[Congressional Record Volume 141, Number 189 (Wednesday, November 29, 1995)]
[Senate]
[Pages S17732-S17734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE BUDGET NEGOTIATIONS

  Mr. GRAMM. Mr. President, as we all know--in fact, as the whole 
country knows--intensive negotiations on the budget are underway in 
this very building, and working Americans have a big stake in the 
outcome of those negotiations.
  While we do not know the final makeup of the compromise that would 
emerge from these negotiations, what I have heard is already alarming. 
I want to talk about the things that we are reading about in the paper, 
the apparent movement in the negotiations. I think it is important that 
if someone feels very strongly about a subject--and I feel very 
strongly about this subject--that we not surprise them by waiting until 
the last minute, when negotiations are finished and a final product has 
been produced, to suddenly spring it on people that are not going to 
support it.
  So what I would like to do this afternoon is to talk very briefly 
about the emerging budget deal and then talk about four simple 
principles that I intend to establish in terms of my own vote. 
Obviously, I speak only on behalf of myself but I believe that, based 
upon the 1994 elections, the vast majority of Americans agree with the 
principles I will outline today. In fact, I think there is no doubt 
about the fact that the vast majority of Americans agree with the 
principles that I will set forth, and which will guide my vote on any 
final budget agreement.
  I think the general parameters of a negotiation are pretty clear in 
terms of what we hear from the White House, from Mr. Panetta, and what 
we are beginning to hear from our own leadership. If you go back to the 
last continuing resolution, there was a little line in that resolution 
that, for the first time, opened the door to the possibility that we 
would change the parameters, the assumptions in our budget.
  Let me explain why that is so important. It sounds kind of trivial to 
many people, what we assume about the health of the economy, interest 
rates, unemployment rates, and the number of people who qualify for 
Government programs. But let me explain how important those assumptions 
are. If you take the assumptions that the independent and nonpartisan 
Congressional Budget Office has established, which guide our budget, 
and you compare them to the assumptions contained in President 
Clinton's budgets, his assumptions about lower unemployment, higher 
growth, lower interest rates, and less spending from existing programs 
ultimately allows him to spend $1 trillion more, over the next 10 
years, than our budget allows us to spend.
  Now, I have one constituent who can comprehend what $1 billion is--
Ross Perot, but I do not have any constituents that I know of, who 
knows what $1 trillion is, so let me try to define it. The trillion 
dollars that President Clinton wants to spend over the next 10 years 
would be equivalent to giving him the ability to write $15,000 worth of 
checks on the checking account of every American family, over that 10-
year period. That is how much $1 trillion is.
  I think it is clear that one path the negotiations could take, a path 
that I am very concerned about, would be to change our assumptions. 
This would be like a family assuming--when they sit down around the 
kitchen table at the end of the month, when they get out a pencil and a 
piece of paper and try to figure out how they are going to pay the rent 
or mortgage and how they are going to buy a new refrigerator before the 
old one goes, or how they are going to try to send the first child in 
the history of their family to college, when they are making tough, 
real-world decisions, when that we are not just making ends meet, but 
struggling for the American dream--assuming that there will be more 
money to spend than will actually be available.
  I want to be very sure, Mr. President, that we do not make, in 
writing our new budget, an assumption that would be equivalent to a 
family saying, well, ``What if we won the lottery?'' or, ``What if we 
got a big promotion next year?'' or, ``What if some distant relative we 
do not know left us some money?'' We know American families do not do 
budgets that way because they have to live with the consequences of 
these decisions.
  I am very concerned that we are on a path toward changing the 
underlying assumptions in the budget in such a way as to let President 
Clinton spend an additional $100 to $150 billion more each year over 
the next 7 years than we have set out in our budget. I am very 
concerned that, if we do this, we are giving up the first real 
opportunity we have had in 25 years to balance the Federal budget.
  I want to let my colleagues know--and I know every person is trying 
to come up with the best solution to the impasse we have--but I want my 
colleagues to know that under no circumstances am I going to support 
any budget that allows President Clinton to spend money we do not have 
on programs we cannot afford.
  If there was one promise that we made clear last year in the 
elections, it was that if the American people gave us a Republican 
majority in both Houses of Congress, we were going to balance the 
budget. I will have no part in backing away from that commitment.
  The first principle I want to set out is a very simple one: I will 
not support a budget that spends one dime more than the dollar figures 
we set out in our balanced budget. We have written a budget and it was 
consistent with putting the Federal deficit in balance over 

[[Page S 17733]]
a 7-year period. Families and businesses have to do it every year. It 
is not cruel and unusual punishment to make the Government do it over a 
7-year period. But we have written a budget that establishes the 
maximum amount we can spend each year for the next 7 years and still 
balance the budget. That amount, by the way, is $12 trillion. This is a 
27-percent increase over what we spent in the last 7 years.
  It seems to me that this is enough, especially when you stop and 
think about the fact that last Sunday, Americans sat down with the 
Sunday newspaper and with their scissors and cut 120 million coupons 
out of their Sunday newspapers, and then carried those coupons to the 
grocery store and went to all the hassles to turn in the coupons as 
they were paying their grocery bill just to save a few nickels, dimes, 
and quarters.

