[Congressional Record Volume 141, Number 33 (Wednesday, February 22, 1995)]
[Senate]
[Pages S2911-S2917]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

  The PRESIDING OFFICER (Mr. Santorum). The Senate will now resume 
consideration of House Joint Resolution 1, which the clerk will report.
  The assistant legislative clerk read as follows:

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

  The Senate resumed consideration of the joint resolution.
   [[Page S2912]] Mr. HATCH addressed the Chair.
  The PRESIDING OFFICER (Mr. Kyl). The Senator from Utah [Mr. Hatch] is 
recognized.
  Mr. HATCH. Mr. President, we are continuing the balanced budget 
amendment debate, and I am happy that we will have a final vote next 
Tuesday, the 28th--at some time probably later in the day that day, 
because we will be stacking votes following the 2:15 return from our 
weekly meeting breaks.
  Mr. President, the proposed constitutional amendment will help us to 
end this dangerous deficit habit in a way that past efforts have not. 
It will do this by correcting a bias in the present political process 
which favors ever-increasing levels of Federal Government spending.
  In seeking to reduce the spending bias in our present system--the 
unlimited availability of deficit spending--the major purpose of House 
Joint Resolution 1 is to ensure that, under normal circumstances, votes 
by Congress for increased spending will be accompanied either by votes 
to reduce other spending programs, or to increase taxes to pay for such 
programs. For the first time since the abandonment of our historical 
norm of balanced budgets, Congress will be required to cast a 
politically difficult vote as a precondition to a politically 
attractive vote to increase spending.
  Section 1 of the proposed amendment would address the spending bias--
unlimited access by Members of Congress to deficit spending--by 
requiring a three-fifths vote of each House of Congress before the 
Federal Government could engage in such spending.
  Such a procedure would not prohibit deficit spending, but would 
simply reestablish, as a norm, a budget in balance rather than one in 
deficit. A consensus greater than a normal majority would be required 
to violate this norm.
  Unless such a consensus exists, Congress would be bound in its 
spending by its available revenues and would be forced to account for 
new spending in one program or budget area by either reduced spending 
in another area or by increased taxes. The political advantages 
resulting from support for new spending then would be matched, at least 
to some degree, by countervailing political disadvantages.
  Section 4 of the proposed amendment would reinforce section 1 and 
further link tax spending and tax raising by requiring both Houses of 
Congress to approve any bill to increase revenues by a constitutional 
majority. While section 1 would ensure, as a norm, that Federal 
spending is matched by Federal revenues, section 4 would ensure that 
such revenues are not raised without political accountability for 
Members of Congress. It would also make it less likely that the budget 
would be regularly balanced by increasingly high levels of taxation. 
This balanced budget amendment, then, is a spending limit/tax limit 
resolution.
  As a result, House Joint Resolution 1 effects a subtle, but 
important, change in the psychology of the budget process. Under the 
present system, each spending interest, in effect, competes with the 
taxpayers to raise the total ante in the Federal treasury.
  Under a system, however, in which some form of spending ceiling is in 
effect, these same interests suddenly will be competing with one 
another in order to ensure themselves a certain portion of a fixed ante 
in the Federal treasury. Not only will spending interests have to 
convince Congress that their favored programs merit funding at a 
certain level, but they will, in addition, have to establish the 
priority of their programs.
  A spending ceiling comprised of something beyond mere congressional 
self-restraint will force Members of Congress to view spending requests 
in terms of relative desirability, not simply in terms of whether or 
not a program is desirable at all, which is currently our rule. It is 
safe to conclude, I believe, that every program authorized by Congress 
is considered important and desirable, or it would not have passed into 
law in the first place. Presumably, we do not pass bills that no one 
wants at all.
  The balanced budget amendment, however, will introduce an element of 
competition among the spending interests into the budget process. 
Congress will be forced to look at the whole spending pie, not just a 
piece of it.
  In summary, the purpose of House Joint Resolution 1 is to eliminate a 
political process that allows Members to avoid having to vote for 
higher taxes in order to pay for higher spending and to establish a 
more genuinely neutral environment within which the budget competition 
occurs. The proposed amendment does not define what constitutes or what 
does not constitute a responsible budget, but only defines the 
institutional framework within which such budgets could be put 
together.
  It is a necessary and appropriate step toward putting our fiscal 
house in order.
                             accountability

  While it is true that much of the enormous growth in Federal 
Government spending over the past two decades may be a response to 
evolving notions of the role of the public sector on the part of the 
American citizenry--that is, a genuine shift in the will and desire of 
the people--it is my contention that a substantial part of this growth 
stems from far less benign factors.
  In short, the American political process is defective insofar as it 
is skewed toward artificially high levels of spending, that is, levels 
of spending that do not result from a genuine will and desire on the 
part of the people. It is skewed in part because the people often do 
not have complete information about the cost of programs or about the 
potential for cost growth of many programs. It is skewed in this 
direction because of the characteristics of the fiscal order that have 
developed in this country in recent decades. It is a fiscal order in 
which Members of Congress have every political incentive to spend money 
and almost no incentive to forego such spending. It is a fiscal order 
in which spending decisions have become increasingly divorced from the 
availability of revenues.
