[Congressional Record Volume 141, Number 190 (Thursday, November 30, 1995)]
[House]
[Pages H13865-H13868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                THE 7-YEAR BALANCED BUDGET IS A CHARADE

  The SPEAKER pro tempore (Mr. White). Under the Speaker's announced 
policy of May 12, 1995, the Chair recognizes the gentleman from Hawaii 
[Mr. Abercrombie] for 33 minutes.
  Mr. ABERCROMBIE. Mr. Speaker, I thank the gentleman from New York 
[Mr. Owens] for yielding to me.
  The point that the gentleman was making and has been making so 
clearly about the minimum wage and the necessity for having a living 
wage in order to be able to sustain one's self in today's world is more 
than amply demonstrated if we consider the budget negotiations now 
underway.
  Mr. Speaker, this is not the first time that I have appeared on the 
floor on this subject, but obviously you and other colleagues and other 
citizens, friends tuning in to our proceedings, may not have heard 
everything it is that is at stake. You see and hear the headlines about 
balancing the budget, but Mr. Speaker, I am here to tell you today, and 
I am not the only one, that that is not what is taking place.
  The budget is not being balanced. I feel very, very strongly that 
every time the national media in particular, whether linear or in 
newspapers or electronic with radio and television, report the balanced 
budget negotiations going on, they are doing a disservice. I do not 
want to say it is a question of lazy journalism. It may simply be the 
fact that not sufficient homework is being done or that we have moved 
into a situation in which news is reported simply on the basis of what 
is said by one side and another on an action-reaction basis, and then 
no one bothers to research any more as to whether anything anybody says 
is true or not.
  Mr. Speaker, let me put forward to you the simple proposition that I 
am contending is the actual situation with the nonbalancing of the 
budget. I do not know if we want to call it a truth-in-budgeting 
proposition, but we most certainly do not have a balanced budget. Very 
simply, very plainly, I want to state, and so far there has been no 
repudiation of this whatsoever by anyone in the majority, that there is 
in fact no balanced budget, that the budget that is printed has been 
available to us right straight through from the beginning from the 
majority, does not contain a balancing by the year 2002.
  I can understand why the Speaker of the House said that he arrived, 
or is reported to have said that he arrived at the 7-year number by 
intuition. I can understand that, because it is all guesswork. The No. 
7, the 7 years, 2002, is something that was picked out of the air 
because they were able to balance the budget on paper, but on paper 
only. It is a charade. It is an illusion.

  What is happening, Mr. Speaker, is as follows: Every year, including 
this year, there is going to be a deficit, and the deficit will be here 
this year to the tune of some $245 billion; and the deficit in the year 
2002 will be in the neighborhood of $105 to $108 billion, all assuming 
that there are no bumps in the economic road. In order to mask, in 
order to mask those deficits put forward by the Republican majority, 
put forward by the Speaker of the House, they are going to take from 
the Social Security trust fund billions upon billions upon billions of 
dollars, starting in the neighborhood of $63 billion this year and 
billions upon billions every year thereafter, up until the year 2002, 
in which they will take approximately $115 billion.
  So you see, Mr. Speaker, that if the deficit in the year 2002 is 
approximately $105 billion and you borrow $115 billion, you can claim 
on paper that you have a $10 billion surplus.
  So I am stating yet once again today--and I hope the proposition will 
attract some interest at some point--that the negotiations now going on 
between the White House and the Republican majority are not geared 
toward balancing the budget. No one who examines this budget can come 
to that conclusion.
  Now it is going to be said that it is balanced, but it is not. 
Because on the day that the budget is supposed to be balanced, we will 
need an explanation from Mr. Gingrich as to how we are to pay the 
approximately $636 billion that has been taken from the Social Security 
Trust Fund, plus interest.
  My calculations and those of Senator Hollings and Senator Dorgan in 
the other body indicate that that will probably be in the neighborhood 
of $1 trillion owed to the Social Security trust fund by the people who 
say they are balancing the budget.
  Now I have been a single voice so far, at least on the floor of this 
House, trying to bring out what the truth of all of these budget 
negotiation shams are all about. But I can assure you I am not the only 
one and will not be the only one by the time this process is over. I am 
going to continue to speak out; I am going to continue to bring to this 
floor the quotations from columns and observations by others who are 
beginning to catch on to what this is all about.
  Does anybody out there, do any of our colleagues really believe that 
if it was possible to balance the budget in 7 years that it would not 
have been done already? In time to come I will show how this kind of 
proposition has been put forward before. President Reagan said he was 
going to do it. President Bush said he was going to do it. President 
Clinton indicated he would certainly like to do it.

