[Congressional Record Volume 142, Number 12 (Tuesday, January 30, 1996)]
[Senate]
[Pages S545-S548]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UNANIMOUS-CONSENT REQUEST
Mr. DORGAN. Mr. President, I rise today on behalf of the minority
leader and our Democratic caucus to ask unanimous consent that the
Senate proceed to the immediate consideration of the bill to increase
the debt limit. I will explain in just a moment my intention and the
reason I offer this unanimous-consent request.
All of us understand what we have just been through in this past
year. We have been through a pretty difficult time. We have struggled
as between different philosophies on a range of issues, and we have
seen Government shutdowns on two occasions. We have seen and heard
people boast about potentially not extending the debt limit and causing
a default on the debt. So we have been through a very difficult period.
I think most Members on both sides of the aisle would like very much
never to see that repeated. I do not know of anyone who has a continued
appetite to see another Government shutdown. I frankly do not know of
anyone who, at this point, thinks it would be a good idea if this
country were to default on its debt. And yet, we are now at about
February 1 and at the end of this month, the Secretary of the Treasury
indicates that he will not have the resources with which to meet the
requirements to repay the bonds that exist, and there would be a
default unless the debt limit is extended.
Some say, ``Well, let us wait until the end of February, until we
have done certain things to find a way to reach an agreement between
this party and the other party.'' I understand that, and I understand
the reason why some would like to postpone this for a while.
On the other hand, there are others of us who are anxious that we
move as quickly as we can to get something into a conference so we have
some movement on extending the debt limit, so we can tell the people of
this country that we are working on it and making progress on it. To
wait for the final 3, 4 days or the final week prior to the need for a
debt limit extension, prior to default, does, it seems to me, given the
circumstances of the last year, create a condition that could provide
some risk. That is why some of us feel that this would be the time to
move a piece of legislation that would increase the debt limit and move
that into a conference.
So with that purpose in mind, I ask unanimous consent that the Senate
proceed to the immediate consideration of a bill, now at the desk, to
increase the debt limit, that the bill be read a third time and passed
and the motion to reconsider be laid upon the table.
The PRESIDING OFFICER (Mr. Coats). Is there objection?
Mr. LOTT. Reserving the right to object.
The PRESIDING OFFICER. The assistant majority leader and Senator from
Mississippi is recognized.
Mr. LOTT. Mr. President, I certainly understand why the distinguished
Senator from North Dakota would make this effort at this time. I point
out, I still believe, I still hope that there is an opportunity for a
budget agreement. I am an incurable optimist. The President has
indicated he is willing to continue that effort. I know there are
informal discussions going on at the staff level.
The problem with debt limits, as the Senator well knows from his days
in the House in particular, even in the Senate, is that there are some
Senators and some Congressmen who would prefer not to vote for a debt
limit going over $5 trillion for the first time in history until there
is some guarantee that there is going to be fiscal restraint, that
there is some budget agreement that will control the rate of growth of
spending, control the annual deficits and the debt.
If there is any hope that we might get an agreement, then certainly a
good place to consider putting that would be on the debt limit. Plus,
there also continues to be an effort across the aisle in a bipartisan
way, in the House and Senate, to come to a bipartisan coalition
agreement. It looks to me like good progress has been made in that
area.
[[Page S546]]
I have looked at the numbers from the coalition group and the numbers
in the House and both of them are actually better than the results of
the discussions between the President and the leaders in Congress from
both sides of the aisle.
That may be the way to do this: Get a budget No. 3 that we can vote
on that would have broader bipartisan support than we had earlier. Once
again, maybe put it on the debt limit and move it forward. Or in
addition to that, I do know the House is meeting this week and they are
looking at other alternatives as to how that might be considered.
So, in an effort to get it through the House and get it through the
Congress and get it to the President, we want to make sure we thought
it through carefully, have done it right. We do not want to go through
a futile exercise of getting something to the President he will veto.
I assume there is a time sensitivity, although the Secretary of the
Treasury indicated there were going to be real problems last November,
and while he was working to avoid those problems, now we do not really
know where the problem does develop. Is it the middle of February, the
first of March, middle of March, or can we go on indefinitely by
actions of the Secretary of the Treasury?