  The balanced budget amendment seeks to restore Government 
accountability for spending and taxing decisions by forcing Congress to 
prioritize spending projects within the available resources and by 
requiring tax increases to be done on the record. In this way, Congress 
will be accountable to the people who pay for the programs and the 
American people--including the future generations who must pay for our 
debts--will be represented in a way they are not now. Congress will be 
forced to justify its spending and taxing decisions as the Framers 
intended, but as Congress no longer does. No longer can Congress just 
say yes to every special interest group and shove the costs onto our 
children or pretend that there are no costs. Every spending decision 
will be forced to compete with others and subjected to rigorous cost/
benefit analysis.
  Mr. President, this is the essence of responsible fiscal 
decisionmaking, and is the essence of the balanced budget amendment.
  Mr. President, we have just heard the address of our first President 
of the United States, which we have read to us on an annual basis 
during the time we celebrate Washington's birthday.
  I have to say, Mr. President, that that first President, as well as 
most all subsequent Presidents, would not believe what is going on 
today with regard to our taxing and spending policies. They would not 
believe that for 26 straight years, we have failed to balance the 
budget. They would not believe that we have put our country into almost 
$5 trillion of debt, and they would not believe that a current 
President would have submitted a budget that has approximately a $200 
billion deficit for each of the next 12 years. They would not believe 
that we are spending and taxing the American people the way we are.
  They expected that perhaps, during times of war or during times of 
severe recession or depression, that there might be some deficits run. 
But they never expected, at the Founding, that we would run deficits 
every year for 26 straight years, and for most of the last 60 years. I 
think some of them must be rolling over in their graves.
  This is a chance for us--because the House of Representatives for the 
first time in history has passed a balanced budget amendment, 
essentially the same one that we called up in 1982 and 1986 and last 
year--to follow suit and for the first time in history submit a 
balanced budget amendment to the States for their ratification. It is 
worth 
[[Page S2913]] the effort. It is worth the pain. It is something we 
simply must do.
  Eighty percent of the American people realize it. We just need 67 
percent of the U.S. Senate to realize it and vote for it.
  Mr. President, I urge my colleagues in the strongest terms to support 
this constitutional amendment to help us to restore sound government to 
the American people. I think it is the only way we are going to get 
there and it is the only way we can protect the future or even have a 
future of any great value for our children and grandchildren. We owe it 
to them.
  This is an important vote. It is probably the single most important 
vote of this century. All we need are 67 of those who sit in this 
hallowed body to stand up and say, ``We've had it. We've had enough. 
We're going to do something about it.'' It is a bipartisan resolution. 
It is a Democrat and Republican resolution. It has been hammered out 
between both sides. It is the first time in history we can do it, and 
we are going to do something about it. So I urge my colleagues to join 
with us in passing this balanced budget amendment on to the people in 
the States to ratify it as part of the Constitution.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Thompson). Without objection, it is so 
ordered.
  Mr. MOYNIHAN. Mr. President, I have some good news and good news for 
the Senate.
  I can report--and I know that my distinguished friend, our President 
pro tempore in time and my very dear friend, the chairman of the 
Judiciary Committee, will want to know--that I have just returned from 
Phoenix, AZ, where I had the honor to deliver the Goldwater Lecture at 
Arizona State University. I can report that Senator Goldwater is in 
great spirits, thriving, active, and irreverent, as usual.
  I do not want to get any politics into this matter, but just now it 
is the Republicans in Arizona who are mad at him. But, no doubt, those 
reversals will come and go, as they have always done in his wonderful 
long and still very creative life.
  The other thing to say is that I gave the lecture on the subject of 
the matter before us, a balanced budget amendment, and trying to 
relate, as I have done on the floor earlier, the extraordinary 
achievement which we have had in this country and to a considerable 
degree the members of the OECD, the Western industrial nations, Japan, 
and others, in modulating to a degree that they have almost 
disappeared, those huge swings in the economy that seem to be 
destabilizing the industrial world.
  Industrialism brought with it a business cycle which was baffling. 
People could not understand how one day everybody is at work and a year 
later everybody is out of work. And unlike the farm--where you are 
always working whether you are making much or you are starving or not--
the unemployed were standing on street corners. The banks were closed, 
industries padlocked their gates, all sorts of symbolisms of trouble, 
disorder, instability, which indeed gave rise to hugely radical 
assertions about the need to change the very structure of property, of 
management, of the social order.
  In a chart which I displayed for the Senate on Monday a week ago, I 
showed the real growth, the change of GDP that had taken place between 
1890 and 1990. This data, Mr. President, is provided by the Department 
of Commerce, the Bureau of Economic Analysis, and the chart was 
prepared by the Joint Economic Committee.
  It is striking the way in which economic growth goes up, crashes 
down; up, down; up, crashes down; swoops up, down.
  In the period between 1890 and 1938, which we will call a half 
century, the real GDP dropped almost 5 percent on three occasions: in 
1893, in 1914, and in 1938. The exact numbers: 1893, 4.89 percent; 
1914, 4.4 percent; and 1938, 5.1 percent; the 1938 date being well 
remembered as the occasion in which President Roosevelt, the New Deal 
seeming to have revived the economy somewhat, crashed down again 
regardless.
  Then on two occasions the GDP dropped almost 10 percent. In 1908 it 
dropped 8.2 percent; in 1921 it dropped 8.7 percent. Then in 1932, as 
we know, it crashed 14.8 percent and we went into the Great Depression, 
a period which put at issue the question of whether a liberal, 
capitalist economy could continue to exist. It was said that obviously 
it cannot. It cannot provide stability in the economy and cannot 
provide for its people.
