[Congressional Record Volume 141, Number 107 (Wednesday, June 28, 1995)]
[Senate]
[Pages S9296-S9304]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE BUDGET RESOLUTION

  The PRESIDING OFFICER (Mr. DeWine). Under the previous order, the 
Senate will resume debate on the conference report to House Concurrent 
Resolution 67, the budget resolution for fiscal year 1996.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. GRAMS. Mr. President, I rise this afternoon to voice my strong 
support for the budget conference report, which I believe is a historic 
document that looks forward and not back; one that promises freedom, 
not Government servitude; and one that delivers hope and not despair.
  Mr. DOMENICI. Mr. President, I wonder if the Senator will yield for a 
moment?
  Mr. GRAMS. Yes, go ahead.
  Mr. DOMENICI. Mr. President, I understand we are going to be on this 
resolution for 1 hour now; is that correct?
  The PRESIDING OFFICER. There is not an hour to end the debate, or to 
begin debate.
  Mr. DOMENICI. We will be going back and forth? I ask the Senator, how 
much time would the Senator like?
  Mr. GRAMS. No more than 10 minutes.
  Mr. DOMENICI. I yield 10 minutes to the distinguished Senator.
  Mr. GRAMS. Mr. President, talking about the budget, this historic 
budget is a budget unlike any other approved by Congress in more than a 
quarter of a century because, not only does it balance the budget 
within 7 years without raising taxes, it actually cuts taxes for 
middle-class Americans.
  It marks the first time since 1969 that Congress has committed itself 
to a balanced budget, and reflects the change demanded by the voters in 
November: Get government off our backs and out of our back pockets.
  Mr. President, our budget resolution provides $245 billion in tax 
relief, making it the largest tax refund in history.
  I am proud that the centerpiece of the tax relief package will be the 
$500 per-child tax credit originally proposed by me and my very good 
friend from Indiana, Senator Coats, in our families-first legislation, 
and by Representative Tim Hutchinson in the House.
  Along with my freshman colleague, Senator Abraham, and the leadership 
of Senator Dole, we have ensured that this Senate goes on record 
supporting middle-class tax relief, and incentives to stimulate 
savings, investment, job creation, and economic growth.
  And, Mr. President, this tax relief could not have come at a better 
time.
  Government has become a looming presence in the lives of the American 
people, mostly through the encouragement of Congress.
  Each year, the people are asked to turn more and more 
responsibilities over to the Federal Government--for Government 
regulation, for Government support.
  From the time they get up in the morning till the time they go to bed 
at night, there are very few aspects of daily American life that are 
not touched by the hand of government.
  So government has been forced to grow just to keep up.
  Consider that government spending at the Federal State, and local 
levels has jumped from less than 12 percent of national income in the 
1930's to more than 42 percent today.
  And the burden for keeping these ever-ballooning bureaucracies in 
operation has fallen on the taxpayers, of course--through more and 
higher taxes.
  As a sign of just how big the Federal Government has grown--and how 
the number of tax dollars sent to Washington have grown right along 
with it--look what has happened to the IRS.
  Today, it has an annual operating budget in excess of $7.5 billion. 
If it were a private company, its gross receipts--more than $1 
trillion--would put it at the top of the Fortune 500 list.
  All that--just by processing tax dollars.
  Most middle-class American families pay more in Federal taxes than 
they spend for food, clothing, and shelter combined.
  Families with children are now the lowest after-tax income group in 
America--below elderly households, below single persons, below families 
without children.
  Since 1948, when Americans paid just 22 cents per dollar of their 
personal income in taxes, the Gallup organization has asked Americans 
what they think about the taxes they pay.
  That first year, 57 percent of the people said yes, taxes are too 
high. Today, nearly 50 cents of every dollar earned by middle-class 
Americans goes to taxes of some sort--and 67 percent of the people say 
they're handing over too much of their own money to the Federal 
Government.
  They might feel differently if they were getting a fair return on 
then investment. But Americans see their hard-earned dollars being 
wasted by the Federal Government. They look at the services they are 
getting in return and they feel like they are being taken to the 
cleaners.
  The 1993 tax bill offered by President Clinton did not help, either. 
As the largest tax increase in American history, it hit middle-class 
Americans right where it hurt the most--their wallets.
  The President's 1993 tax hike actually increased their tax burden, 
making it more difficult for the middle class to care for themselves 
and their children.
  And I remind you--not a single Republican voted for it.
  The tax burden has become so heavy in my home State of Minnesota that 
it took until May 14 this year--134 days into 1995--for us to finally 
reach Tax Freedom Day.
  That is the day when Minnesotans are no longer working just to pay 
off taxes, and can finally begin working for themselves. Nearly 20 
weeks, over 800 hours on the job just to pay Uncle Sam and his cousins 
at the State level.
  In order to pay all these taxes, Americans are spending more time on 
the job. Within the past three decades, the average American has added 
about 160 hours annually to their work schedule. That is about 4 extra 
weeks of work a year.
  They are overworked, overstressed, and they are moonlighting more 
than ever before.
  In 1995, one in six Americans holds more than one job. One out of 
every three is regularly working on weekends and evenings. And it is 
not because they necessarily want to--it is because they must.
  A significant number of families are relying on that second job just 
to pull themselves above the poverty line and meet their annual tax 
obligations.
  The majority of families who have reached a middle-class standard of 
living are families relying on two incomes. They are still pursuing the 
American dream, but the ever-increasing tax burden keeps pushing it out 
of reach.
  Imagine what those longer work hours are doing to the family. Or 
better yet, listen to taxpayers like Natalie Latzska-Wolstad of Coon 
Rapids, MN, who struggle with the demands of family life, the job, and 
the Government--while pursuing their own version of the American Dream.
  I went to the floor of the Senate last month to talk about Natalie 
and her family, after she wrote me a moving letter about the enormous 
tax burden her family is forced to bear.
  It hit home for Natalie after she and her husband met with their 
realtor, only to learn that they simply could not afford to purchase a 
new home on their own.
  Let me quote just a few paragraphs from Natalie's letter: ``I have 
finally reached the point of complete frustration and anger over the 
amount of taxes being deducted from my check each month,'' she wrote.


[[Page S9297]]

       When we got home that evening my husband and I sat down 
     with our checkbook and our bills and tried to determine what 
     we were doing wrong.
       After taking everything into consideration we determined 
     that we weren't spending our money foolishly.
       The only real problem we found was when we looked at our 
     paycheck stubs and actually realized how much of our income 
     was going to pay for taxes.
       It saddens me to think of how hard my husband and I work 
     and how much time we have to spend away from our daughter to 
     be at work, and still we cannot reach the American dream.

  This is a disturbing letter, and I am even more troubled knowing it 
is just one of hundreds I have received from across the country. I know 
you have heard some Senator on the floor say: Americans do not want tax 
relief. I do not know who they are talking to, or who is writing them 
letters. But I hear something completely different from the people that 
I get letters from. Here is another example.
  From California:

       Our families desperately need tax relief, and our 
     Government needs to stop spending so wastefully.
  From Georgia:

       I want to personally thank you for fighting for tax relief 
     for families. Your efforts do not go unnoticed.

  From Illinois:

       We are a one-paycheck family struggling to keep our heads 
     above water.
       Two of our three children are in a private school. The 
     burden of paying for the public and private school systems is 
     great for us. Nonetheless, we must do what we know to be best 
     for our children.
       It is encouraging to know there are members of the 
     government who understand our struggle and are working on our 
     behalf.

