[Congressional Record Volume 142, Number 71 (Monday, May 20, 1996)]
[Senate]
[Pages S5305-S5376]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  CONCURRENT RESOLUTION ON THE BUDGET

  The PRESIDING OFFICER. The Senate will now resume consideration of 
Senate Concurrent Resolution 57, which the clerk will report.
  The legislative clerk read as follows:

       A concurrent resolution (S. Con. Res. 57) setting forth the 
     congressional budget for the U.S. Government for fiscal years 
     1997, 1998, 1999, 2000, 2001, and 2002.

  The Senate resumed consideration of the concurrent resolution.

       Pending:
       Boxer amendment No. 3982, to preserve, protect, and 
     strengthen the Medicaid program by controlling costs, 
     providing State flexibility, and restoring critical standards 
     and protections, including coverage for all populations 
     covered under current law, to restore $18 billion in 
     excessive cuts, offset by corporate and business tax reforms, 
     and to express the sense of the Senate regarding certain 
     Medicaid reforms.

[[Page S5306]]

       Wyden/Kerry amendment No. 3984, to express the sense of the 
     Senate regarding revenue assumptions.
       Wellstone amendment No. 3985, to express the sense of the 
     Senate on tax deductibility of higher education tuition and 
     student loan interest costs.
       Wellstone/Kerry amendment No. 3986, to express the sense of 
     the Senate that funds will be available to hire new police 
     officers under the Community Oriented Policing Service.
       Wellstone amendment No. 3987, to express the sense of the 
     Senate that Congress will not enact or adopt any legislation 
     that would increase the number of children who are hungry or 
     homeless.
       Wellstone amendment No. 3988, to express the sense of the 
     Senate with respect to maintaining current expenditure levels 
     for the Low Income Home Energy Assistance Program for fiscal 
     year 1997.
       Wellstone amendment No. 3989, to express the sense of the 
     Senate with respect to the interrelationship between domestic 
     violence and welfare.
       Kerry amendment No. 3990, to restore proposed cuts in the 
     environment and natural resources programs, to be offset by 
     the extension of expired tax provisions or corporate and 
     business tax reforms.
       Kerry amendment No. 3991, to increase the Function 500 
     totals to maintain levels of education and training funding 
     that will keep pace with rising school enrollments and the 
     demand for a better-trained workforce, to be offset by the 
     extension of expired tax provisions or corporate and business 
     tax reforms.
       Kyl amendment No. 3995, to express the sense of the Senate 
     regarding a supermajority requirement for raising taxes.
       Kyl amendment No. 3996, to providing funding for the Low 
     Income Home Energy Assistance Program through fiscal year 
     2000.
       Kennedy amendment No. 3997, to express the sense of the 
     Congress that the reconciliation bill should maintain the 
     existing prohibition against additional charges by providers 
     under the medicare program.
       Kennedy amendment No. 3998, to express the sense of the 
     Congress that the reconciliation bill should not include any 
     changes in Federal nursing home quality standards or the 
     Federal enforcement of such standards.
       Kennedy amendment No. 3999, to express the sense of the 
     Congress that provisions of current medicaid law protecting 
     families of nursing home residents from experiencing 
     financial ruin as the price of needed care for their loved 
     ones should be retained.
       Kennedy amendment No. 4000, to express the sense of the 
     Senate relating to the protection of the wages of 
     construction workers.
       Byrd amendment No. 4001, to increase overall discretionary 
     spending to the levels proposed by the President, offset by 
     the extension of expired tax provisions or corporate and 
     business tax reforms.
       Lott/Smith amendment No. 4002, to express the sense of the 
     Congress regarding reimbursement of the United States for the 
     costs associated with Operations Southern Watch and Provide 
     Comfort out of revenues generated by any sale of petroleum 
     originating from Iraq.
       Simpson/Moynihan amendment No. 4003, to express the sense 
     of the Senate that all Federal spending and revenues which 
     are indexed for inflation should be calibrated by the most 
     accurate inflation indices which are available to the Federal 
     Government.
       Graham amendment No. 4007, to create a 60 vote point of 
     order against legislation diverting savings achieved through 
     medicare waste, fraud and abuse enforcement activities for 
     purposes other than improving the solvency of the Medicare 
     Federal Hospital Insurance Trust Fund.

  Mr. LOTT. Mr. President, I ask unanimous consent that when we go back 
into the quorum, the time be equally divided against the time on the 
resolution.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. 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. ASHCROFT. 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. ASHCROFT. Mr. President, I ask unanimous consent that the pending 
amendment be set aside so that I might submit another amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 4008

   (Purpose: To provide for an income tax deduction for the old age, 
  surviors, and disability insurance taxes paid by employees and self-
                         employed individuals)

  Mr. ASHCROFT. I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Missouri (Mr. Ashcroft) proposes an 
     amendment numbered 4008.

  Mr. ASHCROFT. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. ASHCROFT. Mr. President, thank you very much.
  Mr. President, the centrality of resource to government, the power to 
tax, the impact and effect of taxation upon our economy is something 
which is well known and understood across our culture. The development 
of a budget for this country is perhaps one of our most important 
responsibilities. It has to do with the fundamental ways in which we 
view ourselves. It helps us focus on who we are and what we can be when 
we have the right balance between spending and the rest of the 
economy--the private sector of the economy; when we have the right 
balance between taxes that are spent by government and resources that 
are spent by individuals in the culture.
  When I think about America, I think about it as a place of hope, a 
place of opportunity, a place that can solve problems that might not 
have been susceptible to solution anywhere else. I think about the 
words on the base of the Statue of Liberty, Emma Lazarus' poem, which 
is so aggressive. It is so hopeful. It says:

     Give me your tired, your poor,
     Your huddled masses yearning to breathe free,
     The wretched refuse of your teeming shores,
     Send these, the homeless, tempest-tossed to me:
     I lift my lamp beside the golden door.

  America so brash, America so capable, America so resilient, so 
oriented to growth and opportunity that it says to the rest of the 
world, ``Send me your most troublesome problems. Send me the most 
difficult of your cases, we lift a lamp of opportunity here. Give me 
your tired, your poor. We will take care of it here because we are 
growing, we are on the move.'' What troubles me perhaps more than 
anything else is that of late instead of saying, ``Give me your tired, 
your poor,'' we seem to be reciting that we are the tired, we are the 
poor.
  It has been said that America is the ``city on the hill,'' a special 
example to the rest of world, a place to look to, a city of hope and 
opportunity. Well, perhaps it might be said that if we are a city, we 
are in need of renewal. We sure would not want the kind of urban 
renewal that has been inflicted on American cities, but the sense that 
we need to again restart the engine, regenerate the opportunities of 
this culture. Perhaps we ought to look carefully at what is it that has 
moved us from a culture that could say, ``Give me your tired, your 
poor, your huddled masses yearning to breathe free, the wretched refuse 
of your teeming shores, send these, the homeless, tempest-tossed to 
me.''
  What it is that has moved us from saying that to being doubtful about 
the future, to be insecure, having this sense of social discomfort, of 
social disease, social insecurity, if you will, which we find in 
America today? I have to say to you that I think it has been the 
flatness in growth which we have normally expected in this culture but 
which we are not seeing in the American culture.

  Economic growth has always driven the idea that America could be a 
special place of opportunity. It was that sense of endless opportunity 
in this country that drove us to say, ``Give me your tired, your 
poor.'' It was this understanding that we could always grow our way 
through circumstances and difficulties. Growth has been a marvelous key 
toward providing some new hope for individuals at all times in our 
history.
  Yet, what has happened to growth? What has happened to our culture? 
We have seen a tremendous flatness in recent years. Take-home pay is 
stagnant at best. The average household income is 6.3 percent below its 
1989 level--6.3 percent down; 6.3 percent is $1 out of every $18. So 
where you used to get $18 you now only have $17. That is just in the 
last 6 or 7 years.
  Zero growth in worker income for the first 3 years of the Clinton 
administration. Working families are being taxed. They are being 
stressed.
  We find they get up early; they work late; they sacrifice time with 
each other and with their children, and they have less and less for it. 
They are squeezed.
  What is the reason? Why is it that we as a culture find ourselves 
laboring

[[Page S5307]]

under this weight rather than soaring toward the opportunity of a 
lifted lamp that can greet any challenge boldly and say, ``Give me your 
best shot?'' We cannot only roll with the punch; we can succeed.
  I think it is simple. I think it is because the Government has begun 
to take so much of the wage of working Americans that Americans no 
longer have the resource to spend for themselves. Tax liberation day is 
a day that is calculated each year which says that since the Government 
has the first claim on your wages, how long do you have to work into 
the year in order to pay all the Government's claim?
  Tax liberation day was just a little over a week ago. The truth of 
the matter is it is awfully substantial in our culture, the burden that 
taxes place on each of us. As a matter of fact, as a percentage of the 
gross domestic product, that is, the output of this economy, we have 
higher rates of taxation at this moment in history than we have ever 
had in the history of this Republic, higher than the rate of taxation 
that it took to throw the British out of this country, higher than it 
took to win the Civil War, higher rates of taxation than it took to 
make the world safe for democracy in World War I, higher rates of 
taxation than it took for us to spend our way out of the Depression of 
the 1930's, and more taxes in terms of gross domestic product than it 
took for us to win World War II. The American people are being taxed at 
the highest rate in history when measured by gross domestic product.
  That is a shame. It is a substantial burden on the American people. 
And as their incomes are being eroded, repressed, held back, they are 
wondering what happened to their income. I think it is pretty easy for 
us to say what has happened to their income because the growth of 
Government spending has soared. We have gone to an income tax which was 
2 to 3 percent of income in the 1950's to more than 10 times that much 
now. And we have levels of taxation which are just incredible. Of the 
family budget, in 1955, 27.7 percent was total taxes--in 1955. It is 
38.2 percent in 1995. That is more than a third increase in what the 
American family is being asked to pay in taxes.
  Just looking at the data from this decade, it is not a happy picture 
because in 1990 we had a substantial tax increase, and in 1993 the 
Clinton administration and the Democrats in the Congress imposed upon 
the American people without a single Republican vote the largest tax 
increase in the history of America. And so when the American worker 
looks around to say, what happened to my wage increase, it is pretty 
easy to say what has happened to your wage increase, what has happened 
to the growth in this economy, what has happened to the dynamic 
potential of hope that America represents and ought to be. It has been 
stolen by Government. What the people cannot spend is what Government 
has taken. And when Government takes well over 38 percent of your 
income, you cannot spend it, and if Government did not take it, you 
could spend it. Government is out of control. It is taxing at 
incredibly high rates and families are suffering.

  Senator Coverdell of Georgia is eloquent in describing how taxes have 
gone up regularly since the 1950's and 1960's. You can trace and 
correlate the number of families where people feel it is necessary for 
both parents to be out of the home working. Taxes have not only stolen 
the resource of money from our families but they have stolen the 
resource of parenting in many respects by forcing people who would 
otherwise want to stay in the home to be parents to leave the home in 
order to go into the marketplace to try and make enough. So that the 
workers are not getting increases.
  The record of the recent past is the workers are not getting 
increases, but the record is that the Government is getting increases, 
and so we not only have the diversion of the important financial 
resource from family, we have had a diversion of other resources. And 
people are not able to make their own decisions about whether they want 
to go into the marketplace or to stay in the home or spend time with 
their family or devote themselves to the development of family 
concerns; you have a situation where they are simply compelled to be 
there.
  This is a situation of Government that is out of control.
  This chart here just gives us a little indication of where the money 
goes. House and household, in the average family, 15 percent pays for 
its home and its household. That is 2.5 times less, or this is 2.5 
times more total taxes; food, 6 percent of the normal family's income; 
taxes, over 600 percent more than that; transportation, 6 percent; over 
600 percent more than we spend on transportation; to put clothes on the 
backs of Americans costs 4 percent of family income; it costs almost 10 
percent that much to pay taxes.
  This is the largest total tax figure. This represents more of the 
gross domestic product than at any time in the history of this country, 
and it is no wonder that we find ourselves in a period of stagnation, 
of retrogression, of reduction rather than in development and growth, 
and it is time again to unleash the engine of opportunity, the driving 
force of growth in our culture and society.

  Government has stolen the wage increases of American workers by 
regressing growth in the American culture. It is the reason, if we are 
the city on the Hill, we need renewal. It is the reason we no longer 
say give me your tired, your poor. We have people complaining that they 
are tired and they are poor, and it is time for us to grant to the 
American people the kind of relief which will make a difference to 
them. I think we need to find a way to relieve the American public of 
its tax burden, but we need to make sure that this goes to the people 
who need it most. We need to find a way to make sure that the American 
public, the working public, the middle class, the forgotten middle 
class in everything but campaign years, is remembered.
  Let me just say that I think I have a way to get that done. I think I 
have an effective way to deliver tax relief to the middle class, and 
let me describe it to you. Almost all of us--well, all of us who do 
work--pay what is called payroll taxes. These are taxes that go to 
support Social Security. And I would not touch those taxes in any way. 
We need to pay those in order to make sure that the Social Security 
trust fund is maintained. But these Social Security taxes are a tax. We 
pay those to the Government. They go to make sure that our ability to 
pay individuals who are on Social Security their benefits is 
maintained. We do not want to impair in any way the ability of this 
culture to pay those citizens who are on Social Security what they 
deserve and what they have earned by paying their Social Security taxes 
in the past.
  But it is a tax. And when you pay the 6 point something or other 
percent of your wages as a Social Security tax, it is a tax. There is 
no two ways about it. It is a tax. It is not an investment program for 
you. They do not take your money and invest it and put it away so that 
you will have something when you retire. It is simply a tax that is 
levied on you so they can meet the current demands of the Social 
Security system.
  What is interesting about that tax is that you have to pay that tax 
after you have already had your income tax calculated. So that you have 
paid a tax on that money, and then you pay a tax again. This is a 
classic setting where we have asked the American people to be subject 
to a tax on a tax.
  That is unfair. Double taxation for the American people in this 
setting is grossly unfair. It is something that we have rejected in 
virtually every other category of our existence, but we are asking 
American workers, working families, to pay a tax on a tax. As you know, 
the Social Security tax is only levied on the first $62,000 of your 
income, $63,000; $62,700 is the real number. So if you are paying a tax 
on that amount and it is also being taxed for income tax purposes, you 
have a double tax.
  I think we ought to make that deductible. You still have to pay the 
Social Security tax, but you no longer have to pay the income tax on 
things that are never income to you, because this money never reaches 
an employee. The working families of America never see it. It is 
deducted. It is called the payroll deduction tax. It is a tax that goes 
straight from your employer right into the Federal Government. You do 
not even get a sniff at this resource, and yet you are taxed on this 
tax.
  Strangely enough, interestingly enough, this is not a tax which hits 
American business in the same way,

[[Page S5308]]

because the business community has a right to deduct from its taxes the 
payments that it makes that match the workers' tax. So the business 
community, the giant corporate citizens of America--and we need them 
and they are good and appropriate--they get fair treatment by being 
able to deduct this as an expense. But the citizen, the worker, pays on 
the first $62,700 of our income, we pay Social Security taxes out of 
money that we have already paid taxes on. We have a tax on the tax, and 
it is time that we stopped that. It is time that we elevate the 
American worker at least to the tax standing and tax position of 
American corporations. It is time that we gave that tax break to the 
American worker.
  It is important that this tax break, by providing for deductibility 
of the Social Security tax before the income tax is paid, go to the 
American worker. It is important to note that it is only on the first 
$62,000 of income. So, as a matter of fact, for the millionaires, they 
only get the break on $62,000 of their income, just like the average 
working family would only get the break on that first segment of 
income.
  So for those who are fond of saying every time there is a tax break, 
that this is a tax break for the rich, well, you need not apply here, 
because this is limited automatically to providing the deduction for a 
tax you are paying to Social Security, and since nobody pays it above 
$62,700, it is not a deduction for the rich. It is a deduction in terms 
of proportional deductions of your wages that favors, dramatically 
favors, the middle class. What an important thing that is, because 
middle-class families are the families that desperately need help.

  What would happen to the middle-class family? How would the middle-
class family be affected? For middle-class families, the Social 
Security tax is the single largest tax that is paid. No other tax that 
we pay takes a bigger chunk out of the average family's income than 
Social Security taxes. So to give a deduction on that would be 
substantial. It would really mean they would have about a 1-percent 
decrease in their income tax rate for these families, the average two-
income family. That means that you would pay about $1,770 less in taxes 
for the year than you would if we did not have this deduction.
  What happens to the economy of the United States of America if you 
let working people who have earned the money just pay tax once by 
sending it to the Social Security trust fund but not being taxed on 
that money twice, therefore, having the extra $1,770 in income? What 
will happen in the United States? Growth, that is what will happen. It 
is universal. No one projects anything but substantial growth. The 
middle number is about 500,000 new jobs, about 10,000 jobs per State.
  I had the privilege of being Governor of my State for about 8 years 
before I became a U.S. Senator, and it is a great privilege. If someone 
came to your State saying they had 10,000 jobs for you, I mean, 
stopping the Governor from doing cartwheels would be a major endeavor. 
We care about growth; we care about opportunity.
  That is the equivalent of two large car assembly plants. States have 
fallen all over themselves. I remember the competition for the Saturn 
plant, eventually won by Tennessee, I sadly say. Good for Tennessee, 
bad for Missouri. We would like to have had it. But several of those in 
every State in the United States of America? It is estimated that the 
gross domestic product would raise by one-half of 1 percent as a result 
of letting the people spend the money instead of having the Government 
spend the money.
  I think we need to remind ourselves on a regular and consistent basis 
that when we tax people, it is a question of not whether money will be 
spent, it is whether we are going to spend the money in the Government 
and whether we can decide best for people how to serve their needs or 
whether they can decide best by having the money at their own disposal 
and by having the money for themselves to spend.
  I believe that the families in America know best, and the economists 
indicate that, if we will stop spending this money and just let it be 
spent in the private sector by the families, it will mean about 
500,000--500,000--new jobs in America, about 10,000 jobs per State. The 
gross domestic product will go up by .5 percent. That would mean that 
77 million--77 million--working Americans would have more resources to 
devote to themselves, to their families, do more for themselves, do 
more for their families, and do more of the good things that American 
families want to do.

  So often we say that Government is required because families will not 
do what they ought to do, but I believe we have come to a place where 
Government has made it impossible for families to do what they ought 
and want to do. They want to share, they want to be involved in their 
communities, they want to be involved in their churches and synagogues 
and mosques and temples. They want to be involved in reaching out to 
other people. But when Government takes such a big share, when you have 
to work 3 hours every day to get the Government's share out of the way 
and you struggle through the rest of the day to meet your own needs, it 
does not leave much opportunity for sharing.
  So we have a situation where we really need to provide relief to 
America's working families. They are struggling. We talk about the 
problems of the family. It is time for us to do something about the 
problems of our families.
  We talk about Government as if it all was involved in something that 
was fundamental, essential, and necessary--and frequently is--but 
families are fundamental, essential, and necessary. One hundred years 
ago, Williams Jennings Bryan said, if you tore down your cities and 
left your farms, the cities would grow back up. But if you destroyed 
the agriculture and the producing capacity of this country, grass would 
grow in the streets of the cities.
  I think if you tore down government, it could spring back up if you 
left the families in place, but if you were to tear down the families 
of America, I can guarantee you that grass would grow over this 
Capitol, and it may if we do not provide relief in some way to the 
families of this country that are hard pressed by this weight. It is 
not inconsequential that the governmental share is in red here, because 
much of this is the resource of the next generation as well. We are not 
only on a binge of taxation, we are on a binge of spending, and that 
binge of spending threatens the well-being of young Americans and those 
who are yet to be born.
  This is a program and proposal that basically comes down to the 
question of, do you want more taxes or less taxes? Do you want to grow 
Government, or do you want to grow people? What is the purpose of 
Government? The purpose of Government is related to growth, but it is 
not related to the growth of Government; it is related to the growth of 
people. It is our responsibility to maintain an environment in which 
people grow, in which their enterprises grow, in which citizens grow 
and in which their corporations grow.
  It is a place where individuals grow and institutions grow, but if we 
make it so that government is the only thing that can grow because it 
sucks up so much of the resource of this culture, we will have 
destroyed the genius of America, we will have destroyed the opportunity 
of it, we will have destroyed the character of it. It is time for us to 
get out of the destruction business and to get into the restoration 
business.
  That is why the Working Americans Wage Restoration Act is what we 
ought to be focused on. This is a way, without impairing Social 
Security in any respect, to place into the hands of the American people 
the capacity to do for themselves and for their families and for others 
what they ought and want to do and to do so by balancing a taking by 
government of an inordinate amount of their resources.
  Remember, it is time to curtail this tax on tax. The American family 
has been treated unfairly. It has been taxed where corporations have 
been given a deduction. We are taxed at the highest levels in history. 
Not even to prosecute the most disastrous of all wars have we taxed our 
people as much as we have. It is time for us to provide the relief to 
the American family which will allow the American family to flourish, 
and allows us to again have the kind of bold, brash, and aggressive 
behavior of hope that said: Give us your best shot. Give us your tired, 
your poor.
  We can make something of anything in the United States because we are

[[Page S5309]]

growing. It is time for us to be the city on the hill again and not the 
city in need of urban renewal, but a city of hope and opportunity.
  It is time for us to give the American worker a chance to do what 
needs to be done and to provide a basis upon which the American worker 
and the American economy can again grow.


