[Congressional Record Volume 142, Number 8 (Tuesday, January 23, 1996)]
[Senate]
[Pages S298-S301]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        CAMPAIGN SPENDING LIMITS

  Mr. SPECTER. Mr. President, January 29, which is next Monday, will be 
the 20th anniversary of the decision of Buckley v. Valeo. I had 
intended to comment on January 29, the anniversary date of that 
decision which established as a principle of constitutional law that 
any individual could spend as much of his or her money in a campaign as 
he or she chose. That issue was a matter of substantial consternation 
to me when the decision was handed down and, I think, remains a major 
impediment on public policy in the United States on the way we run our 
election campaigns, where, realistically viewed, any seat is up for 
sale.
  There have been many, many examples of multimillion-dollar 
expenditures in this body, the U.S. Senate, the U.S. House of 
Representatives, and in State Government, and now we are witnessing one 
for the Presidency of the United States.
  The fact of life is, if you advertise enough on television, if you 
sell candidacies like you sell soap, the sky is the limit. Even the 
White House of the United States of America, the Office of the 
President, may be, in fact, up for sale if someone is willing to start 
off by announcing a willingness to spend $25 million. If you have $400 
million, that is not an enormous sum; you have $375 million left. 
Somebody might be able to get along on that. You might spend $50 
million or even $75 million to promote a candidacy, both to articulate 
a positive view and then, perhaps even more effectively, to articulate 
a negative view.
  This is a subject I have been concerned about for a long time because 
I filed for the U.S. Senate back in 1975 announcing my candidacy for 
the U.S. Senate on November 17, 1975, in the first election cycle where 
the 1974 election law was in effect. At that time the spending 
limitation applied to what an individual could spend, and, for a State 
the size of Pennsylvania, it was $35,000. I decided to run for the 
office of U.S. Senate against a very distinguished American who later 
became a U.S. Senator, John Heinz. After my election in 1980, he and I 
formed a very close working partnership and very close friendship. I 
have only the best things to say about Senator Heinz.
  But, in the middle of that campaign, on January 29, 1976, the Supreme 
Court of the United States decided Buckley v. Valeo and said a 
candidate can spend any amount of money. My later colleague was in a 
position to do so and did just that. That made an indelible impression 
upon me, so much so that when the decision came down on January 29, I 
petitioned for leave to intervene as amicus and filed a set of legal 
appeals, all of which were denied.
  But it seemed to me since that time, as I have watched enormous 
expenditures in campaign financing by individuals, that simply was 
unsound constitutional law and certainly unsound public policy. There 
is nothing in the Constitution, in my legal judgement, which guarantees 
freedom of speech on any reasonable, realistic, logical constitutional 
interpretation which says you ought to be able to spend as much money 
that you have to win an elective office. I think it is high time for 
the Congress of the United States and the 50 States to reexamine that 
in a constitutional amendment, which is currently pending.
  Senator Hollings has proposed the amendment for many Congresses, and 
I have joined with him and sometimes I have proposed individual 
constitutional amendments. But as we approach the 20th anniversary of 
Buckley v. Valeo, we ought to take a very serious look at it. And we 
may have a striking impetus for change in that law by the Presidential 
campaign which is currently underway. So, in advance of the 29th, I 
urge my colleagues to take a very close look at this issue which I 
think has very serious implications for the electoral process in 
America.
  I thank the Chair. It is now 3:40. I yield the floor.
  The PRESIDING OFFICER. Does the Senator suggest the absence of a 
quorum?
  Mr. SPECTER. And I do suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Thompson). Without objection, it is so 
ordered.

[[Page S299]]


