[Congressional Record Volume 141, Number 107 (Wednesday, June 28, 1995)]
[Senate]
[Pages S9236-S9260]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE BUDGET RESOLUTION

  The PRESIDING OFFICER. There will now be a period for debate on House 
Concurrent Resolution 67, the concurrent resolution on the budget for 
fiscal year 1996.
  The Chair, in his capacity as a Senator from the State of Missouri, 
suggests the absence of a quorum.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DOMENICI. 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for the quorum call be rescinded.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. DOMENICI. Mr. President, is the pending business before the 
Senate the concurrent budget resolution?
  The PRESIDING OFFICER. We are in a period for debate on the budget 
resolution.
  Mr. DOMENICI. I understand that we have decided to take 4 hours 
today, equally divided, and Senator Exon might have other Senators who 
want to speak during his 2 hours.
  Mr. EXON. I advise the Chair that the answer to that is yes.
  Mr. DOMENICI. Mr. President, I want to say to Senators--particularly 
to those who are conferees and, in addition, those on the Budget 
Committee, all of them--I am not sure they knew we were going to be on 
this at noon today. Perhaps they thought it would be later, or perhaps 
even some might have thought tomorrow. I ask that they come to the 
floor, or call us if they would like some time. I would like as many of 
them who like to speak to do so. We will have some time tomorrow. I 
understand three of them want to speak today. This is my invitation to 
them so that we can arrange the time.
  Mr. President, I yield myself 15 minutes.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized for 
15 minutes.
  Mr. DOMENICI. Mr. President, today, the fiscal year 1996 concurrent 
budget resolution conference agreement, which will be before the Senate 
shortly, represents, in my opinion, a very historic step in bringing 
the Federal budget under control, bringing it to balance in 7 years by 
slowing the growth in Federal spending.
  This blueprint that has been crafted is one which, first and 
foremost, reaches a balance by the year 2002 and does that by 
ratcheting down the deficit to a balance in 2002. It does that by 
reducing expenditures of the Federal Government. There are no other 
items making up that reduction and ratcheting down those deficits, 
other than reducing the amount of Government spending.
  This provides, in addition, up to $245 billion in tax relief. But I 
want to repeat what we have spoken about so often in the Senate--that 
relief comes only when we have achieved a balanced budget by adopting 
this resolution with mandatory caps on the expenditures of appropriated 
accounts, with one set of caps for defense and one set for all the rest 
of the expenditures that occur annually, called ``appropriated 
accounts''; and then when we present from the respective committees to 
the Budget Committee the reconciliation bill, which will accommodate 
and respond to the instructions given by this resolution, and once they 
are in the hands of the Budget Committee here and in the House, we will 
have them evaluated by the Congressional Budget Office, the 
authenticator, the neutral group, chosen by most, and only a couple of 
years ago chosen officially before the American people by the President 
of the United States, as the real authenticator, which would have no 
smoke and mirrors, which would be objective--we will ask that entity to 
evaluate our performance. If the caps are enforced--and we intend to 
enforce them--and that bill called ``reconciliation''--a strange name, 
but I guess the best way to say it is that it reconciles the laws of 
the country with the budget resolution, thus, it is called 
reconciliation. That big package will address the issues of Medicare, 
Medicaid, and many other entitlements, and it will attempt to make 
Medicare solvent for the next 10 to 12 years, instead of leaving it on 
a spend-out that would yield to bankruptcy within 6 to 7 years. They 
will not have enough money to pay their bills in 6 to 7 years. So when 
that event occurs, and it is certified by that authenticator, then we 
will tell the American people and the U.S. Congress that we have a 
balanced budget.
  At that point in time, what will happen is the $245 billion will be 
released to the Finance Committee in the Senate and its counterpart in 
the Ways and Means Committee in the House, and they will proceed. While 
we remain the custodians of the reconciliation bill, we are holding it, 
they will produce the tax bill after they have debates in their 
committee, and they will send that tax bill to the Budget Committee, 
who will then be the guardian of both and bring both to the floor. One 
will not be passed without the other. We will pass the big 
reconciliation bill, which the authenticator will say gets you to 
balance; and then, Mr. President, the American people should know that 
tax cuts cannot get you out of balance. That is part of the mandate. 
The tax cuts cannot, in the last year, the seventh year, be bigger than 
the economic dividend which created a surplus in that last year. It is 
around $50 billion. So if some wonder whether the tax cuts are going to 
deny the people of this country a balanced budget, it will not. 

[[Page S9237]]

  The deficits in each of the previous years will be a little higher 
than we thought they would be as the bill left the U.S. Senate, because 
we have to accommodate to $75 billion--not $245 billion, but to $75 
billion more than we had accounted for in our budget. Those will be 
spread back across by way of increased deficits annually. But in the 
final year you will be in balance.
  So we believe it is an exciting time, an exciting event to speak 
about today, to speak about tomorrow, and then to ask the U.S. Senate 
to vote yes or no. I am very hopeful that the vote will be more than 50 
voting for it. I believe that is going to be the case, which means it 
will pass.
  It will do a lot of good things for America. First of all, it 
demonstrates a commitment to keep our promise to the American people 
that we will, working together with them, enact a balanced budget for 
the American people.
  It also is an answer to many--most of whom are on that side of the 
aisle--who said we do not need a constitutional balanced budget to get 
a balanced budget.
  Saying, over and over, ``Just do it. Take the action that you must.'' 
We took it seriously. In 7 years, we produce that kind of budget.
  From this Senator's standpoint, there is probably no event on the 
domestic side, in the past three or four decades, that is more 
important to the future of America and more indicative that we are 
changing directions, than this budget resolution. It is the framework 
to change the fiscal policy of America, and to change the way the 
Federal Government operates with and toward the sovereign States and 
the people of the country.
  There should, when it is implemented, be less Government here. I 
believe the American people have been saying they want less Government 
here. It will say, ``You have more power at the State level.'' It will 
say, ``We are giving you more power over programs we have held both the 
purse strings and the power over.''
  It is a vote of confidence in the Governors and legislators of 
America who are closer to the people than we are, and who are capable 
of modifying and melding programs so that they do not fall prey to the 
one-shoe-fits-all philosophy. That if there is one program with one 
definition, and one set of strings, it must be good for all Americans 
and for all States. It will change that premise of Government.
  Incidentally, Mr. President, there is no question that we cannot get 
there unless we reform and alter and make better the programs of health 
care that America as a United States Government manages or funds, or 
operates. We will do that.
  We will reform Medicaid and Medicare--at least our committees will--
in response to this instruction of this budget resolution, requiring 
that they reconcile the law. I will talk about that in a little while.
  In addition, sometimes we forget that of all our responsibilities, 
there is only one that we do alone and that the sovereign States do not 
do and we do not ask them to. That is our national defense. I assume 
when we come here as Senators and take the oath that we pledge our 
support to our Constitution and our Nation, but I think it is obvious 
that we are, at the minimum, committing ourselves to the national 
defense.
  So we take care of the national defense here, also. Before we are 
finished with our presentation, for those who say we have raised 
defense spending while we have reduced spending in certain social 
programs--in particular, the entitlements--we will show the American 
people that, truly, defense, when we are finished with our 7 years, 
will not have grown, but of a steady starting point, will have come 
down by $17 billion--$17 billion less than 1995. So, while it comes 
down, contrary to what is being said by some, Medicare, Medicaid, and 
other entitlements will go up. Medicare itself will go up by 252 
billions of dollars--not down--up. Medicaid will go up by about $180 
billion cumulative over the 7 years--not down--up.
  I would like to go on with a few other summaries and a few 
definitions. Then at the appointed time I will yield to Senator Exon, 
and from my side of the aisle, since we have half the time, fellow 
Republicans, I would like some Senators to use some of this time this 
afternoon, 15 or 20 minutes, by each Senator genuinely interested.
  Let me give Senators Webster's definition of the word ``compromise.'' 
The third definition of compromise in this source dictionary ``is 
something midway between other things in quality, effect and 
criteria,'' et cetera.
  Compromise is something our Founding Fathers envisioned. Clearly, 
this conference agreement before the Senate today is a compromise. Let 
me suggest from my standpoint, the Senator who chaired the Budget 
Committee that got it started out, that put the package together, I 
truly believe this is an excellent package and a very solid compromise 
that will serve our people well.
  Clearly, the House did not get everything it wants in its 5-year 
blueprint for America; nor did we. Balance is achieved in 7 years by, 
first, reducing the rate of growth in total spending.
  Let me give a few numbers and ways to look at that. Total Federal 
spending grows from $1.5 trillion in 1995 to $1.875 trillion in 2002. 
The average growth rate, Mr. President, will be 3 percent a year. When 
it goes from $1.5 trillion to $1.875--almost $1.9 trillion--it will 
grow at 3 percent. The Federal deficit would grow next year to nearly 
$200 billion if we do not adopt and enforce this resolution. Mr. 
President, $200 billion without the changes in policy which will reduce 
that to $170 billion. Thereafter, it will decline to a surplus of $7 
billion in the year 2002.
  The total deficit reduction over the next 7 years will reach almost 
$900 billion. Everyone should understand that reduction occurs while 
the budget is still growing. It is a reduction in the amount of growth 
by $900 billion, including the interest we will save.
  The tax reductions that are contemplated, we should understand very 
clearly, and every Member of the Senate should, first, there is nothing 
in this budget resolution that will tell our Finance Committee, the 
tax-writing committee, what taxes they should reduce. There is nothing 
in any budget resolution adopted under the laws of this land that can 
tell a committee precisely what their finished product will be.
  I cannot stand here and say that I am clairvoyant enough or 
understand the mind of the Finance Committee so well that this $245 
billion, if they use it, will yield certain tax cuts. What I can say, 
unequivocally, that those reductions cannot and will not occur until 
the committees of this Senate have first met their spending reduction 
instructions.
  Let me repeat: The tax reductions that we speak to, which I have 
alluded to in terms of how we constrain them so as to assure balance, 
cannot occur and will not occur unless the committees of the U.S. 
Senate--from the Agriculture to the Labor Committee, to the Finance 
Committee, to Government Operations, to Energy and others--until they 
reconcile the law and change it pursuant to this instruction to save 
the money, there will not be any opportunity for our Finance Committee 
of the U.S. Senate to pursue a tax bill.
  Once that certification occurs--and I have explained that heretofore. 
Let me do it again. There will be, flowing from the Budget Committee to 
the Finance Committee, an allowable of $245 billion, $170 billion of 
which, Mr. President, is the economic dividend which we are entitled to 
for having reached balance.
 They will then proceed to write a tax bill, and they must have 
sufficient votes to get it done. And when they put it in the 
reconciliation bill in our hands, as custodians of both they will need 
51 votes of the floor of the Senate also.

  So in a very real sense, the Senate of the United States will decide 
what tax cuts there will be in this $245 billion allowed. And Senators 
will have a very big input into it. Ultimately, once again we will have 
to go meet with the House, who will do their job, and we will have to 
see what the product is.
  Cumbersome it is. Unpredictable, with certainty today--even as short 
a time as 3 months from now we cannot predict, because committees will 
do their will. But we have come as close as we have ever come to 
putting an enforceable blueprint before the committees of this Senate. 
And the only thing they have to decide: Do you want to be part of 
balancing the budget or not? And if you do, you have to do what you 

[[Page S9238]]
have been told to do. And I am not telling them what to do. When this 
vote occurs tomorrow, and a majority of this Senate says aye, the 
Senate is telling them what to do.
  There is no other way under current procedures to get that job done. 
You could never bring those bills here without a budget resolution 
because they would be debated forever, amendable forever, and Americans 
would be waiting until God knows when for a balanced budget. So, while 
it is not nice to tell committees you have 2\1/2\ months or 3, because 
the date they must produce is September 22, they will produce it and 
send it over to the Budget Committee for interpretation.
  I am certain most of the discussion in opposition to this budget 
resolution will say it is too quick, not quite the right time, this 
economy is perhaps not as robust as it was 2\1/2\ years ago. Let me say 
to everybody watching and all our Senators, for those who do not want 
to balance the budget of the United States it is never the right time 
to balance it. For, if you are on the up side of the business cycle, 
with a buoyant 4 percent growth, there will be those who say it is not 
the right time because we do not want to put any damper on that. Let us 
let that great economy go on. If you do it in the middle of the 
business cycle there will be those saying, oh, no, do not do that. It 
is too close to coming down. And if you wait until now, when you we 
have had a rather robust recovery for a rather prolonged time, there 
will be those saying do not do it now. We need to make sure the economy 
continues on.
  But to all of those critics, I remind you that if a balanced budget 
is not worth something to our children and to the future and to 
opportunity for the future, then we ought not be doing it. But if it 
is, we ought to do it, for it has a bigger positive effect in our 
economic lives and the lives of our children than the temporariness of 
an up or down in the business cycle.
  But, did you hear how much we are reducing the deficit in the first 
year? We are reducing it by $30 billion. It would have been $200 
billion. We will get it down to $170. To anyone who wants to criticize 
this on the basis that it is bad for the economy, then let them say 
that a $30 billion reduction could harm an economy of almost $6 
trillion.
  I am also certain that there will be those who will say we should not 
reform Medicare. We should not do that as fast as we are doing it. And 
we will hurt people. And some will even say we are cutting Medicare.
  Let me suggest, Medicare is going to grow from $158 billion to $244 
billion as an annual expenditure of Medicare by the year 2002. It will 
grow at an annual average rate of 6.4 percent. The total Medicare 
spending over the next 7 years will top $1.6 trillion. Medicare is 
borderline solvent. It will not have money to pay its bills in 6 or 7 
years. By the changes we are asking, the reforms we are asking, it will 
be made solvent and will be there for our seniors.
  One last observation that should not go unnoticed. Per capita 
expenditures on Medicare will increase from $4,900 per recipient to 
$6,700 per recipient by the year 2002. Relative to what I perceive to 
be an unsustainable current spending path, the conference agreement 
reduces Medicare spending from that expected amount, which I do not 
believe was sustainable, and reduces it by $270 billion.
  I will talk about Medicaid in due course, defense and nondefense 
spending. But, obviously, at this point I have given to the U.S. Senate 
and those concerned and observing at least an overview of why we are 
doing what we are doing.
  I close with just my own pledge and my own feelings on this day about 
this event. Mr. President, fellow Senators, the time has come for adult 
Americans leading this country to produce a Government plan that no 
longer asks our children and grandchildren to pay our bills. The time 
has come for us to say enough is enough. No more burden on our children 
to pay for the deficit spending of today. Sooner or later we must do it 
for the general good of our country and for the specific well-being of 
our children and grandchildren. And I stand ready to support what we 
are suggesting and recommending because I believe the better good and 
the broader and more basic good for our country will come from us being 
responsible.
  Mr. President, I yield the floor.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I yield myself such time I might need off 
time on our side.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I want to start out by congratulating my 
good friend, Senator Domenici from New Mexico, the chairman of the 
Budget Committee, for the remarks he has just made.
  I say to Senator Domenici, the remarks I will make in the next few 
moments are certainly not intended directly at him. I have the highest 
regard for him, his ability, and, generally speaking, I would subscribe 
wholeheartedly to the road he just outlined to get from here to there 
with regard to a balanced budget.
  I worked with Senator Domenici on the Budget Committee since I came 
here 17 years ago. He is a principled individual. He worked very hard 
to put this budget together. Unfortunately, we were not able to see eye 
to eye. I would simply say to my friend from New Mexico that the main 
disagreement here, as he understands fully, is not the goal that I 
think we both want, a balanced budget, but--and there has been 
considerable discussion and debate--which will continue--the roads or 
the paths we follow to get from here to there.
  I think in summation, before I begin my remarks, I just wanted to say 
that he is the Republican leader and I am the Democratic leader. When 
we have this kind of democracy in action we are entitled to the 
majority view, we are entitled to the minority view. I simply say, I 
congratulate him for what he has done. I hope we could work together in 
the future.
  But certainly, as he knows full well, the events of the last few 
months have not made it possible for us to join forces as I hoped, 
earlier, we might be able to. That is not his fault and it is not mine. 
That is the system under which we operate.
  Mr. DOMENICI. Will the Senator yield?
  Mr. EXON. I will be happy to yield.
  Mr. DOMENICI. Mr. President, let me first say I am very gratified by 
the remarks, and I appreciate them. Frankly, I must say the feeling is 
mutual. I did not feel very good when I heard the Senator was not going 
to be around here very long, that he decided to go home and retire. I 
think he has done an excellent job for his people and for this great 
country. I am very sorry we do not have a budget we both can stand up 
here and say we are for.
  I am quite sure that in many of the difficulties, many of the exact 
issues, the Senator from Nebraska and I would be on the same boat, he 
and I, traveling down that stream, trying to get to ``Balanceville,'' I 
guess I would say. We are not there this year. I know the Senator will 
hope for us the best in our journey. We will try to get there. If the 
Senator from Nebraska cannot help us now, perhaps he might later on 
when the President chooses to make it more difficult for us.
  Maybe the Senator--who knows--might be in one of those meetings to 
see what we can do.
  I thank him very much.
  I yield the floor.
  Mr. EXON. I thank my friend. I appreciate his very generous remarks. 
We have been on different sides on many issues. In 1993, when we passed 
the first great deficit reduction bill in history offered by the 
President, while I thought that my friend and colleague from New Mexico 
probably agreed with many of the thrusts of the President's initiative, 
he still was not able to support it.
  I have reviewed some of the statements that he made in opposition to 
the President's measure which received not one single Republican vote 
in either the U.S. Senate or the House of Representatives. With that 
thought in mind, I have gone through the remarks that I am about to 
make and hope that Senator Domenici and others might not, in a year or 
two, be able to point back and say Exon said this and it did not turn 
out that way.
  I will simply say that we do get carried away with rhetoric from time 
to time. I am going to try to be straightforward about this and explain 
my position, and the general Democratic position with regard to what we 
think is 

[[Page S9239]]
an unfair, very troubled, very bumpy road, especially with regard to 
our senior citizens, our veterans, rural America, and others not so 
fortunately situated financially.
  Mr. President, today we bring down the curtain on the first act of 
this budget drama that has been unfolding since February. And I hope I 
can bring a little Nebraska common sense to the sound and fury that has 
swirled around this budget.
  Contrary to what we may read in the papers or see on television, the 
budget we are debating should not be about Presidential politics. It is 
not about the Republican Party or the Democratic Party.
  This budget is about 100 million American households. It is about the 
250 million Americans who are looking to us to make the right decisions 
about this budget. That is not the province of any person or party.
  I am glad the President has become engaged in this landmark debate on 
how to balance the budget. The American people want to see cooperation 
between the two parties. They crave rational and civil discourse and 
meaningful dialog. They hope that we will take the best ideas--
regardless of party--and forge a tough new alloy from these different 
metals.
  Unfortanately, my Republican colleagues have a different view. They 
believe that their budget is so pure, so sacred, so perfect that it 
cannot be touched by those of us on this side of the aisle.
  I am reminded of a story that Will Rogers told. It seems that a woman 
confessed to her priest that she was guilty of the sin of pride. She 
said, ``When I look in the mirror, I think I'm beautiful.'' The priest 
said, ``That's not a sin. That's a mistake!''
  And so it is with this Republican budget. The Republicans may think 
so, but their budget has not improved with time. It has not turned into 
a dazzling butterfly. It is a mistake on a colossal scale.
  At the opening of the conference on the budget, I predicted that the 
Senate budget would deteriorate. I wish that I had been wrong, but with 
each violent lurch forward, this budget gets meaner and uglier. The 
all-Republican conference merely twisted the knife.
  And that is the story of Republican priorities throughout this 
budget: From bad to worse--from worse to worst.
  Were the Medicare cuts softened to ease the pain on the elderly? No, 
they are worse--$14 billion worse, bringing the total Medicare cuts to 
$270 billion. That is the largest cut in Medicare history coming from 
the self-proclaimed saviors of Medicare. Hit men is more like it.
  What about Medicaid? Was there any attempt to help the elderly, 
disabled and the children who rely on this health safety net? Not a 
chance in this Republican budget. Medicaid was slashed by an additional 
$7 billion, bringing the cuts to a staggering $182 billion over 7 
years.
  What about rural America, already reeling from the $11.9 billion in 
cuts in the Senate budget? This new budget heaps on further abuse with 
an additional $1.4 billion in agriculture cuts bringing the total 
damage to $13.3 billion.
  And what about the tax cut? What about the so-called economic 
dividend we heard so much about on the Senate floor in May? It was the 
once and future tax cut. It was the tax cut that was not a tax cut, in 
the parlance of my friends across the aisle.
  Thank goodness, we can finally end that charade. We can dispense with 
the play-acting. There is a tax cut in this conference agreement. It is 
a whopping $245 billion tax cut--$75 billion more than the Senate 
economic bonus and it is on page 32 of the conference report. That is 
where the Senate Republicans accommodate the Contract With America. 
``Caved in'' would be a more accurate description.
  We know how the Republicans will pay for the $245 billion tax cut. 
They pay for it by strip mining Medicare and Medicaid. They pay for it 
by gouging education, job training, and the earned income tax credit. 
They pay for it by flailing rural America.
  Of course, we do not have any firm details on the tax cut itself.
   That will be up to the tax-writing committees, as Senator Domenici 
indicated. But I think we can venture a good guess at what will be in 
this witches' brew. The conference agreement is the vessel for the 
Contract With America and it's filled to the brim with tax cuts, 
primarily for the wealthy.