                    Amendment No. 4008, as Modified

  Mr. ASHCROFT. Mr. President, I ask unanimous consent to send a 
modification of my amendment to the desk.
  The PRESIDING OFFICER. The Senator is free to amend his amendment. 
Without objection, it is so ordered.
  Mr. ASHCROFT. I thank the Chair.
  The PRESIDING OFFICER. The amendment is so modified.
  The amendment (No. 4008), as modified, is as follows:

       On page 3, line 5, decrease the amount by $29,900,000,000.
       On page 3, line 6, decrease the amount by $44,400,000,000.
       On page 3, line 7, decrease the amount by $476,700,000,000.
       On page 3, line 8, decrease the amount by $49,100,000,000.
       On page 3, line 9, decrease the amount by $51,700,000,000.
       On page 3, line 10, decrease the amount by $54,300,000,000.
       On page 3, line 14, decrease the amount by $29,900,000,000.
       On page 3, line 15, decrease the amount by $44,400,000,000.
       On page 3, line 16, decrease the amount by $46,700,000,000.
       On page 3, line 17, decrease the amount by $49,100,000,000.
       On page 3, line 18, decrease the amount by $51,700,000,000.
       On page 3, line 19, decrease the amount by $54,300,000,000.
       On page 4, line 8, increase the amount by $34,577,000,000.
       On page 4, line 9, decrease the amount by $47,622,000,000.
       On page 4, line 10, decrease the amount by $48,997,000,000.
       On page 4, line 11, decrease the amount by $51,903,000,000.
       On page 4, line 12, increase the amount by $53,474,000,000.
       On page 4, line 13, decrease the amount by $55,439,000,000.
       On page 4, line 17, decrease the amount by $29,900,000,000.
       On page 4, line 18, decrease the amount by $44,400,000,000.
       On page 4, line 19, decrease the amount by $46,700,000,000.
       On page 4, line 20, decrease the amount by $49,100,000,000.
       On page 4, line 21, decrease the amount by $51,700,000,000.
       On page 4, line 22, decrease the amount by $54,300,000,000.
       On page 9, line 21, decrease the amount by $1,209,000,000.
       On page 9, line 22, decrease the amount by $1,156,000,000.
       On page 10, line 5, decrease the amount by $2,298,000,000.
       On page 10, line 6, decrease the amount by $1,412,000,000.
       On page 10, line 13, decrease the amount by $2,684,000,000.
       On page 10, line 14, decrease the amount by $1,865,000,000.
       On page 10, line 21, decrease the amount by $2,821,000,000.
       On page 10, line 22, decrease the amount by $2,278,000,000.
       On page 11, line 5, decrease the amount by $2,927,000,000.
       On page 11, line 6, decrease the amount by $2,560,000,000.
       On page 11, line 13, decrease the amount by $2,964,000,000.
       On page 11, line 14, decrease the amount by $2,735,000,000.
       On page 11, line 22, decrease the amount by $2,449,000,000.
       On page 11, line 23, decrease the amount by $1,520,000,000.
       On page 12, line 5, decrease the amount by $2,525,000,000.
       On page 12, line 6, decrease the amount by $2,346,000,000.
       On page 12, line 12, decrease the amount by $2,686,000,000.
       On page 12, line 13, decrease the amount by $2,693,000.000.
       On page 12, line 19, decrease the amount by $2,909,000,000.
       On page 12, line 20, decrease the amount by $2,882,000,000.
       On page 13, line 2, decrease the amount by $3,209,000,000.
       On page 13, line 3, decrease the amount by $3,131,000,000.
       On page 13, line 9, decrease the amount by $3,619,000,000.
       On page 13, line 10, decrease the amount by $3,474,000,000.
       On page 13, line 17, decrease the amount by $875,000,000.
       On page 13, line 18, decrease the amount by $131,000,000.
       On page 13, line 25, decrease the amount by $783,000,000.
       On page 14, line 1, decrease the amount by $446,000,000.
       On page 14, line 8, decrease the amount by $933,000,000.
       On page 14, line 9, decrease the amount by $740,000,000.
       On page 14, line 15, decrease the amount by $1,083,000,000.
       On page 14, line 17, decrease the amount by $931,000,000.
       On page 14, line 24, decrease the amount by $1,183,000,000.
       On page 14, line 25, decrease the amount by $1,086,000,000.
       On page 15, line 7, decrease the amount by $1,283,000,000.
       On page 15, line 8, decrease the amount by $1,225,000,000.
       On page 15, line 16, decrease the amount by $359,000,000.
       On page 15, line 17, decrease the amount by $241,000,000.
       On page 15, line 24, decrease the amount by $440,000,000.
       On page 15, line 25, decrease the amount by $349,000,000.
       On page 16, line 7, decrease the amount by $506,000,000.
       On page 16, line 8, decrease the amount by $462,000,000.
       On page 16, line 15, decrease the amount by $574,000,000.
       On page 16, line 16, decrease the amount by $545,000,000.
       On page 16, line 23, decrease the amount by $574,000,000.
       On page 16, line 24, decrease the amount by $582,000,000.
       On page 17, line 7, decrease the amount by $574,000,000.
       On page 17, line 8, decrease the amount by $588,000,000.
       On page 19, line 16, decrease the amount by $1,264,000,000.
       On page 19, line 17, decrease the amount by $639,000,000.
       On page 19, line 24, decrease the amount by $1,341,000,000.
       On page 19, line 25, decrease the amount by $882,000,000.
       On page 20, line 7, decrease the amount by $1,339,000,000.
       On page 20, line 8, decrease the amount by $1,197,000,000.
       On page 20, line 15, decrease the amount by $1,339,000,000.
       On page 20, line 16, decrease the amount by $1,382,000,000.
       On page 20, line 23, decrease the amount by $1,687,000,000.
       On page 20, line 24, decrease the amount by $1,409,000,000.
       On page 21, line 7, decrease the amount by $1,687,000,000.
       On page 21, line 8, decrease the amount by $1,484,000,000.
       On page 21, line 16, decrease the amount by $104,000,000.
       On page 21, line 17, decrease the amount by $58,000,000.
       On page 21, line 24, decrease the amount by $110,000,000.
       On page 21, line 25, decrease the amount by $215,000,000.
       On page 22, line 7, decrease the amount by $110,000,000.
       On page 22, line 8, decrease the amount by $276,000,000.
       On page 22, line 15, decrease the amount by $110,000,000.
       On page 22, line 16, decrease the amount by $297,000,000.
       On page 22, line 23, decrease the amount by $110,000,000.
       On page 22, line 24, decrease the amount by $306,000,000.
       On page 23, line 6, decrease the amount by $110,000,000.
       On page 23, line 7, decrease the amount by $312,000,000.
       On page 25, line 17, decrease the amount by $5,938,000,000.
       On page 25, line 18, decrease the amount by $4,436,000,000.
       On page 25, line 25, decrease the amount by $6,127,000,000.
       On page 26, line 1, decrease the amount by $5,670,000,000.
       On page 26, line 8, decrease the amount by $6,188,000,000.
       On page 26, line 9, decrease the amount by $6,015,000,000.
       On page 26, line 16, decrease the amount by $6,199,000,000.
       On page 26, line 17, decrease the amount by $6,122,000,000.
       On page 26, line 24, decrease the amount by $6,208,000,000.
       On page 26, line 25, decrease the amount by $6,190,000,000.
       On page 27, line 7, decrease the amount by $6,211,000,000.
       On page 27, line 8, decrease the amount by $6,204,000,000.
       On page 31, line 3, decrease the amount by $7,705,000,000.
       On page 31, line 4, decrease the amount by $7,705,000,000.
       On page 31, line 10, decrease the amount by $9,502,000,000.
       On page 31, line 11, decrease the amount by $9,502,000,000.
       On page 31, line 17, decrease the amount by 
     $11,391,000,000.
       On page 31, line 18, decrease the amount by 
     $11,391,000,000.
       On page 31, line 24, decrease the amount by 
     $13,427,000,000.
       On page 31, line 25, decrease the amount by 
     $13,427,000,000.
       On page 32, line 6, decrease the amount by $16,161,500,000.
       On page 32, line 7, decrease the amount by $16,161,500,000.
       On page 32, line 13, decrease the amount by 
     $16,161,500,000.
       On page 52, line 14, decrease the amount by 
     $16,161,500,000.

[[Page S5310]]

       On page 38, line 7, decrease the amount by $545,000,000.
       On page 38, line 8, decrease the amount by $16,000,000.
       On page 38, line 14, decrease the amount by $545,000,000.
       On page 38, line 15, decrease the amount by $71,000,000.
       On page 38, line 21, decrease the amount by $545,000,000.
       On page 38, line 22, decrease the amount by $186,000,000.
       On page 39, line 3, decrease the amount by $545,000,000.
       On page 39, line 4, decrease the amount by $354,000,000.
       On page 39, line 10, decrease the amount by $545,000,000.
       On page 39, line 17, decrease the amount by $491,000,000.
       On page 39, line 18, decrease the amount by $512,000,000.
       On page 42, line 2, decrease the amount by $13,998,000,000.
       On page 42, line 3, decrease the amount by $13,998,000,000.
       On page 42, line 8, decrease the amount by $23,505,000,000.
       On page 42, line 9, decrease the amount by $23,505,000,000.
       On page 42, line 15, decrease the amount by 
     $21,875,000,000.
       On page 42, line 16, decrease the amount by 
     $21,875,000,000.
       On page 42, line 22, decrease the amount by 
     $20,882,000,000.
       On page 42, line 23, decrease the amount by 
     $20,882,000,000.
       On page 43, line 5, decrease the amount by $19,783,500,000.
       On page 43, line 6, decrease the amount by $19,783,500,000.
       On page 43, line 12, decrease the amount by 
     $21,604,500,000.
       On page 43, line 13, decrease the amount by 
     $21,604,500,000.
       On page 51, line 13, increase the amount by 
     $54,300,000,000.
       On page 51, line 14, increase the amount by 
     $276,100,000,000.
       On page 51, line 15, increase the amount by $7,924,000,000.
       On page 51, line 16, increase the amount by 
     $75,738,000,000.
       On page 52, line 14, decrease the amount by 
     $26,872,000,000.
       On page 52, line 15, decrease the amount by 
     $22,195,000,000.
       On page 52, line 21, decrease the amount by 
     $38,120,000,000.
       On page 52, line 22, decrease the amount by 
     $34,898,000,000.
       On page 52, line 24, decrease the amount by 
     $37,606,000,000.
       On page 52, line 25, decrease the amount by 
     $35,309,000,000.
       On page 53, line 2, decrease the amount by $38,476,000,000.
       On page 53, line 3, decrease the amount by $35,673,000,000.
       On page 53, line 5, decrease the amount by $37,277,500,000.
       On page 53, line 6, decrease the amount by $35,538,500,000.
       On page 53, line 8, decrease the amount by $39,277,500,000.
       On page 53, line 9, decrease the amount by $38,138,500,000.

  Mr. ASHCROFT. Reserving the balance of my time, I yield the floor.
  The PRESIDING OFFICER. Does the Senator note the absence of a quorum?
  Mr. ASHCROFT. The Senator from Missouri notes the absence of a quorum 
and asks unanimous consent that the time be charged equally to both 
sides.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. THOMAS. 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. THOMAS. Mr. President, I also ask unanimous consent that the 
current amendment be set aside.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.


                           Amendment No. 3974

   (Purpose: To express the sense of the Senate supporting biennial 
                               budgeting)

  Mr. THOMAS. Mr. President, I ask unanimous consent that I can bring 
up an amendment that I have filed on the biennial budget.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Wyoming [Mr. Thomas] proposes amendment 
     numbered 3974.

  Mr. THOMAS. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the end of title III, insert the following new section:

     SEC.   . SENSE OF THE SENATE SUPPORTING BIENNIAL BUDGETING.

       (a) Findings.--The Senate finds that the current budget 
     process--
       (1) results in constant and redundant congressional action 
     on spending measures and budget issues;
       (2) causes instability in financial markets and creates 
     budgetary uncertainty for recipients of Federal funds, 
     thereby inhibiting the efficient operation of these programs; 
     and
       (3) allows insufficient time for Congress to consider 
     national needs as a basis for sound and efficient policy 
     approaches, thereby fostering piecemeal solutions that 
     contribute to unrestrained growth of the Federal Government.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) a biennial budget process would--
       (A) create an orderly, predictable process for 
     consideration of spending decisions responsive to policy 
     priorities and improve congressional control over the Federal 
     budget and therefore promote better accountability to the 
     public;
       (B) provide greater stability and certainty for financial 
     markets, Federal, State, and local government agencies which 
     need sufficient time to plan for the implementation of 
     programs; and
       (C) allow sufficient time for the fulfillment by the 
     Congress of its legislative and oversight responsibilities, 
     including the consideration of authorizing legislation, 
     budget resolutions, appropriations bills, and other spending 
     measures; and
       (2) the Congress should enact legislation in the 104th 
     Congress to establish a biennial budget process.

  Mr. THOMAS. Mr. President, I offer to the Senate a sense-of-the-
Senate resolution which states that we would have biennial budgeting.
  I make this recommendation for several reasons. The primary factor is 
my personal experience with biennial budgeting. I come from the Wyoming 
legislature where we employ a 2-year budget cycle. It works very well. 
It seems to me that we ought to bring that Western wisdom inside the 
beltway. I know it has been considered before, but obviously Congress 
has not enacted the concept.
  I want to take just a moment to recognize the chairman of the Budget 
Committee, Senator Domenici, who has been a real leader on this issue 
for a number of years. In fact, he and Majority Leader Bob Dole joined 
me when I recently introduced a bill, S. 1434, that would create a 
biennial budget process.
  Obviously, there are some great benefits from biennial budgeting. One 
of them is being demonstrated here today. This Congress we have spent 
most of our time working on the budget. I am not sure what the numbers 
are, but if you looked at last year, I suspect that we will have spent 
fully two-thirds of the year in this place talking about the budget.
  The alternative to that, it seems to me, is the opportunity of having 
a biennial budget in which basically we could talk about a budget, 
debate a budget, discuss a budget, enact a budget in 1 year, put that 
budget into place for a period of 2 years, and have the following year 
to do one of the other major responsibilities of the Senate, and that 
is oversight.
  I strongly believe that we do not spend enough time on oversight in 
Congress. That is one of our basic responsibilities. This failure has 
led to the continuous growth of the Federal Government.
  So there are a number of reasons why biennial budgeting would be 
important. One is that it would promote timely action on budget 
legislation. We would not drag the process out as much as we do now. 
Another benefit is that it would provide an opportunity for Federal 
agencies to plan a little further ahead. Although it is not long term--
2 years--it would create more stability in executive branch programs.
  A 2-year budget cycle would also eliminate some of the redundancies 
of the current process. I am not on the Appropriations Committee here. 
I was, however, in my legislature, and I know how much time and effort 
goes into it and how important it is. Quite frankly, it is not any more 
difficult to do it for 2 years than it is for 1.
  I suspect that there is not generally a great deal of support by 
appropriators for this concept. Obviously, one of the reasons is that 
appropriators have a great deal of authority around here, primarily 
because they consider the budget every year. Naturally, they don't want 
to relinquish that power. Appropriators who want something out of the 
budget for their State are beholden to the current budget process. I do 
not say that unkindly, that is just the way it is. Consequently, I do 
not

[[Page S5311]]

expect the appropriators to support this reform.

  One of the other benefits, of course, is you reduce the frequency of 
Presidential/congressional conflicts, though those instances will 
always occur. There is a responsibility on the part of the Congress, of 
course, for the House to initiate and the Congress to put forth a 
budget. Under the Constitution, the President has an opportunity to 
approve or disapprove it. I think this is one of the areas where there 
is a certain amount of frustration; where we find ourselves sometimes 
changing and fixing everything to meet the President's requirements. 
The fact is, the President has some requirements, too, to accommodate 
himself to the Congress. It is not a one-way street down Pennsylvania 
Avenue. So biennial budgeting would reduce these conflicts. It would, 
as I mentioned before, encourage long-term planning, particularly in 
the executive branch and in State governments.
  Mr. President, I am not going to take a great deal of time to discuss 
this issue. I know this is not the time to go into great length to 
debate it. This is the time, however, to give it some consideration, 
when we are in the middle of the budget process. We will be moving into 
the appropriations cycle, when this budget is over, which will likely 
take until October to complete. In addition, we recently finished last 
year's appropriations process. So biennial budgeting provides a great 
opportunity, I believe, to streamline the process.
  But making the process more efficient is not even the most important 
benefit of biennial budgeting. In a 2-year budget cycle, more time can 
be spent on oversight, and less time can be spent on budgeting 
conflicts with the executive branch. Mr. President, all in all, I think 
it makes a great deal of sense.
  Biennial budgeting will not cure all of the Federal Government's 
ills, of course, but it is, I believe, a solid step toward restoring 
some fiscal and oversight accountability in our Nation's Capital. As I 
mentioned, now is not the time to debate it. However, I intend to 
pursue the issue in the future. Though I plan to withdraw the 
amendment, I am putting my colleagues on notice that this issue must be 
addressed. I urge my colleagues to join me in that effort.
  I ask unanimous consent that the amendment be withdrawn.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
amendment will be withdrawn.
  The amendment (No. 3974) was withdrawn.
  Mr. THOMAS. Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. EXON. Mr. President, I thank my friend from Wyoming for 
initiating the discussion--this has been talked about a great deal 
today--and for now withdrawing the amendment. That does not mean we are 
not going to be revisiting things like this in the future, but in the 
interests of moving the budget process along it is best to delay the 
discussion.
  We have today and we have tomorrow night, which is the time the 
majority has indicated they would like to complete work on the budget. 
We are already way late on the budget. It was supposed to be acted upon 
earlier. So I hope we could move ahead in a brisker fashion than we 
have before. I would simply say to my colleagues on both sides of the 
aisle, we are awaiting more amendments. If there were either a Democrat 
or Republican Senator seeking to offer an amendment right now, this 
Senator would yield. But I send out the call once again, we are going 
to have a crammed, packed day today without any votes. The votes will 
be stacked for tomorrow. But Tuesday is going to be one of those most, 
most difficult times.
  It appears to me, unless we can move in much quicker fashion than we 
have thus far, we are going to find ourselves tomorrow night into one 
of those situations where the Senate looks awfully bad. That is when we 
run out of the allotted time that has been yielded on the budget 
amendment, that is 25 hours on each side, and then we get ourselves 
into a situation where Members of the Senate insist upon offering 
additional amendments--and they have that right--but even though we 
just put up the amendment, there is no debate whatsoever. And then we 
immediately go to a rollcall vote.

  It always seems to me if historians would ever look at the U.S. 
Senate and address some of our worst, our unproductive moments, it 
would be that time that typically happens with the budget resolution, 
that is voting without debate, voting oftentimes without a majority of 
the Senate even having the slightest idea of what the amendment is 
designed to do.
  So this is the time to offer amendments. I hope on this Monday 
morning, before reckoning day Tuesday, we would get these amendments 
introduced. At the present time we already have 20 votes scheduled for 
tomorrow. Even if those were 10-minute votes, which all of them cannot 
be, we can see the difficult timeframe we are in.
  Also tomorrow, Tuesday, is going to be shortened by what I was 
advised recently, by the fact we will, most of us, will be going to a 
memorial ceremony at I believe 11 o'clock tomorrow morning at the 
National Cathedral as a result of the death of the late, great Admiral 
Boorda. So, that is going to take time out of our day tomorrow. I 
simply appeal to Senators on both sides of the aisle to come down now, 
offer your amendments, curtail as much debate time as we can so we can 
move ahead.


                           Amendment No. 4008

  There was an amendment introduced this morning by the Senator from 
Missouri that I would like to make some comments on in opposition. The 
pending business I make reference to is the amendment offered by 
Senator Ashcroft, amendment No. 4008.
  It sounds to me like deja vu all over again. While viewers of the 
Senate may have received the impression--let me repeat that--viewers of 
the Senate may have received the impression that we are trying to 
reduce the deficit here, it seems that the Senator from Missouri has 
another thing in mind altogether. He wants to revisit the voodoo 
economics of the early 1980's that got us into the fiscal mess that the 
United States finds itself in today. His amendment would cut taxes 
first, before we have done the hard work of cutting the deficit.
  This Senator is for cutting the deficit above everything else. This 
Senator, and many similarly situated, would like very much to reduce 
taxes. That is the ultimate goal of a politician these days. It is not 
a bad goal. But the thing we have to remember is that we cannot do 
everything at the same time if everyone is going in different 
directions. And I am afraid that is what is demonstrated above 
everything else, unfortunately, by the amendment offered by the Senator 
from Missouri. He has very specific ideas about where to cut taxes and 
I suppose that everyone favors tax cuts. But he is far less specific 
about how to come up with the money to pay for it.
  In what I heard of the Senator's speech, he did not say one word 
about where the money is coming from. So the arithmetic is simple. Cut 
taxes by $276 billion over the next 6 years--that is wonderful. That is 
what everybody is for. Who can be against that--unless you are sincere 
about cutting the deficit of the United States of America. I thought 
that was the No. 1 item of concern for Members on both sides of the 
aisle. Cutting taxes by $276 billion over the next 6 years, as 
suggested by the Senator from Missouri, sounds real good and it is a 
whopping tax cut. But the problem is, they look around to find the 
discretionary savings to pay for this at some later date. That is the 
kind of murky fiscal thinking that has got us into the situation we are 
trying to address today and have been trying to address for some 
months.
  Mr. President, I need to correct a few things that the Senator from 
Missouri said in his diatribe against government. That is another very 
popular thing to do. Cutting government and carrying on diatribes 
against how bad government is is really good politics, but is it good 
sense?
  The Senator from Missouri said many, many things against government. 
The Senator would have us believe that the 1993 budget bill is the 
cause of the tax burden on the middle-class citizens of America. 
Nothing--nothing, Mr. President--could be further from the truth, in 
reality. In reality, 98 percent of income taxpayers do not pay 1 more 
penny in taxes because of the 1993 tax bill. I wish we had

[[Page S5312]]

the time to go back to listen to the attacks from that side of the 
aisle on the 1993 tax bill. It would be astonishing for people to read 
about the reasons that the people on that side of the aisle voted 
against the 1993 tax bill. The 1993 tax bill is the main reason for the 
fact that we have had 3 successive years of reductions in deficit of 
the Federal Government of the United States of America--something that 
has not happened since Hector was a pup. The fact of the matter is 
that, primarily as a result of that bill, we have reduced the annual 
deficit from the range of $300 billion down to an estimated $140 
billion to $147 billion this year. The deficit has been cut by more 
than half. Millions of working families had their taxes cut because of 
the changes in the earned-income tax credit in the 1993 bill.
  Mr. President, there are seldom things that we do around here that 
are perfect. But it seems to me that at a time when we are trying 
desperately to put things together on both sides of the aisle to 
balance the budget by the year 2002 and return sanity to the financing 
of the Federal Government, the amendment offered by the Senator from 
Missouri is the worst possible step that we could take.
  Senator Ashcroft's amendment is a budget buster, by any definition. 
Senator Ashcroft has stated that the cost of the proposal would be $276 
billion over the next 6 years, over $45 billion annually. Democrats 
recognize that Social Security taxes present a burden to lower income 
taxpayers and have, as a result, strongly supported the earned income 
tax credit. The earned income tax credit was designed, in part, to 
offset these costs.
  Just so that we understand, the earned income tax credit is something 
that gives the very lowest income people of the United States of 
America a credit to try to get them up above the poverty line, get them 
out of welfare so that we will not have that welfare drain that is 
continuing to cause us problems.
  The Republican budget cuts eliminates that earned income tax credit 
for the poorest among us by $17 billion over the next 6 years. Last 
year's Republican budget would have actually increased taxes. It would 
have increased taxes on those lowest paid people in the United States, 
which amounts to about 7 million working families. This year's budget 
must include many of the same proposals.
  President Clinton, in his 1993 budget, lowered taxes on working 
families by increasing the earned income tax credit. That is designed 
to get people off welfare, get them to work, and have them contribute 
to society, as we would all like to have them do if they had an income 
above the poverty level. But I repeat, President Clinton's 1993 budget 
lowered taxes on these working families by increasing the earned income 
tax credit.
  In 1996, over 15 million families will receive a tax break as a 
result of that bill. In my State of Nebraska alone, over 78,000 
families will receive a tax cut averaging about $650 for the year. I 
want to emphasize once again that those are the lowest paid people in 
the United States that we are trying to send a lifeline to lift them up 
by their bootstraps, if you will, Mr. President, to give them a chance 
to be what most of them would like to be--successful taxpaying 
citizens.
  So when we are talking about cutting Social Security taxes, I simply 
say that I would like to do that, too. I also say that the Democratic 
Party, under the leadership of President Clinton, has done just that in 
another form--the earned income tax credit. I am sure that amendment 
offered by the Senator from Missouri is good politics. But it is not 
good government.
  I yield the remainder of our time, and I yield the floor.
  The PRESIDING OFFICER (Mr. Thomas). Who yields time?
  Mr. EXON. Mr. President, I yield myself what additional time off the 
bill that I may need. I want to drive home again how dire our 
circumstances are with the constraints of time. As I had announced 
earlier, we have 20 rollcall votes scheduled and more than 5 hours of 
voting time on Tuesday. If we start voting at 12 noon, we would be 
voting until 5 o'clock in the afternoon.
  In addition to that, we have an hour or two that will have to be 
taken out, obviously, for the memorial service for Admiral Boorda. In 
addition to that, we have the usual two caucuses, or conferences, of 
the two parties, which takes place at noon. I am also advised that 
sometime during the evening tomorrow, there is a dinner planned for 
Senator Simpson, one of our most distinguished Members, who is retiring 
from the Senate.
  So with that complicating factor, it makes good sense for Senators 
who can to now come to the floor and offer amendments. I see that, 
while I have been talking, my colleague from Texas has come to the 
floor, as I understand it, to offer an amendment. With that, I am 
pleased to yield the floor for the chance for the Senator from Texas to 
offer what I understand is an amendment.
  The PRESIDING OFFICER. The Senator from Texas is recognized.


                           Amendment No. 4009

(Purpose: To express the Sense of the Congress that the 1993 income tax 
        increase in Social Security benefits should be repealed)

  Mr. GRAMM. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Texas [Mr. Gramm] proposes an amendment 
     numbered 4009.
       At the appropriate place, insert the following:

     SEC.   . SENSE OF THE CONGRESS THAT THE 1993 INCOME TAX 
                   INCREASE ON SOCIAL SECURITY BENEFITS SHOULD BE 
                   REPEALED.

