[Congressional Record Volume 142, Number 30 (Thursday, March 7, 1996)]
[Senate]
[Pages S1624-S1630]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TEMPORARY DEBT LIMIT EXTENSION
Mr. LOTT. Therefore, Mr. President, I ask unanimous consent that the
Senate now proceed to the immediate consideration of H.R. 3021 just
received from the House.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:
A bill (H.R. 3021) to guarantee the continuing full
investment of Social Security and other Federal funds in
obligations of the United States.
The Senate proceeded to consider the bill.
Mr. LOTT. Therefore, Mr. President, I announce there will be two
votes, then, at approximately 5 minutes before 2 o'clock. We hope to
begin on time. I believe the managers of the bill are in the area and
are prepared to begin immediately. We will have the votes starting at 5
minutes before 2 o'clock.
While we wait on the managers to come to the floor, I want to say
that I think this is a good agreement under the circumstances. This
would provide for a short-term debt ceiling extension to March 29. The
purpose of this short-
[[Page S1625]]
term extension is so that we can continue to work, as requested by the
bipartisan Governors, with the leaders in Congress and with the
administration to see if we can come to a broader bipartisan agreement
on the budget or, in the alternative, come to some agreement on the
entitlement reform that we would like to be able to include in this
debt ceiling legislation, which would be for the longer period of time.
I am pleased we have reached this point. I am delighted to yield the
floor so the managers can begin consideration of this bill.
Mr. MOYNIHAN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Burns). 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for the quorum call be rescinded.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. Without objection, it is so ordered.
Mr. MOYNIHAN. Mr. President, as best I understand, we have a 30-
minute time period running. Inasmuch as the Senator from New York
suggested the absence of a quorum, I fear that in 4 minutes time our
opportunity to debate the matter will have expired. I wonder if I might
ask unanimous consent--I am sure my esteemed friend from Delaware would
not mind--if I could ask that the next 10 minutes be charged to the
majority.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MOYNIHAN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. ROTH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ROTH. Mr. President, I rise to ask my colleagues to join me in
supporting H.R. 3021, a bill to extend the current debt ceiling until
March 30, 1996. Under current law, the debt ceiling would be reached on
March 15. This bill is intended to give the Secretary of the Treasury
ample authority to ensure the full investment of all Federal funds and
trust funds, including the Social Security trust fund, until March 30,
1996.
Mr. President, I am told that the Secretary of the Treasury, Robert
Rubin, supports this legislation and that President Clinton intends to
sign it.
Mr. President, I ask unanimous consent to have printed in the Record
the letter received from Secretary Rubin.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Department of the Treasury,
Washington, DC, March 7, 1996.
Hon. Robert Dole,
Majority Leader, U.S. Senate, Washington, DC.
Dear Mr. Leader: Over the past several days, Treasury and
Congressional staff have had constructive discussions
regarding new legislation to raise the ceiling on the
Nation's debt. The resulting bill, H.R. 3021, is up for
consideration in the House today. The Administration
continues to believe that a long-term straightforward debt
ceiling increase should be enacted as soon as possible.
Clearly, this is the preferable course of action.
Nevertheless, at this juncture, I urge that this interim bill
be approved by Congress this week.
As a reminder of the events that would transpire without
Congressional action, I have attached a letter from Under
Secretary Hawke. In it he states that the lack of prompt
action by Congress could result in non-investment of incoming
trust fund receipts and could hamper our ability to auction
and settle securities later in the month, thereby prompting a
default.
We also continue to believe the commitment you articulated
together with Speaker Gingrich and Majority Leader Armey in
your February 1 letter is the right one. We should resolve
the debt limit impasse by enacting legislation that is
``acceptable to both [the President] and the Congress in
order to guarantee the government does not default on its
obligations.''
We look forward to working with you to achieve enactment of
a long-term straightforward debt ceiling bill.
Sincerely,
Robert E. Rubin.
Mr. ROTH. Mr. President, therefore, I believe that we must act
swiftly in passing this critical bill.
Let me reiterate my position regarding the debt limit issue. It is
this Senator's intention to work toward passage of a long-term debt
limit extension later this month. We will not default on our debts.
What this legislation does is simply allow a few more weeks to work out
a few unresolved issues with the Governors proposals on Medicaid and
welfare.
Let me just take a few moments to summarize the bill for my
colleagues. Section 1(a) of the bill provides the Secretary with the
authority to invest receipts received by a trust fund or other Federal
fund until March 30, 1996. Obligations issued under this authority
shall not count toward the public debt limit. This is to ensure the
full establishment and maintenance of income to Social Security and
other Federal funds that by law are authorized to invest in Federal
obligations and securities.
Section 1(b) defines the term Federal fund as a trust fund or account
to which the Secretary of the Treasury is authorized to issue Federal
obligations for investment purposes.
Section 1(c) extends the current authority--Public Law 104-103--to
incur debt, not subject to the public debt limit for purposes of
guaranteeing timely payment of Social Security and other Federal
payments, from March 15, 1996 until March 30, 1996.
Mr. President, I hope that the Senate expeditiously enacts this
critically important piece of legislation to preserve the full faith
and credit of the U.S. Government.
Mr. President, I yield back the floor.
Mr. MOYNIHAN addressed the Chair.
The PRESIDING OFFICER. The Senator from New York.