  I mention these occasions--three times we dropped 5 percent or near 
to, twice 10 percent, once 15 percent in a half century. We do not drop 
from a zero level; we go down from heights. So, for example, in 1893, 
we were growing at about 12 percent a year in GDP, and in an instant 
real growth has dropped below zero to 4.8 percent, a 
15-, 16-, 17-percent plunge. It was known as the panic of 1893. People 
were thrown into the streets.
  Then in 1908, for no reason that any person understood and nothing 
the Government could do--our Government was too small to make much 
difference in the affairs of the economy at large. We had no national 
banking system. The Reserve had not yet been created by Carter Glass in 
this Chamber. Of the great issue of the 19th century, of all the great 
issues we struggled with, the only one we never resolved in the 19th 
century was the issue of the banking system. So there was no Federal 
Reserve and no monetary policy. It took a long time to get monetary 
policy, but we could not think about it until we had an instrument to 
do it.
  There was also a big drop in GDP in 1946, but that was merely 
associated with the conversion from a wartime economy. We stopped 
building battleships, which are part of GDP, and down went the economy, 
and in no time you are building Chevrolets and up went the economy.
  Now, the depression of the 1930's was the great trauma of American 
capitalism, of free enterprise, and all over the world political 
movements came to power that said it could not work; fascism in 
Germany; Leninism, Marxism, and similar movements pervaded every 
country, not least our own. Their common refrain: this system--
capitalism--does not work.
  If we could look at these swings, we could say there is a case to be 
made; human beings had never experienced this. But, if we could go back 
to millennia, we would see a rise and fall in the economic production 
associated with how good the crops were, did it rain, was it a wet 
spring. If the Mongols invaded, there was not much in the way of 
economic growth in Hungary that year. If the Black Death came along, it 
would have some effect, but not much. There was not much growth to 
begin with. Only with industrialism came great ups and downs, and 
people started saying that this will not work.
  Then in the middle of the 1930's, the work which we associate with 
John Maynard Keynes was done which hit upon the key explanation of what 
was taking place. Classical economics held that ``all markets clear.'' 
That, Mr. President, is a technical term. It means that whatever is 
offered for sale will be bought--at a price, not necessarily what the 
seller would wish. But, Mr. President, wages will drop, prices will 
drop, and markets will clear and there will be full employment and full 
utilization of resources.
  Economists were able to show that not necessarily. We could reach an 
equilibrium in which a large public of men were out of work, a large 
number of plants closed, a large number of mines were not operating. 
What classical economics could not account for, suddenly, was 
explicable. We began, finally, to break the code of the business cycle. 
And it is a nice piece of information, if I may say.
  The first use of this economics, which was associated with the idea 
of underconsumption, you had to stimulate consumption, first use was 
made in World War II when the problem was overconsumption. And price 
levels came down in World War II. In 1944, the inflation rate was 2.2 
percent. Not bad. But Government controlled, to be sure. And then they 
broke up in 1945.
  In 1946, with this information at hand beginning to be understood, 
beginning to be numerate, we started to be able to get numbers for 
these things. We did not know what the unemployment rate 
[[Page S2914]] was in the Great Depression. We took the unemployment 
rate in the census, decennial census. We took it in the spring of 1930, 
not much unemployment. In the spring of 1940, rearmament had begun, and 
in the official statistics there was no depression. But people knew 
otherwise.
  The Employment Act of 1946 stated as the goal of the U.S. Government 
the full utilization of resources, fullest possible--meaning men and 
women entering the work force, meaning capital, meaning plant and 
equipment which was capital, and so forth.
  The Council of Economic Advisers was established. In the early years 
the economic report of the President was a pretty thin volume, but they 
were getting the hang of it. By 1946 we had an unemployment rate which 
was published. We will have the economic report shortly now and we will 
see that the series as statistics begins in 1946.
  May I interject here to offer the congratulations of the Senate, if I 
may so presume, to Dr. Tyson, who the President has announced will 
leave the position of Chairman of the Council of Economic Advisers and 
become head of economic policy within the White House, a position Mr. 
Rubin had until he became Secretary of the Treasury.
  They began to work on this notion of countercyclical behavior by the 
Federal Government. They began to realize--as John Kenneth Galbraith 
has shown this in his work--when the 1929 stock market crash took 
place, the Federal Reserve had acted in a way to deepen the decline 
rather than to counter it, the idea of countercyclical spending.
  I have said before on the floor, Mr. President, that in the early 
years, the problem that the economists faced, or thought they faced, 
and Presidents agreed and Congress pretty much agreed, was that the 
Federal revenues were too large in the early stages of the business 
cycle; that as the economy began growing, revenues grew. In those days, 
before we had indexed the Internal Revenue Code and the tax rates, why, 
they would grow very fast. Congress did not spend them quickly enough. 
And, indeed, there emerged a problem. The Kennedy administration was 
the first to deal directly with this question--or more correctly, 
problem--called fiscal drag. Because in 1958, there had been a 
recession which took growth just a tiny tick below, into a negative 
position, not 1 percent, but one-half of 1 percent. And then the 
recovery had begun.
  But in 2 years, it stalled so that another tick--not the big crashes, 
smashes, panics but not quite what we wanted. President Kennedy's 
economic advisers said, ``What do we do?'' They concluded that we had 
to put in place some countercyclical spending. Then I was to be an 
Assistant Secretary of Labor for Policy and Planning Research. It is a 
moment we all remember in our lives, if it comes to us. On my first 
visit to the Oval Office, I accompanied Secretary Arthur Goldberg, and 
we had a proposal to raise the pay of Federal employees. The President 
said, ``Good idea, we need that.'' And he also decided everybody should 
get at least $100 a year. And we went on like that. It was very early 
on. We moved the date of the dividend of the Veterans Administration 
life insurance forward. Then we gave a double dividend.