       (a) Findings.--Congress finds that the assumptions 
     underlying this resolution include that--
       (1) the Fiscal Year 1994 budget proposal of President 
     Clinton to raise federal income taxes on the Social Security 
     benefits of senor citizens with income as low as $25,000, and 
     those provisions of the Fiscal Year 1994 recommendations of 
     the Budget Resolution and the 1993 Omnibus Budget 
     Reconciliation Act in which the 103rd Congress voted to raise 
     federal income taxes on the Social Security benefits of 
     senior citizens with income as low as $34,000 should be 
     repealed;
       (2) that the Senate Resolution should reflect President 
     Clinton's statement that he believed he raised federal taxes 
     too much in 1993; and
       (3) That the Budget Resolution should react to President 
     Clinton's Fiscal Year 1997 budget which documents the fact 
     that in the history of the United States, the total tax 
     burden has never been greater than it is today, therefore.
       It is the sense of the Congress that the assumptions 
     underlying this Resolution include--
       (1) that raising federal income taxes in 1993 on the Social 
     Security benefits of middle-class individuals with income as 
     low as $34,000 was a mistake;
       (2) that the federal income tax hike on Social Security 
     benefits imposed in 1993 by the 103rd Congress and signed 
     into law by President Clinton should be repealed; and
       (3) President Clinton should work with the Congress to 
     repeal the 1993 federal income tax hike on Social Security 
     benefits in a manner that would not adversely affect the 
     Social Security Trust Fund or the Medicare Part A Trust Fund, 
     and should ensure that such repeal is coupled with offsetting 
     reductions in federal spending.

  Mr. GRAMM. Mr. President, I am making a modest proposal that the 
President and the Congress should work together to go back and fix a 
problem in the 1993 budget whereby the Democrats, while continuing to 
say that no American making less than $115,000 a year was going to pay 
more income taxes as a result of the 1993 Clinton tax increases, raised 
taxes on Social Security benefits, and the President tried to impose 
that tax on individuals making $25,000 or more.
  We ended up in Congress seeing it adopted on a straight party-line 
vote--I am proud to say every Republican voted against it--and taxes 
were increased on Social Security benefits for any individual who has 
earnings of $34,000, or more.
  I want to first note that we are already moving toward repealing the 
gasoline tax that was contained in the 1993 Clinton budget. It is my 
belief that we will break the logjam perhaps this week and allow a vote 
on repealing that gasoline tax. I think we will have at least 75 
Members of the Senate vote to repeal it. Gasoline prices have risen 
dramatically over the past few weeks, and this is the only way we can 
immediately lower the cost of gasoline to the American consumer. It is 
important to note that, in 1993, for first time in the history of this 
country we had a permanent gasoline tax increase that was not dedicated 
to road building.

[[Page S5313]]

  Historically the gasoline tax has been a discriminatory tax. It taxes 
people who live in rural areas more than those who live in urban areas. 
It taxes people who live in the West more than it taxes those who live 
in the East, and the same is true for those living in the South 
relative to those in the North. Overall, it hurts most those people who 
have to drive their cars and their trucks to work.
  To try to deal with the discriminatory nature of the gasoline tax, 
historically we have not used it--at least since we established the 
highway trust fund--as a permanent revenue source for general 
Government. Instead, we have used gasoline taxes to build highways.
  The argument has been that when people pay the tax, it is essentially 
a user fee that goes to build roads. The people who pay the most, 
because they drive the most, are the biggest beneficiaries of road 
maintenance and road improvement.
  We are well on our way, I hope and believe, to repealing the unfair 
gasoline tax in part because it was the first time a permanent gasoline 
tax went to the general revenue and not to road building. As a result 
of this first even change in the way we handle gasoline taxes, since 
1993 we have been taxing, in the words of our colleague from Missouri, 
people who have to drive to work for a living in order to subsidize 
people who do not work.
  So I think we are well on our way to fixing the first problem with 
the 1993 tax increase proposed by President Clinton.
  I am proposing today a sense-of-the-Senate resolution that will begin 
moving us toward fixing the second problem: the very heavy tax that was 
imposed on Social Security benefits.
  First of all, I want to dispel this notion, which is still embodied 
in the political rhetoric of the President and of the Members of 
Congress who voted for this tax increase, that the tax increase in 1993 
did not raise income taxes on people who made modest incomes. In fact, 
their standard line is nobody earning less than $115,000 a year paid 
more income tax.
  I want to begin dispelling this notion by looking at the 1994 1040 
formats and instructions that were mailed to over 100 million 
households in the country. I think that when we look at this tax form 
we can immediately see that the people who make the argument that 
``nobody's income tax was raised if they made less than $115,000 a 
year'' are not leveling with the American people.
  The way we can do this is first by looking at page 7. This is section 
1 and it says ``Before you fill in form 1040, here is what is new for 
1994.'' As you read down the first column, you see Social Security 
benefits, and it says, ``If your income, including one-half of your 
Social Security benefits, is over $34,000, if single--over $44,000, if 
married filing jointly--more of your benefits may be taxable. See the 
instructions for lines 20(a) and 20(b) on page 18 for details.''

  When you look at the actual 1040 tax form--which will be the same 
this year as well--if you look at line 20(a) you see you have to enter 
the level of your Social Security benefits, the amount that is taxable 
is added to your income and, therefore, your income taxes go up.
  Let me tell you why I think this tax needs to be repealed. First of 
all, what we are beginning to do with means testing entitlements and 
with this confiscatory tax on Social Security benefits, is basically to 
divide America neatly into two groups: one group of people which pays 
for programs and the other group which benefits from these programs but 
largely does not pay for them. When we have reached the point that we 
are imposing a confiscatory tax on Social Security benefits for people 
who earn $34,000 a year, what we are really saying to working Americans 
is, ``If you say save for your retirement, if you build up a private 
retirement fund, if you build up an annuity, if you save your money, 
and if you use the ability you had during your working lifetime to 
provide for your retirement, we are going to come in and take a 
substantial part of your Social Security benefits away from you. But, 
if you do not provide for your future, if you do not save, and if you 
do not build up your retirement, then you are not going to lose your 
Social Security benefits.''
  What we are in fact doing is we are encouraging Americans not to 
build up their private retirement because, if they do, we will then 
come in and take their benefits away from them. This is a part of a 
larger movement toward what is called means testing in all areas of 
American government.
  Basically the approach today is to say, if you earn a benefit and pay 
for it, great, but unless you meet an income test, even though you paid 
for the benefit, you do not get it. My view is that it would be wiser 
to divide earned benefits from unearned benefits. Under this system, if 
someone has earned a benefit by paying for it, they ought to get it, 
but if they are getting something they have not earned, then their 
eligibility should be judged based on their income. I believe that of 
all the provisions in the President's 1993 tax bill, the Social 
Security portion was probably the most unfair--even the President tried 
to hide what he was doing. If you will remember in the debate and all 
of the materials that were presented by the administration, what they 
tried to do was to argue that, well, if your mother has $34,000 of 
income, she is actually much richer because she probably owns her own 
home, and, if she moved out and lived in a tent, she could rent her 
house and you could count that as her income; or if she owns a 
refrigerator, if she sold it or rented it, she could earn income on it; 
or even if she has insurance--these were all considered sources of 
income. According to the administration, for the first time in American 
history that I am aware of, in 1993, the Democrats talked about imputed 
income, and it seems to me that what the Democrats were trying to do 
was trying to hide the fact that they were taxing Social Security 
benefits--the President wanted to tax individuals making $25,000 or 
more; Congress adopted a tax on those earning $34,000 or more.

  What I am doing in this amendment is very simple. First, I am noting 
the fact that income taxes were raised--you can see that right here on 
the 1040 form. There is no doubt about it; this Social Security tax is 
not some separate tax, it is part of your income tax. As every senior 
citizen know--you take half your Social Security benefits, you add it 
to your outside income, and then you pay taxes on it.
  What I want to do is to call on the President to join the Congress in 
order to come up with a proposal to repeal this unfair tax, and to 
offset it by cutting spending elsewhere. I am not in this amendment 
saying ``do it my way,'' I am saying let us work with the President on 
a bipartisan basis, and let us do it in such a way that it does not 
damage either Social Security or Medicare.
  I remind my colleagues that none of this tax went into the Social 
Security trust fund. In fact, permanent law was changed to put the 
money in general revenue in order to subsidize cost overruns in 
Medicare. What we need to do is to work with the President to try to 
come up with a way to repeal this unfair tax. I think this is a tax 
that should have never been adopted. I remind my colleagues that the 
President said in 1994 he raised taxes too much. I think the gasoline 
tax was one of those taxes, I think Social Security is another of those 
taxes, and I think it is very important that this tax be repealed.
  One final point, I see several of my other colleagues are here, but I 
want to reiterate a point that I made the other day. Something is wrong 
in these debates when the people who want to raise taxes always argue 
that every tax increase is only on rich people. This was the argument 
made in 1993, but subsequently, we have discovered that everybody pays 
gasoline taxes. As our colleague from Missouri in the best line of the 
debate said, the Government is taxing people who are driving to work 
for a living and giving the money to people who do not work. We now 
find that the Government is taxing Social Security benefits on people 
who earn $34,000 a year, but in the continuing rhetoric of those who 
constantly want to raise taxes, in 1993 we were supposedly only raising 
taxes on the rich.
  We have in the budget before us sufficient funding to give a $500 tax 
credit per child for every working family in America. As we all know, 
that credit starts to phase out for families who earn higher incomes. 
No one disputes the fact that 75 percent of the benefits

[[Page S5314]]

go to people who make less than $75,000 a year--in most families by the 
time they are making substantial amounts of money their children are 
already grown, so it is not surprising that the well off do not 
qualify.
  However, have you noticed that the same people who were arguing a 
gasoline tax is only a tax on the rich, and who argued that a Social 
Security tax on incomes over $34,000 a year was only a tax on the rich, 
are now claiming that a $500 tax credit per child is a tax cut for the 
rich?
  When you go back and look at the rhetoric, those who want to raise 
taxes always claim to be taxing rich people, and whenever anybody else 
proposes cutting taxes, they are accused of wanting to cut the taxes of 
only rich people. It is as if these taxers believe that everybody who 
works for a living is rich. It is as if they believe only rich people 
pay taxes.
  The reality, of course, is that in terms of the overall revenues of 
the country, there are not very many rich people. We could take the 
total income of all of the supposedly rich, and still not fund the 
Government for the month. Where the real revenues come from is middle 
and upper middle-income working families. What I want to do in my 
amendment is to have the Congress go on record as saying the 1993 tax 
hike on Social Security was a mistake, and have the Congress join 
together with the President to work out a bipartisan proposal so that 
we can repeal this Social Security tax. This tax is unfair, it 
discourages people from providing for their retirement, it punishes 
those who saved and sacrificed during their working life, and it takes 
benefits away from them relative to people who have not saved. That 
clearly is not good public policy. It clearly is not right. I hope we 
pass this amendment unanimously, and I urge my colleagues to vote for 
it tomorrow. I yield the floor.
  Mr. BROWN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. BROWN. Mr. President, I ask unanimous consent that the pending 
amendment be set aside so that I may offer an amendment.
  The PRESIDING OFFICER. Is there an objection?
  Mr. EXON. Mr. President, reserving the right to object, if I 
understand it, my friend from Colorado is offering another amendment 
before we have any more debate on the amendment just offered by the 
Senator from Texas?
  Mr. BROWN. That is correct. I think I can accomplish it in 60 seconds 
and I hope not to disturb or delay the----
  Mr. EXON. With that--anything to preserve time--I have no objection.
  The PRESIDING OFFICER. The Senator from Colorado.


                           Amendment No. 4010

(Purpose: To express the sense of the Senate that there should be a cap 
    on the application of the civilian and military retirement COLA)

  Mr. BROWN. Mr. President, I rise to send an amendment to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows.

       The Senator from Colorado [Mr. Brown] proposes an amendment 
     numbered 4010.

  Mr. BROWN. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the end of title III, add the following:

     SEC.  . SENSE OF THE SENATE REGARDING CAPPING FEDERAL 
                   RETIREMENT COLAS.

       It is the sense of the Senate that the assumptions 
     underlying the functional totals in this resolution assume 
     that there should be a COLA for only that portion of 
     individual civilian and military pension levels that do not 
     exceed $75,000 per year.

  Mr. BROWN. Mr. President, as one looks at the budget, the enormous 
gulf that faces us down the road is clearly related to entitlement 
programs and the prospect that many of our entitlement programs will 
literally be insolvent as we get into the years 2010 and 2020. I want 
to address that.
  One of the problems with addressing this is that many of these 
benefits are earned. Reasonable limitations, for example, on 
entitlement programs merit consideration; it would be wise policy, but 
the major problem is that we do not want to make changes retroactively.
  This amendment is very straightforward. It proposes a sense of the 
Senate that I hope will result in reconciliation reconstruction that 
says any military or civilian retirement paid by the Federal Government 
is entitled to a full COLA on the first $75,000 but that portion above 
$75,000 will not generate an additional COLA.
  Mr. President, why is it important? It would not save that much money 
only from the very, very high pensions right now. It is important 
because while there are very few pensions above $75,000 a year right 
now, 30 years from now there will be a large number of them and this in 
34 years will save literally tens of billions of dollars. It is a way 
of helping to stabilize those funds and make sure that they do not go 
insolvent in the future and do it in a way so that it does not affect 
people retroactively.
  I yield the floor, Mr. President.


                           Amendment No. 4009

  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I should like to return and take time for 
the remarks I am about to make in opposition to the Gramm amendment 
that was offered a few moments ago.
  Mr. President, first, on the Gramm amendment sense-of-the-Senate 
resolution. I want to explain exactly what a sense-of-the-Senate 
resolution is, so that everyone outside the Senate knows what it is? A 
sense of the Senate merely means that the Senate is saying, without 
having any effect whatsoever of law, that this is probably something 
that we should do. Therefore, the sense-of-the-Senate proposition 
offered by the Senator from Texas is not binding, is not going to 
accomplish anything, but it might make some people feel good, and it 
may well be a good political base for the majority party in the U.S. 
Senate.
  It is not unlike the amendment previously offered in this regard by 
the Senator from Missouri that I have made some comments on. I happen 
to feel that while we can have differences of opinion on all of these 
things, I simply say that the world is not going to turn around, nor is 
any law going to turn around, by long debate, as if it were fundamental 
to the free enterprise system, or wasting time on sense-of-the Senate 
resolutions. That, in my view, does not make sense.
  Mr. President, the President's historic deficit reduction package 
asks the top 13 percent of Social Security recipients--only the top 13 
percent of Social Security recipients--to pay taxes on those funds. 
Every penny of the revenue from this provision went to strengthen the 
Medicare trust fund.
  The Senator from Texas conveniently overlooked that when he said, 
quite cleverly, that not 1 penny of this tax on the highest 13 percent 
of the recipients in Social Security went back into the Social Security 
trust fund. That is true, but that is the trouble with debate 
oftentimes on the floor of the U.S. Senate. We are talking in half-
truths, and half-truths confuse the American people.
  By and large, people who draw Social Security, and qualify to do so 
after having paid in, are in the Medicare trust fund. We have heard a 
great deal about Medicare's being insolvent and going broke. I said on 
the floor of the Senate last week that a lot of that was merely to 
scare senior citizens.
  Where would the Medicare trust fund be today if the President had not 
decided and the Congress had not acted to make the top 13 percent 
highest paid recipients of Social Security pay some tax since the funds 
go directly into their Medicare trust fund to help them out when they 
get sick.
  This whole debate is phony, especially at a time when the Republican 
majority is hammering, suggesting increased premium payments for 
Medicare, when the majority is cutting Medicare far more than is 
necessary, and at a time when the majority is ``doing in'' rural 
hospitals. At the same time, they are turning around and drawing up the 
1993 tax bill as a means of a political attack during a very political 
year.
  I must say, for the information of the Senate, since the Republicans 
are

[[Page S5315]]

bringing up the 1993 tax bill and saying how bad it was, that I think 
every reasonable person would agree that because of the 1993 tax bill, 
for the first time in modern history we have had a steady 3-year 
decline in the annual deficit from above $300 billion down to under 
$150 billion. That helps the senior citizens and that helps America. 
But here they are dragging up 1993 all over again.
  If they want to talk about 1993, we at the present time are going to 
produce some research, and if we are going to waste the time of this 
body while we are considering a very important matter of balancing the 
budget, bringing it into balance by the year 2002, I will take some 
time to talk about what some Members on that side of the aisle said 
about the 1993 tax bill. I have been handed some statements already, 
but I will save those for another time.
  If we are just going to be out here talking, talking, talking, 
talking about restoring cuts in Social Security taxes to the top 13 
percent highest income recipients of Social Security, and if we are 
going to be talking about that and saying how important it is and how 
unfair it was for the President of the United States to do that, then I 
think, likewise, people who are even proposing this in the form of a 
sense of the Senate should come up and say, ``Where are they going to 
get the money?'' Where in the world are they going to get the money to 
do all of these things that they claim they want to do, which they are 
not doing with a meaningless, ineffective sense-of-the-Senate 
resolution? Is that being honest with the American people?

  So I simply say to my colleague from Texas, what he should do, if he 
is serious about this, is to say, ``Where is the money going to come 
from,'' because every time we have a Republican get up with these kinds 
of arguments, Mr. President, this logical question deserves an answer. 
Fine, we sure want to cut taxes, and we will go with you. Tell us where 
the money is going to come from to balance the budget by the year 2002, 
which I thought, and I am beginning to have second thoughts, was one of 
the main tenets of the Republicans' efforts.
  The 1993 tax bill that they are now attacking, once again, did not 
affect retirees who only rely on Social Security. Eighty-seven percent 
of Social Security recipients have not paid 1 penny more--let me 
repeat, 87 percent have not paid 1 penny more. Only the top 13 percent 
of Social Security recipients were affected by those provisions. Those 
beneficiaries live in households with an average net worth of over $1 
million.
  Social Security benefits were first made subject to taxation in 1984 
when Ronald Reagan was President of the United States. Ronald Reagan's 
Social Security provision affected 69 percent of older Americans who 
have lower income. Howard Baker was the Senate Republican majority 
leader and Bob Dole was the chairman of the Finance Committee. When I 
am forced to go back and make statements like this, I say to myself, 
``Jim Exon, you are doing the same thing that the Republicans are 
doing. You're talking about history to make political points.'' 
Therefore, Mr. President, I am going to get off that, I am going to 
heed my own advice, if they will simply let up on that side about 
offering amendments that make no sense, offering amendments that will 
make it impossible for us to balance the budget by the year 2002, at 
the very time they are talking about offering a constitutional 
amendment to balance the budget by the year 2002.
  With the attitude I am hearing from that side of the aisle, Mr. 
President, I wonder if the American people fully realize where they are 
trying to take us, and if they are sincere in what they are offering. 
Maybe it is all just politics.
  Mr. President, I yield the floor with an appeal once again that we 
can get this job done. We can balance the budget if we will be honest 
with each other. But I say we will never do it, Mr. President, if we 
are going to continue the type of diatribe that we are receiving on the 
floor of the Senate right now, this fiscal conservative will not be a 
part of.
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER (Mr. Brown). The Senator from Mississippi.
  Mr. LOTT. Mr. President, I rise in support of the amendment offered 
by my friend, the distinguished Senator from Texas, Senator Gramm. This 
amendment is a sense of the Senate that the Social Security tax 
proposed by the President and passed in 1993 should be repealed. Let me 
first respond directly to one of the comments just made by the Senator 
from Nebraska. I will tell him where this money is coming from. It is 
coming straight from the frugal, prudent, hard-working Americans who 
sacrificed and invested in America.
  This tax penalizes the people who have saved for their retirement. In 
Washington, when we talk about cutting taxes, everybody asks ``Where is 
it going to come from if you allow people to keep their own money?'' I 
feel totally comfortable telling the seniors that they are going to be 
able to keep a little bit more of the money that they worked for, that 
they have earned, that they have saved.
  There were so many things in that 1993 tax increase of $265 billion 
that I thought were wrong, the gas tax being one of them, for a 
varieties of reasons. That hits every American that drives an 
automobile, a truck, a boat, or flies in an airplane. Everybody got hit 
by that. I objected to it when it was proposed and enacted.
  But this one got me the most because we are taxing the Social 
Security benefits of our retirees, our seniors. It raised the 
percentage of taxable benefits from 50 percent to 85 percent. In my 
opinion, this was the most offensive of all the tax increases included 
in that package.
  Was it going to go, though, into the Social Security trust fund? No. 
Was it going to go directly into reducing the deficit? No. It was moved 
over into another account. This is a precedent that really worries me. 
We have started down a road here that I believe is wrong and will come 
back to haunt us many times.
  This is a sense-of-the-Senate amendment on the budget resolution. But 
there is no reason why we should not--and I hope that we will before 
this year is out in a bill that comes from the Finance Committee--
repeal this unbelievable 1993 tax increase.
  We fought it in 1993. I offered amendments in the Budget Committee to 
knock it out. I offered those amendments on the floor. They were 
defeated basically on a party-line vote; although, as I recall, I think 
maybe some Democrats actually did vote to knock it out, too. We fought 
it then, and we should not give up the fight now. That is why I 
introduced S. 50, a bill to repeal this onerous tax and why I am here 
today in support of Senator Gramm's amendment.
  We have taken action this year, at long last, to finally raise the 
limit on earnings that our seniors can keep without being forced to 
give up part of their Social Security benefits. At this point--or up 
until we made that change--if people between 65 and 70 made over 
$11,500 a year, they would start losing some of their benefits. At 
least we are going to now hopefully get that raised up to $30,000. I 
hope we will continue to move to completely eliminate this earnings 
test.
  I ask people when I make speeches around this city, and back at home 
in Mississippi, ``Can you defend the fact that we have penalized people 
in just that age group?'' You do not have the same penalty if you are 
71. But if you are 67, and you want to keep working and being 
productive and making a contribution and paying taxes, you get 
penalized. So the law that we passed recently to raise the threshold 
was one step in the right direction that we have made. And this is 
another one that we can make and we should make.

  Some people say, ``Oh, my goodness, once again you're worrying about 
taxing the rich. Yes, they may be elderly, but they must be rich.'' 
Well, as I recall, when the President sent this proposal up to us, it 
started to tax benefits if people had incomes of the princely sum of 
$25,000. In my State of Mississippi you can get by on that, but that is 
not rich anywhere in America. As a result of our efforts to kill this 
tax increase outright, we finally wound up getting that up to $34,000 a 
year. Once again, I ask you, is that somebody rich? I mean, if you have 
income of $34,000 a year, then you are hit with this tax. And the 
number of people who have to pay this unfair tax will increase each 
year because the thresholds are not indexed.

[[Page S5316]]

  I think there is nothing crueler that we could do when we are 
encouraging our seniors to stay involved and be productive than to 
penalize savings and working. It is harmful to the economy.
  We hope to make some changes in the tax area this year. Most of them 
I believe will help families with children, like the $500 per child tax 
credit. Some will help economic growth and the creation of jobs. But 
none is more important, in terms of fairness, than the repeal of this 
tax increase, taxes on Social Security benefits.
  Some people say, ``Well, it doesn't really affect your income 
taxes.'' Well, Senator Gramm, from Texas, pointed out that it certainly 
does. This is the form 1040. It specifically has a line for reporting 
Social Security benefits as income.
  I want to emphasize it again. It says that if your income, including 
one-half of your Social Security benefits, is over $34,000 if single, 
or over $44,000 if married filing jointly, your benefits may be 
taxable. See instructions on lines 20(a) and 20(b) on page 18 for 
details.
  There is no question that this is a tax increase on the elderly's 
income. I urge my colleagues to quit trying to defend it. Just 
acknowledge that it was a mistake. This is something that we can do for 
our seniors. We should clearly do it. I urge the adoption of this 
amendment by my colleague from Texas. I yield the floor, Mr. President.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I thank the Chair. I understand the Senator from Nebraska 
has a question.
  Mr. EXON. Would the Senator yield for a brief question, because I 
know that the Senator from North Dakota has worked long and very hard 
on this proposition? I assume that he is going to be talking about the 
efforts that he and I and others have been trying to put forth to bring 
sanity back into the financial structure of America.
  Yet I am very much concerned about the fact that we have people on 
the other side who are making critical statements and offering 
meaningless amendments to give them a forum to talk about things that 
do not make any sense. But the latest I hear now once again is this cry 
to reduce taxes on Social Security recipients. OK, I am for reducing 
taxes on everybody.
  The question I ask the Senator from North Dakota, who has done lots 
of research and is considered an expert on this, has the Senator heard 
or does the Senator understand, if we would adopt something like they 
are suggesting on that side into law, have they stipulated where the 
offset would be or does that just come from the tooth fairy?
  Mr. CONRAD. The Senator from Nebraska asks a very good question. I 
was thinking next of offering an amendment that would repeal all taxes. 
Let us repeal them all. Of course, I do not have to pay for such a 
proposal in the context of a sense-of-the-Senate resolution--just as 
some have not paid for their proposals.
  I must say, for sheer hypocrisy, the presentations I have heard this 
morning go beyond almost anything I have heard in a long time. I guess 
it is an indication that we are close to an election. On the one hand, 
our colleagues on the other side say they want to reduce the deficit 
and balance the budget. Yet they also propose reductions in income to 
the Federal Government without a replacement, which is the height of 
hypocrisy, and it is precisely what got this country into trouble in 
the 1980's.