I do not think he can go on indefinitely, but I do know that the
intention of the majority leader is that we act on this in a timely
fashion, and the House and the Speaker are acting on some legislation
that will allow us to act probably the week of February 26, maybe
before that. If we can come to some sort of agreement, maybe we can do
it before that.
But I think just to move it here at this point would be a futile
exercise and maybe even would be unhelpful in trying to get an
agreement.
So at this point, Mr. President, I object to the request.
The PRESIDING OFFICER. Objection is heard.
Mr. DORGAN addressed the Chair.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, the Senator from Mississippi is absolutely
correct that a logical place to increase the debt limit would be in a
budget agreement, and if there is a budget agreement--and I hope there
is--then obviously the debt limit should be increased in that
agreement.
The dilemma is, the Moody's organization last week served notice
publicly, because of the potential of a default, because of the
potential that perhaps the debt limit will not be extended, because of
the potential that there might be some who want to use the debt limit
as leverage, and the ultimate leverage, of course, being default if
there is not a budget agreement, because of that, Moody's has indicated
they are taking a look at whether to downgrade the creditworthiness of
U.S. Government bonds.
It seems to me that ought to be a warning to all of us that we ought
not fool around with this question of the grading of Government bonds
and the creditworthiness of Government bonds.
This is a very important issue. The Senator from New York, Senator
Moynihan, has spoken at some length on it. I say to the Senator from
Mississippi, I know that Senator Dole is not in any way suggesting that
he would want to default. In fact, I do not think Senator Dole felt
that the Government shutdowns were the way to run the Government. So I
am not suggesting that there are those whom we are discussing at this
point who believe this would be a wise course. I think there are some
in the Congress who probably have said in the past, ``It does not
matter to us if we do not pay the bondholders 30 or 60 days
afterward,'' the implication of that suggesting that default certainly
is an option as one of the pieces of learning we will use in the
negotiations.
So many of us feel that rather than waiting until it is too late, let
us start early here and be offering some UC requests to see if we
cannot move this along. I know the minority leader has indicated that
when the Senate is in session during this month, he feels that we
should be offering requests. I am offering this on his behalf today to
extend the debt limit. And, again, I understand the reasons for the
objection today. My hope would be that in the days ahead we will find a
way to advance this through the Senate and go to conference so we can
send a message to the country and the world that no one around here
will play with the creditworthiness of this country. No one will use
the issue of default as leverage in this context. I think most of us
believe that would be terribly, terribly risky, and a very
unsatisfactory outcome.
So I understand the point the Senator from Mississippi has made. I
hope he understands why I have offered this today. He would expect to
see it offered again in the days ahead when the Senate is in session.
I would like to, if I might, Mr. President, propound a question to
the Senator from Mississippi. Although we are in session today----
Mr. LOTT. If the Senator will yield first, because I think he is
fixing to change the subject, I want to get this into the Record.
I think there is some question, also, just for the information of the
Senators, about the Senate acting first on a clean debt ceiling,
whether this is a revenue effort under those conditions and therefore
subject to a point of order. I make that observation. I am not pursuing
it at this point.
For the information of the Senate, I ask unanimous consent to have
printed in the Record at this point the history, going back to 1984
through 1990, of how debt ceilings were extended and the riders that
were added to those debt ceiling bills in order for them to be able to
complete and go through the process.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Legislative Riders on Past Debt Limit Extensions
1990--H.R. 5355
Passed by the House, but not by the Senate. Would have
increased the debt ceiling by $322 billion to $3.444
trillion. Rider: Amended the rules on sequestration to exempt
Social Security.
1989--H.R. 3024
Increased the debt ceiling by $70 billion for the period
from August 7, 1989, through October 31, 1989. Rider: Made
changes regarding the current accrual value of certain
obligations issued on a discount basis.
1989--H.J. Res. 280
Increased the debt ceiling to $3.1227 trillion. Rider:
Repealed Section 89 of the Internal Revenue Code (relating to
health benefits provided under certain discriminatory
employee benefit plans).
