[Congressional Record Volume 141, Number 53 (Wednesday, March 22, 1995)]
[Senate]
[Pages S4301-S4312]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     LEGISLATIVE LINE-ITEM VETO ACT

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
resume consideration of S. 4, which the clerk will report.
  The legislative clerk read as follows:

       A bill (S. 4) to grant the power to the President to reduce 
     budget authority.

  The Senate resumed consideration of the bill.

       Pending:
       (1) Dole amendment No. 347, to provide for the separate 
     enrollment for presentation to the President of each item of 
     any appropriation bill and each item in any authorization 
     bill or resolution providing direct spending or targeted tax 
     benefits.
       (2) Feingold amendment No. 356 (to Amendment No. 347), to 
     amend the Congressional Budget and Impoundment Control Act of 
     1974 to limit consideration of non-emergency matters in 
     emergency legislation.
       (3) Feingold/Simon amendment No. 362 (to Amendment No. 
     347), to express the sense of the Senate regarding deficit 
     reduction and tax cuts.
       (4) Exon amendment No. 402 (to amendment No. 347), to 
     provide a process to ensure that savings from rescission 
     bills be used for deficit reduction.

  The PRESIDING OFFICER. Under the previous order, the Senator from New 
Jersey, Mr. Bradley, is recognized to offer an amendment on tax 
expenditures, on which there shall be 45 minutes of debate, with 30 
minutes for Senator Bradley and 15 minutes for Senator McCain, the 
Senator from Arizona.


                 Amendment No. 403 to Amendment No. 347

      (Purpose: To modify the definition of targeted tax benefit)

  Mr. BRADLEY. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from New Jersey [Mr. Bradley], for himself, Mr. 
     Wellstone, Mr. Robb, Mr. Glenn, and Mr. Kohl, proposes an 
     amendment numbered 403 to amendment No. 347.

  Mr. BRADLEY. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 5, strike lines 13 through 20 and insert the 
     following:
       (5) the term ``targeted tax benefit'' means any provision 
     which has the practical effect of providing a benefit in the 
     form of a different treatment to a particular taxpayer or a 
     limited class of taxpayers, whether or not such provision is 
     limited by its terms to a particular taxpayer or a class of 
     taxpayers but such term does not include any benefit provided 
     to a class of taxpayers distinguished on the basis of general 
     demographic conditions such as income, number of dependents, 
     or marital status.

  Mr. BRADLEY. Mr. President, I yield myself 10 minutes.
  Mr. President, we begin this Congress with, I think, two obligations. 
The first is to change the way we do business, and the second is to cut 
Government spending. I think reform has been bottled up for years.
  So, Mr. President, I believe now is the time to adopt a line-item 
veto and have the line-item veto applied both to tax expenditures and 
to appropriations. Two years ago, I introduced legislation that would 
give the President the authority to veto wasteful spending in both 
appropriations and tax bills. I reintroduced this line-item veto the 
very first day of this Congress, and its passage has been one of my 
highest legislative priorities. The separate enrollment approach that I 
adopted was modeled on the bill offered by Senator Hollings and 
introduced several Congresses ago. I want to thank and commend Senator 
Hollings for his leadership on that issue.
  Therefore, I am pleased to see that our Republican colleagues have 
come to recognize the wisdom of the separate enrollment approach that 
Senator Hollings and I have been championing for years. I also want to 
comment our colleagues across the aisle for taking steps to include tax 
expenditures in the line-item veto bill they introduced yesterday. The 
approach our Senate colleagues have taken toward tax expenditures is a 
significant improvement over the approach adopted by the House.
  We need to be honest with the American public about the fact that for 
each example of unnecessary, pork-barrel spending through an 
appropriations bill, there are numerous, similar examples of such 
spending buried in tax bills. The Tax Code provides special exceptions 
from taxes that will total over $450 billion this year, more than 
double the entire Federal deficit and nearly one-quarter of total 
Federal spending. Because many of these Tax Code provisions single out 
narrow subclasses for benefit, the rest of us must pay more in taxes. 
How serious can we be about balancing the budget if we let billions in 
tax pork go virtually unchallenged each year?
  Mr. President, I believe that our fellow Americans would be shocked 
if they knew some of the ways we spend money through the Tax Code. My 
favorite special-interest tax loophole is the roughly $100 million we 
will give away over the next 5 years to allow homeowners to rent their 
homes for up to 2 weeks without having to report any income. Word has 
it the provision was put in the Tax Code to benefit a rich homeowner 
who lived near the Masters Golf Tournament in Augusta, GA. The lucky 
man hit the jackpot every year by renting his house to tournament 
spectators for a small fortune, without having to declare any of this 
money as income.
  Then there is the $12 million in tax subsidies that go to help 
producers offset the costs they incur to mine lead, asbestos, and 
uranium--deadly poisons we spend millions more to clean up. We also 
give away a cool $60 million a year to corporations that make 
electricity using plants and windmills. In addition, we generously 
allow U.S. citizens who work overseas to exclude $70,000 per year from 
their income taxes. Over the next 5 years, this loophole will cost the 
rest of us $8.6 billion.
  As a member of the Finance Committee, I have seen an almost endless 
stream of requests for preferential treatment through the Tax Code. For 
example, the 1992 tax bill was littered with special exemptions. In 
that bill, we included a special accelerated depreciation schedule for 
rental tuxedos at a 5-year cost of $44 million to the rest of us. We 
also provided special accounting rules for the owners of cotton 
warehouses and created an special tax exemption for custom firearms 
manufacturers and importers. Over the years, I have been presented with 
hundreds of other requests, including exemptions from fuel excise taxes 
for crop-dusters and tax credits for clean-fuel vehicles.
  There are obvious reasons why the American public knows so little 
about these loopholes. They are often written in complicated language 
and buried deep in the Tax Code. In addition, unlike appropriated 
spending, which is reviewed every year, once a tax loophole becomes 
law, it rarely sees the light of day. In fact, according to a recent 
GAO study, almost 85 percent of the 1993 tax expenditure losses were 
attributable to tax
 expenditures that were enacted before 1950, and almost 50 percent of 
these losses stem from tax expenditures enacted before 1920.

  Reducing the deficit will require leadership, not gimmicks. In 
passing a line-item veto bill, we must demonstrate this same type of 
leadership. Sadly, I note that the line-item veto proposal passed by 
the House resorts to what I would describe as a mere gimmick. By 
defining ``targeted tax benefits'' to include only those loopholes that 
benefit ``100 or fewer taxpayers,'' the House has forfeited an 
opportunity to address the impact that tax loopholes have on our 
Nation's continuing budget crisis.
  Mr. President, obviously, there are plenty examples of the so-called 
rifle shot tax giveaways. In 1988, the Philadelphia Inquirer ran a 
series of articles which identified billions of dollars worth of tax 
loopholes in the 1986 and 1988 tax bills. As stated in that series, 
these loopholes included special provisions for some trucking companies 
but not others, for some insurance companies but not others, for some 
utilities but not others, for some universities but not others. Of 
course these special provisions should be subject to a potential veto. 
However, these rifle shots are not the only examples of wasteful 
spending through the Tax Code; there 
[[Page S4302]]  are plenty of other examples which benefit more than 
100 taxpayers.
  In fact, of all of the loopholes that I described earlier, not even 
one could be determined to benefit 100 or fewer taxpayers. The income 
exclusion for home rentals at the Masters Golf Tournament could benefit 
more than 100 taxpayers. The tax subsidies given to corporations that 
mine lead, asbestos, and uranium could benefit more than 100 taxpayers. 
The tax subsidies for electricity production from windmills and plants 
could benefit more than 100 taxpayers. And, the tax giveaways to 
citizens who work overseas benefit more than 100 people. Therefore, 
under the House version of this bill, none of these tax loopholes would 
be subject to a potential line-item veto if they were created today.
  In addition to the fact that the House definition of a targeted tax 
benefit would allow billions of dollar in tax expenditures to go 
unchecked, that definition leads to a number of practical problems. 
Under the House version of the line-item veto, in order to veto pork in 
a tax bill, the President would first have to determine that the 
loophole would benefit 100 or fewer taxpayers. No one knows how the 
President would make such a determination. As far as I am aware, no 
Federal agency keeps track of how many taxpayers benefit from 
individual tax expenditures. Although this may seem surprising, it is 
understandable given that many tax expenditures consist of exclusions 
from income, rather than simple deductions. As a result, information on 
the number of beneficiaries is not readily available. In fact, of the 
25 largest tax expenditures, 14 provide exclusions from income rather 
than deductions. Although these are large and well known examples, 
there are other examples of income exclusions for which the information 
would not be readily available. Therefore, there is no easy way to 
determine how many taxpayers would benefit from a proposed tax 
expenditure. In addition, what would happen if the President vetoed a 
tax loophole only to find out later that he did not have such authority 
because the provision would have benefited more than 100 taxpayers?
  Even if one could determine how many taxpayers would benefit from a 
particular loophole, it would be easy enough for any of the big dollar 
lobbyists that prowl the Halls of Congress to rework the loophole to 
make it vetoproof. Clearly, if lobbyists are sophisticated enough to 
insert a loophole into a tax bill in the first place, they will be more 
than sophisticated enough to ensure that the language is sufficiently 
broad that it escape a possible veto. Therefore, the ``100 or fewer'' 
definition will create a perverse incentive to make bigger and even 
more expensive loopholes just to avoid the veto.
  I am pleased to note that the version of line-item veto offered in 
the Senate does not resort to the same gimmicks that the House used. 
The language in the line-item veto before us today would make subject 
to a potential Presidential veto all new and expanded tax expenditures 
which both lose revenue during the
 any period of the budget window and have ``the practical effect of 
providing more favorable tax treatment to a particular taxpayer or 
limited group of taxpayers when compared to other similarly situated 
taxpayers.''

