[Congressional Record Volume 141, Number 165 (Tuesday, October 24, 1995)]
[Senate]
[Pages S15507-S15510]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           SCORING THE BUDGET

  Mr. HOLLINGS. Mr. President, once again we have lied to the American 
people.
  Mr. President, once again, we are lying to the American people. For 
the past several weeks, we have heard the cries of the ``balanced 
budget'' and ``the first opportunity in 25 years really to balance this 
budget.'' Everywhere men and women cry ``balance.'' But, Mr. President, 
there is no balance to this budget. It is an outright fraud, and my 
friends on the other side should know better.
  It was an embarrassing moment at the Budget Committee last evening. 
The chairman of the Budget Committee had fallen into the trap of 
playing to the cameras.
  He had a clock flashing the amount of the gross debt and a chart 
showing the first page of the reconciliation bill with a ribbon, like 
in a horserace or the good housekeeping award, certifying that this 
budget was for fiscal responsibility. Not so at all.
  On last Tuesday, just a week ago, he inserted in the Congressional 
Record the letter from June O'Neill, the Director of the Congressional 
Budget Office, together with the tables showing a surplus of $10 
billion.
  I ask unanimous consent that the letter be printed in the Record 
again at this point.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                 Taxation, Budget, and Accounting Text

  [Letter from Congressional Budget Office Director, June O'Neill to 
   Senate Budget Committee Chairman Pete Domenici (R-NM), projecting 
 enactment of reconciliation legislation submitted to committee would 
      produce budget surplus in 2002, issued Oct. 18, 1995 (Text)]

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                 Washington, DC, October 18, 1995.
     Hon. Pete V. Domenici,
     Committee on the Budget, U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     reviewed the legislation submitted to the Senate Committee on 
     the Budget by eleven Senate committees pursuant to the 
     reconciliation directives included in the budget resolution 
     for fiscal year 1996 (H.Con Res. 67). CBO's estimates of the 
     budgetary effects of each of those submissions have been 
     provided to the relevant committees and to the Budget 
     Committees. Based on those estimates, using the economic and 
     technical assumptions underlying the budget resolution, and 
     assuming the level of discretionary spending specified in 
     that resolution, CBO projects that enactment of the 
     reconciliation legislation submitted to the Budget Committee 
     would produce a small budget surplus in 2002. The effects of 
     the proposed package of savings on the projected deficit are 
     summarized in Table 1, which includes the adjustments to 
     CBO's April 1995 baseline assumed by the budget resolution. 
     The estimated savings that would result from enactment of 
     each committee's reconciliation proposal is shown in Table 2.
       As you noted in your letter of October 6, CBO published in 
     August an estimate of the fiscal dividend that could result 
     from balancing the budget in 2002. CBO estimated that 
     instituting credible budget policies to eliminate the deficit 
     by 2002 could reduce interest rates by 150 basic points over 
     six years (based on a weighted average of long-term and 
     short-term interest rates) and increase the real rate of 
     economic growth by 0.1 percentage point a year on average, 
     compared with CBO's economic projections under current 
     policies. CBO projected that the resulting reductions in 
     federal interest payments and increase in federal revenues 
     would total $50 billion in 2002 and $170 billion over the 
     1996-2002 period. Those projections were 

[[Page S 15508]]
     based on a hypothetical deficit reduction path developed by CBO. The 
     deficit reductions estimated to result from the 
     reconciliation legislation submitted to the Budget Committee, 
     together with the constraints on discretionary spending 
     proposed in the budget resolution, would likely yield a 
     fiscal dividend similar to that discussed in the August 
     report.
       If you wish further details on this projection, we will be 
     pleased to provide them.
           Sincerely,
                                                  June E. O'Neill,
                                                         Director.