Mr. MOYNIHAN. I wish to join my esteemed chairman, the Senator from
Delaware, in stating that, indeed, this legislation is necessary. It is
in fact urgent, a fact which in and of itself speaks to the awkwardness
with which Congress has approached the most elemental of duties, which
is to ensure the full faith and credit of the U.S. Government. Here we
are in a fiscal year that began October 1. We can look out the Senate
doors and there in the park between here and the Supreme Court we see
spring rains; we see spring buds; the daffodils are all but upon us;
and we still have not extended the debt ceiling, which we will have to
do.
We are now in an extraordinary pattern of putting in jeopardy the
world's primary currency, the world's largest economy but also the
world's largest debtor nation. The full faith and credit of the United
States is of interest not just to Americans but to the world itself.
I hope we will, indeed, make this extension.
I believe my esteemed chairman placed Mr. Rubin's letter in the
Record. Mr. Rubin's letter was accompanied by a letter from the
Honorable John D. Hawke, Jr., who is the Under Secretary of the
Treasury for Domestic Finance, explaining in detail why this particular
extension is urgent and must not be put off. I ask unanimous consent
that the letter be printed in the Record so that it will be seen out in
the rest of the world that at least the Treasury Department knows what
the problem is.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Department of the Treasury,
Washington, DC, February 26, 1996.
Hon. Robert Dole,
Majority Leader, U.S. Senate, Washington, DC.
Dear Mr. Leader: Because the Congress will shortly be
considering legislation to increase the public debt ceiling,
Secretary Rubin has asked me to provide you with information
concerning the Treasury's expected cash and debt positions
for the next several weeks. We share the view expressed in
the Leadership's February 1 letter to the President that it
is of great importance for Congress to resolve the
uncertainties surrounding the debt limit by promptly enacting
an increase acceptable to both Congress and the President.
In his letter to you of January 22, Secretary Rubin
described the remaining three actions that he believed to be
legal and prudent, and that would provide funds with which to
pay the country's financial obligations. He estimated at that
time that these actions would be sufficient to carry us
through February 29 or March 1. On February 1, Congress
passed H.R. 2924, which was signed into law on February 8 as
Public Law 104-103, granting authority to Treasury to issue
an additional $29 billion in debt that would be temporarily
exempt from the debt limit. The debt limit exemption for
these securities expires on the earlier of March 15 or the
enactment of a new debt limit increase by the Congress. As
the Secretary informed you on February 20, on Friday we
issued $29 billion in bills under this new authority, and
with this action, and the auctions scheduled for this week,
the payment of all benefits
[[Page S1626]]
and other disbursements scheduled for March 1 has been
assured.
In addressing our expected future cash and debt positions
in the light of these recent actions, I must caution that
there are inherent uncertainties in such predictions. Our
projections are revised every day to reflect the actual
volume of receipts and disbursements we experience, and the
results that are ultimately realized three to four weeks
hence may well vary by several billion dollars in either
direction from the numbers we currently estimate.
On March 5, Treasury is scheduled to announce the amount of
13- and 26-week bills that will be auctioned on March 11 and
issued in exchange for payment on March 14. Treasury sells
13- and 26-week bills every week, and this schedule follows
the normal pattern. While we project that there will just be
room under the debt limit on March 14 to issue these
securities, we currently estimate that the cash balance on
March 14, after the securities are issued, will be less than
the $5 billion that we consider a prudent minimum. Moreover,
because we estimate that the debt limit leeway remaining
after the bills are issued will be less than $1 billion, we
see no room to increase the size of the bill auction to
improve the cash balance, and because of our cash needs we
will not be able to decrease the size of the auction
significantly to preserve debt limit leeway.
Similarly, on March 12, Treasury is scheduled to announce
the amount of 13- and 26-week bills to be auctioned on March
18 and issued in exchange for payment on March 21. If there
is no debt limit increase, or assurance of a debt limit
increase, by March 12, that announcement will have to be
conditional: that is, it will state that the March 18 auction
will be held only if Treasury has assurance of its ability to
issue the bills on March 21 without exceeding the debt limit.
We strongly prefer not to make such a conditional
announcement because the effect is to prevent ``when-issued''
trading in the securities until the final announcement is
made. Secondary market trading usually begins on a when-
issued basis immediately after the announcement of an
auction, and is important because it affords precaution price
discovery. Truncating the when-issued trading period tends to
increase the Government's cost of borrowing.
By March 13 or 14, if there is no debt limit increase, we
project that our cash balances will be below our prudent
minimum of $5 billion and that there will be less than $1
billion in leeway under the debt limit. If the actual debt
level on March 13 or 14 is $1 billion more than we currently
forecast, Treasury would be out of debt limit room and would
not be able to issue sufficient securities to the trust funds
to enable all trust fund receipts to be invested on those
dates.
On March 15, under the terms of Public Law 104-103, the $29
billion of securities we issued Friday will become subject to
the debt limit, if no debt limit increase is enacted prior to
that date. As a consequence, the amount of Treasury debt
outstanding would then be well over the limit. Of course, all
the outstanding debt will have been validly issued, and no
action to reduce debt will be mandated. Nevertheless,
Treasury will immediately be disabled from issuing any new
securities, since outstanding debt already will be in excess
of the debt limit. Therefore, Treasury would be unable to
issue securities to any trust funds either to invest their
incoming receipts or to roll over maturing investments. We
estimate that on March 15 this would leave approximately $9.8
billion of trust fund assets uninvested, including
approximately $2.0 billion of assets of the Social Security
and Medicare trust funds--a result I am sure we all want to
avoid.