  Yesterday, Senator Domenici stated that this language would subject 
to a potential veto all tax expenditures which particular companies, 
businesses, or taxpayers relative to other taxpayers. I agree that this 
provision would allow the President to veto new tax subsidies for 
individual companies and industries such as the ethanol industry, small 
oil and gas producers, dairy farmers, owners of cotton warehouses, and 
the like. However, I am concerned that the version offered by our 
Republican colleagues may lead to confusion and gaming. Although I 
believe that the language offered as part of the Republican substitute 
to S. 4 is very broad, a few of our colleagues have indicated that it 
might be narrower than the language itself would suggest. In my mind, 
the term ``when compared to other similarly situated taxpayers'' simply 
makes explicit a comparison that was implicit in similar language in S. 
14.
  Therefore, in order to clear up any confusion and to ensure that all 
new tax loopholes are subject to the same scrutiny as other types of 
spending, I have sent to the desk an amendment that would authorize the 
President to veto wasteful spending in future tax bills.
  Mr. President, the language in the amendment that I have offered is 
not new, nor should it be particularly controversial. This language 
uses the exact same definition of ``targeted tax break'' as was 
included in S. 14, introduced by Senator Domenici and originally 
cosponsor by Senators Exon, Craig, Cohen, Dole, and me. Furthermore, 
the amendment I have introduced uses the exact same language that our 
Republican colleagues promised the Nation they would use when they 
introduced their Contract With America. The language in this amendment, 
which was introduced in the House by then-Minority Leader Michel, 
simply states that the President may veto those tax loopholes which 
have ``the practical effect of providing a benefit in the form of a 
different treatment to a particular taxpayer or a limited class of 
taxpayers, whether or not such provision is limited by its terms to a 
particular taxpayer or a class of taxpayers. Such term does not include 
any benefit provided to a class of taxpayers distinguished on the basis 
of general demographic conditions such as income, number of dependents, 
or marital status.''
  By its very terms, this language does not cover those types of tax 
provisions that provide general benefits. It would not subject a 
reduction in tax rates to a veto. Obviously, that would be a benefit 
for all Americans. Similarly, it would not subject an expansion in the 
standard deduction or the elimination of the marriage penalty to a 
veto. At the same time, the amendment that I have offered would not 
effect any of the provisions currently in the Tax Code. My amendment 
would not allow the President to touch such provisions as the home 
mortgage interest deduction, the deduction for State and local taxes, 
or the deduction for charitable contributions. Instead, this amendment 
would only effect new or expanded tax provisions.
  Mr. President, I request unanimous consent to insert into the Record 
copies of two letters, one from Dr. Rivlin at OMB and the other from 
Dr. Reischauer at CBO, interpreting the language that I have 
introduced. As our colleagues will note, these letters make clear that 
the amendment that I have offered simply places spending through the 
Tax Code on par with other types of spending. Adoption of my amendment 
will prevent additional loopholes from creeping into the Tax Code at 
the same time we are cutting assistance for the poorest and neediest in 
our society.
  My amendment would also reduce the danger of gaming the revenue 
estimating process to avoid a potential veto. Under the current version 
of the line-item veto, a tax loophole cannot be vetoed unless it is 
scored as losing money during any part of relevant budget window. 
However, as we have seen with some proposals such as the backloaded 
IRA's and neutral cost recovery provision in the House's tax package, 
by slowly phasing in tax expenditures, they can be estimated to raise 
revenue during the first 5 years even though they lose billions of 
dollars over the 10-year budget period. My amendment would eliminate 
this
 gaming process.

  If the President had the power to excise special interest spending, 
but only in appropriations bills, we would simply find the special 
interest lobbyists who work appropriations turning themselves into tax 
lobbyists, pushing for the same spending in the Tax Code. Spending is 
spending whether it comes in the form of a Government check, or in the 
form of a special exception from the tax rates that apply to everyone 
else. Tax spending does not, as some pretend, simply allow people to 
keep more of what they have earned. It gives them a special exception 
from the rules that oblige everyone to share in the responsibility of 
our national defense and protecting the young, the aged, and the 
infirm. The only way to let everyone keep more of what they have earned 
is to minimize these tax expenditures along with appropriated spending 
and the burden of the national debt so that we can bring down tax rates 
fairly, for everyone.
  Therefore, Mr. President, I encourage all of our colleagues to pass a 
line-item veto bill that includes both appropriations and real tax 
expenditures. In 
[[Page S4303]]  their so-called Contract With America, the Republicans 
promised that they would subject wasteful spending to a potential line-
item veto whether this spending occurred in an appropriations or tax 
bill. I believe that the definition that the Republicans promised in 
their contract, the same definition that was included in S. 14 when it 
was introduced in this Chamber, is an appropriate way to prevent new 
wasteful spending projects from creeping into the Tax Code.
  Mr. President, the line-item veto is not in itself deficit reduction. 
But if the President is willing to use it, it is the appropriate tool 
to cut a certain kind of wasteful spending--the pork-barrel projects 
that tend to crop up in appropriations and tax bills. Although this 
type of spending is only one of the types of spending that drive up the 
deficit, until we control these expenditures for the few, we cannot 
asked for the shared sacrifice from the many that will be necessary to 
significantly reduce the deficit.
  Mr. WELLSTONE addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. BRADLEY. Mr. President, how much time remains on the side of the 
proponents?
  The PRESIDING OFFICER. The Senator has 20 minutes 15 seconds.
  Mr. BRADLEY. I yield 8 minutes to the distinguished Senator from 
Minnesota.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized.
           tax loopholes should be covered by line-item veto

  Mr. WELLSTONE. Mr. President, I rise as an original cosponsor of this 
amendment to subject a host of special interest tax breaks and 
loopholes to the President's expedited rescission, or line-item veto 
authority provided for in this bill. This amendment would give the 
President the same authority to rescind new special interest tax breaks 
that he would have under the bill to cancel new direct spending. The 
logic of the amendment is simple, and straightforward: We should treat 
tax breaks just as we treat direct spending in the Federal budget.
  In all of our debates on budget priorities, there has been too little 
discussion about a particular kind of spending that enjoys a special 
status within the Federal budget: tax breaks for special classes or 
categories of taxpayers. Many of the benefits from these breaks and 
loopholes go to corporate or other wealthy interests in our society. If 
we are going to give the President line-item veto authority over direct 
spending programs, then we should give him the same power to veto 
special interest tax breaks and tax loopholes. That is what this 
amendment would do; it would cover all new tax breaks, hold them up to 
scrutiny, and subject them to potential rescission, or cancellation.
  This is not the first time in this session of Congress that I have 
raised the issue of closing special interest tax loopholes as a part of 
our deficit reduction efforts. A couple of weeks ago my colleague from 
Wisconsin, Senator Feingold, Senator Bradley, and I offered a sense-of-
the-Senate resolution as an amendment to the proposed balanced budget 
amendment which said that tax expenditures ``should be subjected to the 
same level of scrutiny in the budget as direct spending programs'' in 
our efforts to balance the budget. That proposal received 40 votes from 
my colleagues on our side of the aisle. We have argued for months, and 
will continue to argue, that savings from restricting special interest 
tax breaks must be a key part of our efforts to further reduce the 
deficit.
  Let me make a simple point here that is often overlooked. We can 
spend money just as easily through the Tax Code, through what are 
called ``tax expenditures,'' as we can through the normal 
appropriations process. Spending is spending, whether it comes in the 
form of a government check or in the form of a tax break for some 
special purpose, like a subsidy, a credit, a deduction, or accelerated 
depreciation for this type of investment or that. Some tax expenditures 
are justified, and should be retained. But some are special interest 
tax breaks that should be eliminated, or loopholes that should be 
plugged.
  These special tax breaks allow some taxpayers to escape paying their 
fair share, and thus make everyone else pay higher taxes. They are
 simply special exceptions to the normal rules, rules that oblige all 
of us to share the burdens of citizenship by paying our taxes. They 
also limit State revenues because many State income taxes are tied to 
the Federal tax rules. It seems only fair that if the President can use 
the line-item veto authority to cut special-interest spending programs, 
then he should also be able to cut special-interest tax breaks which 
will cost the Treasury billions of dollars in lost revenues.

  Special-interest tax breaks are simply a subcategory of the larger 
group of tax provisions called tax expenditures. The Congressional 
Joint Tax Committee has estimated that tax expenditures cost the U.S. 
Treasury over $420 billion every single year. And they also estimate 
that if we do not hold them in check, that amount will grow by $60 
billion to over $485 billion by 1999. That is why tax breaks must be on 
the table along with other spending as we look for places to cut the 
deficit.
  Now, not all tax expenditures are bad. Not all should be eliminated. 
Some serve a real public purpose, such as providing incentives to 
investment, bolstering the nonprofit sector, encouraging charitable 
contributions, and helping people to be able to afford to buy a home. 
But some of them are simply tax dodges that can no longer be justified. 
At the very least, all of these should undergo the same scrutiny as 
other Federal spending. If we are going to allow the President to line-
item veto specific spending programs, then we should also allow him to 
veto specific tax breaks that subsidize a targeted class of taxpayers.
  The particular language of this amendment has a long history, and has 
often been supported in the past by Members on the other side of the 
aisle. This language is taken directly from the so-called Contract With 
America about which we have heard so much recently. On pages 32-33 of 
the commercially available version of the contract, when discussing the 
line-item veto, it says, ``Under this procedure, the President could 
strike any appropriation or targeted tax provision in any bill.'' Thus 
we are offering an amendment first outlined in the provisions in the 
Contract With America.
  In addition to being part of the contract, a similar amendment was 
offered on the House floor by Representative Michel, the former House 
minority leader, to a previous version of the line-item veto 
legislation. Gaining bipartisan support, this amendment was adopted in 
1993 in the House during consideration of a version of the line-item 
veto bill. The language of this amendment also appeared in the original 
version of Senator Domenici's expedited rescission bill which he 
introduced in January of this year. Therefore this language simply 
fulfills a promise made by many of those on the other side of the 
aisle, including those who wrote the Contract With America.
  Although there are many things in that Republican so-called Contract 
With America which I oppose, I agree completely with the contract when 
it says that we should give the President the power to veto all new 
special tax breaks and loopholes, and not just those new tax
 breaks that affect fewer than 100 taxpayers, as included in the bill 
the committee reported. Tax attorneys will have a field day if we adopt 
that arbitrary 100 taxpayers limit on the President's authority to 
line-item veto tax expenditures. This is a sham, which some have 
estimated would cover only a tiny percentage of all tax breaks 
currently in the Code if it had been in law when they were established.

