[Congressional Record Volume 142, Number 46 (Friday, March 29, 1996)]
[Senate]
[Pages S3182-S3183]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  Mr. MURKOWSKI. Mr. President, I would like to make reference, in my 
remaining time, to some facts on the budget.
  It is rather curious, but in the last 13 months, President Clinton 
has sent up

[[Page S3183]]

to the Congress nine separate budget bills. We have one now, like the 
others, containing, in my opinion, some fairy-tale numbers, some rosy 
scenarios. They propose economics and delays into the next century when 
the spending cuts are actually going to take place, when it will be 
reduced.
  Mr. President, 60 percent of the President's spending cuts are in the 
years 2001 and 2002 when we know, regardless of what happens this year, 
President Clinton will not be in office.
  Spending will increase 25 percent from $1.5 trillion this year to 
$1.9 trillion in the year 2002. Spending will increase 25 percent, and 
the national debt will rise by more than one-third, from $4.9 to $6.5 
trillion.
  Think about that, Mr. President. From $4.9 trillion to $6.5 trillion 
we are increasing the debt. That is like increasing the balance on your 
credit card or increasing the overdraft, if your bank holds such an 
overdraft.
  Although the deficit drops to $158 billion this year under the 
President's proposed reelection budget, the deficit goes up to $164 
billion next year. This is our annual deficit. This means every year we 
are spending more than we are generating in revenue. We will spend $164 
billion more than we generate in revenue, yet we mandate the American 
public balance their checking accounts. The Federal Government goes 
through a budget process. Everything it needs, beyond what it generates 
in revenues, it gets by adding to the deficit to the tune now of 
increasing it from $4.9 trillion--that is the total accumulated debt 
that has arisen as a consequence of the debts each year--we are going 
to increase that up to $6.5 trillion.
  I spent a little bit of time in the banking business before I got in 
the business of being a Senator from the State of Alaska. Interest 
costs are, I think, one of the most interesting and underrated 
considerations in this process, certainly among the more deceptive 
elements of the President's budget.

  This year we are going to spend 14 cents of every $1 of Federal 
spending on our $235 billion interest bill--14 cents out of every $1 of 
Federal spending. That costs us $235 billion. Next year the interest 
costs are going to rise to $238 billion. That is about 14.5 percent of 
the budget.
  Interest is like having a horse that eats while you sleep. It 
continues throughout the night eventually eating faster than you can 
feed it. Interest does not employ anybody, does not provide any new 
jobs, and does not pay any taxes in that sense. It has to be addressed 
if you have debt. The United States has debt.
  There is a rather curious process going on here. I will try and wind 
this up because I see my friend from Tennessee is on the floor as well. 
But the administration says that by the year 2002, interest costs are 
only going to be 12 percent of the budget and interest spending will be 
down to $223 billion. How is it possible for debt service costs to go 
down while the debt goes up from $4.9 trillion to $6.5 trillion? Is it 
lower interest costs? The President assumes flat interest rates at 5 to 
10 percent on 10-year notes. So that is not it.
  As I said, I used to be a banker. It does not take a rocket scientist 
to figure out that if the size of your debt rises by a third and 
interest rates are flat, the amount of interest you are going to pay 
has to go up.
  Why does that not happen under President Clinton? I wonder if we have 
rejected some of the principles of mathematics. The answer, Mr. 
President, is hidden in the back of the President's budget. I think 
this deserves the light of day. During the next several years, trust 
fund surpluses, especially the surpluses in the Social Security trust 
fund, rise by nearly $1 trillion. For every $1 of surplus, the Federal 
Government issues a special debt note--a debt note--to the trust fund 
that is not counted as interest under our budget rules. I would ask the 
Chair why. I am sure the Chair would have the same difficulty in 
explaining it.
  But for every $1 of that Social Security trust fund, which is going 
to be somewhere in the area of $1 trillion, for every $1 of surplus, 
the Federal Government issues a special debt note to the trust fund 
that is not counted as interest under our budget rules. That is $1 
trillion of debt service not counted in the President's budget.
  If you counted the interest we will pay the trust fund on the $1 
trillion in new debt we owe the trust fund, as a consequence of that, 
going into the interest formula, the real interest figure would look 
more like $350 billion as interest on the debt in the year 2002 instead 
of $225 billion, which is what the administration would have us 
basically accept or believe in this proposal.
  My point is, Mr. President, the administration projects the interest 
at 14.5 percent, or 14.5 cents on the dollar, when in reality it is 18 
percent as a consequence of borrowing from the trust fund.
  Mr. President, I will attempt to pursue this after the recess with 
some charts that I think will more visually show just what is going on 
here. The American public better be concerned because, as we look at 
greater portions of our total budget going for interest on the debt, we 
recognize we are going to have less for social needs and other 
priorities in our country.
  This must come to a halt. It could only come to a halt by adopting a 
balanced budget. We still have not been able to convince the White 
House of the realism of a real balanced budget that will actually cut 
spending.
  I thank the Chair and wish the Chair a good day.
  Mr. FRIST addressed the Chair.
  The PRESIDING OFFICER. The Senator from Tennessee.

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