of growth is equal to creating 650,000 jobs. That 
means that the debt of the 1980's cost us over 3.5 million new jobs. 
Mr. President, every dollar that goes to pay for the interest of our 
national debt takes a dollar away from our economy to assist in 
productivity increases. Congress can not continue to do this to our 
national economy and, most importantly, to Americans. We can only guess 
where our economy would be if this Nation had a balanced budget 
amendment before the 1980's.
  The GAO recently released a report that a balanced budget by 2001 
would 
[[Page S2563]] create an average increase, adjusted for inflation, of 
36 percent for every American's standard of living. Further, since 
1960, the private savings rate has dropped from over 8 percent of our 
economy to 5 percent. During the same time, the Federal Government 
deficits have increased from less than 1 percent of the economy to more 
than 3 percent, resulting in a net national savings rate of less than 3 
percent. On this note, the OMB reports that if we balance the budget 
over the next 5 years, the net national savings rate would increase to 
6.1 percent. If nothing is done our national savings rate would be a 
mere 3 percent.
  Over the past 15 years, our expenditures in inflation adjusted 
percentages from fiscal year 1980 to fiscal year 1994 have decreased 
Federal spending for education by 13 percent and transportation by 2 
percent. On the other hand, defense expenditures were up by 18 percent 
and entitlement expenditures, mainly Social Security and Medicare, were 
up by 50 percent. However, our gross interest payments have grown 120 
percent. Mr. President, this trend can not continue if this Nation is 
going to be able to continue educating our children to compete in this 
global economy.
  If you were to ask what should the priorities of this Nation be? Let 
us just take a choice. Should we spend more money on education for the 
future of this Nation, or more money on interest? Well, it is clear 
what our choice would be--education. Yet, we have precisely reversed 
our priorities because we have been imprudent with our fiscal policy.


                            savings and debt

  Why are deficits so bad for our economy? First, deficits tend to 
consume savings that we could use for truly productive investments. To 
fund these budget shortfalls, the Federal Government must keep 
borrowing, consuming limited capital. The resulting shortage of capital 
exerts an upward pressure on interest rates, recently done by the 
Federal Reserve, and further depresses economic activity.
  Second, the budget deficit is eroding our economic standing relative 
to the rest of the world. Raising interest rates and discouraging 
private investment, the deficit has continued to slow our economic 
growth in terms of our Nation's productive capacity relative to other 
nations. An excellent example of this is the cost American business 
pays to borrow capital, about 10 percent; compared to Japan, which can 
borrow money at under 5 percent. Clearly, American businesses are at a 
competitive disadvantage because of imprudent fiscal policies followed 
by the U.S. Government. Further evidence of this growing competitive 
disadvantage can be found during the 1980's, when thousands of American 
businesses made the decision that they cannot afford high interest 
rates on future investments--investing instead overseas, where interest 
rates were more affordable. Because of our lack of fiscal restraint, 
American firms are creating new jobs overseas and not in the United 
States.
  To further outline the economic incentives to relocate overseas a 
recent hearing on education and the economy highlighted the tremendous 
financial pressures placed on American investments. In his testimony, 
Alan Wurtzel, vice chairman of Circuit City Stores, Inc. stated that 
our poor education system provides very few qualified and skilled 
workers. For this reason, many firms find it more attractive to 
relocate overseas where a highly skilled work force can produce quality 
products without extensive job training or skill enhancement.
  Our performance in 
reindustrialization will 
continue to remain sluggish until we restore our economic health. This 
cannot be done when the Federal Government continues to run deficits. 
Without increased productivity in this Nation, our wages can not 
increase.
  Even more significant to our international position, our debt has 
been the principal factor in the Nation's trade deficits. The CBO 
recently estimated that over 50 percent of our trade deficit is from 
our Federal deficits. The CBO also reported that ``deficit reduction 
increases investments, which in turn increase the productive capacity 
of the economy. Moreover, deficit reduction lowers borrowing from 
abroad, which reduces the amount of income that is generated in the 
United States but flows to foreigners.'' Not surprisingly, our trade 
deficit remains a serious problem for our economy.