  How would we decide which special tax breaks will benefit fewer than 
100 taxpayers? Even if a specific provision is intended to benefit only 
a small group of people or corporations, crafty tax attorneys will 
always find ways to expand the group of intended beneficiaries. In 
addition, as I understand the situation, no Federal agency currently 
keeps track of how many taxpayers benefit from individual tax 
expenditures. This is perfectly understandable, because many tax 
expenditures are exclusions from income, rather than deductions which 
must be reported to the IRS. How do we calculate how many people 
exclude income from taxation, when of course those taxpayers do not 
even report this excluded 
[[Page S4304]]  income? Thus the arbitrary 100 taxpayers limit is 
absurdly narrow.
  But the language of the Dole substitute is even more unclear on tax 
expenditures than the 100 taxpayer language used by the committee. The 
backers of the Dole substitute claim that their bill would allow the 
President to veto special interest tax breaks and loopholes. But the 
language of the Dole substitute uses a very confusing and vague 
definition of ``targeted tax benefits'' subject to the President's 
line-item veto. The substitute defines ``targeted tax benefits'' as 
those provisions which are estimated as ``losing revenue within the 
periods specified in the most recently adopted concurrent resolution on 
the budget'' and which have ``the practical effect of providing more 
favorable tax treatment to a particular taxpayer or limited group of 
taxpayers when compared with other similarly situated taxpayers.''
  What does this definition mean? What does a similarly situated 
taxpayer mean in this context? Should we bring in high-priced tax 
attorneys to help us understand the effects of this language? Under 
this definition, could Congress give special tax breaks to a specific 
industry such as the oil and gas industry, and shield these tax give-
aways from the President's line-item veto because all companies within 
the favored industry would be allowed to claim the same special 
interest tax break? Under current law, U.S. citizens working overseas 
can exclude $70,000 per year from their U.S. income taxes. If Congress 
were to foolishly increase this exclusion to $80,000 per year, would 
that change be subject to the President's line-item veto authority 
under the substitute? Of if Congress were to give new special tax 
breaks to American companies operating overseas, such as we already do 
under current law, would that change be covered by the language in the 
substitute? How would this language affect companies doing business in 
Puerto Rico, who enjoy special tax breaks under current law? The 
existing Tax Code is riddled with numerous special tax give-aways to an 
entire industry. Would the President be allowed to line-item veto new 
special interest tax loopholes for any given powerful industry under 
this language? We need to clarify this
 confusing provision in the Dole substitute, because on its face it 
only applies to a very limited number of these tax breaks.

  If the President is to be given the power to veto spending 
provisions, then he should also be given the power to veto certain 
especially egregious special interest tax breaks, especially those 
which favor an entire protected industry such as the oil and gas 
industry. The writers of the Republican Contract With America 
understood this point, even if the majority party in the other body 
voted to abandon this section of the contract. We should restore the 
original contract language, as our amendment would do.
  By giving the President the power to line-item veto any new tax 
expenditure provisions, we could save billions of dollars. For example, 
do we really need special tax breaks for Mount Rushmore coins, or tax 
rules that allow people to rent out their homes for 2 weeks each year 
without paying tax on that income? Both of these tax breaks have been 
proposed in the past, and the latter actually became law. A line-item 
veto which at least covers new tax breaks might prevent measures like 
these from slipping into the Tax Code in the future, where they could 
go unexamined for years or even for decades.
  Our amendment is the latest in a series of legislative initiatives 
designed to call attention to this problem and to prompt Congress to 
reexamine tax loopholes. There are many existing special loopholes 
buried in the current Tax Code which need to be reconsidered. While 
this measure only subjects new tax breaks to Presidential veto 
authority, many of us will certainly want to revisit specific tax 
loopholes that are already in the Tax Code during the reconciliation 
process. But for now, our amendment provides for a mechanism to cover 
all new tax breaks in the same way that it covers only new spending. I 
think we ought to signal today that the standard of fairness we will be 
applying will include closer scrutiny of these tax breaks.
  It is only fair, since these special tax breaks for certain companies 
and industries force other companies and individuals to pay higher 
taxes to make up the difference. Some of these tax breaks allow 
privileged industries such as the oil and gas industry to avoid paying 
their fair share of taxes. All distort, to one degree or another, 
economic investment decisions, usually in favor of companies with the 
highest paid lobbyists in Washington. In many cases, doing away with 
these special tax breaks for certain industries would allow a more 
efficient allocation of economic resources.
  I think it is a simple question of fairness. If Congress is really 
going to make the $1.48 trillion in spending cuts and other policy 
changes that would have to be made to balance the Federal budget by 
2002, then those on the other side of the aisle should make sure that 
wealthy interests in our society, those who have political clout, those 
who can hire high-priced lobbyists to make their case every day here in 
Washington, are asked to sacrifice at least as much as regular middle-
class folks whom you and I represent. We should represent those who 
receive Social Security or Medicare or Veterans' benefits, and not just 
those special interests who can afford to pay
 high-priced hired guns to lobby for them.

  I am amazed to learn that many in the majority party in the other 
body are proposing expanding corporate welfare tax loopholes at the 
very same time that they are slashing Government spending on programs 
for the poor, for children, for education, and for the most vulnerable 
in our society. They have proposed tax cuts for the wealthy which, 
according to the Treasury Department, total over $700 billion, and at 
the same time they refuse to subject a broad range of new tax breaks to 
potential cancellation by the President. And these are the ones who 
call themselves deficit hawks?
  By refusing to extend the line-item veto authority given to the 
President under this bill to industry-wide tax breaks and loopholes, 
members of the majority party are trying to protect their wealthy and 
well-connected friends. And they are doing so at the expense of 
principles that they often espouse: economic efficiency and market-
based allocations of capital. As I have observed, often these special 
tax loopholes and tax breaks distort economic decision-making, causing 
corporations and individuals to shift their resources in order to take 
advantage of these loopholes.
  I think now is the time to put a stop to further massive spending on 
special interest tax loopholes. We should allow the President to be 
able to line-item veto these costly special interest tax breaks. A 
basic standard of fairness requires that we examine special interest 
tax breaks along with the one-third of all Federal spending which is 
currently covered by the legislation before us.
  Some will charge that by closing tax loopholes and restricting 
special interest tax breaks we are somehow proposing to raise taxes. 
But the opponents of covering these tax breaks in the line-item veto 
legislation need to understand that the current system forces middle 
class and working people to pay more in taxes than they otherwise would 
have to pay. While some are paying less than their fair share in taxes 
because of these special tax subsidies, others are being forced to pay 
more in taxes to make up the difference. Closing tax loopholes is not 
raising taxes. Allowing these tax breaks to continue forever without 
close scrutiny is part of the reason why taxes on the regular middle 
class taxpayer are higher than they otherwise could be. Of course, 
these subsidies are hidden in the Tax Code because it would be too hard 
to get the votes in Congress, in the full light of day, to directly 
subsidize these industries--especially under current budget 
constraints.
  It is a simple matter of fairness. In our attempts to reduce the 
Federal deficit, all sectors of our society must make some sacrifices. 
Specific industries and the wealthy are the ones who often benefit most 
from the special interest tax breaks and loopholes. If we do not treat 
tax expenditures the same as direct spending provisions, the wealthy 
