[Congressional Record Volume 141, Number 204 (Tuesday, December 19, 1995)]
[Senate]
[Pages S18902-S18904]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     ENCOURAGING A BALANCED BUDGET

  Mr. KENNEDY. Mr. President, earlier today, I noticed a rather 
extensive advertisement that was in the Washington Post, and also other 
newspapers, a full page advertisement. On one side are all the 
signatories of 

[[Page S18903]]
major industries. It was run in several of the newspapers. It says, 
``Without a Balanced Budget, the Party's Over, No Matter Which Party 
You Are In.'' These corporate and business leaders urge that the 
Congress move ahead with the President and pass it at the earliest 
possible time. I want to read to the Senate a letter I just sent to 
those who have signed this advertisement and point out the following 
reaction that I had to the letter itself:

       Dear Sirs: I welcome and agree with the message in your 
     two-page advertisement in the New York Times and the 
     Washington Post this morning that America should live within 
     its means and achieve a balanced budget. The issue is not 
     whether we achieve a balanced budget, but how to do it in a 
     way that assures that the sacrifices as well as the benefits 
     of reaching a balanced budget are fairly shared among all 
     Americans. I hope you agree that equal sacrifice is the heart 
     of a fair balanced budget.
       The original Republican budget plan was properly vetoed by 
     President Clinton last week, because it failed to meet this 
     test. It inflicted deep cuts in Medicare, Medicaid, 
     education, the environment, and other important national 
     priorities, and it included large tax breaks for wealthy 
     individuals and corporations. Half of all the spending cuts 
     in the Republican plan came from the bottom 20% of families 
     in America, while only 9% of the cuts came from the top 20% 
     of families in America. Two-thirds of the tax breaks in the 
     Republican plan go to this same top 20% of Americans, while 
     the bottom 20% would face a tax increase. The middle 60% of 
     Americans would also be hit unfairly. They would lose an 
     average of $600 each because of the spending cuts, and get 
     back only a third of that amount in tax reductions. These are 
     conservative distributional estimates, and they plainly 
     demonstrate the unequal sacrifices and unequal benefits 
     contained in the Republican plan.
       You say that every form of spending should be on the table, 
     ``including long term entitlement programs.'' I agree. By the 
     year 2002 the largest of all entitlement programs will be the 
     tax entitlements. Between now and the year 2002, the federal 
     government will spend over $4 trillion in tax loopholes and 
     tax preferences which go disproportionately to wealthy 
     individuals and corporations. In 2002, these tax entitlements 
     will represent a large share of the budget than Social 
     Security, Medicare, Medicaid, or any of the other entitlement 
     programs. But so far, out of the $4 trillion of tax 
     entitlements, the Republicans are willing to cut only $16 
     billion.
       Surely, if elderly couples depending on Medicare and having 
     an average income of less than $17,000 a year would be 
     required by the Republican plan to pay an additional $2,500 
     in Medicare premiums to balance the budget over the next 
     seven years, corporations can be asked to contribute their 
     fair share. If four million children would lose their health 
     care and five million senior citizens and disabled Americans 
     would lose their Medicaid protection to balance the budget, 
     corporations can be asked to bear their fair share. Surely, 
     if education funding would be cut by 30% and millions of 
     college students would have the cost of their student loans 
     increased to a point where they may no longer be able to 
     afford college, corporations can be asked to bear their fair 
     share.
       If you are truly interested in balancing the budget, I hope 
     you will agree that corporations should bear their fair share 
     of the cuts, along with working Americans, senior citizens, 
     children, and students.
       I make the following proposal. The Republican plan would 
     provide a reduction of 17% in the Federal budget over the 
     next seven years, exclusive of defense spending and Social 
     Security. Reducing the $4 trillion in tax subsidies by 17% 
     would achieve savings of $680 billion. If we applied the 17% 
     reduction to only one-quarter of the tax expenditures, we 
     would save $170 billion--more than enough to provide the 
     additional savings needed in the current impasse to balance 
     the budget fairly in seven years. Surely it makes sense to 
     reduce corporate subsidies by a similar percentage as 
     programs that benefit working Americans and the poor are 
     being cut.
       Or, a number of specific corporate loopholes that are 
     contrary to sensible national policy could be eliminated 
     entirely to achieve the needed savings. It would make sense 
     under this approach to focus specifically on tax subsidies 
     that have the direct or indirect affect of encouraging 
     American businesses to move transactions and jobs overseas. 
     It is particularly offensive, at a time when large numbers of 
     American workers are losing their jobs and being dislocated 
     by changes in the economy, that the tax code is subsidizing 
     corporations to move transactions and job overseas.
       I urge you to appoint a task force of CEOs to put together 
     a proposal by which tax entitlements would bear their fair 
     share of needed budget reductions. I am ready to meet with 
     this task force at any time to discuss your proposals. If you 
     took this step, the balanced budget which we all support 
     would be within our grasp almost immediately. Most 
     importantly, the balanced budget would be achieved with equal 
     sacrifice from all Americans, without destructive cuts to 
     Medicare, Medicaid, education, and the environment.
       I look forward to hearing from you that you are prepared to 
     bear your share of the sacrifice in the name of fairness as 
     we put America on a course of living within its means.
           Sincerely yours,
                                                Edward M. Kennedy.