  Then Joseph Pechman at the Brookings Institution, in conjunction with 
Walter Heller, Chairman of the Council, proposed revenue sharing with 
the States. We proposed a tax cut and, Mr. President, it worked. We 
went right through. When Arthur Okun gave the last report of the 
Council under President Johnson, he said, ``Look, 6 years of unbroken 
economic growth.''
  They should have tamped down the economy, given the inflationary 
effects of the Vietnam war spending. And, indeed, when President Nixon 
came into office, although I believe he had a balanced budget, he also 
had a recession. But that came out of that.
  And George Shultz, his first Director of the Budget, in his fiscal 
1973 budget said, ``I am sending a full employment budget which will 
have a deficit, but the deficit will be the difference between what 
will be revenue at full employment and less than full employment.'' We 
were still stimulating.
  So it went. We had one more tick in the seventies. Then in 1982, we 
had the only real decline in economic growth in the postwar period. 
Economic growth, GDP, gross domestic product, dropped 2.2 percent, one 
time in half a century. There was another slight tick in 1991. But 
again, just a tick. That had never happened before in the history of 
industrial societies. It is an immense achievement. It is not a 
Democratic achievement. It is not a Republican achievement. It is an 
achievement of applied analysis.
  That is what is threatened. That achievement is what is threatened by 
this amendment to the Constitution. If it were a statute, I would not 
be spending my days on the floor. Statutes come and statutes go. This 
is the Constitution; the basic law of the land.
  Mr. President, when I spoke last Monday, I recounted how in 1979, 
when there was a movement among the States to petition Congress to call 
a constitutional convention for this purpose, I had asked the then 
Chairman of the Council of Economic Advisers, Charles Schultze, a 
distinguished economist from the Brookings Institution, if he would run 
the numbers from the 1975 recession--a fairly serious recession, which 
President Ford had to live with--with a balanced budget amendment. He 
wrote me back to say the computer blew up; we had no countercyclical 
forces we could use, and so the hypothetical economy spiraled down to 
that equilibrium when there is a high rate of unemployment and a low 
rate of utilization of capital.
  I mentioned also that we had simulated on our own on a back-of-the-
envelope sort of thing. Dr. David Podoff, sometime chief economist on 
the Finance Committee, more recently minority chief economist, using 
Arthur Okun's principles developed in the early sixties, estimated that 
if we had a 3-percent increase in unemployment, some exogenous event--
Mexico goes to ruin, oil prices spiral, whatever--we could end up with 
a drop of GDP of 18 percent. That is a depression figure. That was last 
Monday.
  I see the distinguished sometime once and future President pro 
tempore on the floor. I would like to report to him that in yesterday's 
New York Times, there is a report of a simulation made in the Treasury 
Department. I take the liberty of saying this on the Senate floor. I 
know where it was made. I know it came about in response to some of our 
arguments. And, Mr. President, the story, by Mr. Louis Uchitelle, an 
able reporter, is headed ``The Pitfalls of a Balanced Budget. 
``Dismantling a Decades' Old System for Softening Recessions.''
  Here is the interesting event. I just say that they have simulated 
the 1991 decline and say, with a balanced budget amendment, 
unemployment would have reached 9 percent. A laid-off worker who 
collected $12,000 in unemployment pay might have received only $7,000, 
and so forth.
  Now, sir, I said earlier that the new economics, the learning we went 
through, was not a Democratic thing or a Republican thing. It was 
applied social science learning, a collective learning.
  And so the fascinating thing is that Mr. William Hoagland, the 
Republican staff director for the Senate Budget Committee, and a very 
able public servant, is quoted as saying--he is in fact, the first 
person quoted:

       There are risks associated with a balanced budget, and I 
     don't think anyone should deny that. Nevertheless, the debate 
     on the floor has been dominated by what we must do to get the 
     budget in balance, not what the risks of a balanced budget 
     amendment might be.

  Mr. Hoagland expressed surprise that the biggest risk--deeper, more 
painful recessions--had not figured significantly in the debate--
although the Senator from New York and my distinguished colleague from 
Maryland have called attention to this risk in several floor speeches.
  This is Mr. Hoagland making the statement.
  They go on to quote a whole series of economists, a sequence of 
economists saying, ``Does not Congress know what it is doing?''
  ``Does it not realize what we have achieved?''
  And now, Mr. President, as I have been talking here long enough, and 
I know others wish to speak, particularly the distinguished Senator 
from West Virginia, I said I came back from Arizona last evening with 
good news and good news.
  First, the good news is that I gave the Barry Goldwater lecture at 
Arizona 
[[Page S2915]] State University. Senator Goldwater is in great spirits, 
good health, active, and being as much a torment to his fellow 
Republicans as to his fellow Democrats.
  But the second event was on the way to deliver the lecture, the very 
able president of the university, Dr. Coor, picked me up at the hotel. 
We had about a 20-minute drive to the university, and I told him what I 
was going to say. He said, ``Well, now, we all know that, don't we?'' 
That we went through this great achievement of learning to break out; 
that capitalism did not disappear; it is the same; and it is not even 
questioned in the world by this new economics. He said, ``Everyone 
knows that, surely. What's the problem with the Congress?''