  From Kentucky:

       We realize you are fighting a tough battle and we fully 
     support you on this issue. Keep fighting!

  From Oklahoma:

       I want to let you know there are a lot of us middle-income 
     heads of households who support you firmly.

  And finally from Pennsylvania:

       Please continue to keep the pro-family community in mind. 
     The family, its strength, is what keeps this nation strong.

  Those are strong words, Mr. President, from people who know what they 
are talking about.
  As somebody once told me, those who say, We don't need a tax cut 
probably do not pay taxes.
  Contrary to 40 years of conventional wisdom in Washington, American 
families are better equipped and better able than the Federal 
Government to spend their own dollars. And they need the tax relief 
offered in the budget resolution more than ever.
  When we first introduced the idea of family tax relief and the $500 
per-child tax credit in 1993, our arguments were simple: taxes were too 
high, the burden of tax increases fell disproportionately on the 
middle-class, and big government was forcing more workers out of the 
working class and into the welfare class.
  Today, those same problems remain, and the arguments for tax relief 
have not changed, either. The big difference, however, is that this 
year, with this Congress--with this budget resolution--we are finally 
doing something about it.
  The $500 per-child tax credit takes money out of the hands of the 
Washington bureaucrats and leaves it in the hands of the taxpayers. It 
would return $25 billion annually to families across America, $500 
million to my Minnesota constituents alone.
  And it is truly a tax break for the middle class. We will ensure that 
9 out of every 10 dollars of this tax relief go to families making less 
than $100,000.
  That is not the wealthy, Mr. President. That is middle-class America.
  The Clinton administration and the Treasury Department have tried to 
refute our tax relief numbers.
  Without dwelling on the inherent bias in asking the President's own 
Treasury Department to examine a Republican budget plan, let me just 
say that our budget figures are based on numbers provided by the 
nonpartisan Congressional Budget Office and the Joint Tax Committees.
  Members of the President's own party have called on him to use CBO 
numbers--numbers which clearly show middle-class taxpayers benefit most 
from our tax relief.
  Along with tax relief, the other important aspect of the budget 
resolution is that we have balanced the budget.
  For decades, Congress has offered up budgets which raised taxes, sent 
government spending spiraling out of control, and created massive 
deficits.
  They built up a national debt of nearly $5 trillion because Congress 
thrives on spending other people's money.
  But who gets stuck with the bill?
  Not this generation. No, we are passing this debt on to our kids and 
grandkids.
  Even the Clinton administration, despite all its talk about shrinking 
the deficit, has washed its hands of the problem.
  Under both of the President's budget plans, the deficit would 
increase from $177 billion this year to well over $200 billion through 
the next decade, and add another $1.5 trillion to the national debt.
  When the voters ushered in a new political reality in November, they 
soundly rejected business as usual in Washington.
  They looked to the Republicans for an alternative, for a budget that 
could turn back 40 years of spending mentality and the belief that 
``money will fix everything, especially if it's your money and 
Washington can spend it.''
  Today, we have delivered.
  We crafted a document the naysayers said could never be achieved--a 
resolution that brings the budget into balance by the year 2002--and it 
is proof that we are serious about living up to our pledge.
  And we have done it without slashing Federal spending, without 
putting children, seniors, and the disadvantaged at risk.
  Most of our savings are achieved by slowing the growth of Government.
  Will there need to be some sacrifices? Yes, although the Government 
will have to sacrifice more than the people will.
  Will belts need to be tightened? Yes.
  But a belt that is not tightened today may become a noose tomorrow, a 
noose around the necks of our children and grandchildren.
  As I hear over and over from Minnesotans: The American people are 
willing to make those sacrifices--if they believe their Government is 
serious about making change.
  At long last, America has a Congress that is serious.
  Mr. President, what we do with this budget resolution, we are doing 
for the taxpayers who silently foot the Government's bills--the average 
men and women who get up every morning, send their kids to school, go 
to work, maybe at more than one job, and pay their taxes every year.
  They are the forgotten middle-class families, the people who have for 
too long borne the burden of Federal overspending.
  The taxpayer have watched their money vanish and then reappear in the 
form of some lavish Federal program which benefits few but the 
bureaucrats themselves.
  Mr. President, is it fair to ask these middle-class Americans to 
endure greater economic hardships if we continue to do nothing?
  Is it fair to expect middle-class Americans to endure greater 
economic hardships if we continue to do nothing?
  Is it fair to expect middle-class Americans to do without, when their 
Government has never had to, if we continue to do nothing?
  Is it fair to enslave the children of middle-class America with our 
debts if we continue to do nothing?
  If each Senator in this Chamber asks themselves those very questions, 
the budget resolution will pass and it will be an overwhelming 
victory--a victory not for this Congress, but a victory for the people.
  Thank you, Mr. President. I yield the remainder of my time.
  Mr. DOMENICI. Mr. President, I understand that Senator Brown was 
next.
  How much time is the Senator going to use?
  Mr. BROWN. I would like 10 minutes.
  Mr. DOMENICI. I yield 15 minutes to Senator Brown. And then following 
that, we will go to Senator Frist if there is no Democrat who wants to 
be heard.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. BROWN. I thank the Chair.
  I wish to start this discussion off with a tribute to a Senator who 
has been on the front line in this fight for a long time. Senator 
Domenici's brilliant efforts not only helped put together a package 
that has not been put 