                         STATUTORY DEBT CEILING

  Mr. MOYNIHAN. Mr. President, it would be just 16 years since I came 
to the Senate floor to speak to a large new idea in our politics which 
seemed to me was then taking shape and which, as I do believe, has 
since become a central fact of American government. This was the idea 
on the part of those who legitimately, from their perspective, felt 
that the U.S. Government had become too large, too interfering, too 
dominant in the affairs of the State and local governments, and in 
general moving in a direction that this group did not desire.
  They spoke to the futility of seeking to dismantle the great edifice 
of Government that had been growing, not truly since the New Deal, but 
since the beginning of the century with the administrations of Theodore 
Roosevelt, Woodrow Wilson, and thereafter, of course, President 
Franklin Roosevelt, President Johnson, President Nixon --a growth in 
Government that had never been fully accepted by all parts of the 
electorate, nor need it have been, and now was attaining very 
considerable opposition.
  The effort to reverse this direction by repealing this statute and 
amending that and reducing this program and such was not so much 
countervailing as beyond the capacities of the legislature. Indeed, the 
Government had attained to a size and complexity that dismantling even 
a small part of it was a huge enterprise. So the reasoning of this new 
school was that this would never succeed.
  What would indeed succeed, it was argued, was to deprive the National 
Government of revenue. By systematically reducing revenues through tax 
cuts, there would come a time when there was simply not the available 
resources to maintain the level of outlay that was then taking place.
  This had many informed and sophisticated iterations, if you like, but 
the whole idea was put in one compact phrase that appeared in the first 
year of the administration of President Reagan. And it was in usage in 
the White House, as we understood. It was ``starve the beast.''
  At that time, 1980, the debt of the Federal Government was about $900 
billion, a sizable enough sum but in no way an unmanageable one. Debt 
had risen during the two world wars and had been brought back down. 
Some debt occurred in the 1930's, nothing spectacular; revenues were 
well within the range of obligations, and the Government was moving 
forward.
  Two things then happened. Government outlays began to grow very 
rapidly as several entitlement programs took hold. Medicare is but the 
most important example. A good indicator, also, however, is Medicaid. 
Medicaid, which is a Federal entitlement to persons with very limited 
resources. Those Medicaid costs doubled in the 8 years of the 
administration of President Reagan, doubled again in the 4 years of the 
administration of President Bush. If you project this trend, as we have 
done, and put them in the form of a geometric progression, you find 
that the costs of Medicaid would double on the 29th of December of this 
year. So those outlays began to go up rapidly.
  Then in 1981, there was a large tax reduction, and revenues ceased to 
grow. The income tax brackets were indexed so that there was not an 
inflationary increase in revenues that had previously been the case 
during the 1970's.
  Mr. President, we passed five tax cuts, and indeed the level of 
inflation in 1980 was such that the Office of Management and Budget 
anticipated a surplus even with the tax reductions.
  The 1982 recession brought that inflation down. The tax cut took 
hold. And so we were on a path simultaneously of increased outlays and 
reduced revenues, very much that which those who advocated this 
particular approach had anticipated.
  What they had not anticipated was that President Reagan, who very 
much wanted a tax reduction, did not want programs reduced in any large 
amount and certainly in no very few particulars. Mr. David Stockman, 
President Reagan's Director of the Office of Management and Budget, in 
his memoirs, ``The Triumph of Politics,'' records the options he would 
present the President. There was a program, it costs this much, it 
should be abolished, it should be left alone, it should be reduced a 
little, and the President, in the kind of generous nature we know he 
has--happily--cut it a little, perhaps, but nothing large was done. 
Instead, debt in enormous amount was incurred.
  We went from a debt of about $900 billion to a debt of almost $5 
trillion in a very short time, and debt service began to crowd out 
other activities of the Federal Government. While there had been very 
little articulation of this theory--``starve the beast''--the practice 
has gone forward with extraordinary, almost inexorable, relentless 
thoroughness. We are now in this 16th or 17th year since I first spoke 
on the matter, and the situation approaches crisis.
  The crisis that we come to is the working out of the theory, if you 
might, the debt having attained to its present level, the decision is 
being talked about of not extending the debt any further, with the 
consequence not that we would reduce the size of the American 
Government--a legitimate strategic objective I did not necessarily 
share; I do not disavow it in every respect nor does anybody in this 
Chamber. The idea today would be not to extend the debt ceiling and let 
the U.S. Government default on its obligations for the first time in 
our history.
  I was remarking, Mr. President, to the Democratic caucus at noon 
today that in 1814, the British invaded Washington, burnt the White 
House, burnt this Capitol Building, the part just the other side of the 
door here, the original building. They did not burn the Marine 
Commandant's house, because they were staying there, but they overtook 
the Capitol completely. The President fled, the Congress fled, and the 
Nation seemed in the most dire possible circumstances: Our Capitol had 
been seized. Yet the service on the national debt continued to be paid. 
I think it probably was the case it was most paid overseas and in 
specie out of various subtreasuries.
  In that degree of crisis in a newly formed nation, not fully even 
formed perhaps, we never defaulted. We never defaulted during the Civil 
War. The question did not arise in the great wars in the 20th century. 
But here, in a moment of peace, we may be about to do this. The 
consequences would be immeasurable. From the very height of its 
position in the world and in the history of the world, the United 
States would become a nation in default, a nation whose currency is in 
question, whose debt has, in effect, been repudiated.
  We may not think of it this way. We may not imagine others thinking 
of it this way. It could happen, Mr. President, and if we do not do 
something in the next days, it very possibly will happen. The 
unimaginable, the unthinkable will happen.
  We have reached the debt ceiling of $4.9 trillion. Either we raise 
the debt ceiling or we undermine the foundations of American democracy 
and the American economy and who knows what in the world at large.
  I might recede and say, Mr. President, during the last Congress, I 
then had the honor to be chairman of the Committee on Finance. We 
raised the debt ceiling twice, not out of any unconcern for the 
deficit, but out of the realistic appreciation of what we could do.
  In August 1993, we passed in this body a deficit reduction package of 
$500 billion. It was signed. It brought about the largest reduction in 
the deficit in history. Interest rates declined--a fiscal dividend--or 
as described by Secretary Rubin described, a reduction in the deficit 
premium on interest rates.
  We did that, and we reduced the deficit. At the same time, we had to 
increase the debt ceiling. Twice we did that, leaving it at $4.9 
trillion. This last November 9, I came to the floor and offered an 
amendment to increase the debt ceiling just a very small amount to 
$4,967,000,000,000, enough to get us through, as I hoped, until there 
was a Budget Reconciliation Act agreed to. And knowing what we would 
have to have in the way of additional debt expenditure in the course of 
the next 2 years, we could then pass a proper 2-year debt ceiling 
increased to perhaps $5,500,000,000,000.
  That measure--offered, as I say, on November 9--failed by a vote of 
47 to 49, a very close margin. Two votes would have put us over into 
the present moment, but not to a true resolution of a 2-year prospect.
  Mr. President, in the absence of that, the debt ceiling was soon 
reached, and 