will avoid making any sacrifices as we cut spending programs for the 
middle class and the poor. Just because some special interest has the 
means to hire a high-priced tax lobbyist to get a special tax break 
written into legislation does not
give them the [[Page S4305]]  right to avoid sharing in whatever 
sacrifices are necessary to reduce the budget deficit.
  The General Accounting Office issued a report last year, and have 
issued several others on tax expenditures. It was titled, ``Tax Policy: 
Tax Expenditures Deserve More Scrutiny.'' I commend it to my 
colleagues' attention. It makes a compelling case for subjecting these 
tax expenditures to greater congressional and administration scrutiny, 
just as direct spending is scrutinized. The GAO report reminds us that 
spending through special provisions in the Tax Code should be treated 
in the same way as other spending provisions.
  The GAO noted that most of these tax expenditures currently in the 
Tax Code are not subject to any annual reauthorization or other kind of 
systematic periodic review. They observed that many of these special 
tax breaks were enacted in response to economic conditions that no 
longer exist. In fact, they found that of the 124 tax expenditures 
identified by the Budget Committee in 1993, about half were enacted 
before 1950. Now that does not automatically call them into question. 
It just illustrates the problem that once enacted, special tax breaks 
are not looked at in any systematic way. Many of these industry-
specific breaks get embedded in the Tax Code, and are not looked at 
again for years. Giving the President the authority to cancel special 
interest tax breaks would prevent egregious ones from creeping into the 
Tax Code in the first place.
  This amendment simply says that new tax expenditures should be 
treated the same as new spending programs for purposes of the line-item 
veto. It might prompt us to rethink some of our spending priorities. 
When we begin to weigh, for example, scaling back the special treatment 
for percentage depletion allowances for the oil and gas industry 
against cutting food and nutrition programs for hungry children, we may 
come out with quite different answers than we have in the past about 
whether we can still afford to subsidize this industry through the Tax 
Code. CBO estimates that eliminating this tax break would save $4.9 
billion in Federal revenues over 5 years.
  We must allow the President to veto new special interest tax 
expenditures, despite the vague and confusing language in the Dole 
substitute. It looks to me like those who oppose our amendment are 
saying that they will not ask for much, if any, sacrifice from wealthy 
corporate and other special interests in our society who have enjoyed 
certain tax breaks, benefits, preferences, deductions, and credits that 
most regular middle-class taxpayers do not enjoy.
  The Republican contract promised to give the President the authority 
to line-item veto all these special tax breaks, but that language was 
deleted by the Senate Budget Committee. That language has also been 
deleted from the Dole substitute. I think we need to restore the 
original language of the expedited rescission bill.
  At a time when we are talking about potentially huge spending cuts in 
meat inspections designed to insure against outbreaks of disease; or in 
higher education aid for middle class families; or in protection for 
our air, our lakes, and our land; or in highways; or in community 
development programs for States and localities; or in sewer and water 
projects for our big cities; or in safety net programs for vulnerable 
children; or to eliminate the School Lunch Program, we should be 
willing to weigh these cuts against special tax loopholes that could 
cost hundreds of billions each year.
  Mr. President, I urge my colleagues to support the amendment, and I 
yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. BRADLEY. Mr. President, how much time remains on the side of the 
proponents?
  The PRESIDING OFFICER. The Senator has 12 minutes and 26 seconds.
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I ask unanimous consent to go off the 
amendment for approximately 5 minutes to engage in a colloquy with the 
Senator from Nebraska about the bill.
  Mr. BRADLEY. Mr. President, reserving the right to object, the 
subject matter is unrelated to the pending amendment?
  Mr. McCAIN. Unrelated to the pending amendment.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. EXON. Mr. President, I would like to yield to my colleague from 
Arizona. We have had some very brief preliminary discussion to try to 
expedite and move things along just a little bit.
  I propose to him that in order to move things along, I will be a 
cosponsor of the Bradley amendment. If the Bradley amendment is 
successful, then there is a backup amendment that I would like to 
withdraw, but I would like to have it pending in case the Bradley 
amendment should not prevail.
  My amendment simply says--and I will debate it briefly if I may have 
5 minutes--basically that if the Bradley amendment fails, I would like 
to have a backup provision that simply says we should take a look at 
not just a 5-year but a 10 year-period with regard to what effect any 
kind of taxation would have on the overall budget proposition. There 
may be some pros and cons on that. It might be acceptable.
  I would simply like to suggest at this time that after we finish 
debate under the allotted time under the Bradley amendment, if I may 
have 5 minutes and my colleague maybe 5 minutes, we could make an 
agreement that we would have a vote on my backup amendment that would 
be withdrawn if the Bradley amendment prevails.
  Mr. McCAIN. Mr. President, I would also like to find out if your 
amendment would be acceptable by both sides, to prevent a----
  Mr. EXON. Mr. President, I will not insist on a rollcall vote. If 
that is possible, we could maybe voice vote.
  Mr. McCAIN. I would like to take the remaining minute or 2 to discuss 
the parliamentary situation as it exists with my friend from Nebraska.
  The PRESIDING OFFICER. Is the Senator reserving his right to object?
  Mr. McCAIN. No, Mr. President. I am now on the 5-minute request to 
discuss the parliamentary situation, not related to the pending 
amendment.
  It is my understanding from my conversations with my colleague from 
Nebraska that we are in the process of reducing the number of 
amendments and getting time agreements on those so that we could 
probably be able to--hopefully, within an hour or 2, or 2 or 3 hours--
get some kind of final agreement so that a cloture vote would not be 
necessary.
  Under those circumstances, I urge all of our colleagues to consider 
their amendments, consider how much time they would require, and 
hopefully we could move forward so that we do not have to go through a 
cloture vote and reach cloture on this bill.
  Finally, Mr. President, I would like to avoid the cloture vote, along 
with my friend from Nebraska. I think we are now reaching a point where 
we could get time agreements and perhaps even a time certain for 
passage.
  Mr. EXON. Mr. President, if I may for a moment, I thank my friend 
from Arizona.
  I simply use this opportunity to appeal to all Senators on both sides 
of the aisle to please come to the floor at this time, or sometime 
within the next hour, to consult with us. It is important, if we are 
going to expedite matters as I would like to do, and hopefully not have 
a cloture vote unless that becomes necessary--but I suspect we are 
going to have to go through the cloture vote unless we can come to some 
reasonable agreement on the number of amendments--how serious the 
Senators are in offering them.
  I place an appeal at this time to Members on both sides of the aisle 
who have amendments to please consult with the managers now so that 
maybe we can have a sense and eliminate some of the amendments that are 
duplicates, or duplicates to some degree, and maybe have an agreement 
by 2 o'clock this afternoon that would set a course of as definitive 
action as is possible with the conflicting debate that still might take 
place on some of these amendments.
  Mr. McCAIN. Mr. President, I ask to be recognized for 1 additional 
minute.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Mr. President, it is not clear yet--a pending vote on a 
Feingold amendment; a possible pending vote on 
[[Page S4306]]  a Feingold amendment, that is possible; along with a 
pending vote at the expiration on the previously agreed to time on the 
Bradley amendment. It is not clear to me yet when those votes will take 
place.
  There is, I understand, a signing ceremony down at the White House on 
the unfunded mandates bill sometime later this morning. I hope within 
the next minutes we will get some indication as to when the votes, both 
on the Feingold amendments and the Bradley amendment, will take place.
  Now, Mr. President, I ask unanimous consent to return to the pending 
amendment, which is the Bradley amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                 Amendment No. 403 to Amendment No. 347