  I would like to demonstrate this point with some charts. We can see 
what has happened with the deficit when our friends across the aisle 
were in charge.
  Mr. EXON. Will the Senator yield for a follow up question in that 
regard?
  Mr. CONRAD. I will be happy to yield.
  Mr. EXON. As long as we are talking about history--they are talking 
about 1993. I would just like to ask my friend from North Dakota, 
because I believe he will know the answer, in 1983, when Ronald Reagan 
was President of the United States and the Republicans were in control 
of the U.S. Senate, President Reagan recommended that we, at that time, 
pass the very first--the very first--tax on Social Security recipients 
above a certain income level. Am I correct in that? That was the year, 
was it not?
  Mr. CONRAD. I think that is correct, that that was part of the 1983 
act, which imposed a tax on Social Security of retirees.
  Mr. EXON. I am wondering if the Senator from North Dakota would, 
offhand, know how the Senators who are now assailing that action by 
President Clinton, how they voted on the first act in this regard?
  The Senator from Missouri was not a Member of either the House or the 
Senate at that time, but I believe the other Members of the Senate who 
are now assailing this, as if it were a new violation of the rights of 
Social Security recipients--would my colleague know offhand how they 
voted on that first act President Reagan suggested back in 1983?
  Mr. CONRAD. I do not presume to know how they voted. But I assume, 
since it was a recommendation from President Reagan, they may have 
supported their President in that recommendation.
  Mr. EXON. I thank my friend.
  Mr. CONRAD. Mr. President, let me just say, this is one of those 
things that is very easy to come out here and demagogue. It is 
precisely what is wrong in this country--not just wrong on their side 
of the aisle; we have plenty of it on our side of the aisle, too. It is 
exactly why this country is in trouble. Because the easiest thing in 
the world to support are policies that increase the deficit and add to 
the debt. That is exactly what has been going on here since 1980.
  This chart shows what has happened to the deficit since 1980--this is 
expressed in dollar terms. In 1980, the deficit that President Reagan 
inherited was about $70 billion. But look what happened during the 
Reagan years. The deficit absolutely exploded. It went up to over $200 
billion a year, finally hitting over $220 billion in 1986. The unified 
Federal budget deficit then came down as measured in dollar terms, and 
stabilized throughout the rest of President Reagan's term.
  Then we got a new President, President Bush, and the deficit took off 
again. There was a dramatic increase. The deficit went up to $290 
billion in 1992, the year before Bill Clinton became President of the 
United States. Since Bill Clinton has been President, these deficits 
have come down each and every year. The deficit in dollar terms has 
been cut in half since 1992.
  Why did this happen? It happened because some of us had the courage 
to vote for a package in 1993 that, yes, raised taxes, primarily on the 
wealthiest 1 percent in this country. It also cut spending. The 
combination, an increase in taxes primarily aimed at those who are the 
wealthiest among us, coupled with cuts in spending, cut the deficit in 
half. Bill Clinton deserves credit for that.
  Our friends on the other side of the aisle, when that 1993 deficit 
reduction bill passed, said it would crater the economy. They said it 
would add to unemployment. They said it would put us in a recession. 
They were wrong. They were wrong on every count. It reduced the 
deficit. As I have indicated, it cut the deficit in half. But not only 
did it reduce the deficit, it reduced interest rates, it sparked an 
economic recovery that has created over 8.5 million new jobs.

  Beyond that, we have had the highest level of business investment in 
30 years. We have had strong economic growth. The result has been a 
resurgent American economy. This country is now rated the most 
competitive nation in the world. One of the key reasons is because we 
reduced the deficit in 1993.
  Now, some on the other side of the aisle, seeking political 
advantage, want to go to the heart of things that contributed to that 
package of deficit reduction. What a profound mistake that would be. We 
should not allow deficits to start going back up, year after year, and 
to put the country back behind the 8-ball of debt. Debt, deficits and 
decline, Mr. President. Those are the three ``D's'' of those in the 
1980's who put this country on a diet of endless deficits and debt. 
What a profound mistake it would be to go on that course once again.
  I want to make clear, the Senator from Missouri has proposed an 
offset for his tax reductions. I do not put him in the same category of 
others who do not. I disagree with the spending cuts the Senator from 
Missouri has proposed, but at least he has had the honesty to stand up 
and say how he would

[[Page S5317]]

pay for his amendment. I commend him for having the forthrightness to 
say how he would pay for those tax cuts. That is the way we ought to do 
business here. Then we can have an honest debate about whether those 
spending cuts are wise or not.
  But I must say, I have no respect for people who stand on this floor 
and propose reducing revenue and do not say how they are going to pay 
for it. That is precisely what got us in this spot we are in today.
  The first chart I used today showed unified Federal budget deficits 
in dollar terms, and the record of our two previous Presidents. This 
next chart shows it in a little different way. This next chart shows, 
as a percentage of our gross domestic product, what has happened to the 
deficits. In other words, these are the deficits in relationship to the 
size of our economy.
  Again, one can see the pattern. Under President Reagan, the deficit 
soared from about 3 percent of our gross domestic product to over 6 
percent. The deficit as a percent of GDP then came back down as deficit 
reduction measures were put in place, to still over 3 percent. Then 
President Bush came into office and once again deficits soared as a 
percentage of the gross domestic product or as a percentage of the size 
of our economy. Then Bill Clinton took over in 1992, and the deficits 
have come down sharply as measured against the size of the gross 
domestic product--a very good start. It does not finish the job. We 
have much more that needs to be done for deficit reduction.
  Some say deficit reduction is not so important. Some say we now have 
the lowest deficits in the industrialized world, that we have made 
great progress. We are OK.
  Mr. President, nothing could be further from the truth. We have made 
significant progress. We have cut the deficit in half. We have cut the 
deficit, compared to the size of the economy, in half. We have the 
lowest deficits of any of the industrialized countries.
  The problem, Mr. President--and I would say the occupant of the Chair 
knows this well as a distinguished member of the Budget Committee--the 
problem is, we have the baby-boom generation coming, and we have a 
demographic time bomb that we have to face.
  Mr. President, this next chart shows where we are headed, in terms of 
our national debt. Very often people are confused at the difference 
between the deficit and the debt. The Federal budget deficit is the 
yearly amount that we spend over and above what we take in in 
revenue. The deficit is the annual difference between what we take in 
and what we spend. The deficit has been coming down. The debt is the 
cumulative total of all of our deficits. Obviously, as long as we 
continue to run deficits, the debt will continue to mount.

  This chart shows what will happen to the gross Federal debt with no 
action, with no further deficit reduction. Mr. President, it shows that 
when Ronald Reagan took over as President, the debt was less than $1 
trillion in this country, about $900 billion. Look what has happened 
since that time. The debt has gone up and up and up and up. Mr. 
President, that is a course that is unsustainable. It is especially 
unsustainable when one recognizes that we have the baby boom generation 
coming along. Medicare is currently among the fastest growing of any 
program in the Federal budget in terms of its cost. When baby boomers 
start to retire, the number of people who are eligible for programs 
like Medicare and Social Security will double from 24 million to 48 
million. Then, Mr. President, we will truly be in a circumstance in 
which we will face a budget calamity. That budget calamity has been 
outlined for us very clearly. If we fail to act, future generations 
will face either an 82 percent lifetime net tax rate or a one-third cut 
in all benefits.
  Mr. President, I ask those who are listening, those who may be senior 
citizens who are hearing that their taxes may be cut, I ask them to 
think, what does it mean to your grandchildren if we do not get our 
fiscal house in order? If future generations in this country face an 
82-percent lifetime net tax rate--yes, I am not misspeaking; an 82-
percent tax rate, or a one-third cut in all benefits--because that is 
where we are headed if we do nothing.
  Mr. President, let me put it another way. Last year the Entitlements 
Commission, on a bipartisan basis, told us that by the year 2012, if we 
fail to change course, every penny of the Federal budget will go for 
just entitlements and interest on the debt. There will be no money for 
any of the other things that people say they need in this country, 
whether it is parks, education, or law enforcement. There will be no 
money for any of that. All of it will go for just entitlements and 
interest on the debt by the year 2012. Mr. President, that is why we 
must take action.
  I have shown the chart that shows what has happened to the growth of 
the debt in dollar terms. It is skyrocketing. There is a little 
different picture that emerges when one looks at debt as a percentage 
of our gross domestic product. In other words, roughly speaking, debt 
in relationship to the size of our economy. There, too, one can see the 
trend line. It has been extremely unfavorable. We had a national debt, 
as a percentage of our gross domestic product, it was just over 30 
percent in 1980. Look what has happened. The debt, measured against the 
size of our economy, measured against the gross domestic product, has 
been rising, rising, rising. This is a course that is unsustainable. It 
is now, as we meet here in 1996, up to 70 percent. I say to my 
colleagues, we faced a much higher debt in relationship to our gross 
domestic product after World War II. At that time, debt to GDP was over 
120 percent. Under every President and under every Congress from after 
World War II until 1980, the debt measured against the size of our 
economy, measured against the gross domestic product, declined--
declined, went down.
  Look what happened after the Reagan administration, after we heard 
this same swan song that you can cut revenue and you will get more 
income and it will all add up. Hooey. Absolute hooey. It was a 
disaster. It added to the deficits, it added to the debt, and it 
created economic decline in this country because interest rates were 
forced up, made this country less competitive, and hurt every sector of 
our economy. Let us not repeat that mistake. That would be a profound 
error for the economy of this country.
  Mr. President, the good news is since the Clinton administration and 
Congress passed the 1993 deficit reduction bill, the debt as a 
percentage of GDP has leveled off. It has quit soaring and it has 
leveled off. Now, Mr. President, what we need to do is start the debt 
as a percentage of GDP going down, to put it in decline. That is our 
responsibility. That is our challenge. The best way to do that, Mr. 
President, is to adopt a budget plan that cuts spending because further 
deficit reduction, at least in my judgment, should be based on reducing 
spending, not on further tax increases.

  In fact, I have been part of a group, a bipartisan group, 22 
Senators, who will present an alternative plan this evening that not 
only cuts spending but also has a modest tax cut as well. Mr. 
President, we should not and we cannot have an overall plan that 
increases the deficit year after year or that fails to move us toward 
balance. That would be a profound mistake. Let me just show how 
profound a mistake it is to give up on this deficit battle. I 
understand, it is not particularly popular to cut spending, nor is it 
particularly popular to oppose further tax cuts that are not paid for. 
Mr. President, it is critical that we have the courage to do so. The 
future of our children is at stake.
  Mr. President, this chart shows our children's economic position in 
the year 2025 under two different scenarios. These are not my 
projections. These are the estimates of the General Accounting Office. 
This is a study they did a year or two ago. They concluded that if we 
take no action, by the year 2025 our children's economic position will 
be at about $28,000 a year. If, instead, we have a balanced budget by 
2002, our children's economic position in the year 2025 will be 
improved to over $37,000. That is a dramatic difference in the economic 
futures of our children.
  The question is, do we have the will to stay on the deficit reduction 
course that we have been pursuing for the last 3 years? Do we have the 
courage to continue to reduce spending? Do we have the courage to 
maintain the revenue base so these deficits continue to

[[Page S5318]]

go down and so the debt in relationship to the size of the economy 
starts to go down, so that interest rates are lower, so that more money 
is invested in this country, so that we can have greater economic 
growth? You cannot have investment without savings. The best way to 
improve savings in this country is to stop the ``dissavings'' by the 
Federal Government. The deficits represent dissavings. The deficit 
represents reducing the pool of money that is available in our society 
for investment. It is that investment that will fuel future economic 
growth.
  Mr. President, another way of looking at what the future holds is our 
children's debt in 2025. Again, in the no-action scenario versus a 
balanced unified budget by the year 2002, Mr. President, you can see 
very clearly under the no-action scenario, our children's debt in 2025 
will be over $60,000 for every person in this country. Mr. President, 
the alternative, if we balance the budget by the year 2002--and that is 
unified balance rather than true balance, but unified balance by 2002--
our children will have a debt of $4,800 instead of $60,000. That is why 
we have to be deadly serious about the job of deficit reduction.
  Mr. President, this chart presents where we are headed in a different 
way. It shows very clearly that current trends are not sustainable. 
This chart shows the total revenues of the United States. Again, this 
is measured as a percentage of the gross domestic product, Federal 
outlays as a percentage of the gross domestic product. The green line 
shows revenue, current revenue, projected until the year 2030. Revenue 
runs right below 20 percent of our gross domestic product. That is 
historically what Federal revenue has been. This chart shows 
discretionary spending as the blue bar. It shows net interest as a 
yellow bar. It shows entitlement spending as a red bar.
  Look at what this chart shows. This is 1970. Discretionary spending 
was by far the largest. Entitlements were relatively small in 
comparison. By 1980, discretionary spending was about the same size as 
entitlement spending. But entitlement spending was growing rapidly.
  In 1990, the deficit is worse. Discretionary spending is now smaller 
than entitlement spending. The yellow portion shows interest growing 
dramatically. In the year 2000, you can see the trend--entitlements, 
again, now much larger than discretionary spending. In 2010, 2020, the 
same pattern until we reach 2030. By that time all revenue of the 
Federal Government will be eaten up by entitlement spending.
  Mr. President, this is not a course that is sustainable. I indicated 
that, later today, a bipartisan group of us--22 Senators, 11 Democrats 
and 11 Republicans--are going to present what we call the centrist 
budget. It is a compromise between things that Republicans have 
advocated and policies that Democrats have advocated. It is an attempt 
to break through the gridlock, to actually achieve an agreement so that 
we can get this country on a course of deficit reduction that is 
sustainable and that will lead to unified balance in the year 2003. It 
is a 7-year plan of deficit reduction, but one that does not only 
reduce the deficits in the next 7 years, but creates a platform that 
will encourage deficit reduction beyond that point, and that will 
secure deficit reduction beyond that point because of entitlement 
reforms that are critically important to our economic future.
  Mr. President, this chart shows what happens under the Republican 
plan that is before us, which is the blue line. The green line is the 
President's budget plan. This lighter colored line, is the centrist 
plan. The red line shows what happens if we fail to take action. It is 
the so-called baseline. You can see that deficits will rise inexorably 
if we fail to take action.
  Under any of the other three plans, we will see steady downward 
progress with respect to the deficit.
  Mr. President, I hope my colleagues will give serious consideration 
to the centrist plan when we present it later today. I wanted to 
outline the differences on the 7-year plans between what the 
Republicans have before us, what the President has advocated, and what 
the centrist coalition has agreed to.
  Mr. President, this part of the chart compares the plan on a 7-year 
basis. It looks at the major categories of spending and compares the 
centrist plan, the Clinton plan, and the Republican plan. On 
discretionary spending, the centrist plan proposes savings of $268 
billion over the next 7 years. The Clinton plan, which is a 6-year 
plan, but if you extend the policy for 7 years, would have $312 billion 
of savings out of discretionary spending. The Republican 7-year plan 
would have $393 billion of savings out of discretionary spending.
  Our group, the bipartisan group, concluded that both the Clinton plan 
and the Republican plan are unrealistic in their discretionary savings. 
They are heavily backloaded in both cases --both the Republican plan 
and the President's plan. Frankly, we believe future Congresses are 
unlikely to hold to the path that they have outlined. That is precisely 
what has been wrong around here. We adopt plans that do not have any 
realistic prospect of coming true.
  Mr. President, on Medicare, which has been such a hot-button issue in 
this Chamber and across the country, the centrist plan saves $154 
billion over 7 years. The President's plan--and, again, he has a 6-year 
plan, but if you extend the policy 7 years, he has about $156 billion 
over 7 years. The Republican plan, $228 billion in savings out of 
Medicare over 7 years.
  Many of us would conclude that the Republican plan goes too far. 
Those savings are going to require reductions from what current law 
provides in a way that will be very difficult, especially for rural 
hospitals in the State that I represent.
  On Medicaid, the centrist plan, $62 billion over 7 years; President 
Clinton's plan, $81 billion over that period of time; and the 
Republican plan before us, $106 billion. Again, this is assuming you 
take their 6-year policy and extend it to 7. Welfare, EITC, centrist 
plan, $58 billion savings over 7 years; Clinton plan, $52 billion; and 
the Republican plan, if you take the 6 years of policy and extend it, 
$87 billion.
  A major difference between the centrist plan and the other plans 
before us is that we have made a technical correction to the Consumer 
Price Index of one-half of 1 percent. I just say, if there are those 
who are serious about entitlement reform, if there are those who are 
serious that we are on a course that is not sustainable. If there are 
those who are serious that we face a situation that will lead to either 
an 82-percent lifetime tax rate for future generations or a one-third 
cut in all benefits, because entitlement spending is running out of 
control, a technical correction of one-half of 1 percent in the 
Consumer Price Index is something that will help secure the economic 
future for not only senior citizens, but for the American economy as 
well.
  Mr. President, economist after economist have told us that the 
Consumer Price Index overstates the cost of living. Of course, we use 
the Consumer Price Index to alter Social Security payments, to index 
the tax system, because we want to make adjustments for increases in 
the cost of living. The problem is that the best evidence we have is 
that the Consumer Price Index is overstating increases in the cost of 
living. There is a mistake, and that mistake is very, very costly. A 1 
percent change in the Consumer Price Index, if it is overstating the 
cost of living by 1 percent, that is over $600 billion over 10 years.
  Mr. President, we had a group of economists--a bipartisan group--
review this question for the Senate Finance Committee. They came back 
and told us that the Consumer Price Index overstates the cost of living 
by from 0.7 percent to 2 percent.
  Mr. President, our bipartisan group decided that we would make a 0.5 
percent technical correction in the Consumer Price Index in order to 
more accurately reflect the cost of living. Mr. President, this will 
save $125 billion over 7 years. Neither of the other plans have this 
feature. I believe this is one of the most important parts of the 
centrist coalition plan. It is a significant long-term entitlement 
reform that will help to get us off the unsustainable fiscal course we 
are on.
  I say to my colleagues, if we cannot make this kind of technical 
correction, which has been supported by Alan Greenspan--he said the 
overstatement of the cost of living by the Consumer Price Index is most 
likely 1 percent, and Alice Rivlin in her book of deficit

[[Page S5319]]

reduction options that she put out indicated the overstatement may be 
from 0.4 percent to 1.5 percent. As I stated previously, a bipartisan 
group of economists, led by Michael Boskin, former chairman of the 
Economic Advisers under President Bush, recommended the overstatement 
is from 0.7 percent to as much as 2 percent. Our group has said that we 
ought to at least make a change of 0.5 percent and save $125 billion.
  On the question of tax cuts, we do have a tax cut in the centrist 
plan. Not all of us thought it was the better part of wisdom. Mr. 
President, the view prevailed in our group that there ought to be a tax 
reduction. I personally believe that we ought to balance the unified 
budget first. I mean, I have been here 9 years. I have heard over and 
over the swan song that we have a plan that is going to reduce the 
deficit, and over and over the deficit has gone up. It has not gone 
down. Only after the 1993 plan that we on this side supported, did we 
actually see the deficit go down both in dollar terms and measured in 
terms of our gross domestic product.
  Mr. President, over and over before that we were told there were 
plans that were going to reduce the deficit. They did not. They failed. 
My own judgment is we that ought to prove that we are balancing the 
budget and getting the job done before there is a tax reduction. But 
that was not the view of the centrist group. The consensus was there 
ought to be a tax reduction.
  So in our group there is a net tax reduction of $105 billion over 7 
years. That compares to the Republican plan of $151 billion over 7 
years and President Clinton's plan, which is roughly a wash over a 7-
year period, if you extend the first 6 years' policy.
  Mr. President, we will have a lot more to say about the centrist plan 
later tonight. I feel deeply that the greatest challenge facing this 
body and facing this country is to stay on the path of deficit 
reduction. Let us not be distracted by those who say that we cannot cut 
anything. That is not right. And let us not be distracted by those who 
say we can cut taxes and we will get more revenue. We heard that swan 
song before. All it led to was escalating deficits, escalating debt, 
and a decline in the strength of this country.
  I hope deeply that we have the courage to stay on the course of 
deficit reduction. The only group that on a bipartisan basis has been 
able to reach agreement is this centrist coalition of 22 Senators--11 
Democrats and 11 Republicans. All we have gotten around this town in 
the last year has been partisanship and gridlock. I suppose, if you 
were looking at where we are and where we are headed, you would say the 
greatest likelihood is that, with the course that we will stay on in an 
election year, that there is a low probability that we will be able to 
get together and do something even as important as putting together a 
plan that will allow us to achieve significant deficit reduction over 
the next 7 years. I hope very much that the conventional wisdom is 
wrong. I hope very much that somehow out of the partisanship of an 
election year, we will find the ability and the will to work together 
to do something which would be great for our country, which is to 
reduce the deficit, keep us on a path moving toward balance so that we 
can reduce interest rates, so that we can see this economic revival 
continue and strengthen, and so that we can look at our children and 
say honestly that we are helping to secure their economic futures.
  Mr. President, nothing could be more clear than that deficit 
reduction has helped strengthen this economy. That is a course we ought 
to stay on. That is a commitment that we ought to make to each other, 
that somehow we find a way to bridge the differences and reach 
agreement, agreement on a plan to at least give us a unified balance by 
the year 2003. We can do that. The model is before us. We have a group 
of Senators who on a bipartisan basis have done it.
  Mr. President, let us complete the job. I thank the Chair. I yield 
the floor.
  Mr. ASHCROFT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. ASHCROFT. Mr. President, I inquire of the Chair as to the pending 
amendment and as to the time remaining on both sides.
  The PRESIDING OFFICER. The pending amendment is the Gramm amendment. 
The sponsor has 35 minutes 45 seconds, and the other side has 8 minutes 
54 seconds.
  Mr. ASHCROFT. Thank you, Mr. President.
  Mr. President, would the Chair please inform me when there are 25 
minutes left?
  The PRESIDING OFFICER. Yes.
  Mr. ASHCROFT. Mr. President, I thank the Senator from North Dakota 
for acknowledging in his remarks that my particular amendment contained 
offsets. There was some misunderstanding about that. The Senator from 
Nebraska indicated that we had been inadequately focused on offsets. 
The truth of the matter is I would not propose reductions in taxes 
without reductions in spending. I think that is important.
  I want to make a few remarks about the Gramm amendment because I 
think it is related to the things that ought to concern us the most.
  The Gramm amendment talks about relief for individuals who are paying 
taxes on their Social Security benefits. But what is interesting to me 
is that the Democratic side of the aisle seems to be so reluctant to 
grant that relief. There seems to be every reason to say that the 
relief is appropriate, because when a worker pays his Social Security 
tax--that is a tax, and the worker, under our current law, has to pay 
income tax on the money that he uses to pay his Social Security tax. So 
that is a double tax.
  Then, if the individual gets that money back from the Government and, 
because he is working, he has to pay a tax on that money again, that is 
a triple tax. The old song ``Sixteen Tons'' said it right. ``If the 
right one doesn't get you, the left one will.'' But it looks to me like 
in this instance we say, ``If the right one doesn't get you and the 
left one misses you, we are going to kick you out of the ballpark.'' It 
is just simply wrong for us to tax the money first, then to ask people 
to pay the Social Security tax with what is left over, and then when 
the person is eligible for the Social Security to tax them a third 
time.
  I do not know why the Democratic side of the aisle would insist on 
this triple whammy. It is just unreasonable, inappropriate, and 
counterproductive. It inhibits growth and stifles the enterprise that 
we want people to continue to have into their later years in life.
  Senator Gramm has cogently outlined his proposal. Senator Lott spoke 
clearly in its behalf. Somehow to let people have money that they have 
already paid tax on twice seems to be an affront to the folk on the 
other side of the aisle. We need to understand that when people earn 
money, it is their money, and taxing it once is enough. Taxing it twice 
is an outrage. Taxing it three times is just totally unacceptable. The 
triple tax that exists here is something that we ought to abandon and 
abandon rapidly.
  Senators from other side of the aisle have stood to talk about and 
question the sincerity of people on this side of the aisle as it 
relates to tax relief. They have said that every time we propose tax 
relief it increases the deficit.
  Well, that is kind of an interesting thing that suggests because we 
lowered tax rates, somehow there was less money coming into the 
Government, and because there was less money, we had much, much higher 
deficits.
  Frankly, that misrepresents, misguides, misleads and promotes 
misunderstanding in the public. They talk about the so-called siren 
song of lowered tax rates, and they say it always leads to higher 
deficits. I do not think so.
  I quote from an article in the Wall Street Journal. As a matter of 
fact, these statistics were provided to the Journal by Senator Abraham 
from the State of Michigan. ``The growth of real tax revenues was 65 
percent higher per year in the low tax rate 1980's than in the high tax 
rate 1990's. From 1982 to 1989, Federal revenues adjusted for inflation 
expanded by an average of 3.8 percent per year despite a sharp 
reduction in tax rates.'' So what we had in those years was lower tax 
rates, but because of the growth in the economy, we had higher revenues 
for the Government.
  Now, that was a formula for growth. It was a formula where 
individuals could find growth in their own lives. It was a way to have 
a better economy. It was a way to decrease the deficit. When you have 
more money coming in, the only way to increase the deficit is to