  Mr. President, I ask unanimous consent that the two-page 
advertisement be printed in the Record at this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Washington Post, December 19, 1995]

   A Bipartisan Appeal from Business Leaders to the President of the 
    United States Bill Clinton, House Speaker Newt Gingrich, Senate 
  Majority Leader Bob Dole, Senate Minority Leader Tom Daschle, House 
 Majority Leader Dick Armey, House Minority Leader Dick Gephardt, and 
                        All Members of Congress

       Without a balanced budget, the party's over. No matter 
     which party you're in.
       There are moments in history when a single choice can mean 
     the difference between vastly differing futures--one bright, 
     the other dark. We believe that you, the political leaders of 
     this country, are now confronting such a choice in your 
     deliberations over a plan to balance the federal budget.
       We are convinced that the health of our economy rests on 
     your ability to avoid political gridlock and give the 
     American people what leaders of both parties say they favor 
     and, indeed, have agreed to--a credible plan to balance the 
     budget. By ``credible'' we mean that such a plan should:
       Use realistic projections that assume the fiscal and 
     economic scenario developed by the Congressional Budget 
     Office and reviewed by objective third parties:
       Take no longer than seven years as the maximum time period 
     by which a balanced budget would be achieved;
       Ensure that the process of deficit reduction is achieved in 
     roughly equal steps throughout these seven years, rather than 
     ``backloading'' the politically difficult decisions into the 
     next century; and
       Have everything on the table, including long-term 
     entitlement programs as well as the size and shape of any tax 
     cuts.
       Included among us are Democrats and Republicans, Liberals 
     and Conservatives. What unites us in this appeal is our 
     common concern for America's future.
       All of us are leaders of institutions keenly sensitive to 
     interest rates and the short- and long-term outlook for the 
     U.S. economy. We believe that the recent decline in long-term 
     interest rates and much of the boom in the stock market is 
     directly predicated on the financial markets' expectation 
     that a successful bipartisan budget-balancing compromise will 
     be reached quickly, and that a credible long-term plan will 
     be put in place in short order.
       Federal Reserve Board Chairman Alan Greenspan recently 
     observed: ``If there is a shattering of expectations that 
     leads to the conclusion that there is indeed an inability to 
     ultimately redress the corrosive forces of deficit, I think 
     the reaction would be quite negative--that is, a sharp 
     increase in long-term interest rates . . . I think we would 
     find that with mortgage rates higher and other related rates 
     moving up, interest-sensitive areas of the economy would 
     begin to run into trouble.''
       As you continue your negotiations, we ask you to reflect on 
     the full consequences of success or failure. However 
     Americans ultimately resolve our honest and principled 
     disagreements over the size and scope of government, America 
     must begin to live within its means.
       The time for good economics as well as good politics is 
     NOW.
       America is waiting.
           Respectfully yours,
     Paul Allaire,
                              Chairman and CEO, Xerox Corporation.
     Richard H. Jenrette,
          Chairman and CEO, The Equitable Companies, Incorporated.
     Jon Corzine,
                 Chairman and Senior Partner, Goldman, Sachs & Co.
     Peter G. Peterson,
           Chairman, The Blackstone Group, President, The Concord 
                                                        Coalition.
     M.R. Greenberg,
              Chairman and CEO, American International Group, Inc.
     John Snow,
        Chairman and CEO, CSX Corporation, Chairman, The Business 
                                                       Roundtable.
       This message has been paid for by the above named 
     individuals and organizations.
                                                                    ____


             [From the Washington Post, December 19, 1995]

                         Committee in Formation

       Duane L. Burnham, Abbott Laboratories.
       Paul H. O'Neill, Alcoa.
       H. L. Fuller, Amoco Corporation.
       Mitt Romney, Bain Capital, Inc.
       Nolan D. Archibald, The Black & Decker Corporated.
       Josh S. Weston, Automatic Data Processing, Inc.
       Lawrence A. Bossidy, Allied Signal Inc.
       Richard de J. Osborne, ASARCO Incorporated.
       John B. McCoy, Banc One Corporation.
       Stephen A. Schwarzman, The Blackstone Group.
       John Whitehead, AEA Investors Inc., Former Deputy Secretary 
     of State.
       E. Linn Draper, Jr., American Electric Power.
       