  Now, perhaps I do not want to put those words in his mouth per se. 
But he said, ``What is the problem?'' I had an idea, and I put it to 
him at the time. And I will say again, if I get one idea a week at this 
point, I feel that is a pretty good week. The idea is a very simple 
one: There are not enough people around old enough to remember what it 
used to be like. Sir, if you are under 60, you do not know anything 
about the economic world before we understood countercyclical financing 
by the Federal Government, before the Federal Government got the tools: 
It has to have a sizable budget. You have to have unemployment 
insurance, Medicaid, things like that, which automatically happen, a 
Federal Reserve that can take action. I said it has been in place so 
long that we forgot the pain with which it had to be put in place, the 
hard intellectual work, the accusations. To be a Keynesian was to be a 
Red, somehow. John Maynard Keynes was a liberal, sir. He was not a 
member of the Tory Party, nor a member of the Labor Party; he believed 
completely in the free market, private enterprise. He just wanted the 
free market to produce lots more goods and keep doing it.
  Mr. LEAHY. Will the Senator yield for a question at that point?
  Mr. MOYNIHAN. I am happy to yield.
  Mr. LEAHY. Would the Senator accept the fact, however, that there are 
some Members in this body under 60 who at least understand the concept, 
if they have not felt the pain directly?
  Mr. MOYNIHAN. Because they are learned Senators who have read their 
history.
  Mr. LEAHY. Will the Senator yield further? And I am delighted to hear 
he was with my friend, Dr. Coor----
  Mr. MOYNIHAN. Oh, yes.
  Mr. LEAHY. Who served previously as president of the University of 
Vermont, and also with our mutual friend, of course, Senator Barry 
Goldwater, with whom we both had the opportunity to serve here in this 
body.
  But I tell my learned friend and neighbor from New York something I 
just said to my dear friend from West Virginia, the senior Senator from 
West Virginia. A poll was taken very recently, in the last few days, in 
my State of Vermont, where a majority of Vermonters said, ``Yes, pass 
the balanced budget amendment.'' But then a very significant proportion 
said, ``But we don't expect it to do anything.''
  I might say to my learned friend, because I listened to his 
discussions and I heard him lay out very much for the President of the 
United States at a small gathering a week ago that we should have a 
sense of history, probably the biggest sense of history we ought to 
have is that this country has amended the Constitution only 17 times 
since the Bill of Rights. We have done it very carefully. Now we have 
60 or 70 proposals made in the last few weeks to amend the 
Constitution, all of which would fit nicely on a bumper sticker, none 
of which, I would add, would do anything to improve the greatest 
democracy in the world and many of which I feel would damage greatly 
this wonderful country.
  I thank the Senator for yielding.
  Mr. MOYNIHAN. I want to say, Mr. President, that the Senator has made 
a very important statement. When the painful process, the creative 
process of the economic system was taking place in the thirties, 
democracy was under assault the world over, and there were more than a 
few who had given up on it in this United States, and capitalism was 
thought to have been discredited forever; free enterprise was thought 
to be a selfish doctrine put forward by a privileged few, and full 
employment a nostrum of dreamers, idealists, and probably subversives.
  Oh, what a time we had, and it was a close-run thing. I joined the 
Navy 50 years ago last July 1. I joined in the middle of a world war in 
which the forces we were contending against and with were as opposed to 
our system as any that ever existed in the world, and it was a close 
thing.
  We have been going on about the Enola Gay. May I say to the Presiding 
Officer that the real issue was, was Hitler going to get that bomb 
first, because the people working on it here knew the people working on 
it there. And we knew what we could think up, they could think up. And 
the British destroying the heavy water plant in Norway may have made 
the real difference.
  It was that close. Do you want to go back to that world? We could do 
it on this floor next Tuesday.
  I see the distinguished Senator from West Virginia has risen.
  Mr. BYRD. Mr. President, will the distinguished Senator yield?
  Mr. MOYNIHAN. I am happy to yield, Mr. President. I yield, whatever.
  Mr. BYRD. The distinguished Senator from New York is making a very 
important statement. He discusses the countercyclical forces that come 
into play automatically in a time of recession. The distinguished 
Senator from Vermont has stated that there are many people who say that 
we ought to vote for this amendment, but who privately tell him that it 
will not work.
  It is a sad commentary--and there are those of our colleagues who say 
that we need this in the Constitution in order to give us discipline, 
in order to enforce discipline upon us--that statement is a sad 
commentary on the character of the elected officials of our country----
  Mr. MOYNIHAN. Yes, sir.
  Mr. BYRD. To say that we need a new constitutional amendment to 
enforce discipline upon us, so we will balance the budget.
  This constitutional amendment will have been before the Senate 30 
days come next Tuesday. That is the final day of decision. The 
amendment was passed in the House, I think, in 2 days.
  Mr. LEAHY. I believe so.
  Mr. MOYNIHAN. Two days.
  Mr. BYRD. Two days! And there have been some complaints about the 
time that we have taken in the Senate to debate it.
  My good friend from Utah, the other day--if the Senator may yield, 
Mr. President, without losing his right to the floor, to me?
  Mr. MOYNIHAN. I am happy to yield.
  The PRESIDING OFFICER (Mr. DeWine). Without objection, it is so 
ordered.