[[Page H13866]]

  President Reagan was unable to balance the budget. He put forward a 
plan on paper; never worked out. President Bush said he wanted to do 
it. Put forward a plan on paper, never worked out. President Clinton 
has been unable to do it.
  President Clinton, to give him credit, as a result of his first 
budget proposition, has been able to bring down both the rate of the 
deficit as well as the deficit itself, since his first budget came to 
the Congress and since we passed it in 1993. But the plain fact is that 
bringing down the deficit, either in absolute numbers or the rate of 
the deficit, is not the same thing as balancing the budget.
  Now, everybody in the country, when they are told by the Speaker of 
the House that we are to use honest numbers in balancing the budget in 
7 years, expects that that will be a reflection of the budgets that 
they understand.
  Mr. Speaker, in your home and my home I think we know what we mean by 
balancing our budget at the end of the month or at the end of the year. 
We have so much revenue come in; we have so much revenue go out. And if 
those books balance at the end of the year, we say we have balanced our 
budget.
  But you do not balance your budget, Mr. Speaker, I am certain that 
you do not balance your budget in your household any more than I do in 
mine, by telling your spouse that you have balanced the budget, your 
family has balanced your budget for the year by stealing your mother's 
and father's Social Security.
  I am going to emphasize that. Maybe stealing is a bit of a harsh 
word, because it is only being borrowed, but some people might call it 
stealing if they did not know that it was being borrowed; and I do not 
think the average American taxpayer knows that that is what is 
happening.
  I am frankly surprised, Mr. Speaker, that the American Association of 
Retired Persons has not gotten on this, the AARP. The various 
committees to protect Social Security seem to be silent.
  I notice that the Consumers Union and some of the tax groups, tax 
justice groups have been very vocal with respect to Medicare and 
Medicaid cuts and expenditures, but in this area of actually balancing 
the budget, they have all been strangely silent. I wonder about those 
among our colleagues and across the Nation who are paying dues to these 
organizations. I wonder whether they might begin to inquire of the 
leadership of some of these organizations that say they are trying to 
protect Social Security and provide tax justice, some of these people 
that supposedly analyze what is going on in government, Common Cause.
  There is a whole range of organizations out there that seem to be 
silent on this. Why is it that they have not come forward to indicate 
that we are not balancing this budget, unless someone has put forward a 
proposal that I am unaware of that indicates how we will pay more than 
$1 trillion that will be owed in the year 2002 to the Social Security 
trust fund in order to make up for the money that, on paper, is 
supposedly balancing the budget?

                              {time}  1845

  Just bringing down the deficit does not balance the budget. And 
robbing--there I go again--I suppose I should not use that word--
borrowing is perhaps the more appropriate term as far as accountants 
are concerned. But I can assure you as far as the average taxpayer is 
concerned, he or she is going to feel a little bit upset about the idea 
of taking their Social Security trust fund dollars and putting that 
money toward so-called balancing the budget.
  I have here in front of me the National Journal's Congress Daily from 
Wednesday, yesterday, November 29. Budget negotiators must close a $730 
billion gap.
  And I read through this learned publication. It is depended upon by 
you Mr. Speaker, and I, I think, as a source, a reference point, 
depended upon by other members of the public as being reliable.
  It says here the Democratic and Republican budget negotiators began 
meeting Tuesday night, face the daunting task of trying in a few weeks 
to bridge the differences totaling at least $730 billion in entitlement 
savings, discretionary spending levels and tax cuts if they are to 
agree on a 7-year balanced budget path this year.
  Mr. Speaker, this is not the first time that you have heard that 
phrase, the glide path to a balanced budget. It keeps coming up. But I 
notice the more time I spend on this floor talking about the fact that 
there will not be a balanced budget, there is no glide path, except to 
budget oblivion in 7 years, the greater the silence that accompanies 
it.
  I have invited over and over again the Speaker to come down and 
refute what I am saying, but I understand he is probably over at the 
White House or in touch with those people who are at the White House 
doing the negotiating on this illusory, phony, 7-year nonbalanced 
budget. Now I do not think they are going to be able to fool Senator 
Dorgan with it.
  I will at some point in the near future be reading into the record 
some of the points that Senator Dorgan has made, a Democratic Senator 
from North Dakota who is on top of this and understands it as well as 
Senator Hollings. But the fact is, is that Senate Budget Chairman 
Domenici says, ``We're making progress. We will meet every day this 
week including Saturday. This is a serious effort.''
  If it is a serious effort, I would like the good Senator to indicate 
whether or not they are negotiating how much money they are going to 
take out of Social Security to mask the budget deficits that they in 
fact have in this budget and have in the next budget and the budget 
after that all the way up to the year 2002.