  Have we lost our ability to be outraged about the fact that the 
Government does not make those sorts of decisions when we are now 
taking $1 out of every $4 earned by every family of four in America? In 
1950 we were taking only $1 out of every $50.
  I think, if we back away from our commitment to balance the Federal 
budget, we are betraying everything we promised in 1994, and I refuse 
to be a part of that.
  The first principle is that I will not support a budget that spends 
one dime more than the dollar figures we set out in our budget. 
Especially since this is the maximum amount we can spend while still 
balancing the Federal budget.
  The second principle is that I am not going to vote for a budget 
which provides tax cuts that are smaller than the tax cuts set out in 
the Balanced Budget Act. I want to remind my colleagues that we are 
talking about letting working families keep an amount that equals 
roughly 2 percent of the total amount of Federal spending.
  We promised in the election a $500 tax credit per child. That means 
beginning in January every family in America with two children would 
get to keep $1,000 more of what they earn to invest in their own 
children, their own family, their own future.
  We have a fairly tight lid on it. The money is only going to working 
moderate, middle, and upper middle-income families. I know many of our 
Democratic colleagues are outraged that, if you do not pay taxes, you 
do not get a tax cut. I am not outraged about this. I think it is time 
to start operating Government in a way that tries to help those people 
who pull the wagon instead of solely being focused on the people who 
are riding in the wagon and, quite frankly, are being kept in the wagon 
by programs that deny them the ability to get out and become part of 
the American experience.
  So I am not going to negotiate away a very modest tax cut which we 
committed to, which we set out in terms of absolute dollars at $245 
billion over a 7-year period, roughly 2 percent of the level of 
spending of the Government, 70 percent of which goes to families, that 
begins to allow people to save more of what they earn, to invest more 
in their own children, and that has some modest incentives for economic 
growth.
  Now, what is negotiable? First of all, I think we should be ready to 
sit down with the President anywhere, at any time, and under any 
circumstance, to negotiate how we spend the $12 trillion that is 
consistent with balancing the Federal budget. I think we ought to be 
totally willing to sit down with President Clinton and negotiate on 
each of those 7 years, how that $12 trillion is spent while still 
balancing the Federal budget.
  I want to draw a clear line of distinction between negotiating about 
how to spend the amount of money that is consistent with balancing the 
budget and negotiating about how we might change the budget itself to 
allow more spending that we can not afford and that clearly would deny 
us the ability, for the first time in a quarter of a century, to 
balance the Federal budget.
  I also believe we should be willing to sit down and hear the 
President out as to what the makeup of the tax cut should be. I do not 
believe we should compromise further on the size of the tax cut. I 
offered the original amendment in the Senate which would have cut 
Government spending further than our budget in order to adopt the 
Contract With America tax cut as it was adopted in the House. That 
amendment was rejected. We have already compromised in coming down from 
the original Contract With America.
  As my dear friend, Dick Armey, said about compromising on the tax 
cut, he ``already gave at the Senate.'' and I agree with this 
sentiment.
  It is clear that there is a movement in the negotiations toward going 
back and assuming that things will be better in the future than we 
believed they would be 3 weeks ago, because in some sense many Members 
of Congress and the White House believe if they could just assume away 
part of the deficit problem, that they could jointly achieve their 
objectives, that we could claim we have balanced the budget, that the 
President could spend more money, and that perhaps happiness might be 
found on both ends of Pennsylvania Avenue.
  Mr. President, I am not going to support that effort. I think that 
would be a tragic mistake. How can we conclude that the economy is 
going to be brighter in the future, if at the same time we prevent 
economic growth by giving smaller tax cuts, by having the Government 
spend more money, and by having larger deficits?
  We would be assuming a rosy scenario and doing things that deny the 
ability of that scenario to ever come true. I am not going to support 
that effort.
  Let me set down this fourth principle. Any changes that we make in 
what are called economic assumptions or technical assumptions--what we 
think interest rates will be 6 years from now, how fast we think money 
is going to be spent out of a program--that every penny resulting from 
those changes and assumptions ought to go to deficit reduction. By 
applying it to deficit reduction we can guarantee that it will be there 
if, in fact, things do not turn out to be as rosy as we would like them 
to be.
  We would be doing what prudent families do. That is, budget on the 
assumption that you are not going to win the lottery, budget on the 
assumption that you are not going to get the big promotion. And if you 
do get the promotion, if Aunt Sally does give you money, then you are 
in a very sound position to decide what to do with it. I believe if we 
conclude, as we say in the language art that is contained in the 
continuing resolution, if the Congressional Budget Office, in 
consultation with the White House and outside groups, concludes that 
there may be a brighter future than we thought 3 weeks ago when we 
debated this issue, then every dollar of savings ought to go to balance 
the budget in this century.
  Only in Washington do we have a debate about whether to balance the 
budget in 7 years or 10 years or even whether to do it at all. I have 
never, ever, in any of the States that I have traveled in the last few 
years heard, nor, has anybody come up to me and said ``Senator Gramm, I 
think balancing the budget is a great idea. Why not do it later than 
you plan?'' I have never had anybody say that to me. But almost every 
day--and as many of my colleagues know, I am meeting a lot of people 
all over the country--almost every day somebody comes up and says, 
``Why are you waiting 7 years? Why don't we do it sooner? Why don't we 
do it now?''