[[Page S5320]]

have sharply increased spending. Conveniently, those on the Democratic 
side of the aisle in this Chamber never associate the deficit of the 
1980's with the sharply increased spending. They want to talk about a 
reduction in tax rates. They never want to talk about the fact that the 
tax revenues went up and that their spending went up much, much higher 
than the revenues. And I do not blame them for their reticence. But the 
truth is that every time the other side of the aisle talks about 
deficit reduction, it means more money out of the American working 
person's pocket. Every time they talk about debt, Americans should grab 
their wallets, because the only way they see to reduce the federal debt 
is to increase taxes. They do not see debt reduction by way of 
curtailing spending, and they certainly do not see it as a means of 
growth.
  I thank the Senator from North Dakota for recognizing that my 
amendment to stop making people pay income tax on their Social Security 
tax includes cuts in spending which fully offset any costs. Some 
speakers on the Democratic side of the aisle literally questioned the 
sincerity of my proposal. I think that is inappropriate, because I know 
what it means to operate with fiscal reliability and integrity.
  During my time as Governor, I learned what it meant to balance a 
budget. We balanced every one. We did more than that. We established a 
cash flow operating reserve with hundreds of millions of dollars, 
making sure that we always could cover our expenditures in a timely 
way. In addition to a cash flow operating reserve, we established a 
rainy day fund for the State so that when troublesome times came, we 
could have money set aside in advance to accommodate unanticipated 
expenses. That is not the kind of thing that comes from demagoguery or 
insincerity. It comes from understanding that if you have the right 
growth rate and you have the right restraint in spending, good things 
will happen.
  The folks on the other side of the aisle seem to think that it is 
alright to tax the so-called rich--that it is easy to do and it will 
not hurt anybody. I think that is a fallacy that ought to be exposed. 
Taxing the rich usually hurts everybody. They talk about the fact that 
98 percent of the tax increase of 1993 was on people who were so-called 
rich. Well, you know and I know that their definition of rich is 
different than that of most people.

  Not only that, the point is that by having that tax increase, the 
largest tax increase in the history of the country, they stifled this 
economy. They put a lid on it.
  Although wages were up 1 percent last quarter--listen to this--this 
is the first time in 5 years that wages have inched ahead of increases 
in the cost of living.
  One quarter out of 5 years we finally had wages get up by 1 percent 
over the cost-of-living increase, and the Democrats are claiming that 
their tax increase did not have a negative impact on the economy. I 
would call that a pretty negative impact. No wonder the people across 
America feel a wage squeeze. We have a situation where economic 
stagnation is hurting folks.
  The truth of the matter is that workers saw no growth in their income 
in the first 3 years of the Clinton administration compared to robust 
annual growth during the Reagan years. I believe that we ought to be 
growing our economy. We ought to be growing it aggressively.
  Here is what the Heritage Foundation said about the 1993 Clinton tax 
increases. They said, ``The Clinton tax increases robbed every 
household of $2,100 and cut personal savings by $138 billion.'' When 
you put a lid on the economy, even with a tax increase which you say 
threatens only the wealthy, you indeed hurt all of the people.
  I would ask that the Chair allot me an additional 3 minutes.
  The PRESIDING OFFICER (Mr. Frist). The Senator may resume.
  Mr. ASHCROFT. So I have risen today to say that yes--we should think 
about reducing the deficit, but let us think about it by way of 
providing the restraint in spending which accompanies the tax break in 
my amendment, so that there would be absolutely no increase in the 
Government's debt burden.
  Second, the economic growth effects of my proposal to provide a 
deduction for Social Security taxes would help us pay off the debt much 
more quickly. Since we have already offset all of the loss in revenue, 
the growth in the economy would provide a tremendous opportunity to 
garner additional revenue from the 500,000 new jobs from the 0.5-
percent growth in the gross domestic product, and that would accelerate 
our ability to pay the debt.
  For the Democrats who are loathe to allow people to spend their own 
money and prefer to have Government do all the spending, this should be 
a win-win situation. For modest cuts, a 1.8-percent cut in total 
Federal spending in fiscal year 1997, we give the people an opportunity 
to create 500,000 new jobs, 10,000 new jobs in every State, to boost 
gross domestic product by one-half of 1 percent, and to aggravate the 
deficit not at all. If the economic activity from the surge in jobs and 
the surge in gross domestic product resulted in the anticipated 
increase in tax revenues, we would accelerate paying off the debt 
substantially. Those who have said they have been around here for years 
and they have heard this song before should talk not about the proposal 
but should talk about their performance.
  Their performance in prior years has been, yes, on occasion to cut 
taxes, but, no, never on occasion to cut spending. On average, spending 
went up 1\1/2\ times for every one time that taxes were reduced. The 
truth of the matter is, you cannot overgrow spending and have 
reductions in taxes and expect the deficit to disappear, but you can 
combine the therapeutic impacts of spending cuts and tax cuts together 
to give a one-two punch to the deficit.
  It is time for us to say that the proposal to reduce the tax burden 
on working Americans by providing a deduction for Social Security taxes 
is a responsible one. There are offsets. It is not a set of offsets 
that are imposed only in the outyears. They begin large and they stay 
large, because this is substantial tax relief to the American people. 
It is not a budget buster, it is a budget booster, because the growth 
in the economy will help all American families. The average American 
family with two working adults will benefit by $1,770. For those 
Members of the opposition who would be interested in a responsible tax 
cut, I invite them to confer with me, because this is one that can be 
done and will work.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, am I correct in that the Gramm amendment is 
the amendment before the body at this time?
  The PRESIDING OFFICER. That is correct.
  Mr. EXON. Following my remarks, which will be brief, I ask unanimous 
consent, since it will be this side of the aisle that will be up for 
the next amendment, that following my remarks, the amendment offered by 
the Senator from Texas be temporarily set aside so that the Senator 
from Iowa can offer an amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. EXON. Mr. President, I have been listening with keen interest and 
appreciation to my colleague from Missouri with regard to his 
amendment. I will simply say to the Senator from Missouri that as him, 
I was the Governor of Nebraska. I will simply say that everything that 
the Senator from Missouri took credit for during his tenure as the 
distinguished Governor of a neighboring State follows almost exactly 
the record of this Senator as a Democratic Governor of the great State 
of Nebraska.
  So I think, as far as our background credentials are concerned with 
regard to fiscal sanity, we are generally parallel.
  I simply say that I am opposed to the amendment offered by the 
Senator from Missouri for the reasons that I stated previously. We 
still do not know the details of where the offsets would come from to 
make up for the big, huge tax decrease that is being suggested.
  I believe that, while they are not spelled out in the detail that we 
would anticipate, by and large, most of the cuts that are being 
proposed, without specifics from the Senator from Missouri, will fall 
into discretionary spending. As has been pointed out by the excellent 
address to the body by the Senator from North Dakota a few

[[Page S5321]]

moments ago, those particular discretionary spending items are the ones 
that already have been dramatically reduced.
  I was particularly struck, though, by statements from the Senator 
from Missouri with regard to what has happened to the economy. The 
Senator from Missouri indicated that the economy had been stifled--I 
believe that was the word, or something akin to it--that the economy of 
the United States of America had been stifled as a result of the 1993 
action which, I will point out again, was not supported by a single 
Republican in the House of Representatives or a single Republican in 
the U.S. Senate.
  If the economy was stifled as a result of that action, right or 
wrong, then we should do a whole lot more stifling because, by and 
large, the economy of the United States has grown at an adequate rate, 
the stock market has reached the highest record in history during this 
stifled period, unemployment has gone down, and the confidence of the 
American public has gone up. In reality, we have 8.5 million new jobs 
as a result of that stifling that the Senator from Missouri cites. We 
have a faster growth rate than any other comparable industrialized 
nation in the world.
  In bringing up the 1993 budget that was authored and suggested by the 
President of the United States, the people on the other side of the 
aisle are continuing to bring up statements that simply are not 
accurate. Calling the economy of the United States stifled since 1993 
is something that no one--no one--can justify or believe if one looks 
at the record.

  I indicated earlier that I was doing a little bit of research on what 
some of the Republicans said about that budget when it was enacted in 
1993. Evidently, they are trying the same tomfoolery on the U.S. Senate 
with a debate on this matter that has nothing to do with 1993, but 
evidently they think it is a good political thing to do. They were way 
off base with all of their pronouncements, with all of their arguments 
at that time, and I think they are just compounding their errors and 
their illogical prognostications here today. As I remember it, the Vice 
President of the United States had to cast the deciding vote in the 
Senate.
  I will simply cite here--I will not mention names because names are 
not particularly important--but certainly one of the most prominent 
leaders in the U.S. Senate from that side of the aisle said on page 
S4169, March 13, 1993:

       Four years from now, we are going to have a deficit of 
     about $400 billion and the economy is going to be on its 
     back.

  Well, it is not quite 4 years, but close to it and no one can say 
that the Senator's statement was accurate.
  Another leader on the Republican side of the aisle said in a similar 
regard on page S4170, March 31, 1993:

       This is an invitation to continued recession and slow 
     growth, because business cannot create jobs with this kind of 
     a new burden.

  And then another Republican, one of my really good friends, said on 
page S3109 on March 18, 1993 about the 1993 bill:

       I think it may be the most recessionary ``deficit reduction 
     package'' in history.

  There are a litany of those kinds of statements that were totally 
wrong, inaccurate. Though I say that I suspect many of us have said 
totally inaccurate and untrue things, I do not for a moment question 
the sincerity of the Members that I have just quoted from on that side 
of the aisle. But I think it is clear that their predictions of things 
to come if that 1993 act was enacted into law would be a disaster--they 
may have been sincere in that belief at the time, but I think the 
record clearly indicates that they were wrong. Their predictions were 
way off base, and they were inaccurate.
  I think basically the same thing, therefore, would follow with regard 
to their continued speeches and amendments attacking that 1993 act. I 
will match the record of the last 4 years with regard to the economy of 
the United States of America against the previous 4 years on any 
economic indicator--jobs, growth, deficit, you name it.
  The PRESIDING OFFICER. All time has expired on the amendment.
  Mr. EXON. I thank the Chair. I was about to yield the floor. I hope, 
with regard to the previous agreement, the Senator from Iowa will be 
recognized.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Iowa is recognized.
  Mr. HARKIN. I thank the Chair.


                           Amendment No. 4011

  (Purpose: To provide that the first reconciliation bill not include 
Medicaid reform, focusing mainly on Welfare reform by shifting Medicaid 
       changes from the first to the second reconciliation bill)

  Mr. HARKIN. Mr. President, I have an amendment I send to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Iowa [Mr. Harkin], for himself, Mr. Biden, 
     Mr. Bryan and Mr. Dorgan, proposes an amendment numbered 
     4011.

  Mr. HARKIN. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 46, line 12, decrease the amount by 
     $72,000,000,000.
       On page 49, line 17, increase the amount by $1,900,000,000.
       On page 49, line 18, increase the amount by 
     $72,000,000,000.

  Mr. HARKIN. Mr. President, I send this amendment on behalf of myself, 
Mr. Biden, Mr. Bryan, and Mr. Dorgan. This is the first of two 
amendments which I will offer. I will try not to take too much of the 
Senate's time. I just want to explain them briefly, what they do.
  First, this amendment which I just sent to the desk, Mr. President, 
is very simple and very straightforward. It takes the first 
reconciliation bill, which is supposed to have both welfare and 
Medicaid together in it, and divides it. So what my amendment would do 
is, welfare reform and welfare would still be in the first 
reconciliation bill, but Medicaid would become a part of the second 
reconciliation bill, the one concerned with all of the other 
entitlement changes.
  Mr. President, I believe there is overwhelming support in this body 
and in this country for tough, commonsense welfare reform. The Senate 
passed such a bill by a vote of 87 to 12 last year. The President has 
repeatedly said he would sign such a plan, and even leaders in the 
other body said the bill should be passed.
  Unfortunately, the Senate-passed measure was changed in conference in 
ways that were unacceptable to the President and to many Senators. So 
it is time to get back on track. Our country's welfare system is 
broken. It is wasting tax dollars and it is wasting human lives.
  Our present welfare system is unfair, unfair to the taxpayers and 
unfair to the people on welfare. It is time to make welfare work for 
America. In my own State of Iowa, we have a commonsense welfare reform 
that is working and getting results. It was done, I might add, in a 
bipartisan, well-crafted manner.
  In the late 1980's, we had experiments around Iowa on the best ways 
of delivering welfare, getting people off of welfare, that was 
incorporated into a bill that passed the Iowa Legislature in 1993. So 
we have had it in existence now for 3 years. Quite frankly, in that 
short span of time that it has been in effect--not quite 3 years; a 
little over 2 years--taxpayers have saved money, about one-third of 
those on welfare are now working, and fewer families are on the welfare 
rolls.
  I just have some charts here to illustrate what has happened in Iowa 
with the Iowa welfare reform program. It came into existence in the 
last of September of 1993--so the first of October 1993. At that time, 
we had about 18 percent of the people on welfare working. As of March 
of this year, we had almost 33 percent working, almost a third of those 
on welfare now working. You can see the trend line has been up.
  If I am not mistaken, I believe Iowa now has the distinction of 
having a higher percentage of people on welfare working than any State 
in the Nation. I believe that is right. That is because of this very 
commonsense welfare reform proposal that we passed. So that is the 
number working, and the trend line is still going up.
  Here is the caseload that we have from September of 1993, when we had 
36,404. We had a big bump up when we made the changes. Everyone knew 
that was going to happen. But since that time the trend has been 
constantly

[[Page S5322]]

down. We now have 33,320. So the trend line has been down. So we are 
successfully getting people off of the welfare rolls and into self-
sufficiency.
  The third chart shows exactly what we are talking about in terms of 
expenditures. The green line is the expenditures on welfare in Iowa for 
1992 to 1993, the year prior to the new plan going into effect. You can 
see we spent a total of $13.6 million that month. This is the last 
year; this is from April of 1995 through April of 1996. As you can see, 
there was $12.5 million, down to a little over $11 million. Just in the 
2 years it has been in existence, we have gone from $13.6 million down 
to $11.1 million.
  So we have fewer people on welfare. We have more people working. We 
are expending less money on welfare. So by any yardstick of 
measurement, the Iowa program is working. Again, I think that one of 
the key ingredients is that it puts common sense ahead of ideology. It 
is built on good ideas that work, and it is founded on the driving goal 
of achieving self-sufficiency, not just getting people into a job, but 
getting people to achieve self-sufficiency.
  I might add, it was done in a bipartisan manner. It passed the Iowa 
Legislature by a huge bipartisan vote, signed into law by the Governor. 
It is working. I believe this is the way we ought to approach welfare 
reform, in a nonideological, bipartisan fashion.
  But I think, again, the budget before us lumps welfare reform in with 
Medicaid reform. Quite frankly, Medicaid reform proposals are far more 
controversial. If they are added to welfare reform, it will be almost 
certainly what has been called a ``poison pill'' that would result in a 
Presidential veto.
  Mr. President, I want to make it clear, my amendment does not endorse 
the Medicaid cuts proposed in the pending measure. It simply shifts the 
sums assumed in the resolution to the second budget reconciliation bill 
which can be reached in a wide variety of ways or not reached at all.
  The reality is, there is little chance of enacting a bipartisan 
package on Medicaid at this present time. But there is a good chance of 
enacting a bipartisan bill on welfare reform. Why do I say that? 
Because we have already done it. We did it last fall by a vote of 87-
12. It had overwhelming bipartisan support.
  So let us not kill commonsense welfare reform. Let us not walk away 
from the common ground in favor of scoring political points. That I 
believe would be a tragic mistake. So this amendment says, let us put 
aside ideology, let us work together to give the American people what 
they want and what we can achieve, and that is genuine, balanced, and 
fair welfare reform. That is what our amendment is designed to do, to 
make sure that we address welfare reform separate and apart from 
Medicaid reform and divide those issues up in the two reconciliation 
bills that we will have in front of us.
  Mr. President, I yield the floor and note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HARKIN. 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. HARKIN. For the purpose of offering an amendment I ask unanimous 
consent that the pending amendment be temporarily laid aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 4012

   (Purpose: To restore funding for education, training, and health 
programs to a Congressional Budget Office freeze level for fiscal year 
 1997 through an across-the-board reduction in Federal administrative 
                                 costs)

  Mr. HARKIN. Mr. President, I send an amendment to the desk on behalf 
of Mr. Specter.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Iowa [Mr. Harkin] for Mr. Specter, for 
     himself, Mr. Harkin, Mr. Hatfield, Mr. Jeffords, and Mr. 
     Pell, proposes an amendment numbered 4012.

  Mr. HARKIN. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The amendment is as follows:

       On page 25, line 17, increase the amount by $1,200,000,000.
       On page 25, line 18, increase the amount by $1,200,000,000.
       On page 27, line 16, increase the amount by $1,500,000,000.
       On page 27, line 17, increase the amount by $1,500,000,000.
       On page 42, line 2, decrease the amount by $2,700,000,000.
       On page 42, line 3, decrease the amount by $2,700,000,000.
       On page 52, line 11, decrease the amount by $1,400,000,000.
       On page 52, line 12, decrease the amount by $1,400,000,000.
       On page 52, line 14, increase the amount by $1,400,000,000.
       On page 52, line 15, increase the amount by $1,400,000,000.

  Mr. EXON. Mr. President, I wonder if the Senator would yield before 
he goes into the second amendment? I have a very brief statement that I 
want to make in support of the first Harkin amendment. From what I know 
of the second amendment I might not be in support of it. I do not wish 
to confuse the Senator or the Senate as to what the intentions are of 
the Senator from Nebraska.
  Mr. HARKIN. I yield such time as the Senator desires.


                           Amendment No. 4011

  Mr. EXON. Mr. President, the Harkin amendment reveals the truth about 
the Republican strategy, it seems to me, better than anything else. If 
this amendment is rejected, it will prove that they are not serious 
about enacting bipartisan welfare reform this year, legislation that I 
think is a must. Unlike welfare reform there has not yet been a broad 
bipartisan agreement on specific Medicaid legislation. This is because 
the Republicans have not backed down from their proposal to block grant 
this program.
  While Democrats and Republicans are closer to agreement on the level 
of Medicaid savings, we remain quite far apart, Mr. President, on how 
to achieve those savings. Democrats will not agree to end guaranteed 
coverage for children, pregnant women, elderly, and disabled Americans. 
Yet the Republican proposal gives no sign of maintaining those vital 
guarantees.
  Nor are any details provided to support their claim that this 
proposal reflects the National Governors' Association plan. Democrats 
are justifiably skeptical that States would be protected from economic 
fluctuations, changing demographics, and natural disasters, a key 
element of the Governors' plan under a Medicaid block grant. Therein 
lies the problem. If our Republican colleagues are serious, they would 
agree to enact bipartisan welfare reform first and then work to achieve 
a balanced budget that restrains Medicaid spending. This amendment 
would make that course possible. I appreciate it being offered by my 
colleague from the neighboring State of Iowa.
  I yield back any of the time yielded to me.
  Mr. HARKIN. Mr. President, I thank my colleague and friend from 
Nebraska, the ranking member of the Budget Committee, for his kind 
words and insight into this amendment. I think, again, he hit the mark 
correctly, that if we are really interested in passing a bipartisan 
welfare reform bill this is the only way we are ever going to be able 
to do it. I hope we can get good support for this amendment on both 
sides of the aisle and get about the business of passing a good, 
strong, welfare reform bill this year in a bipartisan manner.


                           Amendment No. 4012

  Mr. President, my second amendment has to do with education and 
health funding. The budget resolution goes about balancing the budget 
in all the wrong ways by undoing the modest good that was done less 
than a month ago when the Congress finally passed an appropriations 
bill for fiscal year 1996 that the President could sign. The Senate 
voted 88 to 11 to approve that bipartisan compromise bill, about as 
close to a consensus as we ever get around here.
  It is incredible to me that we find ourselves debating a budget 
resolution that undoes that deal that we had just a month ago. I hear a 
lot of talk from the other side they provide increases in education. 
Make sure you look beyond the blue smoke and the mirrors because it 
simply is not true. As this chart shows, the resolution before the 
Senate provides about $36.3 billion for education and job training 
programs. That is about a $1.2 billion decrease from what CBO estimated 
it needed to

[[Page S5323]]

freeze funding for those programs in fiscal year 1997. The resolution 
also provides for $21.6 billion, or $1.5 billion below a CBO freeze for 
health programs.