  Mr. HOLLINGS. I thank the distinguished Chair.
  Thereupon, Senators admonished the Director of the Congressional 
Budget Office that she was violating section 13301 of the Budget Act, 
which provides that Social Security trust funds shall not be used to 
hide the size of the deficit.
  On October 19, 2 days later, the same June O'Neill, the Director of 
the Congressional Budget Office, sent a second letter in response to 
inquiries made by my colleagues from North Dakota, Senators Conrad and 
Dorgan. In that response, Ms. O'Neill explained that if you follow the 
law, you will end up with a deficit of $98 billion in the year 2002.
  I ask unanimous consent that the letter be printed in the Record at 
this point.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                  Congressional Budget Office,

                                 Washington, DC, October 19, 1995.
     Hon. Kent Conrad,
     U.S. Senate,
     Washington, DC.
       Dear Senator: Pursuant to Section 205(a) of the budget 
     resolution for fiscal year 1996 (H. Con. Res. 67), the 
     Congressional Budget Office yesterday provided the Chairman 
     of the Senate Budget Committee with a projection of the 
     budget deficits or surpluses that would result from enactment 
     of the reconciliation legislation submitted to the Budget 
     Committee. As specified in section 205(a), CBO provided 
     projections (using the economic and technical assumptions 
     underlying the budget resolution and assuming the level of 
     discretionary spending specified in that resolution) of the 
     deficit or surplus of the total budget--that is, the deficit 
     or surplus resulting from all budgetary transactions of the 
     federal government, including Social Security and Postal 
     Service spending and receipts that are designated as off-
     budget transactions. As stated in the letter to Chairman 
     Domenici, CBO projected that there will be a total-budget 
     surplus of $10 billion in 2002. Excluding an estimated off-
     budget surplus of $108 billion in 2002 from the calculation, 
     CBO would project an on-budget deficit of $98 billion in 
     2002.
       If you wish further details on this projection, we will be 
     pleased to provide them. The staff contact is Jim Horney, who 
     can be reached at 226-2880.
           Sincerely,
                                                  June E. O'Neill.