[[Page S9298]]
together before in this Senate, at least during the last quarter 
century, but he brought people with widely diverse views into agreement 
over a plan that will rescue America. This is a bailout for America's 
finances. I believe it is due in large part to an enormous amount of 
dedicated effort by the Senator from New Mexico.
  Mr. President, I said bailout of America's finances. That is not an 
overstatement. That is precisely what I meant.
  For those who are listening, let me share with you why I believe that 
is true. The chart on my left is a simple, straightforward chart on the 
amount of money this country owes.
  Mr. President, let me quickly acknowledge these are not numbers that 
an accountant would use. There is no CPA firm in the country that would 
show this as the amount we owe. It is far from what we owe. It does not 
use sound accounting principles that are generally accepted, but it is 
the numbers that we use. It does not show our contingent liabilities. 
It does not show a wide balance sheet. But this is the net amount, if 
you are in the marketplace to borrow each year, and it is significant 
in that it is the amount that American working men and women have to 
pay interest on each year.
  What we have seen for a quarter century is a continuous growth line 
of budget deficits. They go up in bad times and down slightly in good 
times, but they continue to grow and grow and grow and grow.
  Mr. President, what is depicted here is nothing more on a straight 
basis than the amount we owe coming from the lower levels in the 
1950's, rising to almost $5 trillion. That is roughly $40,000 for every 
working person in this country.
  Let me put it in perspective. That is every man, woman and child who 
has a full-time or a part-time job owes over $40,000 for their share of 
the national debt. What is significant is that they have to pay the 
interest on that every year. Before a penny goes to support their 
family, before a penny goes to support their parents or their children, 
before a penny goes to pay the necessities of life, they have to come 
up with the interest on over $40,000.
  The problem is that this amount is expected to explode even higher. 
Any reasonable person, Democrat or Republican, liberal or conservative, 
who can look at these numbers, who can look at this chart, who can look 
at the forecasts that have been put in place, cannot but conclude that 
this problem has to be solved. It is not a question of can we wait 
until tomorrow. It is not a question of can we hide from it. It is not 
a question of can we refigure it in a way that will not look as bad. It 
is a simple, straightforward question that we are at a point now where 
the deficits are in a runaway fashion, and if we fail to address it, if 
we fail to acknowledge it, every American, rich or poor, will be poorer 
because of it. The predominance of the American economy in the 20th 
century will be lost. Our ability to be able to finance our debt, our 
very ability to borrow in the international marketplace will be 
destroyed.
  I believe people who do research of this type cannot help but notice 
what has happened to the value of the dollar in this crisis has gotten 
worse. The value of the dollar has plummeted. As a young man in the 
United States Navy when I visited Japan, the dollar would buy over 400 
yen. And as we speak it is in the neighborhood of 85. It used to be, at 
the end of the war, that the dollar would buy 5 deutsche marks. As we 
speak it is about 1\1/3\.
  The trend is not good. The reality is the financial crisis that has 
gripped our country has seen the rapid depreciation of the value of our 
currency. We have turned the biggest trade surplus in the world's 
history into the biggest trade deficit in the world's history. We have 
turned the greatest creditor nation in the world into the biggest 
debtor nation in the world.
  I honestly believe that unless we address this problem, what we will 
face is a drastic, almost catastrophic financial failure of this 
Nation.
  The good news is that this budget does address it. This budget does 
give us a plan, and it gives us a commitment. It involves a proposal to 
revise the programs when reconciliation bill comes before this body.
  Some will say it is too harsh, and some, like me, will say it is too 
weak; it is not strong enough; we ought to do more; we ought to end the 
deficit in the next year or two and not wait 7 years. But the political 
reality is that this is a budget that can pass. This is a budget that 
will solve the problem. It is a moderate proposal, but it is essential. 
We do not continue to have a viable financial circumstance for this 
Nation as a whole if this problem goes unaddressed.
  The normal process is for the President of the United States to come 
forward and recommend a budget. One may fairly ask: What did the 
President recommend in light of those astronomic increases in the 
deficit?
  Here is what the President suggested. He suggested huge increases in 
spending each year for the next 5 years, and proposed increasing the 
annual deficit from what was then estimated as $177 billion for 1995, 
increasing it each and every year up to $276 billion in the year of 
2000. Now, that is reestimated by the Congressional Budget Office over 
the next 5 years.
  Members will note that what we have talked about is a 7-year budget 
that not only comes into balance but provides a surplus. But the 
President's plan for this Nation was not to reduce the annual deficit 
but to increase it and to increase it dramatically. I believe that had 
we followed the President's course, the U.S. finances would be 
comparable to those of Orange County today. What the President had 
prescribed was a plan for fiscal disaster for this Nation and a poorer 
life for every working American and higher interest charges for every 
working American to pay, and, yes, a further decline in the value of 
the dollar.
  Some will say: Well, the President stepped forward and revised those 
figures and, instead of proposing continuous, increasing deficits, 
advocated balancing the budget within 10 years. Indeed, all Americans 
have heard the President speaking on TV, talking about he proposes a 
balanced budget in 10 years and the Republicans in 7 years. So what are 
we talking about? In fact, he even said his was far more humane.
  Mr. President, I wish to address that because the President of the 
United States himself has indicated that the Congressional Budget 
Office is the one that ought to be the arbiter of these figures.
  The Congressional Budget Office did evaluate his figures. They did 
come back and tell us what the President's revised proposal was. It was 
not a $276 billion debt increase in the year 2000, as he had originally 
proposed. What he proposed was something that involved a 10-year 
budget, but in the 7th year it called for a $210 billion deficit.
  Mr. President, here is the proposal: Continuous rising debt, 
continuous rising spending by the President and a deficit by the year 
2002, a deficit increase by the year 2002 of $210 billion.
  The agreement that is before this body is a surplus proposal for that 
year of $6.4 billion--a $210 billion increase in the deficit versus a 
$6.4 billion surplus.
  Some will say: Wait a minute; that is not what the President said. He 
said he wanted it balanced by the end of 10 years.
  Mr. President, the figures are not what he said in his rhetoric but 
what they total up to when you have an independent Congressional Budget 
Office review them.
  The reason I mention all of this is because this body faces a choice. 
It faces a choice of whether we vote yes or no on this budget 
resolution.
  Let me remind the body of what the choices that have been presented 
are, and they are the only alternative choices out there. One is to 
balance the budget in 7 years and have a $6.4 billion surplus. The 
other is the President's revised plan that calls for a $210 billion 
deficit and a failure to address the problem in the following years.
 Mr. President, there is no choice. And that is the bottom line of what 
we consider here today. It is either fiscal disaster, continuing 
increases in deficits and debt, a higher and higher burden for every 
working American, or it is a responsible plan that slows the growth of 
spending.

  Now, Mr. President, some may say, ``It slows the growth? I thought 
you were cutting?'' Mr. President, on this chart we see what this 
budget does. It modestly increases spending each year and modestly 
reduces the deficit each year, attaining a surplus by the year 2002. 

[[Page S9299]]