  The Wall Street Journal reported that the $245 billion Republican tax 
cut could include such goodies for America's wealthiest as a $64 
billion capital gains tax revision and a $500-per-child tax credit for 
families making up to $200,000 per year--key provisions of the Contract 
With America.
  The sense-of-the-Congress resolution, sponsored by Senator Boxer, 
that stated that 90 percent of the tax benefits should go to working 
families making under $100,000 was changed beyond recognition. It was 
gutted in conference to drop the $100,000 cut-off. It was totally 
rewritten to conform with the Contract With America.
  House conservatives are threatening to derail the reconciliation bill 
unless it meets their far-right litmus test. Representative Phil 
Burton, leader of the so-called Conservative Action Team, told the 
Journal, and I quote, ``It is imperative that it''--the child tax 
credit--``be kept at $200,000.''
 House Ways and Means Chairman Archer said, and I quote, ``I'm not 
going to go back and do another tax bill.'' And why should he when the 
Senate Republicans are waving the white flag to the Speaker of Newt 
Gingrich's, army.

  Mr. President, families making $200,000 a year do not need any 
largesse from the Federal Government. It is astonishing that at a time 
when we are asking for a helping hand for our elderly, our students, 
and middle-income Americans, we are giving a handout to the wealthy. It 
is obscene that my Republican colleagues are contemplating tax cuts for 
families making six figures. Is this mainstream America, Mr. President? 
I emphasize that. I think the Republicans are not so much concerned 
about mainstream America as they would have you believe. My Republican 
friends talk much about it. I can simply sum up by saying it certainly 
is not mainstream Nebraska.
  Mr. President, the most confusing part of the tax cut package is that 
it costs $245 billion, but it is supposedly financed with an economic 
bonus of only $170 billion. Anyone can tell you that is $75 billion 
short.
  Republican leaders have gone to great pains to explain this sleight 
of hand by focusing on the net effects of the cut and the bonus in the 
year 2002. In that year, the economic bonus will be $50 billion, the 
CBO says. The Republican package will thus be restricted to $50 billion 
as well for that year. In preceding years, however, the cost of the tax 
package will exceed--will exceed, Mr. President--the savings from the 
economic bonus by a significant margin. I underline that. In the 
preceding years, the costs of the tax package will exceed the savings 
from the economic bonus by a significant margin.
  Despite the differences in the cost, the Republicans claim that the 
$245 billion tax cut can be included in the budget without compromising 
the goal of zero deficits in the last year.
  In order for all of this to pan out, spending cuts in programs like 
Medicare and Medicaid once again will have to be used to finance the 
additional costs. This is coming from the party that claims it is 
``saving'' Medicare. For Medicare, any more of these kinds of 
``savings'' will assure that there will not be anything left for the 
program.
  My Republican colleagues are not only short $75 billion to pay for 
their tax cut, they are also short on explanations. They are not 
explaining to the American people that the extra $75 billion in tax 
cuts would result in higher debt service and, in turn, higher 
deficits--up to $100 billion--for the years leading up to the magic 
balanced budget year of 2002, and that, in turn, would cause higher 
debt service costs for those intervening years. Mr. President, that is 
clear.
  I mentioned earlier that this budget is about American people, and so 
it is. I want to take a few minutes to get beneath the shiny surface of 
this budget that is all glitter and glut for the wealthiest. Nowhere do 
we see this more than in Medicare and Medicaid. The Republicans now 
siphon off $275 billion from Medicare to help pay for their tax cut. 
That means the average Medicare beneficiary will pay $3,345 more over 
the next 7 years in out-of-

[[Page S9240]]
pocket costs--$860 more alone in the year 2002.
  The $182 billion in Medicare cuts is especially harsh on the elderly, 
the disabled and children. Average Federal and State spending would be 
reduced by nearly 30 percent by the year 2002, and of the children 
covered by Medicare, more than half live in working families.
  Mr. President, under the Republican budget, the States would be 
forced to roll back the number of people served. I estimate that 8 
million people, including children, could fall through the safety net 
by the year 2002. As many as 2.9 million seniors and disabled, 
including children, could lose access to long-term care.
  From day one of this budget, I have expressed my deepest concern 
about the betrayal of rural America. Rural America has been sold out. 
Rural America became a popular fall guy for this Republican budget. 
What is particularly galling to this Senator is that agriculture is 
being asked to take such a whack once again. It is totally out of all 
proportion to other cuts in the budget.
  Where is fairness in this budget? Farm program cuts in the Republican 
budget represent 20 to 25 percent in spending reductions over the next 
5 years.
  Agriculture Secretary Glickman warns, and I quote, ``Cuts in spending 
of this magnitude could be especially burdensome on those farming areas 
that specialize in the production of target price commodities and could 
reduce producer payments, incomes, and their ability to borrow.''
  The Republican budget does not stop with these programs. It wraps its 
fingers around and squeezes the life from numerous programs vital to 
Americans. The earned-income tax credit was high on their hit list. The 
EITC, as it is commonly called, is a refundable tax credit for working 
families. It helps families get off and stay off welfare by boosting 
the value of low-wage jobs.
  While the conference report folds EITC changes into the overall 
savings for welfare reform, the description suggests that the far more 
draconian Senate-passed cuts are assured. If enacted, these provisions 
would result in tax increases--that is right, Mr. President, tax 
increases--for more than 14 million families. Families with two or more 
children would be the hardest hit, losing $305 in 1996 alone. More than 
72,000 Nebraska families will lose $110 million in benefits under this 
proposal over the next 7 years. They would experience an average tax 
increase of $230 in 1996 alone. Families with two children would lose 
$290 in 1996.
  Mr. President, do not tell me that there are no tax increases in the 
Republican budget because they are there and they are real.
  The Republicans are just as shortsighted about job training. The 
conference cut job training by 20 percent. That means that by the year 
2002, 1.3 million fewer disadvantaged youths will be able to 
participate in the summer jobs programs. That also means that nearly 
1.3 million fewer dislocated workers could be assisted in their efforts 
to return to productive employment.
  Mr. President, let us look, too, at education. The Republican budget 
makes scandalous cuts in one of the greatest investments our Nation can 
make.
  Let us start at the beginning with Head Start. Under the Republican 
budget, preschool children from disadvantaged backgrounds could be 
denied this critical service that prepares them to succeed in school.
 Even if Head Start was funded at the current level of the current law, 
over 350,000 children would be denied services over the next 7 years 
because the population of eligible children will continue to grow.

  The same is true with title I, education for the disadvantaged. Under 
the conference agreement, up to 2 million children from disadvantaged 
backgrounds could be denied funding to help them improve basic math and 
reading skills. And that is even if title I programs were funded at the 
current levels.
  We have also heard a lot about the hit on student loans. The 
conference agreement assumes elimination of the in-school interest 
subsidy for 500,000 graduates and professional students. This would 
cost an average graduate student between $3,000 and $6,600 more in 
interest payments over the life of his or her loan.
  However, do not for one second believe that this is the full extent 
of the cut. Eliminating this subsidy for graduate students does not 
account for the full $10 billion cut required by the conference 
agreement. All students, including undergraduates, could be required to 
pay hundreds of dollars more for loans in the form of higher upfront 
fees or loss of the grace period that currently prevents interest from 
accruing on loans until 6 months after graduation.
  Under the conference agreement, the 3.7 million college students 
receiving Pell grants--30,000 of them in Nebraska alone--could lose the 
value of these grants and see them cut dramatically. Even if Pell 
grants were funded at current levels, their value would decrease by 
nearly 40 percent by the year 2002 simply because of inflation. And 
student population will continue to grow over this time. Nearly half of 
all of the Pell grant recipients have annual incomes of less than 
$10,000 a year. Fairness, Mr. President? I think not.
  I also want to touch briefly on impacted aid. Under this Republican 
budget, Nebraska school districts, with large amounts of Federal land 
within their boundaries, could see their operating budget shrink to 
unacceptable levels.
  The level of funding for veterans programs and the cuts therein are 
an abomination. For example, the cut in VA medical funding will result 
in the cancellation of approximately 74 projects. These are projects 
which are needed for the VA to meet current community health care 
delivery standards. Our veterans deserve better than this Republican 
budget.
  Mr. President, I could go through this budget function by function 
and line by line and program by program and prove how it hurts ordinary 
Americans and hurts them badly. That is what is often lost in these 
budget debates--the human factor. We speak in baselines. We speak in 
acronyms. We do not speak in terms that put a face to the budget. And I 
have been able to partially do that today in these remarks.
  In conclusion, let me say that the face that is reflected in the 
Republican budget is not one of mainstream America. It is not the face 
of our elderly. It is not the face of our children. It is not the face 
of our middle class or our veterans or our working poor. It is not the 
face of rural America. And as one from rural America, I can assure you 
beyond any question that it is not the face of rural America.
  The face reflected in this Republican budget is one for the 
privileged few, the wealthiest among us who do not have to worry about 
Medicare or job training or college tuition loans or crop prices or the 
state of care at the local Veterans Administration hospital. They are 
not being asked to make the sacrifice.
  The others are the ones that are being asked to make this sacrifice, 
all for the good of the wealthiest citizens of America. They are the 
ones, the wealthiest, who will benefit most from this package with a 
$250 billion unfair tax cut. From the beginning of this budget process 
I have stated that the only way to balance the budget is through shared 
sacrifice. The only way to balance the budget is through 
bipartisanship. But for the past 6 months my Republican colleagues have 
worn blinders. They have seen only their core constituency. They have 
seen only their own party, which has veered dramatically to the right.
  If the Republicans insist on maintaining their narrow version, they 
do so at their own peril and the peril for mainstream America. The 
stage has been set for a confrontation between the Republican Congress 
and the Democratic White House. I have called it a train wreck. That is 
an apt description.
  However, if the Republicans open their eyes, they will see there is 
an alternative, one that will get us to the same destination and 
without the chaos of a Government held hostage to politics.
  That alternative is called bipartisanship. I tell my Republican 
friends, meet us halfway, and we will create a budget that is not only 
a balanced one, but represents the whole citizenry of this great 
Nation.
  Mr. President, I understand that there has been an informal agreement 


[[Page S9241]]
that we could go next to Senator Kennedy. And, if acceptable, I would 
yield to him whatever time he might need. And then following that, it 
would be two Republican Senators in a row, after the two Democrats, 
myself and Senator Kennedy.
  In furtherance of that agreement, and if there is no objection, I 
yield 15 minutes or such additional time as he might need to my friend 
and colleague from Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Thank you very much, Mr. President. I want to say at the 
outset how much all of us appreciate the good efforts of our friend and 
colleague from New Mexico, Senator Domenici, and Senator Exon in trying 
to help chart responsible expenditures for our national endeavors. And 
I want to thank, in particular, the Senator from Nebraska for an 
extraordinary statement. He clearly understands these issues in fiscal 
terms. But I think, most importantly, he understands them in human 
terms. This afternoon he explained very eloquently to the Senate and to 
the American people the impact of these budget recommendations on the 
families of our great country. And I want to build on his excellent 
presentation.
  In looking at a budget, we have to consider the bottom line in terms 
of the expenditures, but we also have to consider what the real impact 
on the families of this country is going to be. When we talk about 
having ``fair sacrifice'' and ``shared sacrifice,'' it is only fair to 
try to review, in some detail, exactly where the belt-tightening is 
going to come. And when we look over, as the Senator from Nebraska has 
pointed out, the total expenditures, we find out that it does come down 
particularly hard on the working families of this country, and it comes 
down particularly hard on the children of those working families, those 
that go on to our fine State schools and colleges across the country 
and those that go into the schools that enhance students' academic 
achievement and accomplishments. In addition, the burden falls on the 
men and women who have been a part of our great national economy and 
national life over a period of many years and now are experiencing, and 
should experience, the glories of old age with a degree of security in 
Medicare. Moreover, the burden falls on those who, out of necessity, 
are being attended to with the coverage of Medicaid.
  Of the extraordinary cuts that we are going to be facing in the 
Medicaid program, two-thirds of the cuts are going to be from home care 
for the very frail and the neediest, the poorest of Americans. SSI is 
covered within that chunk, and the rest is in the coverage of some 18 
million children. These are poor children. We are going to see 
significant cuts in the coverage of poor children. Half of those poor 
children have working parents. This gives us some idea of where the 
burdens are going to fall.
  So it seems to me, Mr. President, as we review this budget, that 
there is going to be a significant burden placed on the Medicare for 
elderly people who have built this country, sacrificed for their 
children, and made America the strong country that it is.
  In addition to Medicare and Medicaid, there is also a slash in the 
education programs that the Senator from Nebraska already discussed. 
There will be a significant slash in college opportunities. The Senator 
from Nebraska talked about the reduction in assistance for graduate 
students who receive loans. These students are now able to defer those 
loans until they get out of graduate school. We call that the in-school 
interest rate. The fact is, those who are going to the graduate schools 
will pay for it, as well as those in the colleges.
  Every family should know that students will not be able to defer 
college loan interest while they are still in school. This ought to be 
a wake-up call for every family that is making $75,000 a year or less. 
Eighty-eight percent of all of the college loan programs go to families 
that are making $75,000 a year or less. Well, I have news about what 
this means for your family. After 10 hours of debate on the floor of 
the U.S. Senate, and after this legislation is passed, it is going to 
mean that your children, if they are fortunate enough to get a student 
loan, are going to pay one-third more--from $3,500 to $4,500 more--for 
that student loan program. Obviously, the amount rises even higher in 
relation to the size of the loan.
  As the Senator from Nebraska also pointed out, there is a slash in 
wages for working families. There will be $21 billion in tax benefits 
for tax expenditures over the next 7 years of this program. But, the 
men and women who will have a tax increase are those individuals who 
are making $26,000 a year or less. That is why I think it is only fair, 
when we look at what this budget means, to do what the Senator from 
Nebraska has done, to see who it is going to impact adversely.
  There will be an adverse impact, as the Senator from Nebraska has 
pointed out and the Senator from Maryland has pointed out, on working 
families who are making $26,000 or less a year. We have news for you: 
Your taxes are going up. Taxes will not go up if you are in the very 
wealthy incomes of this country, but they are going up for working 
families, and it is going to mean less in take-home pay for the worker.
  It is not surprising to me, Mr. President, that this budget would 
come out this way, because the Republicans have resisted any increase 
in the minimum wage to make work pay. They have failed to say to men 
and women who are prepared to work 40 hours a week, 52 weeks of the 
year, that you will not live in poverty, which has been an age-old 
commitment since the late 1930's under Republican and Democratic 
administrations.
  We have opposition to increasing the minimum wage to make it a 
livable one. We have an assault on the Davis-Bacon families who are 
averaging $27,000 a year to try to cut their wages. And now we have, on 
the measure that is before us, the $21 billion burden in taxes that is 
going to be on the working families of this country. When we look over 
here at this chart, we see that this proposal asks our seniors, the 
very young, those going to college, the working families--all 
Americans--if they are prepared to tighten their belts if they need to 
because we have a shared responsibility for our national interest that 
is what is called for in the name of our national interest. Why are we 
doing it?
  The answer is right over here on this chart. It is to pay for the 
$245 billion of tax cuts for the wealthiest individuals in this 
country. This is what we are asking workers: ``Tighten your belts.''
  This is what we are saying to those who want to go to college--the 88 
percent of those who get student assistance who come from families 
making $75,000 a year or less: ``You are going to have your belt 
tightened; you are going to pay anywhere from $3,000 to $5,000 more 
over the life of your indebtedness.'' We are going to undermine higher 
education programs.
  We are saying to families that we are going to penalize 350,000 to 
500,000 young children who will not be able to go to a Head Start 
Program. We are going to exclude the 2 million American children who 
otherwise would qualify for programs that assist the economically 
distressed under the Title I program. We are going to slash the School-
to-Work Program that was enacted and had strong bipartisan support in 
the Congress last year.
  Finally, we are saying to our senior citizens over the period of 
these next 7 years, ``You are going to pay a cumulative total of some 
$3,200 out-of-pocket more with this Republican budget,'' if we are 
going to have shared cuts in Medicare between the provider and between 
the beneficiary. If you are a family on Social Security and retired, 
you will pay a cumulative total of $6,400. The average income for those 
families is only about $17,000.
  Make no mistake about it, we will hear a lot of talk about a billion 
dollars here and a billion dollars there. What I am talking about here 
is who it is going to hit. For what? To pay for these tax cuts for the 
rich.
  Finally, I would have thought--I am about to yield to my friend from 
Maryland--at least out of a sense of some decency, that the Budget 
Committee would have come returned to the floor and said, ``I know we 
have voted on the billionaires tax cut.'' What is the billionaires tax 
cut? It is the provision that exists in the IRS that says, effectively, 
that if you have made hundreds of millions of dollars over the past 
years, you renounce your citizenship, 