  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. McCAIN. Mr. President, first of all, I would like to say to my 
friend from New Jersey, I know of no one who is more aware, more 
knowledgeable, and more articulate on tax issues--along with many 
others, but especially tax issues--than the Senator from New Jersey. We 
know of his exemplary record, including the key role he played in the 
last major tax bill passed by Congress in the 1986 tax reform bill.
  It is with some trepidation that I oppose this amendment of the 
Senator from New Jersey. I certainly understand the target and the aim 
and intent of this amendment. I believe that the amendment sets a 
different standard for a targeted tax benefit for purposes that are 
contained in the Dole substitute.
  His definition of the targeted tax benefit in this amendment is 
broader. The amendment defines a targeted tax benefit, I quote from the 
amendment, as any provision that applies different tax treatment to a 
limited class of taxpayers. The amendment does exempt from the 
taxpayers in a limited class, defined by general demographic conditions 
such as income, number of dependents, or marital status.
  By the terms of the amendment as we understand it, it pulls into the 
definition of targeted tax benefit, any tax benefit that goes to any 
other limited class of taxpayers, such as retirees, Americans with 
physical disabilities such as blindness, survivors of a deceased parent 
or spouse, disabled veterans, foster parents, farmers, fishermen, 
students, and homeowners.
  A few examples, Mr. President, of potential tax benefits that would 
be a targeted tax benefit under this amendment and subject to the line-
item veto would be, for example: President Clinton's 1996 budget 
proposal to create a special tax deduction for college education 
expenses, the reason being, where it would fall under the Bradley 
amendment, is that students or their parents who pay for college 
expenses are a limited class of taxpayers.
  Proposals in most of the major health care reform bills proposed last 
year to clarify the tax treatment of long-term care insurance would 
fall under this amendment because taxpayers who choose to purchase 
long-term care insurance are a limited class of taxpayers.
  The proposal in the Contract With America to increase the amount of 
money a small business can deduct, expenses for equipment purchases 
from $17,000 up to $35,000 per year, because the contract proposal is 
limited to small businesses, which are also a limited class of 
taxpayers.
  The proposal to extend the 25-percent deduction for health insurance 
costs paid by self-employed persons, and the reason for this is that 
this proposal is limited to self-employed taxpayers, who are also a 
limited class of taxpayers.
  The distinguished Democratic leader, Senator Daschle, has a bill that 
provides tax relief for farmers who have suffered from the 1993 Midwest 
floods. This proposal is limited to farmers, a limited class of 
taxpayers.
  Unlike the pending amendment, the Dole substitute definition of a 
targeted tax benefit looks to a limited group of taxpayers, and whether 
within the limited group, one taxpayer or group of taxpayers is treated 
more favorably than other similarly situated taxpayers.
  Under the Dole substitute, none of the examples mentioned would be a 
targeted tax benefit, and under the Dole substitute none of the 
examples mentioned would be subject to the line-item veto.
  Mr. President, under the previous unanimous consent agreement, at the 
expiration of the time, I will be making a motion to table as was 
provided for in the unanimous-consent agreement.
  Mr. President, I reserve the balance of my time.
  Mr. DASCHLE addressed the Chair.
  The PRESIDING OFFICER. The minority leader is recognized.
  Mr. DASCHLE. Mr. President, I will use my leader time to speak on 
this amendment and allow Senator Bradley to use the remaining minutes 
of his time for his own purposes.
  Mr. President, the amendment that is now pending is one that 
virtually every Member of the Senate ought to be able to support.
  Senator Bradley's amendment on tax breaks is identical--it is 
identical--to that contained in the Domenici-Exon bill. It is the very 
same language that has been cosponsored by many people on both sides of 
the aisle, including both leaders at this point. Its intent is to make 
clear what we all say we want: To give the President a strong bill.
  We want to allow the President to weed out special interest breaks, 
whether they are buried in an appropriations bill or buried in a tax 
bill. We have said that our view of a strong bill is a bill that 
broadens the scope, that gives the President the greatest opportunity 
for review of legislative issues, of questions that may arise as he 
considers the viability of any piece of legislation, giving the 
President the opportunity, whether it is in taxes or appropriations, is 
our definition of strength.
  Senator Bradley's amendment puts tax breaks on an equal footing with 
wasteful spending. It allows the President to select out and veto 
provisions that might favor one group over another at the expense of 
the American taxpayer.
  So, Mr. President, it is a bill that certainly Senator Domenici, and 
many of us who cosponsored his legislation, feel is important, and I am 
very pleased that we have, again, an opportunity to support what we all 
have indicated we want, and that is a bill that is, indeed, as strong 
as it can be.
  I am gratified that our Republican colleagues agree with Democrats 
that tax breaks should be on the table and open to review. The current 
language in the Dole substitute is very broad. Under any reasonable 
commonsense interpretation of this language, tax breaks are on the 
table, and that is as it should be.
  I am supporting Senator Bradley's effort in order to remove any 
ambiguity in interpretation. I think Senators Domenici and Exon had it 
exactly right the first time, and I hope they will return to their 
roots and support this amendment when we have the vote later on today.
  Senator Bradley's amendment is also important because it has another 
crucial component. It eliminates the incentive that exists under the 
Dole substitute to shift tax breaks out of the budget window and escape 
Presidential scrutiny. For example, the House has a provision in the 
Contract With America called neutral cost recovery. Although this tax 
provision loses billions of dollars and is a huge drain on the 
Treasury, it would not come under the President's scrutiny. That is 
because it does not lose money until after the 5-year budget window.
  Instead of inviting budget games, we should allow any tax break that 
loses money to be subject to Presidential review, and Senator Bradley's 
amendment does that. That is a gimmick. We want to avoid gimmicks. We 
truly want truth in budgeting. We want the President to have an 
opportunity to review all budgetary implications, provisions that may 
be in the law, and that is really what this amendment does.
  This amendment would ensure that the President looks beyond 5 years 
and not be constrained simply to examine a piece of legislation only 
because it has a 5-year budget estimation. There is widespread 
agreement in the Senate about the need of Presidential review of 
wasteful spending. This amendment puts wasteful tax breaks on the 
table, and I certainly urge my colleagues to support it.
  With that, I yield the floor.
  [[Page S4307]] Mr. BRADLEY. Mr. President, how much time remains on 
each respective side?
  The PRESIDING OFFICER (Mr. Faircloth). Twelve minutes 46 seconds for 
the Senator from New Jersey, and 11 minutes for the Senator from 
Arizona.
  Mr. BRADLEY. I yield 2 minutes to the distinguished Senator from 
Illinois.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.
  Mr. SIMON. Mr. President, I thank my colleague for yielding. I think 
this is an extremely important amendment. Frankly, this line-item veto 
is not in ideal shape, from my perspective. But what happens when we 
have a one-time appropriation is we have a one-time wound. If we vote 
$500,000 to save Bill Bradley's birthplace--and I know Bill Bradley 
would oppose such an appropriation--that is a one-time appropriation. 
But when we put in these little tax favors for people, these little 
things that provide tax breaks, that is a wound that bleeds year after 
year after year. I think it is extremely important that we adopt this 
amendment.
  I would like to see a line-item veto that also would give the 
President, frankly, the authority to reduce appropriations. Apparently, 
we cannot do that under the present Constitution. I wish we could. I 
prefer that. But I think if we are going to deal with appropriations in 
a line-item veto, we also have to deal with tax expenditures in a 
meaningful way.
  The Dole amendment deals with it but in a very narrow sense. This is 
even more narrowly crafted than I would like to see, but it at least 
gives us the ability to stop a running wound, and we have created too 
many running wounds.
  Mr. President, I am pleased to support the Bradley amendment.
  Mr. BRADLEY addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from New 
Jersey.
  Mr. BRADLEY. Mr. President, I yield myself 5 minutes.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. BRADLEY. Mr. President, again, I would like to, if I can, having 
listened to some of the comments, try to take a few minutes to clarify 
what I believe the language means.
  Before any tax loophole would be subject to a line-item veto, under 
the language of the pending bill, it would have to meet two criteria: 
First, the loophole would have to be estimated by the Joint Tax 
Committee to lose revenue within the period specified in the most 
recently adopted concurrent resolution on the budget.
  Now, Mr. President, although this provision is subject to budgetary 
gimmicks, I believe it is clear. It says that if a tax expenditure 
loses money in the next 5 years, it would be included. What my 
amendment seeks to do is to broaden this to a 10-year period; to say 
that you cannot put a tax expenditure in the code and make it effective 
in year 6, 7, and 8. You cannot put a tax expenditure in the code 
claiming that it will raise revenue, as some inevitably will in the 
first couple of years, when in fact it will lose enormous amounts of 
revenue in the second 5 years.
  So I am concerned--and seek to rectify with this amendment--that the 
budget window here creates a possibility for gaming.
  For each tax bill, we receive estimates from the Joint Tax Committee, 
the detailed revenue gains and losses for each fiscal year covered by 
the current budget resolution. If a given tax loophole was estimated to 
lose revenue during any of these years, it would meet this first part 
of the definition. If it loses revenue in the first 5 years under the 
bill, it would be included as an item that could be vetoed.
  The second criterion is, the loophole would have to have ``the 
practical effect of providing more favorable tax treatment to a 
particular taxpayer or limited group of taxpayers when compared with 
other similarly situated taxpayers.''
  While the first part of this part of the test is fairly clear, I 
think some Members of the Senate have questioned what the phrase ``when 
compared with other similarly situated taxpayers'' means. My view is 
that this language makes explicit what was implicit in the earlier 
versions of this phrase. All tax expenditures are judged relative to a 
given baseline that applies to all other taxpayers, and this language 
simply makes this comparison clear.
  So, for example, if tomorrow we pass the $10,000 tax credit for all 
Members of Congress, that loophole would be subject to a Presidential 
veto.
  First, because it would lose revenue in the next 5-year period. And, 
second, the loophole would provide a limited group of taxpayers; that 
is, Members of the Congress, more favorable tax treatment; that is, the 
$10,000 tax credit, when compared to other similarly situated 
taxpayers; that is, all taxpayers that are not Members of Congress.
  As a real example, a few years ago Congress approved a loophole that 
provided that