  Mr. HOLLINGS. I thank the distinguished Chair.
  Again the following day, October 20, the same June O'Neill 
acknowledged an accounting mistake and corrected her October 19 letter 
by explaining that actually the deficit in the year 2002 would not be 
$98 billion, but $105 billion instead.
  Now, calling this budget balanced is a mistake that is commonly made, 
Mr. President. Just two Sundays ago on ``Meet the Press,'' the best I 
have seen in the public media covering this budget, Mr. Tim Russert, 
asked Mr. Panetta, ``Will you withstand those political charges and go 
along with the reduction in cost-of-living increases in order to 
balance the budget?''
  That question is based on a false premise, Mr. President. The 
reduction of the cost-of-living increase does not go to balance the 
budget, but, on the contrary, adds to the surpluses in the Social 
Security trust fund. We are getting all get boiled up around here, Mr. 
President, with respect to Medicare and Social Security, about things 
that are in the black and ignoring the part of Government that is not 
paid for.
  Specifically, let me cite Social Security. At the end of this fiscal 
year, Social Security will have a $544 billion surplus. Has anybody in 
this body, Capitol, ever heard the word ``surplus''? I have. I worked 
with President Lyndon Johnson, in 1968 and 1969 with our good friend, 
Chairman George Mahon, of the Appropriations Committee.
  In December 1968 we called the President and said, ``Mr. President, 
please allow us to cut another $5 billion.'' The outlays were for the 
entire Government in 1968-69, defense included were $178 billion. 
Today, just the interest cost on the national debt is projected to 
reach $348 billion, almost $1 billion a day.
  We have been fiscally responsible at times. And perhaps before I 
start, I ought to qualify myself as a witness, like they do in court.
  Mr. President, this particular Governor got the first triple-A credit 
rating, before Tennessee, before North Carolina, Georgia, before any 
Southern State. It was accomplished by hard work, but I, as a young 
Governor, knew I could not make any impression on investors by just 
talking about paving a road and serving barbecue. We needed a calling 
card of fiscal responsibility.
  Even back then I was trying to get business sense in Government, I 
asked the management consultants, to look at higher education, 
elementary and secondary education, the tax commission, insurance 
department. We went through Government making it more efficient and 
earning a triple-A credit rating, which incidentally, was subsequently 
lost by our former Republican governor.
  Then, as I previously stated, I worked in Washington with Chairman 
Mahon back in 1968. And we continued that work to try and cut spending 
without decimating the responsibilities of Government. When President 
Ford came in, we had an economic summit and we cut spending. When 
President Carter came in, I was the chairman of the Budget Committee. I 
went to the White House after President Carter had been defeated in 
November 1980 and said, ``Mr. President, you are going to leave a 
bigger deficit than you inherited from President Ford.'' He said, ``How 
much?'' I said, ``$66 billion.'' He said, ``Well, then, how much are we 
projecting?'' I said, ``We are projected to have a deficit of $75 
billion. And if that occurs, no Democrat will ever get elected again.''
  So we passed the first reconciliation bill, signed by President 
Carter on December 5, 1980, cutting spending. I went to my good 
friends, Senator Magnuson of Washington, Senator Church of Idaho, 
Senator Culver of Iowa, Senator Gaylord Nelson of Wisconsin, Senator 
George McGovern of South Dakota, Senator Birch Bayh of Indiana. I said, 
``You fellows have got to help. We have got to cut back on the 
appropriations bills that we have already approved.'' And we did just 
that.
  In 1981, I worked with the then majority leader, Howard Baker. We 
could see that this supply-side economics was just exactly what Baker 
called it, ``river boat gambling.'' In the coming days, you are going 
to hear a whole lot of campy nonsense about opportunity and growth, 
about giving people their money back, and about people back home 
knowing more about how to spend their money.
  We should remember our experience with the supply-siders mantra of 
``growth, growth, growth.'' We first called it Kemp-Roth, then 
Reaganomics, and finally Vice President Bush named it ``voodoo.'' And 
here we go again with the voodoo. We are heading full-tilt toward 
enacting a massive tax cut, when we are looking for money to pay the 
bills.
  It is absolutely irresponsible. We have lied again to the American 
people.
  President Reagan came to town promising to balance the budget in 1 
year. Then having been sworn in, the President said, ``Oops, this is 
way worse than I ever thought. We will balance it in 3 years.'' We 
could not pass a budget freeze, so we tried Gramm-Rudman-Hollings which 
was a freeze plus automatic cuts across the board.
  The trouble is that we are about to see history repeat itself. We may 
pass this budget but then, after 2 or 3 years, they will throw it away 
just like they threw away Gramm-Rudman-Hollings on October 19, 1990, at 
12:41 a.m. in the morning.
  I stood at this desk and raised the point of order against doing away 
with the fixed deficit targets of Gramm-Rudman-Hollings, but Senator 
Gramm and others voted me down. So it is not accurate to say, ``Oh, it 
didn't work.'' It was working too well, that was the problem for some 
of my colleagues. Instead, they said, ``Let's have caps on spending and 
we will balance the budget.'' And you can see the caps have gone up, up 
and away.
  My Republican colleagues have, to their credit, mastered the rhetoric 
and the lingo: Balance, balance, balance, balance, first time in 25 
years, solid 

[[Page S 15509]]
budget, certified by CBO--it is an absolute charade. CBO says that by 
the year 2002 there will be a $105 billion deficit. But Mr. Archer, the 
chairman of the Ways and Means Committee over on the House side, was 
quoted yesterday in USA Today. He said:

       House Ways and Means Chairman Archer (R-TX) denies that his 
     party's budget is balanced with borrowing through Social 
     Security dollars and angrily denied Hollings' allegations. 
     ``I don't know where he comes up with that,'' Archer says of 
     Hollings.