[[Page S9242]]
take citizenship overseas, and say, ``Goodbye, America,'' and become a 
modern-day Benedict Arnold, you can take all of your accumulations of 
wealth and not pay any taxes. That is wrong.
  We have already overwhelmingly voted on that issue. I would have 
thought that the Budget Committee, returning from conference would have 
said--and the House has gone on record on this--we are serious enough 
to indicate we are going to close that loophole, so that we are not 
going to have so many cuts in Medicare, education, or wages for working 
families. But it is not in there, I say to my friends. All that stands 
in there are the provisions which will provide some $245 billion for 
tax benefits that will go to the wealthiest individuals.
  If you read, as I am sure the Senator from Maryland has, the Senate 
budget closely, you will notice that a measure passed the Senate that 
said that 90 percent of any tax would go to working families under 
$100,000 a year. I do not know whether the Senator from Maryland 
noticed, in reading through the budget, but the conference eliminated 
the $100,000--eliminated the $100,000. We know what is going on. We 
know who they want to benefit. It is the wealthiest individuals.
  Why? When the Senate passes something so overwhelmingly that says 
that 90 percent of the tax benefits is going to go to those working 
families that earn under $100,000, and it comes back from conference 
saying it will go to working families, but they take off the $100,000, 
what does that say? I can tell you what it says to this Senator. It 
says, ``You are right; when we get our chance to cut the $245 billion, 
who is going to get it? It is going to pay for the tax cuts for the 
rich.''
  Mr. SARBANES. Will the Senator yield for a question?
  Mr. KENNEDY. That is what this is about. That is basically what we 
are talking about in these 10 hours prior to the time the Senate is 
going to vote, and it is going to be something that every family in 
this country should pay attention to.
  They should pay attention today. They should pay attention tomorrow. 
They should pay attention to when these measures are put before the 
Congress in real terms, in terms of the cuts on appropriations and in 
terms of reflecting the budgets over the period of these next several 
weeks. If the American people want us to go on that path, then they 
should be urging all of us to vote ``yes.''
  However, if the American people say, ``Hey, wait a minute, wait a 
minute, wait a minute. Cuts in education, cuts in our Medicare, raising 
the taxes for working people--for tax cuts for the wealthiest 
individuals? That is not what last fall was about.'' It certainly was 
not about that in my State of Massachusetts, and it was not about that 
in the State of Maryland. Maybe it was in some other part of this 
country. But that is not what the people of my State elected me to see 
done--cutting education, cutting college opportunities, cutting wages 
for working families, and slamming it to the retirees so that we can 
get tax cuts for the wealthiest individuals.
  (Mr. FAIRCLOTH assumed the chair.)
  Mr. SARBANES. If the Senator will yield for a question, I ask the 
Senator from Massachusetts--because I know that there will be an effort 
to defend this budget resolution on the basis that it is going to 
balance the budget over a 7-year period--if they did not provide $245 
billion in tax cuts for the wealthy, is it not the case that we could 
reduce the slashes in these programs by $245 billion and still have a 
balanced budget?
  Mr. KENNEDY. The Senator is absolutely correct. In real terms, it 
would say to those 18 million children--effectively a quarter of all of 
the children in this country that are covered by the Medicaid Program--
and, it would say to the 5 to 7 million of those that are going to lose 
any kind of coverage under this Medicaid cut, that you still will have 
some coverage. What it would say to those children, half of whom are 
the sons and daughters of working families that are trying to make it 
in the United States of America, is that they would not lose their 
coverage. And what it would say to the frailest senior citizens, the 
ones absolutely dependent upon the Medicaid Program in so many 
instances, that they will receive assistance, and so forth. The Senator 
is correct. If we could take that $245 billion and say that we are not 
going to have those kinds of cuts in the Medicaid Program, we would say 
to those seniors and to those children that they are important and we 
are not going to balance the budget by cutting support for their 
significant needs.
  Mr. SARBANES. If the Senator will yield further. This is an extremely 
important point. I thank the Senator from Massachusetts for the very 
effective way in which he has made the point. People must understand 
that the very deep cuts in these programs that are so important to 
them--Medicare for our senior citizens, educational assistance in order 
to send our young people to college, and the earned income tax credit 
for working families--that these very deep cuts being made in those 
programs in this budget resolution are not solely in order to balance 
the budget. Those deep cuts are being made in order to provide $245 
billion that will be given in tax cuts for the people at the top end of 
the income scale.
  There is a direct connection between the Senator's two charts, and it 
must be understood. A senior citizen must understand that the Medicare 
cuts to which they are going to be subjected are much more severe and 
much deeper in order to create a pot of money with which to give a tax 
cut to the very people at the top end of the income scale. This is a 
very important point because senior citizens are going to be told that 
this is necessary in order to balance the budget, and balancing the 
budget is a good thing for them. But cuts of this magnitude are not 
necessary to balance the budget.
  So the issue that is posed by this budget resolution is the simple 
question: Is it more important for America that people with six-figure 
incomes, $200,000, $300,000, $400,000, should get a tax cut and a 
senior citizen should suffer a reduction in their Medicare benefits? Is 
it more important to give a tax break to those at the very top of the 
income scale and deny a young person the opportunity to go to college? 
That is the question that is being framed by the priorities that are 
outlined in this budget resolution. These deep cuts are not being made 
to balance the budget; $245 billion of those deep cuts are not to 
balance the budget; they are to give a tax break to the wealthiest 
people in the country.
  I defy anyone to explain to me the fairness and the rationale of 
doing that. As the Senator from Massachusetts has so eloquently stated, 
you are going to have young people wanting to go to college who are 
going to find doing so much more difficult because of this resolution. 
I ask the Senator, has the forgiveness of interest on the money people 
borrow to go to college while they are in school been eliminated by 
this budget resolution?
  Mr. KENNEDY. Well, effectively, it will mean that the in-school 
interest which was deferred until after college and after graduate 
school, that provision will effectively be wiped out. You recover 
approximately $3 billion to recover the in-school interest for graduate 
students. Under the mandate in the Republican budget, the only way you 
can make the other money up is to require those young people, the day 
after they get that loan, when they are going to school, to start off 
repaying it immediately.
  Let me comment about that and I will yield further. The fact of the 
matter is that a year ago, even 2 years ago, when we were considering 
the direct loan program in higher education, our Republican friends 
asked us over here on the Labor and Human Resources Committee, ``After 
the graduation date, should we not give the students 6 months to be 
able to find a job so they do not take that first job just to pay back 
loans?'' It did make sense, and we had a strong bipartisan coalition in 
support of it. We overwhelmingly passed an amendment to give the 
college student or graduate student a very short period of time, 6 to 9 
months to get that first job, deferring payment of loans during that 
time. And it made sense from an actuarial point of view. You are 
demonstrating, when that young person has the 6 to 9 months, by and 
large they get a better job and it is easier to pay back the loans. 
That is 

[[Page S9243]]
the history of the payback of the student loan program. So, now we are 
going in just the opposite direction.
  Our Republican colleagues persist in suggesting that this budget 
eliminates the in-school interest subsidy for graduate students only. 
But the numbers do not add up. This budget requires savings of $10.8 
billion over 7 years from student loan accounts.
  But eliminating the in-school interest subsidy for graduate students 
saves only $3 billion over 7 years, according to the official CBO 
numbers that govern this budget. That leaves the budget $7 billion 
short in the student loan accounts alone.
  Where will that $7 billion come from in this Republican budget? It 
will come from the nation's students one way or another. Either the 
Republicans will eliminate the in-school interest subsidy for 
undergraduates as well as graduates. That would save the required $10 
billion. Or students will be asked to give up the other benefits that 
we have fought to secure for them--on a bipartisan basis--over the last 
5 years. They will no longer have the 6-month grace period in which to 
find a job before they have to start paying back loans. That would save 
$3 billion. Or they will face higher up-front loan fees and interest 
rates. That would save another $3\1/2\ billion.
  The bottom line is that this budget assumes a $10 billion cut in 
student loan accounts, and the graduate student subsidy accounts for 
less than one third of that amount. It is bad enough that the 
Republicans have designed a budget that taxes students to pay for tax 
cuts for the rich. It's worse that they insist on hiding the ball about 
the true impact of these cuts on the Nation's students.
  It is important to note also that the student loan cuts are only a 
portion of the total education cuts contained in this misguided budget. 
This Republican budget contains the largest education cuts in U.S. 
history. It eliminates one-third of the Federal investment in education 
by the year 2002, based on Congressional Budget Office estimates. The 
specific cuts are as follows:


                              COLLEGE AID

  Cuts $30 billion in Federal aid to college students over the next 7 
years.
  Half of all college students receive Federal financial aid.
  Seventy-five percent of all student aid comes from the Federal 
Government.
  Increases personal debt for students with subsidized loans by 20 to 
48 percent by eliminating the in-school interest subsidy.
  Affects up to 4 million students a year.
  Undergraduate students who borrow the maximum of $17,125 will pay an 
extra $4,920.
  Reduces Pell grants for individual students by 40 percent by the year 
2002, or terminates Pell grants altogether for over 1 million students 
per year, even assuming a freeze at 1995 levels.
  Could increase up-front student loan fees by 25 percent, raise 
interest rates on student loans, or eliminate the grace period for 
students to defer payment on loans after graduation.


                               SCHOOL AID

  Elementary and Secondary Education Act: Cuts funding for improving 
math and reading skills to 2 million children; reduces funding for 
60,000 schools.
  Safe and drug free schools and communities: Cuts over $1 billion in 
antidrug and antiviolence programs serving 39 million students in 94 
percent of the Nation's school districts.
  Head Start: Denies preschool education to between 350,000 and 550,000 
children.
  Special education: Eliminates $5 billion in Federal support for 
special education services for 5.5 million students with disabilities.
  Goals 2000: Denies assistance to 47 States and more than 3000 school 
districts helping students to achieve higher education standards.
  School-to-work: Cuts $5.3 billion from initiatives to improve job 
skills for up to 12 million students through local partnerships of 
businesses, schools, and community colleges.
  Technology: Eliminates Federal initiatives to develop and provide 
educational technology for the classroom through collaboration with 
private funders.
  Now, that you have heard the facts, I would like to ask the Senator a 
question as to whether or not he would agree with me. We will hear 
these eloquent statements about how this glidepath for the country is 
moving us toward a balanced budget and that it is necessary for these 
college students to pay 30 percent more on their student loans, see a 
further reduction in the value of the Pell grants which go to the 
neediest children--a 40-percent reduction in that program over the life 
of this budget. We are going to see the indebtedness of the young 
people of this country increase dramatically.
  Would the Senator from Maryland tell me how he would be able to 
convince the students in the State of Maryland who get a student loan 
program, how he would be able to convince them and say that what we are 
doing to you is increasing your indebtedness so we will have a balanced 
budget so that your future would be better off? Is there any logic to 
that rationale? I do not see it.
  I do not see how we say to the young people, going back to the point 
of the Senator from Maryland, that we are taking the savings and 
putting it toward a tax cut for the rich. We are trying to say to the 
young people going to schools and colleges, ``Pass this and your future 
will be more secure.'' Someone better tell the college students they 
will pay 30 percent more for their loans. And the value of their Pell 
grant will be 40 percent less, meaning they have to borrow more. How 
are they better?
  Mr. SARBANES. Some of them will not get an education.
  Mr. KENNEDY. The Senator is correct.
  Mr. SARBANES. The fact is some are on the edge now, and they need the 
forgiveness of the interest while they are in school in order to be 
able to pay their tuition.
  What we have done now is knocked some students out of even getting an 
education. The ones who are able to go on will assume an even heavier 
burden.
  I know an argument that will be made. They will say to the young 
people, ``We will be reducing the deficit over time and that is a 
desirable thing for you.'' I will not quarrel with that.
  The fact of the matter is that these programs are being cut an 
additional one-quarter of $1 trillion, $250 billion, in order to give 
tax cuts to the people at the top end of the income scale.
  If we did not do that, if we did not give the tax cuts, we would have 
$250 billion with which we could ease the deep cuts that are being made 
in these programs. Our young people would have a much greater chance to 
get an education.
  I ask the Senator from Massachusetts, is not the loan program we are 
talking about, the Stafford loan program--is that what it is called?
  Mr. KENNEDY. Yes, named after one of the very important education 
leaders from the State of Vermont, who happened to be a Republican.
  Mr. SARBANES. A Republican; just to prove the point that in the past 
there was very strong bipartisan support for this program.
  Mr. KENNEDY. The Senator is correct.
  I think it is important for these families to understand something 
else. That is, what has been happening in the States. So often around 
here we say we can cut student loans because the States will make up 
the difference. I can say that the cost of tuition in my own State of 
Massachusetts--for our State schools and colleges--has the second-
highest tuition rates of any State in the country, if we include the 
tuition and fees. Of course, there are different ways of calculating 
it.
  When we talk about what a family is paying out, what both the 
students and their parents are having to do, we have seen a significant 
reduction, over $350 million less, in State appropriations in support 
our higher education system. I daresay that has been happening in many, 
many States.
  It is important for families that care about the education of their 
young to recognize that when we do this today there is not any 
indication--maybe in some States, but by and large, the past record is 
not encouraging--that States will be making up the difference and 
assisting those needy students.
  Let me ask the Senator from Maryland a question. I can remember not 
long ago, probably in the last 8 or 9 years, when the tuition for the 
University of Massachusetts in Boston was 

[[Page S9244]]
$800. They raised it to $950. About 12 percent of all the student 
applications went down with that $150 increase. This happened because 
85 percent of the students that go to University of Massachusetts in 
Boston had parents that never went to college and 85 percent of the 
students that went there already worked 25 hours a week or more.
  These are kids trying to get an education. Hard working, recognizing 
the importance of education being their opportunity--150 bucks makes a 
big difference--and we are talking to these students about hundreds, 
thousands of dollars of increased indebtedness to them.
  We are talking about what happens in those schools and colleges--I 
know that the Senator from Maryland pays attention to what happens in 
his State and education policy there, generally--but does the Senator 
not agree with me that $200 or $300 increases in tuition is big money?
  When we ask the families to take on indebtedness, when they are 
paying a mortgage, and when we force them to pay for other things--for 
example, in the greater Boston area we have seen dramatic increases in 
the water rate to pay for unfunded Federal programs to help clean up 
the clean water --the families turn to us and say, ``Look, we have had 
it up to here. What are you doing to us? Why are you cutting back in 
terms of our children's future, our family's future.'' I wonder whether 
the Senator from Maryland does not find similar stories in his own 
State.
  Mr. SARBANES. Mr. President, I say to the distinguished Senator, we 
are experiencing exactly the same problem in Maryland. The Governor of 
my State has indicated clearly that there is no way that the State can 
compensate for these cuts. So the cuts will actually fall on our young 
people who are trying to get an education.
  The critical question before the Senate is, when we balance the 
budget, how will we go about doing it? What priorities are we going to 
set? Who will feel the impact of the affect of this balancing effort?
  As the Senator from Massachusetts has pointed out very clearly in his 
chart, this plan cuts education, it cuts Medicare, it cuts nutrition 
programs, it slashes important investments in our Nation's future, it 
raises taxes on working people by the impact on the earned income tax 
credit. So the children, the elderly, and working families, are asked 
to bear the brunt of this deficit reduction. And then the conference 
agreement provides for large tax decreases for the very wealthy.
  We must put those two things together. In effect, what is happening 
in this resolution is we are slashing all these programs for people who 
need them, in order to give a large tax break to the wealthy--not in 
order to balance the budget. If we did not give the large tax break, we 
would have $250 billion less in these severe cuts, and the budget would 
still be balanced.
  It is not a matter of balancing the budget. It is a matter of 
slashing these important programs, in order to give large tax cuts to 
the very wealthy.
  I defy anyone with any reasonable sense of priorities to tell me why 
someone making $200,000, $300,000, $400,000 a year, should get a tax 
cut, and a young person trying to get to college should now have to pay 
interest on their college loan while they are in school and not 
working. Or why a very wealthy person should get a tax cut, and a 
senior citizen on Medicare who is fighting to find the means to provide 
for their health care needs is going to experience a decrease in their 
medical services. That is the sense of priorities that is contained in 
this concurrent resolution, which has been made far worse in the 
conference than when it left the Senate. The budget was bad enough when 
it left the Senate. Now it has been made worse. The cuts in the student 
loans have been doubled in the conference.
  This sense of priorities that is in this budget resolution is a 
disaster for America.
  I very much hope it will be rejected.
  Mr. KENNEDY. Mr. President, I say finally, because the hour has moved 
on and there are others who wish to speak, the final bottom line of 
what the Senator from Maryland has pointed out, it is not just older 
people, it is not just students, it is not just some workers, it is 
America's working families.
  This all comes together. It all comes together for working families. 
It is their children that are going to be paying more out for the 
loans. It is their parents who are going to be paying out more for 
their copayments, deductibles, and for other payments that Medicare 
will not cover.
  It is their families, their immediate families, that will find their 
taxes rising higher, if they are making less than $26,000, than they 
otherwise would have. It is their schools that will not get those 
incentive grants to enhance their academic achievement. It is their 
children in those schools that will be denied the violence and drug 
abuse prevention programs, to try to help those young people resist the 
appeals of violence and substance abuse.
  This is what this issue is really about. This Republican budget is 
historic indeed. It is an historic attack on American working families, 
senior citizens, children, families, and veterans, brought to us by the 
same Republican Party whose policies created the huge budget deficits 
of the 1980's.
  The Republican budget takes the bad bill passed by the Senate and 
makes it worse: Greater tax breaks for the rich, deeper cuts in 
Medicare and Medicaid, even heavier burdens for families struggling to 
educate their children. Americans will be paying a higher price for the 
impact of this budget well into the next century if these harsh cuts 
ever actually become law.
  But, these cuts will not become law if Democrats have anything to say 
about it. The Republican budget deal being rammed through Congress is 
veto bait. It is even worse than the misguided version passed earlier 
by the Senate. Splitting the difference between the extreme Senate 
version and the even more extreme House version is a hold-your-nose 
compromise that is beginning to smell already. The Medicare cuts are 
extreme by any standard. These cuts are far deeper than any cuts that 
could conceivably be justified by any need to keep Medicare solvent. 
The Republican argument on the insolvency of Medicare is a sham.
  Mr. President, I hope this measure will not be accepted. I yield the 
floor.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from the 
State of Washington.
  Mr. GORTON. Mr. President, I am authorized by the manager on this 
side to yield myself such time as I may take. I point out the Senator 
from New Hampshire, under the previous order, is the next to be 
recognized.
  Mr. President, do you remember that wonderful phrase that a few years 
ago was turned into the title of a movie, ``Only In America,'' an 
expression of awe and wonder? Mr. President, I think we have to 
rephrase it as a question of stunned disbelief. Only among Democrats, 
only among the few left on that side of the aisle who, as liberals, 
worship at the shrine of an ever-increasing Government, only among 
those who debate against this budget resolution is a $300-billion-plus 
increase in what this country will spend on Medicare described not as a 
cut but a slash.
  Mr. President, if this budget resolution passes, not only will we 
preserve a Medicare system which otherwise will go bankrupt, we will 
spend more than $300 billion in increased Government support of 
Medicare in the next 7 years. Yet these last two Senators speak of cuts 
and slashes, deserting of our commitments.
  The increase in Medicaid during that period of time will be almost 
half as much. It is also described as a cut, as a slash. Only among 
liberal Democrats, Mr. President, only among liberal Democrats is a 
modest reduction in a check coming to an individual from the Government 
described as a tax increase. But that is the way we mistranslate for 
the American people. If your welfare payment goes down, that is a tax 
hike by their description. Only among Democrats, Mr. President.
  Mr. President, they are right about this. This is perhaps the most 
significant budget resolution to be passed by the Congress of the 
United States since we instituted the concept of budget resolutions. 
Why? Because this is the first one that gives a real and enforceable 
promise that the budget will be balanced. It is the goal of this 
process to end the time, the decades during which Members of Congress 
spend the people's money and send the bills to their children and to 
their grandchildren. That is not a policy for our 