  Has anybody come forward to explain what happens in 2003? Do we 
suddenly disappear? Is there some Biblical implication from this that I 
am unaware of? Is there something in the book of Revelation that says 
that the world as we know it and particularly the budget of the United 
States ends in the year 2002 and somehow we will not have to pay that 
$1 trillion in principal and interest that we have taken from Social 
Security?
  Now, if it is indeed a surplus, and so we can borrow from it and keep 
it, as the budget wizards say, off-budget, now think about that, Mr. 
Speaker. How many of us in our lives when we talk about a balanced 
budget to our families are able to say, Oh, by the way, that credit 
card payment? Well, that's off-budget. We're not counting that, because 
that credit card came in the mail. I didn't really solicit that, so 
even though I've spent money, even though I've used that card, in this 
instance the Social Security trust fund card, I'm not going to count 
it. That's just a surplus.
  Well, if it is a surplus, why do we not give it back? If it is a 
surplus that is not needed to pay Social Security to those who are 
eligible for it, then why do we not give it back? Why does a bill not 
come forward tomorrow from the Speaker's office saying, We're going to 
give that surplus back. We don't need it?
  I will tell you why. Because we want to give a tax cut. I hear 
everybody saying they want a tax cut on the Republican majority side. 
They want a tax cut. Well, let us give a tax cut to those people who 
really need it, the people who pay into the Social Security trust fund. 
We have increased taxes before on Social Security. Why? to make it 
solvent. We did that in the early 1980's as a result of the Greenspan 
Commission report which said unless we increased the amount of taxes 
that we pay out of our paychecks every week to Social Security, we 
would not have that trust fund, the trust fund would not be sound, it 
would flounder. We would be unable to make our obligations to Social 
Security recipients.
  And so we raised the taxes on ourselves. Take a look. It is called 
FICA on your paycheck every week. Just take a look down, when you get 
all of the deductions, your State taxes, your Federal taxes and all the 
other deductions that you have, FICA. That is your Social Security tax.
  Well, if there is a surplus in there, why not give that back? There 
is your middle-class tax cut, I submit to you, Mr. Speaker. There is 
your middle-class tax cut. Cut that Social Security tax.
  Well, this is not original with me. Senator Moynihan and others 
previously have indicated, ``Well, look, if you indeed have this 
surplus, let's give the money back.''
  Well, the hue and cry that went up when Senator Moynihan first 
broached 