       Neither the United States nor the Virgin Islands shall 
     impose an income tax on non-Virgin Islands source income 
     derived by one or more corporations which were formed in 
     Delaware on or about March 6, 1981, and which have owned one 
     or more office buildings in St. Thomas, United States Virgin 
     Islands.

  There it is, a tax expenditure. Word has it that this loophole was 
designed to benefit a single, well-connected, millionaire and his 
Virgin Islands company. That was his loophole.
  Again, this loophole under the bill before us would be subject to a 
potential line-item veto. First, it would lose revenue in the next 5 
years. Second, the loophole would provide a particular taxpayer; that 
is, the single Virgin Islands company, with more favorable tax credit; 
that is, forgiveness of tax on all non-Virgin Islands source income, 
when compared to other similarly situated taxpayers; that is, other 
taxpayers that either were nonincorporated in Delaware on March 6, 
1981, or do not own an office building in the Virgin Islands.
  Now, Mr. President, a few Members have suggested--incorrectly, I 
believe--that the term ``when compared to similarly situated 
taxpayers'' will cause the definition of ``targeted tax break'' to be 
interpreted narrowly. This suggestion is based on I think the flawed 
reasoning that ``similarly situated'' means ``identical.'' Such 
interpretation would mean that no tax loophole would ever be subject to 
veto. Instead, loopholes for Members of Congress, loopholes for 
individual companies in the Virgin Islands, and numerous other 
loopholes would all be free from a potential veto because all identical 
taxpayers would get the same benefit.
  The debate on this floor evidences the clear intent of the supporters 
of this bill to subject tax loopholes to a Presidential veto, and 
therefore it includes the tax loophole for the Members of Congress, it 
includes the tax loophole for the Virgin Islands corporation, and it 
includes other new and expanded tax loopholes.
  I think that is, frankly, what the bill says. That is what this 
amendment says. The disagreement is not over that. The disagreement is 
the budget window. And in the bill before us, there is a big 
possibility for gaming by saying if there is a tax loophole that will 
not lose revenue until the second 5 years, it is not subject to veto, 
and that is what this amendment attempts to correct.
  How much time remains, Mr. President?
  The PRESIDING OFFICER. The Senator has 2 minutes and 13 seconds.
  Mr. McCAIN. I say to my friend, if my friend from New Jersey will 
yield, I would be glad to yield 5 minutes of my time to him, if he so 
wants to use it.
  Mr. BRADLEY. I am fine with 2 minutes.
  The PRESIDING OFFICER. Who yields time?
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Arizona.
  Mr. McCAIN. Mr. President, I yield 5 minutes to the Senator from 
Maine [Mr. Cohen].
  The PRESIDING OFFICER. The Chair recognizes the Senator from Maine.
  Mr. COHEN. Mr. President, I thank my friend for yielding. I would 
like to offer a couple of comments to put this line-item veto proposal 
in perspective.
  The Constitution clearly gives Congress the ``power of the purse.'' 
But, every President since Thomas Jefferson has asserted the executive 
branch's discretion and right to hold back moneys appropriated by 
Congress. This tug- 
[[Page S4308]] of-war goes to the most basic facet of our democratic 
system of government: The balance of powers between the executive and 
the legislative branches of government.
  The conflict between the power of the purse and the power of 
impoundment dates back to the earliest days of our Republic. The first 
significant impoundment of appropriated funds was made by Thomas 
Jefferson who, back in 1803, refused to spend $50,000 appropriated by 
Congress to provide gunboats to operate on the Mississippi River.
  The conflict between the legislative and executive branches has been 
going on now for over 150 years. You may recall, Mr. President, it was 
back in the early 1970's when this really came to a head. President 
Nixon challenged Congress' power and withheld over $12 billion in 
highway funds. This resulted in an attempt to impeach President Nixon 
because he had trespassed upon the powers of Congress. Congress did not 
impeach the President--appropriately so--but it did pass the Budget and 
Impoundment Control Act back in 1974. This act imposed many new 
restrictions on the President's ability to impound budget authority.
  Twenty years have transpired since this act was passed and the tenor 
of the debate has shifted dramatically. We have gone from a sense of 
urgency to restrict an imperial President to a sense that the President 
needs to restrict, if not an imperial Congress, at least a spendthrift 
one.
  I support strengthening the President's ability to veto wasteful 
spending. In fact, I introduced legislation along with Senator Domenici 
to accomplish this last Congress and did so again this year.
  But, I think we ought to be clear about one thing. No matter what 
type of line-item veto authority is given to the President, assuming it 
will be given, the overall impact on the deficit is not going to live 
up to the high expectations of the American people.
  Giving the President more power to rescind or veto spending can 
achieve some positive results. To be able to surgically remove wasteful 
spending items would be a service to the taxpayers and, in turn, 
improve the public image of Congress. Every report about a $700 toilet 
seat or a Lawrence Welk Museum sends the message that Congress is 
either intoxicated with power or powerless to overcome its spending 
addiction.
  But there should be no expectation that the line-item veto authority 
can do the heavy lifting in terms of reducing the deficit. Many of the 
items listed by various watchdog groups in their annual so-called pork 
lists are astonishing, and would never be supported if they were not 
embedded in large appropriations bills that are presented to the 
President on a take-it-or-leave-it basis.
  I do not suggest that any amount of waste ought to be tolerated, but 
purging these items, while important, will not alone take us far in 
reducing the deficit. I support giving the President more authority to 
line out wasteful spending. But, it should be clear that we have not 
yet been able to confront the much more difficult task, and more 
difficult challenge, of getting our deficit under control.
  At this point it is not clear, Mr. President, whether there is going 
to be a filibuster on this measure or whether we will be able to 
overcome that filibuster. I hope that we can. In the meantime, if this 
measure is not approved and sent to the President for his signature, 
there is another way to achieve our goal. Every request made of the 
Appropriations Committee ought to be made public. Those of us who 
request that specific items be included in the appropriations bills 
ought to have those requests published in the Congressional Record. 
That would bring some light to this process. If we are unable or 
unwilling to stand behind the requests that we make to the 
Appropriations Committee, then obviously we would be unwilling to take 
to the floor to try to defend them.
  Unfortunately, I think we have reached the point of ``Stop us before 
we spend again.'' The power of the purse is already ours. It is a power 
we have abused too often, and too often, I might add, to the applause 
of our constituents. For too long, we have been rewarded for bringing 
home the bacon while condemning the presence and prevalence of 
trichinosis in the Congress. We cannot continue to have it both ways.
  This measure will indeed force us to defend our requests in the 
bright light of day. It will make us more responsible if we may be 
called upon to defend here on the Senate floor what we demand. This 
measure leads us to a sense of congressional responsibility.
  I support the efforts of my colleagues, Senator McCain of Arizona and 
Senator Coats of Indiana. I support the measure we have brought to the 
floor.
  But, I again want to reemphasize the point that, assuming it passes 
and the President signs it, this measure will not do the heavy lifting 
required to reduce the deficit. But, it will be a step forward. It is a 
measure that has become necessary by virtue of the fact that we have 
engaged in wasteful spending.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. COHEN. May I have an additional 30 seconds?
  Mr. McCAIN. I yield as much time as he may consume to the Senator 
from Maine.
  Mr. COHEN. Mr. President, once again, let me say we could have 
avoided all of this had we not indulged ourselves in the notion that we 
can bring home the bacon to our constituents and they will applaud us. 
We know one person's bacon is someone else's pork. It all depends on 
who is looking at it. It seems to me we should at least be willing to 
stand on the Senate floor and identify and defend those requests we 
have made of the appropriations or authorization committees. If we 
cannot bring ourselves to do that, the projects are not worthy of 
support by our colleagues and should not be in the appropriations 
process.
  In closing, I hope this measure does in fact receive the endorsement 
of enough of my colleagues on the Democratic side of the aisle to cut 
off any filibuster. Absent that, one way we can accomplish the same 
result is to have these requests published as a matter of record in the 
Congressional Record.
  I thank my colleague from Arizona for yielding me this time.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from New 
Jersey.
  Mr. BRADLEY. Mr. President, I ask my distinguished colleague from 
Arizona two brief questions.
  One is: The language that is embodied in this amendment, does the 
Senator intend to fight for this language in the conference?
  Mr. McCAIN. I would say to my friend from New Jersey, I believe not 
only will we fight for it but I believe the House's intentions were 
exactly the language of this amendment rather than, as the Senator from 
New Jersey has pointed out, the rather nebulous and amorphous 
definitions that were in the House-passed bill.
  I believe from my conversations with Members in the other body, they 
would be agreeable to this language as opposed to the present language 
in the bill.
  Mr. BRADLEY. And the language in question does, according to the 
Senator's own reading, yield some tax expenditures being subject to the 
line-item veto?
  Mr. McCAIN. I would say to my friend, absolutely. I believe, again, 
the egregious examples of the advantages that have been accrued to a 
few are addressed.
  I also concede to my friend from New Jersey that there are other 
areas, such as was pointed out in the remarks of the Senator from New 
Jersey, which are not covered but which should be covered. I just do 
not know exactly how we do that. If we expand in order to cover that, 
what goes along with that I think is something we cannot support at 
this time.
  Mr. BRADLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. BRADLEY. How much time remains?
  The PRESIDING OFFICER. The Senator has 22 seconds.
  Mr. BRADLEY. Mr. President, I think this amendment is about the 
budget window. I think the underlying bill, plus the amendment that is 
offered, really means the same thing when it comes to similarly 
situated. I 
[[Page S4309]]  think to argue it is a narrow interpretation would mean 
that no tax loophole would ever be subject to veto because similarly 
situated would have to be identical. Instead, new loopholes for Members 
of Congress, loopholes for individual companies--such as in the Virgin 
Islands, as in the example I gave--or numerous other loopholes would 
all be free from potential veto. I know that is not the intent of the 
distinguished Senator from Arizona nor of the proponents of this bill.
  I thank the Senator. I am prepared to yield the remainder of my time.
  Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. The Senator from Arizona has 4 minutes and 2 
seconds.
  Mr. McCAIN. I ask if the Senator from New Jersey would like to make 
any additional remarks out of my time?
  Mr. BRADLEY. No. I do not think so. I am prepared to yield the 
remainder of my time.
  Mr. McCAIN. Mr. President, I am prepared to yield the remainder of my 
time. I yield 2 minutes to the Senator from Nebraska.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Nebraska.
  Mr. EXON. I thank my colleague from Arizona. Briefly, for the benefit 
of the Senator from Arizona--and we have talked about this, and other 
parties--I clearly state I am a cosponsor of the Bradley amendment 
which I think is a very good one, a very timely one. But, as is well 
known, I have a backup amendment at the desk.
  The Bradley amendment would ensure that the tax loopholes covered by 
the bill would be a broad class of tax loopholes. His amendment will 
also allow the item veto to apply to tax loopholes that lose money 
after 5 years, and that portion of his amendment and only that is what 
my backup amendment, that I have just referenced that is being held at 
the desk, would address. My amendment would apply to the line-item veto 
to a 10-year window rather than 5.
  As I stated earlier, if Senator Bradley's amendment succeeds I will 
not call up my amendment, as his amendment would already have addressed 
the issue. But if the Bradley amendment fails, then I think the least 
we should do is to proceed with the consideration of the backup 
amendment that is at the desk, that I think has probably a pretty 
broad-based support on both sides of the aisle.
  I thank my colleague from Arizona. I reserve the remainder of my time 
if any and yield it back to him.
  Mr. McCAIN. Mr. President, I yield to the Senator from New Jersey.
  Mr. BRADLEY. Mr. President, I would add as cosponsors Senator Kerrey 
of Nebraska, Senator Harkin of Iowa, Senator Feingold of Wisconsin, 
Senator Exon of Nebraska, Senator Hollings of South Carolina, and 
Senator Simon of Illinois.
  I thank the Senator.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Under the previous unanimous consent agreement I move to 
table the amendment at this time.
  In accordance with the wishes of the Senator from New Jersey, I ask 
for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on the motion.
  Mr. McCAIN. Mr. President, I ask unanimous consent to stack this 
along with other votes until the hour of 5 p.m. today.
  Mr. EXON. Mr. President, reserving the right to object to that, there 
has been no clearance of that on this side.
  Mr. McCAIN. Could I modify that request? I ask unanimous consent to 
delay the vote for a short period of time, until there is some 
agreement on both sides as to when votes will take place.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Mr. President, I ask for recognition to make a suggestion 
to my friend from Nebraska.
  The PRESIDING OFFICER. The Chair recognizes the Senator.
  Mr. McCAIN. I ask my friend from Nebraska, since--if, in the case of 
the defeat of the Bradley amendment he is going to have another 
amendment, perhaps he and I might debate that amendment now in the 
event the Bradley amendment does go down?
  Mr. EXON. That might be in order. I would not hesitate to do that if 
the Senator thinks this is the right time to do that.
  Mr. McCAIN. If the Senator from Nebraska wishes to do that now I 
think it would be appropriate.
  Mr. EXON. I will be glad to debate the amendment without calling up 
the amendment now.
  I would simply say I think most of the debate has been covered on 
this matter.
  Mr. SIMON. Will my colleague yield?
  Mr. EXON. I will be glad to yield.
  Mr. SIMON. I heard the Senator say he was going to propose this if 
the Bradley amendment was defeated. I, frankly, think we need this 10-
year thing, whether the Bradley amendment carries or not because the 
Bradley amendment does exempt certain types of tax breaks.
  Mr. BRADLEY. If the Senator will yield, the amendment that is before 
the Senate at this time includes the 10-year window. So, if you are 
voting for the Bradley amendment you are voting for what would be the 
Exon amendment.
  Mr. SIMON. The time is from the Senator--I do not see that in the 
amendment from the Senator from New Jersey.
  Mr. BRADLEY. The amendment is not time limited. It would apply to a 
tax expenditure whenever--it could be 15 years. There is no 10-year 
limit. It is forever.
  Mr. SIMON. But, if I may, what the Bradley amendment says is:

       . . . but such term does not include any benefit provided 
     to a class of taxpayers distinguished on the basis of general 
     demographic conditions such as income, number of dependents, 
     or marital status.

