[Congressional Record Volume 141, Number 170 (Tuesday, October 31, 1995)]
[Senate]
[Pages S16376-S16378]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             RECONCILIATION

  Mr. HOLLINGS. Mr. President, last Friday in the wee hours of the 
night there was a total abandonment of any kind of truth in budgeting. 
There is no better way to express it.
  Under this entire charade, once again, we have lied to the American 
people. There is no question that in those wee hours, Mr. President, 
that they were trying their dead-level best and finally succeeded in 
buying off the votes of certain of the Senators with respect to 
Medicaid.
  In order to purchase it, what they did was use Social Security funds. 
That was a use and violation--not only of the rule but of the law. The 
rule was called by the distinguished Senator from Florida and the 
distinguished Senator from Iowa, Senator Harkin. If you ever want to 
see distortion, obfuscation, and abandonment of responsibility by the 
Parliamentarian in the U.S. Senate, I wish you would read that Record.
  Be that as it may, the Chair would say, I do not know. We will refer 
to the chairman of the committee, Senator Domenici, and say, well, I 
like what the Chair has ruled. Ruled and on and on and back and forth 
but no idea of a parliamentary ruling or recognition of the law. That 
is why I take the floor today.
  What really happens is that they constantly are talking about a 
balanced budget when everybody--both at the White House, the Democratic 
White House, and the Republican Congress--know that it cannot be done. 
It cannot be done without increasing taxes.
  Here in the extreme, they are talking about decreasing taxes--about 
tax cuts.
  Let me go right to the point here, so I can make a coherent record.
  Mr. President, I ask unanimous consent that this little two-page 
summary of budget tables be printed in the Record at this particular 
point.
  There being no objection, the tables were ordered to be printed in 
the Record, as follows:


            ``Here We Go Again'': Senator Ernest F. Hollings

                        [In billions of dollars]

Starting in 1995 with:
  (a) A deficit of $283.3 billion for 1995:
    Outlays.......................................................1,530
    Trust funds...................................................121.9
    Unified deficit...............................................161.4
    Real deficit..................................................283.3
    Gross interest................................................336.0
       (b) And a debt of $4,927 billion.
       How do you balance the budget by:
       (a) Increasing spending over revenues $1,801 billion over 7 
     years?

           GOP ``SOLID'', ``NO SMOKE AND MIRRORS'' BUDGET PLAN          
                        [In billions of dollars]                        
------------------------------------------------------------------------
                                                    CBO       Cumulative
               Year                CBO outlays    revenues     deficits 
------------------------------------------------------------------------
1996.............................        1,583        1,355         -228
1997.............................        1,624        1,419         -205
1998.............................        1,663        1,478         -185
1999.............................        1,718        1,549         -169
2000.............................        1,779        1,622         -157
2001.............................        1,819        1,701         -118
2002.............................        1,874        1,884          +10
                                  --------------------------------------
  Total..........................       12,060       11,008       -1,052
------------------------------------------------------------------------

       (b) And increasing the national debt from $4,927.0 billion 
     to $6,728.0 billion?

                                 DEBT\1\                                
                        [In billions of dollars]                        
------------------------------------------------------------------------
                                                  National     Interest 
                     Year                           debt        costs   
------------------------------------------------------------------------
1995..........................................      4,927.0        336.0
1996..........................................      5,261.7        369.9
1997..........................................      5,551.4        381.6
1998..........................................      5,821.6        390.9
1999..........................................      6,081.1        404.0
2000..........................................      6,331.3        416.1
2001..........................................      6,575.9        426.8
2002..........................................      6,728.0        436.0
                                               -------------------------
  Increase 1995-2002..........................      1,801.0        100.0
                                                                        
------------------------------------------------------------------------
                                                    1996            2002
                                                                        
------------------------------------------------------------------------
\1\Debt off CBO's August baseline includes:                             
  1. Owed to the trust funds..................      1,361.8      2,355.7
  2. Owed to Government accts.................         81.9        (\2\)
  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\Off CBO's August baseline.                                           
\2\Included above.                                                      

       (c) And increasing mandatory spending for interest costs by 
     $100 billion?

