[Congressional Record Volume 141, Number 158 (Thursday, October 12, 1995)]
[Senate]
[Pages S15092-S15093]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  BIPARTISAN BUDGET SUMMIT NEEDED NOW

  Mr. LEAHY. Mr. President, this morning's headline reports that budget 
negotiations between the President and the Republican congressional 
leaders have broken down. Instead of working together, the leaders are 
slinging partisan arrows of blame at each other in today's papers. I 
think, because of that, it is all the more reason to have a bipartisan 
summit on the budget.
  In fact, this is the third time in the last 2 months and the fourth 
time this year that I have called for a summit meeting between 
congressional leaders and the President to resolve their budget 
differences.
  In my earlier speeches, my main concern has been to avoid the costly 
and unnecessary Government shutdown that some have predicted in the 
beginning of the fiscal year last week. Fortunately, the President and 
the Congress have avoided this disaster. We agreed to a continuing 
resolution that funds the Government for the next 6 weeks. I applaud 
the bipartisan cooperation displayed to reach this continuing 
resolution.
  But I fear that the President and the Republican congressional 
leadership are now playing a more serious game of chicken--a high-
stakes game over raising the debt limit.
  The Government is fast approaching the $4.9 trillion ceiling of 
Federal borrowing imposed by Congress in 1993. For the Government to 
keep paying its bills, Congress has to increase the debt limit. I think 
the deadline is about a month away on November 15, when the Government 
needs to borrow to meet $25 billion in interest payments, payments due 
thousands of individuals, businesses, financial institutions, and 
pension funds that own Treasury securities.
  The Republican leaders are now threatening to use the debt limit as a 
club to beat the President into submission over the budget. Already, 
165 Republican Members of the House of Representatives have pledged to 
refuse to vote for raising the debt limit, unless the President agrees 
to what they say should be the budget. In 21 years here, I have not 
seen an action so irresponsible by either Democrats or Republicans. The 
Speaker of the House, Newt Gingrich, is not helping by going along with 
the ultimatum and saying, ``I am with them. I do not intend to schedule 
the debt limit if they are not met.'' It sounds almost like a child in 
a sandbox 

[[Page S 15093]]
throwing a tantrum, instead of somebody who leads a great institution 
and is a leader of a great national political party.
  The Speaker says he will use this hard-line approach no matter what, 
declaring, ``I do not care what the price is.'' Treasury Secretary 
Rubin responded that the President will not be blackmailed by the use 
of the debt limit as a negotiating level.

  Well, I am one Vermonter who feels that issuing ultimatums is dumb 
and counterproductive. Raising the debt limit should not be a partisan 
issue. It is just too important.
  Federal Reserve Chairman Alan Greenspan got it right when he said: 
``The issue of default should not be on the table. To default for the 
first time in the history of this Nation is not something anyone should 
take in a tranquil manner.''
  In fact, such a default would have serious consequences, indeed.
  The nonpartisan Congressional Budget Office, reflecting some of the 
feelings as Republican Chairman of the Federal Reserve Board recently 
warned:

       Defaulting on payments have much graver economic 
     consequences than failing to enact discretionary 
     appropriations by the start of the fiscal year * * *  even a 
     temporary default--that is, a few days' delay in the 
     Government's ability to meet its obligations--could have 
     serious repercussions in the financial markets. Those 
     repercussions include a permanent increase in Federal 
     borrowing costs * * *.
  It is foolish to risk increasing our Federal borrowing costs through 
a default.
  Unfortunately, the United States carries close to a $4.9 trillion 
debt burden and over 16 percent of our annual budget goes to interest 
payments on the Federal debt.
  Interestingly enough, some of the same people who say that we will 
not honor this debt today are some of the same Members of Congress who 
strongly supported the President of their own party who, during the 
1980's, tripled the national debt.
  One analyst estimated that if the Government's interest rate had been 
just a 0.01 percentage point higher than the last year, the 
Government's annual borrowing costs would have increased by $211 
million. Those same people say they want a balanced budget are willing 
to throw away a chance to balance the budget by permanently jacking up 
the Government's interest costs.
  That repercussion of default goes a lot further than just the 
Government's borrowing costs. It may make some nice political points 
back home to say, ``We do not care; we will just shut down the 
Government, that mean, nasty old government. We do not need it 
anyway.''
  Well, they ought to also tell some of their constituents, if they are 
a homeowner looking for a mortgage, their mortgage rates will go up. If 
they are consumers shopping for a new car, the costs of that new car 
will go up. If they are a small business that wanted to expand, wanted 
to increase their inventory, wanted to increase their equipment, they 
will pay more for the money to do that.
  To crush the dreams of millions of Americans over this silly game of 
political poker is totally irresponsible. Some have even suggested that 
the Treasury Department play games with Government trust funds--
including the Social Security trust fund, the Medicare trust fund--in 
order to postpone default. I believe that also is irresponsible.
  Every day Treasury collects billions of dollars for these public 
trust funds for the payroll taxes. They invest the fund surpluses to 
pay beneficiaries later on. This year, the Social Security trust fund 
will run a surplus of $481 billion. The Medicare trust fund will run a 
surplus of $147 billion. Tapping into these funds allows the Treasury 
to avoid default, but cashing in the surpluses is morally and fiscally 
wrong.
  We made a commitment to the American people to keep these funds in 
trust for future generations. Divesting the funds ignores the long-term 
investment needs to provide the baby-boom generation with Social 
Security and Medicare benefits in the years to come.
  The Republican leadership and the President need to get together. The 
consequences of a Government default are just too serious to be held 
hostage by partisan politics. To protect our public trust funds, to 
keep the Government's and private sector's costs down, and maintain 
America's creditworthiness, we need a bipartisan budget summit now to 
avoid a debt limit crisis.

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