[[Page H13867]]
the subject was something to behold. No one wanted to give it back 
because no one believes for an instant that there is in fact a surplus 
there that we will not need to call upon.
  So what we have is a situation in which a supposed surplus is 
available for the picking. And so if you want the illusion of having a 
balanced budget, why not go to the Social Security fund, take the 
money, promise at some vague time in the future to pay it back with no 
plan as to how that is to occur, and then be able to claim to the 
voting public that you have a balanced budget?
  There is the real tax cut. No, what do we propose? What does the 
Republican majority propose instead? No, let us have a tax break for 
the wealthiest people, and let us take away the tax incentives that we 
have at the very bottom, the so-called earned income tax. If your wages 
are below a certain level for a working family, your taxes are cut in 
order to give you more money to spend to increase your prosperity.
  No, we take billions from them, at the bottom, and give it to those 
at the top, when the real tax cut if we wanted to do that would be to 
give back the Social Security surplus.
  But if you gave back the Social Security surplus, then you could not 
borrow from it, could you, to try and fool people into thinking you 
have balanced the budget.
  And so the policy hurdle, it says in the Congress Daily, negotiators 
have to scale after they finish process issues is evident in six big 
ticket items.
  Tax cuts, which I just mentioned, and savings from Medicare, 
Medicaid, welfare reform, agriculture, and reform of the aforementioned 
earned income tax credit.
  Now, do you think that you are really saving money if you cut 
Medicare, if you cut Medicaid? And the welfare reform does not include 
that which is already available to those who can go to work in terms of 
child care, in terms of health insurance, in terms of education 
credits? Of course not. These are no savings. This is going to be 
tremendous pain inflicted on people. And for what? In order to achieve 
the illusion of a balanced budget when no balanced budget exists.
  How is it possible for us to raid Social Security on the one hand, 
and at the same time make a claim that taking money from Medicare and 
Medicaid, those people least able to help themselves, is in fact a step 
forward toward the balancing of that budget?
  Some of my good friends, my Republican friends have indicated, well, 
if what you say is true, and one or two of them even indicated they 
would do a little homework on it, and I am pleased that they have that 
kind of attitude, that they are always willing to learn as I hope I am.
  They have indicated that if it is in fact the case that we are going 
into Social Security, into the trust fund, and that that could be 
construed as a breach of good faith, if you will, with the public in 
terms of actually balancing the budget, if that is the goal, then they 
indicate, ``Well, we'll have to make even deeper cuts.''
  And I said, well, maybe that's your solution. I'm not sure how much 
more pain you want to inflict on people than that which would already 
occur if we adopted the proposals that are forthcoming right now.
  But I can assure you in order to do that, you are going to have to 
come up with some $636 billion in addition just to make that number 
come out in 7 years.
  That may be the proposal. The sentiment was expressed to me by 
freshman members of the Republican majority, and inasmuch as at least a 
reputation of some sort has grown in the media that freshman 
representatives in the republican majority are trying to work together, 
perhaps they can figure out a way to add an extra $636 billion to at 
least attempt to bring the budget into balance in 7 years.
  How they are going to do that without inflicting the pain that I have 
mentioned, I have no idea. That is not my problem. After all, I am not 
in the majority right now. that may change by 1996. I can assure you, 
Mr. Speaker, if and when the public makes a determination that when you 
tell them you are going to balance the budget and take their Social 
Security money instead, that they are sorely afflicted by that notion.
  Now, I have had discussions with a great many people in their 
thirties and forties and those in their fifties as well, but 
particularly the younger voter, that they fear they will not have their 
Social Security available to them when they get into their sixties, 62, 
65, or whatever number we set as being the number at which you would be 
eligible to collect Social Security, if we change it.
  Now, think about it. if you are in your thirties out there, and you 
are working hard, you are in your forties and you are beginning to 
think about, gee, maybe I have had a career and I am going to be moving 
down the road towards a pension and I am counting on my Social 
Security. How many of those people, Mr. Speaker, do you believe would 
like it that their Social Security trust fund is going to be raided 
over the next 7 years in order to accomplish the illusion of a balanced 
budget?
  So I say to those of my colleagues here, some of whom have made it 
quite clear that they do not intend to make Congress their career, 
although as I understand if the Constitution is still operative, none 
of us can make it a career past 2 years, every 2 years we have to renew 
our license or the people renew a license for us in order to sit here, 
none of us have a right to be here except by leave of our constituents. 
And those constituents may take offense if they believe that we have 
abused the privilege of our office by saying to them that we have 
balanced the budget in 7 years and taken their Social Security funds in 
the process. I think some questions are going to start to come up for 
people when they have to answer those questions.

  Senator Gramm of Texas, from the other body has said, I am quoting 
again from the National Journal. He is concerned the way it is going to 
be breached--he is talking about the balanced budget in 7 years--
concerned the way it is going to be breached is by assuming away the 
problems by changing the economics so negotiators have to cut less to 
get to balance.