               the need for the balanced budget amendment

  Mr. President, some of my colleagues have asked why do we need to 
have a balanced budget amendment? They often cite the recent Treasury 
Department's study which indicates the possible effects on States and 
their finances if a constitutional amendment is passed. They often 
discuss the possible negative impact this amendment might have
 on their State. What this study does not discuss is what will happen 
to Federal spending if we do nothing. Or, if nothing is done to control 
Federal spending how this will adversely impact our childrens' future. 
What this study clearly shows is how far Federal spending is out of 
whack. The bottom line in this budget battle is what is best for our 
children. I believe that for the good of our children we must end 
budget deficits. Congress needs to learn what those in my home State's 
capital, Montpelier and all other State capitals, take as an article of 
faith--a balanced budget.

  Mr. President, a balanced budget amendment is necessary from just 
what I outlined above. That is, Congress, both Democrats and 
Republicans, are unable to make the tough choices necessary to balance 
the budget. A prime example of not making the difficult choices 
necessary to balance our budget can be found during the last Congress. 
Take for example, three battles last Congress on appropriation matters, 
as my colleagues will recall. One of these was an amendment to cut the 
defense budget by only $1 billion--only one-third of 1 percent. The 
second fight was on continued funding for the space station. The third 
fight was on increasing the grazing fees to lower Federal costs.
  How did we deal with these three appropriation battles? We 
compromised by passing everything, and that is what we do day after 
day, year after year, piling up the debt for our children's children to 
take care of. Over the past decade, the deficit numbers have worsened 
to the point that they are now deeply embedded in our budgets, in our 
priorities and even in our national consciousness. This constant 
barrage of deficit spending seems to have given us a sense of numbness, 
making us feel that it is now beyond our control and not in the 
interest of our national will.
  Finally, over the next few days I plan to discuss what Congress can 
and cannot do to balance the budget. First, I will discuss the 
desperate need to reinvigorate the American educational system. Our 
poor educational results remain a constant drain on our standard of 
living and economic growth. The cost to our economy is enormous, mainly 
through lost productivity and decreased revenue that results from our 
inadequate education system. Second, I will outline the need to 
carefully review and reform Federal spending on health care. As my 
colleagues know, about one-half of the deficit is related to increased 
Federal spending on health care.
  Mr. President, my experience is that unless we get firm control on 
these two critical problems, Congress will be unable to balance the 
budget and our Nation will continue to suffer lost economic growth. Our 
future will be dim. However, if we do as I believe we can, our future 
will be bright and prosperous. In the days ahead, I will show how I 
believe it can be done.
  Mr. President, in closing, I think we need to follow what Thomas 
Jefferson voiced some 200 years ago, we must pass a constitutional 
balanced budget amendment.
  Mr. President, I yield the floor.
  Mr. HATCH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. I ask unanimous consent to be recognized for 2 minutes, 
and I will try to take less time than that.
  The PRESIDING OFFICER. I say to the Senator from Utah, a vote has 
been ordered. Do you seek consent to postpone that for 2 minutes?
  Mr. HATCH. I seek unanimous consent to speak for 2 minutes or less.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. Mr. President, the one thing we have not done today is put 
up our balanced budget debt tracker.
  For the 13th day, we are up to now $10,782,720,000. For the 14th day, 
which 
[[Page S2564]] was Sunday, we went up to $11 billion. And for the 15th 
day, just so we all understand where we are here, we are now up to 
$12,441,600,000, just for 15 days that have expired since we started 
this debate, above the $4.8 trillion baseline that we started with.
  I just want everybody to understand that, while we are fiddling, 
Washington is burning with deficits that are going up and up and up 
every day. That is why this balanced budget amendment is so important.
  I would have felt badly if we had gone through this whole day without 
putting up our balanced budget amendment tracker.
  With that, I yield back the remaining time and hope we can go to the 
vote.

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