[[Page S9245]]
future, for those children and for those grandchildren. We propose to 
end that era.
  Why? Because borrowing, year after year, $200 billion more than we 
can repay, eats into our ability to invest in our own future. It drives 
up interest rates and drives up job opportunities for the very people 
our opponents, in defending the status quo and defending those 
deficits, claim to be supporting but are actually oppressing. Even the 
promise in this budget resolution, if appropriately enforced, gives us 
a dividend of $170 billion for the public sector in lower interest 
rates on the debt we have, and in increased tax collections from a more 
vibrant economy which has created more jobs. And it gives far more than 
that to the people whom we are here to serve.
  Granted, on the part of the manager of this bill for the Democrats 
and some of his colleagues, there is lip service given to the idea of a 
balanced budget, someday, long in the future--but not now and not in 
this way. Always in some different way.
  The President of the United States, when he was a candidate, told us 
he would pass a balanced budget. He claimed 2 years ago to have reduced 
our budget deficit which he did almost entirely by increasing taxes on 
the American people and then is surprised this year when the tax bill 
comes due and at the very time it comes due, because money is taken out 
of our pockets, we have a pause, a dip in our own economy--a possible 
recession caused by those tax increases.
  Earlier this year, the President was not interested in a balanced 
budget at all. More recently, he has come to feel it is appropriate. 
But not now and not in this way and not with valid figures.
  We say it is time. The time is now and this is the way. Some of us 
will say, as we often do in many bills here: This bill is not perfect, 
but it is the best we can come up with. Mr. President, I guess I do not 
think it is perfect. It is not exactly what I would have written or the 
direction I would have gone. But that is absolutely irrelevant. There 
are 100 of us here in this body, each with a different point of view, 
and none of us with an absolute certainty as to what perfection is. But 
what this is is the reaching toward a goal. Perfection is not our goal, 
a balanced budget is. This budget will lead us to that point and in 
doing so, will allow more money to remain in the pockets of the 
American people, will create more jobs for them, will lower the 
interest rates on their homes and, not at all incidentally, lower the 
interest rates on those student loans we have heard so much about--
undoubtedly by considerably more than whatever the changes in those 
loan policies may well be. A balanced budget is a concrete goal. A 
balanced budget is what we will reach if we pass and enforce this 
budget resolution.
  In doing so, yes, Mr. President, we will lower taxes on the American 
people. Only over there on that side of the aisle, Mr. President, is a 
$500 family tax credit for any person who makes enough money to pay 
$500 in income taxes described as a tax break for the rich. Only over 
there is someone who pays any income tax at all and gets a break under 
this proposal--rich.
  The people whom we serve will be surprised to learn how many of the 
wealthy there are who presumably are on the dole of these tax 
reductions. And I guess, Mr. President, that is the single worst 
element of this proposal from the point of view of those who love the 
status quo and love the Government we have today. The thought that an 
American--any American--might possibly be allowed to keep any 
additional amount of what they earn is the worst possible policy from 
their point of view because they believe the Government ought to be 
spending that money, and we do not. That is the difference between us.
  Mr. President, this is a budget resolution that will build America. 
And this is a budget resolution which I must say is a tribute to the 
senior Senator from New Mexico, the chairman of the Budget Committee. 
New Mexico's inestimable gift to the U.S. Senate, my friend, the friend 
of the Presiding Officer, who, with a tremendous commitment to the 
future of this country and a patience which I know that I could not 
match and a willingness to listen to different points of view, both 
reasonable and unreasonable but never abandoning the goal of a better 
America, an America which stops sending its bills to its future, has 
led us to a budget resolution which will reach that goal.
  I want to say in conclusion, Mr. President, that I hope this budget 
resolution passes with a large majority. But large or small, it will 
make for a better country, and its passage will be a magnificent 
tribute to its author, the senior Senator from New Mexico.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the senior Senator from 
New Mexico.
  Mr. DOMENICI. Mr. President, I understand Senator Gregg is going to 
follow with his remarks for as long as he wants to and then we have 
another Senator on our side ready. We will go back and forth. I will 
have to leave the floor for a little while.
  I say to Senator Gorton, let me just thank you for those remarks. I 
appreciate them. I want to say frankly to the U.S. Senate, while 
everyone will be here to participate in this victory, that our system 
puts a special burden and a special responsibility on committees. And 
every now and then a committee has an opportunity to do something very, 
very sensational, or fall back into a quagmire of making excuses, or 
let us do it like we have always done it. But this Budget Committee is 
made up of a group of veterans and a group of newcomers, two of whom 
are on the floor, Senator Gorton is here, and Senator Gregg is here. 
They did an excellent job. I mean they did not flinch. They voted for 
tough, tough things because they had a goal and they wanted to achieve 
it.
  I want to thank Senator Gorton for his participation, as well as all 
the other members.
  Let me say to Senator Gregg that I asked him early on to head a task 
force on the toughest part of this budget. How do we fix in some 
meaningful way the rampant growth of entitlements led by the two health 
care programs, but not exclusively. And he worked for well over 2 
months with exciting ideas, and difficult challenges. You came up with 
some very, very rational reasons, and we followed them ever since.
  So I thank him for that. I am sure the Senate looks forward to his 
remarks. He has a wonderful way of showing what reality is instead of 
letting those who would be against everything show it their way. I hope 
the Senate and the people pay attention to his analysis today.
  I yield the floor.
  Mr. GREGG addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from New 
Hampshire.
  Mr. GREGG. Mr. President, first I want to thank the Senator from New 
Mexico for his very generous comments, and join the Senator from 
Washington in exalting the efforts of the Senator from New Mexico who 
has for the first time in 25 years been able to put this country on the 
right track. Passing a balanced budget resolution is an amazing event. 
But, more importantly than that--and I know that this is what the 
Senator from New Mexico has kept his energies focused on in this area, 
and has kept us all focused on the goal--it is a great gift to our 
children and to the next generation. The Senator from New Mexico has a 
few, and also has a few grandchildren.
  It was because of his concern about their future and the fact that he 
has been for many years fighting the battle of making sure that we do 
not pass on to our children and our grandchildren a Nation which is 
bankrupt, that he has kept this committee and this Congress focused on 
the end line. The end line is to produce a budget which gets to 
balance, and as a result reduces the burden of debt which we are 
passing on to our children.
  So, once we pass this budget--which I am sure we will--and once we 
institute its recommendations, it will be a tremendous gift, which 
really will have been because of the author of and the wrapper of, and 
which we will be passing on to our children as a result of his efforts. 
I thank the Senator from New Mexico for having given us all this 
leadership in this area.
  I also would like to pick up on a comment that was made by the 
Senator from Washington because he is a pretty astute observer of this. 
He sort of alluded to the fact that we just heard a presentation from 
the Senator from Massachussetts and the Senator from 

[[Page S9246]]
Maryland which essentially said, if you would argue it properly, they 
were presenting the philosophy of the liberal approach to Government, 
sort of the philosophers of the left, so to say. It is their belief 
that Government must always grow and must always expand.
  I think their real outrage comes from the fact that we are 
contracting the size of Government. We are saying that really it cannot 
be allowed to constantly grow and expand beyond the ability to pay for 
it. And that as we contract the size of Government we are going to 
return some of the benefit of the contraction in the size of 
Government, or at least its rate of growth--we are never going to 
actually downsize it, but the rate of growth--return some of the 
benefit of that to the people through a tax break. It is sort of like 
prying money out of the hand of someone who is at the door of death, 
the liberal philosophy being at the door of death in my opinion, to try 
to get them to give any money back to the American people through tax 
cuts.
  That is what we are proposing. Think about it in the context of what 
these tax cuts are. They represent two-tenths of 1 percent of the total 
spending that the Federal Government will undertake over the 7-year 
period. We are going to spend $12 trillion over the next 7 years. We 
are talking about cutting taxes $245 billion. Yet, you would think that 
we were exercising a scorched earth policy against the actions of the 
Government by instituting that sort of really rather minuscule return 
to the American people of their benefit. Is this going to flow to the 
wealthy in America? First off, the resolution says it is not. The 
resolution says the tax cuts shall flow to the working people of 
America. And that is pretty obvious.
  We are talking about primarily the biggest tax cut being a benefit 
for the working families, people with kids; a $500 tax credit to people 
with kids. Now, sure, a lot of wealthy Americans have kids. A lot of 
middle-class Americans have kids. A lot of lower-income Americans have 
kids. I suspect if you were to line all those kids up and put them on a 
scale, you would find that the number of kids of the middle class and 
working Americans far exceed by a factor of millions, I suspect, the 
number of kids of the wealthy Americans.
  So, by definition, the vast majority of this tax cut is going to flow 
to just plain working American families that have children. That is 
where it is going. And is it such an outrage to take two-tenths of 1 
percent of the spending that is going to occur over the next 7 years 
and say we are going to rebate it to you, the American people? Well, it 
is, if you are a liberal, because, basically, if you are a liberal, you 
believe you own that money, and you should not give it up. We own it, 
if you look at it from a liberal prospective.
 We should design the programs to tell you how to run your family.

  Well, what we are saying is let us let the American people have the 
money and manage their own families a little bit, have a little bit 
more money to manage their own families rather than have the Federal 
Government tell them how to run their families and how the money will 
be spent. This whole tax cut issue is really a lot of smoke from the 
other side both on substance and I think on policy also.
  I wanted to focus a little bit today on some other issues because we 
have heard a lot about how we are slashing and cutting Medicare and 
Medicaid and we are raising defense spending, and I have not heard too 
many numbers that have defended that in real terms because they cannot, 
if you look at the numbers.
  The fact is that if you take a freeze baseline--I think that is the 
only way to do it honestly--you say what are we spending today on 
Medicare; what are we spending today on Medicaid; what are we spending 
today on defense. Let us say it was $100 today. Two years from now, are 
we going to be spending $102 on these programs, or are we going to be 
spending $98 on these programs?
  That is an honest way of evaluating whether or not spending is going 
up or coming down. None of this current services baseline, none of this 
assumption baseline. It is what you actually take out and put on the 
table in the way of dollars for these programs. That is what counts for 
whether or not it goes up or it goes down.
  If you look at those numbers--like everybody else in this 
institution, I only function now with charts--you will see that over 
the 7-year period, Medicare spending, off the current baseline of a 
freeze, which would be $176 billion, goes up $349 billion. That is new 
dollars that we will be spending on Medicare over the next 7 years over 
what is being spent this year.
  Medicaid spending under this budget goes up $149 billion over the 
next 7 years over what we are spending this year. Defense spending goes 
down--this number happens to be wrong; it has been reestimated--$13 
billion over the 7-year period.
  So this representation that we are somehow slashing Medicare, 
slashing Medicaid, in order to raise defense spending is absolutely 
false. There is no other word for it. It is false. The fact is Medicare 
and Medicaid spending are going up, and this chart shows it in a bar 
graph. This is how much Medicare spending goes up. This is how much 
Medicaid spending goes up. And as you can see, it is a very sizable 
portion. Medicare spending is going up almost--well, better than twice 
Medicaid spending, but Medicaid spending is going up better than 149 
times what defense spending is going up because defense spending is not 
going up; it is going down. And so let us have a little integrity 
around here when we start talking these numbers.
  Some other numbers that I think are important are how these spending 
factors that we undertake over the next 7 years relate to the past 7 
years, because we have heard a lot about how we are cutting Medicare, 
we are cutting Medicaid, and we are increasing defense.
  Well, if you look at it in relationship to the last 7 years, defense 
spending was $2.02 trillion over the last 7 years. Over the next 7 
years, it is going to be $1.88 trillion. We will spend less on defense 
over the next 7 years than we spent on defense in the prior 7 years.
  Remember, there is no adjustment for inflation in here. That means 
defense is going down in hard dollars. It means defense is going down, 
if you look at it in inflationary dollars, even more. So defense is 
going down in comparison to the last 7 years.
  If you look at Medicaid spending and compare it to the last 7 years, 
over the last 7 years we spent $445 billion in Medicaid. Over the next 
7 years we are going to spend $772 billion on Medicaid, almost twice 
the amount of money we spent in the last 7 years. So we are 
dramatically increasing the amount we are spending on Medicaid.
  If you look at Medicare, Medicare spending over the last 7 years was 
$923 billion. If you look at it over the next 7 years, we are going to 
spend $1.6 trillion or 73 percent more than we spent in the prior 7-
year period.
  How can you define that as a cut? There must be some new math that I 
did not learn when I was in school that you get if you go to certain 
schools in this country which could define an increase of 73 percent as 
a cut. Not only is it not a cut, it is a substantial increase.
  Why are we doing this in the Medicare accounts? I think we have to 
understand that this budget resolution accomplishes a couple of very 
significant public policy events.
  No. 1, of course, is it balances the budget for the first time in 25 
years, which is absolutely critical to our children. We hear a lot of 
talk about children and concern for the children. I do not think there 
is any question that everybody in this institution is genuinely 
concerned about our children and their future and how we address them. 
But I cannot think of a single thing that is more important relative to 
our children's future than to be able to give them the opportunity to 
have a prosperous lifestyle. And whether or not you have a prosperous 
lifestyle depends on how much debt you have to pay.
  It works that way in your home. If you run up a big debt and you have 
to pay it off, you are basically going to have a lot of trouble doing 
that. You are going to have to work hard, and you are probably going to 
work longer hours and you are probably going to find that you are able 
to keep less because you are paying off a big debt. This country is 
passing a big debt on to its kids, and unless we get this budget under 
control, it will get a lot bigger. 

[[Page S9247]]

  So the most significant thing this resolution does is it improves the 
opportunity for our children to have a decent and prosperous lifestyle, 
and that, I believe, is the largest gift of all, as I said earlier, and 
will far outweigh some of the negatives that were alleged will occur 
from the other side, which I do not agree to anyway. But even if you 
accepted them on face value, they are far outweighed by the positive of 
balancing this budget for our children's future.
  Second, what this budget does is that, in driving this Government to 
be fiscally responsible and managed in a way that we can afford it, we 
are taking a hard look at all the major programs that are in this 
institution. And a lot of them were created with good intentions, but 
they have not worked. The classic example, of course, is welfare. No 
program has had a more disastrous track record than welfare considering 
the amount of money that has been spent on it. I am sure there are more 
disastrous programs, but in relationship to the amount of dollars spent 
on it, it would be hard to find.
  The fact is what this budget does is assumes that we are going to 
take the welfare system and improve it substantially, basically by 
putting it back in the control of the States that have the imagination 
and flexibility and the originality to create new and aggressive 
programs, and the Governors are excited about the opportunity. I can 
tell you, as a former Governor, they will deliver a heck of a lot more 
dollars to the recipients that need it by having flexibility than by 
having a huge bureaucracy on their back. So we are going to reorganize 
welfare.
  We are also going to take a hard look at the other entitlement 
programs, all of them, but the one entitlement program that needs the 
most scrutiny because it is the most sensitive and it is the most 
critical right now is Medicare, because the trustees of the Medicare 
trust fund--and this is not a Republican group; in fact, four of the 
six trustees are members of this administration, including the 
Secretary of HHS and the Secretary of the Treasury--the trustees of the 
Medicare trust fund have said that if something is not done to correct 
the fundamental financial situation or imbalance of the trust fund, it 
will go bankrupt in the year 2002.
  This is a chart that reflects that. This is where we are today, and 
this is where it goes--bankruptcy in 2002 for the trust fund.
  What are the practical implications of that? The practical 
implications are that there will be no insurance program for seniors in 
the year 2002. And so what does this budget proposal put forward? It 
puts forward ways in which we can effectively address that issue and 
bring under control the rate of growth of the Medicare trust fund so 
that we can afford it, and so that it will exist and work well for our 
seniors.
  It does not assume that seniors will get less care. It actually 
assumes that seniors will get more care. They will get more care 
because we will give them more options; we will give them more choices. 
And in the process, we will, hopefully, move them from a fee-for-
service system into fixed-cost systems which can deliver high quality 
care but for costs which are predictable.
  Are we talking about cutting the Medicare trust fund to do this or 
cutting Medicare spending to do this? No. As I mentioned earlier, we 
are talking about increasing it rather dramatically, $345 billion of 
increase over the 7 years.
 And what does that work out in this inflation factor? It works out to 
the fact that today the Medicare spending is growing at 10.5 percent.

  What we are talking about in this resolution is accomplishing a rate 
of growth that is basically 6.4 percent. Mr. President, 6.4-percent 
rate of growth. That is what we are assuming for the Medicare spending 
under this resolution. Is that a cut? Only if you function under the 
liberal new math. Under any reasonable math, even moderate math, a 6.4-
percent annual increase is still an increase in spending and it a very 
substantial increase in spending. In fact, it represents twice the rate 
of growth of inflation. That is the commitment we made in this budget. 
And it is a significant commitment to our senior citizens, and it will, 
we believe, produce a budget which will be in balance.
  Now, there has been some discussion about a couple other issues I 
wanted to touch on quickly. That is the education issue. There is a 
representation, if you were to listen to the earlier colloquy between 
the Senators from Maryland and Massachusetts, that all students 
everywhere will be impacted adversely by this resolution. Well, I think 
maybe they are not up to speed on what the resolution does.
  The resolution does say that graduate students will be impacted, but 
undergraduate students will continue to have their programs and have 
them pretty much the way they are today. Graduate students, yes. They 
will be asked to pay the cost of interest on their loans after they 
graduate from graduate school. Their interest on their loans will 
accrue while they are in graduate school, which they do not now.
  What does that mean? Well, it basically means John and Mary Jones 
working at the local diner, 60 hours a week to try to make ends meet, 
will no longer have to subsidize the guy who is going to law school and 
his graduate loan and the interest on that graduate loan. It means that 
lawyers, in fact, they will still be subsidizing them to some degree 
but that person going to law school will, when they get out of law 
school, because their earning capacity will be significantly increased, 
be required to pay the burden of the interest that was accrued on that 
loan. I think that is fairly reasonable.
  Yes, we should maintain the programs for undergraduates. I believe 
they should keep undergraduates free from the interest cost during the 
period they are in school. But for graduates, I can see no legitimate 
reason for not requiring them once they get out of graduate school, 
where they have increased their earning capacity dramatically, to pay 
back that interest. Because, after all, if we do not do that, what we 
are basically doing is transferring to our wealthiest Americans, the 
graduate students, from our moderate- and middle-income Americans' tax 
dollars, something that there appears to be outrage about over the tax 
cut. It does not clone that direction as mentioned earlier. But it 
seems to be acceptable relative to graduate students from that side of 
the aisle, this income transfer, from hard-working Americans to people 
who are clearly going to be quite wealthy once they get out of the 
graduate schools, whether it is law school or medical school or 
whatever.
  So that is, I think, a bit of a specious argument to begin with. But 
second it is specious because it ignores probably the most underlying 
positive event which this balanced budget amendment is going to 
generate for all Americans, not just for the Federal Government; that 
is, the fact that all the economists that have looked at this, 
including CBO, have said if we put in place a budget which balances the 
Federal budget over the next 7 years and does it in real numbers, with 
real terms, as this one does, that there will be a drop in the interest 
rates in this country of 2 percent. A 2-percent drop in interest rates 
is a huge benefit to homeowners, to people who are borrowing on their 
credit cards, people who are buying cars, and equally people who are 
going to graduate school. And I suspect just that the percent drop will 
more than pay for the cost of incurring the interest in later years or 
will certainly pick up a significant proportion.
  So, I do not find this argument to be very persuasive. Good politics, 
which unfortunately appears to be a big part of this debate, but not 
persuasive on the facts as is the argument that there is a Medicare cut 
here which is maybe good politics but is inaccurate and clearly not 
true on the facts.
  Now, the President presented a budget in this process also. The 
President has presented a number of budgets. The first budget was out 
of balance by $200 billion a year or $1.2 trillion over 5 years. And 
then he came forward and presented a second budget, just a little while 
ago. And that unfortunately came forward, scored by his own folks on 
the basis of his own numbers, something that he said he would not do, 
not scored by CBO. And when it was scored by CBO it turned out that 
budget was also out of balance by about $200 billion a year for 
essentially as far as the eye could see. 

[[Page S9248]]

  But I want to congratulate the President. I think he has stepped on 
the playing field, finally. We have had a second effort here in June. 
And basically he has gotten involved in the process where he was not 
before. His first budget was clearly a walkaway from the budget 
process. Sort of a Pontius Pilot approach to the budget, just washing 
his hands of it. But this budget is not what he presented. Granted, CBO 
has scored it as a budget which does not get to balance. But when it 
was sent up it was sent up with some very basic assumptions which I 
think are good assumptions and good intentions.
  First, he has agreed we need to get to a balanced budget. His 
timeframe is 10 years. Ours is 7. I was interested in the Senator from 
Massachusetts's discussion of this issue. I was thinking that if we 
were to accept the President's budget, the Senator from Massachusetts 
would have been here--I am sorry I did not have a chance to ask him 
this--would have been here for 45 years before we get to a balanced 
budget, if I calculate right, since 1965. In any event, it is a long 
way away, but at least we agree it is a balanced budget.
  Second, he has stated that we need Medicaid and Medicare reform. That 
is important. Because you cannot get to a balanced budget unless you 
address the issue of Medicaid and Medicare spending.
  Third, he has agreed we need welfare reform. He not only agrees to 
it, he was the primary mover in this area. I give him credit for coming 
out early and aggressively to do something in the area of welfare 
reform, and hopefully we can accomplish it. So those are three areas of 
agreement.
  Fourth, he has agreed that other entitlement programs have to be 
addressed and discretionary spending has to be addressed and in the 
budget he sent up he had some good numbers in those areas.
  And fifth, he has proposed a tax cut. Less than what is in this 
budget but still a tax cut so it recognizes the need to flow dollars 
back to the people as we address this issue of balancing the budget.
  So, on five major points, five major points, we are basically in 
agreement, and the question comes down to dollars and timing. I think 
there is an area for significant action here.
  For example, in the Medicare, for all the slashing and cutting that 
we are alleged to do from Members on that side of the aisle in the 
Medicare accounts, I would point out if you compare the President's 
number to our number, in outlays--that is really the only honest way to 
do it--you take out all the assumptions, and the President's number is 
only $11 billion off from our number each year in a program that is 
spending hundreds of billions of dollars. Not really a very significant 
difference in the sense of coming to agreement. Significant difference? 
Yes. But a difference which is clearly manageable--Mr. President--$11 
billion on accounts which spend hundreds of billions of dollars. So the 
President's numbers and our numbers are pretty close.
  On Medicaid it is even closer. The President's outlay numbers are 
only $9 billion different from ours. On some of the other entitlements, 
welfare, for example, $10 billion of difference from ours. Those are 
numbers that are very close. And I think they are numbers that can be 
resolved. And so the President has come forward with a budget which 
basically agrees philosophically with five of the points we have been 
raising: First, you need to get to balance; second, you need to address 
Medicare and Medicaid; third, you need welfare reform; fourth, you need 
to address the other entitlements in discretionary accounts; and, 
fifth, you need a tax cut. Which is what our budget does.
  And then his numbers in the key accounts, which are the entitlements 
accounts, are clearly in striking distance of our own numbers. So it 
seems to me there is an opportunity there for significant action to 
reach accommodation and reach agreement. Which brings me back to my 
original premise, which is that this budget is a no-nonsense, make-
sense budget about how we get to balance and delivers to our children 
the opportunity to have a country which has some prosperity and hope 
for them.
  The President, from his presentation, appears to also understand the 
need for that. I hope that the Members on the other side of the aisle 
would agree with the President's view and agree
 that these goals are what are needed and agree that these numbers are 
places he can start, because as we go over to the appropriations and 
reconciliation process, maybe we can reach the accommodations necessary 
to deliver to our children this gift which is so critical, a balanced 
budget.