[[Page S300]]
the Secretary of the Treasury was reduced to borrowing moneys in ways 
that were entirely lawful but not really anticipated as a more than 
temporary steps to avoid a debt crisis. He had to deal with the fact 
that the Federal Government was without a budget. I say, it is no 
accident that this was the 11th time since 1981 that the Federal 
Government has been without a budget and without resources.
  Within 1 year of my having observed this strategy here on the Senate 
floor, it was in effect. They were short-term events. They were 
referred to as monument closings: The Government would close down for a 
day and some national facilities would not be available but with no 
real interruption of the Government itself.
  This time, we have had the longest shut down ever. It is not perhaps 
noticed, but we almost shut down the Federal courts, the third branch 
of Government, indispensable to governing but of itself the least 
dangerous branch, as one of the ``Federalist Papers'' referred to it.
  It depends entirely on the Congress and the Executive to provide 
these choices. It had none. It was at the point where it would not have 
had money to pay criminal and civil jurors or security guards. The 
prospect of the Federal courts closing was upon us, and we did finally 
act, but only almost reluctantly, not as if performing a duty, but 
dealing with an irritating necessity.
  Now, here we are again. Yesterday, the Secretary of the Treasury told 
us in the most explicit terms that he has reached the end of measures 
that he can legally take, that he is willing to take, or legally can 
take, the two being coterminous. He has said that he has three final 
measures. He will suspend the reinvestment of approximately $3.9 
billion in Treasury securities held by the Exchange Stabilization Fund. 
That is the total amount of dollars in that fund. If we were to use the 
German mark and Japanese yen also, the dollar would be subject to the 
most extraordinary turbulence in world markets. The Secretary also said 
that the Federal Financing Bank will exchange $9 billion in assets in 
its portfolio, primarily, I believe, from the Tennessee Valley 
Authority, with which the distinguished Presiding Officer is very 
familiar, and several other Government activities, which he can do. The 
exchange of assets will permit the Treasury to obtain $9 billion in 
cash.
  Finally, he has the ability to extend the 12-month debt issuance 
suspension period. That, I have to say, is what we are in, a debt 
issuance suspension period, from 12 months to 14 months. This will 
permit the Treasury to obtain an additional $6.4 billion in cash by 
temporarily using interest-bearing assets of the civil service 
retirement fund. And that is it. Nothing more.
  These actions would raise $19.3 billion. They will take the U.S. 
Government through until February 29 or March 1. At that point, sir, 
the U.S. Government will default on its obligations--something that 
could not have been imagined in the world 20 years ago. We are facing 
it, but we are not facing up to it. I had hoped that I might offer a 
measure to increase the debt ceiling, a clean simple increase, on 
tomorrow, or on Thursday, but I understand we may not be in session. On 
Friday, I will try to do this, but it is not clear whether it will be 
possible with the continuing resolution that keeps the Government open 
for certain purposes and the rest of the fiscal year. Then I am told we 
will not be back until February 26. That is 3 days before default.
  I would hope something would concentrate our minds. This measure 
would simply allow the Federal Government to meet its obligations while 
the negotiations about the budget continue between the Congress and the 
administration. There is room for agreement in those negotiations. The 
distinguished senior Senator from Pennsylvania was on the floor just 
now talking about the areas where no principle is involved. It is just 
a question of at what rate Medicare outlays grow. They are growing at 
say 9 percent, and another party says 8 percent, and another party says 
7 percent. They are only discussions of increments where if there is a 
will, there is surely a way to agreement.
  Maybe there is no will to reach final agreement on some issues that 
are thought to be of principle. Very well, let us have a national 
election. We are going to do that. The Republican Party caucuses 
begin--I guess, caucuses for both parties will begin in Iowa and then 
primaries in New Hampshire, and off we go. It is an extended period. 
There are days when you can wish this were Canada and if we had to have 