                    [Deficit in billions of dollars]

How? You don't!
    (a) 1996 Budget: Kasich conference report, p. 3...............-$108
    (b) October 20, 1995, CBO letter from June O'Neill............-$105
--You just fabricate a ``paper balance'' by ``smoke and mirrors'' 
    and borrowing more: Smoke and Mirrors.
(a) Picking up $19 billion by cutting the Consumer Price Index (CPI) 
    by .2 percent--thereby reducing Social Security benefits and 
    increasing taxes by increasing ``bracket creep''.
(b) With impossible spending cuts:
    Medicare........................................................270
    Medicaid........................................................182
    Welfare......................................................... 83
(c) ``Backloading'' the plan:
  --Promising a cut of $347 billion in FY2002 when a cut of $45 billion 
      this year will never materialize.

------------------------------------------------------------------------
                                                  Outlays      Revenues 
------------------------------------------------------------------------
(d) By increasing revenues by decreasing                                
 revenues (tax cut)...........................  ...........         $245
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
  +Increased borrowing from tax cut...........  ...........          -93
                                               -------------------------
      Grand total.............................  ...........         -555
                                               =========================
(e) By borrowing and increasing the debt (1995-                         
 2002)--Includes $636 billion ``embezzlement''                          
 of the Social Security trust fund............  ...........        1,801
------------------------------------------------------------------------

       The Real Problem--
       Not Medicare--In surplus $147 billion--Paid For
       Not Social Security--In surplus $481 Billion--Paid For
       But interest costs on the national debt--are now at almost 
     $1 billion a day and are growing faster than any possible 
     spending cuts
       --AND both the Republican Congress and Democratic White 
     House as well as the media are afraid to tell the American 
     people the truth: ``A tax increase is necessary.''
       --SOLUTION: Spending cuts, spending freezes, tax loophole 
     closings, withholding new programs (Americorps) and a 5 
     percent value added tax allocated to the deficit and the 
     debt.


            ``Here We Go Again''--Promised Balanced Budgets


                                                                billion
President Reagan (by fiscal year 1984):
President Reagan (by fiscal year 1991):
President Bush (by fiscal year 1995):
    1981 Budget.....................................................  0
    1985 GRH budget.................................................  0
    1990 budget..................................................+$20.5
  Mr. HOLLINGS. Mr. President, start in the year 1995; we are going to 
try to balance the budget. Starting in the year 1995, you start with a 
deficit of $1.518 trillion in outlays, so you have a deficit here of 
$283 billion for 1995. And a debt of $4.927 trillion.
  If you start with a deficit and a debt of almost $5 trillion and you 
look at the increased spending over revenues during each of the fiscal 
years, using Congressional Budget Office figures, you will find that 
cumulatively, from 1996--and each year is listed in this particular 
document to 2002--there is an increase of spending of $12.06 trillion 
over revenues received over each of those years--cumulatively, now, of 
$11.008 trillion.
  So you are spending $1 trillion more than you are taking in over this 
GOP budget plan. Specifically, you can look at last month. September 
ended the fiscal year 1995. If you look at the outlays for that year 
and for this year, 1996, and you see the increase from the $1.530 
trillion to $1.583--or a $53 billion increase in spending.
  Now we are going to cut spending, balance the budget, cut spending--
yet the very first year here we have increased spending $53 billion.