  Some will say, ``Wait a minute. Let us talk about real numbers and 
real figures. What does this budget really do?'' We have heard, and it 
has been said nationwide, that the President says we slashed and cut 
Medicare. Mr. President, that is false. That is inaccurate. That is not 
true. That is not a fair representation of the facts of this budget.
  Now what are the facts of this budget? Medicare in 1995 spends $158 
billion. Medicare under this plan by the year 2002 will spend $244 
billion. Medicare will increase over the distance of this plan by $317 
billion on a net basis and $349 billion on a gross basis.
  Some will say, ``Wait a minute. Medicare increases? I thought you 
were cutting it.'' What this budget plan calls for is a slowing of the 
rate of increase in Medicare. It does not call for a cut in Medicare. 
It calls for a huge increase in Medicare. Let me repeat it. On a gross 
basis, this budget calls for a $349 billion gross increase over 7 years 
in Medicare spending. To depict it as a slash in Medicare is simply 
inaccurate. Literally over the next 7 years we will spend $1.6 trillion 
on Medicare. And total spending on Medicare in the next 7 years will be 
73 percent higher over the next 7 years than it has been in the past 7 
years.
  I hope as Americans listen to this debate, they will have firmly 
fixed in their minds that what this budget does is to increase Medicare 
spending, not cut it. It also slows the rate of increase in Medicare 
spending, so that it is less likely that the trust fund goes bankrupt. 
For those who think we ought to increase spending even faster than this 
budget does, I hope they will accept the burden to come here and 
explain what they do when they bankrupt the trust fund, how they 
provide health care, because, Mr. President, that is the bottom line 
for the debate on health care. Yes, you can spend up all your savings 
account, but what happens when it runs out? That is what this budget 
attempts to address.
  Now, some have said we will cut Medicaid. What are the facts? 
Medicaid spent $89 billion in 1995 and will spend $124 billion a year 
by the year 2002. Medicaid spending will rise $149 billion on a net 
basis. It will spend a total of $772 billion in the next 7 years. The 
total spending in the next 7 years on Medicaid will be 73 percent 
higher than it was in the past 7 years.
  Well, perhaps by now people are saying, ``Wait a minute, I have heard 
all the numbers. What is bottom line?'' The bottom line is the rhetoric 
by those naysayers that say we cannot change anything. The bottom line 
is, what they have used to describe and attack this budget has not been 
accurate. The bottom line is, what we have seen is a misdescription of 
what this budget does.
  Mr. President, lastly what I heard some of the detractors say is, 
this budget provides a huge increase in defense spending. Mr. 
President, if you look at the numbers, I think they speak for 
themselves. Defense spending goes from $270 billion in 1995 to $271 
billion in the year 2002.
  The PRESIDING OFFICER. The Chair will advise the Senator his time is 
expired.
  Mr. BROWN. I ask unanimous consent that I have an additional 4 
minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWN. Mr. President, the reality on defense spending is that 
between now and the next 7 years, compared to 1995 defense spending, it 
will drop $13 billion. It will not increase; it will drop. Some will 
say, ``Wait a minute. It might have dropped more under other plans.'' 
That is absolutely correct. But let me remind the body that that $13 
billion drop is a drop in stated dollars and not adjusted for 
inflation. If you viewed it in constant dollars, it would be much more 
dramatic dollars. Could we save more in defense? My view is we could, 
and should. But to say this is a bad budget because it increases 
defense spending simply flies in the face of the real fact.
  Now, Mr. President, I want to put back up the chart we started with, 
because I think it displays in cold, hard facts the reality of this 
debate. Do we adopt a budget that brings us into balance? Or do we go 
on as we have? Is the status quo that the President advocates good 
enough? Or do we need to take strong, firm steps to slow the growth of 
spending and bring the budget into balance and restore fiscal 
soundness?
  Mr. President, I believe there is no choice. I believe there is no 
choice because there is no alternative before the body. If you select 
staying with the status quo, you not only condemn American working men 
and women to carry a burden of interest payments and debt that will 
cause the greatest economy in the world to stagger and fall, you not 
only foment a fiscal crisis, but you deny the men and women and the 
children and their children and their great grandchildren any 
possibility of having a competitive economy in the years ahead.
  There is no choice on this budget, Mr. President. It is either adopt 
a reasonable plan to move this budget into balance or offer the status 
quo that the President has advocated and see the future of our children 
and grandchildren lost. Great nations and great societies have arisen 
in abundance on this Earth. They abound around the globe. The glories 
of the Samarian society and the Egyptian society are renowned in the 
textbooks of history. The Greek civilization brought great advances to 
mankind. Perhaps few have achieved the dominance of the Romans. There 
was a time when French glory spread its influence around the world. And 
there was a time when the Sun never set on the British Empire.
  Each nation in its turn has had its time in the Sun. And now, Mr. 
President, the question is whether or not the Sun will set on the 
greatest experiment in democracy in the history of mankind--the United 
States of America. This budget offers our children a future.
  Mr. FRIST addressed the Chair.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. FRIST. I yield such time as may be required for me, which I will 
take from our side.
  Mr. President, I rise today, first, to commend my colleagues on the 
Budget Committee who participated in the conference on the budget 
resolution. I was not a member of the conference, but as a member of 
the Budget Committee, I certainly appreciate the hard work that went 
into this package from Members in both Houses of Congress.
  Second, I want to express my strong support for this package and to 
point out why the reforms Republicans have outlined in this plan are 
vital to America's future. This is truly a historic budget agreement, 
one that will achieve balance in 2002 for the first time in almost 
three decades. And this budget is fair. It slows the growth of Federal 
spending. Even President Clinton has now agreed that we must balance 
the budget and that we must change our spending habits if we are ever 
to restore the long-term health of this country.
  Mr. President, as a physician, I would like to focus on the health 
care spending aspect of this budget agreement,
 because I think it is critical for each and every American to 
understand exactly what the Republicans have proposed. But first I 
would like to commend the conferees on coming to an agreement with 
respect to tax relief for hard-working Americans.

  The conference agreement ensures that we get to balance by first 
locking in spending cuts and then, and only then, by cutting taxes to 
put hard-earned dollars back into the hands of the working families and 
small businesses of the country.
  I look forward to working with the Finance Committee to craft the 
specifics of the Senate tax relief bill which I hope will, indeed, 
include family tax relief, as well as capital gains tax cuts. These 
reductions will greatly benefit the American family and the American 
economy.
  Mr. President, the most important provisions of the budget conference 
agreement in my mind are those which address the growth in the Medicare 
and Medicaid Programs. Like the earlier resolution passed by the 
Senate, the budget resolution conference report sets forth outlay 
levels for Medicare spending that are based on reforms necessary to 
preserve and protect Medicare. These new spending levels will require 
structural changes in our Medicare system, changes which will improve 
the system, will improve the delivery of care, changes which are 
absolutely essential to ensure that Medicare will be solvent in the 
year 2002 and beyond. 

[[Page S9300]]