  Mr. BYRD. Our good friend, the Senator from Utah, stated that, 
essentially, there appeared to be some indications that there was a 
deliberate attempt to delay the vote. Well, there has been a deliberate 
attempt to delay the vote, in order that we can take time to explore 
this amendment and dissect it, probe into it carefully. But then there 
was some expression that it was obvious that this was now becoming a 
filibuster. Of course, anybody who knows anything about filibusters 
knows that this is not a filibuster. There are people in this town who 
would not know what a filibuster is if they met it on the street. But 
there is kind of a mental--there is a mindset here in this town, that 
if you discuss a bill 4 or 5 days, or a week or 2 weeks, then there is 
a filibuster. I thank God for the United States Senate! I thank God for 
the United States Senate!
  If the Senator will be patient--because I do not want him to 
discontinue his statement in this very important subject area, which 
will be vitally affected if we were, God avert, to lose our senses to 
the point that we would adopt this constitutional amendment. When Rome, 
the western seat of the Roman Empire, fell in 476 A.D. and the German, 
Odoacer, deposed the impotent, unfortunate, diminutive emperor, whose 
name was Romulus Augustus, the center of authority moved to the eastern 
seat of empire, namely, Constantinople. In Constantinople, there was no 
independent Senate. There was no independent Senate to challenge the 
emperor's claim of authority over even the church and theology. When 
Justinian, in 532 A.D., ordered his top general, Belisarius, to 
massacre citizens of Constantinople during the Nika rebellion, 
Justinian----
  [[Page S2916]] Mr. MOYNIHAN. In the stadium, I believe.
  Mr. BYRD. Yes, Justinian had 30,000 of the citizens of Constantinople 
murdered. There was no independent Senate to challenge his authority to 
do so. With an autocrat like Justinian ruling in the Golden Horn, one 
need not wonder that the people of Russia, when they formed the Russian 
state some centuries later, had no Senate to teach them the lessons 
regarding checks and balances and separation of powers, and human 
rights, and limited monarchy.
  When Ivan the Terrible, Ivan IV, in the year 1570 A.D. massacred 
hundreds--hundreds of citizens in the city of Novgorod, there was no 
independent Senate to challenge his right to exact such a revenge on 
those people. Muscovy had no Senate.
  When Peter the Great built the city of St. Petersburg on the marshes 
and swamps near the Neva River, he brought in tens of thousands of 
slave laborers who met their deaths in the building of that city. Each 
worker was paid 1 ruble per month. But there was no independent Senate 
with control over the purse and with the power to challenge Peter the 
Great; no independent Senate to debate at length and to challenge the 
authority of Peter the Great.
  When Stalin, in our own time--you do not have to go very far back in 
history to remember Stalin and Lenin--when they created the monstrous 
tyranny that spread its tentacles into Poland, Hungary, Czechoslovakia, 
East Germany, and the Baltic States, there was no independent Senate 
with power over the purse and the right of unlimited debate to 
challenge Lenin and Stalin. How many millions of people died under 
Stalin? More than 20 million--more than 20 million.
  So here in America we have a Senate that takes all of 30 days, all of 
30 days, mind you, in discussing an amendment which will forever--
forever destroy the constitutional system of separation of powers and 
checks and balances, and the power over the purse, lodged in the 
legislative branch, as we know that system.
  Mr. MOYNIHAN. Yes.
  Mr. BYRD. I thank the distinguished Senator for taking the floor 
today. I wish I could have had the privilege of sitting in his classes. 
Perhaps I would know a little something about economics. But I am very 
thankful that I have the opportunity here to listen to him. And I 
listened carefully.
  I thank the Senator for yielding.
  Mr. LEAHY. I wonder if the distinguished Senator will yield to me for 
just a moment on this point?
  Mr. MOYNIHAN. I will be happy to do so.
  Mr. LEAHY. Mr. President, I associate myself, first with the remarks 
just made by the distinguished senior Senator from West Virginia, but 
also with the remarks made earlier by the distinguished senior Senator 
from New York.
  At the risk of dealing with two of the foremost historians of the 
Senate, I would make a slight addition to what was said by the 
distinguished Senator from West Virginia and what was concurred in by 
the distinguished Senator from New York. The distinguished Senator from 
West Virginia said, ``Thank God for the U.S. Senate.'' I would add to 
that: Thank God for some individuals in the U.S. Senate.
  The Senate gives us the right, under our rules and according to our 
history, to speak on these matters. But only if individual Senators do 
it. I applaud the distinguished Senator from West Virginia and the 
distinguished Senator from New York, for they, as Senators, utilized 
the opportunity. The Senate, while a great institution, is still made 
up of 100 individuals.
  I have said, as my friends know, time and time again on this floor 
that the U.S. Senate should be, and can be, the conscience of the 
Nation, but only if individual Members exercise that conscience. I have 
said many times on this floor--and I will speak many more times on this 
constitutional amendment, as I will on some others coming up--let us 
look back on our 200 years of history. We are the greatest, most 
powerful democracy history has ever known. But we have become so 
because we followed our Constitution. We have amended it only 17 times 
since the Bill of Rights.
  Frankly, Mr. President, I have not seen anything that has occurred in 
the 54 years of my lifetime that is so important and in such a need of 
change in our country that we must have this pell-mell rush to amend 
the Constitution--in just 2 days in the other body. Mr. President, that 
is a shame; that is a disgrace; that is not something to be proud of--
to say to the American people that in 2 days we took this precious 
Constitution, this great cornerstone foundation of our democracy and we 
amended it.
  Are we not doing a wonderful thing? No. To that I say, for shame. I 
have no idea how the vote will come out on this. But at least let us as 
Senators stand up and say to the American people that you heard a full 
discussion of it, not that it was rushed through because somebody wants 
to make a check mark.