These trust funds, unlike the Civil Service Retirement and
Disability Fund and the so-called G Fund, do not have
statutory protection in the form of an automatic restoration
of interest not earned during a period in which new debt
cannot be issued. Thus, a subsequent Act of Congress would be
required to restore that lost interest. Based on past
experience in similar situations, we expect that Congress
would act to restore lost interest.
In addition, because savings bonds count against the debt
limit, new sales of savings bonds would have to be suspended
on March 15. This would affect approximately 45,000 banks and
payroll offices that act as issuing agents, and would disrupt
the savings programs of millions of individual investors.
Because March 15 is a tax payment date, cash balances will
improve through March 20. However, on March 21 a total of
$16.6 billion of trust fund assets, including $8.8 billion of
Social Security and Medicare receipts, would remain
uninvested. Moreover, on March 21 Treasury bills totaling
$25.5 billion will mature. If the debt limit has not been
increased before that time, it is unlikely, based on current
estimates, that the Treasury will be able to issue enough new
securities to raise the cash needed to pay these bills. It is
conceivable that our cash balance on March 21 might be as
much as the amount by which outstanding debt exceeds the debt
limit, and that we could use the cash, plus a small bill
auction, on that date to pay the maturing bills. However, our
most recent projections do not show this occurring. In any
event, such an action would exhaust Treasury's cash on that
date, and we project that on March 22 cash flow will be
negative.
As I cautioned, these projections reflect current estimates
only and are all subject to changes--which could be favorable
or unfavorable--to reflect our actual day-to-day experience
with receipts and disbursements. The Secretary has asked that
I continue to keep you informed if and as changes in the
projections affect the sequence of events I have set forth.
Sincerely,
John D. Hawke, Jr.,
Under Secretary of the
Treasury for Domestic Finance.
Mr. MOYNIHAN. With that, Mr. President, I would simply say I feel
that while the 2-week extension is urgent and absolutely indispensable,
we ought to do more. And with the conclusion of this part of our
debate, I will proceed, when the chairman is ready, to offer an
amendment that would in fact extend us to the spring of 1997 when we
have a new cycle in American Government and a new fiscal year.
The PRESIDING OFFICER. All time on the bill has now expired.
Amendment No. 3465
(Purpose: To increase the public debt limit)
Mr. MOYNIHAN. Mr. President, I send to the desk an amendment and ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from New York [Mr. Moynihan] proposes an
amendment numbered 3465:
Strike all matter after the enactment clause and insert the
following:
TITLE --PUBLIC DEBT LIMIT
SEC. 01. INCREASE IN PUBLIC DEBT LIMIT.
Subsection (b) of section 3101 of title 31, United States
Code, is amended by striking the dollar amount contained in
the first sentence and inserting ``$5,400,000,000,000''.
Mr. MOYNIHAN. I thank the Chair. And as you have observed, this is a
succinct matter. We are simply taking the debt ceiling now at $4.9
trillion and raising it to $5.4 trillion. The statutory limit on the
total outstanding public debt of the United States subject to that
limit will be reached on March 15, 1996 or shortly thereafter.
Might I make the point here that when we speak of the public debt, we
include here all the debt owed to the various trust funds of the
Federal Government as, for example, Social Security trust funds which
are really internal financing arrangements that do not represent debt
held by private investors.
Today is the third time in this fiscal year that I have offered an
amendment to extend the permanent debt ceiling. On November 9, I
proposed simply raising it to $4.967 trillion in order to provide time
to complete action on the budget reconciliation bill. The amendment was
tabled 49 to 47. On January 26, I offered an amendment to raise the
debt ceiling to $5.4 trillion, which would have taken us beyond the
November elections to about May of next year. And that amendment was
also tabled by a very close vote, Mr. President, 46 to 45. And the
amendment I have just sent does the same thing. It would bring us to
about May 31, 1997. Anything sooner than that gets us involved with a
Presidential election which will have occurred, a State of the Union
Message, a February recess. It seems to me that taking this issue up
next May is an orderly way to do it, a way to tell financial markets
that this country is not in jeopardy of default.
The very idea of default has not existed in the vocabulary of
American politics.
I made the point, Mr. President, that in 1814 the British invaded
Washington, burned the White House, burned the Treasury Building,
burned the Capitol; but the interest on the national debt continued to
be paid out of the sub-Treasury in Manhattan. The thought of default
never occurred to us. Here we are, talking about 3 weeks until
doomsday. Three weeks until doomsday? That is no way for a grownup,
mature, solvent nation to behave.
The General Accounting Office has produced a report, ``Information on
Debt Ceiling Limitations and Increases,'' which was prepared at my
request, and reports that we are in the 21st debt ceiling crisis or
debt issuance suspension period since 1946. All these crises, save
four, have occurred since 1980-- 17 since 1980. And it is, therefore,
no coincidence that we have closed down the Federal Government 11 times
since 1981--something unthinkable in previous years. But we do it.
The current debt ceiling crisis, which began on November 15, has
already lasted 114 days. Prior to this crisis, the longest one was 100
days; that was 1985.
[[Page S1627]]
So, Mr. President, I ask unanimous consent that the General
Accounting Office report be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. General Accounting Office, Accounting and
Information Management Division,
Washington, DC, February 23, 1996.