1987--H.J. Res. 324
Increased the debt ceiling to $2.8 trillion. Rider: Gramm-
Rudman II, which contained provisions relating to
sequestration, overall budget caps, and budget process
reform.
1986--H.J. Res. 668
Increased the debt ceiling by $189 billion for the period
from October 21, 1986, through May 15, 1987. Rider: This debt
limit was attached to the Omnibus Budget Reconciliation Act
of 1986.
1985--H.J. Res. 372
Increased the debt limit to $2.0787 trillion. Rider: Gramm-
Rudman Deficit Control Act, which contained provisions
relating to sequestration and set overall budget caps.
1985--H.R. 3721
Increased the debt ceiling to an amount no greater than
$1.9038 trillion for the period from November 14, 1985, to
December 6, 1985. Rider: Contained riders that delayed the
effective dates of the following provisions by one month: Tax
increase on cigarettes; section 285 of the Trade Act of 1974;
section 10(d) of the Railroad Unemployment Insurance Act and,
section 5(c) of the Emergency Extension Act of 1985.
1984--H.R. 5692
Increased the debt ceiling by $30 billion to $1.520
trillion. Riders: Allowed the Treasury to hire experts or
consultants as contract employees. Reimburse the State
Department for health and medical services provided to
overseas employees; maintain uniforms provided to Treasury
employees; provide athletic services for students at the
Federal Law Enforcement Training Center in Glynco, Georgia;
install fencing, guard booths, lighting, and other
maintenance for Treasury Department facilities and enter into
reciprocal assistance with state and local law enforcement
agencies.
Mr. LOTT. Now I will respond to another question.
Mr. DORGAN. I think it might be worthwhile to put in the Record the
reports of last week by the Moody's organization about the evaluation
of the potential downgrading of Federal bonds. That might describe in
some more detail the issue of the risks that some of us are concerned
about. I ask unanimous consent that the report I cited be printed in
the Record.
There being no objection, the report was ordered to be printed in the
Record, as follows:
[[Page S547]]
U.S. Debt Rating Threatened
Alarmed by the protracted budget brawl in Washington, a
venerable Wall Street credit rater is threatening to
downgrade America's prized triple-A rating if the deadlock
forces the government to default on its debts for the first
time.
The unprecedented warning Wednesday from Moody's Investors
Service, which has been judging borrower credit worthiness
for nearly a century, would mark a stunning blow to the U.S.
government's credit standing and sully the pristine status of
$397 billion in Treasury debt with interest due in coming
months.
The warning marked the bluntest negative reaction from the
financial world so far to the possibility that Uncle Sam
might renege on a pledge to repay borrowed money, which has
never happened and has helped make U.S. government IOUs the
safest and most coveted securities in the world.
``This is a wake-up call,'' said Mike Casey, an
international economist at Ramirez Capital Consultants Inc.,
a New York investment research firm.
Moody's said it was obliged to make the warning because
``the positions being taken in the current debate over the
budget and the debt ceiling have significantly increased the
risk of a default on the above-mentioned security
obligations.''
It said the possible downgrade doesn't reflect ``any
underlying deterioration in the fiscal position of the United
States Government, but rather from the peculiar circumstances
surrounding the present political controversy over the
direction of federal economic and social policy.''
Some congressional Republicans have threatened to allow the
government to default if the Clinton administration doesn't
capitulate on spending cuts in the battle to balance the
federal budget. The administration has said Congress must
raise the $4.9 trillion debt limit by March 1 or a default
could result.
Although most economists say the possibility of default
remains extremely remote, many still regarded the Moody's
warning as a sobering reminder that it's not possible.
``In a sense it's like nuclear warfare,'' said Robert
Brusca, chief economist at Nikko Securities International in
New York. ``If it happens it's a terrible problem. But
nobody thinks it's going to happen.''
The Moody's warning coincided with conciliatory moves in
the budget battle, and House Speaker Newt Gingrich said he
wanted to avoid a default. But it was unclear whether
Gingrich also was speaking for more militant Republicans,
many of them freshmen in the House, who have used the threat
of default as a bargaining tactic.