  I thank the President, and I yield the floor.
  Mr. LAUTENBERG addressed the Chair.
  The PRESIDING OFFICER (Mr. Coverdell). The Chair recognizes the 
Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I give 15 minutes of our time to the 
distinguished Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank the Senator from New Jersey, and I 
thank my colleagues.
  Let me first say that a balanced budget should be our goal. In fact, 
I offered an alternative budget resolution during debate on the budget 
in the Senate that balanced the budget, and did so by 2004, without 
counting Social Security surpluses, and did so with a different set of 
priorities contained in the budget before us today.
  I think it is fair to say that the Republican budget resolution 
before us today is a fraud. Over and over, we have heard it stated on 
the floor of the Senate and in the news media that they have balanced 
the budget. Apparently, nobody has bothered to look at the budget 
resolution, because if you look at the budget resolution, you find out 
they have not balanced the budget. Here it is. Here is the conference 
report that we are debating today, and on page 3 of conference report, 
under ``Deficits,'' it says:

       For purposes of the enforcement of this resolution, the 
     amounts of the deficits are as follows:

  And we go to the year 2002, in which they are claiming they have 
balanced the budget. Do you know what one finds? It is the dirty little 
secret of this budget. There is not a zero by ``deficits'' in the year 
2002. That is what we would have if they balanced the budget. It does 
not say zero. It says the deficit in fiscal year 2002 is $108.4 
billion. That is not a balanced budget. That is not within hailing 
distance of a balanced budget. That is a budget that is not anywhere 
close to balancing, a $108 billion deficit in the year 2002.
  How is it the Republicans claim they have balanced the budget? They 
claim it because they are looting and raiding the Social Security trust 
funds of every dime of surplus that is in those accounts. That is their 
plan. That is what they have in mind for America, to take every penny, 
every dime of the Social Security surplus, more than $600 billion over 
the next 7 years, take it all, spend it on other things, use it to give 
tax cuts to the wealthiest among us. That is the plan that is before 
us. It is a giant fraud. It is a huge hoax. That is what is before the 
American people today.
  This is the biggest transfer-of-wealth scheme ever in the history of 
this country. They are going out there and taking money from people 
from their payroll taxes--and by the way, 73 percent of the American 
people pay more in payroll taxes than they pay in income taxes--and 
they are taking that money from them on the promise that it will be 
used to fund their Social Security retirement.
  That is not what they are doing. They are taking that money and they 
are spending every dime of the Social Security surpluses. Just in the 
year 2002, they are taking $108 billion of Social Security trust fund 
surpluses. They are using that to spend on other parts of the budget, 
and they are using it to give giant tax breaks to the wealthiest among 
us. That is their plan.
  If the American people are hoodwinked on this one, at some point they 
will find the bill coming due, because last year the Entitlements 
Commission told us precisely what will happen if such a plan goes 
forward. We will face either an 85-percent tax increase or a 50-percent 
cut in benefits in order to fund those entitlement programs, because it 
does not add up.
  Mr. President, this Republican budget is a monument to misguided 
priorities. It is unfair and just plain wrong. There are draconian 
reductions in Medicare, Medicaid, education, agriculture, 

[[Page S9249]]
and public investments that benefit average Americans. And why? So they 
can give massive tax breaks to the wealthiest among us.
  This budget, make no mistake, is a return to trickle-down economics. 
It gives the wealthy a massive tax reduction and asks the middle class 
to pay the bill. One middle-class program after another is reduced in 
order to finance a tax break for those that have the most.
  For example, the Republicans are reducing Medicare $270 billion over 
this 7-year period; Medicaid by $182 billion. Make no mistake, rural 
hospitals all across America will close. I have dozens of such 
hospitals in my State. I have talked to the administrators. I have 
asked them the effect of these budget plans, and they have said to me, 
``Senator, we will close our doors. We will have no option.''
  Our Republican friends say they are for welfare reform, they want 
people to work. They are right about that, people should work. But with 
the budget cuts that they have outlined, people will not be working. 
The Congressional Budget Office told the Finance Committee, under the 
Senate Republican plan that 44 of the 50 States in this country will 
not have a work requirement. They will not be able to have a work 
requirement. They will be better off taking a 5-percent penalty and not 
having any work requirement in 44 of the 50 States of this country 
because there will not be enough funds for child care and for job 
training. What a fraud, but the wealthy will get their tax cut.
  The Republicans take domestic spending, spending in this country on 
infrastructure, spending on education, spending on research and 
development--the very things that are critical to our future--and they 
cut those $190 billion below a hard freeze.
  In the budget plan I offered, we froze those programs for 7 years. 
Their program cuts $190 billion below a freeze, tough, harsh cuts in 
education, in infrastructure and research, in the things that matter to 
the future of our country, but the wealthy will get their tax cut.
  The Republican budget agreement also makes draconian and drastic cuts 
in agriculture programs. Many people do not understand agriculture 
outside of the heartland of the country. But I tell you, our farmers 
work every day competing not only against the French farmer and the 
German farmer, but against the French Government and the German 
Government, and this budget signals unilateral disarmament; we are 
going to give up in this trade battle; we are going to leave that 
playing field to our European competitors; and we are going to back 
away from one more market where the United States has been dominant; we 
are going to raise the white flag of surrender in this trade battle and 
give up these agricultural markets.
  Make no mistake, that is precisely what is going to happen under this 
plan.
  Middle-class program after middle-class program will be devastated, 
but the wealthy will get their tax cut. Those priorities do not make 
sense, and they certainly do not benefit the middle class. The tax cuts 
that our friends have in mind are tax cuts that benefit 
disproportionately those who are the wealthiest among us.
  This chart shows an analysis of the House plan. We do not yet have 
the Senate plan. The House plan is very clear in terms of who benefits 
from the Republican tax bill. If you are a family of four earning over 
$200,000 a year, you get an $11,000 tax break. If you are a family of 
four earning $30,000 a year, you get $124. That is 100 times as much to 
the family of four earning $200,000 as to the family of four earning 
$30,000. That is the Republican idea of targeting tax relief: Give the 
crumbs to the middle class; give the cake to the wealthy. That is the 
Republican plan that is before us today.
  This budget resolution is nothing more than a repeat of the failed 
trickle-down economics of the 1980's. We learned a lesson in the 1980's 
that some have forgotten. We learned then that wealth does not trickle 
down, it gets sucked up. That is precisely what the plan before us 
today will do: Big bucks for the big guys and crumbs for the middle 
class. That is the plan that is before us.
  I say to my colleagues and friends that if these policies are 
enacted, we will witness an even larger redistribution of wealth than 
the one that took place in the early 1980's. I remind my colleagues 
what happened. From 1983 to 1989, the last time the Republicans had 
control, this is what happened to growth in financial wealth in this 
country. The top 1 percent got 66 percent of the increased wealth in 
that period--the top 1 percent got 66 percent of the increased wealth. 
The bottom 80 percent--the vast majority of the people in this 
country--went backward. They saw their wealth reduced by 3 percent.
  Mr. President, the Republican commentator, Kevin Phillips, had an 
interesting comment on National Public Radio several weeks ago. He 
said:

       If the budget deficit were really a national crisis . . . 
     we'd be talking about shared sacrifice, with business, Wall 
     Street, and the rich--the people who have the big money--
     making the biggest sacrifice. Instead, the richest 1 or 2 
     percent--far from making sacrifices--actually get new 
     benefits and tax reductions.

  That is the plan that is before us--an enormous transfer of wealth, 
from the middle class and the lower income people to those who are the 
highest on the income scale in this country. That is not fair, that is 
not right, and that is not an economic plan for the future of America.
  During Senate debate on the budget resolution, I and a number of my 
colleagues offered an alternative balanced budget, one that balanced 
the budget by the year 2004, without counting Social Security 
surpluses. And we had much different priorities. Yes, we reduced the 
rate of increase in Medicare and Medicaid, because that must be done--
but not in the draconian fashion contained in this budget resolution.
  We also had reductions in the rate of growth for nutrition programs, 
and others--but not the draconian reductions that we see here. We were 
able to do that by going to the wealthiest among us and asking them to 
participate in a plan to restore America's fiscal health. Shared 
sacrifice; everybody has to play a part. That is the American way. That 
is the way we ought to do what needs to be done.
  Mr. DORGAN. I wonder if the Senator from North Dakota will yield for 
a question.
  Mr. CONRAD. I am happy to yield.
  Mr. DORGAN. I appreciate it. I have been watching some of the 
discussion. I have noticed several Members of the majority side nearly 
breaking their arms patting themselves on the back in the last hour or 
so because they say they have brought a balanced budget to the floor of 
the Senate. I noticed in the press conference at which they unveiled 
it, they said they kept their promise, ergo, a balanced budget. I 
notice the press reported that they had brought a balanced budget to 
the floor of the Senate. Then I notice on page 3 of the document before 
the Senate, the very chart that I think the Senator from North Dakota 
has, Senator Conrad, where it says ``deficits,'' it appears they have 
been patting themselves on the back too soon.
  The Senator from North Dakota is saying, is he not, that there are no 
balanced budgets in 2002? In fact, this budget resolution would leave a 
deficit of $108 billion in the year 2002; is that correct? And, if so, 
why is everybody patting themselves on the back and claiming that the 
budget is in balance if on page 3 it says it is not in balance, that it 
is $108 billion short of balance in the year 2002?
  Mr. CONRAD. The Senator is exactly right. I think they are hoping 
nobody actually reads the document. So far, they have been wildly 
successful in that. The news media have not bothered to read the source 
document either. If they do, they will see under ``deficits'' in the 
year 2002, it does not say zero; it does not say they have reached a 
balanced budget. It shows a deficit of $108 billion in the year 2002. 
That is because they have looted every penny of the Social Security 
surplus trust funds during this period.
  The PRESIDING OFFICER. The time yielded to the Senator from North 
Dakota has expired.
  Mr. CONRAD. I yield the floor, Mr. President.
  Mr. LAUTENBERG. Mr. President, we will yield to the Republican side 
now, despite the fact that we had only 

[[Page S9250]]
one Democrat speak after two Republicans in a row. But we have a 
distinguished friend on the other side, Senator Grassley from Iowa, who 
wishes to speak. I now yield so that the Senator can use some of his 
time.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield myself 20 minutes.
  The PRESIDING OFFICER. The Senator is recognized for 20 minutes.
  Mr. GRASSLEY. Mr. President, I do not want to engage the Senator from 
North Dakota because I want to make my remarks and run to a meeting 
that I have to have. But I want to make this point in his presence, and 
we can argue about it at a later time. What he said I am not going to 
say is inaccurate because he has the documentation for what he said. 
But he spoke about our document and our claim of a balanced budget as 
being a fraud on the American people. We can accept that judgment if he 
is willing to say that if we had the President's document as a final 
document before this body to pass as the budget resolution for this 
year, with the claim that the President balanced it in the year 2005, 
which is 3 years longer than ours, the Senator from North Dakota would 
have to say that the President's budget is a fraud on the American 
people, because the document that we have before this body, that we 
correctly claim will balance the budget by the year 2002, uses exactly 
the same accounting procedure that has been used in this body by both 
Republicans and by Democrats when they were in the majority. It would 
also be used by the President of the United States in saying he had a 
balanced budget.
  The President would use the same approach that we used. The fact of 
the matter is that our document is not a fraud. Our document balances 
the budget by the year 2002. And except for the fact that the President 
of the United States uses OMB numbers instead of CBO projections for 
the future, I would have to say that the President balances the budget 
by the year 2005. Therefore, the President's document is not a fraud 
and our document is not a fraud.
  I hope that if the Senator from North Dakota is going to say that the 
way we do business and account for the balance is a fraud, he would be 
willing to say that the way the President of the United States did it 
as well was fraudulent. But the fact is that we are balancing the 
budget. We are balancing the budget because the United States people 
have finally sent a very clear message to the Congress of the United 
States that it is morally wrong for this generation to live high on the 
hog and to let our children and grandchildren pick up the bill.
  Now, most of the debate behind the desire to have a balanced budget 
in this body is going to be based solely upon the public policy that it 
is good economics to have a balanced budget. And I agree with those 
statements. But I think that the main reason we should balance the 
budget is because for one generation we had anything we want through 
the Federal budget because of the bottomless pit of borrowing and that 
is not right.
 I do not believe it was ever right.

  Obviously, it got into the thinking of public servants that there was 
nothing wrong with one generation living off future generations.
  We are finally going to be able to put our house in order so that 
after the year 2002, we are going to be able to pay our own way. Then 
future generations can have a better life. They will not be saddled 
with the high interest and the high debt. If we did not change business 
as usual in this country on fiscal policy, future generations would be 
facing tax rates in the high 80 percent to pay for the debt that we 
have loaded on them.
  If any Member wonders whether or not we can have a great future 
without borrowing to the extent to which we borrow, $4.9 trillion, just 
think, for the first 165-year history of our country, except for the 
years you classify as war years, our forefathers were able to show 
surpluses in budgets of the Federal Government 3 out of 4 years.
  So the economic philosophy that has come to dominate public 
policymaking in Washington, DC, that somehow we had to have a deficit 
to have prosperity, that does not square with the practice of our 
forefathers who lived within their income and still built a strong, 
viable economy and a society that was strong.
  The moral arguments for this budget are very, very strong, I think 
the overriding reason for victory that the balanced budget brings.
  One other comment that is somewhat a reaction to what has been said 
on the other side of the aisle about the tax cuts, most importantly 
about the hogwash of the tax cuts going to the wealthy. I think they 
express those points of view because there is not an appreciation of 
what $500 per child in the pockets of middle-class Americans can do for 
the families of America and what it can do for the economy.
  Maybe there is not an appreciation by the limousine liberals of 
America of what $500 means to a family because the philosophy on the 
other side of the aisle, quite frankly, is that somehow all the 
resources of this country belong to the Government, that we let, 
somehow out of the goodness of our heart, a certain amount of money be 
given by the Government to the families.
  That is all wrong. Everything belongs to the families and the workers 
of America. Under our constitutional system, people might give up some 
of their resources to Government through taxes to exercise certain 
functions that can be done by Government for the good of all of 
society.
  In the last 30 or 40 years, the concept of tax expenditures has crept 
into our policymaking here in Washington. We say that the deduction for 
children is a tax expenditure. We say that the tax deduction for 
interest on home mortgage is a tax expenditure. We say this or that 
which you can subtract from your income tax is a tax expenditure.
  Well, a tax expenditure implies that Government owns all the 
resources of this Nation and we might expend some of the money back to 
the families to keep.
  We can complain about high taxes and $500 tax credits for families on 
the other side of the aisle very easily when you start with the concept 
that every penny made by the working families of America in this 
country belongs to the Government and Government is going to let the 
families keep something. That turns good reasoning on its head.
  We, on this side of the aisle, accept the premise that all the 
resources of this country belong to the families and the workers of 
America and that we, Government, ought to only take from those families 
what is legitimately needed to exercise the legitimate functions of 
Government.
  That is why on the other side of the aisle they can make light of and 
maybe even make fun of a $500 tax credit per child.
  I want to commend the chairman of the Budget Committee for his hard 
work in reaching this budget compromise. I want to say it this way so 
the American people out there, cynical about one person any place in 
American society maybe can make a difference--and I believe one person 
can make a difference. I believe that any one person, any place, 
regardless of their station in American life, can make a difference if 
they want to. Our society and our system of government allows that to 
happen. And each person that says they cannot make a difference 
belittles their contributions that they can make and underestimates 
their contribution that they can make to American society.
  That is true in this body, as well. One person can sometimes make a 
difference. I think that Senator Pete Domenici's desire to have a sound 
fiscal policy for this country and to work to a balanced budget has 
made a difference, just because of the single individual of Senator 
Domenici. I think I can hold him up as an example, when people are 
cynical about an individual in Congress making a difference, that we 
are going to have a balanced budget in the year 2002 because of 1 
person out of 535 in this Congress. Maybe I ought to say at least of 
the 100 Members of the Senate, because Senator Domenici of New Mexico, 
chairman of the Budget Committee, made a difference.
  I suppose, as the Senator from Washington said about an hour ago, 
everybody cannot have everything that they want in a balanced budget. 
You can have everything you want when you can borrow unlimited amounts 
of money to pay for it. But the principle of a balanced budget, for the 
first time 

[[Page S9251]]
in a generation, dictates that you cannot have all your desires. It 
dictates the establishment of priorities within Government. It also 
dictates that every Member of this body cannot have everything they 
want in a budget.
  I, too, like the Senator from Washington, can find parts of this 
conference report that maybe I do not like. But we cannot lose sight of 
its singular accomplishment that it balances the budget in 7 years.
  This balanced budget will mean that our children and grandchildren 
will have a better tomorrow. This resolution will also help working 
families today with lower interest rates and better wages because of 
the increased productivity that is going to come from it.
  It is for these reasons that I intend to vote for this conference 
report.
  While the Congress has produced a balanced budget for the benefit of 
our children, I want to note by contrast, that the administration has 
still failed to provide a plan to achieve balance.
  Last week I spoke on the floor, urging the administration to provide 
the additional spending cuts necessary for their new budget proposal to 
achieve balance. And I urged them to do what the President said he was 
going to do in February 1993 in his first budget resolution, to use the 
Congressional Budget Office's economic projections.
  As is well known, CBO has stated that President Clinton's budget 
proposal--that is the second one this year--provides a deficit of $210 
billion in the year 2002, the year that Congress' budget resolution 
gets into balance, the Republican budget resolution gets our budget in 
balance.
  And in the year 2005, the President's budget will still have a $209 
billion deficit.
  I am very pleased that leaders on the other side of the aisle have 
already come forward, urging their President to provide for more 
spending cuts and to use CBO's economic projections so his budget will 
have integrity and so it will actually be in balance.
  Monday's Wall Street Journal quotes the minority leader as saying 
that President Clinton must find hundreds of billions of dollars in 
more spending cuts. And in the Washington Times that same day, the 
minority leader is quoted as saying the White House will comply with 
CBO estimates.
  Another Democratic Senator is quoted in the Washington Times as 
saying, ``They cooked the numbers. The President needs to get back to 
the CBO numbers.''
  I am glad to see Members on the other side of the aisle agree that 
the administration must use CBO estimates and must provide hundreds of 
billions of dollars in more spending cuts. This is necessary if the 
White House is going to have any credibility in efforts to achieve a 
balanced budget.
  Now the ball is once again in the White House court. I strongly 
encourage the administration not to punt the ball for a third time. The 
American people do not want their President to abdicate leadership on 
the budget. They are glad he is in the ballgame now, but we want him in 
the ballgame playing as a full member of the team.
  This budget we have before us preserves Medicare. Medicare would 
otherwise be bankrupt in the year 2002. I am glad the President 
recognizes in his budget that Medicare would be bankrupt by the year 
2002, and he proposes slower growth of Medicare as we propose slower 
growth of Medicare. And even with slower growth, it is still going to 
grow at 7 percent. Even at slower growth the per capita expenditure for 
Medicare is going to go up from $4,900 today to $6,500 in the year 
2002. We are going to be spending $1.7 trillion on Medicare. We are 
going to have Medicare still be one of the biggest, if not the biggest 
programs in the Federal budget. Medicare will not go bankrupt under 
this budget.
  Agriculture is going to do very well under this budget. I thank the 
chairman for helping us in the Senate hold a strong line on the 
Senate's figures for agriculture. I think this conference report 
represents a real victory for agriculture because the House was going 
to cut agriculture $17 billion for 7 years. Normally, splitting the 
difference we would have been cutting more than $14 billion. Our 
figures will be at $13 billion, just above the Senate's 
recommendations, and the conference retained the sense-of-the-Senate 
language that only 20 percent of the savings required of the 
Agriculture Committee should be realized from farm programs.
  No one will benefit more from this effort to balance the budget than 
our family farmers. Because of the intense amount of capital that it 
takes to be a family farmer and because, especially among young 
farmers, so much of this capital is borrowed, lower interest rates will 
be of enormous benefit to this capital-intensive industry. Lower 
interest rates will result from a balanced budget.
  The Food and Agricultural Policy Research Institute, which is a 
combination of the University of Missouri and Iowa State University, 
analyzed the impact on the farm economy of a balanced budget. In a 
preliminary estimate, this organization took the CBO estimates of 
reduced interest rates that would be realized from a balanced budget 
and said it would translate into a $2.5 billion increase in farm income 
in the year 2002.
  Finally, on the subject of taxes, this conference report assumes $245 
billion in tax cuts for the American people, especially working 
families. I am particularly pleased that under this budget resolution 
there can be no tax cuts until after CBO has certified that the budget 
does get to balance.
  We all know we have a credibility problem with the American people 
when we talk about balancing the budget and cutting taxes at the same 
time. But we overcome that problem with the American people because 
this resolution will ensure that we have done the hard work first, that 
we have actually cut the necessary spending that it takes to achieve a 
balanced budget. It will be an enforceable reconciliation package. And 
then it will be scored by the Congressional Budget Office so we know 
there are x number of dollars available for a tax cut and that the tax 
cut is paid for and we do not cut taxes until that is done. That 
protects us from the usual traditional use of smoke and mirrors that 
are too often used, and never gets us to our targeted deficit 
reduction.
  When it comes to tax cuts, as a member of the Finance Committee I 
state categorically I do not agree with the House of Representatives 
that we should give middle-income tax cuts to families up to $200,000. 
As a member of the Finance Committee, I will be working to have that be 
capped at $100,000. But there is no question that families will greatly 
benefit from being able to retain more of their income. Families will 
be able to use those resources for their children's education, their 
children's health, their children's nutrition. Let the families make 
the decision, not big Government make the decision on where this money 
should be spent. Because I am confident that families will make the 
better choice.
  One last note on taxes. I want to make a brief comment about a small, 
very small but very important part of this budget resolution. I am very 
pleased that the House agreed to join the Senate in rejecting the off-
budget funding for the Internal Revenue Service. The off-budget funding 
was proposed by the administration to provide for approximately 6,000 
more IRS agents. The Senate last month, by a vote of 58 to 42, and it 
was a bipartisan vote, rejected this off-budget funding for the 
Internal Revenue Service. By rejecting this off-budget funding gimmick 
the Congress showed, first, that we would not engage in smoke and 
mirrors budgeting to achieve balance and, second, by eliminating this 
off-budget funding for IRS, we showed the American people that this 
Congress is committed to getting big Government off their back. The IRS 
has more than sufficient resources to do its job. It does not need the 
thousands more agents knocking on taxpayers' doors, as proposed by the 
administration.
  This was a small but important victory for the taxpayers. It is a 
symbol that this new Congress did get a message from the last November 
election that Americans want to see a smaller, less intrusive 
Government. In this regard, again, this could not have been done 
without the help of the chairman of the Budget Committee, Senator 
Domenici. His dogged work in ensuring that this off-budget funding for 
the IRS was eliminated made that possible.
  This victory would not have been possible, then, without his 
determined support. I want to close by saying this 