  Here are the figures. The 1996 omnibus continuing resolution that we 
passed, 88 Senators voted for it, contained $36.2 billion for 
education. CBO--not OMB, CBO--estimates that just to meet this 
requirement for next year would require $37.4 billion. The budget 
resolution before the Senate only provides for $36.3 billion, for an 
actual cut of $1.178 or almost $1.2 billion in education. The same is 
true in the health care on the omnibus continuing resolution that we 
passed by 88 votes. There is $23.2 billion. CBO says just to freeze 
that would require $23.2 billion. The budget resolution provides for 
$21.6 billion, for a $1.5 billion cut there.
  I am pleased to offer this amendment on behalf of Senator Specter 
who, because of other pending matters, could not be here today or else 
he would have offered the amendment. I am offering it on his behalf, 
but I am proud to be a cosponsor, along with a number of other 
Senators.
  This amendment would simply restore the $2.7 billion for education, 
job training, and health programs to the freeze levels, just to the 
freeze level. For example, the CBO freeze does not restore title I to 
its normal appropriations cycle which would require an additional $1.3 
billion in fiscal year 1997 on top of the $1.2 billion.
  The offset is also simple. It cuts a little more than one-half of 1 
percent across the board from all of defense and nondefense 
administrative expenses. This reduction would be taken only from 
administrative personnel services and contractual services.
  Mr. President, during the last year, students, parents, teachers, 
school boards, school administrators, were treated to a roller coaster 
ride because of great uncertainties caused by the Federal budget 
process. Let us not repeat that mistake again this year. The American 
people are sick and tired of the partisan bickering and want us to get 
on with the business of governing.
  We started last year with proposals for deep cuts in student loans. 
The House planned to cut $18 billion; the resolution offered by the 
Budget Committee called for cuts of $14 billion. We finally adopted a 
bipartisan amendment in the Senate which reduced the cut to $4 billion. 
Students and their parents were not thrilled but saw this at least as a 
significant improvement. Then the resolution went to conference and the 
cut was $10 billion. So, students and parents really started worrying 
again. The Senate once again moderated the cuts and people said, ``OK, 
this is good.'' The House did not, the concern intensified again.
  The final deal drastically cut the successful direct lending program 
including cuts of $5 billion. This bill was rightfully vetoed.
  That was followed by the ups and downs of negotiations on the fiscal 
year 1996 appropriations bill. The Government shut down twice. For 7 
months, the Federal Government was directionless because of short-term 
continuing resolutions instead of annual appropriations.
  Parents worried that their children would not get the reading and 
math assistance they need because title I funding was cut by 7 percent. 
Teachers worried about whether or not they would have a job next year. 
School boards and administrators were unable to plan for the upcoming 
year because they did not know what their budget would be. In short, 
chaos reigned.
  We should promise the American people that we will never do that 
again. Passing this amendment would be a good place to start. I do not 
believe that this takes us fully where we need to go, but it is a 
start. As I said, we are going to need more money than just this simple 
freeze to meet the increasing needs that we have out there. Especially 
for title I programs in this country, we are going to need some 
additional money in fiscal year 1997. But both Senator Specter and I, 
and others, felt that at least with the budget resolution we ought not 
to be starting in the hole, that we ought to, at least with this budget 
resolution, start where the freeze was from last year.
  I can only say that this Senator will support efforts by others to 
get it above the freeze from last year because I think the need is 
there for education and job training money. But if we start from a 
position of where we are $1.2 billion already in the hole in education 
and job training, or $1.5 billion in the hole on health, then it is 
going to make it that much harder to get above a freeze later on.
  So, again, this amendment is designed to put us in the same position 
as we were just a month ago, when 88 Senators voted to approve the 
Specter amendment and send this bill on, which increased the funding up 
to this level, as I said, in the fiscal 1996 omnibus continuing 
resolution. This would provide for us to get to the freeze level. 
Beyond that, I am hopeful that we will be able to add more money for 
education and job training, especially in the area of title I.
  With that, I yield the floor.
  Mr. SPECTER. Mr. President, the subcommittee which I chair addresses 
a wide array of programs--from the educational needs of children, the 
training and retraining of this nation's work force, to confronting the 
problem of teen pregnancy, AIDS, and the causes and cures of disease 
Collectively, the programs in the Labor, Health and Human Services, and 
Education bill address many of the present needs of this nation's 
people and are investments in our future.
  Because of the wide array of funding needs contained in the Labor-
HHS-Education appropriations and given our tight budget situation, it 
has become exceedingly difficult to craft a bill that addresses all of 
these needs. The amendment which I offer today adds a total of $2.7 
billion to levels in the resolution for education, training, and social 
services programs in function 500, and to health activities in function 
550. This increase will bring funding in these functions to freeze 
levels as estimated by the Congressional Budget Office and will help in 
funding the education, job training and health programs under my 
subcommittee's jurisdiction.
  Just last month, the Senate voted 88-11 to approve a compromise 
amendment offered by Senator Harkin and myself to the Labor, HHS, 
Education appropriations for fiscal year 1996. That compromise is what 
it took to break loose the stalemate on fiscal year 1996 funding for 
Labor, HHS and Education programs and to get a bill through the 
Congress. Without the amendment I am offering today, I think that we 
could see a repeat of last year's long and disruptive appropriations 
process, and that would be an embarrassment that this body ought not 
let occur again. The fiscal year 1996 bill required an additional $2.7 
billion, and I believe that we will again need this amount to get the 
bill through fiscal year 1997.
  The increase in the amendment applies only to fiscal year 1997 and 
does not increase spending in the outyears. The amendment is offset by 
an across-the-board cut of a little more than one-half of 1-percent 
from all executive branch administrative expenses. That is, 
administrative and personnel services and contractual services on a 
pro-rata basis from funds available to every Federal agency, 
department, and office in the executive branch, including the Office of 
the President.
  The resolution before the Senate provides $36.3 billion for education 
and employment and training programs, a decrease of $1.2 billion below 
what CBO has estimated to freeze these programs in fiscal year 1997. 
The resolution also provides $21.6 billion or $1.5 billion below a 
freeze for health programs. This amendment simply restores funding for 
education, job training and health programs to a very modest freeze 
level.
  Even at a freeze level, the Labor-HHS-Education subcommittee will be 
faced with the formidable task of maintaining our commitment to the 
core education programs, including Pell grants, campus-based aid, title 
I, and head start.
  For employment and training programs, an additional $67 million is 
needed in fiscal year 1997 just to cover the operational cost increases 
resulting from opening four new Job Corps centers. Without passage of 
this amendment, the subcommittee will be forced either to not fund the 
operation of these new centers or further reduce services in other 
training programs for this nation's workforce at a time of heightened 
anxiety over economic security.

[[Page S5324]]

  Last week was Brain Awareness Week and many of my colleagues visited 
with researchers and advocates urging the Congress to expand support 
for research on the brain. Others, attended the Wednesday's May 15 
press conference with actor Christopher Reeve of ``Superman'' fame in 
which he appealed for increased funding for spinal cord injury 
research. Still others, have met with constituents urging us to expand 
funding for research on cancer, heart disease, AIDS, diabetes, and 
Alzheimer's disease. Without this amendment, we will be unable to 
maintain level support for critical health care priorities, 
jeopardizing funding for the National Institutes of Health, for 
community and migrant health centers, for breast and cervical cancer 
prevention, and for childhood immunizations.
  I, therefore, urge my colleagues once again to join Senator Harkin 
and me in supporting this $2.7 billion amendment.
  Mr. JEFFORDS. Mr. President, the fiscal year 1997 budget resolution 
deserves accolades for its goal of achieving a balanced budget by the 
year 2002. I support this worthy ambition, yet I cannot fully support 
the manner in which it achieves this result.
  Unfortunately, the resolution before us today requires education to 
shoulder an unhealthy portion of discretionary cuts in order to achieve 
a balanced budget. As I have said countless times in the past, cutting 
education spending may--on paper--help balance the budget. In reality, 
however, cuts in eduction do the exact opposite. Decreases in education 
spending gut already scarce dollars for programs designed to raise the 
standard of living, provide better jobs and training, and consequently 
increase our tax base resulting in more revenue to fill the Federal 
coffers. Let us not be shortsighted and limit the most critical 
investment we can make toward a future downpayment on our debt.
  For these reasons I support the amendment offered by my colleague 
from Pennsylvania to restore funding for education discretionary 
spending. My colleagues may argue that we are not cutting education 
funding but simply limiting its growth. It is true that this resolution 
provides an increase of $1 billion in fiscal year 1997 over last year's 
allotment. I will concede that this does not constitute a decrease in 
the strict sense of the word. However, it clarly is a decrease when 
taking inflationary costs into account. In fact, CBO has indicated that 
it represents a decrease in outlays of approximately $1.7 billion in 
the first year alone.
  The foundation of Federal education leadership is built on keeping 
promises to our young children at risk; creating greater access to 
higher education for all; and guiding the country to help keep our 
children's education at a standard that is competitive with the rest of 
the world's. We cannot possibly keep this promise if, as this 
resolution proposes, we decrease education discretionary spending by 
close to $2 billion in fiscal year 1997 alone.
  Public awareness of our need to reform education is growing. Polls 
show that the public is coming to understand the enormous costs of the 
failure to educate our children. Eighty-six percent of those surveyed 
by the recent PBS/National Issues Convention felt that we are spending 
too little money on education and training.
  However, we continue to ignore the clear desires of our constituents. 
During last year's budget debate we essentially went through the same 
routine. The fiscal year 1996 resolution also cut education 
discretionary spending but a successful floor amendment, offered by my 
colleague from Maine, restored funding for education programs. 
Americans understand intuitively that investing in education is the key 
to our future success, and the best possible national investment that 
we can make as a country. When the rest of the country gets it and we 
do not, I sometimes wonder who really needs the education.

  Support of the Specter amendment is truly critical. Countless studies 
document that American children are not keeping peace with their 
international counterparts. Well publicized reports continue to show 
that in math and science we have not kept pace with our foreign 
counterparts. In a recent study, American students came in last, behind 
Slovenia.
  More astonishing, reports indicate that 50 percent of those who 
graduated from high school in recent years graduated functionally 
illiterate. The basic problem is reading comprehension. Keep in mind 
also that nationally, up to 30 percent of our ninth graders eventually 
drop out of school altogether. This is totally unacceptable. How can 
our businesses be expected to compete when they are delivered potential 
workers of this quality?
  Money is not the solution, by any means, to the trouble our society 
faces. However, when programs, specifically designed to address 
educationally disadvantaged students in reading and writing, only serve 
a fraction of the eligible population we do those children and our 
country a disservice. When programs designed to prevent dropout barely 
keep pace with inflation yet dropout percentages boom, we know that 
more funding is critical. When governors and high powered CEO's come 
together--on their own time and money--to speak about education needs, 
you know that indeed education is of such national significance that it 
can no longer be pushed aside as the stepchild of Federal public 
policy.
  And while money may not be a panacea it does make a difference. What 
have we done when we needed to highlight a major problem or national 
priority? We committed the resources necessary to match our goals. Take 
for example the space program during our race to the Moon with the 
Russians, we did not decrease funding in order to beat our competition, 
we increased it considerable and the dividends paid off. We are in no 
less of a crisis today with our education situation than we were with 
Sputnik--now is the time to take action.
  The Specter amendment achieves, the very basic first step--level 
funding for education in this year's budget. We cannot, in good 
conscience do anything less. I urge my colleagues to support this 
amendment.
  Mr. KYL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, I ask the Senator from New Mexico if I might 
have about 3 minutes of the time.
  Mr. DOMENICI. Of course. I yield it off the resolution.
  Mr. KYL. Mr. President, I ask unanimous consent that I be allowed to 
proceed on the Gramm amendment. I am not asking to lay the current 
amendment aside but that I may proceed to discuss that amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 4009

  Mr. KYL. Mr. President, I do that in order to strongly support the 
amendment of the Senator from Texas calling for the repeal of the 
Clinton tax increase on Social Security benefits. He spoke of this 
about an hour ago. It is a measure that I had offered in the House of 
Representatives within hours of the time, on August 6, 1993, that the 
Social Security tax increase cleared the Senate. I had offered the bill 
there to repeal it. I also supported Senator Lott's bill to repeal the 
tax, which he called the Senior Citizens Tax Fairness Act. And I am 
very pleased to stand in support of the amendment of the Senator from 
Texas to do the same.
  This is the tax increase that President Clinton pushed through the 
Congress in 1993 to impose higher taxes on seniors with incomes of only 
$34,000 a year and couples with annual incomes of $44,000 a year. The 
Clinton administration talked about taxing the rich, but we did not 
believe that couples making $44,000, or individuals making $34,000 a 
year, should be considered rich. As a result of the Clinton tax 
increase, 85 percent of these people's Social Security benefits are now 
subject to tax. That represents an effective tax increase of 70 percent 
over prior law.
  The CBO estimated that, in 1994, 9.5 million Social Security 
beneficiaries were hit by the Clinton tax increase. That is a figure, 
of course, that will rise every year--to roughly 13.5 million in 1998, 
and much more each year thereafter--because the tax is not indexed for 
inflation.
  It was very clever the way the President crafted the proposal, 
letting inflation do the dirty work of continuing to raise taxes long 
after the bill was signed into law in 1993.
  Repealing the Clinton tax on Social Security will put over $55 
million back into the pockets of retired Arizonans

[[Page S5325]]

every year, and nearly $3.7 billion into the pockets of seniors 
nationwide. If we really care whether seniors have enough resources to 
pay for adequate health care, to put food on the table, or pay heating 
and air conditioning bills, we ought to support the amendment of the 
Senator from Texas.
  Whether or not this amendment is supported, I think, comes down to a 
question of who we trust, Mr. President. Who do we trust more to spend 
the money wisely, the people that worked hard an entire lifetime to try 
to ensure themselves a secure retirement, or Government bureaucrats in 
Washington? I put my faith in people to use their own money to provide 
for themselves and their families.
  It is important to emphasize that the Clinton tax increase applies to 
individuals with incomes of only $34,000 a year. I do not think that is 
a definition of a wealthy person. Yet, that is who pays the bill. I 
think, by now, most people realize that Clinton's talk of taxing only 
the ``rich'' is just an excuse to raise taxes on everybody. He raised 
taxes on seniors making $34,000 a year. He raised the gas tax, which 
hits the poorest Americans hardest of all.
  I note, parenthetically, Mr. President, that according to the Bureau 
of Labor Statistics, in 1987, the poorest 20 percent of Americans 
devoted 8.8 percent of their expenditures to gasoline and motor oil, 
while the wealthiest 20 percent devoted only 3.1 percent of their 
expenditures to such things. So the gas tax, like the Social Security 
tax, hits those who are not the most wealthy in our country.
  I predict that we are going to repeal the Clinton gas tax and the tax 
on Social Security benefits. Neither is defensible. The Gramm amendment 
that is before us today will put Senators on record about whether they 
favor the repeal of the tax increase on seniors, and whether we put our 
trust in older Americans or whether we put our trust in bureaucrats.
  I commend Senator Gramm from Texas for raising this amendment. I hope 
we all support it. I thank the other Senator from Texas, Senator 
Hutchison, for standing aside and letting me take this time.
  Mr. President, I earlier posited two amendments--3995 and 3996. In 
that order, I ask for the yeas and nays on those two amendments.
  The PRESIDING OFFICER. Is there objection for it to be in order to 
request the yeas and nays at this time?
  Mr. DOMENICI. We need to have a Member of the minority party present.
  Mr. KYL. If there is no one present, I will defer until then.
  Mr. DOMENICI. Why do we not let the Senator from Texas go.
  Mr. KYL. I will defer until then.
  Mr. DOMENICI. Is Senator Hutchison going to speak to the IRA 
amendment?
  Mrs. HUTCHISON. Yes.
  Mr. DOMENICI. That has been adopted by voice, right?
  Mrs. HUTCHISON. It was my understanding that the two managers would 
put it in at the appropriate time.
  Mr. DOMENICI. We agreed to it on Friday. The Senator is assured of 
that sense of the Senate for this bill. I am hopeful that any tax bill 
we do includes that. She knows of my high regard for that amendment and 
for her leadership on it. If the Senator cares to speak to it, it would 
be appropriate at this point.
  Mrs. HUTCHISON. I would appreciate the opportunity to explain what we 
have done for the homemakers of America.
  Mr. DOMENICI. How much time?
  Mrs. HUTCHISON. Up to 5 minutes.
  Mr. DOMENICI. I yield up to 10 minutes to the Senator from Texas.
  The PRESIDING OFFICER. The Senator from Texas.


                           Amendment No. 4006

  Mrs. HUTCHISON. I want to say how much I appreciate what Senator 
Domenici has done, with the acquiescence of Senator Exon. Clearly, this 
is a bipartisan issue, and it is something that will really make a 
difference for the homemakers and the one-income earner couples in 
America. In fact, it makes them equal with every person who works 
outside the home. Now people who work inside the home will have the 
same opportunity for retirement security.
  Senator Barbara Mikulski and I cosponsored the homemaker IRA bill in 
1993. It was included in the balanced budget that was passed by 
Congress and sent to the President last year. But it was vetoed, so we 
are coming back this year in the balanced budget resolution and saying 
this is a priority. This amendment is adopted. It is in the bill. It 
will be a priority, and here is what it does. It says that, if you work 
inside the home, you are now only able to set aside $250 for your 
retirement security, whereas, if you work outside the home, you are 
able to set aside $2,000 a year for your retirement security. So this 
has created a real hardship on a one-income-earner family or on a 
homemaker who may lose his or her spouse in the future. Our bill says, 
if you work inside the home, you can set aside $2,000 a year just as if 
you worked outside the home. This allows the one-income-earner couple 
that may be sacrificing for the homemaker to stay home and raise the 
children to have the same retirement benefits and options as if the 
spouse had worked outside the home.
  What it does for the homemaker who may lose her spouse in later years 
is to have in her own name, her own retirement account, her IRA just as 
if she had worked outside the home all these years. This, Mr. 
President, just makes everybody in this country equal if they work 
inside the home or outside the home. They will be able to set aside 
that $2,000 a year for their retirement security.
  What difference does it make? It makes a big difference. A lot of 
people do not take advantage right now of the $2,000 that they can set 
aside that will earn interest tax free so that at the end of their 
working lives they will have a nest egg. The conservative estimates, if 
you just think of a 6-percent return, would be that a one-income-earner 
couple now would be able to set aside enough to build, over a 30-year 
working life, almost $200,000 for a nest egg. But if you allowed the 
homemaker to contribute equally, it would go up to about $335,000, so 
almost $350,000. If you do better than 6 percent in your investment, of 
course, it would be more than that. A $335,000 nest egg is a lot for a 
family that has just to set aside $4,000 a year. For an individual to 
set aside $2,000 a year, you can get into the $200,000 to the $250,000 
range in your retirement nest egg. That can help a lot. When you have 
Social Security, which is a supplement, and then you have an IRA, if 
you have set aside that $2,000 a year, you can have an income that you 
will be able to live on.
  This is what we should be encouraging in our country. We should be 
encouraging savings. Every statistic you see says that our country has 
the lowest savings rate of any industrialized nation in the world. That 
is really a shame. We ought to encourage savings, and this is the way 
we can do it.

  So what we have done by having this amendment adopted by Senator 
Domenici and Senator Exon is we have said that this will be a priority. 
When all of the Washington mumbo jumbo ends and we have had our House 
bill and our Senate bill and our conference committee, what we are 
saying is in the end when we reconcile all these differences and all of 
the things that we have passed, that the high priority will be for 
equity for the homemakers of our country for their retirement security.
  Mr. President, it is a win for everyone. It is a win for the 
homemaker. It is a win for the one-income-earner family. It is a win 
for America because the more people who have a retirement security, the 
more people who will be happy, who will be stable, who will not have to 
worry about looking to the Government for help. This is a very modest 
investment for us to say these earnings will be tax free through these 
years to give that stability in retirement to that couple, or that 
individual that has worked for 30 years and should be able to plan for 
their own retirement security.
  So I am very pleased that we have taken one more step. We have passed 
this bill once. It was vetoed by the President. Now we are coming back. 
We are going to pass it again. I hope that we will be able at the end 
of this year to say we have finally done what we should have done a 
long time ago in this Congress, and that is acknowledge that the work 
done inside the home is every bit as important as the work done outside 
the home and maybe even more so.
  So I am pleased that we are doing this once again. We are going to 
stress how important the homemakers and the family units are in our 
society. This is the right thing to do.

[[Page S5326]]

  Mr. President, I want to say that the original cosponsors of our 
resolution, this amendment, are Senators Dole, Robb, Feinstein, and 
Snowe.
  I ask unanimous consent to add Senators Helms, Murray, and Moseley-
Braun, at their request, to be cosponsors of this with Senator Mikulski 
and myself.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. Mr. President, I ask unanimous consent that my time 
be charged to the majority time for the resolution.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. Thank you, Mr. President. Once again, I appreciate 
Senator Domenici for realizing what a priority this is and for agreeing 
to this amendment. I appreciate the Democrats who are also accepting 
it. This is the right thing for the homemaker and the families of 
America. I hope that by the end of this year we will be able to declare 
victory and say that this option is now open for all of the people who 
work in our country whether the work is inside the home or outside the 
home.

  I thank the Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I yield myself 2 minutes off the 
resolution.
  I just wanted to say to the Senator that a lot of people talk about 
making our policies more friendly toward families and friendly policies 
for our Nation. The Senator has talked about it as well as anyone here, 
but she does something about it. There was a discriminatory situation. 
It is the denial of IRA's for homemakers.
  It seems to me that, on the one hand, we say that is among the most 
significant work being done in behalf of our families and our Nation, 
and then, on the other hand, we say, however, if you are out of the 
household and not a homemaker, you will be able to set up an IRA 
account for your retirement but not if you are a homemaker. I believe 
you have hit the nail right on the head. If you want to be profamily, 
you had better start right here at this level and stop discriminating 
against these activities of men, women, or children who are doing 
things that are profamily and make that more difficult.
  So I commend the Senator for it. I do not have much to say directly 
about what the Finance Committee writes. But I think you have a very 
exciting approach and one that fits the rhetoric of the day to a ``t.'' 
You are to be commended for it.
  Mrs. HUTCHISON. If the Senator will yield, although it will be the 
Finance Committee that has the final word on this, what the Senator 
from New Mexico and Senator Exon have done by accepting this amendment 
is to give clear direction to them with a unanimous vote of the Senate 
saying this is what we want to be a priority. I do think because of the 
leadership of the Senator from New Mexico and Senator Exon that we will 
be able to declare victory at the end of this year. It is a long time 
coming.
  Thank you.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Before the Senator from Texas leaves, I would like to join 
my colleague, Senator Domenici, in complimenting her for moving ahead 
on family. Family matters are so important. Maybe we cannot do a lot 
about it directly here, but as the Senator from Texas knows, we 
accepted her amendment because we thought it was a good one. I thank 
her for bringing it up.

  The PRESIDING OFFICER. Who yields time?
  Mr. EXON. I yield the floor.
  Mr. DOMENICI. I yield the floor.
  Mr. EXON. Mr. President, what is the pending matter before the 
Senate?
  The PRESIDING OFFICER. The pending question is amendment No. 4011, 
the Harkin amendment.
  Mr. EXON. Mr. President, I ask unanimous consent, for the purpose of 
entertaining amendments that are about to be offered by the Senator 
from Arkansas, that the Harkin amendment be temporarily set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 4013

(Purpose: To restore common sense to the budget rules by reversing the 
               rule change on the scoring of asset sales)

  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. BUMPERS. I send an amendment to the desk, Mr. President.
  The PRESIDING OFFICER (Mr. Kyl). The clerk will report the amendment.
  The assistant legislative clerk read as follows.

       The Senator from Arkansas [Mr. Bumpers], for himself, Mr. 
     Bradley, and Mrs. Murray, proposes an amendment numbered 
     4013.

  Mr. BUMPERS. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Add the following new section at the end of Title II:

     SEC.   . SALE OF GOVERNMENT ASSETS.

       (a) Budgetary Treatment.--For purposes of any concurrent 
     resolution on the budget and the Congressional Budget Act of 
     1974, no amounts realized from sales of assets shall be 
     scored with respect to the level of budget authority, 
     outlays, or revenues.
       (b) Definitions.--For purposes of this section, the term 
     ``sale of an asset'' shall have the same meaning as under 
     section 250(c)(21) of the Balanced Budget and Emergency 
     Deficit Control Act of 1985.
       (c) Treatment of Loan Assets.--For the purposes of this 
     section, the sale of loan assets or the prepayment of a loan 
     shall be governed by the terms of the Federal Credit Reform 
     Act of 1990.

  Mr. BUMPERS. Mr. President, this amendment deals with a change the 
Republican majority made to the budget rules last year which permitted 
the use of revenue from asset sales to be scored against the budget. 
The last two CBO Directors, Mr. Reischauer and Mr. Penner, have 
criticized this change to the budget rules as being bad public and 
fiscal policy.
  From 1987 to 1995, we had a firm policy that you could not sell 
assets and use the revenues derived from those sales to count against 
the deficit. Nobody quarrels with the occasional selling of an asset. 
At times it makes perfectly good sense. But when you score the asset 
sales against the deficit, you have to ask yourself, next year, what do 
you do for an encore?
  When I was Governor, I received a revenue sharing check from the 
Federal Government for $21 million. I did not put the money in the 
State operating budget because I knew then, even as a freshman Governor 
of Arkansas, it was bad policy. I did not have to come to the Senate to 
find that out.
  It was bad policy because if I had put it in the operating budget, 
revenue sharing could have came to an end the next year, which it did 
after I came to the Senate. We received revenue sharing for several 
years and were glad to get it, but it was eventually discontinued. All 
I could think about was the poor Governors out there who had been using 
revenue sharing for operations--their share of Medicaid, their 
educational budget, and when suddenly you find $100 million not coming 
in next year, what do you do? You raise taxes or reduce services to 
make up the difference.
  And so, in 1987, this body very wisely said: In the future, you 
cannot sell assets and score the revenue for budgetary purposes. That 
was the rule we operated under until 1995. All of a sudden, in 1995, 
the Republicans took control of Congress and began proposing to sell a 
number of assets, including the Elk Hills Naval Petroleum Reserve; the 
Federal power marketing administrations, which generate hydroelectric 
power at Federal dams; the Arctic National Wildlife Refuge; oil from 
the strategic petroleum reserve, which we have been filling up with oil 
for almost 15 years now for the rainy day when we might have another 
Arab oil embargo; and the Uranium Enrichment Corporation. Incidentally, 
I have no quarrel whatever with selling the Uranium Enrichment 
Corporation. I was glad that the Federal Government privatized the 
Corporation, but do not score it against the budget deficit.
  Mr. President, not only was there a proposal to sell these assets, 
but a senior Member of the House of Representatives introduced a bill 
to appoint a commission--listen to this one, Mr. President--to decide 
which of the national parks should be sold.