  Why I favor the idea of the 10-year projection is, even if the 
Bradley amendment is accepted, if someone wants to get a tax break for 
divorcees, just as one example, we ought to know what that is going to 
cost, not just for 5 years but for 10 years.
  So I think the Exon amendment still makes sense even though we accept 
the Bradley amendment. I am strongly for the Bradley amendment.
  Mr. EXON. Mr. President, I simply respond to the question posed by my 
colleague from Illinois--as I said just before I yielded to him, I 
strongly support the Bradley amendment and most of the arguments that 
have been made for the Bradley amendment, and I am a cosponsor--that 
would be taken care of if the Bradley amendment prevailed. Basically 
the thrust of this--and I will be glad to talk individually with my 
colleague from Illinois--the Bradley amendment strikes not just a 5-
year reference. It strikes any reference whatsoever. That would simply 
mean that forever we would have to do this. It probably is the right 
way to go.
  My backup proposal would be to extend the 5-year provision to 10 
years, and that is what we have been talking about. Therefore, it is a 
compromise that might be accepted on the other side and, I think, would 
be much better than the 5-year amendment, not as good as what I think 
is implied in the Bradley amendment. But mine is a compromise.
  I would be very glad to listen to further statements or reasoning on 
what I am sure are well-intentioned remarks made by my friend from 
Illinois.
  If I might very briefly, I would simply say, as I have talked with my 
colleague from Arizona, the floor manager on this on the other side of 
the aisle, it seems to me that all of the basic thrust for doing this 
has been covered very well on the Bradley amendment. I think it would 
be repetitious for me to go through a whole new argument on this. I am 
sure this is fully understood by my colleague from Arizona.
  I would simply say that I would incorporate in the support of my 
amendment all of the arguments that have been made in a very articulate 
fashion by my colleague from New Jersey on his amendment, and at an 
appropriate time today, after the majority leader decides after 
consultation with the minority leader when we should begin voting, my 
intention is to call up the Exon backup amendment only until a decision 
is made by the body on disposition of the Bradley amendment, 
[[Page S4310]]  which would be the first item voted in this area, as I 
understand it, and we will be glad to take it up at that time.
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Arizona.
  Mr. McCAIN. Mr. President, on this side we are in agreement with the 
Exon amendment. I believe that it would be accepted if, in the case of 
the Bradley amendment, there is rejection by this body of the Bradley 
amendment.
  The problem with the Bradley amendment is not the time we are talking 
about, but it is the broadening of the scope of the targeted tax 
benefits.
  So I want to assure my colleague from Nebraska that unless something 
unusual happens between now and the time we vote on the Bradley 
amendment--around here anything can happen--at least speaking, I 
believe, with some confidence, we would accept by voice vote the Exon 
amendment and thereby eliminate the requirement for another recorded 
vote.
  Mr. President, I ask the indulgence of my friend from Nebraska while 
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. EXON. Mr. President, I ask unanimous consent that the order for 
the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. EXON. Mr. President, in order to conserve time and move briskly 
ahead, I would like to make a few brief remarks on an amendment that 
Senator Hollings of South Carolina will be offering very shortly. I 
would like to address the Hollings amendment which incorporates the 
pay-as-you-go system on the Budget Act.
  The amendment to be offered by my friend and colleague from South 
Carolina was offered in the Budget Committee during markup on the 
measure we are now addressing on the floor of the Senate.
  This amendment would codify and strengthen one of the most important 
provisions of the budget process law--the pay-as-you-go rule. It simply 
codifies into the Budget Act section 23 of the 1995 budget resolution, 
which sets forth the 10-year pay-as-you-go rule. This rule has been a 
resounding success.
  The amendment also makes two worthwhile additions to the provisions 
that exist in the current law. First, it applies the pay-as-you-go rule 
to budget resolutions. This is a position that the Budget Committee 
chairman, Senator Domenici, advocated in his substitute budget 
resolution in prior years.
  Second, the amendment would require Congress to use a CBO baseline in 
calculating whether the pay-as-you-go rule has been violated or not. 
Current law requires us to measure against the budget resolution 
baseline.
  Most years, these two are one and the same thing. However, this year, 
there is much talk about pumping up the numbers for reasons of the so-
called dynamic scorekeeping, or some rosy scenarios regarding the 
changes in the Consumer Price Index. This amendment would help to 
ensure that we cannot play games with the baseline, which I think is 
absolutely critical if we are going to be up front and honest.
  The bottom line is that the pay-as-you-go rule has worked extremely 
well. Under the pay-as-you-go rule, Congress has restrained its 
appetite for new entitlement programs and has gone without wasteful 
deficit-increasing tax cuts. Congress can still create entitlements or 
cut taxes. This rule simply requires that we pay for what we do. This 
is the essence of sound budget policy.
  Mr. President, while awaiting the return to the floor of the Senator 
from Arizona and, hopefully, the appearance on the floor very shortly 
of Senator Hollings of South Carolina to offer the amendment I 
referenced, 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. HOLLINGS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The motion to table the Bradley amendment has 
been set aside. Therefore, amendments are in order.


                 Amendment No. 404 to Amendment No. 347

  (Purpose: To provide that entitlement and tax legislation shall not 
                          worsen the deficit)

  Mr. HOLLINGS. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from South Carolina [Mr. Hollings] proposes an 
     amendment numbered 404 to Amendment No. 347.

  Mr. HOLLINGS. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place insert the following:

     ``SEC.  . PAY-AS-YOU-GO.

       ``At the end of title III of the Congressional Budget Act 
     of 1974, inert the following new section:


                      ```enforcing pay-as-you-go.

       ```Sec. 314. (a) Purpose.--The Senate declares that it is 
     essential to--
       ```(1) ensure continued compliance with the deficit 
     reduction embodied in the Omnibus Budget Reconciliation Act 
     of 1993; and
       ```(2) continue the pay-as-you-go enforcement system.
       ```(b) Point of Order.--
       ```(1) In general.--It shall not be in order in the Senate 
     to consider any direct-spending or receipts legislation (as 
     defined in paragraph (3)) that would increase the deficit for 
     any one of the three applicable time periods (as defined in 
     paragraph (2)) as measured pursuant to paragraphs (4) and 
     (5).
       ```(2) Applicable time periods.--For purposes of this 
     subsection, the term ``applicable time period'' means any one 
     of the three following periods--
       ```(A) the first fiscal year covered by the most recently 
     adopted concurrent resolution on the budget;
       ```(B) the period of the 5 fiscal years covered by the most 
     recently adopted concurrent resolution on the budget; or
       ```(C) the period of the 5 fiscal years following the first 
     5 years covered by the most recently adopted concurrent 
     resolution on the budget.
       ```(3) Direct-spending or receipts legislation.--For 
     purposes of this subsection, the term ``direct-spending or 
     receipts legislation'' shall--
       ```(A) include any bill, resolution, amendment, motion, or 
     conference report to which this subsection otherwise applies;
       ```(B) include concurrent resolutions on the budget;
       ```(C) exclude full funding of, and continuation of, the 
     deposit insurance guarantee commitment in effect on the date 
     of enactment of the Budget Enforcement Act of 1990;
       ```(D) exclude emergency provisions so designated under 
     section 252(e) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985;
       ``(E) include the estimated amount of savings in direct-
     spending programs applicable to that fiscal year resulting 
     from the prior year's sequestration under the Balanced Budget 
     and Emergency Deficit Control Act of 1985, if any (except for 
     any amounts sequestered as a result of a net deficit increase 
     in the fiscal year immediately preceding the prior fiscal 
     year); and
       ```(F) except as otherwise provided in this subsection, 
     include all direct-spending legislation as the term is 
     interpreted for purposes of the Balanced Budget and Emergency 
     Deficit Control Act of 1985.
       ```(4) Baseline.--Estimates prepared pursuant to this 
     section shall use the most recent Congressional Budget Office 
     baseline, and for years beyond those covered by that Office, 
     shall abide by the requirements of section 257 of the 
     Balanced Budget and Emergency Deficit Control Act of 1985, 
     except that references to ``outyears'' in that section shall 
     be deemed to apply to any year (other than the budget year) 
     covered by any one of the time periods defined in paragraph 
     (2) of this subsection.
       ```(5) Prior surplus available.--If direct-spending or 
     receipts legislation increases the deficit when taken 
     individually (as a bill, joint resolution, amendment, motion, 
     or conference report, as the case may be), then it must also 
     increase the deficit when taken together with all direct-
     spending and receipts legislation enacted after the date of 
     enactment of the Omnibus Budget Reconciliation Act of 1993, 
     in order to violate the prohibition of this subsection.
       ```(c) Waiver.--This section may be waives or suspended in 
     the Senate only by the affirmative vote of three-fifths of 
     the Members, duly chosen and sworn.
       ```(d) Appeals.--Appeals in the Senate from the decisions 
     of the Chair relating to any provision of this section shall 
     be limited to 1 hour, to be equally divided between, and 
     controlled by,the appellant and the manger of the bill or 
     joint resolution, as the case may be. An affirmative vote of 
     three-fifths of the Members of the Senate, duly chosen and 
     [[Page S4311]]  sworn, shall be required in the Senate to 
     sustain an appeal of the ruling of the Chair on a point of 
     order raised under this section.
       ```(e) Determination of Budget Levels.--For purposes of 
     this section,the levels of new budget authority, outlays, and 
     receipts for a fiscal year shall be determined on the basis 
     of estimates made by the Committee on the Budget of the 
     Senate.
       ```(f) Sunset.--Subsections (a) through (e) of this section 
     shall expire September 30, 1998.'''
  Mr. HOLLINGS. Mr. President, this amendment pertains to budget 
resolutions. In the budget resolution passed last year, there is a 
provision that states that:
       . . . for the purposes of this applicable time period--

  Referring to whether certain legislation is deficit neutral.

     and under section 23, on a point of order, 23 (b)(2): For the 
     purposes of this subsection, the term ``applicable time 
     period'' means any one of the following periods: The period 
     of the 5 fiscal years covered by the most recently adopted 
     concurrent resolution on the budget, or, (c), the period of 
     the 5 fiscal years following the first 5 years covered by the 
     most recently adopted concurrent resolution on the budget. 
     And for the purposes of that particular definition, the term 
     ``direct spending,'' or ``receipts,'' shall include any bill, 
     resolution, amendment, motion, or conference report, to which 
     this subsection otherwise applies, (b) excluding concurrent 
     resolutions on the budget.