  Mr. President, I would recommend that he go to the conference report 
of Mr. Kasich's budget on page 3 where it says: Fiscal year 2002, 
$108,400,000,000 deficit. ``Deficit'' is the word used, not surplus or 
balance.
  No wonder we're in a pickle. The chairman of the Ways and Means 
Committee does not even know that the budget provides for a deficit in 
2002. Here in the Senate, the chairman of the Budget Committee charges 
that we are using a phony argument. But I would invite my colleagues to 
look at the Congressional Record of last Tuesday, October 17, and you 
will see that Mr. Domenici himself says that we will owe the Social 
Security fund. I quote from S. 15193, October 17 and Mr. Domenici:

       So we owe it, in fact, we owe part of it to the Social 
     Security trust fund.

  So please spare me this about phony. They think as long as they 
holler ``balance'' and holler ``phony and fraudulent'' people will 
ignore the fact that the law plainly says that Social Security shall be 
excluded from deficit and surplus totals.
  I ask unanimous consent to have printed in the Record that section 
13301 of the Congressional Budget Act.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     SEC. 13301. OFF-BUDGET STATUS OF OASDI TRUST FUNDS.

       (a) Exclusion of Social Security From All Budgets.--
     Notwithstanding any other provision of law, the receipts and 
     disbursements of the Federal Old-Age and Survivors Insurance 
     Trust Fund and the Federal Disability Insurance Trust Fund 
     shall not be counted as new budget authority, outlays, 
     receipts, or deficit or surplus for purposes of--
       (1) the budget of the United States Government as submitted 
     by the President,
       (2) the congressional budget, or
       (3) the Balanced Budget and Emergency Deficit Control Act 
     of 1985.
       (b) Exclusion of Social Security From Congressional 
     Budget.--Section 301(a) of the Congressional Budget Act of 
     1974 is amended by adding at the end the following: ``The 
     concurrent resolution shall not include the outlays and 
     revenue totals of the old age, survivors, and disability 
     insurance program established under title II of the Social 
     Security Act or the related provisions of the Internal 
     Revenue Code of 1986 in the surplus or deficit totals 
     required by this subsection or in any other surplus or 
     deficit totals required by this title.''.

  Mr. HOLLINGS. I thank the distinguished Chair.
  Mr. President, what I do then is go to the figures themselves, 
because it is not very difficult.
  I ask unanimous consent to have printed in the Record a budget table.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

                                                  BUDGET TABLES                                                 
                                              [Outlays in billions]                                             
----------------------------------------------------------------------------------------------------------------
                                                                                           Gross                
               Year                  Government  Trust funds    Unified        Real       Federal       Gross   
                                       budget                   deficit      deficit        debt       interest 
----------------------------------------------------------------------------------------------------------------
1968..............................        178.1          3.1        -25.2        -28.3        368.7         14.6
1969..............................        183.6         -0.3         +3.2         +2.9        365.8         16.6
1970..............................        195.6         12.3         -2.8        -15.1        380.9         19.3
1971..............................        210.2          4.3        -23.0        -27.3        408.2         21.0
1972..............................        230.7          4.3        -23.4        -27.7        435.9         21.8
1973..............................        245.7         15.5        -14.9        -30.4        466.3         24.2
1974..............................        269.4         11.5         -6.1        -17.6        483.9         29.3
1975..............................        332.3          4.8        -53.2        -58.0        541.9         32.7
1976..............................        371.8         13.4        -73.7        -87.1        629.0         37.1
1977..............................        409.2         23.7        -53.7        -77.4        706.4         41.9
1978..............................        458.7         11.0        -59.2        -70.2        776.6         48.7
1979..............................        504.0         12.2        -40.7        -52.9        829.5         59.9
1980..............................        590.9          5.8        -73.8        -79.6        909.1         74.8
1981..............................        678.2          6.7        -79.0        -85.7        994.8         95.5
1982..............................        745.8         14.5       -128.0       -142.5      1,137.3        117.2
1983..............................        808.4         26.6       -207.8       -234.4      1,371.7        128.7
1984..............................        851.8          7.6       -185.4       -193.0      1,564.7        153.9
1985..............................        946.4         40.6       -212.3       -252.9      1,817.6        178.9
1986..............................        990.3         81.8       -221.2       -303.0      2,120.6        190.3
1987..............................      1,003.9         75.7       -149.8       -225.5      2,346.1        195.3
1988..............................      1,064.1        100.0       -155.2       -255.2      2,601.3        214.1
1989..............................      1,143.2        114.2       -152.5       -266.7      2,868.0        240.9
1990..............................      1,252.7        117.2       -221.4       -338.6      3,206.6        264.7
1991..............................      1,323.8        122.7       -269.2       -391.9      3,598.5        285.5
1992..............................      1,380.9        113.2       -290.4       -403.6      4,002.1        292.3
1993..............................      1,408.2         94.2       -255.1       -349.3      4,351.4        292.5
1994..............................      1,460.6         89.1       -203.2       -292.3      4,643.7        296.3
1995..............................      1,530.0        121.9       -161.4       -283.3      4,927.0        336.0
1996 estimate.....................      1,583.0        121.8       -189.3       -311.1      5,238.0        348.0
----------------------------------------------------------------------------------------------------------------
Source: CBO's January, April, and August 1995 Reports.                                                          