  I applaud my good friend from West Virginia with whom I have had the 
pleasure of serving my 20 years and my friend from New York with whom I 
have served 18 years, for standing up and reminding people of history. 
The history lesson does not fit on a bumper sticker or in a 12-second 
spot on the evening news or in a headline. And, unfortunately, I must 
say it does not fit often enough in the classrooms of the schools of 
this country. It should, and maybe the U.S. Senate will help bring it 
back.
  Mr. MOYNIHAN. Mr. President, I want to express my great appreciation 
to the Senator from Vermont and my revered colleague, the Senator from 
West Virginia. If he was not in my classrooms, I have been in his 
classroom for 18 years. I hope it shows, at least to some extent.
  I mean to propose to act in the manner that the Senator from West 
Virginia spoke of earlier Senate's having done because the emperor. We 
have a Chief Executive and we owe him our counsel, whether he welcomes 
it or not.
  Sir, I have to tell you that the Treasury Department analysis of the 
calamitous potential of this measure, in terms of deepening recessions 
and leaving us with prolonged periods of unemployment, under 
utilization, bringing on crises between groups, between regions--the 
Treasury Department has prepared an analysis of this and that analysis 
is now in the White House waiting to be cleared or released. I say 
again, that analysis is now in the White House waiting to be cleared.
  There is a simple fact hereabouts in this city--it is almost a secret 
but everybody knows it--which is that there are those who would like to 
see this issue go away. Pass the amendment, see what happens in 5 
year's time or 3 year's time, not in 2 year's time. That would be the 
most profoundly irresponsible act I can imagine. I say, sir, that we 
are not asking for anything. Whether it is associated with executive 
privilege, this is simply the economic analysis that the profession 
will produce at this time. But we have not heard from the White House. 
There was one op ed article by Dr. Tyson that was not bad. But we have 
not heard from the White House what every President since John F. 
Kennedy has known and understood, that this would strip the Federal 
Government and particularly the executive branch of those automatic 
stabilizers which have kept us from plunging and trashing and dropping 
into ruin in the century that preceded the Employment Act of 1946.
  Mr. President, I hope I am heard. I will know better by the end of 
the day. If I have not been heard, I will be on the floor first thing 
in the morning. I will stay here until it is clear that our request has 
been refused or what I hope is that it be granted so that we can help 
the President and avoid a calamity, which may be decided by one or two 
votes.
  Finally, Mr. President, I ask unanimous consent that the text of the 
New York Times article, ``The Pitfalls of a Balanced Budget, 
Dismantling a Decades-Old System for Softening Recessions,'' be printed 
in the Record at this point.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Feb. 21, 1995]

The Pitfalls of a Balanced Budget--Dismantling a Decades-Old System for 
                          Softening Recessions

                          (By Louis Uchitelle)

       The unemployment rate, which peaked at 7.7 percent after 
     the last recession, could have reached 9 percent if a 
     balanced budget had been required, Government and private 
     [[Page S2917]] economists estimate. And a laid-off worker who 
     collected $12,000 in unemployment pay might have received 
     only $7,000 or so.
       Such estimates of the potential economic impact are not 
     emphasized very much, however, in the debate over the 
     balanced budget amendment. So far, the battle has focused on 
     its value as a tool to shrink government or to discipline 
     spending. But if the amendment is enacted, the side effect 
     would be huge: a system that has softened recessions since 
     the 1930's would be dismantled.
       ``There are risks associated with a balanced budget, and I 
     don't think anyone should deny them,'' said William Hoagland, 
     the Republican staff director for the Senate Budget 
     Committee. ``Nevertheless, the debate on the floor has been 
     dominated by what we must do to get the budget in balance, 
     not what the risks of a balanced budget amendment might be.''
       Mr. Hoagland expressed surprise that the biggest risk--
     deeper, more painful recessions--had not figured 
     significantly in the debate, although Senator Daniel P. 
     Moynihan, Democrat of New York, and Senator Paul S. Sarbanes, 
     Democrat of Maryland, had called attention to this risk in 
     several floor speeches. ``The reason must be that the 
     advocates of a balanced budget see the benefits to the 
     economy as far outweighing the negatives associated with 
     cyclical downturns,'' Mr. Hoagland said.
       ``That must be what is going on.''
       No benefit seems to hold more sway than the view that the 
     amendment would shrink the Federal Government by restricting 
     its power to tax and to spend. A dollar not collected and 
     spent by the Government is a dollar left in the hands of the 
     private sector. And the private sector invariably invests 
     money more efficiently than the Government, this view holds.
       ``The people have spoken clearly that government is too big 
     and we need to do something about it,'' said Robert Hall, a 
     Stanford University
      economist who favors smaller government. ``The problem is 
     that the balanced budget amendment is a heavy-handed 
     solution and risky.''
       The biggest risk is to the nation's ``automatic 
     stabilizers,'' which have made recessions less severe than 
     they were in the century before World War II. The 
     stabilizers, an outgrowth of Keynesian economics, work this 
     way: When the economy weakens, outlays automatically rise for 
     unemployment pay, food stamps, welfare and Medicaid. 
     Simultaneously, as incomes fall, so do corporate and 
     individual income tax payments. Both elements make more money 
     available for spending, thus helping to pull the economy out 
     of its slump.
       The problem, of course, is that the stabilizers make the 
     deficit shoot up--by roughly $65 billion as a result of the 
     1990-1991 recession, according to the Treasury Department. 