[[Page S9252]]
is truly a historic vote. I did not think I would see the day when we 
would have a credible budget conference report that would get us to 
balance, either in my public service or in my lifetime. By adopting 
this conference report we take the necessary steps to put our fiscal 
house in order and provide the benefits of a balanced budget to our 
children and grandchildren.
  We all tell our children and grandchildren that it is good and 
important to have dreams and hopes. This budget will help our children 
and grandchildren make these dreams and hopes come true.
  I yield the floor.
  Mr. LAUTENBERG addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I thank the distinguished occupant of 
the chair.
  Mr. President, the Republican budget before us purports to solve our 
deficit problem in 7 years. However, it will not do the job. For one 
thing, the budget claims balance by using billions of dollars in the 
Social Security trust fund. In some ironic way that is almost a joke 
because no company, no corporation--and I come with some experience 
having been the CEO of a major American corporation, the one that I 
helped build with a couple of other young fellows--none of them would 
dare propose to show their balance sheets, or their financial 
statement, as having been balanced using the company's pension fund.
  By the way, Mr. President, I allow myself up to 20 minutes or such 
time less than that which I care to use.
  The PRESIDING OFFICER. That is the Senator's right.
  Mr. LAUTENBERG. Mr. President, no corporation would dare use the 
pension fund that does not belong to them as a line on their financial 
statement suggesting that in fact they have had a pretty good year. 
That would amount to absolute fraud. And I think any chairman or 
president of a company who signs such a statement, the financial 
officer, could be accused and charged with fraud, and could be charged 
with violation of the accounting rules that apply to public companies.
  Meanwhile, my Republican colleagues claim that they are going to 
balance the budget in 7 years, but only by using billions of dollars in 
the Social Security trust fund that are reserved for senior citizens, 
the beneficiaries. I hope they will not break their arms patting 
themselves on the back about this.
  In any case, Mr. President, there is a much larger question involved 
in this debate. And that question is Whose side are you on?
  Those on the Republican side of the aisle are on the side of high-
income people with lots of assets. And so it is not surprising that 
they advocate a tax cut for the wealthy.
  They claim it will help the economy. I think it was at one point 
called trickle down. Trickle down was something like--I know this is a 
play on words--trickle-dee trickle-dum. But the fact is that trickle 
down economics did not work.
  Meanwhile, Mr. President, we Democrats are here to represent ordinary 
Americans. The people who work every day, trying to provide for their 
families, trying to buy a home, a roof over their heads, trying to 
supply an education for their children, trying to reserve funds for 
their older age, or trying to help a parent. These people will not 
benefit by a tax cut to the rich.
  Mr. President, the Republicans justify their budget by talking about 
debt. But there is a lot of confusion about debt.
  Debt is a recognized and an acceptable aspect of personal and 
business life in this country. Show me a company, any company of size, 
a company doing $50 million a year, $100 million a year, probably a lot 
smaller than that, that does not have debt on its books, and I will 
show you a private company owned by perhaps one individual. But assume 
as soon as you get other owners in the business, public companies and 
so forth, it goes almost without saying that they need debt, that they 
need to borrow to expand, to invest in the future, to invest in 
research, product development, and marketing. That is the way it is.
  What is the dream of the average American family? The largest asset 
that most Americans have is their home. And I do not know anybody, 
middle income, modest income, or rich, that buys a home for cash. They 
go to the bank or they go to a lending institution. They say, ``Lend me 
money based on my collateral; the brick and mortar that was used to 
build my house, the piece of property that I own.'' And for many, 
throughout their lifetime of work, the largest asset that they acquire 
is their home or the equity in their home at such time as they dispose 
of it.
  So it has to be with government at times. And we ought not to make 
phony comparisons of government to business or government to 
individuals. You hear the argument that American families balance their 
budget, so why not government. That is phony. Everybody knows that. 
Every American family lives like every American business conducts 
itself. They borrow money. It is part of our system.
  Yet we should try to balance the operating budget. And there is no 
question that we need to do much more to cut wasteful spending and move 
in that direction.
  There may be some disagreement about the date, whether it is the year 
2002 or the year 2005. But both Democrats and Republicans share the 
overall goal.
  The question is how do we get there and who pays the ultimate price? 
Whose side are you on?
  We have heard our friends on the other side claim that they are not 
cutting Medicare, or that they are simply cutting into the growth of 
Medicare. The fact of the matter is that when you take $270 billion out 
of Medicare over the next 7 years, with the huge growth in the number 
of beneficiaries, and rising medical costs, that money goes for less 
per person than it would otherwise. These cuts in Medicare will mean a 
cut of over $3,300 per individual, almost $7,000 per couple, over the 
next 7 years. And that is a lot of money for the average family. As a 
matter of fact, the average senior citizen today pays 20 percent of his 
or her income in out-of-pocket health care costs.
  We are talking about people whose incomes at best are modest. 
Seventy-five percent of Medicare recipients have incomes under $25,000 
a year; 35 percent have incomes under $10,000 a year. But we are 
talking about an average increase for those folks of $3,300 per person, 
or roughly almost $7,000 for a senior couple.
  Student loans--it is going to cost students $3,000 more over the 
period of a student loan. And the question is, who is going to be 
deprived of the opportunity to go to college?
  Mr. President, I have heard lots of personal stories about our 
colleagues. There are some illustrious, distinguished careers that were 
built among people here in this body with relatively modest starts. And 
I was one of those people. I came from a family where my mother was 
widowed at age 36. I was 18 and had already enlisted in the Army to do 
what I had to in World War II. There was no money in that household--
nothing. The modest allotment that I sent home was small. It helped my 
mother. She worked hard to take care of my sister and herself and to 
maintain the small apartment that they lived in.
  When I got out of the service, I was 22. I wanted to go to college 
and was accepted to a fine university. Were it not for the GI bill, Mr. 
President, I do not know which way my career would have gone. But I 
created a business. I am actually a member of the hall of fame of an 
industry, the information processing industry, for what is called my 
pioneering efforts in building the service side of the computer 
business today larger than the hardware side of the computer business. 
A company I helped found with two other fellows today employees over 
20,000 people. It is a wonderful story about America and the success 
that can be achieved here from three poor kids, and I was one of them. 
The other two are brothers.
  It was the GI bill that sent me to Columbia University. Without that 
I never would have known which turn to take in the road, very frankly. 
But with that assistance from the Government, I made a contribution. It 
is an industry that employs over a million people today, and I take 
some measure of the credit for having helped create 

[[Page S9253]]
the notion that you could buy computer services outside of your 
company; you did not have to own the hardware and you did not have to 
have the programmers, the technicians; you could do it--all because I 
got a start from my Government.
  My father during the Depression years was humiliated by the fact that 
he had to work under a WPA program. It was a very unpleasant 
experience. But my father knew even more than his dignity, he had to 
have a week's pay and he had to put some food on the table, and he had 
to maintain the respectability that he had as head of the household. So 
he took a Government program job. It was not long, but it was 
necessary.
  So here we have education, employment. If only my father had health 
insurance during the year of his sickness when my mother worked behind 
the counter of a luncheonette so she could pay doctor bills and 
administer to him at the same time.
  So here we have a picture of America, Mr. President. What kind of a 
country are we? Is our mission primarily to cut taxes for the wealthy 
or is our mission here to build citizenry in the proudest way possible, 
to make patriots out of people because they love their country, because 
their country does something for them? And if it takes us a couple of 
years more to eliminate a budget deficit, so it shall be. Because the 
price of not doing it could be detrimental to our country for decades 
to come.
  We go to the 21st century with the heaviest competition that this 
country has ever seen, whether it is from the European Union, 350 
million people strong, or from the Pacific rim where energy is just 
boiling and people want to take our markets and take our products and 
take our opportunity. We can avoid being in that competition very 
clearly by not educating our people, by not training them, by not 
penetrating those markets, by eliminating Government's assistance in 
helping to get to those markets. We can do those things. In this case, 
a penny saved is liable to be a dollar lost.
  So we have to do this with some sense of compassion, with some sense 
of mission about what our democracy is like.
  And yet, in this budget, we are going to take away the earned-income 
tax credit for modest families. We are going to make students pay more 
to get their loans. And we are going to cut Medicare benefits.
  But we are going to take care of our friends who are in the high side 
of the income strata. We are going to make sure that they get their tax 
cut. I think it is ridiculous.
  The people who are looking at this placard have to ask themselves the 
question: Whose side are you on? Where are we going to go? Are we going 
to be a Government that provides energy and seed money and 
encouragement for people to develop, or are we going to say, no, no, 
no, you have to live without these things and if the child does not 
have sufficient nutrition, so be it. And if the child does not have an 
education and goes to prison, we will build enough prisons. But will we 
build enough pride in our citizenry? That is the question.
  So we are here with a conference report today that says we are going 
to give out 245 billion dollars' worth of tax cuts, but we are going to 
take $270 billion out of Medicare and $182 billion out of Medicaid.
  Medicaid. My goodness, I live in a State that has the second- or 
third-highest per capita income in the country, New Jersey, but we also 
have the paradox of some of America's poorest cities in our midst. And 
those cities and other urban areas, where incomes are not high, very 
often are totally dependent on Medicaid to carry the hospitals that 
will serve the needs of children. But we are going to say we are going 
to cut that because we are saving money. Yes, we are saving over here. 
We are going to give some to those rich guys over there, but we are 
saving money. And so those children will not get treated. And what kind 
of respect will they have for themselves, their families or their 
country if they have not enough to eat and not enough health care? Not 
much, I can tell you. They will find other ways to satisfy their basic 
needs.
  (Ms. SNOWE assumed the chair.)
  Mr. LAUTENBERG. And so, Madam President, the debate will go on and we 
will have different perspectives, but the one thing that will ring 
through this debate loudly and clearly in my view is: Whose side are 
you on? The Democrats believe that people in modest income levels, 
people in the middle class may need that extra little push to help them 
move their families along so that they can move up the social and 
economic ladder. And our friends on the other side will say, no, no, 
no, we are not going to spend money on those silly programs like child 
nutrition and day care and those kinds of things. No, we have to give 
tax cuts to the rich so that they can perhaps let something trickle 
down for others.
  I do not believe that is what America wants. It will be interesting 
to see how the American public receives this debate.
  And with that, Madam President, I am prepared to yield.
  Madam President, the next speaker is ordered from the Republican 
side, and they will allot their time as they see fit.
  Mr. ABRAHAM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. I thank the Chair. I yield myself whatever time I may 
take--I believe 15 minutes or so.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ABRAHAM. I thank the Chair.
  Madam President, last November, voters sent 11 new Members to the 
Senate. I believe all of us came to Congress dedicated to keeping the 
promises we made in our campaigns, and specifically we promised to end 
business as usual and to replace the old equation here in Washington of 
higher taxes and more Government with smaller Government and the goal 
of letting people keep more of what they earn.
  Central to our campaign was a commitment to end 25 years of deficit 
spending here in the Congress.
  Today, the Senate is debating a budget resolution which delivers on 
those promises. First and foremost, this resolution balances the 
Federal budget over the next 7 years. It does so by slowing the growth 
of Federal spending from 5 percent a year to 3 percent a year. In 
dollars, that means Federal spending will continue to grow from $1.6 
trillion next year to $1.9 trillion in the year 2002.
  Now some, of course, have argued that we moved too fast. But the 
facts are quite simple. If we do not take action now, America will face 
an economic crisis far greater than any this Nation has ever confronted 
before. Here is why.
  If Washington keeps spending money the way it has for the last 
quarter of a century, the Medicare trust fund will go bankrupt in 7 
years. In 15 years spending on entitlements and interest payments on 
the national debt alone will equal all tax revenues. That means not $1 
for national defense, law enforcement, education, job training, 
veterans programs and so on, unless we run up even higher deficits in 
the future, deficits at levels we have never previously contemplated.
  Most importantly, unless the actions we begin in Congress are enacted 
and signed by the President, a child born this year, 1995, would during 
their lifetime pay $187,000 in Federal taxes, not in total, but just to 
cover their share of interest on the national debt that already exists 
and will accumulate during their lifetimes.
  By adopting this budget we can avoid fiscal disaster and begin the 
process of removing the mountain of debt from the backs of our 
children. Moreover, balancing the budget also sets the stage for an era 
of lower interest rates, accompanied by expanded job creation and a 
higher standard of living. Balancing the budget will result in 
significantly lower interest rates, which means that the average 
homeowner can save up to $500 per month on their mortgage. In addition, 
the GAO reports that balancing the budget could produce real income 
growth of up to 36 percent by the year 2020. For families and children 
then, balancing the budget means more than just reducing public debt, 
it means keeping a roof over their heads, putting food on their table, 
going to better schools and financing retirement. It means a brighter 
future.
  How do we get there? We get to a balanced budget by setting 
priorities and making tough decisions. We get to a 

[[Page S9254]]
balanced budget by keeping our promises, promises to eliminate wasteful 
spending, to evolve programs to the States and control growth of 
entitlements and provide taxpayers with some badly needed relief.
  First, this resolution trims the fat off of the Government and does 
so by eliminating unnecessary agencies, consolidating duplicative 
programs and privatizing those functions that are better served by the 
private sector.
  The resolution includes the elimination of almost 150 departments, 
administrations, agencies, commissions, committees, boards and 
councils--everything from the Board of Tea Experts to the Department of 
Commerce. It also assumes the privatization of entities like the naval 
petroleum reserve and the Uranium Enrichment Corporation and the Alaska 
Power Marketing Administration, all of which provides services which 
are better left to the private sector.
  Finally, this resolution consolidates duplicative programs to make 
the Government less cumbersome and more efficient. And all these 
reforms save the American taxpayer $190 billion over the next 7 years.
  This budget also devolves powers to State and local governments. 
During my campaign I promised the people of Michigan to return the 
operation of various Government functions back to the State, where 
Governor Engler and our legislature are out front on important issues 
like reforming welfare, Medicaid and education. I know Governors from 
other States are equally as innovative.
  This budget takes advantage of the tremendous talent outside the 
beltway by utilizing block grants to replace the hundreds of Federal 
welfare, housing and education programs. These block grants, which in 
many committees are already moving forward on a bipartisan basis, will 
provide the Governors with the resources and the freedom they need to 
carry out such reforms.
  Another promise I made to the people in Michigan was to work to 
control the growth of Federal entitlement programs. The need for this 
reform was made apparent in February when the Medicare trustees 
announced the trust fund will be insolvent 7 years from now. The 
trustees concluded that the HI program is severely out of financial 
balance and that the trustees believe that the Congress must take 
timely action to establish long-term financial stability for the 
program. This budget embraces this call to act by addressing both the 
short- and the long-term insolvency of Medicare programs.
  First, it allows Medicare to continue to grow at a 6.4 percent rate 
per year. This reform enables Medicare to pass the trustee short-term 
solvency test while still growing at twice the rate of inflation.
  Second, the resolution includes a call for a special commission to 
address the long-term stability questions facing Medicare and to advise 
Congress on how to keep Medicare's promise for future generations. 
President Clinton's most recent budget endorses this approach by 
advocating similar reforms.
  Now, we have heard a lot during the debate on this budget when it 
first came before us, and we heard already today, and I am sure 
tomorrow we will hear issues raised as to whether or not we should do 
these things with regard to entitlement programs and Medicare in 
particular, whether or not we can limit the growth to twice the rate of 
inflation. And the claims will be made that this is impossible to do 
simply because, if we did this at the current rate of growth, the 
current rate of inflation in health care programs, it will have this, 
that or the other effect. All these horror stories we heard suggests it 
is impossible to change any system in this country.
  That is certainly not the case, at least based on the recent evidence 
we have seen in the health care area. What we have seen is that in the 
private sector the inflationary health care has been dramatically 
reduced as corporate America, small business America, as families in 
America have addressed these growth problems by finding innovative ways 
to deal with health care and health insurance costs, by engaging in 
more preventive medicine and joining managed care facilities, by 
finding other alternatives to simply assuming that the rate of 
inflation can never change. I think it can. I think on a bipartisan 
basis we can, while providing the same level of service, limit the rate 
of growth of Medicare to the types of percentage that are contained in 
this budget resolution.
  Another central promise of my campaign was to fight for tax relief 
for America's families and businesses. Federal, State, and local taxes 
today combine to take almost 40 percent of every American's dollar that 
they earn. The tax burden on American families has increased by 300 
percent over the past 40 years. Our Tax Code is excessive and it is 
often arbitrary and too often it chokes innovation and job creation.
  In my campaign, I promised the people of Michigan to support much-
needed tax relief, like the $500 per child family tax credit, which we 
have talked about already and will continue to discuss in this body. 
This budget delivers on those promises by providing $245 billion in 
relief over the next 7 years. Under this resolution when spending has 
been cut and a balanced budget is ensured, $245 billion is made 
available to the Finance Committee for legislation providing family tax 
relief and incentives to stimulate savings and investment. And we need 
those incentives. Recent economic indicators suggest the economy may be 
slowing down. If slower growth is on the horizon, then we need to do 
more than just focus on spending. Slower economic growth endangers our 
common goal of a balanced budget in the year 2002. According to the OMB 
a 1-percent slower economic growth rate translates into $150 billion in 
higher deficits over the next 5 years. By including real incentives for 
investment and savings, we can help stimulate the economy and ensure 
that revenues keep pace with projections.
  A good example of how this can work, I think, was embodied in Jack 
Kemp's original enterprise zone proposal. In these zones lower taxes on 
capital would encourage businesses and employers to go into 
economically depressed areas, spurring economic growth and job 
creation. The primary benefits of these zones go to the residents of 
the zones themselves as their neighborhood is given a much-needed 
boost. And within the next few weeks I plan to introduce a bill that 
would supercharge the current empowerment zones with powerful savings 
and investment tax incentives such as those that have been previously 
outlined in enterprise zone bills to try to create that kind of job 
creation.
  By including a tax cut in the budget, we are opening the door for tax 
reforms like enterprise zones, family tax credits, and other incentives 
for savings and investment. These tax cuts in turn will increase--grow, 
create jobs, improve savings and ultimately improve the standard of 
living for most Americans. I intend to work with the Finance Committee 
to provide Americans with a profamily, progrowth tax cut this year.
  Madam President, 2 weeks ago Bill Clinton sent to Congress a proposal 
that embraces the central themes of this Republican budget.
 It cuts spending. It limits the growth of entitlements, and it 
provides Americans with relief from excessive Federal taxes. In short 
and in many ways, the President's budget alternative vindicates 
Republican efforts to balance the budget. While the plan falls short of 
its goals, which has been quantified by the Congressional Budget 
Office, I still think it is a good start in the right direction. I also 
hope that the President now will support other Republican efforts to 
create jobs and strengthen our economy, and I look forward to working 
with the administration to do so.