[[Page S16377]]

  Then you go down to the debt and it is listed there of $1.801 
trillion in the debt. And you found out over the 7-year period, you are 
not only increasing the National debt by $1.8 trillion to a level of 
$6.728 trillion, but you have increased interest costs on the national 
debt to $100 billion.
  I have listed there what is owed to the trust funds, what is owed to 
the Government accounts, and what is owed to additional borrowing 
because, in my limited time, I am trying to talk about the public debt, 
which is No. 3, ``owed to additional borrowing.'' But we borrow from 
the trust funds. We owe them, at this particular point, $1.361 
trillion. And if we look at the owed to the Government accounts, such 
as the bank insurance funds, the Federal Savings and Loan Insurance 
Corporation, the credit union share insurance fund, and these other 
accounts, as of next year, we will owe some $81.9 billion there.
  So we are moving deficits from one pocket to the other. We are not 
eliminating them. And, yes, we are borrowing at the public till, for a 
total, of course, of, as we have indicated there, a debt of $6.728 
trillion.
  So the question is, starting in 1995 with a deficit of $283 billion 
and a debt of $4.9 trillion, and increasing mandatory spending for 
interest costs by $100 billion, how do you balance the budget that way? 
Of course, you do not.
  Go right to the next list of figures. My authorities are none other 
than the chairman of the Budget Committee on the House side, Mr. 
Kasich, because he was the chairman of our budget conference that got 
up this GOP budget and so-called reconciliation. On page 3 of the 
conference report by Mr. Kasich, you will find the word ``deficit'' for 
the year 2002: a $108 billion deficit.
  Then you go to the letter last week from the Director of the 
Congressional Budget Office, Miss June O'Neill, and find on October 20, 
she determined a deficit of $105 billion; whether it is $105 or $108--
as the old expression goes, continuing deficits as far as the eye can 
see--it is over $100 billion.
  So, if you cannot do it, what do you do? You fabricate a paper 
balance, by smoke and mirrors and borrowing more. You fabricate a 
balance. This Senator knows as a member of the Commerce Committee, by 
simply borrowing again moneys that have already been represented in 
legislation as having been consumed. In our telecommunications bill, we 
came up with a budget point of order. We needed to raise some $8 
billion so we put in there the auctions of $8 billion.
  Now we come again to the Commerce Committee for their reconciliation 
responsibility of raising $15 billion and we list again the $8 billion 
that has already been included in the telecommunications bill. Or, go 
to the Finance Committee. The Finance Committee, struggling and 
straining under Medicare, trying to find the money, put in what they 
call a BELT. The BELT says--for example, on the House side they were 
$35 billion shy. So it is just rhetoric or language to the effect that, 
with $35 billion, that the next Congress will have to make it up. That 
is no way to balance the budget, but that is part of the smoke and 
mirrors.
  You can pick up $19 billion as they have with the Consumer Price 
Index being reduced by .2 percent, thereby reducing, of course, the 
Social Security benefits and increasing taxes because what you do is 
hit bracket creep, as they call it. Then you go with the impossible 
spending cuts of $270 billion in Medicare, $182 billion in Medicaid, 
and $83 billion in welfare.
  Just take the one--welfare. Suppose you are a Governor and you are 
assigned the welfare responsibility with a traumatic cut. Now you have 
added responsibilities. What you have to do is start a training 
program. Two-thirds, of course, of those on welfare are children but 
the other one-third are those who are unskilled or untrained, generally 
female adults who have not had the advantage of schooling. So you have 
to set up schooling and a training program. Thereupon, you institute a 
hiring or a Government job program of last resort. Then, to get to 
work, you have to institute, if you please, a child care center because 
they have to leave the children at home to take the job. And on down 
the list. You are not going to save that amount, of course, on welfare.
  Another way, of course, in subsection C shows backloading the plan, 
whereby all the real cuts are made in the last 2 years. The last year 
alone, for example, in the year 2002, they have to cut $347 billion. 
Here now, we are struggling and are not going to obtain $45 billion 