     Under the balanced budget amendment, Congress and the 
     Administration would be required to get the budget quickly 
     back into balance, through spending cuts, higher tax rates, 
     or a combination of the two--perhaps even in the midst of a 
     recession.
       ``The Government would become, almost inevitably, a 
     destabilizer of the economy rather than a stabilizer,'' said 
     Joseph Stiglitz, a member of the President's Council of 
     Economic Advisers. Many economists share that view.
       Absent the stabilizers, every 73-cent drop in national 
     income in the last recession would have become a $1 drop, 
     said Bradford DeLong, deputy assistant Secretary of the 
     Treasury, who as a Harvard economist studied this dynamic and 
     recently updated his research. Of the 27 cents in cushioning, 
     20 cents came from falling tax revenue and 7 cents from the 
     higher spending.
       Economists outside the Government offer similar estimates. 
     Ray Fair of Yale University, for example, said for every $10 
     billion decline in national income during a recession, the 
     deficit rises by $2 billion, as the stabilizers kick in with 
     their higher spending and lower tax revenue.
       ``We ought not to give up the stabilizers,'' Professor Fair 
     said. ``That would be very Draconian.''
       Nearly every economist agrees that the American economy 
     requires, if not stabilizers, some substitute method for 
     offsetting recessions in an era of balanced budgets. And 
     those who favor the amendment are no exception.
       ``It would be a disaster to lose the stabilizers,'' said C. 
     Fred Bergsten, director of the Institute for International 
     Economics, who endorses the amendment as a necessary step if 
     the nation is to afford the high cost of Social Security and 
     Medicare for the baby boom generation, which reaches 
     retirement age early in the next century.
       Mr. Bergsten notes that the amendment, as now worded, would 
     permit Congress to bring back the stabilizers by a three-
     fifths vote in both houses. The vote would permit the 
     necessary deficit spending to finance the stabilizers.
       While a three-fifths vote is a big hurdle, Mr. Bergsten and 
     others argue that Congress would get used to authorizing the 
     necessary deficits during recessions. Nevertheless, he would 
     prefer a different solution. Once through the painful process 
     of balancing the budget by 2002, as required by the 
     amendment, then the Government should run budget surpluses in 
     years of strong economic growth and full employment, Mr. 
     Bergsten said.
       The surpluses would cover the rising costs of the 
     stabilizers during recessions. ``You could go down to a 
     balanced budget in the hard years, and still give the economy 
     a little stimulus,'' he said.
       The Congressional Budget Office has estimated that the 
     surplus needed to pay for the stabilizers during a recession 
     as severe as that of 1981-1982, the worst since World War II, 
     would be 1 percent of the national income during robust 
     periods of full employment, and perhaps as much as 1.5 
     percent.
       That would mean an annual surplus in today's dollars of $70 
     billion to $100 billion, rather than the nearly $200 billion 
     or so in annual deficits expected under current policy. Most 
     of the $200 billion is to help pay for programs like highway 
     construction and new weaponry that have fixed costs and do 
     not fluctuate with the ups and downs of the economy, as 
     unemployment pay, food stamps, tax revenues and the other 
     stabilizers do.
       Some economists--including Milton
        Friedman, a Nobel laureate in economics who is with the 
     Hoover Institute--hold that the stabilizers, despite the 
     ballyhoo, are no longer so important. The Federal Reserve, 
     through monetary policy, can more than offset their 
     disappearance by lowering interest rates an extra notch or 
     two to give the economy an additional stimulus in hard 
     times.
       ``I have looked at many episodes in the world in which 
     monetary policy went one way and fiscal policy the other, and 
     I have never found a case in which monetary policy did not 
     dominate,'' Mr. Friedman said. He favors a balanced budget 
     amendment that would shrink the Federal Government by putting 
     a ceiling on the tax increases that could be enacted to 
     balance the budget.
       But the Clinton Administration and even Federal Reserve 
     officials question whether monetary policy could alone handle 
     the task of reviving an economy in recession. The 
     stabilizers, they note, kick in automatically--before the 
     Federal Reserve and most economists often realize that the 
     economy is falling toward recession.
       A recession might be well along and getting deeper before 
     the Fed recognized the problem and began to drop rates. The 
     lower rates, in turn, would not be felt in the economy for a 
     year to 18 months, the traditional lag. And even if the Fed 
     acted quickly enough, the economy would behave in new and 
     different ways without the stabilizers.
       ``My guess is that we would get it wrong the first time we 
     went into recession, making that recession much deeper than 
     it should be,'' said a Federal Reserve official, who spoke on 
     condition that he not be identified. ``But we would learn 
     from that experience and do a better job thereafter.''
  Mr. MOYNIHAN. Mr. President, I yield the floor.
  Mr. LEAHY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Mr. President, I am, as I have said, going to speak again 
on the question of the balanced budget. I think that the speeches made 
by the distinguished senior Senator from West Virginia and the 
distinguished senior Senator from New York are such that I hope a lot 
of people will listen to them.
  Obviously, I myself am in great agreement. As I have stated, the 
Senate owes a thanks to both of them. But more than that, the United 
States owes thanks. This is a matter that should be debated.
  Mr. BYRD. Mr. President, I thank the distinguished Senator from 
Vermont and the distinguished Senator from New York for their comments.
  Mr. LEAHY. Mr. President, I ask unanimous consent that I be allowed 
to speak as in morning business on another subject.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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