  Madam President, this budget resolution takes a historic step toward 
balancing the budget by slowing the growth of Government and returning 
power to the States. It is a credit to Senator Domenici and to the 
members of the Budget Committee and to the leadership, I think, that we 
have set this goal and stuck with it.
  As is the case, I know, with the President and many others in this 
Chamber, there are parts of this budget resolution that I wish were 
different. There is an area, for example, in the student loan area 
where I wish it were different, closer to something that I had worked 
out before.
  But I think it does an extraordinarily good job of ordering 
priorities and reaching the commonly held objective of bringing the 
budget into balance, 

[[Page S9255]]
and it is the reason that I strongly support what we are attempting to 
do today and tomorrow.
  The question before Congress is not just about dollars and cents, 
revenues and outlays. The question confronting us is whether this will 
be the first generation of Americans that fails to pass on to our 
children as much freedom and opportunity as we inherited from our 
parents. Like many other new Republicans in Congress, I ran for the 
Senate promising to fight for an agenda that would guarantee my 
children and their generation more freedom and opportunity. This 
budget, I think, keeps those promises, because it guarantees that the 
freedoms and opportunities for future generations are greater than 
ever. I look forward to working with the President and, hopefully, 
congressional Democrats to get this job done.
  We heard earlier today numerous people comment on the implications of 
this budget. The previous speaker was quite eloquent in trying to 
outline his view of America and where he thought this budget would take 
us. He talked about his family and their experiences in this country. I 
would just like to close by talking about my family.
  My grandparents were all immigrants. They came to this country about 
a century ago in search of freedom. None of the four could speak 
English. Probably cumulatively the four had about $5 in resources when 
they got here. But they came to this country because they wanted to 
live in a country that was free and they wanted their kids and their 
grandchildren and future generations of their family to live in a 
nation that was free.
  They did not come here seeking a nation for the purpose of finding a 
place where there were great Government benefits. They believed in 
their own capacities to do things, and they wanted a place where they 
would have a chance to enjoy the freedom to do the things they want.
  My parents were very hard-working folks. Neither of them had a 
college education. They were not really well educated, in fact, but 
they cared an awfully lot about their children and they wanted my 
sisters and me to have a little more opportunity than they did.
  My dad worked for almost 20 years as a UAW member on an assembly line 
in Lansing, MI, in an Oldsmobile factory, and he and my mom had a small 
business after that. They worked very hard, 6, sometimes 7 days a week, 
to give my sisters and me a chance to have the other part of the 
American dream--freedom and opportunity.
  I think what they envisioned for my generation and what I think they 
all wanted for my children's generation was a chance to grow up in a 
nation that provided these opportunities. I sincerely believe that if 
we burden the next generations with an ever-increasing amount of debt, 
we will not pass on the kind of freedom that my grandparents came to 
this country to find and that my parents tried to pass on to my sisters 
and to me.
  I just will close by saying this. We heard a lot of talk about 
compassion and which party has the ability to provide it and what this 
budget will do. But just remember, Madam President, that in this 
budget, we will be spending over the 7-year period involved something 
in the vicinity of $12 trillion of taxpayers' money, of moneys sent to 
us by hard-working people across this country. We are a very 
compassionate Nation, I think, and we are spending most of those 
dollars in one way or another on programs which benefit people who are 
less fortunate.
  So I think we are a compassionate Nation. If we continue to provide 
the people with the freedoms and the incentives to pursue their 
entrepreneurial instincts and pursue the kind of opportunity my 
grandparents came to this country to find, we will get the job done.
  I cannot imagine, in a nation that does as much, how we can ever get 
to the floor and suggest we are not compassionate, our programs are not 
effective. I think this budget allows us to continue providing support 
for people who are truly needy but, at the same time, make it possible 
for people to enjoy the freedom and opportunities in America.
  So I strongly support what we have done and look forward to working 
to adopt this resolution.
  At this time, I yield the floor.
  Mr. SIMON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Madam President, I yield 10 minutes to the Senator from 
North Dakota.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Madam President, I am struck sometimes, in listening to 
the discussion on the floor of the Senate, by some Members of the 
Senate who think that it is always intrusive to ask someone in this 
country to pay taxes; that it is, after all, their money and they 
should not be required to send it, and the only reason the Congress 
asks them to send it is so the Congress can squander it on one thing or 
another.
  The fact is, in our country, we do a lot of things together. When we 
do things together, there is an obligation for all of us to pay for 
it--educating our kids, building our roads, paying for our police and 
fire protection, and providing for the common defense of our country. 
That is what we must do in our country, and all of us have an 
obligation to pay for some of that. And we do that through taxes.
  None of us enjoys it, perhaps, but I happen to consider the taxes I 
pay a good investment in my children's education. I am pleased I do. I 
happen to consider the taxes that I pay something that I am proud to do 
to support the men and women, for example, who serve in our Armed 
Forces and risk their lives in defense of this country's liberty and 
freedom. So I think we ought to talk about what is it that makes a good 
country and what are our obligations to each other and to our country.
  About 6 months ago, I went to Dulles Airport to meet an airplane. I 
had about a month or two prior to that been watching television and saw 
on television a young woman in Bosnia whose parents had been killed, 
who had been critically wounded herself, and who lay in a hospital for 
some long while. Her brother, in the same attack that killed her 
parents and critically wounded her, was miraculously spared, and he was 
able to come to the United States. She, on the other hand, when she 
recovered from her wounds, after laying in critical condition, having 
lost her parents and then her brother having been taken from her, was 
living in a single room with a candle trying to study, despondent over 
losing her family.
  I decided I was going to see if I could help this young woman 
somehow, and I did. She came to the United States, and I picked her up 
at Dulles Airport and reunited her with her brother. Coincidentally, 
this happened 1 year to the day after my daughter had died.
  I was thinking on the way to the airport to meet this young woman 
from Bosnia who had suffered from such tragedy a lot of things that 
were very emotional for me, because we could not do much to save my 
daughter, and yet I thought perhaps I was helping some other young 
woman start a new life. I felt at least in some ways maybe there was 
some opportunity to reach out.
  Her plane arrived and she got off the plane and was overcome with 
emotion as she met her brother, whom she never expected again to see. 
She cried and was extraordinarily emotional. When we were talking after 
this, she said to me, ``It was only something I barely was able to 
dream about, that I might some day ever come to the United States of 
America. You don't have any idea what this means to someone to be able 
to come to the United States of America. We view the United States as a 
land of opportunity, as a place where opportunity exists to live a good 
life and live in peace and live in freedom.''
  I thought to myself, when she said that through her tears, that all 
of us in this Chamber, I think, and probably all of us in this country 
from time to time, take too much of this country for granted. If by 
chance we are able to hear from others what this country means to them, 
we can understand again what our great grandparents and grandparents 
and our parents helped build in this country.
 It is a pretty remarkable, special, unusual place. This is a 
superpower, a world economic leader. It did not start that way. But 
because of genius in people, because of a free market capitalist 
system, because of businesses that took risks, and, yes, even because 
of Governments that did 

[[Page S9256]]
things and invested the taxpayers' money and also provided opportunity, 
this country has progressed. We led the way.

  We, as we moved along, decided there is a right way and a wrong way 
to do things. The captains of industry in the turn of the century were 
producing tainted meat with rat poison. Upton Sinclair wrote his book 
about how they killed rats by lacing the bread with arsenic. He said 
they would shove the bread and rats down the chute and it would get 
mixed in and they would produce a mystery meat that would end up on the 
shelf. We decided we did not want to eat tainted meat.
  We also decided we did not want to pollute our air. In the last 20 
years, we are using twice as much energy and we have cleaner air. Is it 
because the captains of industry said we are going to spend money to 
clean up emissions? No, it is because people here in the Senate and 
across the way in the House said there is a right way and a wrong way 
to do things. We said we were going to require less pollution. Yes, it 
will cost a little more. But we have cleaner air now than we had 20 
years ago, and we have cleaner water than we had 20 years ago.
  Is it a nuisance to comply with all of that? I suppose so. Is it good 
for our kids to leave this country in better shape? You bet it is. The 
Government provided leadership and did the right thing. We have to 
provide the leadership in fiscal policy as well. Do we not have to 
balance the Federal budget? You bet. There is no question about that. 
There ought not to be one scintilla of debate on the floor of the 
Senate on the question of whether we should put our fiscal house in 
order. The question is not whether we should, the question is how. 
There is a right and a wrong way to do that as well.
  The Federal budget represents our priorities. One hundred years from 
now they can look at the budget and figure out what the people in this 
country thought was important to them. They can determine that just by 
looking at what they decided to spend money on. I know it is easy to 
criticize. I do not mean to be critical. As has been said, ``Any 
jackass can kick a barn door down, but it takes a carpenter to build 
one.'' Yet, I must be critical of the priorities in the budget. I think 
they are wrong.
  I want to balance the budget. I have supported initiatives to do so. 
But I do not think we ought to make it harder for kids to go to 
college. That is what this budget does. I do not think we should do it 
by deciding that health care is going to be more expensive for the poor 
and elderly. We do not advance the economic interests of this country 
when we decide a poor child at school should not be entitled to a hot 
lunch, but the richest Americans are entitled to a tax cut. That does 
not make sense for this country.
  This is a debate about priorities. I have been watching people break 
their arms patting themselves on the back today for a balanced budget. 
I only observe that if you take this document that is on every single 
desk in the Senate and turn to page three, look at the heading called 
deficits, and look at the year 2002, you will see that in the year 
2002, on this majority party budget deficit document, it says the 
budget is not in balance. It is, in fact, a $108 billion deficit.
  I have a standing offer of $1,000 of Senator Rockefeller's money--
because he has a little more than the rest of us, so he would provide 
$1,000 of his money to anyone--to any Member of the Senate or any 
journalist who would demonstrate to us that this budget is in balance. 
I made that offer 24 hours ago, and nobody has taken the $1,000 dollars 
yet, and nobody will, largely because this budget is not in balance. 
Everybody in this Chamber knows it. Yet, they are spending most of 
their time complimenting themselves on doing something they have not 
done. That might be fun for them and might eat up some of their time, 
and it might even convince some people it is in balance. But those who 
have taken simple arithmetic and who can read page numbers can simply 
go to page 3 and understand that it is not in balance.
  Again, I say, about priorities, that the priorities here are not the 
right priorities. We can, should, and will debate the priorities. And, 
in my judgment, it is investing in our children's education. It is in 
balancing the budget, but doing so in a way that spends money that is 
productive, that yields investments.
  If I have 1 or 2 minutes left, I want to tell a story I have told 
before. It represents what I think is the future of this country. The 
oldest Member of Congress, when I came here, was Claude Pepper. I went 
to his office to meet him. Behind his desk were two pictures on the 
wall. One was of Orville and Wilbur Wright taking their first flight. 
You know, it was autographed. That is how old Claude was. It said, ``To 
Congressman Pepper with deep admiration.'' He came to Congress in the 
1930's and was still here in the 1980's. Beneath the autographed 
picture of Orville and Wilbur Wright making their first flight was a 
picture of Neil Armstrong standing on the Moon.
  What was it in that relatively short period of decades that produced 
people that went from the ground to the air to the Moon? Education and 
genius. It was massive amounts of education in our country, allowing 
people to become the best they can be--engineers, scientists, and more. 
It was not just going to the Moon; it was progressing in so many other 
areas. Why? Because we made the right investments. We understood the 
right priorities.
  The right priorities, in my judgment, are this country's children. 
This budget short-changes America's children. Someone once said that 
100 years from now your income will not matter, or how big your house 
was, but the world might be a different place because you were 
important in the life of a child.
  The question for us about priorities is: Will we pass a budget that 
is important in the lives of America's children? If we will, it will 
not be this one because its priorities are wrong. We can do much 
better, and will, if we reject this budget, reject the tax cuts for the 
rich, reject more money for defense, and invest more in America's kids, 
and make sure we take care of the things that are important in this 
country.
  I yield back the entire balance of my time.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. GRAMM. Madam President, I rise today in support of the budget 
agreement. I want to congratulate Senator Domenici. I want to 
congratulate Congressman Kasich. It is very seldom in American politics 
that you get an opportunity to vote for a big bill--a budget in this 
case--that takes a step toward fundamentally changing the way our 
Government does its business.
  I am not saying that this is the be-all and end-all of budgeting. I 
am not saying that this budget in and of itself is going to 
fundamentally change the future of America. But I am saying that it is 
an important step in the right direction. It is clearly the most 
dramatic and important budget that we have adopted in the U.S. Congress 
since 1981.
  I believe that the American people will be beneficiaries of this 
budget. And it is not perfect, from my point of view. I think we could 
have cut spending more. I think we could have let working people keep 
more of what they earned. I think we could have done more to change 
fundamentally American Government. The bottom-line truth is that this 
is a dramatic change in policy, and I think everybody who has had 
anything to do with this budget can be proud of what they have done.
  Let me set in perspective what we are doing here today. We are 
writing, over a 7-year period, a binding budget that, if enforced over 
that 7-year period, will balance the Federal budget. That is something 
that we have not done since 1969.
  The important thing to note about this budget is that we are not 
promising to do things in the future that will balance the budget. What 
we are doing in this budget, and in the follow-on legislation that we 
will adopt this year, is we are making changes now that will, over the 
next 7 years, if the economy stays roughly as we now anticipate it will 
stay, in a modest recovery mode, balance the Federal budget and will, 
for the first time in over a quarter-century, mean that the Federal 
Government is living within its means. That is a very important change 
in public policy. What did it take to achieve this change?
  Some of our colleagues on the other side of the aisle are going to 
talk about deep cuts, about denying benefits, but let me try to set 
that in perspective. 

[[Page S9257]]

  Since 1950, Federal spending has grown, on average, about 7\1/2\ 
percent a year. Federal spending since 1950 has grown 2.5 times as fast 
as family income has grown.
  An interesting number is, that if the family budget since 1950 had 
grown as fast as the Federal budget has grown, and if the Federal 
budget had grown as fast as the budget of the average family in America 
has grown, the average income of working families in America today 
would be almost $130,000 a year and the Federal Government would be 
one-third the size it is today.
  Given a choice between the America we have and that America, I would 
take the America of higher family income and smaller government.
  What we are doing in this budget is limiting the growth of Federal 
spending to no more than 3 percent a year, each year, for the next 7 
years.
  Now I know we have many people on the other side who will say, well, 
after having grown at 7\1/2\ percent a year for 40 years that to limit 
the growth to 3 percent a year is going to decimate Government 
programs.
  I would just like to remind my colleagues that every day in America, 
businesses make tougher decisions than that just to keep their doors 
open. Every day in America, families make far tougher decisions than 
that in dealing with the real world problems that families in America 
face every single day.
  The difference is that families and businesses live in the real world 
in America where you have to make tough choices. Our Government has not 
lived in the real world for the past 40 years. I think we can take a 
little pride in the fact that this budget is a major step toward 
bringing our Government in Washington back into the real world that 
everybody else lives in.
  Under the old budget, under the Clinton budget, the Federal 
Government over the next 7 years would have spent $13 trillion. Under 
this budget, we are still going to spend $12 trillion. We are talking 
about spending roughly $1 trillion less than we would have spent.
  But we are talking about more than simply controlling the growth of 
Government. We are talking about something that I fought for in the 
Senate. I offered an amendment to cut spending further so we could let 
working families keep more of what they earn. That amendment was not 
successful. But I am very proud of the fact that the conference 
accepted, basically, a variant of the House language that allows 
working families to keep more of what they earned.
  In 1950, the average family with two little children in America sent 
$1 out of every $50 it earned to Washington, DC. Today that average 
family with two children is sending $1 out of every $4 it earns to 
Washington, DC.
  I do not think there are many people in America that believe that 
Washington is doing a better job of spending that family's money than 
that family would do if we let them keep more of what they earn, to 
invest in their own children, in their own family, in their own 
business.
  I am very proud of the fact that we are making a major step in this 
budget that is going to let us enact a $500 tax credit per child so 
that families can spend more of their own money on their own children 
on their own future.
  In our tax cut, we call for a cut in the capital gains tax rate. I 
know the President says if you cut tax rates, rich people will exploit 
the situation. They will invest their money. If they are successful 
they will earn profits.
  Welcome to America. That is how our system works. We want to 
encourage more people to invest money. I do not understand a country 
and a Government and people who love jobs but hate people who create 
them. I do not understand all this class warfare that we are always 
debating about. If we want people to invest money, we have to provide 
incentives to people who have money. Those are basically people who 
have been successful.
  What a different world our President is from than the world I am 
from. When I was growing up and we rode by the nicest house in town, 
never once did my mama point her finger out and say, ``We ought to tax 
those people, and give us their money.'' My mother always pointed her 
finger out and said, ``If you work hard and you make good grades, you 
can have a house like that.'' I like my mama's America a lot better 
than I like Bill Clinton's America.
  I am proud of the fact that in our budget we provide incentives for 
people to invest their money to create jobs and growth and opportunity 
so that other Americans can get their foot on the bottom rung of the 
economic ladder and climb up and begin to create success for 
themselves, their family, and their country.
  This tax cut that we are talking about in this bill sounds like a 
small amount of money in Washington, DC, $500 per child. Many have 
said, well, it is not enough money to make any difference. Well, to a 
two-child family in Texas, that is $1,000. And $1,000 is real money. 
The fact that $1,000 is not real money in Washington, DC, tells more 
about the problems in Washington, DC, than it does about anything else.
  The tax credit for children that we contemplate in our budget will 
mean that a family with four children, that makes $35,000 a year, will 
be taken off the income tax rolls. A family with two children that 
earns $45,000 a year, if we go on now and adopt the tax cut that goes 
with this budget, will see its income taxes cut by one-fourth.
  This will mean that working families can keep more of their own money 
to invest in education, in housing, in nutrition. The President, in 
criticizing our budget, says this budget cuts spending on children. 
This is not a debate about how much money we spend on children, but it 
is certainly a debate about who will do the spending.
  President Clinton and the Democrats want the Government to do the 
spending. We want the family to do the spending. We know the Government 
and we know the family. We know the difference.
  We believe that letting families keep more of what they earn to 
invest in their own children will mean that they will do a better job 
and they will be richer and freer and happier.
  When we concluded the debate on this budget, I was concerned that we 
were not going to fulfill the promises that Republicans made in the 
campaign.
  We promised the American people three things if they made Republicans 
the majority: No. 1, we would balance the budget; No. 2, we would let 
working families keep more of what they earn; No. 3, we would provide 
incentives for economic growth. I am proud of the fact that in this 
final budget we are balancing the budget over a 7-year period. We are 
letting families keep more of what they earn. We are providing 
incentives for economic growth.
  Promises made, promises kept. That is something that there has not 
been enough of in Washington, DC. I am very proud to have been part of 
an effort where we have fulfilled our promises and where we are, in 
fact, beginning to change the way our Government does its business. I 
served in the House and in the Senate. I have never had an opportunity 
to vote for a budget that if fully enforced, under realistic 
assumptions, would do the job of balancing the Federal budget. I am 
very proud that I am going to have an opportunity to cast my vote for 
this budget. It may very well be that 2 years from now or 4 years from 
now we will have to go back and make an adjustment. It may very well be 
that we will have to reduce the growth in spending further at some 
point to get the job done. I am certainly willing to do that.
  The important thing today is--and I think every Member of the Senate, 
whether they vote for this budget or not, can be proud of the fact--
that we have written a budget that is a fundamental change. This budget 
would never have been written had the 1994 elections not been held, had 
there not been a fundamental change in the makeup and control of 
Congress.
  But we are writing, today, a budget that under realistic assumptions 
will balance the budget over the next 7 years. It represents a change 
in policy. It represents the fulfillment of a commitment that we have 
made to the American people. I think every person who is privileged to 
serve in the Senate today can be proud of the fact that this budget 
does what the American people wanted done, change the way we do 
business in Washington.
  It does not complete the job. In and of it itself today, it does not 
balance the budget. But it lays the foundation for a 7-year program 
that if we stay with it, if we are willing to make 