  By beginning the process of reform to avoid bankruptcy in the short-
term, we will be on our way toward structural reform that will ensure 
Medicare's long-term viability so that this program, which is so 
important to many seniors and individuals with disabilities, will be 
there for years to come.
  Yet, even though these reductions in the growth of Medicare spending 
will certainly require change, it is important to understand that both 
total spending and spending for each Medicare beneficiary will continue 
to grow over time, will continue to increase at a rate well above that 
of inflation.
  Total spending grows in Medicare from $178 billion in 1995 to $274 
billion in the year 2002. That is an average annual growth rate of 6.4 
percent in the Medicare Program, which is twice as fast as the average 
projected inflation rate over the next 7 years.
  More importantly and easier to understand, I think, and I will refer 
to this chart next to me, is that the Medicare per capita spending in 
this conference agreement--that is, how much we are spending per 
Medicare beneficiary--increases over time. A Medicare beneficiary today 
will have spending associated of $4,816 in 1995, and in this conference 
agreement, that will increase by the year 2002 to $6,734. This is not a 
cut, this is an increase from 1995 to the year 2002 for each individual 
in the Medicare Program, from $4,800 to $6,700. That is a 40-percent 
increase over 7 years. Even after accounting for inflation, that is a 
12-percent increase per person in our Medicare Program over these 7 
years.
  These numbers show two things. First, the Republican budget takes 
care of our seniors. The conference agreement increases spending for 
each Medicare beneficiary so that we can continue to provide access to 
high-level, high-quality care for our seniors and disabled citizens.
  Second, these numbers show that the Republican budget is responsible 
by requiring the Medicare Program to be improved and to be 
restructured, it strengthens and preserves the fiscal viability of the 
program for our Nation's seniors now and for generations to come.
  Finally, the conference agreement strikes the right balance on 
Medicaid as well. Currently, the growth in Medicaid is simply 
unsustainable. Medicaid comprises nearly 20 percent of State budgets. 
In my own State of Tennessee, Medicaid accounts for 25 percent of the 
overall State budget, $3 billion of a $12 billion State budget. If left 
unchecked, Federal spending on Medicaid will double by the year 2002. 
It is simply not sustainable.
  The conference agreement gradually slows the rate of growth in the 
Medicaid Program from over 11 percent now down next year to 8 percent, 
gradually down to 7, 6, 5, and then 4 percent by the year 2002. Still, 
total Federal spending on the Medicaid Program will be $773 billion 
over the next 7 years.
  Again and again, Governors all across this country have told us that 
if we strip away the regulations, if we increase flexibility and return 
control of these programs in Medicaid over to the States that they will 
be able to institute reforms to achieve these levels of Federal 
spending.
  Mr. President, the States are the entities responsible for managing 
the Medicaid Program, and I am confident that the levels agreed to in 
the budget resolution conference report will be attainable.
  I wanted to outline the specifics of the Medicare and Medicaid 
spending today, because I do believe it is important, critical that we 
look at the facts and not just get lost in the rhetoric. The rhetoric 
that we have heard today, and will likely hear tomorrow, undoubtedly 
will continue to surround our consideration of this agreement as we 
hear that there are tax cuts being taken on the backs of the elderly 
and the poor. This representation really ignores the problems that are 
inherent in our Federal health programs that do need to be improved, 
that do need to be changed. And this representation is, in my judgment, 
an inappropriate response to an impending crisis that is staring us in 
the face.
  Again, I am proud of my colleagues and honored to be a part of this 
historic occasion.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. BUMPERS. I yield myself 15 minutes.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. BUMPERS. Mr. President, the great French philosopher Voltaire 
once said, ``History doesn't repeat itself, men do.'' So here we go 
again, precisely as Voltaire said, plowing the same ground, the same 
way we did in 1981, and it will be a few years from now before we can 
stand on the floor and say, ``I told you so.''
  In 1981, I stood right here at this desk and fought like a saber-
toothed tiger to keep us from quadrupling the deficit. But there was a 
herd instinct that swept across this floor, and only 11 Senators--only 
11--stood up for common sense.
  What did we get? We got a deficit which grew to $290 billion in 1992, 
and which accumulated over the years into today's $4.6 trillion 
national debt.
  This chart shows what the Republicans promised in 1981. They were 
going to balance the budget in 1983, no later than 1984, and here is 
where they said the deficit would go--down toward zero. Between 1984 
and 1985, they said, we would have a balanced budget.
  ``How do you reach a balanced budget?'' we asked. ``You double 
defense spending and cut taxes,'' they said. That was their method of 
balancing the budget.
  What happened? Here it is. By 1983, we had a $200 billion deficit. 
Even those of us who were terrified by the 1981 budget changes would 
never have guessed that could happen.
  David Stockman, President Reagan's head of OMB, wrote a book about 
that.
  Here it is. It is called ``The Triumph of Politics,'' and he wrote it 
in 1986, after the damage had been done. In the book he says that the 
1981 Reagan budget plan was all done on the back of an envelope. Where 
were the numbers coming from, he asked? People kept putting things on 
his desk that he did not understand.
  Stockman was a friend of Senator Moynihan because he had studied 
under Senator Moynihan while in college. And in his book, Stockman 
relates a conversation he had over dinner with the Senator and Mrs. 
Moynihan on September 24, 1981 after the damage of the Reagan tax cuts 
had already been done. Stockman says he told Moynihan, ``You guys on 
the hill are going to have to rescue this. We went too far with the tax 
cut and now I can't get them to turn back.''
  And Moynihan responds, ``I am not sure whether anything can be done 
about it.''
  And so the damage continued to pyramid. In 1992, Bill Clinton was 
elected President. President Clinton came to this body in 1993 with a 
proposal to raise taxes by $250 billion and cut spending by $250 
billion, and we passed it, without one single Republican vote in the 
House and without one single Republican vote in the Senate.
  And this chart shows where the deficit was when President Clinton 
made his proposal. It was headed for a $300 billion deficit in 1992. We 
had nearly a $300 billion deficit. The Republicans said the Clinton 
proposal would be a disaster for the Nation and would bring on a 
terrible depression. The predictions were ominous and endless. But what 
happened? The deficit, the first year, went from $300 billion to $255 
billion; the next year, to $203 billion; and this year to $175 billion, 
without one single Republican vote.
  So here we are. We cannot stand to admit the success of that. So we 
have this budget here. I daresay I could walk down the streets of 
Little Rock and pick out 535 people at random, bring them to 
Washington, put 435 in the House and 100 in the Senate, and I promise 
you that we could come out with a better budget, a more compassionate 
budget, and a fairer budget, than this one.
  I heard a Congressman say the other day that there is ``plenty of 
pain in this for everybody.'' Really? Pain for everybody? What about 
Members of Congress? Where is their pain? Where is the pain of people 
who can afford to send their children to school without Pell grants and 
student loans?
  The one thing that will restore some sense of decency, civility, 
culture, and social fabric in this country is education. You can stand 
on this floor and 