                                                    Year 2002 (billion)
1996 Budget: Kasich Conf. Report, p. 3 (deficit)..................-$108
1996 Budget Outlays (CBO est.)....................................1,583
1995 Budget Outlays...............................................1,530
                                                             __________

      Increased spending............................................+53
                                                               ==========
_______________________________________________________________________

CBO Baseline Assuming Budget Resolution:
  Outlays.........................................................1,874
  Revenues........................................................1,884
                                                               ==========
_______________________________________________________________________

This Assumes:
  (1) Discretionary Freeze Plus Discretionary Cuts (in 2002).......-121
  (2) Entitlement Cuts and Interest Savings (in 2002)..............-226
  (3) Using SS Trust Fund (in 2002)................................-115
                                                             __________

      Total reduction (in 2002)....................................-462
  Mr. HOLLINGS. Mr. President, these budget tables show the Government 
outlays from 1968 through 1995 and the CBO estimate for 1996. It shows 
the trust funds that we have borrowed from for a total of 
$1,255,000,000,000.
  Then it shows the term they use--``Unified deficit''--that is 
borrowing from the public and then also borrowing from your own pocket.
  I ask unanimous consent that I may continue for another 5 minutes to 
conclude.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. HOLLINGS. I thank the distinguished Chair.
  So we have each figure in a separate column. Adding the unified 
deficit to the money we owe the trust funds gives us the real deficit 
which last year totaled $283.3 billion.
  I ask unanimous consent to have printed in the Record another budget 
table.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:


             more budget tables: senator ernest f. hollings

------------------------------------------------------------------------
                                                  National     Interest 
                                                    debt        costs   
------------------------------------------------------------------------
1996..........................................        5,238          348
2002..........................................        6,728          436
                                                                        
------------------------------------------------------------------------
                                                    1996         2002   
                                                                        
------------------------------------------------------------------------
Debt includes:                                                          
    1. Owed to the trust funds................      1,361.8      2,355.7
    2. Owed to Government accounts............         81.9      ( \1\ )
    3. Owed to additional borrowing...........      3,794.3      4,372.7
                                               -------------------------
      Note: No ``unified'' debt; just total                             
       debt...................................      5,238.0      6,728.4
------------------------------------------------------------------------
\1\ Included above.                                                     

       Surplus in Social Security (CBO through 1996)--$544.0 
     billion.
       Surplus in Medicare (CBO through 1996)--$145.0 billion.
       
[[Page S 15510]]



                         ``solid'' budget plan

       1995 real deficit (CBO), -$283.3 billion.

------------------------------------------------------------------------
                                                                 CBO    
                     Year                       CBO outlays    revenues 
------------------------------------------------------------------------
1996..........................................        1,583        1,355
1997..........................................        1,624        1,419
1998..........................................        1,663        1,478
1999..........................................        1,718        1,549
2000..........................................        1,779        1,622
2001..........................................        1,819        1,701
2002..........................................        1,874        1,884
                                               -------------------------
    Total.....................................       12,060       11,008
------------------------------------------------------------------------
$636 billion ``embezzlement'' of the Social Security Trust Fund.        