[[Page S9258]]
changes when things go wrong--and they inevitably go wrong--with modest 
adjustments over the next 7 years, we can guarantee the American people 
that we will balance the Federal budget, and if things go well, we can 
do it without further action.
  I think that is a tremendous achievement. I am very proud to have 
played a small role in it. I congratulate Senator Domenici. I 
congratulate Members of the House and Senate. And I am delighted to 
have an opportunity to cast a vote for this budget.
  I reserve the remainder of our time.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Madam President, I yield myself 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SIMON. Madam President, there is credit to be spread around. And 
there is blame to be spread around, for the deficit and where we are. I 
thought Senator Dorgan's remarks earlier were right on target. It is 
why I am proud to have him as a Member of the U.S. Senate.
  The Republicans, and I specifically commend Senator Domenici, deserve 
credit for having the target of balancing the budget. The Democrats, on 
the other hand, I think, have the right priorities, and the priorities 
that we are offered in this budget are not the priorities that the 
Nation needs.
  I add that I would feel much better about this if we had a balanced 
budget amendment. I would feel better because we would have interest at 
least 1 percent lower and that means, over a 7-year period, $170 
billion to spend on things that are needed in this country. And the 
irony is that some of the groups that fought the balanced budget 
amendment are now having their programs hurt because we do not have a 
balanced budget amendment. We need it also because our history is that 
when we adopt a program like this we keep it for about 2 years, as in 
Gramm-Rudman--which I voted for--and then it becomes too politically 
awkward, and we lose it.
  What is wrong in terms of the priorities that we have? For national 
defense, we increase spending. We already are spending more than the 
next eight countries in the world combined. If you go back to the 1973 
defense budget and add the inflation factor, we end up spending more 
money in fiscal year 1996 than we did in fiscal year 1973, and the 
Berlin Wall has fallen. You would never guess it, looking at the 
budget. In 1973, we had troops in Vietnam. In 1973, we had almost twice 
as many troops in Europe. In 1973, we were building up our nuclear 
arsenal. Now we are buying, including buying weapons the Defense 
Department says we do not need--B-2 bombers. They tell us it is a white 
elephant, yet we are going to go ahead, I assume. We will have a vote 
on it, not with my vote, but we will go ahead and have B-2 bombers. We 
are going to spend $59.8 billion in an increase over where we are right 
now on national defense.
  International affairs, foreign aid. I recognize it is not popular. 
But among the industrial nations of the world, do you know where we are 
in terms of percentage of our budget that we spend on foreign aid? We 
are dead last. And the great threat today is not a military threat. I 
want a strong military, but the great threat is instability. And we are 
saying in our budget we want to keep that military option as the 
greater option to the economic option. It does not make sense.
  What other nations today worry about is, frankly, not whether we have 
the equipment technology and the manpower to respond. The question is 
whether we have the backbone in the administration, in Congress, in the 
American people, not in our Armed Forces. Cutting back foreign aid, 
though it is politically popular, it is extremely shortsighted.
  Education? I commend the Presiding Officer, the junior Senator from 
Maine, for her amendment which added money back in for education. Yet, 
this budget cuts back education a total of $67 billion. Every study--
conservative, liberal, you name it--says what we ought to be doing for 
the future of our country is we ought to be investing more in 
education. Yet this budget does the opposite.
  Medicaid? We hear a lot of Medicare. I agree with my colleagues who 
make the speeches on Medicare. But frankly, I am more concerned about 
Medicaid because Medicaid is poor people. When we reduce the spending 
on Medicaid $182 billion, let us keep in mind, half the people on 
Medicaid are children, poor children. Would the people of the United 
States want us to cut back on that? I do not think so.
  Tax cuts? I disagree with the Republicans. I disagree with the 
Democrats on tax cuts. I do not think we ought to be having tax cuts 
when we have deficits. Would I like a tax cut? Of course. We all like 
tax cuts. But if I give myself a tax cut, I know I am hurting the 
future of my three grandchildren. Faced with that option, the American 
people do not want a tax cut. Yet, both political parties are 
pandering--that is what we are doing, pandering--on the tax cut. The 
Senate, assuming that you had interest reduction, would have given a 
$170 billion tax cut; the House, $345 billion; the conference is $245 
billion. Are we better off applying that to the deficit or applying it 
to education? I think, very clearly, the Nation would be much ahead if 
we applied it to the deficit or to education.
  I ask unanimous consent, Madam President, to have printed in the 
Record a column by Robert Samuelson that appeared in the Washington 
Post called ``Macho Tax Cuts,'' and a New York Times editorial, ``The 
Rich Get Richer Faster.''
  There being no objection, the articles were ordered to be printed in 
the Record, as follows:

Macho Tax Cuts: Don't Believe It, They're Actually Tiny and Undesirable
                        (By Robert J. Samuelson)

       Among Republicans, cutting taxes has always been macho. 
     Writing recently in the Wall Street Journal, House Speaker 
     Newt Gingrich said the case for tax cuts rests on the ``key 
     principle'' of the Contract With America, which is: ``The 
     American government's money does not belong to the American 
     government. That money belongs to Americans, and it's time to 
     give Americans some of their own money back.'' It will surely 
     surprise most Americans to know that, once they've paid their 
     taxes, the money still belongs to them. But if so, why be 
     timid? Give all of it back. End taxation. Period.
       The silliness of this rhetoric emphasizes the 
     undesirability of instant tax cuts. Taxes are the price of 
     government; they shouldn't be cut unless the budget is in 
     surplus. The populist pap that tax money belongs to ``the 
     people'' is simply the latest of many pretexts, advanced by 
     both parties, to prolong budget deficits. The money belongs 
     to ``the people'' until ``the people'' divert it to 
     government for purposes that, presumably, serve their needs. 
     If Americans want lower taxes, they'll have to ordain smaller 
     government.
       These arguments are now relevant because, in the current 
     House-Senate conference to write a budget, tax cuts loom as 
     the largest disagreement. Between 1996 and 2002, the House 
     would cut taxes by $354 billion; the Senate would reduce 
     taxes only if balancing the budget provides extra revenues 
     through faster economic growth. The tax cuts taint otherwise 
     courageous budget proposals. Although the Republicans' plans 
     can be faulted on details, they broach the critical--often 
     unpopular--choices that must be faced to control spending and 
     deficits.
       By contrast, the instant tax cuts feed the illusion that 
     people don't have to pay for government. It is, ironically, 
     the House Republicans who best discredit this false logic. In 
     a new book (``Restoring the Dream: The Bold New Plan by House 
     Republicans''), they call a balanced budget a ``moral 
     imperative'' to avoid burdening ``our children and our 
     children's children'' with a huge federal debt. If so, what's 
     the excuse for adding $354 billion to that debt, which under 
     the House plan would grow to $4.5 trillion in 2002, up from 
     $3.6 trillion in 1995?
       One possible excuse is that Americans need to be bribed, 
     via lower taxes, to accept unpleasant spending cuts. Although 
     this is plausible, some public-opinion surveys actually 
     suggest just the opposite. A recent NBC/Wall Street Journal 
     poll asked respondents to select priorities: Deficit 
     reduction (54 percent) ranked ahead of tax cuts (37 percent). 
     A CBS/New York Times poll similarly asked respondents to 
     choose deficit reduction or tax cuts: 56 percent picked lower 
     deficits and 40 percent lower taxes.
       Mostly, the tax cuts indulge partisan symbolism--``hey 
     look, we shrunk government.'' In fact, this is highly 
     misleading, because the tax cuts would be tiny. They would 
     average about 3.8 percent for individuals and families, 
     estimates the Joint Committee on Taxation. In 2002 the 
     federal tax burden would be 18.2 percent of our economy's 
     output (gross domestic product), says the House Budget 
     Committee. If taxes weren't cut, the tax burden would be only 
     18.8 percent of GDP. (Indeed, the tax burden has been highly 
     stable since World War II. It averaged 17.6 percent of GDP in 
     the 1950s and 19 percent in the 1980s.)
       The $354 billion of tax cuts are so small because, in the 
     same seven-year period, federal spending would total about 
     $12 trillion. For many Americans, the tax cuts would be 
     trivial or nonexistent. There's a $500 tax credit 

[[Page S9259]]

     for each child under 18 in families with less than $200,000; 
     but that wouldn't affect 77 percent of taxpayers, says the 
     Joint Committee. There's modest relief (up to a $145 credit) 
     of the so-called marriage penalty, but that would apply to 
     only about 11 percent of taxpayers.
       The obvious danger is the tax cuts could prevent a balanced 
     budget. The House plan rests on optimistic assumptions. 
     Economic growth is expected to rise and interest rates to 
     fall. They might not. Spending on Medicare--federal health 
     insurance for the elderly--is assumed to slow sharply. Even 
     if (a big if) legislation is passed to curb Medicare, the 
     desired savings might no materialize. Health spending has 
     routinely resisted precise forecasting.
       The drive for lower taxes may also impel unwise spending 
     cuts. Defense is the federal government's first 
     responsibility. Is it adequately financed? Maybe not. It 
     would be virtually frozen for seven years with little 
     adjustment for inflation. In 2002, defense spending ($280 
     billion under the House plan) would be about $45 billion 
     below the present ``base line.'' Republicans would also 
     transfer, via block grants, welfare, Medicaid and, possibly, 
     some food programs to states. But if block grants are set too 
     low, states will have to raise taxes or cut services sharply.
       It is imprudent to cut taxes before the consequences of 
     these policies are better understood. Finally, tax cuts are 
     simply unfair before the budget is balanced. Until then, they 
     would mainly represent a transfer from the poor (whose 
     benefits are cut) to the well-to-do. About half the tax cut 
     of the House bill would go to the eighth of taxpayers making 
     more than $75,000 a year, who also pay about half the taxes. 
     Naturally, these people tend to vote Republican while the 
     poor don't.
       The politics are straightforward, but in a cynical age, 
     they may not be shrewd. By and large, Americans see through 
     rhetorical ruses. If tax cuts are passed, people will 
     ultimately grasp that they don't amount to much. They will 
     feel (correctly) misused, especially if deficits persist. The 
     dilemma for House Republicans is that, having made an 
     unprincipled promise to cut taxes, they cannot change without 
     seeming to break their word. But it is better to admit a 
     mistake than to perpetuate it.
       A balanced budget aims to restore discipline to 
     government--to revive traditional notions that choices must 
     be made, that people must pay for what they get and that 
     government must live within limits. Such discipline is not 
     just an accounting exercise. It is also a moral code. It 
     takes government seriously and seeks not only to eliminate 
     what it can't (or shouldn't) do but also to improve what it 
     should (and can) do. A lot of Republicans aren't there yet; 
     they're too busy, in Tarzan fashion, thumping their chests 
     and screaming: ``Me Tax Cutter.''
                                                                    ____

                [From the New York Times, Apr. 18, 1995]

                       The Rich Get Richer Faster

       The gap between rich and poor is vast in the United 
     States--and recent studies show it growing faster here than 
     anywhere else in the West. The trend is largely the result of 
     technological forces at work around the world. But the United 
     States Government has done little to ameliorate the problem. 
     Indeed, if the Republicans get their way on the budget, the 
     Government will make a troubling trend measurably worse.
       Some inequality is necessary if society wants to reward 
     investors for taking risks and individuals for working hard 
     and well. But excessive inequality can break the spirit of 
     those trapped in society's cellar--and exacerbate social 
     tensions.
       After years of little change, inequality exploded in 
     America starting in the 1970's. According to Prof. Edward 
     Wolff of New York University, three-quarters of the income 
     gains during the 1980's and 100 percent of the increased 
     wealth went to the top 20 percent of families.
       The richest 1 percent of households control about 40 
     percent of the nation's wealth--twice as much as the figure 
     in Britain, which has the greatest inequality in Western 
     Europe. In Germany, high-wage families earn about 2.5 times 
     as much as low-wage workers; the number has been falling. In 
     America the figure is above 4 times, and rising.
       Interpreting these trends requires caution. Inequality rose 
     here in the 1980's in part because the United States created 
     far more jobs--many low-paid--than did Western Europe. Low-
     paying jobs are better than no jobs. Rising inequality in the 
     United States has also been caused in substantial part by 
     middle-class families that moved up the income ladder, 
     opening a gap with those below them.
       About half of Americans move a substantial distance up or 
     down the income ladder over a typical five-year period. In a 
     mobile society, where workers rotate among high- and low-
     earning jobs, earnings gaps are less frightening because any 
     given job would be less entrapping.
       But mobility has offset none of the increased inequality in 
     income. Studies at the Maxwell School at Syracuse University 
     show that mobility in America is not higher than in Germany. 
     Nor does mobility here appear to be higher today than it was 
     in the early 1970's.
       The best guess about the factor behind burgeoning 
     inequality is technology; the wage gap between high- and low-
     skilled workers in America doubled during the 1980's. College 
     graduates used to earn about 30 percent more than high school 
     graduates, but now earn 60 percent more. Prof. Sheldon 
     Danziger of the University of Michigan estimates that trends 
     in private pay rates explain about 85 percent of recent 
     increases in inequality; Reagan-Bush tax cuts for the rich 
     and spending cuts for the poor explain much of the other 15 
     percent.
       But even if government is not the main actor, it could be 
     part of the solution. Changes in the Canadian economy during 
     the 1980's also hit hard at low-wage workers. But there the 
     Government stepped in to keep poverty rates on a downward 
     path. In the United States, poverty rose.
       House Republicans are now pushing the Federal budget in the 
     wrong direction. At a time when employers are crying out for 
     well-educated workers, the G.O.P. proposes to cut back money 
     for training and educational assistance. America needs better 
     Head Start, primary and secondary education. It needs to 
     train high school dropouts and welfare mothers. The G.O.P. 
     policy would leave the untrained stranded. That would harm 
     the nation's long-term productivity--and further distort an 
     increasingly tilted economy.

  Mr. SIMON. Madam President, the goal of balancing the budget is 
noble. I applaud that. I joined the Republicans when that vote was 
established in the Budget Committee. I went over and voted with the 
Republicans for that. The priorities that we have in this budget, 
however, are wrong. I think we will have to reexamine this as we move 
into reconciliation, as we move ahead. I will be here a year and a 
half. Within a year after I get out of this body, we will be shifting 
away from this goal unless we change the priorities. I think the goal 
is one we ought to be fighting for, and I hope we will shift the 
priorities.
  (Mr. GRAMS assumed the chair.)
  Mr. SIMON. Mr. President, I have how much time remaining on this 
side?
  The PRESIDING OFFICER. The Senator from Illinois has 4 minutes and 45 
seconds.
  Mr. SIMON. Mr. President, if someone on this side wants to take the 
time now, fine. Otherwise, I will yield that remaining time. I yield 
the time that remains to the Senator from Washington, and I ask 
unanimous consent that I be allowed to yield an additional 4 minutes to 
the Senator from Washington from the 6 hours remaining under the 
statute on the budget resolution.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. It is not clear from that when my colleague would want 
that time. Does he want that time tonight?
  Mr. SIMON. Now. We are talking about yielding 10 minutes to the 
Senator from Washington now.
  Mr. DOMENICI. We have been asked by the Republican leader--you have 4 
minutes. We have 2 minutes. Is that correct? The Senator can yield that 
4 minutes to her right now. Or he can wait and do a bigger package.
  Mr. SIMON. The Senator from Washington indicates she would like to 
wait and take it a little later then.
  Mr. DOMENICI. The Republican leader is here. If the leader would not 
mind, I have 2 minutes in which I would like to respond. Then we will 
yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I have 2 minutes left. I will take it 
now. I understand the other side will yield back this time, and we will 
give the floor to the Republican leader at that time.
  Mr. President, I think perhaps with all of the things said on that 
side of the aisle, I would like to make two points. It has always been 
a problem with bodies such as this, legislative bodies in which 
everybody seems to be for the same idea, everybody seems to say we want 
to get to the same place. But the difficulty is to get them to go to 
that place following the same path, to decide they want to do some 
tough things and to concede and compromise along the way.
  So, Mr. President, I did not expect this U.S. Senate to unanimously 
agree on a balanced budget and then say we were doing it the right way. 
So Americans should understand that is the way it is always done in 
bodies such as this. Everybody agrees on some principles, but how you 
get there only Senators can decide.
  Second, the question has been asked on whose side is this budget or 
whose side are we on? Mr. President, I say to the Senator and to the 
American people, this budget is a budget for all Americans. We do not 
believe we want to pick and choose. We want a budget that is good for 
our country, we want a budget that is good for Americans, and we want a 
budget that is good for our 

[[Page S9260]]
children and for our grandchildren and children not yet born. We are 
convinced we cannot spend on the programs that are currently part of 
America at the same level, and give everybody everything they are 
getting under current programs, and be a budget that is good for all 
Americans, because the debt will continue, the interest rates will go 
up. And what it all boils down to it is that Americans will pay in the 
end with less of an economy, less good jobs, and less opportunities.
  So I answer the question posed on that side of the aisle with a great 
deal of pride, that this budget is good for America and the people of 
America. We are not picking and choosing. We are producing a budget 
that will make America a better place for everyone.
  I yield the floor.
  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. EXON. 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. BAUCUS. Mr. President, I rise in opposition to this conference 
report.
  When Senator Domenici's budget resolution passed the Senate, I said 
it was a good accountant's budget. That is, it had the right bottom 
line, and it made some tough choices by eliminating Cabinet Departments 
and reducing spending. But in the end, it failed the test of priorities 
and values.
  It cut Medicare service by $256 billion, which would reduce the 
essential Medicare health services for older Americans by nearly a 
quarter and place intense financial pressure on their children. And it 
weakened our future prospects by cutting education severely.
  At the same time, the Senate budget left in place wasteful Federal 
projects like courthouses, foreign spending like the so-called TV 
Marti, and luxury items like space telescopes. At the same time, it 
provided a large tax cut whose benefits went primarily to wealthy 
individuals and corporations rather than middle-income Americans.
  So I voted against it. But I hoped that with some changes in these 
priorities areas it could be made acceptable.
  Unfortunately, the opposite has happened.
  Medicare will be cut by an additional $14 billion, threatening the 
well-being of Montana's 125,000 senior citizens and the survival of 
Montana's rural hospitals.
  Support for agriculture will decline by an additional $1.4 billion to 
a total of $13.3 billion over 7 years. Per farm, that means 
agricultural supports will fall by $1,000 every year for the next 7 
years. And with 85 percent of American farms grossing under $100,000 
per year, we will see a severe cut in income all over rural America.
  Education will be reduced by $10 billion, meaning our children will 
be less able to compete with our trade rivals abroad.
  And wealthy people will get $75 billion more in tax breaks, which 
comes directly from senior citizens, rural hospitals, agricultural 
producers, and investment in education.
  Finally, it is no longer a good accountant's budget. Senator 
Domenici's sober projections have been replaced by unrealistic rosy 
scenario assumptions about growth, interest rates, and so on. It is far 
less likely to lead to a balanced budget.
  So this budget is significantly worse than the version the Senate 
voted on last month. It is less disciplined. Less far-sighted. And more 
damaging to senior citizens, rural America, and our future.
  I oppose it, and I urge the conference committee to go back to the 
drawing board and start over.
  Mr. EXON. How much time is remaining on our side?
  The PRESIDING OFFICER. Three minutes twenty seconds.
  Mr. EXON. I ask unanimous consent that we be allowed to reserve that 
time for later in the debate without further charging to this side of 
the aisle.
  How much time is left on the other side?
  The PRESIDING OFFICER. Five seconds.
  Mr. DOLE. Five seconds?
  The PRESIDING OFFICER. That is correct.
  Mr. DOLE. We will yield that back.
  [Laughter]
  Mr. EXON. We do not yield ours back at this time.

                          ____________________