[[Page S9301]]
moralize all you want. You are not going to force people to go to 
church by moralizing with them. You are not going to force people to 
quit having babies out of wedlock by moralizing with them. You are 
going to solve all of these problems by educating people. The one thing 
Joycelyn Elders said--and it is not popular to quote her these days, 
but this is worth repeating--when they asked, ``What are you going to 
do about this generation?'' She said, ``Nothing, they are already lost. 
I am going after the next generation.'' Well, I do not totally agree 
with that, but I can tell you that is where our money ought to be 
spent--on the coming generation.
  So what are we going to do? Cut $11 billion out of education for the 
next 7 years and stand back and ask why our children are not learning.
  What else? Why, we are going to deny 350,000 children the right to 
Headstart. Everybody knows what Headstart means to children, 
particularly from poverty areas. So what are we going to do? Sorry, we 
are closed.
  What else? Two things that we fund here are, for some reason, such an 
anathema to most Republicans. I watch public broadcasting and Discovery 
and Arts and Entertainment. I do not watch sitcoms. I do not know any 
of those people. I do not say that boastingly. It just does not 
interest me. I have an intense curiosity about everything, and I am 
interested in knowledge; I want to learn all I can before I die--and 
that is not too far away. But I am still curious about everything, so I 
watch the Learning Channel and the channels where I am likely to learn 
something, not the channels where I know I am not going to learn 
anything.
  So what do the Republicans propose? Eliminate PBS. Eliminate the 
National Endowment for the Arts. ``Well, Senator, you favor 
pornography, or you must if you favor the National Endowment for the 
Arts.'' No, I do not favor pornography. But I am hot to keep the 
Arkansas symphony afloat. I am hot to keep the Arkansas Repertory 
Theater afloat. I am hot to see people in small rural communities of 
this Nation get exposed to Shakespeare now and then. I deplore the 
Mapplethorpe exhibit as much as the Presiding Officer or any other 
Senator. It is like welfare--eight percent rip off. You cannot design a 
program that somebody is not going to corrupt.
  So two of the few civil, decent culturally enriching things in this 
Nation, public broadcasting and the National Endowment for the Arts, 
they go on the block.
  Earned-income tax credit. You think about the earned-income tax 
credit, which everybody considers to be the greatest program ever 
invented to keep people off welfare. This is where people who make less 
than $28,000 a year get a refundable credit of up to $2,200 a year, on 
a sliding scale. We make money off of it because we keep them off 
welfare. Is that what Dale Bumpers says? No. That is what Senator 
Domenici, chairman of the Budget Committee, said. What did he say about 
the earned income tax credit? ``It is a great way to help families with 
the costs of raising their children. It sends assistance to those in 
need; to those who work hard and yet struggle to make a living and 
provide for their children.'' That was Senator Domenici, not Dale 
Bumpers. This is what Senator Packwood said: ``A key means of helping 
low-income workers with dependent children get off and stay off 
welfare.'' Those are Senator Packwood's words. This is what President 
Reagan said: ``The best antipoverty, the best profamily, the best job 
creation measure to come out of the Congress.''
  So what do we do to that? About $21 billion is whacked off of it in 
this budget resolution.
  Family values. I must tell you that I get sick listening to the 
moralizing about family values from the same people who choose to 
torpedo the best program we have going to help families stay together 
and stay off welfare.
  What else are we going to do? We are going to sell the Presidio, the 
most magnificent piece of property left in America. The old Fort 
Presidio goes on the auction block.
  What else? We are going to sell the naval petroleum reserves, which 
we have always relied on in a time of military crisis. The naval 
petroleum reserve. We are going to sell it to the highest bidder.
  What else? We are going to privatize all those people who are in the 
towers at the airports who guide our planes. We are going to privatize 
them. It will run for profit in the future--not for safety necessarily, 
but for profit.
  What else? We are going to sell the Uranium Enrichment Corporation 
and the Power Marketing Administration which make the Government money. 
We will get a pretty good amount of revenue in the year that we sell 
those programs, but then we will fail to get the annual revenue that we 
are getting now.
  What else? We are getting down to the bone now, Mr. President. We are 
going to cut Medicare $270 billion. How are we going to do that? We are 
going to reform Medicare. How are we going to reform it? Nobody knows. 
Nobody has said.
  We can either bankrupt every rural hospital in America, which we 
would do in my State, cut doctors' fees to the point they do not want 
to participate in the program anymore, or assess every single Medicare 
recipient in the country $3,345 over the next 7 years.
  Medicaid, the poorest of the poor, we are going to increase 4 
percent. It has been increasing by 10 percent. What will happen? We 
will do block grants to the States and we will have 50 different 
programs for Medicaid.
  Mr. President, all 100 people who sit in this body get a nice fat 
check every month, $133,000 a year. A lot of them never dreamed they 
would make that much. I guess I am one of them. We get $133,000 a year. 
We have a nice, fat, cushy pension waiting to retire. But we have a 
health care plan second to none. Any doctor or hospital in this city is 
more than pleased to see a Member of Congress come in because they know 
our plan will pay for everything.
  But do you know what we forget? We forget that 37 million people in 
this country are over 65, and 50 percent of them go to bed terrified at 
night for fear they will get sick and not be able to pay their medical 
bills. We in Congress have no such fears.
  What are we going to do? We are going to give a $245 billion tax cut. 
Not a middle-class tax cut. I cannot believe people have the temerity 
to call this a middle-class tax cut. This tax cut, at least the House 
tax cut, goes to virtually the wealthiest people in America.
  What in the name of God are we thinking about? Seventy percent of the 
people of this country say, ``Don't spend that $245 billion on tax 
cuts.'' If you can come up with $245 billion, put it on the deficit.
  Mr. President, what is next? Defense--the Senate Armed Services 
Committee is this day marking up a bill that is calculated to do one 
thing: that is to gin up the cold war one more time. More B-2 bombers. 
For whom? Whom are we going to bomb? Even new battleships--two 
battleships. All kinds of things the Defense Department, even the Joint 
Chiefs of Staffs, say they do not want. We in Congress will teach the 
Joint Chiefs a thing or two about military battles.
  Imagine Senators telling old people we are cutting Medicare by $270 
billion and telling poor people we are cutting Medicaid by $180 
billion. What do we say to the Defense Department? Have it all; just 
have what you want. Do you want to kill the ABM treaty so the Russians 
have no choice but to start rearming? Do you want to build all the 
weapons systems that really have no meaning in today's world? Here is 
the proof of the pudding.
  The United States is spending $280 billion this year, counting the 
Energy Department's budget, on defense; the eight biggest military 
nations on Earth outside NATO--Russia, China, North Korea, Iraq, Iran, 
Libya, Syria, Cuba, our most likely adversaries--the combined total 
budgets of all eight nations is $121 billion.
  We are spending twice as much in the United States alone as our eight 
most likely adversaries combined. When we add NATO spending of $250 
billion, the United States and NATO are spending four times more than 
all these nations combined. Mr. President, this sounds like sheer 
lunacy, because it is.
  In a few days, the Budget Committee will send over all their 
mandatory spending instructions to the committees to report back to 
them by September 22. Then CBO will certify that the budget really will 
be in balance in the year 2002. Then the Budget Committee 

[[Page S9302]]
will tell the Finance Committee, ``Come up with a big tax cut of $245 
billion over the next 7 years,'' and then the Budget Committee will 
combine all of this mandatory savings legislation with a tax cut bill, 
and it is all going to be passed in one fell swoop.
  What does that mean? That means that we will pass a tax cut this 
fall. We will pass this budget, and all the appropriations bills that 
go with it, and then we will be free to have an immediate tax cut.
  Then next year, it will require only 51 votes to undo every bit of 
our balanced budget. If we have a recession, a war, if we have a trade 
war, earthquakes, hurricanes, floods, every Senator in this body will 
fall all over himself to vote to pay for every bit of it, and there 
goes our balanced budget because we will have already passed a $245 
billion tax cut.
  Mr. President, we are back to square one. I know my time is about to 
expire. I wanted to say some other things. I just want to close by 
making a couple of observations.
  This budget is guaranteed not to solve the problems of this Nation. 
This budget tells the American people only one thing: That it has been 
crafted with the utmost cynicism to keep people's attention diverted 
just long enough to get this tax cut passed.
  When we pass a tax cut, think of who will feel the pain. Here is the 
chart. On capital gains alone, 76.3 percent of the capital gains tax 
cuts will go to the wealthiest 5 percent of people in America--76 
percent to the wealthiest 5 percent of people in America. If that is 
what America is about, somehow or another, I missed it all. You could 
not hold a gun to my head and make me vote for this budget. I yield the 
floor.
  Mr. President, I suggest the absence of a quorum, and I ask unanimous 
consent that the time consumed by the quorum not be charged against the 
resolution.
  The PRESIDING OFFICER (Mr. Abraham). Without objection, it is so 
ordered.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DOLE. 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. PELL. Mr. President, it should come as no surprise that the 
budget resolution which has come back to us from conference is far 
worse and more dismaying in its impact than the version which passed 
the Senate on May 25.
  What I said when I voted against the resolution the first time 
applies now with even more force: This budget is a plan for the 
evisceration of progressive government as we have come to know it in 
the past 40 years. Sadly, it marks the end of an era of high intentions 
and decency and compassion in public policy.
  On of the worst provisions of the conference report, from my point of 
view, is the mandatory cut of some $10 billion in education programs, 
notwithstanding the fact that the Senate last month voted 67-32 to 
restore $9.2 billion to this account.
  The conference cut in education will substantially increase the 
indebtedness that students incur to pay for college tuition, adding 
some $4,000 to $5,000 to the cost of an average student loan. It could 
well mean that literally millions of students will have to trim, defer 
or even drop their plans for college.
  A number of important education programs--such as Safe and Drug Free 
Schools, Goals 2000, School to Work Opportunities, Head Start, Pell 
grants, the National and Community Service Act and Vocational 
Education--could well be subject to severe funding reductions and even 
elimination.
  At a time when our Nation needs a more educated and better prepared 
workforce, these education cuts mean we would be moving in precisely 
the opposite and wrong direction.
  Similarly, Mr. President, the conference report's outline for 
spending on foreign affairs, the so-called 150 account, indicates that 
over time, there will be significant cuts in funding for U.S. foreign 
affairs agencies, personnel and assistance programs; there will be an 
enormous reduction in U.S. financial support for the United Nations and 
U.N. peacekeeping missions; and there will be major constraints on the 
ability of the United States to conduct diplomacy and exert influence 
abroad.
  If we follow the prescriptions in this budget plan, the United States 
will be unable to exercise leverage over or work cooperatively with the 
international community to resolve conflicts, advance our interests, or 
promote democratic and free market principles.
  I am particularly disturbed by the potential impact of the budget 
plan on our ability to contribute to the United Nations. Having just 
returned from the 50th anniversary celebration of the United Nations, I 
am once again reminded of the tremendous contributions that the United 
Nations has made to support and advance U.S. foreign policy goals, and 
of how useful a tool it could be for the United States in the future. I 
am not so naive as to profess that the United Nations has always lived 
up to its potential, but for every example of failure that are numerous 
countervailing examples of success.
  These cuts will set us squarely down the road toward retrenchment and 
withdrawal. If we choose to go this route, we will do grave disservice 
to the next generation of Americans. At the end of World War II, we 
chose not to yield to the temptation of isolationism, and our country 
prospered as it never had before. I think we should have learned our 
lesson by now.
  These cuts in education funding and in the foreign affairs account 
typify the great differences in priorities and values which distinguish 
the opponents from the proponents of this resolution. All of us agree 
that many Federal programs should be trimmed or restructured or phased 
out altogether. But we have significant differences over where the axe 
should fall.
  I for one think that far more critical attention should be given to 
modifying and reducing the elaborate defense and security structure 
which in many ways is a casualty of its own success in the cold war.
  I am dismayed that the conference report comes back to us with even 
greater allowance for defense outlays than we originally provided. As I 
see it, we should be spending far less on defense and more on domestic 
social programs.
  The same might be said for the vast hidden budget of our intelligence 
apparatus which I note spent some $10 billion in its unsuccessful 
efforts to estimate the state of the Soviet economy, the collapse of 
which it failed to anticipate.
  Mr. President, as I indicated last month, my differences on the 
budget go deeper than priorities. I continue to question the basic 
premise that the Federal budget must be brought into absolute balance 
in a specific time frame.
  And I particularly question the wisdom, indeed the sanity, of 
providing for tax cuts at the very time our objective should be to 
bring revenues and expenditures into balance. It seems preposterous 
that the budget resolution now comes back to us with a provision for 
tax cuts of $245 billion, notwithstanding the Senate's decisive 
rejection by a vote of 69 to 31 of the Gram amendment last month.
  For every dollar of opportunistic tax cuts provided by this 
resolution, an offsetting dollar must come from some other source. The 
designers of this budget actually propose to borrow funds in the next 
few years to make up for the lost revenue, and then the impact will 
fall on school children, college students and Medicare recipients among 
many others.
  This seems like a strange way indeed for a modern society to manage 
its affairs. A far better way, it seems to me, would be to make 
judicious cuts, reduce the deficit to reasonable proportions and, if 
necessary, raise additional revenues to preserve worthy programs.
  We should not loose sight of Franklin Roosevelt's wise dictum that 
``Taxes, after all, are the dues that we pay for the privileges of 
membership in an organized society.'' In the end, we get what we pay 
for.
                  opposition to defense funding levels