Hon. Daniel Patrick Moynihan,
U.S. Senate.
Dear Senator Moynihan: Your January 16, 1996, letter
requested information on past debt ceiling limitations and
actions that the Department of the Treasury (Treasury) has
taken to avoid defaulting on government obligations. In our
January 26, 1996, letter to you, we discussed actions taken
by Treasury during debt ceiling crises since September 30,
1984.\1\ As agreed with your office, the enclosure to this
letter provides information on (1) when the outstanding debt
subject to the statutory debt limit was within $25 million
\2\ of the public debt limit between July 1, 1954, and
September 30, 1984, (2) the debt ceiling crises occurring
between September 30, 1984, and February 15, 1996, and (3)
when the statutory debt ceiling has been revised since June
26, 1946.
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\1\ Debt Ceiling Limitations and Treasury Actions (GAO/AIMD-
96-38R, January 26, 1996).
\2\ During the current crisis, Treasury has maintained a $25
million difference between the outstanding debt and the debt
limit.
---------------------------------------------------------------------------
Changes in the debt ceiling
The federal government began with a public debt of about
$78 million in 1789 and since then the Congress has attempted
to control the size of the debt by imposing ceilings on the
amount of public debt that can be issued. Until 1941, the
Congress set ceilings on the various types of Treasury
securities that could be issued. In February 1941, the
Congress set an overall ceiling of $65 billion on all types
of Treasury securities that could be outstanding at any one
time. This ceiling was raised several times between February
1941 and June 1946 when a ceiling of $275 billion was set and
remained in effect until August 1954. At that time, the
Congress imposed the first temporary debt ceiling which added
$6 billion to the $275 billion permanent ceiling. Since that
time, the Congress has enacted numerous temporary and
permanent increases in the debt ceiling which currently
stands at $4.9 trillion.
relationship of the debt ceiling to the outstanding debt
As shown in the following chart, the relationship between
the public debt limit and the amount of outstanding debt is
very close. \3\
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\3\ These figures are nominal dollars. They are not adjusted
for inflation or for growth in the economy.
---------------------------------------------------------------------------
(Chart not reproducible in Record.)
In order to determine when a debt ceiling crisis may have
arisen, we reviewed historical Treasury documents for the
period July 1, 1954, through February 15, 1996, and
identified 21 periods when the outstanding debt subject to
the statutory debt limit was within $25 million of the debt
ceiling.
If you have any questions regarding the information in this
letter, please call me at (202) 512-9510, or Gary Engel,
Assistant Director, at (202) 512-8815.
Sincerely yours,
Gregory M. Holloway,
Director, Governmentwide Audits.
Enclosure.
Information on when the outstanding debt was within $25 million of the
debt ceiling, debt ceiling crises, and debt ceiling changes
Dates Situation or event
June 26, 1946......................... Debt ceiling set at $275
billion.
Aug. 28, 1954......................... Debt ceiling raised to $281
billion.
July 9, 1956.......................... Debt ceiling lowered to $278
billion.
Feb. 26, 1958......................... Debt ceiling raised to $280
billion.
Sept. 2, 1958......................... Debt ceiling raised to $288
billion.
July 1, 1959.......................... Debt ceiling raised to $295
billion.
July 1, 1960.......................... Debt ceiling lowered to $293
billion.
July 1, 1961.......................... Debt ceiling raised to $298
billion.
Mar. 13, 1962......................... Debt ceiling raised to $300
billion.
July 1, 1962.......................... Debt ceiling raised to $308
billion.
Apr. 1, 1963.......................... Debt ceiling lowered to $305
billion.
May 29, 1963.......................... Debt ceiling raised to $307
billion.
July 1, 1963.......................... Debt ceiling raised to $309
billion.
Nov. 27, 1963......................... Debt ceiling raised to $315
billion.
June 29, 1964......................... Debt ceiling raised to $324
billion.
July 1, 1965.......................... Debt ceiling raised to $328
billion.
July 1, 1966.......................... Debt ceiling raised to $330
billion.
Mar. 3, 1967.......................... Debt ceiling raised to $336
billion.
June 30, 1967......................... Debt ceiling raised to $358
billion.
July 1, 1968.......................... Debt ceiling raised to $365
billion.
Apr. 7, 1969.......................... Debt ceiling raised to $377
billion.
June 30, 1970......................... Debt ceiling raised to $395
billion.
Mar. 17, 1971......................... Debt ceiling raised to $430
billion.
Mar. 15, 1972......................... Debt ceiling raised to $450
billion.
Oct. 27, 1972......................... Debt ceiling raised to $465
billion.
Dec. 1-2, 1973........................ Outstanding debt within $25
million of ceiling.
Dec. 3, 1973.......................... Debt ceiling raised to $475.7
billion.
June 30, 1974......................... Debt ceiling raised to $495
billion.
Feb. 19, 1975......................... Debt ceiling raised to $531
billion.
June 30, 1975......................... Debt ceiling raised to $577
billion.
Nov. 14, 1975......................... Debt ceiling raised to $595
billion.
Feb. 27-Mar. 14, 1976 1............... Outstanding debt within $25
million of ceiling.
Mar. 15, 1976......................... Debt ceiling raised to $627
billion.
June 30, 1976......................... Debt ceiling raised to $636
billion.
Oct. 1, 1976.......................... Debt ceiling raised to $682
billion.
Apr. 1, 1977.......................... Debt ceiling raised to $700
billion.