[[Page S5327]]

  So where are we headed Mr. President? We are going to have a big 
national yard sale and sell some of our most valued national treasures 
in an attempt to mask the budget deficit, including some of the 
national parks.
  If you think this is just rhetoric, look at this chart outlining last 
year's proposal to sell the naval petroleum reserves, the major part of 
which is the Elk Hills Naval Petroleum Reserve in California. It 
produces about 63,000 barrels of oil a day. Let me show you what a 
silly idea the proposed sale is. According to CBO, the sale of the 
naval petroleum reserves would produce $1.55 billion in revenue. 
However, over the 7-year budget scoring window we would lose the $2.47 
billion in revenue that would have been produced had the Government 
retained title to the asset. That would result in a net increase in the 
deficit of $992 million over 7 years. Selling the naval petroleum 
reserves now in a rush to make it appear that you are going to balance 
the budget makes absolutely no sense. If we can balance the budget--and 
God knows, we ought to over the next 6 or 7 years--that is fine. But do 
not do it by selling off the Nation at a loss.
  As the chart demonstrates, the $1 billion loss occurring over the 7-
year budget period is just part of the story. If the asset were sold, 
the Federal Government would continue to forgo approximately $400 
million in revenue annually. This would add an additional $12 billion 
in losses over the approximate 30 year lives of the reserves.
  So we are going to sell an asset for $1.55 billion in order to try to 
balance the budget by the year 2002, and if you consider the 30 
subsequent years we lose $12 billion. Bad policy? No; insane policy.
  A moment ago I mentioned the power marketing administrations. For the 
uneducated, the power marketing administrations, or PMAs, market 
hydroelectric power generated at Federal dams. The Southwestern Power 
Marketing Administration serves my State, and I do not want it 
privatized, I do not want it sold, and I am going to do everything I 
can to keep it from being sold.
  Here is why. It is not just because the people of Arkansas use the 
power; it is because I believe in honest budgeting. This chart is 
intended to demonstrate the actual impact the sale of a PMA would have 
on the deficit.
  Assume that in 1996 the Federal Government receives $1 billion from 
the sale of a particular PMA. What do we lose? The first year, 1996, we 
would lose $100 million in revenue that would have been produced if the 
PMA stayed in Federal ownership. So what happens? It is true that we 
get $900 million more in 1996 than we lose. We get $1 billion, we lose 
$100 million in revenues, and, on its face, the deficit would fall by 
$900 million.
  But look at what happens in the future. In the year 2000, we still 
have only gotten $1 billion, but we have now lost half of it in 
revenues foregone. By the year 2002, when we are supposed to balance 
the budget, we've received $1 billion, but now we have lost $700 
million in lost receipts, and the net effect on the deficit is only 
$300 million. But here is where the proof of the pudding is. Look at 
the year 2020. We still only got $1 billion in 1996-1997, but in the 
year 2020, considering the $100 million a year in revenues we have 
lost, the Federal Treasury is a net loser of $1.5 billion. No wonder 
Reischauer said it is bad policy. It is crazy policy.
  Last year the Senator from Alaska took strong exception to my last 
two charts which point out that the change in the budget scoring rule 
could produce crazy proposals such as the sale of Mount Rushmore or the 
Statue of Liberty. Mount Rushmore is a moneymaker. There is no telling 
what we might get.
  But you know, there is something more important than that. Mount 
Rushmore is a national symbol. I have been there; you have been there, 
Mr. President. It is a magnificent thing. They are designing a portrait 
there out of that stone of an Indian on a horse. I think it is Crazy 
Horse. It is not finished yet. It is going to be magnificent. But let 
us say we are going to put Mount Rushmore up for sale. Do not worry 
about the fact that this honors four truly great Presidents of this 
Nation that the United States wanted to honor forever. Sell it off.
  I do not know what the Republicans in the House have in mind with 
this bill to sell off natural parks. Maybe they have the Statue of 
Liberty in mind. Now that would probably bring a lot of money. Is that 
not magnificent? But you know something? It is no more magnificent than 
Yellowstone, Yosemite, the White River Wildlife Refuge in my State, or 
Hot Springs Natural Park in my State, which are near and dear to me.
  Let me say to the Senator from Alaska that I do not think these sales 
are going to happen. I am just giving the worst-case scenario I can 
think of, and based on some things that have happened around here in 
the last 2 years, I am not making any promises.
  But I can tell you we had it right in 1987 that we would not score 
assets sales for deficit reduction purposes, for a very good reason: It 
is bad fiscal policy and it is bad public policy because you have to 
make it up. If you reduce the deficit $1 billion by selling the PMA's 
this year, how do you make up that deficit next year to make sure the 
deficit stays on a downward slide? You have to come up with $1 billion 
someplace else.
  Mr. President, I serve on the Energy Committee. This year the budget 
resolution instructs the Energy Committee to report legislation that 
will produce savings of $1.4 billion over 6 years. However, the 
resolution only directly mentions how the Committee is expected to meet 
$400 million of the savings. There are only three options available to 
the committee to meet the additional $1 billion requirement: First, we 
could sell the PMAs; second, we could impose royalties on hardrock 
mines; or third, we could allow oil and gas drilling in ANWR. My 
friend, the senior Senator from Alaska, obviously supports the latter 
approach.
  He and I are good friends. We fight like saber-toothed tigers on the 
floor, but we are good friends. We just could not disagree more on the 
Arctic National Wildlife Refuge. Let me just say this: It is my firm 
belief that the President of the United States will veto any bill that 
comes to him that allows drilling in ANWR. I will certainly urge him 
to.
  The other two possibilities are political nonstarters. A large number 
of Senators oppose the sale of the PMA's and the mining industry will 
again fight tooth or nail against any royalty.
  Everybody in this body knows that I have fought for 7 years to reform 
the 1872 mining law. Sometimes I wake up in the middle of the night and 
I cannot believe: First, that I have been fighting that battle for 7 
years and second, that, because I have not yet won, the Secretary of 
the Interior continues to be forced to deed valuable public land and 
minerals for practically nothing. He does not have any choice. He is 
required to under this 122-year old law.
  The Secretary of the Interior, several weeks ago was forced to give a 
deed to a mining company for 40 acres of public land for the princely 
sum of $200. What do you think was on the 40 acres that the taxpayers 
of this Nation got $200 for? Eighty million dollars' worth of gypsum. 
Two years ago, he deeded land containing 11 billion dollars' worth of 
gold.
  So a third possibility would be to impose a mining fee to produce $1 
billion over the next 6 years. But if I am any judge of the makeup of 
the U.S. Senate, about the only votes for that will be on this side of 
the aisle. There will be few votes on the other side--maybe five.
  You talk about balancing the budget; you talk about wanting a 
constitutional amendment. Oh, yes, let us go back and tinker with what 
James Madison did, and John Adams and John Jay and Alexander Hamilton 
and Ben Franklin. Let us go back and tinker with what they did 206 
years ago drafting the Constitution that has made us a great nation, 
the freest nation on Earth, the longest living democracy, the oldest 
constitution in the world, tinker with that to bring about a 
constitutional amendment to balance the budget, but do not disturb 
those big international mining companies who have been raping and 
pillaging the U.S. taxpayer since 1872.
  I yield the floor, Mr. President.
  Mr. STEVENS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. STEVENS. Mr. President, I thank my good friend for his 
forbearance. He is, as he says, a good friend

[[Page S5328]]

from Arkansas. We have postponed this debate until this afternoon, and 
that enabled me to return to my home.
  May I have some of the Senator's time, by the way?
  Mr. DOMENICI. I say to the Senator, we have used no time in 
opposition. I yield the Senator whatever time he needs, up to 1 hour.
  Mr. STEVENS. I thank the Senator.
  Mr. BUMPERS. Is it possible for me to yield the Senator from Alaska 
time under the unanimous-consent agreement?
  The PRESIDING OFFICER. The Senator has a right to yield time.
  Mr. BUMPERS. I have 2 hours total; is that correct?
  The PRESIDING OFFICER. The Senator has 1 hour.
  Mr. BUMPERS. One hour for all three amendments?
  The PRESIDING OFFICER. The Senator from Arkansas has 36 minutes, 48 
seconds remaining on his time on this amendment.
  Mr. BUMPERS. Mr. President, parliamentary inquiry. I had the 
possibility of three amendments, two for sure. I understood that there 
would be 2 hours, that I could allocate that 2-hour period any way I 
wanted to in offering those three amendments. Is that correct or not?
  Mr. EXON. There would have had to be a unanimous-consent agreement 
for that. I believe that every amendment that he offered, whether it 
was 1, 2 or 3 or 10, the Senator would have 1 hour under the control of 
his time and 1 hour for the opposition. And if there are second-degree 
amendments, it would be half an hour.
  Mr. BUMPERS. Let me ask the Senator this question. Who controls the 
time in opposition, then?
  Mr. EXON. In this particular case, it would be the Senator from New 
Mexico. The Senator from Arkansas controls that hour for his amendment. 
The Senator from New Mexico would control an hour against it.
  Mr. BUMPERS. The Senator from New Mexico could yield the Senator from 
Alaska time on this amendment?
  Mr. EXON. Certainly.
  Mr. DOMENICI. Which I just did. I will do that again. I yield up to 1 
hour in opposition for that.
  Mr. STEVENS. I thank the Senator very much.
  I was saying, due to the forbearance of our friend from Arkansas, I 
was able to go home to my State. I have just gotten back from Alaska. I 
was able to go home on Friday. I have been all over my State at various 
functions, the regional meeting of the Ahtna Native Corporation up in 
the Gulkana area, down to Homer and Kenai and Fairbanks and Anchorage. 
I want to report to my friend that one of my constituents asked me 
about the comments we make here on the floor. He said, ``That fellow 
from Arkansas certainly can't be your friend, Senator.'' And I told 
him, ``No, that's not true. He is a friend. We just disagree 
violently.'' And it is possible to disagree violently and still be 
friends.
  I came in just as the Senator from Arkansas had his shell game card 
up, talking about the budget shell game. I was reading, as I came back 
into Washington, a summary that my staff had given me about the budget 
that President Clinton had submitted. This budget, at first glance, 
looks like it balances, but it relies upon a trigger that is in the 
budget that reduces discretionary spending by $67 billion in 2001. In 
2002, it does not indicate which programs will be cut, but, 
miraculously, the President that takes office in 2001 would be asked to 
cut the discretionary budget by 20 percent.
  If you want to talk about a shell game, we ought to talk about shell 
games. As a matter of fact, if you want to look at the defense portion 
of the President's budget, you would find that it is a very interesting 
defense budget. It goes through the year 2000--that is what stuck in my 
mind as I looked at that--it goes through the year 2000 with a 
declining amount for defense, and then, miraculously, in 2001-2, the 
defense budget goes up, so it looks like over that period of time there 
is a level spending for defense; but that money is there for defense 
only if that President who is in office in 2001-2 cuts discretionary 
budgets 20 percent.
  I have to tell my friend, the shell game here is that part of the 
President's budget that provides what he seeks to provide in this 
period of time if the asset sales that the Senator from Arkansas is 
talking about cutting out occurs. If the Bumpers amendment is agreed 
to, that President, after the year 2000, when he takes office in 2001, 
is going to have to present us with a budget that increases the cut in 
discretionary spending even more.
  Strangely enough, the problem about this is that we voted on this 
last year. I understand my friend from Arkansas's position, but from my 
point of view, you know, it is unfortunate that once again we have seen 
the Statue of Liberty and Mount Rushmore, and the indication is that, 
somehow or other if we approve this bill, it is possible to sell one of 
those national treasures. No one is suggesting that in connection with 
this bill. There is a suggestion in the other body about selling some 
of the park lands.
  And I find some difficulty in addressing the Senator from Arkansas' 
amendment because what we are talking about is a lot of assets that are 
out there that do have value now, and the question is not really 
whether we sell them but whether asset sales should be counted in the 
budget process.
  The President has submitted the request that the budget take into 
account the receipts from the sale or lease of assets that are owned by 
the Federal Government. That has not been the case in the past. If it 
is the case that we take into account the sale or leasing of Federal 
assets, then we do have an entirely new circumstance, those of us who 
come from public land States, because there has been a lack of 
understanding of the value of Federal land to this country. We have 
some developing attitudes concerning areas such as those controlled by 
the National Park Service.
  Mr. President, I served in the Eisenhower administration in the 
Department of the Interior and I remember well that President 
Eisenhower wanted to double the Park Service land areas and create new 
parks over a period of 10 years from 1956 to 1966. He did. The idea 
that somehow or another we would be against national parks, those of us 
who believe in asset sales, does not really ring a bell with me. I do 
not understand how those charts enter into this debate.
  I do understand there is a lot of land that is surplus to the 
Government's needs. There are many assets that could be used during 
this period of very tight budgets to raise a considerable amount of 
money. I remember when other Senators raised similar objections when I 
first suggested that, instead of having people apply and file a request 
to lease spectrum from the Federal Communications Commission, we have 
an auction of those licenses. Some people here laughed about that. It 
took two Congresses for us to get around to authorizing the FCC to 
auction spectrum.
  As a matter of fact, the first time the Congressional Budget Office 
looked at it, as I recall, they said the maximum that could be raised 
was somewhere around $250 million over a period of time if we auction 
FCC licenses. They did not understand what some of us understand--the 
developing technology of telecommunication. We have raised over $20 
billion so far from the sale of spectrum licenses.
  Now, we believe there are substantial portions of public land in the 
West that are needed and can be used in the economies of those Western 
States that could, in fact, be leased or sold. One of the assets 
happens to be the area that was set aside by my good friend, Senator 
Scoop Jackson in the Alaska National Interest Lands Conservation Act of 
1980--1.5 million acres on the arctic plain, specifically set aside for 
oil and gas exploration and development. The act provided for a special 
environmental impact statement to make sure the area would not be 
damaged by exploration. It is an area just east of Prudhoe Bay, the 
great development of Prudhoe Bay, which incidentally is on State land, 
Mr. President; it was not on Federal lands. The Federal lands adjacent 
to Prudhoe Bay are the 1.5 million acres Senator Jackson set aside. We 
have, since 1981, tried to obtain approval to proceed with the leasing 
of those lands for oil and gas exploration and development.
  The asset sale authorization in this budget resolution could lead to 
that if the Energy Committee reports a bill and the House approves that 
bill and the President approves it. Mr. President, President Reagan 
requested that every year. President Bush requested that every year. It 
was denied under the former leadership of the House and

[[Page S5329]]

Senate. Now, with new management of the House and Senate, we approved 
last year two bills to authorize the Secretary of Interior to proceed 
with leasing of that area. The bills were vetoed.
  What we are really talking about in this amendment is whether we 
should use the assets that the people in the United States own now, 
particularly those in public land States, to derive income, or whether 
we should drive forward to the day we have to increase taxes. The net 
result of Senator Bumpers' position is, do not count asset sales as 
income for the purpose of trying to balance the budget, which 
automatically means you have to raise income from somewhere for the 
Federal Government. The only way to do that is taxes. There is another 
alternative. You could cut further either defense spending or 
discretionary spending.
  The issue of our arctic plain is just one portion of this debate with 
the Senator from Arkansas. What we are really talking about is whether 
the sale or lease of assets should lead to income which should score in 
the budget process. The budget process is hard for anyone to 
understand, but there is no question that I do not think there would be 
anyone outside of the Congress that would disagree with counting as 
income money actually put into the Treasury. We are talking about 
balancing the budget. That is really what the heart of the Bumpers 
amendment is. It gets rid of the scoring process for the sale or lease 
of assets that belong to the Federal Government, which process enables 
us to count that money and tell the American public that income will, 
in fact, be counted toward balancing the budget.

  The benefits to the taxpayers are exactly the same as from the 
revenues that came from the sale of the spectrum by the FCC. That is a 
sale of an asset that belongs to the public. We changed the method of 
leasing. Prior to my concept of auctioning spectrum, people filed no 
lease--really, a permit--to use spectrum. They just paid an annual fee. 
Now they pay substantial amounts of money for the privilege of 
obtaining that permit. That is what comes from a competitive lease of 
oil and gas potential on Federal lands. Exactly the same thing.
  Today the law does not count the money you get from the leasing of 
Federal lands for oil and gas but it does count the income you get from 
spectrum. I hope the Senator understands this. If money comes into the 
Treasury, it makes sense we record it as money received for the purpose 
of balancing the budget.
  The Senator from Arkansas fears once we discover the amount of money 
you can get from that, from development on Federal lands, we will go 
wild and we will start sending the message that we should sell the 
national parks. Nothing is further from the truth. What we should 
recognize, though, is that we should not keep putting our head in the 
sand and say there is no money coming into the Treasury, when, in fact, 
there is. The asset sales ought to be recorded as income that are to be 
scored by the Congressional Budget Office. There is no question we 
should do exactly what we did last year. That is, we should defeat this 
amendment to the budget resolution. It is the same thing offered by the 
Senator from Arkansas last year.
  Let me go back to my visit. I have just come back from home. I talked 
to a lot of people in Alaska. I talked to many of our labor leaders. We 
are a State where when we get together there are not very many of us. 
We have our labor leaders, people from the chamber of commerce, and 
heads of the various corporations--Native and non-native--in meetings 
together. One thing we lack right now is the ability to create new 
jobs. Our economy is flattening out. It is more and more related to 
tourism which is very seasonable, obviously, in Alaska. There are not 
many people getting off cruise ships when it is 60 below zero. We do 
have a lot of industry that is capable and does work through the 
wintertime. Strangely enough, that is the best time to work on Federal 
lands in our State, during the wintertime. What we want to do is to 
find a way to expand the availability of Federal lands in Alaska for 
oil and gas exploration.
  Mr. President, at the height of the transportation of oil by the 
great Alaska pipeline, the pipeline carried 2.1 million barrels of oil 
a day to Valdez for delivery to markets in the United States. Now it is 
down to 1.3. The reserves at Prudhoe Bay are playing out. They are not 
going to disappear overnight. They will just steadily decrease. 
Adjacent to Prudhoe Bay, as I said, on Federal lands--Prudhoe Bay being 
on State lands--is an area that we believe is the greatest reservoir 
for oil and gas in the North American continent. It has been explored, 
it has been analyzed. Everyone has accused us of all kinds of things, 
but I wish I could take the whole Senate up there, show them Prudhoe 
Bay, and show them the area we are talking about, the 1.5 million acres 
along the same arctic coast. There is no difference. One is not 
pristine, and the other, somehow a waste land. They are arctic tundra 
lands. They are not in the mountains. They do not have lakes and trees.
  I remember one day I came out on the floor and showed a brochure that 
had been prepared by the Wilderness Society showing lakes and trees and 
a Caterpillar coming over the hill, and moose standing down by this 
nice lake. It was a fabricated brochure. To their credit, they withdraw 
the brochure when I held it up in front of God and everybody. There are 
people who somehow think there is a difference between the lands we 
have developed at Prudhoe Bay and the lands that are available for 
exploration and development just east of Prudhoe Bay.
  That great reservoir, if it does produce oil and gas, is going to be 
a significant asset for the United States. Mr. President, it will bring 
in more money than the spectrum sales brought in. But you cannot count 
it until it comes. What you can predict--and we do--is there will be a 
substantial bonus for the lease, a bonus paid by people for the 
privilege of exploring. Those are the assets covered under the Bumpers 
amendment. The Bumpers amendment would deny us the right to count the 
money paid for the privilege of exploring. More generally, it would 
deny us the right to count any revenues from asset sales.
  I am not going to continue, except to say to my friend that I hope we 
all realize that when I stood on this floor and we finally got the 
privilege to develop the Alaska oil pipeline, the amendment passed by 
one vote. It was a tie vote, the only vote that Vice President ever 
cast. Every time we want to bring about some development in my State, 
we face horrendous odds. That was in the 1970's, and this feeling 
existed then. We were told we would destroy the caribou and it would be 
a terrible thing for the fish and wildlife. Mr. President, the caribou 
herd at Prudhoe Bay is six to seven times the size it was when the 
pipeline was authorized. The difference now is that, through new 
technology, we can tell the Senate that the amount of land that would 
be utilized in the development of the production facilities for oil and 
gas, if it is a good discovery on that million and a half acres, will 
be about one-twentieth the size of land used in the development of 
Prudhoe Bay. Also, we have made an absolute commitment that, once oil 
and gas production is over, the natural contour, natural vegetation 
would be totally restored.
  That is why I like to take people up to Alaska to show them the 
pipeline camps. I took one group over a pipeline camp and said, ``We 
are going to fly by helicopter up this road, and I want you to tell me 
where the pipeline camp is. We will be going to go over two camps.'' 
Not one saw the area where the camps were. It is totally restored to 
its natural condition. That same thing will happen when the day comes 
that Prudhoe Bay is over and production in the ANWR area, the million 
and a half acres I am talking about. It is an area that is within the 
wildlife refuge --it is not the wildlife refuge. It is a million and a 
half acres that Senator Jackson, in his great wisdom, decided should be 
set aside in the early 1980's for oil and gas exploration.
  So I believe Senator Bumpers presented, once more, an opportunity for 
us to talk about the differences between those who deny us the ability 
to use public lands to raise money to legitimately bring in income and 
to count it toward balancing the budget and those who want to drive on, 
not make the changes necessary in order to bring about a balanced 
budget and know that, ultimately, we have the power to tax. Ultimately, 
the final result of the Bumpers amendment is,

[[Page S5330]]

someone following us will be standing here urging the American people 
to increase their contributions from their own personal income to 
support this Government.
  One thing I found out this last weekend at home, I will tell you, is 
``that dog don't hunt in Alaska.'' No one up there wants any more 
taxes. As a matter of fact, they all urge us to find some way to reduce 
the cost of Government. They urge us to find a way to bring about a 
balanced budget. They want us to find some way to restrain the growth 
of the expenditures of the Federal Government. I think this budget 
resolution, to the great credit of the Senator from New Mexico and also 
the Senator from Nebraska, who also contributed to this process--even 
though he may disagree with us on some things, I know that he, too, 
seeks to balance the budget without raising income taxes.
  So, Mr. President, I hope that the Senate will defeat this amendment 
and that we can go on with the process of trying to use the Federal 
lands that are available for oil and gas exploration, mineral 
development, and basic utilization to develop the economies of the 
Western States. We can use those sensibly and count the income from the 
utilization of those lands towards balancing the budget.
  Mr. President, the one election I lost in my lifetime--well, I lost 
in another one, too--but one I lost even before I got in the Senate 
here was an election to be the president of the Alaska State 
Conservation Society. I believe that we do things in our State in a 
wise way in terms of protecting our environment. We go out of our way 
to do that. Unfortunately, we get tarred by a brush such as the one you 
have just seen. I see a new chart that my friend has, so I will yield 
the floor here in a minute. Clearly, there is no proposal before the 
Senate to do what Senator Bumpers says. This is not a national yard 
sale, if I can borrow from the chart. This is not a proposal to sell 
the national parks. It is a proposal to use the unreserved lands, the 
lands that have not been set aside for a specific conservation purpose 
for development in the Western States, and to produce income to help us 
balance the budget without raising taxes. I thank my friend from New 
Mexico and yield the floor.
  Mr. DOMENICI. I wonder if Senator Exon and I and Senator Bumpers can 
take 5 minutes to discuss with the Senate where we are amendmentwise in 
this process, and we will get right back to where we are.
  I yield up to 5 minutes off the resolution, to be charged equally, on 
this discussion.
  Let me just give the Senate a report. We have done very well, 
considering that we had no scheduled votes on Friday and none today. 
Normally, it is difficult to get Senators to offer amendments under 
those circumstances. We got a unanimous-consent agreement that 
everybody is aware of. Two lists were sent to the desk containing 87 
first-degree amendments. It was agreed to by the Senate that there 
would be no other first-degree amendments and that that was the extent 
of them; is that not correct, Senator?
  Mr. EXON. That is correct.
  Mr. DOMENICI. We asked Senators, in good faith, to help us with this 
bill, unless they wanted to pile up amendments and vote on them without 
debate. We have disposed of 32 first-degree amendments as of this 
moment--I am sorry. That is as of Friday night when we went out of 
session. Then we have done seven here this morning. So that is 39 of 
the 87. So if our arithmetic is right, we have about 47 amendments. 
Some of them are very vague, and I am not sure whether they are going 
to be amendments.
  My purpose for getting some time to talk with the Senate is as 
follows. When we finish tonight--and we plan to be here until about 10 
o'clock, I gather--we will have 8 hours remaining on this budget 
resolution, and it will be Tuesday morning, for all intents and 
purposes. We need to know from more Senators on our side--and we will 
leave it up to Senator Exon to ask his side--who have amendments that 
are still pending that are in that 87. If you are not in that 87, you 
cannot offer an amendment anyway. But if you are one of those 47 
remaining, we need to know if you are going to offer your amendment. 
Tell us as soon as you can during this day. And, staff, while helping 
your Senators, get the word to them that we would like to know in the 
next couple of hours what their intention is on the amendments. Are you 
going to offer every single one? Are you willing to tell us that many 
of them are not going to be offered? We have to know, or we are going 
to be in a tremendous jam tomorrow because unless things change we are 
already going to have somewhere around 30 votes, maybe 35. The Senator 
from Nebraska is going to talk about how long that might take I assume.