------------------------------------------------------------------------
                                                  Outlays      Revenues 
------------------------------------------------------------------------
2002 CBO baseline budget......................        1,874        1,884
This assumes:                                                           
    1. Discretionary freeze plus discretionary                          
     cuts (in 2002)...........................  ...........        -$121
    2. Entitlement cuts and interest savings                            
     (in 2002)................................  ...........        -$226
                                               -------------------------
      [1996 cuts, $45 B] Spending reductions                            
       (in 2002)..............................  ...........        -$347
Using SS Trust Fund...........................  ...........        -$115
                                               -------------------------
    Total reductions (in 2002)................  ...........        -$462
------------------------------------------------------------------------

  Mr. HOLLINGS. Mr. President, in this chart we have taken the outlays 
under the Republican budget proposal as promulgated by the 
Congressional Budget Office for the years 1996 through the year 2002, 
and the revenues from CBO for the years 1996 through 2002. If you look 
at the total for spending, it is $12,080,000,000,000--
$12,080,000,000,000. Then if you look at total revenues over the same 
period, it is only $11,008,000,000,000.
  By simple arithmetic we will be adding over $1 trillion to the debt 
over the next 7 years.
  In the year 2002, the gross debt will go from $4.9 trillion today to 
$6.728 trillion.
  In order to show good faith, Mr. President, I ask unanimous consent 
to have printed in the Record the budget paths that I presented in 
January at our initial meeting of the Budget Committee.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

           Hollings Releases Realities on Truth in Budgeting

       Reality No. 1: $1.2 trillion in spending cuts is necessary.
       Reality No. 2: There aren't enough savings in entitlements. 
     Have welfare reform, but a jobs program will cost; savings 
     are questionable. Health reform can and should save some, but 
     slowing growth from 10 to 5 percent doesn't offer enough 
     savings. Social Security won't be cut and will be off-budget 
     again.
       Reality No. 3: We should hold the line on the budget on 
     Defense; that would be no savings.
       Reality No. 4: Savings must come from freezes and cuts in 
     domestic discretionary spending but that's not enough to stop 
     hemorrhaging interest costs.
       Reality No. 5: Taxes are necessary to stop hemorrhage in 
     interest costs.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               1996            1997            1998            1999            2000            2001            2002     
--------------------------------------------------------------------------------------------------------------------------------------------------------
Deficit CBO Jan. 1995 (using trust                                                                                                                      
 funds).................................             207             224             225            253             284             297             322 
                                         ===============================================================================================================
Freeze discretionary outlays after 1998.               0               0               0            -19             -38             -58             -78 
Spending cuts...........................             -37             -74            -111           -128            -146            -163            -180 
Interest savings........................              -1              -5             -11            -20             -32             -46             -64 
                                         ---------------------------------------------------------------------------------------------------------------
    Total savings ($1.2 trillion).......             -38             -79            -122           -167            -216            -267            -322 
                                         ===============================================================================================================
Remaining deficit using trust funds.....             169             145             103             86              68              30               0 
Remaining deficit excluding trust funds.             287             264             222            202             185             149             121 
5 percent VAT...........................              96             155             172            184             190             196             200 
Net deficit excluding trust funds.......             187              97              27            (17)            (54)           (111)           (159)
Gross debt..............................           5,142           5,257           5,300          5,305           5,272           5,200           5,091 
Average interest rate on debt (percent).             7.0             7.1             6.9            6.8             6.7             6.7             6.7 
Interest cost on the debt...............             367             370             368            368             366             360             354 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--Figures are in billions. Figures don't include the billions necessary for a middle-class tax cut.                                                