  Now, we have a 10-year rule for all legislation save the budget 
resolution. Specifically, Mr. President, on the General Agreement on 
Tariffs and Trade, we had a 10-year rule. In fact, it so happened that 
the President of the United States got this Senator personally on the 
telephone and asked if we would waive that rule, and I said ``no''. I 
had gone along with my distinguished chairman, Senator Domenici, of the 
Budget Committee. It was a fundamental issue that we look at revenue 
losses over a 10-year period.
  The reason for that is very apparent once we focus on certain 
provisions in the Contract With America. I am not just talking 
politically, because politically, I favor some of the items in the 
contract. I favor, for example, a balanced budget amendment to the 
Constitution, if Republicans would only put in there what they say, 
that it is against the law to use Social Security funds for the 
deficit. If they would only put that provision in there, they have 
myself and four other Senators. We can pass the balanced budget 
amendment this afternoon, or any time. We are ready to go.
  But I want to talk about the line-item veto. I support the line-item 
veto and have established a record in my efforts over the last 10-
years.
  I ask unanimous consent that a summary of my record be printed in the 
Record at this particular point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  The Hollings Record: Line-Item Veto

       Since 1985, U.S. Sen. Fritz Hollings has pushed for a 
     separate enrollment line-item veto to give the president 
     power to cut wasteful spending. Here is his record:
       1995: On Jan. 18, Hollings introduced his separate 
     enrollment line-item veto bill (S. 238) and co-sponsored a 
     similar measure introduced by Bradley (S. 137).
       1994: On Oct. 5, Hollings submitted testimony to the Senate 
     Budget Committee that strongly pushed a separate enrollment 
     line-item veto.
       1993: On Jan. 24, Hollings introduced his separate 
     enrollment line-item veto bill (S. 92).
       On June 24, Hollings and Bradley offered an amendment to 
     the Omnibus Reconciliation Bill that would have extended 
     separate enrollment authority to tax expenditures and 
     appropriations. The amendment failed (53-45) to get the 60 
     votes needed to bypass a budget point-of-order.
       1991: On Jan. 14, Hollings introduced a separate enrollment 
     line-item veto bill (S. 165).
       On July 24, Hollings testified before the Senate Rules 
     Committee to support his separate enrollment line-item veto 
     bill (S. 165).
       1990: On Oct. 10, Hollings fought to have a separate 
     enrollment line-item veto favorably reported out of the 
     Senate Budget Committee. For the first time ever--and on a 
     bi-partisan basis--the proposal passed in the committee by a 
     13-6 vote.
       1987: On Jan. 28, Hollings was an original co-sponsor of 
     separate enrollment legislation (S. 402).
       1985: On Feb. 5, Hollings co-sponsored S. 43, a separate 
     enrollment line-item veto bill by Sen. Mack Mattingly.
       In July, Hollings voted twice for cloture on S. 43, but the 
     motions failed twice to get the necessary 60 votes (July 18: 
     57-42; July 24: 58-40).

  Mr. HOLLINGS. Mr. President, I have been in the vineyards for a long 
time on that line-item veto. I used it 35 years ago when the 
distinguished occupant of the chair, I think, was the highway 
commissioner for the State of North Carolina. That was back when we 
were working in tandem, North and South Carolina, on bringing economic 
recovery to both of our wonderful States.
  I had to use a line-item veto in order to get the triple A credit 
rating, because I knew nobody was going to invest in Podunk. They were 
not going to come to a State that was not paying its bills. We used it 
very effectively then, and I have always thought it is fundamental in 
fixing responsibility and in creating accountability.
  We can look at the Contract With America and get a good sense of what 
I'm talking about. There is the capital gains tax that we all know 
about. That has been estimated by the Department of Treasury, of 
course, in the first 5 years to lose only $28.4 billion, but over the 
next 5 years, $91.9 billion. So you can see the losses accelerate 
markedly and that should be considered by those who favor the capital 
gains tax. We are not talking about rich and poor and who is or isn't 
getting a tax cut, but rather, to the contrary, whether we have truth 
in budgeting.
  The second item, one that has been favored by the former Secretary of 
the Treasury and former chairman of the Finance Committee, the former 
Senator from Texas, Senator Bentsen and others, is the IRA's, the 
individual retirement accounts. What they term now as the American 
dream savings account. We are getting now like the Defense Department 
with the Brilliant Pebbles and Sparkling Light and all these kinds of 
nonsensical designations. I wish we would cut out our dreaming up here 
and start work. The American dream savings account, well that is an 
IRA, an individual retirement account. Yes, for the year 1995 to the 
year 2000, that would gain revenue. That is a revenue picker-upper. 
That is income. That is increasing the revenue to the Federal 
Government by a tune of $3.8 billion. But then you look at the next 5 
years, it loses $21.8 billion.
  And then they have one with respect to the schedule of depreciation 
allowances.
  The distinguished occupant of the chair, being a very successful 
businessman, understands depreciation allowances, and how you can get 
accelerated recovery.
  They have a provision that is now before the Ways and Means Committee 
and before our Finance Committee that is called neutral cost recovery. 
Whenever they say neutral, look out. That means that it is not neutral, 
I can tell you that. You just learn from hard experience, when they get 
these fancy words.
  For the first 5 years, 1995 to the year 2000, that picks up revenue 
at $18.4 billion, but for the years 2000 to 2005, it is scheduled to 
lose $120 billion.
  If we look at the total cost of the Contract With America we can see 
that the estimated cost over the first 5 years is $188 billion, but for 
the second 5 years, the Federal Government loses $630.2 billion.
  This is not truth in budgeting. That has been the hard experience now 
of over 20 years of the Budget Act with respect to the measure. We 
thought last year we had done a good job and we saved money. Then we 
come up and we say, ``Oops, instead of cutting spending, we have 
increased it. Instead of recouping revenues, we have cut the 
revenues.'' And we are all out of balance again. That is how you get 
$200 and $300 billion deficits on into the next century. It has to 
stop.
  One big way and most assured way, Mr. President, of stopping that 
would be to get truth in budgeting and adopt this 10-year rule.
  Now, I want to refer to the 10-year rule, because I said momentarily 
that I was not referring to it to score political points. 
Unfortunately, we have taken to partisanship in this body, and it is 
unfortunate. We do not have the comity that we used to have when I 
first came here to the Senate.
  But it is important to stress where the idea for my amendment comes 
from. In the fiscal year 1995 Republican budget resolution that was 
submitted by the Republicans on the Senate Budget Committee just last 
March, I refer to their miscellaneous section No. 1 and description and 
I now read word for word.

       [[Page S4312]] Strengthen the 10-year pay-as-you-go point 
     of order. While the 10-year pay-as-you-go point of order that 
     was established by last year's budget resolution is 
     permanent, it does not currently apply to budget resolutions 
     and could be repealed by a subsequent budget resolution. This 
     proposal would make future budget resolutions subject to this 
     point of order.

  That was the particular provision of our colleagues on the other side 
of the aisle that they submitted.
  I tried to offer it in committee. The Budget Committee met and we had 
discussions, but we were told at the time, ``Let's not take it up on S. 
4. Let's not take it up on S. 14, but have it later.''
  Well, we have not had a scheduled markup. And I think that this 
amendment, if offered in reconciliation, would require the 60 votes 
because of the Byrd rule. But we need it; it would bring truth in 
budgeting to budgets, as well as other legislation before us.
  So I hope that they can join, as they indicated they wanted to and 
indicated in various sessions that I have been with them. And I know 
the distinguished chairman of the Budget Committee is dedicated to 
truth in budgeting. This would be a perfect way to make it permanent 
for all budget resolutions. In the upcoming budget resolution, we are 
going to need spending cuts, we are going to have to have spending 
freezes, and we are going to have to close particular loopholes. And in 
this particular Senator's opinion, it is going to require additional 
revenues in order to do what we all say we are going to do; namely, in 
a 7-year period bring us back into the black and put us on a pay-as-
you-go basis. It is going to be quite a task.
  And do not underestimate the power of Congress to be creative. We can 
do away with departments, get into capital budgets, get into sale of 
capital assets, the power grid out west and everything else. But that 
is just a one-time savings; it does not really bringing us into 
balance.
  They can get into using Social Security. They say they do not want to 
use Social Security, but, very interestingly, very interestingly, the 
distinguished chairman of the Finance Committee said on Tuesday, March 
21--and I will quote from page 4 of an article.
  Senator Packwood said:

       Nothing is sacred including Social Security and other 
     entitlement programs.

  If the chairman of the Finance Committee is thinking in terms of 
using Social Security then we really are in a pickle.
  We hear of plans to reestimate the CPI, but if that is to occur, it 
should be reestimated in a technical fashion and not a political 
fashion. The Bureau of Labor Statistics reviews the CPI every 10 years. 
It is my understanding that we are due for another recomputation of the 
Consumer Price Index in 1998. We can do it in 1995. Suits me, as long 
as it is done in the same technical fashion, and not done in a 
political fashion.
  The reason I refer to that ``in a political fashion,'' is simply that 
I have a quote from the distinguished Speaker of the House, Newt 
Gingrich. I refer to a release on January 16, 1995, and I quote:

       House Speaker Newt Gingrich threatened Saturday to withhold 
     funding from the Bureau of Labor Statistics.

which prepares the CPI each month, unless it changed its approach, at a 
town meeting in Kennesaw, GA. The Reuters News Service reported that 
Gingrich said:

       We had a handful of bureaucrats who all professional 
     economists agree, have an error in their calculations. If 
     they can't get it right in the next 30 days or so, we zero 
     them out. We transfer the responsibility to either the 
     Federal Reserve or the Treasury and tell them to get it 
     right.
  If I was over in Treasury, or wherever, and he transferred it to me 
because they had not gotten it right, I think I could get it right 
because, if not, I might get zeroed out.
  So let Congress go along with an accurate estimation, a statistical 
estimation, a professionally done estimation and not a political 
estimation.
  Therein is some of the creativity, whether using the CPI, or the $636 
billion from Social Security that they can pick up by using Social 
Security under the language of House Joint Resolution 1, the balanced 
budget amendment to the Constitution.
  They are just absolutely determined to repeal section 13301 of the 
Budget Act, that law that was signed into law by President George Bush 
on November 5, 1990.
  If we all sing from the same hymnal and the same sheet music we will 
get truth in budgeting with this particular amendment.
  What we will do is apply the same law that we have applied toward 
everyone else in the Government. If you are on the Agriculture 
Committee, you are subject to the 10-year rule. If you are on the 
Finance Committee with GATT, you are subject to the 10-year rule. If 
you are a member of the Appropriations Committee, you are subject to 
the 10-year rule. Interior, Commerce, go right on down the list.
  But the very crowd that put in this 10-year rule for everybody else 
says, ``By the way, not for us.'' I just do not think that is right. I 
do not think it is honest in that regard. I think we ought to get 
honesty, get truth in budgeting and put it in there with respect to the 
budget resolutions, as well as all the other permanent provisions, that 
10-year rule was so eloquently endorsed by the Senate Budget Committee 
Republican alternative just a year ago.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent to speak as in 
morning business for 7 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________