Oct. 1-3, 1977........................ Outstanding debt within $25
million of ceiling.
Oct. 4, 1977.......................... Debt ceiling raised to $752
billion.
Aug. 1-2, 1978 2...................... Outstanding debt within $25
million of ceiling.
Aug. 3, 1978.......................... Debt ceiling raised to $798
billion.
Apr. 2, 1979 2........................ Debt ceiling raised to $830
billion.
Sept. 29, 1979........................ Debt ceiling raised to $879
billion.
May 30-June 11, 1980 1................ Outstanding debt within $25
million of ceiling.
June 28, 1980......................... Debt ceiling raised to $925
billion.
Dec. 19, 1980......................... Debt ceiling raised to $935.1
billion.
Jan. 30-Feb. 2, 1981.................. Outstanding debt within $25
million of ceiling.
Feb. 7, 1981.......................... Debt ceiling raised to $985
billion.
Sept. 30, 1981........................ Debt ceiling raised to $1,079.8
billion.
June 3-6, 1982........................ Outstanding debt within $25
million of ceiling.
June 28, 1982......................... Debt ceiling raised to $1,143.1
billion.
Sept. 30, 1982........................ Debt ceiling raised to $1,290.2
billion.
May 26, 1983.......................... Debt ceiling raised to $1,389
billion.
Nov. 21, 1983......................... Debt ceiling raised to $1,490
billion.
Apr. 4, 1984.......................... Outstanding debt within $25
million of ceiling.
May 1-16, 1984 1...................... Outstanding debt within $25
million of ceiling.
May 25, 1984.......................... Debt ceiling raised to $1,520
billion.
June 4-July 5, 1984 1................. Outstanding debt within $25
million of ceiling.
July 6, 1984.......................... Debt ceiling raised to $1,573
billion.
Sept. 4-Oct. 12, 1984 1, 3............ Debt ceiling crisis.
Oct. 13, 1984......................... Debt ceiling raised to $1,823.8
billion.
Sept. 3-Dec. 11, 1985 1, 3............ Debt ceiling crisis.
Nov. 14, 1985......................... Debt ceiling raised to $1,903.8
billion.
Dec. 12, 1985......................... Debt ceiling raised to $2,078.7
billion.
Aug. 1-20, 1986 1..................... Debt ceiling crisis.
Aug. 21, 1986......................... Debt ceiling raised to $2,111
billion.
Sept. 30-Oct. 20, 1986................ Debt ceiling crisis.
Oct. 21, 1986......................... Debt ceiling raised to $2,300
billion.
May 15, 1987.......................... Debt ceiling raised to $2,320
billion.
July 18-29, 1987...................... Debt ceiling crisis.
Aug. 7-9, 1987........................ Debt ceiling crisis.
Aug. 10, 1987......................... Debt ceiling raised to $2,352
billion.
Sept. 24-28, 1987..................... Debt ceiling crisis.
Sept. 29, 1987........................ Debt ceiling raised to $2,800
billion.
Aug. 1-6, 1989 1...................... Debt ceiling crisis.
Aug. 7, 1989.......................... Debt ceiling raised to $2,870
billion.
Nov. 1-7, 1989........................ Debt ceiling crisis.
Nov. 8, 1989.......................... Debt ceiling raised to $3,122.7
billion.
Aug. 9, 1990.......................... Debt ceiling raised to $3,195
billion.
Oct. 19-27, 1990 1.................... Debt ceiling crisis.
Oct. 28, 1990......................... Debt ceiling raised to $3,230
billion.
Nov. 5, 1990.......................... Debt ceiling raised to $4,145
billion.
Apr. 6, 1993.......................... Debt ceiling raised to $4,370
billion.
Aug. 10, 1993......................... Debt ceiling raised to $4,900
billion.
[[Page S1628]]
Nov. 15, 1995-Feb. 15, 1996........... Debt ceiling crisis.
1 On one or more days during this period, the difference between the
amount of debt subject to the limit and the debt limit was greater
than $25 million. As noted in the letter, we were unable to
specifically identify the debt ceiling crisis prior to September 30,
1984. Therefore, in order to better estimate the periods when Treasury
may have had difficulty in performing its normal financing operations,
we assumed that Treasury's difficulties continued if the following
occurred: the outstanding debt subject to the limit fell below the $25
million threshold and then rose to the $25 million threshold during a
14-day period.
2 Specific actions taken by Treasury during these periods are discussed
in the following GAO report: A New Approach to the Public Debt
Legislation Should Be Considered (FGMSD-79-58, September 7, 1979).
3 Specific actions taken by Treasury during these debt ceiling crisis
are discussed in the following GAO reports: Civil Service Fund:
Improved Controls Needed Over Investments (GAO/AFMD-87-17, May 7,
1987) and Treasury's Management of Social Security Trust Funds During
the Debt Ceiling Crisis (GAO/HRD-86-45, December 5, 1985).
Mr. MOYNIHAN. I thank the Chair.
Again to say, a default by the Treasury would have disastrous
consequences for the domestic economy of the United States and for
global financial markets. I make the point that during the 1980's, we
became a debtor nation, the world's largest debtor nation. To
jeopardize the full faith and credit of that debt is to jeopardize the
well-being of the Nation.
I have, Mr. President, one last thing to say, a point to make, a
positive point. I know that there are many persons who legitimately
feel that in extending the debt ceiling we are only somehow extending
the tendency to spend more than we have in the way of income, to be
excessive and improvident and, in consequence, debt ridden.