  Mr. HOLLINGS. Mr. President, the January table shows the deficit 
using trust fund and not using the trust fund.
  I have been in this budget game now for over 20 years at the Federal 
level. If anyone can show me any kind of realistic cuts that will by 
themselves balance the budget, I will jump off the Capitol dome. It is 
very easy to make that pledge because you see exactly from the 
arithmetic.
  The Republican budget can claim it balances the budget in 7 years 
only because they use $636 billion of Social Security between now and 
2002. The other half of the trillion-dollar program comes from 
discretionary cuts, entitlement cuts, and interest savings of $347 
billion in the year 2002. That should give us a dose of reality. At 
this very minute, we are struggling to find $45 billion in cuts for 
this fiscal year.
  In addition, you can add on the tax cut, which adds $93 billion to 
the debt. I ask unanimous consent that a Wall Street Journal article 
outlining this fact be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                     [From the Wall Street Journal]

  GOP Tax Cuts Will Add $93 Billion To U.S. Debt, Budget Analysts Say

                           (By Jackie Calmes)

       Washington.--Despite Republicans' claims to the contrary, 
     their tax cuts will add billions to the nation's nearly $5 
     trillion debt even as the GOP seeks to balance the budget by 
     2002.
       An estimated $93 billion in extra debt will pile up as a 
     result of the Republicans' proposed $245 billion in seven-
     year tax cuts, according to calculations from GOP 
     congressional budget analysts. And that's assuming the 
     economy gets a huge $170 billion fiscal stimulus that 
     Republicans are counting on as a consequence of balancing the 
     budget over seven years, thanks mostly to lower interest 
     rates.
       GOP leaders agreed last summer, as part of a House-Senate 
     budget compromise, to apply that hypothetical $170 billion 
     ``fiscal dividend'' toward their proposed $245 billion in tax 
     cuts. That left $75 billion in revenue losses unaccounted 
     for. Interest on that amount would add about $18 billion, for 
     the total $93 billion in debt.
       Meanwhile, the Republican architects of the plan boast that 
     the tax cuts are all paid for with spending cuts. Senate 
     Finance Committee Chairman William Roth, announcing his 
     panel's draft $245 billion tax-cut package last Friday, said 
     it would be completely financed with lower interest rates and 
     smaller government. ``Other factors like that will add up to 
     $245 billion,'' the Delaware-Republican said.
       And Oklahoma Sen. Don Nickels, another Finance Committee 
     panelist and a member of the Senate GOP leadership, added, 
     ``We will not pass this tax cut until we have a letter'' from 
     the Congressional Budget Office reporting that Republicans' 
     proposed spending cuts through 2002 ``will give us a balanced 
     budget and a surplus of at least $245 billion.'' He added, 
     ``It's all paid for.''
       The confusion has to do with the frequently misunderstood 
     distinction between the nation's accumulated debt, now 
     approaching $4.9 trillion, and its annual budget deficits, 
     which have built up at roughly $200 billion a year.
       Republicans' spending cuts, it's projected, generally will 
     put the annual deficits on a downward path until the fiscal 
     2002 budget shows a minimal surplus. But the annual deficits 
     until then, while declining, together with nearly $1 trillion 
     more to the cumulative debt. Meanwhile, the GOP tax cuts add 
     to those annual deficits in the early years--in fact, the 
     fiscal 1997 deficit would show an increase from the previous 
     year. Thus the debt, and the interest on the debt, would be 
     that much higher.
       Interviews in recent weeks indicate that many House and 
     Senate GOP members are unaware of the calculus. And some are 
     unfazed even when they hear of it. ``It would bother me if I 
     thought we were adding to the debt,'' said Texas Sen. Phil 
     Gramm, now seeking the presidency on his record as a fiscal 
     conservative, ``but I don't think we are.''.

  Mr. HOLLINGS. The Chair has been indulgent and I know my 
distinguished colleague from Tennessee is waiting to be heard.
  Let me conclude by asking people to look at the arithmetic and to 
help expose the fact that once again, we have lied to the American 
people.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Tennessee is recognized to speak for up to 20 minutes.

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