After a meeting with Gingrich Wednesday evening, one
freshman congressman, Rep. David McIntrosh, R-Ind. said his
class was ``pretty much on board'' with the speaker.
Moody's said it was placing Treasury bonds and notes with
interest payments due Feb. 29 and April 1 ``on review for
possible downgrade.''
The rating agency didn't make clear what these securities
would be downgraded to. But the loss of triple-A status could
make it more expensive for the Treasury to borrow, adding
billions of dollars in extra interest to the government's
overall debt and reverberating throughout the economy with
pressure for higher interest rates.
Bond prices were sharply lower by midday today, continuing
a slide that began late Wednesday afternoon as word of the
Moody's announcement spread. But traders said prices were
falling for other reasons as well.
Standard & Poor's Corp., another leading debt-rating
service, made similar warnings on Nov. 10, when the issue of
a possible default first arose in the budget negotiations.
Still, the wording of the Moody's announcement was far more
blunt and specific, referring to particular groups of medium-
and long-term Treasury bonds that would be affected.
S&P said a spokesman that it is examining the spillover
effects of a potential default of U.S. Treasury securities
and expects to make an announcement about that in the next
several days.
Treasury Secretary Robert Rubin responded to the Moody's
announcement with a brief statement expressing his belief
that the debt impasse will be resolved by the end of
February.
Some Wall Street economists theorized that Moody's made the
warning partly because of sensitivity to the credit-rating
industry's past failures to forewarn of brewing financial
debacles.
Just in the past few years, for example, both Moody's and
Standard & Poor's have been rebuked for failing to sound the
alarm on impending crises in Mexico and Orange County,
Calif., which cost investors huge losses.
``Moody's and S&P have caught a lot of grief in the past,''
said Casey. ``They have lot of history of locking the barn
door after the cows have gone.''
Mr. DORGAN. Let me ask the Senator from Mississippi a question about
something that will come up later this week that I know is important to
many of us, including the Senator from Mississippi. We are in session
today on Tuesday and we do not have recorded votes and will not have
recorded votes Wednesday. We will have recorded votes on Thursday. My
understanding, from the discussion I had with the majority leader last
Friday, was that on Thursday of this week we would be turning to the
issue of the farm bill. I am very concerned about trying to get us to
move a piece of farm legislation.
I know there are people with very different views about what kind of
farm bill would best serve the interests of family farmers in this
country in the future. Some say, the so-called Freedom to Farm Act must
be passed, or else. Others say that there is the Farm Security Act's
marketing loans, and other things. In your part of the country, in
Mississippi, we are in the circumstance where farmers are ready to go
into the fields at some point soon. I confess that, as of an hour ago
when I last talked to somebody in North Dakota, there is not anybody
close to starting up a tractor and going into a field today because it
is awfully cold there today. But down south people are close to
starting to want to do spring's work. In our part of the country,
farmers want to talk to bankers and to their agribusinesses about the
farm plan. They want to know under what conditions will they plant this
spring, and what will the farm program be? We were supposed to have
passed a 5-year plan last year. There was one put in the reconciliation
bill, which everybody knew would be vetoed. We have nothing at this
point.
My hope is that we can work together, Democrats and Republicans, and
if we need to demonstrate a burst of bipartisanship here, there is no
place better to do that than on a farm bill. Your farmers have the same
needs as mine. I have strong feelings about what we ought to do, and I
know others do as well. Especially, we owe them an answer. I hope very
much that, come Thursday--I think we will have a couple of cloture
votes on a couple of different plans, and perhaps we will not invoke
cloture on either. If that is the case, I hope we can find a way
Thursday to advance some kind of basic farm plan in order to put it
into conference so we can work hard in the next week or so and finally
move a farm plan out of the Congress. Farmers deserve that. We owe that
to them.
I ask the Senator from Mississippi his view on the urgency of this,
and whether he thinks that we are going to be able to move forward
Thursday with some dispatch to deal with this issue.