[[Page S18904]]

       Robert E. Donovan, ABB Inc.
       Vernon R. Loucks, Jr., Baxter International Inc.
       Michael R. Bloomberg, Bloomberg Financial Markets.
       H. A. Wagner, Air Products & Chemicals, Inc.
       John R. Stafford, American Home Products Corporation.
       Robert E. Allen, AT&T Corp.
       Curtis H. Barnett, Bethlehem Steel Corporation.
       Frank Shrontz, The Boeing Company.
       William F. Thompson, Boston Ventures Management, Inc.
       Richard L. Sharp, Circuit City Stores, Inc.
       Robert Cizik, Cooper Industries, Inc.
       John R. Walter, R. R. Donnelley & Sons Company.
       Frederick W. Smith, FedEx.
       Alex Trotman, Ford Motor Company.
       Lawrence Perlman, Ceridian Corporation.
       Joseph L. Rice, III, Clayton, Dubilier & Rice, Inc.
       James R. Houghton, Corning, Incorporated.
       George M.C. Fisher, Eastman Kodak Co.
       Richard L. Thomas, First Chicago NBD Corporation.
       Melvyn J. Estrin, FoxMeyer Health Corporation.
       K. T. Derr, Chevron Corporation.
       M. Thomas Moore, Cleveland-Cliffs Inc.
       Philip J. Purcell, Dean Witter, Discover and Co.
       William E. Butler, Eaton Corporation.
       Paul M. Montrone, Fisher Scientific International Inc.
       John B. Yasinsky, GenCorp.
       Robert J. Eaton, Chrysler Corporation.
       Richard L. Scott, Columbia/HCA Health Care.
       John S. Chalsty, Donaldson, Lufkin & Jenrette, Inc.
       Lee R. Raymond, Exxon Corp.
       Jack B. Critchfield, Florida Progress Corporation.
       John F. Smith, Jr., General Motors Corporation.
       Stanley C. Gault, The Goodyear Tire & Rubber Company.
       Frank A. Olson, The Hertz Corp.
       Ralph S. Larsen, Johnson & Johnson.
       A.J.C. Smith, Marsh & McLennan Companies, Inc.
       Hugh L. McColl, Jr., NationsBank.
       Charles R. Lee, GTE Corporation.
       David A. Jones, Humana, Inc.
       Paul S. Levy, Joseph Littlejohn & Levy.
       Joseph L. Dionne, The McGraw-Hill Companies.
       J. Roderick Heller, III, NHP Incorporated.
       Warren Hellman, Hellman & Friedman.
       Louis V. Gerstner, Jr., IBM Corporation.
       Floyd Hall, Kmart.
       Daniel P. Tully, Merrill Lynch & Co., Inc.
       Stephen Berger, Odyssey Partners, L.P.
       Thomas L. Gossage, Hercules Incorporated.
       Frank E. Baxter, Jeffries & Co., Inc.
       Henry R. Kravis, Kohlberg Kravis Roberts & Co.
       Roger Milliken, Milliken & Company.
       Willis B. Wood, Jr., Pacific Enterprises.
       Donald B. Marron, Paine-Webber, Incorporated.
       Hardwick Simmons, Prudential Securities, Inc.
       Robert E. Denham, Salomon Inc.
       Charles Lazarus, Toys `R' Us.
       Tony L. White, The Perkin-Elmer Corporation.
       James P. Schadt, The Reader's Digest Association, Inc.
       John H. Bryan, Sara Lee Corporation.
       Joseph T. Gorman, TRW Inc.
       H. William Lichtenberger, Praxair, Inc.
       Donald R. Beall, Rockwell International Corporation.
       Dana G. Mead, Chairman, National Assn of Manufacturers.
       L. Dennis Kozlowski, Tyco International Ltd.
       Arthur R. Ryan, The Prudential Insurance Company of 
     America.
       Wolfgang R. Schmitt, Rubbermaid, Inc.
       A. C. DeCrane, Jr., Texaco Inc.
       Dr. William H. Joyce, Union Carbide Corporation.
       James A. Unruh, Unisys Corporation.
       David R. Whitwam, Whirlpool Corporation.
       Keith E. Bailey, The Williams Companies, Inc.
       William R. Toller, Witco Corporation.
       Al Moschner, Zenith Electronics Corporation.
       This message has been paid for by the above named 
     individuals and organizations.

  Mr. KENNEDY. Mr. President, I noted, as I mentioned earlier, that 
this advertisement points out the responsibilities all of us have in 
reaching a balanced budget as a challenge to all of us here in the 
Congress, to the administration, and it is really a challenge to all 
Americans. It is one that we all should be mindful of, and I hope that 
our friends that were signatories to that proposal would also feel that 
in a sense of fairness and equity, they, too, would like to do their 
part. We invite them to be a part of the solution to this challenge 
that we are all facing at this time so that what is eventually 
proposed, which hopefully will have bipartisan support, will be able to 
be looked on as being fair to all Americans. It is in that spirit that 
these remarks are made.
  I thank the chairman and the ranking member of the Armed Services 
Committee. I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Gorton). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. WARNER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________