  Mr. GRASSLEY. Mr. President, I have asked to speak at length on this 
conference agreement to raise some serious reservations about the 
funding levels it contains for defense. I appreciate Chairman 
Domenici's cooperation in allowing me this time.
  I would like to say first that I will vote for this conference 
report. I spoke 

[[Page S9303]]
at length earlier today about the positive aspects of this budget, and 
why it's needed for this country's future. Whatever reservations I have 
about the defense numbers, they are secondary to the main priority--
which is a credible, balanced budget.
  To me, the explosion of debt sanctioned by Congress over the last 
three decades is unconscionable. It has become a moral issue with me. 
We are mortgaging our children's future by failing to act responsibly 
now. It has to stop. The goal of this conference agreement is, in fact, 
to restore responsibility to our fiscal policy. And that's why I 
support the conference agreement despite my opposition to the defense 
budget levels.
  Let me also say that I strongly supported the Senate budget, 
including the defense numbers. To me, the Senate's version of the 
budget we passed in May was the most credible budget passed by this 
body that I have voted for. There was no smoke and mirrors. Just sound, 
tough choices. And as I have done before on this floor, including 
today, I want to once again commend Chairman Domenici for his 
outstanding leadership in crafting that budget.
  Having provided that context, Mr. President, I would like now to 
address the defense issue.
  The conference report pumps $40 billion into the defense budget over 
the next 7 years. There are two justifications given. First, the 
defense budget is ``underfunded.'' Second, we need more money for 
weapons so we can have more money for readiness.
  Neither argument has credibility, in my view.
  The defense debate is often dominated by fancy buzz words and 
phrases. Two examples are: First, the defense budget is 
``underfunded''; and second, we cannot sacrifice ``future readiness'' 
for current readiness. These are the phrases being used. But what do 
they mean?
  What I plan to do is explain these arguments in terms the taxpayers 
can understand. That way, they can see how they are getting ripped off.
  First, the underfunding argument. This argument cites a gap between 
the level of funding for programs in the defense budget, versus the 
realistic cost of those same programs when the bills come due. It says 
more money is needed to fund everything that's in the defense budget.
  This argument is bogus. The fact of the matter is, more money would 
not be needed if the defense managers were to manage their programs 
properly. The funding gap cited in the conference agreement is future 
cost overruns that happen historically because defense managers are not 
doing their jobs.
  The defense budget is not underfunded; it is overprogrammed. The cost 
of what is in the budget is deliberately underestimated. That way, the 
bureaucrats can squeeze more programs in. It is a bait-and-switch game 
that would make the best of the con artists green with envy.
  Once they get all the programs stuffed in by underestimating their 
cost, they turn around and say: ``Gosh, we need more money to pay for 
everything we just crammed in there.''
  If it were not for the conscious game of deliberately underestimating 
costs to shoehorn more programs into the budget, the term 
``underfunding'' might be legitimate. But that is not the case. The 
fact that it is a deliberate scheme to game the system is why it is 
really a case of overprogramming, not underfunding.
  For example, when Republicans accuse President Clinton of using rosy 
economics to balance the budget--therefore, claiming his budget really 
is not balanced--we are accusing him of not making the tough choices. 
By assuming a rosier revenue stream, he is trying to fit more programs 
into the Federal budget, and make fewer cuts. It is poor management and 
leadership. It will lead to higher deficits. In his case, our 
accusations are justified.
  It is the same with the defense budget. That is why I call the 
defense budget a ``blivet''--5 pounds of manure in a 4-pound sack. The 
question is, after they pull this bait-and-switch routine, do we give 
them a bigger sack, or do we ask them to manage their manure better?.
  Interestingly, Mr. President, I used this argument to successfully 
freeze the defense budget in 1985--during the height of the Soviet 
threat. If the argument was successful then for spending less money, 
why would we use it now to argue for more money, especially when the 
threat is gone?
  Simply put, those who are using the argument now to justify more 
spending do not understand the issue.
  The Defense Department has a history of playing the overprogramming 
game. I first uncovered it in 1983, and used analysis of that problem 
to show how more money was making the funding gap worse. The answer was 
not more money, but rather better management. Using that argument, we 
froze defense spending in 1985, and it has been plateaued ever since.
  The overprogramming gap was bad back in 1983, and it hasn't gotten 
any better. The data confirm this. The conference report language 
acknowledges that the problem is still with us. But what the report 
does not do is present a logical case for why an argument that once was 
used to justify less spending and better management, is now used to 
justify more spending in place of better management.
  If my colleagues were to respond correctly to this problem, we would 
say better management must substitute for more money. That means taking 
away a pound of manure, rather than getting a bigger sack. Better yet, 
preventing the excess manure in the first place is what we want. That 
is proper management. If all we do is keep getting a bigger sack, we're 
rewarding bad management.
  It is a game. It is a game mastered by crafty bureaucrats to extort 
taxpayer money out of Congress. In reality, by doing what is argued for 
in this conference agreement, we would be covering the cost overruns 
that will result from putting in more money.
  You see, the cost overruns have not occurred yet. They will occur 
each of the next 7 years, if business is conducted as usual. Putting 
$40 billion more in the defense budget guarantees that business will be 
as usual. And we will get $40 billion of cost overruns as a result.
  Now, let me address the second argument used by the conferees. It is 
really just another symptom of the problem I just described.
  The second argument goes like this: More money lessens the need for 
Pentagon decisionmakers to sacrifice future readiness to meet current 
readiness requirements.
  ``Current readiness'' means spare parts, fuel, and training. ``Future 
readiness'' means procurement. This argument simply means that DOD 
managers do not want to have to manage and prioritize. As cost overruns 
due to bad management occur in each
 of the next 7 years in weapons accounts, the managers don't want to 
have to rob the readiness accounts to pay for the weapons. That is what 
they used to do. But that would hollow out the force. Instead, this 
time they want more procurement money to cover the cost overruns.