                              {time}  1900

  That very well may be. Maybe Senator Gramm knows more than some of 
the other negotiators over there. I wish he would be a little more 
specific about it.
  The National Journal seems to say that, seems to feel that the GOP, 
and I am quoting again, the GOP reconciliation bill over 7 years calls 
for the savings, again, of $270 billion in Medicare, $163 billion in 
Medicaid, $75 billion from welfare reform, $32 billion from the working 
poor and the earned income tax credit, $13 billion from agriculture, 
plus the $245 billion in tax cuts.
  We keep seeing those numbers. Why did we not see in all of these 
reports that come out the $636 billion in Social Security that is being 
taken?
  Mr. Speaker, I think that if our good friends in some of the 
organizations that I mentioned previously would examine the issue, they 
would find that what I am talking about is, in fact, taking place.
  Now, it may be said that in the past, and going back as far as Mr. 
Truman's administation, let us go back to World War II, and I have the 
figures here in front of me, courtesy of Senator Hollings, it may be 
said that as far back as in 1945 and 1948, the last said that as far 
back as in 1945 and 1948, the last year of Mr. Truman's administration 
before his election in 1948 over Mr. Dewey, that they actually ran a 
surplus, and I may say to you that in 1948 the U.S. budget outlays in 
billions of dollars was $29.8 billion, $3 billion of which came from 
trust funds. The real deficit was nonexistent. We had a $5.1 billion 
surplus in that year, and the gross Federal debt, as opposed to the 
deficit, for that year, the debt that we owed was some $252 billion. 
Now, do not forget we had just concluded World War II.
  Obviously, the investment that had to be made by this country in 
advancing the cause of World War II was such that our debt, our 
national debt, was $252 billion. We were on our way toward moving on 
that debt, reducing the deficit by not only balancing the budget but by 
actually producing a surplus of $5 billion.
  By the time we got to the end of President Bush's time in office, by 
the time in 1992 we finished that particular 

[[Page H13868]]
year, the budget for the year in terms of outlays had risen to 
$1,381,000,000,000. Trust funds we were into to the tune of $113 
billion. The real deficit was $403 billion, and our gross Federal 
debt had moved to $4 trillion. The interest alone, Mr. Speaker, at that 
point had come to $292 billion.

  I submit that we are not making any changes in that except for the 
budget that President Clinton put forward. Whatever fault President 
Clinton may be assigned by the Republican majority, they can not deny, 
or rather should not deny, obviously they can if they wish, but it 
would be a political statement as opposed to a statement which is borne 
out by the facts, the fact is that the budget deficit and the rate of 
the deficit has gone down under President Clinton. We can have 
arguments about that, whether that is a good thing or a bad thing in 
terms of the overall prosperity of the Nation.
  On the whole, there seems to be agreement that it has been a good 
thing. The economy as a whole has prospered, if this has not been 
shared, as my good friend, the gentleman from New York [Mr. Owens], has 
indicated in remarks just previous to my own, but that remains another 
issue to be resolved.
  The facts are that in terms of the deficit, in terms of the rate and 
the absolute numbers of the deficit, President Clinton has succeeded to 
this point.
  So now comes Mr. Gingrich with his contract, saying the budget will 
be balanced and picking this number. Now, it may be fair. And, Mr. 
Speaker, at this juncture to indicate that in future discussions, 
hopefully with other Members who feel as I do, that I will be 
indicating to you how it might be, how a genuine deficit reduction, 
debt reduction and balancing of the budget can take place.
  There are no magic formulas involved. There is no sleight of hand, no 
legerdemain, no David Copperfield illusions to it. It is a tough, hard 
road to go, and it is lengthy. It will take discipline of many 
Congresses, not just whatever time the good people of this country 
might give to you or to me, Mr. Speaker, to be here. It involves 
separating capital expenditures from operating expenditures, just the 
way you do in your own family, just the way we do and did and do now in 
the city council in Honolulu on which I served, just the way we did and 
do now in the State legislature in the State of Hawaii, and I am sure 
you do in your area, Mr. Speaker.
  I guess my timing was pretty good then as I got to my conclusion 
about what is to be done. We will be bringing forward that proposition, 
Mr. Speaker, about the sensible way to solve the problem of long-term 
debt, of balancing the budget with using true and honest figures and 
not raiding or embezzling money, as the late Senator John Heinz put it, 
money from the Social Security trust fund.
  With that, Mr. Speaker, it remains only to say this: that if we are 
going to use honest numbers and we truly want to balance the budget, 
let us do it forthrightly, let us do it honestly, let us not try and 
fool the American people. Let us see to it that we are able to bring 
forward a budget that we can stand here and say with veracity to the 
American people: We have truly acted in your interest.

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