Mr. President, this is not the case. Owing in large measure--or so I
choose to believe--to the budget measures, tax and spending measures we
took in 1993, we are now in a very solid cash-flow situation for the
first time since the late 1960's. We are seeing the legacy of debt but
also the consequence of legitimate behavior.
In this period, 1994-97, for the first time since the administrations
of John F. Kennedy and Lyndon Johnson, the Federal Government will have
more revenue than expenditure on programs and procurement. This also
went through to the first years of President Nixon. We had a very small
surplus, tiny, $3.1 billion in the first half of the decade; $2.3
billion in the second half. Then there was the period of the Nixon
administration when matters were just even, properly so.
Then with the onset of President Ford's administration, then
President Carter's, with the great increase in oil prices, inflation,
things of that kind, we began to borrow money to pay for ongoing
programs, $22 billion, then $13 billion.
The first years of the Reagan administration we borrowed $80 billion
to pay for ongoing programs. Some of it is investment, but it was
ongoing. Then in the administration of the latter years of Mr. Reagan,
it dropped to $21 billion.
Then Mr. Bush had the misfortune of a recession, which reduced
revenues, and in some ways raised outlays, and you have a big deficit,
back to a $64.8 billion shortfall between revenues and outlays.
Mr. President, we are now at a $56.7 billion surplus. That means what
we call the deficit is entirely accounted for by interest on the debt
we accumulated in this period. We have our budget in balance, save for
what we borrowed in the 1980's.
There were those who had in mind that is what we should do--that
deficits would end up choking the life out of the Federal Government
and its programs. They had a phrase for it called ``starve the beast.''
They were not wrong. It was the idea that you could not argue this
program out of existence and that program out of existence; just starve
the Government of revenues. And you are then forced to do things you
would have never dreamed of previously. For example, the present
administration proposed a 7-year balanced budget glidepath which had
enormous reductions in discretionary spending. Now you seem to have no
alternative because of the debt service.
But I do say, Mr. President, we can see our way out of this. We have
cut our outlays. Our revenues are solid. If we stay on this path, we
will get to the point where the debt begins to decline. Then it can be
a very rapid event.
I say this to those Members of the House, really, who themselves had
the good sense in 1979 to make the debt ceiling extension automatic.
Passage of the budget resolution automatically increased the debt
ceiling by the necessary amount. I say to them that, if they see an
increase in the debt ceiling as being an invitation to spend moneys you
do not have, that you have been forced to borrow--that may indeed have
been the case in the 1980's; it is not the case today. We are beginning
to act in a mature and open and defensible way.
Let us put this debt ceiling behind us. Let us not have 3 weeks of
saying, my God, in 3 weeks it is doomsday. No. Let us not put this off
and let us do the right thing--pay our bills until next May. In the
interval there will be a Presidential election. We will hear a lot
about this subject. We will have a new administration. I hope we will
have the same President, but he will be in his second term. If we do
not, we will have the distinguished majority leader, one-time chairman
of the Finance Committee, a man who will know what to do. We are on the
right path. Let us do the right thing.
With that, Mr. President, reserving the remainder of my time, I yield
the floor. Mr. President, I suggest the absence of a quorum and ask
that the time be equally divided.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Who yields time?
Mr. MURKOWSKI. Mr. President, I would like to speak with regard to
the proposed debt increase issue for 3 or 4 minutes.
Mr. ROTH. Mr. President, how much time remains?
The PRESIDING OFFICER. The Chair informs the Senator from Delaware
that he has 13 minutes remaining, and the Senator from New York has 1
minute, 26 seconds.
Mr. ROTH. I yield the Senator 3 minutes.
Mr. MURKOWSKI. I thank the floor manager.
The PRESIDING OFFICER. The Senator from Alaska is recognized for 3
minutes.
Mr. MURKOWSKI. Mr. President, I have grave concerns about the
proposal to increase the debt without having a mandate in place to
address a balanced budget. For this body to vote to increase the debt
without having a budget that can be achievably balanced is
irresponsible.
What we are doing here, I think, is extraordinarily irresponsible. We
are losing the leverage that we have--and the leverage that we have is
the ability to affect just how much spending occurs. Mr. President,
this body cannot face an authorization to increase the debt unless this
body has found a way to ensure that the debt is not going to continue
uncontrolled. This is the realization that we must not be afraid to
face: the Government simply does not have the discipline to control its
spending; the Government does not have the discipline and constraints
to control its spending as is dictated in the private sector.
What should this body be doing? Well, Mr. President, this body should
be doing the only responsible thing to do when one incurs too much
debt--and that is decrease expenses. It is not responsible to the debt
without taking corrective action.
The greatest concern this country has is too much debt, and now we
are being asked to accumulate that debt further by increasing the debt
ceiling from $4.9 trillion to somewhere in the area of $5.4 trillion.
What is the rationale for this? The argument is that we simply have to.
I am not arguing with the reality that we have to pay our bills, but to
suggest that we go ahead with this authorization without first having
addressed a mandatory balanced budget is absolutely irresponsible.
To suggest that we are up against some time frame of tomorrow or the
next day is not necessarily true. We know that the Secretary of the
Treasury has continued to borrow from funds, and likely can do so for a
limited period of time. So, why not take
[[Page S1629]]
this opportunity--when there is a need now that is greater than it has
ever been before--to establish a methodology to achieve a balanced
budget?