a national election we could do it in 2 weeks' time, and people would 
know what the issues are and vote and settle them for the parties 
involved, and the Parliament would resume.
  We have a Constitution and we will abide by it. It provides for 
quadrennial elections and we will have them. It is all very well if we 
do not create a catastrophic crisis or undergo a catastrophic failure 
in the interval. We have to increase the debt ceiling. Secretary Rubin, 
an honorable man, the able Secretary of the Treasury, has done what he 
can do under law. He is acting as his predecessors did in the Reagan 
administration and in the Bush administration. But he can do no more 
than the law allows. He will do no more than the law allows. And the 
world watches.
  I would say, if I could direct my views principally to the Congress, 
reach some agreement with the President and agree on what you can agree 
to, let the rest be decided in the Presidential election, and let the 
Government go forward.
  I would also speak to the President in this matter. The President has 
a responsibility that goes far beyond electoral politics. He is 
required under the Constitution--and I sometimes think this is the only 
thing in article II that he is required to do. It says, ``He shall take 
care that the laws be faithfully executed.''
  Certainly, those laws extend to preserving the full faith and credit 
of the United States. If, in some measure, agreement with the Congress 
would permit the debt ceiling to be extended and the solvency of the 
U.S. Government, the value of U.S. currency, the worth of the American 
credit and faith in our word, if in some measure this requires giving 
more in the way of negotiations than otherwise might be the case, I 
would say, sir, he has that responsibility, just as the Congress has an 
equivalent responsibility. This is something that transcends the issue 
of which party will have a majority in the next Congress or what kind 
of majority, which party will have the White House and under what 
circumstances.
  These are temporary measures. They come and they go. This comes with 
regularity. What happens in November--2 years from that there will be 
another set of congressional elections, and 4 years another 
Presidential election.
  There will never be a moment after a default on the debt like the two 
centuries preceding. This will scar our national existence. We will be 
remembered in history for this--not for what we did to the Medicare 
trust funds, not for what we did to the Tax Code or this entitlement or 
that discretionary program. This is what will mark our time--mark our 
time in history.
  We will not be forgiven nor would we deserve to be if, in a feckless, 
shortsighted, irritated, calculating, what-do-the-overnight-polls-say 
mode, we bring about an irreversible disaster to the American Nation.
  That is the option before us. We do not need to. We clearly are of 
the view that we should not. On November 9, a mere two votes separated 
the decision to extend the debt ceiling. We know that. We know we have 
to do it. To fail to do it, we fail in our first obligations as Members 
of the Congress. The President, too, must understand he has an 
obligation to help see that this does not come about.
  We can do it, Mr. President. It will require 20 minutes in either 
body. If it takes all day, we take all day. There is no argument 
against this measure. If there is one Member of the Senate who wishes 
to stand up and say I think it would be a good thing if the U.S. 
Government defaulted on its debt, such that every Treasury bond in 
every investment portfolio, every retirement trust becomes, suddenly, a 
piece of paper not backed by the full faith and credit of the United 
States, if we want that, if we want the yen to become the world reserve 
currency, if we want our inflation to double, if we want our 
unemployment to suddenly soar, or see our national growth collapse, it 
is all within our power, and it will not simply be a negative act, it 
will have been 

[[Page S301]]
an affirmative choice because we know what the consequences will be.
  I cannot think we will do this. If there is any Member of the Senate 
who thinks we ought, he or she is welcome to come to the floor. There 
will be none. We know what to do, I hope in a bipartisan spirit as we 
have done in the past. This is something that the Nation needs, and no 
party would wish to deny. I hope we do this, Mr. President. I dare not 
think of the consequences if we do not.
  I see my friend, the distinguished member of the Finance Committee on 
the floor. I yield the floor.

                          ____________________