Mr. LOTT. Mr. President, in responding to the Senator from North
Dakota, he brought back memories of bipartisan efforts in the past on
the farm bill. I think it was maybe 1982. I remember that at the time I
was in the House and I was the minority whip. At that time, the
majority whip was a fellow named Tom Foley. We were working on the farm
bill. It was very delicate and tedious. Everybody wanted a farm bill,
but some of the people did not necessarily want to go on record voting
for that particular version. I remember even exchanging vote counts
with the majority whip. We managed to get a pretty good farm bill
through, but one that was pretty evenly divided between the two
parties. So that is always the way it should be done. I think usually
that is the way agriculture policy is developed, in a bipartisan way.
I do agree that there is an urgency, too. During the years I have
been a Member of Congress, I never had to go back home in February--
that is when we start going into the field in my State--to tell farmers
that we do not have a farm bill. They do not know what to expect. There
has never been an instance where I recall where we let existing law
expire, which opens the door to utilizing outdated, expensive, and
ineffective 1938 and 1949 so-called permanent laws. That is what is
about to happen. If we do not do something on this, we are going to
revert back to the so-called permanent law. That causes all kinds of
confusion not only for the farmers, but the lenders and the suppliers,
which are an important part of the economy in my State and, I know, in
your State. Even the Secretary stated that reversion to the permanent
law has all kinds of problems. Authorization for wheat, feedgrains, and
rice programs under current law have already expired. So there is an
urgency.
I know the Senator from North Dakota knows that an effort is underway
now where Senators and their staffs are working on what is the best
approach. We did have the farm bill that was in the reconciliation
package, as
[[Page S548]]
the Senator said. It was vetoed by the President. Some of us would like
to look at that as a base and maybe make some changes. I know the
Senator has a different approach. We are working on what is the best
procedure to get an agreement, and we are going to try to have some
understanding worked out later on today--hopefully very shortly--as to
exactly what votes will occur Thursday on or in relation to agriculture
legislation. We are going to be very careful to be fair in how we
proceed and give those who have different views a chance to make their
case, and have one or more cloture votes, but try to make an effort to
get this issue moving in such a way that maybe we can get into
conference and work out an agreement that we can get to the President
in the shortest possible period of time. So we are working right now on
a unanimous-consent agreement that would get us into consideration on
Thursday that would allow for a vote or votes to occur and try to find
a way to move it forward.
Mr. DORGAN. Mr. President, I thank the Senator from Mississippi.
One of the dilemmas here is that the farm bill, which was placed in
the reconciliation bill and passed last year and vetoed, would have
eliminated the permanent law, the 1949 act. Many of us had great
concern about that. There are new and innovative ways to deal with the
issue of payments, and other approaches in the short term. But in the
long term we feel strongly that the needs of a network of family farms
will only be met if we retain some kind of permanent authority for farm
legislation. But I guess the point I was making--and I am comforted
some by the Senator's comments--I think at the end of Thursday we need
to have found a way to reach agreement on something that we can move
into conference that builds a bridge between the various proposals that
now exist. I think we have not seen much bipartisanship in the last
year or so. In fact, it has been some while beyond that, I guess. If
ever we need a burst of strong bipartisanship, it is to find a way to
move this farm legislation forward.
I look forward to working with the Senator. There is an effort
underway; we have a lot of staff people on a bipartisan basis searching
for some common ground. Perhaps that will result in the ability to move
something on Thursday. Time is very short. It is very urgent that we
provide farmers an answer about what will be the conditions under which
they plant this spring, what kind of a farm program will exist in this
country.
Mr. LOTT. Mr. President, for the information of all Senators, we also
still hope there is the possibility that we would have a vote or votes
this week on the telecommunications issue. That has not been clarified
yet.
Speaking of bipartisan efforts, that is one where last year a lot of
work went into that legislation. It is a very important piece of
legislation. I believe it passed by a vote of something like 81 to 18.
It is on the verge of being ready to come out of conference. We hope we
can get an agreement worked out on that also sometime today. If we can,
we would hope maybe we could have a vote on that also on Thursday.
We could have at least two or three votes on Thursday, both of them
on very, very important issues: agriculture and telecommunications.
That is almost a year's work. Time is short on both of them. We are
going to work very hard to try to get an agreement worked out.
I yield the floor. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. AKAKA. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Frist). Without objection, it is so
ordered.
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