Mr. President, interest currently is about 16 percent of our total
expenditure. Mr. President, that is a cost that we have absolutely no
control over; it is an automatic cost that continues to grow and does
not disappear. It's like having a horse--and the Senator from Montana
knows about horses. You may feed a horse and watch him eat, but that
horse continues to eat when you're not around--that horse eats while
you sleep. A horse's eating cannot be controlled and neither can this
country's interest expenditures. In Canada, 20 percent of the budget is
interest on the debt. They cannot afford their health care. If you look
at Central America countries, South America countries, what put them
under was too much debt.
Currently our interest costs are more than our annual deficit. We are
broke, yet we just keep spending. And to suggest that we are on the
right track without having mandatory discipline is absolutely
unrealistic.
Some may suggest the problem will fix itself--the economy will expand
or the tax base will increase, and so forth. Those are all fine. But we
have not addressed a responsible method to curtail this runaway debt,
and here we are today prepared to increase the debt ceiling without
having taken the corrective action, and this Senator from Alaska is
going to vote against it.
The rationale is obvious: We have to be disciplined. We better face
up to it because we are going to be right back here again in a year, 18
months, more or less, increasing the debt ceiling again. Will we have
the leverage then? Well, we have the leverage now, and that leverage is
to enact a mandatory balanced budget. Only then will I vote for the
debt ceiling, but not until. I appreciate the floor manager allowing me
this time.
Mr. ROTH addressed the Chair.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. ROTH. Mr. President, I respectfully rise in opposition to the
Moynihan amendment. I am sure he recalls, as I do, that when George
Mitchell was the distinguished majority leader of this Senate, he often
said the perfect is the enemy of the good when Republicans offered
amendments from time to time.
I just want to reiterate that, as I stated earlier, it is this
Senator's intention, hopefully upon the successful enactment of the
legislation before us, without the Moynihan amendment, it is this
Senator's intention to work toward passage of a long-term debt ceiling
extension later this month. As I have said, we cannot and will not
default on our debts, and I know that is a matter with which the
distinguished Senator from New York agrees.
Mr. MOYNIHAN. There is no disagreement.
Mr. ROTH. Let me suggest that the problem with the Moynihan amendment
is that I think we do make it possible for there to be a default if we
do not move successfully on the legislation before us. The House, I
just want to point out, passed the legislation, H.R. 3021, by a vote of
362 to 51. Most of the ``no'' votes came from Republicans. The House
leadership says that the Moynihan amendment would not pass on the House
side. So it is unlikely that a straightforward debt limit bill will
pass. The House wishes, as you know, to combine that with entitlement
reform, and we intend to vote on that later this month.
The point I want to emphasize is that we are running the risk that,
if the Moynihan amendment should be adopted, it will not be agreed upon
on the House side, and time is not on our side.
As I said earlier, the amendment before us really jeopardizes the
ability of Treasury to manage the public debt. We may not have until
March 21 or even March 15, as I understand the situation. Treasury has
informed us that next week, cash levels will be imprudently low,
something under $1 billion. I think that is the first time that
situation has arisen where we are running that kind of a risk.
The distinguished Senator, my good friend and colleague, asked for
the letter from John D. Hawke, Jr., the Under Secretary of the Treasury
for Domestic Finance, to be printed as part of the Record.
I want to read one paragraph from that letter where the Under
Secretary says:
By March 13 or 14, if there is no debt limit increase, we
project that our cash balances will be below our prudent
minimum of $5 billion and that there will be less than $1
billion in leeway under the debt limit.
If the actual debt level on March 13 or 14 is $1 billion
more than we currently forecast, Treasury would be out of
debt limit room and would not be able to issue sufficient
securities to the trust funds to enable all trust fund
receipts to be invested on those dates.
So that, in my judgment, is why we wish and need to enact H.R. 3021
now, unamended, so that this danger of running out of funds can be
averted.
Mr. President, I strongly urge my friends and colleagues on both
sides of the aisle to reject the so-called Moynihan amendment.
The PRESIDING OFFICER. Who yields time?
Mr. ROTH. I yield 3 minutes to my colleague from Minnesota.
Mr. GRAMS. Mr. President, I want to make a few remarks to go along
with Senator Murkowski's remarks on a lot of reservations some of us
have about extending the debt limit without tying it to a responsible
balanced budget amendment, so that we do not literally give Congress an
open checkbook to go ahead and spend and spend and spend.
I wanted to clarify that we are here today to consider a short-term
extension to this debt ceiling, to give us time for 2 weeks to work out
a further extension of this. What are we asking today? We are asking to
be able to borrow more money. For what? To pay interest.
I tell people back home, it is like if you go to one banker to borrow
money so you could pay interest to another banker you owe on another
loan. If you get into that position, you are in financial trouble. That
is what we are doing here, borrowing more money year after year, and it
does nothing but cover up a history of mismanaging this country's
finances. This is without going back and addressing the problem.
We have to get our finances in order. We have to agree on a balanced
budget within the next 7 years. This should not be viewed as a
political excuse to put off balancing this budget. The debt ceiling
should only be passed, and I will only vote for it, if it has some
specific instructions on how we are going to achieve a balanced budget
and not to just say, well, we are going to borrow some more and add to
the debt, which is going to put our children even deeper into their
financial problems, so we can go on and continue business as usual here
in Washington. We cannot do that any longer.
