[Congressional Record Volume 141, Number 197 (Tuesday, December 12, 1995)]
[House]
[Page H14262]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1330
                     WHY WE NEED A BALANCED BUDGET

  The SPEAKER pro tempore (Mr. Ewing). Under the Speaker's announced 
policy of May 12, 1995, the gentleman from Michigan [Mr. Smith] is 
recognized during morning business for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, for the first day during the 
budget negotiations to try to come to a compromise for a balanced 
budget, the administration and Congress, I think, have made some 
progress. Maybe some of the hopefulness is in what has been suggested, 
that the CBO has estimated now that approximately $135 billion extra 
will be available in their new baseline, and that means the differences 
are less in the dollar amount between the House and Senate.
  Here is one problem, though, in the CBO estimate of their prediction 
of a somewhat rosier economy in the next 3 or 4 years. That is the fact 
that it is exactly that, it is 3 or 4 years. The projection in the 
fifth, sixth, and seventh year is so ambiguous that that is not where 
additional revenues coming into the Government are coming from.
  Therefore, when you decide the social programs that are going to be 
continued and expanded, when you decide the entitlement programs that 
are going to be continued and expanded, you have to take into 
consideration what is going to happen the fifth, sixth, and seventh 
year. Those issues still need to be addressed today.
  I particularly am very concerned about what happened on November 15 
when the President disinvested the so-called G fund and the thrift 
savings fund as well as the civil service retirement trust fund for a 
total of $61 billion.
  Congress, who is given the authority in article 1, section 8, of the 
Constitution to control borrowing, has now had some of that power taken 
away from them by an administration that has found a special way to 
increase the debt load of this country by raiding the trust funds, $61 
billion.
  It took this country the first 160 years of its existence, through 
Pearl Harbor, into World War II, before we had amassed that kind of a 
$60 billion debt. In one fell swoop, the President and Mr. Rubin 
increased the debt load of this country another $61 billion.
  What I would suggest is that it is important to try to regain control 
of spending in this country and the debt ceiling in this country.

  Mr. Rubin suggests, well, once we have appropriated the money, it is 
the responsibility of Congress to come up with whatever is necessary in 
additional borrowing authority to pay off those debts.
  Here is what is being left out of the discussion, Mr. Speaker. It is 
the fact that most of the spending, most of the cuts to achieve a 
balanced budget are coming from the entitlement changes. Since a 
majority in Congress can no longer reduce spending through the 
entitlement programs without the consent of the President, we have lost 
some of our authority to control the purse strings of this country. So 
it is very appropriate to tie the debt ceiling limit to conditions of 
changing the entitlement programs of this country, to try to have the 
U.S. Government live within its means.
  We need to remind ourselves what we are talking about in terms of 
what borrowing is doing to our economy and the obligation that that is 
passing on to our kids and our grandkids.
  We are borrowing money now because we think what we are doing and the 
problems that we face are so important that it justifies us going 
deeper into debt and telling our kids and our grandkids that they are 
going to have to pay back this debt out of money they have not even 
earned yet. They are going to have their own problems.
  Most people conceptually say, well, yes, Government should try to 
live within its means and balance its budget. The fact is, is that it 
has such an impact, not only on our moral obligations of what we pass 
on to our kids as far as increasing their obligation and problems, but 
also its effect on our economy.
  Alan Greenspan, our chief banker of this country, head of the Federal 
Reserve, came into our Budget Committee and said, ``Look, if you are 
able to end up with a balanced budget, interest rates will go down 
between 1\1/2\ and 2 percent.''
  Two weeks ago, he went to the Senate Banking and Financial Services 
Committee and said, ``Look, if you do not end up with a balanced 
budget, interest rates could go up another 1 percent,'' a dramatic 
difference in the effect of our individual lives, on how much it costs 
us to buy a home or borrow money to go to school or buy a car.
  Let me just say that it is so important to our future, to our 
economy, to our well-being in this country and the well-being of our 
kids, that we have got to have a legitimate balanced budget, and I 
sincerely hope the administration and Congress will get together and 
achieve that particular goal of a real, no smoke-and-mirrors balanced 
budget.

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