this year with the best of intent and the contract and the headlines 
and everything else and cannot even reach the $45 billion cut. But in 
the last year under this GOP budget, balanced budget plan, you have to 
cut $347 billion.
  Then of course, you increase your revenues by decreasing revenues. 
That sounds like double talk but that is the tax cut. You get into this 
growth argument that we have heard, now, for the last 2 weeks. All we 
need is a tax cut. It is going to give us growth, growth, just like 
Reaganomics said back in 1981 that put us into these horrendous 
deficits, debt and interest costs on automatic pilot. It is going up, 
up and away, the spending is. That tax cut is $245 billion. Then you 
look of course at the--and by borrowing from the public and from the 
trust funds, another $1.8 trillion. And that borrowing includes $636 
billion embezzlement from Social Security.
  At the present time, we have a $481 billion balance in Social 
Security. That is not the problem. Under Social Security, it is paid 
for, for a good 25 to 30 years, easily. Yes, you have $481 billion 
there and you are going to borrow another $636. At the end of the 
particular budget plan, 2002, you are going to owe Social Security over 
$1 trillion.
  So, Social Security is not the problem, 25 or 30 years out; Medicare 
is not the problem here, 7 years out, The problem is now. We have 
spending on automatic pilot. Interest costs on the national debt--like 
death, like taxes--cannot be avoided. In fact, treat it as a tax 
increase, as I do in a sense. What we have is taxes being increased 
automatically each day $1 billion a day. That is the real problem.
  What happens here is both the Republican Congress and the Democratic 
White House, as well as the media--and I hope they will read this--are 
afraid to tell the American people the truth: That is, you cannot do it 
without a tax increase. So, what we need to do is cut spending, freeze 
spending, tax loopholes closing, withholding on new programs. I had to 
vote against AmeriCorps. Everybody is for voluntarism. In fact, I was 
party to the institution of the Peace Corps. We can make that record 
sometime. But you cannot go into these new programs when you are trying 
to get rid of the deficit and the debt and decrease spending on 
automatic pilot. So you need all of that plus, I suggest, a 5-percent 
value-added tax.
  Mr. President, that is the point. We have seen this exercise. In the 
early 1980's, I went with the Republican leadership and with Senator 
Howard Baker for a freeze. We could not get it. Then we realized by 
1985 that we had--in order to get this deficit and debt down for it was 
growing by leaps and bounds--to have automatic cuts across the board. 
We had Gramm-Rudman-Hollings, and we looked at it. We said we still 
need to close the loopholes. In 1986, we got tax reform.
  Then, listen to this, in 1990, a bipartisan group of eight Senators, 
who hate taxes as much as anybody else, got together in the Budget 
Committee and voted for a value-added tax. Why? Because you cannot 
balance the budget without all of the above--namely, spending cuts, 
spending freezes, loophole closings, denying new programs, and a tax 
increase.
  We have heard this thing about balanced budgets. I really regret it 
because I hear it on the floor. I see it on the screen on my TV about a 
balanced budget. Those working the discipline know there is no idea of 
balance the budget. I heard it just 15 years ago. President Reagan 
presented a budget--the document shows it, and I have it here--that the 
budget would be balanced by 1984.
  Again, under President Reagan, in late 1985 under Gramm-Rudman-
Hollings we pledged that balance--and we got awards for this one--that 
the budget would be balanced by 1991. In 1990--at that time they had 
gone out to Andrews Air Force Base and vetoed, abolished, Gramm-Rudman-
Hollings cuts across the board and put in spending caps. Under that 
budget--I will show you the document--they said that by 1995, just last 
month, you would have a $20.5 billion surplus.

[[Page S16378]]

  Has anyone ever heard the word ``surplus'' in Washington? Balanced 
budgets by 1984, balanced budgets by 1991, and then, finally, in 1995--
we could look at the documents--a surplus of $20.5 billion. Here, 
instead of a surplus of $20.5 billion, we have a $283.3 billion 
deficit.
  So there it is. ``Here we go again,'' as our fearless leader, 
President Ronald Reagan, said. ``Here we go again.''
  I thank the distinguished Chair.

                          ____________________