We need to have some real reforms when it comes to the problems of
the entitlements, welfare, Medicare, and Medicaid. We have been working
toward this, and, hopefully, within the next couple of weeks, we can
work out something that will put us on that glidepath.
I am going to propose what I call the ``taxpayer protection
lockbox,'' which means that if revenues exceed even our spending
forecasts, those extra dollars will not be given to Congress to spend
on even a larger Government. But if there are additional revenues
available, they will be returned to either the taxpayer in the form of
tax relief, or they can only be spent to reduce the debt. But once we
set this spending level, we want to make sure that, if additional
revenues do come in, Congress does not have an open checkbook to spend
even more.
So I wanted to respectfully ask that we examine this problem and make
sure that any extension in the debt limit is tied to a balanced budget.
Thank you, Mr. President.
The PRESIDING OFFICER. The Senator from New York has 1 minute 24
seconds.
Mr. MOYNIHAN. Mr. President, first, let me say to my friend from
Minnesota that he is quite right that we spent moneys we did not have.
We spent them in the 1980's. This is clear and inexorable. This table
shows it in these bar charts. We have finally gotten to the point where
we have revenues above the levels of outlays. We did this in 1993 with
a vote on which not a single vote was found on the other side of the
aisle to do so. But we did it. Now, can we not put this argument aside,
resolve our remaining legislative matters, and get on with the
Presidential election, rather than holding the full faith and credit of
the United States at jeopardy?
[[Page S1630]]
I want to thank my esteemed chairman for the clarity and tone of his
remarks. Whichever way this vote will go, we will manage to get through
this. But that we are doing this for the 17th time since 1980 suggests
that we better look to our procedures in the future.
Mr. President, with thanks to the chairman, I yield back the
remainder of my time.
Mr. ROTH. Will the Senator yield me 1 minute?
Mr. MOYNIHAN. I ask unanimous consent that Senator Roth may have 1
minute.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ROTH. Mr. President, I thank the distinguished Senator from New
York for his remarks. I must, once again, urge the defeat of the so-
called Moynihan amendment. If it should carry, I think it is critically
important that it be recognized that we would be jeopardizing the
ability of the Treasury to manage the public debt.
As I said earlier, we may not have until March 21, or even March 15.
Treasury, again, has informed us that next week cash levels will be
imprudently low and under $1 billion. That is the reason it is
critically important that we enact H.R. 3021 without amendment. As I
have assured the distinguished Senator from New York, then we will look
at the longer term and work together.
I yield the floor.
Mr. MOYNIHAN. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. GORTON (after having voted in the affirmative). Mr. President, on
this vote I have a pair with the distinguished Senator from Kansas [Mr.
Dole]. If he were present and voting, he would vote ``nay.'' If I were
at liberty to vote, I would vote ``yea.'' I withdraw my vote.
Mr. LOTT. I announce that the Senator from Missouri [Mr. Ashcroft],
the Senator from Colorado [Mr. Campbell], the Senator from New York
[Mr. D'Amato], the Senator from Kansas [Mr. Dole], the Senator from
Florida [Mr. Mack], and the Senator from Arizona [Mr. McCain] are
necessarily absent.
Mr. FORD. I announce that the Senator from Hawaii [Mr. Inouye], the
Senator from California [Mrs. Boxer], and the Senator from Illinois
[Ms. Moseley-Braun] are necessarily absent.
The PRESIDING OFFICER (Mr. Santorum). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 43, nays 47, as follows:
[Rollcall Vote No. 24 Leg.]
YEAS--43
Akaka
Baucus
Biden
Bingaman
Bradley
Breaux
Bryan
Bumpers
Byrd
Conrad
Daschle
Dodd
Dorgan
Exon
Feingold
Feinstein
Ford
Glenn
Graham
Heflin
Hollings
Johnston
Kennedy
Kerrey
Kerry
Kohl
Lautenberg
Leahy
Levin
Lieberman
Mikulski
Moynihan
Murray
Nunn
Pell
Pryor
Reid
Robb
Rockefeller
Sarbanes
Simon
Wellstone
Wyden
NAYS--47
Abraham
Bennett
Bond
Brown
Burns
Chafee
Coats
Cochran
Cohen
Coverdell
Craig
DeWine
Domenici
Faircloth
Frist
Gramm
Grams
Grassley
Gregg
Harkin
Hatch
Hatfield
Helms
Hutchison
Inhofe
Jeffords
Kassebaum
Kempthorne
Kyl
Lott
Lugar
McConnell
Murkowski
Nickles
Pressler
Roth
Santorum
Shelby
Simpson
Smith
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Warner
PRESENT AND GIVING A LIVE PAIR, AS PREVIOUSLY RECORDED--1
Gorton, for
NOT VOTING--9
Ashcroft
Boxer
Campbell
D'Amato
Dole
Inouye
Mack
McCain
Moseley-Braun
So the amendment (No. 3465) was rejected.
Mr. EXON. Mr. President, I move to reconsider the vote by which the
amendment was rejected.
Mr. LOTT. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The question is on the third reading and
passage of the bill.
The bill (H.R. 3021) was ordered to a third reading, was read the
third time, and passed.
Mr. ROTH. Mr. President, I move to reconsider the vote by which the
bill was passed.
Mr. MOYNIHAN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. MURKOWSKI. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. LOTT. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LOTT. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________