  So, I think it is prudent policy that, if we conclude that the 
economy is going to have a brighter future--basically because we 
conclude it is going to have a brighter future based on wishful 
thinking--then let us apply every dollar of savings that comes from 
these assumptions to deficit reduction. And if, in fact, it the economy 
does turn out to have a brighter future, the maybe we will balance the 
budget within this century. But if it does not, if the original 
assumptions, the original conservative assumptions, were right, then we 
will balance the budget in 7 years as we promised.
  I hear, every day, our colleagues talking about expanding the ability 
of the President to spend. A member of the leadership recently, while 
on television, suggested that maybe we could bring the tax cut down 
from $240 to $195 billion. I disagree. I think this is the time to 
stand on principle. We had an election. We have a mandate. It is not as 
if the American people were deceived. They knew what we promised to do. 
We wrote a contract. I know 

[[Page S 17734]]
many Members of the Senate say they did not sign the contract, but 
America signed the contract when they elected us and gave us a majority 
in both Houses of Congress.
  I think these four principles I have outlined embody a reasonable and 
a flexible approach to living up to what we promised we would do and 
yet being willing to work with the President in saying: These are our 
priorities as to how we spend the $12 trillion that can be spent over 
the next 7 years while still balancing the Federal budget. What are 
yours? Government must learn to live within the constraint that, quite 
frankly, families face every month when they sit down around the 
kitchen table and get out that pencil and piece of paper. Families do 
not have the luxury of saying, ``Let us assume that something great is 
going to happen, let us spend additional money.'' They have to 
negotiate how they are going to spend the income they have available. 
We should be willing to negotiate with President Clinton on that basis. 
We should hear the President out in terms of his priorities, but we 
have a priority that was given as a mandate by the voters in 1994. That 
mandate and that priority is balance the Federal budget under 
reasonable and realistic assumptions.
  Anybody can balance the budget if you let them make up the 
assumptions. Any family can live within its budget if they can make up 
their income. That is not the trick. The real challenge, however, that 
is faced every night by millions of families sitting around their 
kitchen tables--which, quite frankly, we do not face here in 
Washington, and have not faced for 25 years--is how do you do it based 
on the amount of money you are realistically going to be able to spend? 
Every day in America, families are making these tough decisions, and 
they are having to say no to the things they want. They are having to 
say no because we never say no. They are having to say no to their 
children because we will not say no to spending more and more money of 
their money.
  I think the time has come for us to say no. I want to say no so 
families and businesses can say yes again. I want less Government, and 
more freedom. I want less Government, stronger families, more 
opportunity, and more freedom. I think the way we get there is to stand 
up for some very simple principles. We are committed to balancing the 
budget under realistic assumptions. We have set out what we can spend 
and still achieve our objective. We will spend no more.
  We promised the working people of this country a very small, very 
modest, very targeted amount of tax relief. It in no way gets working 
Americans back to where they were 20 years ago, but it is a step in the 
right direction. It is something we promised and I am not going to back 
off from it. We can negotiate over how to spend the money, but not how 
much to spend. And, finally, if in fact we conclude that the 
assumptions of the budget should be updated, that we should assume a 
more optimistic future--and I think we can make one by balancing the 
budget--but if we makes these assumptions, then every penny of savings 
that comes from those new rosy assumptions should go to deficit 
reduction. None of it should be spent.
  These are the principles I intend to fight for. They are principles I 
think embody what I fought for in the 1994 election when we elected a 
Republican majority. They were embodied in the Contract With America. 
And I think, quite frankly, if we want people to believe politicians 
mean anything when they say it, then there is one way to achieve this 
and that is to actually do what you said you would do. I believe that 
if we stick to these principles we would finally be living up to the 
commitments that we made. I, for one, intend to do it.
  I wanted to go on record today as to what my position is, because I 
do not want anyone to feel that, while they were away negotiating with 
President Clinton, somehow it was not clear where I stood. And when 
this final deal is reached, I do not want anyone to be surprised, if it 
violates one of these very, simple and, I think, eminently reasonable, 
principles, if I do not vote for the deal--because I cannot vote for a 
budget that does not live up to the deal we made first with the 
American people in 1994.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Santorum). The Senator from Wyoming.
  Mr. THOMAS. Mr. President, I ask unanimous consent to proceed as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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