  When you hear the cry for more money for things like ``procurement'' 
or ``modernization'' or ``future readiness needs''--all of which are 
fancy buzz words--those are euphemisms for putting in more money to 
cover cost overruns. It says, ``We are not going to manage better. We 
have run the defense budget this way for decades, and we're not going 
to change now.''
  That is the attitude that troubles me, Mr. President. What troubles 
me even more is that the new Republican Congress is willing to tolerate 
it. We are treating it as a sacred cow. Worse. We are treating it as a 
sacred fatted cow.
  Why is it that Members on my side of the aisle send their management 
principles on a vacation whenever the defense budget is mentioned? We 
scrutinize every other program for better performance. But when it 
comes to the defense budget, it is a jobs jamboree. A pork paradise.
  It is hypocritical. It undermines our credibility as a party. We are 
not willing to tolerate business-as-usual in any corner of the Federal 
Government, except for defense. On defense, we worship at the altar of 
the sacred fatted cow.
  I want to make it clear, Mr. President, that my colleagues in the 
Senate did not have this attitude, for the most part. It was mainly 
those of the other body. During the conference, we met with our 
counterparts in a very important defense discussion. Afterward, we 

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reached a compromise on the defense numbers.
  I do not intend to mention names. But I would like to relay a couple 
points that were made by House leaders in defense of pumping up the 
defense budget.
  The first argument was the pork argument. At the time of the defense 
meeting of conferees, the relevant House committee had already 
completed work on this year's defense bill. If the conferees did not 
pump up the numbers, it would mean going back to Members of Congress 
and saying we would have to go back on our promise to fund this project 
or that program.
  Now, when a Member of Congress is faced with a choice like that, 
guess what he or she will do? The choice is, go along with the pumped-
up defense numbers, or we'll cancel this project in your district. And 
that'll mean jobs.
  What kind of national security strategy is this, Mr. President?
  Everyone knows, the defense budget is justified by a national 
security strategy. We've all heard of the two-war strategy. The defense 
budget is built on a strategy of fighting and winning two near-
simultaneous wars in different parts of the globe.
  Now, I am not so naive to think there's any real tight connection 
between a national strategy and our defense budget. But at least our 
defense community usually goes along with the gag. They pay lip service 
to the connection, even though we all know the defense budget is as 
much a big pork factory as it is a generator of fighting capabilities. 
If we did not pay lip service, there would be no justification for 
budget increases, and hence no credibility.
  In this case--in my discussion in that defense meeting--there was not 
even lip service. It was unadulterated realpolitik. The justification 
for more defense spending was more pork ad more jobs. Period.
  The other comment that was made was the recognition that a national 
security strategy is no longer the basis of our defense budget, since 
the cold war is over. So what, I asked, is the justification for the 
present budget, let alone vast new increases. The answer I got was
 that more defense spending is needed because the United States must 
police the world. And we are the only ones who can do it.

  My question is, how in the world can that justify the spending levels 
in this agreement? If anything, it undermines it. This defense budget 
is still based on an obsolete, cold war strategy. We are still buying 
cold war relics. Before this conference agreement, we were on a path 
toward a post-cold war budget. But with this influx of money, we are 
now returning to the cold war budget in a post-cold war era.
  If we are now going to be policemen of the world, why are we still 
buying things that were specifically designed to counter the Soviet 
threat, not to police the world? We are still buying Seawolfs and B-2's 
and F-22's and Comanche helicopters, and the like. If we are supposed 
to now police the world, why are we buying these? The fact is, this 
argument does not justify these larger defense numbers.
  Another argument is that the defense budget is not going up, we are 
simply trying to freeze it, and keep it from going down. But this is 
not a credible argument. And it never has been. The defense budget is 
based on a national strategy, at least supposedly. If the budget 
declines, which would be consistent with the disappearance of the 
Soviet threat, what is the problem? There should not be a problem--
unless, that is, we view it as a port factory with jobs attached.
  Mr. President, there is no logical basis for the defense numbers in 
this conference agreement. The arguments are bogus, and they reflect a 
lack of serious, credible justification.
  As I mentioned earlier, I support the conference agreement because I 
believe it will lead to a legitimate balanced budget in 2002. And I am 
willing to accept the defense compromise if that's what it takes to get 
an overall agreement.
  But I am taking this opportunity to warn my Republican colleagues not 
to repeat the mistakes we made in the 1980's with the defense budget. 
In the 1980's, our goal was not a defense build-up. It was a defense 
budget build-up. We ended up buying much less with much more than we 
got and spent under the Carter administration. That's because we 
substituted more money for better management. We lost credibility as a 
party because of it.
  As the party that now controls Congress for the first time in 40 
years, we are right back where we were in 1981. Our defense policy, as 
reflected in this conference agreement, is to once again build up the 
defense budget, not defense. It is to, once again, create jobs, not a 
lean fighting machine.
  I have been given assurances by Members of the other body that 
defense reforms are forthcoming. After concentrating this year on 
health care reform, the top reform priority of the other body next year 
will be major defense reform.
  By inference, my colleagues are admitting that they will tolerate 
business-as-usual with the Defense Department--at least for 1 more 
year. I am here to warn my colleagues that 1 year is all they will get. 
One year to conclude that better management will win out over more 
money, as a solution.
  Because if there is not a change next year to doing business-as-usual 
in defense, then I will expend everything in mu arsenal to bring sanity 
to our defense policy. Just like I did from 1983 to 1985, when I ended 
the irrational defense budget buildup under President Reagan. It was my 
amendment on this very floor on May 2, 1985, by a vote of 50-49 that 
ended the insanity back then. And I will do it again.
  Even if it takes me 2 full years to do it, like it did back then. And 
I will win. Because it is not right to have a double standard--one for 
defense, and one for the rest of Government. All that will do is hurt 
the credibility of our party. And I do not want that. Because in my 
view, our party is the only one that can restore hope and opportunity 
for the next generation.


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