  Mr. EXON. I am.
  Mr. DOMENICI. We need to know. We are going to stack these votes but 
not all of them for one voting session. We will arrange, we hope, for 
about 7 or 8 votes in the morning before the Senate temporarily closes 
up the Senate while Senators go to the funeral of the very 
distinguished Chief of Naval Operations sometime around 11, or maybe 
10:30.
  So we will have some votes in the morning. So, again, please let us 
know. Are your amendments going to be offered? If so, can we start 
listing them specifically so we know that they are going to be called 
up and how much time they need?
  I now yield to Senator Exon.
  Mr. EXON. Mr. President, I want to join in the appeal. I say to my 
friend, the chairman of the committee, that I have made two appeals 
earlier to date. I renew it again, and invite all to take advantage--
both Democrats and Republicans--to come down and offer your amendments. 
The view that I have of this right now is that we have 25 amendments 
that have been debated and are stacked for votes tomorrow. Then we 
have, as near as I can tell, 47 to 50, amendments on a list that still 
could be offered. We do not know. Their could be second-degree 
amendments to that. That would make the list even longer.
  But the situation basically is this: we know we are going to have at 
least 25 votes. If we take those 25 and even figure 10 minutes to a 
vote--and history tells us they run a little longer than that--that is 
6 hours as of right now for voting tomorrow. The manager has just said 
that when we finish tonight about 10 o'clock there will be only 8 hours 
remaining on the resolution. The 6 hours of voting will not count 
toward the 8 hours remaining and there will be more votes after that.
  It is very clear, therefore, that we are going to have another one of 
those ridiculous situations where amendments are going to be offered. 
There is going to be no debate, and then we are going to vote. It looks 
terrible for the U.S. Senate to engage in that procedure. But we are 
going through it again. I will say that the figures that I have just 
used include no time for debate. That is just voting.
  Another way of putting it is we are going to be on this resolution 
for the next few days. When we finish today, we are only going to have 
8 hours left on the resolution. In addition to those 8 hours we already 
have 6 hours committed just for voting.
  I would just like to say, since we had a discussion, to my friend 
from New Mexico that it would appear that on both sides of the aisle we 
may have great difficulty in getting any votes in the morning. After 
the announcement was made of the funeral for the Chief of Naval 
Operations, Admiral Boorda, that many Senators on both sides of the 
aisle, therefore, made their plans to come back into town to go to that 
funeral and then come back here.
  So I would simply say that although I would like to start voting in 
the morning it would appear that the efforts we were talking about in 
that regard may be very, very difficult. But that further complicates 
matters.
  Let everyone understand. We are scheduled, as you know, to be out of 
here Friday sometime for a week's recess for Memorial Day. As is usual, 
when that happens, many Senators say, ``OK. We will finish Thursday 
night, and we will not be here Friday.'' I do not know how that is 
going to be possible because in addition to finishing this conference 
report we have the defense authorization measure that is supposed to be 
finished before we go on the recess.
  So I simply say, please, Democrats and Republicans, Senators who have 
amendments either come down and offer them, or tell us that you are not 
going to offer them so that we can best manage the hours or minutes 
that we

[[Page S5331]]

have remaining to accommodate as many of our colleagues on both sides 
as possible.

  Mr. DOMENICI. I thank the Senator.
  Mr. KYL. Mr. President, I ask unanimous consent to ask for the yeas 
and nays on two amendments which I previously offered and have spoken 
to. As far as I am concerned, they do not need further debate. Of 
course, there could be if anyone wanted to respond.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. EXON. Is the Senator asking the yeas and nays?
  Mr. KYL. I ask for the yeas and nays separately.
  Mr. EXON. We have no problem.
  Mr. KYL. I ask for the yeas and nays on amendment No. 3995.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. KYL. Second, Mr. President, I ask unanimous consent for the yeas 
and nays on amendment No. 3996.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. BUMPERS. Mr. President, I will be very brief in concluding the 
debate on my amendment.
  First of all, I want to in the interest of fairness and honesty in 
the debate say to my good friend, Senator Stevens from Alaska, that, 
number one, while we are debating what I consider to be a terrible 
policy of scoring asset sales, in all fairness to the Senators from 
Alaska, there is no proposal to sell ANWR. There is a proposal to lease 
it. It is calculated to bring $2 billion. But the Federal Government 
only gets half of that. Is that not correct, Senator? And we would 
proceed to withdraw royalties once it is developed.
  So, as I say, in the interest of fairness, while we are debating 
asset sales, ANWR is technically not an asset sale. And I must confess 
that my principal objection to leasing ANWR is because I consider it 
bad environmental policy. That is not to say that at some point in the 
not too distant future in an emergency or something we will not 
consider it. I might consider it myself. And I know all the arguments. 
I have heard the chairman of the Energy Committee, with whom I sit on a 
regular basis, make all those arguments for opening ANWR. We just 
happen to have a disagreement on that. I consider ANWR just like I do 
people who save money as a nest egg for their old age.
  One other thing: In my argument a moment ago, I pointed out that when 
I was a Governor I got a check for $21 million from the Federal 
Government and I did not put it into the operating budget for sound 
business reasons. I gave it to the Arkansas Highway Department to build 
highways with. In that way, if revenue sharing ever came to an end, we 
would not be all discommoded by having to fire 1,000 State employees, 
or cut the education budget, or cut the State police, or something 
else.
  Let me say to my Republican colleagues. The Republican Party 
considers itself a party of business in this country. You are friends 
of the business community. We like to think we are too. But I know the 
Republicans for the most part take pride in being probusiness. I am 
probusiness too. But let me say to my colleagues before you vote on 
this amendment which will amend the Budget Act to provide that you 
cannot sell assets and score it for deficit reduction purposes call, 
just call three of your closest friends who have a business of any size 
and ask them: Would they as a sound business principle sell off a 
building? Let us assume you have three buildings. You sell one building 
because you do not need it anymore. Ask how many of them would go out 
and hire a bunch of people knowing that next year they will not have 
that money, and they have to increase sales, or do something to make up 
for that shortfall?
  I can promise you every single president of the company you call will 
say exactly what the two previous heads of CBO have said: it is bad 
policy.
  Let me say, Mr. President, to be crystal clear to everybody, this 
amendment does not prohibit asset sales. If the Senate voted to sell 
the Statue of Liberty, it could do that. This amendment could not 
prohibit it. I would not vote for it. I would consider that horrible 
national policy. All I am saying is if you do sell an asset--we have 
and we will continue to--I have voted for some asset sales--do not 
score it. It is bad business.
  The Senator from Alaska said his people do not want any more taxes. 
Well, now, that is not the most profound statement I ever heard, with 
the utmost respect to the Senator from Alaska. Folks in Arkansas do not 
want any more either. But everybody wants a balanced budget. Everybody 
wants to go to Heaven but not just yet. So I want to balance the 
budget, but I do not want a dishonest budget. To score assets is 
deceptive. It is dishonest. And you will miss the mark of a balanced 
budget in the year 2002 or 2003 if you do nothing else except sell 
assets and score them. You will miss achieving a balanced budget by 
exactly the amount of the asset you sell and score.
  Now, Mr. President, I offered this amendment last year and we got 47 
votes the first time I offered it, and we got 49 votes the second time 
I offered it. I am hoping we will continue the trend of increasing our 
margin by two votes to 51 this year. Maybe not. But I can tell you this 
fight is just like me fighting with Mrs. Bumpers; the ones I win just 
are not over. This one is not going to be over until this Senate 
accepts that scoring of asset sales is bad policy.
  I yield the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BUMPERS. Mr. President, if the Senator from New Mexico will yield 
just a minute, one thing I wanted to do was to read into the Record a 
list of organizations that support this amendment: Taxpayers for Common 
Sense, National Parks and Conservation Associations, National Audubon 
Society, National Rural Electric Cooperative Association, Friends of 
the Earth, U.S. Public Interest Research Group, National Wildlife 
Federation, National Wildlife Refuge Association, Alaska Coalition, 
Alaska Wilderness League, American Public Power Association, Defenders 
of Wildlife, Greenpeace, National Resources Defense Council, Northern 
Alaska Environmental Center and the Sierra Club.
  Now, those are mostly environmental groups, some in Alaska, and I can 
tell you what they are concerned about. Some of these people are just 
concerned about the sale of power marketing administrations, but most 
of these organizations are worried about the sales of wildlife refuges; 
they are concerned about selling off national forests; and they are 
concerned about selling national parks. If you think that is 
farfetched, just bear in mind there is a bill already in the House to 
set up a commission to do exactly that, to report back to us on the 
national parks we do not need and that can be sold.
  I yield the floor, Mr. President.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I am going to yield to Senator Murkowski 
in just a moment. I have been here wanting to say a couple of things 
about this approach that Senator Bumpers is talking about. Then I will 
yield to the Senator, and as I understand it the Senator wants 12 
minutes.
  Mr. MURKOWSKI. Twelve to fifteen.
  Mr. DOMENICI. I am going to yield back now and reserve about 3 
minutes for my myself, and then in sequence I believe the order is that 
Senator Thompson is next with his amendment.
  How long is the Senator going to take?
  Mr. THOMPSON. Probably 10 minutes.
  Mr. DOMENICI. The Senator has an hour if he would like it 
but Senators who have amendments--Senator Snowe will follow on our 
side. She seems to be ready. So we will do that sequencing.

  Mr. BUMPERS. Mr. President, before the Senator moves on, I understood 
I had the right to offer 2 amendments.
  Mr. DOMENICI. Three.
  Mr. BUMPERS. Well, one I may not offer.
  Mr. DOMENICI. You want to offer your second one right now after this 
debate is finished?
  Mr. BUMPERS. I think the Senator from Alaska wants to speak on my 
amendment.

[[Page S5332]]

  Mr. DOMENICI. I understand.
  Mr. BUMPERS. And then I will offer the second. We will make it brief.
  Mr. DOMENICI. So we make sure we understand, Senator Murkowski will 
have ample time to rebut the first amendment. The Senator can offer his 
second amendment. He has up to an hour. I hope he will not use it.
  Mr. BUMPERS. I say to my good friend from Tennessee, I will try to 
confine my remarks to 5 or 10 minutes.
  The PRESIDING OFFICER (Mr. Grams). The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I just want to talk about the 
practicality of this amendment and the budgets that are before us.
  First, the President sent us a budget. I think my friend, the Senator 
from Arkansas, voted for the President's budget. I checked again, and I 
believe the Senator did. I believe the Senator did.
  Now, that budget has $4 billion in asset sales, $2 billion of which 
occur in the last year, using the definition that the Senator has used 
of asset sales. But let me tell you what else it has. It has $38 
billion in spectrum fees, $18 billion of which occur in the last 2 
years--the last year, and then under the triggering mechanism there is 
$6 billion more.
  Now, frankly, I would think if you want a definition that talks about 
single events that you get a bunch of money into the Treasury and then 
you do not keep getting in, you ought to expand your definition and 
talk about the President's spectrum fee.
  Just to put it in perspective, it is twice as much in the last year 
as the Republicans say that sale will yield and without it the 
President's budget is way out of balance, so it is a very important 
thing, and in all of the rationale that the senior Senator from 
Arkansas used, the same rationale for the most part could have been 
applied to the President's budget and to spectrum fees.
  Having said that, I want to make sure that everybody understands we 
just approved as part of last year's appropriations the sale and 
privatization of uranium enrichment functions of this country. A 
previously chartered public corporation will become private and, 
believe it or not, this was recommended way back in the days of 
President Nixon. It took us that long to understand how to privatize 
something that should have been privatized a long time ago. But we are 
very grateful we got it done. I am particularly grateful; I happen to 
have introduced the bill. It has some innovative and exciting things in 
it for this private corporation that is going to run that, including 
for the first time ever futures are going to be sold on uranium because 
we are going to buy a bunch of uranium from Russia, and we do not want 
to flood the market from it, so we came up with the idea of this new 
company having the right to take that in phases and issuing futures 
like you do in other futures markets.
  Under this definition, that would not have been permitted. The 
Senator indicates everybody agrees with that. But strictly speaking, 
many privatizations would have a difficult time becoming reality.
  My second point is the wilderness that is spoken of up there, ANWR, 
is not being sold, and I believe is not even in this budget resolution 
as assumed that it is going to be leased or otherwise. It is not in the 
budget resolution. And as the senior Senator from Alaska said, to be 
supplemented by Senator Murkowski, there is not a sale plan. It is a 
lease. And the lease will continue to yield royalties.
  Why should you not count that if it ever happens? It is not in this 
budget resolution. But if it does, clearly you ought to apply that to 
the deficit. I do not know what else you ought to do with it. Just put 
it in the Treasury and say the deficit did not come down?
  When you put it in the Treasury, it comes down and then you keep 
getting royalties after that. I do not choose to speak the opposite 
side of the coin on ANWR, which has been spoken of on the floor, 
because I do not think I want to make ANWR the prime focus of this 
amendment since it really is not.
  This amendment does not apply to ANWR. It applies to the things I 
have been speaking of and many more, and we ought not adopt it. We 
ought to leave that flexibility where it is, as it is, in this budget 
resolution. And when you bring the budget down as much as we are and 
you get a few $1 billion of asset sales, I believe you are not 
distorting anything unless you cannot depict after that a steady stream 
of reduced deficits following this balanced budget. If it was the only 
thing and then it was shooting back through the air, I would be down 
here saying that is pretty phony, but we are bringing it down so much 
that the additional amount you bring it down by asset sales I believe 
is a pretty adequate and accurate picture of where we are.
  I yield the floor and yield 12 minutes to Senator Murkowski.
  Mr. MURKOWSKI. I thank the floor manager.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. Mr. President, I listened with great interest to my 
good friend from Arkansas. I find it rather curious he is speaking in 
opposition to asset sales today when he voted for them.
  We had the privatization of the U.S. Enrichment Corporation, 
supported by the Clinton administration. It is my understanding it 
would be about $1.2 billion, or net over 7 years between $1.6 and $1.8 
billion.
  The second asset sale was a sale of the helium reserve, supported by 
the Clinton administration, a $47 million revenue stream supported by 
the Senator from Arkansas.
  Lease of excess capacity in SPRO is supported by the administration, 
supported by my friend from Arkansas, and I think it would generate 
some $359 million. That is proposed leases to foreign countries.
  Then there was the sale of surplus assets by the Department of 
Energy, supported by the Clinton administration, to generate $110 
million. I believe my friend from Arkansas supported that as well.
  Prepayment of outstanding loans: One was, as I recall, the central 
Utah project, supported by the Clinton administration, $219 million, 
and I believe supported previously by my friend from Arkansas.
  My good friend seems to cite his problem with the formula for asset 
sales, where we are selling assets to raise revenues under the Budget 
Act. Without the change in scoring, the Federal Government receives 
money, but it does not count. In some instances, such as prepayment of 
loans, the Federal Government does not receive future payments which do 
count as cash. The result is that you have a Budget Act point of order 
for cash because you did not count the revenues. The theory there, Mr. 
President, is you sell something, you have lost revenues, therefore, it 
is a loss. Well, how do you get rid of anything around here?
  A few quick points for those who are not familiar with the process 
around here. We have heard discussions on this issue before. This 
amendment, offered by the Senator from Arkansas, would prevent the sale 
of assets from scoring in the budget process. This change was made in 
the budget process last year at the request of the President, who, I 
might add, is from Arkansas. It was not something we dreamed up at the 
last minute. It came from the President. We happen to agree.
  The change made last year allows us to score the sale of assets that 
are already, basically, a part of the process, and, in this case, the 
group that I just read off, Mr. President, is about $4 billion in 
assets that would be recognized as part of the President's budget.
  It makes no fiscal sense to say after Congress authorizes the sale of 
an asset that they cannot count it in the budget process. It is 
absolutely absurd to this Senator that if we sell something that 
produces $1 billion, we have to borrow money to balance the budget 
because we cannot count that money that comes into the Treasury.
  There is no reason why these asset sales should not count and should 
not help us reduce the deficit. How could we ever sell surplus 
Government property? If we can lease some land, get rid of some 
Government surplus, then why should we not be allowed to have it go 
toward deficit reduction? Why should it not be appropriate for the 
Government to be able to sell some of its assets and use the money to 
help reduce the size of the deficit?
  Additionally, Mr. President, these asset sales are auctions on behalf 
of the Government. They create jobs and opportunities for Americans. 
Whether it be a mineral lease sale, a spectrum

[[Page S5333]]

auction, or a privatization of the U.S. Enrichment Corporation, as we 
did last year, these actions create private sector jobs. Here we have a 
situation where we can sell Government assets, use the money to reduce 
the deficit, and create real private sector jobs.
  I get somewhat of a chuckle when the Senator from Arkansas shows a 
picture of the Statue of Liberty with a for sale sign on it. That kind 
of hype, obviously, may be appealing to some, but it is not factual, 
and the Senator from Arkansas knows it. Does anybody in this body truly 
believe we would sell the Grand Canyon or the Statue of Liberty to 
generate a cash flow? Of course not.

  What does make sense is to sell something that the Government has, 
such as the use of a closed Army base for low-income housing or a 
spectrum auction. Then it makes sense that we use this money to attack 
the deficit and not to throw it away on some other project the Senator 
from Arkansas dreams up. The money comes into the Treasury, and it 
makes sense that we record it as such.
  I find it rather ironic that in this extended discussion, ANWR seems 
to have come in. My understanding today is that the United Nations 
authorized Iraq to put about $1 billion worth of oil each quarter on 
the world market so that we can look to that source to ease the 
shortage associated with the supply and demand of oil.
  My memory suggests it was only a few years ago that we had a half 
million men and women in the Persian Gulf for one specific reason: to 
keep Saddam Hussein of Iraq from controlling the supply of oil from the 
Mideast.
  At that time, we were trying to put Saddam Hussein in a cage. 
Unfortunately, we did not achieve that, but it is rather ironic that 
today we are looking to him for relief when we have areas at home that 
we can open safely using the science technology and experience that we 
have.
  My friend from Arkansas cited an extensive list of national 
organizations, some in my State of Alaska, that object to the asset 
sale concept. I find that rather amusing because spokespersons in those 
organizations have come to me and said, ``Murkowski, there's absolutely 
no question in our minds that you can open up the Arctic safely to oil 
and gas exploration and to production, if the oil is there. But you 
know and we know that this issue is a national cause. It gives us 
dollars, it gives us membership.''
  It is too far away for the Senator from Arkansas or others to go up 
and look at it and see for themselves the technological advancements 
that have been made, or to go down in the Gulf of Mexico in the delta 
off the Mississippi River and see how the technology has developed to 
where they are now drilling in 2,300 feet of water. To suggest that we 
cannot drill on land in a very, very tiny sliver, roughly 2,000 acres 
out of 19 million acres, and do it safely is an effort to hoodwink the 
American people.
  So I am a little surprised that my good friend from Arkansas would 
attempt to roll in the national environmental groups' major issue 
relative to membership and dollars. I am disappointed too that he would 
allow himself to be used by those groups, so to speak, who admit 
without question that we have the capability to develop oil and gas 
resources safely. But they know they need an issue. It creates dollars. 
It creates membership. As a consequence, we have it brought up in this 
debate today.
  So I encourage my colleagues to look behind the motives associated 
with the objections by the Senator from Arkansas who reflects on an 
objection to the process under which the Federal Government sells its 
surplus property, leases, if you will, its resources to generate 
funding so this funding can come back in the Treasury and be utilized 
for deficit reduction or the budget process.
  I think it is an extraordinary set of circumstances that we find 
ourselves in a situation where some would have this particular asset 
sale issue be seen as a vote on a resource development issue that would 
make our Nation less dependent on imported sources of energy.
  I serve on the Energy Committee with my friend from Arkansas. And I 
appreciate his sensitivity to the fact that we are increasing our 
dependence on imported oil. We are about 51.5 percent dependent on 
imported oil. But, you know, the other day we also saw an effort by the 
administration, an announcement of the sale of some of the oil that 
went into the strategic petroleum reserve, that it would be sold, about 
12 million barrels.
  This was hyped up by the media as way of bringing down the price of 
gas. None of them were sensitive enough to really pick up on the issue 
of how insignificant it was, because when you discuss 12 million 
barrels, and we consume 18 million barrels a day, you can readily see 
that this is simply a drop in the bucket. But nevertheless, it was 
significant to the media. And we note that the President has proposed 
further sales of SPRO. And we are going to be debating that in the 
Energy Committee.
  But the single most important thing, Mr. President, is we created 
SPRO as a consequence of the oil embargo in 1973. We saw a disruption 
in our supply of oil. Congress acted in the national security interests 
of the country by creating a strategic petroleum reserve with 
approximately a 90-day supply in mind. We did not achieve 90 days 
supply, Mr. President. We got up to about 37 days. But I find it 
extraordinary that at that time we were 36 percent dependent on 
imported oil. Today, we are over 50 percent and there is a suggestion 
that we sell some of SPRO.
  Mr. President, it is only a matter of time. We are losing our 
leverage on the Mideast because we are becoming too indebted to them as 
a single energy source. We will rue the day in this body when we have 
not met our obligation to reducing this country's dependence on 
imported energy by encouraging domestic development where we are most 
likely to find it and where, indeed, we have the proven technology to 
do it safely.
  I also find it rather ironic on some of the issues in Alaska some 
people would rather see a check written for the impact of people rather 
than benefit from the creation of jobs, such as was the case proposed 
in the Tongass for $110 million, to take care of their needs. The 
environmental community does not suggest that is applicable to taking 
care of the concerns of the Gwich'ins or the porcupine caribou herd in 
this case.
  No. It is an issue that emotionally is charged with unfounded 
rhetoric, based again on those unscrupulous, extreme environmentalists 
that want to use this as the single most important issue to generate 
funding, generate membership, because Americans cannot go up to see it 
for themselves, and time after time we simply sell American technology 
and ingenuity short.
  I can tell you as a businessman, Mr. President, if the position of 
the Senator from Arkansas prevails, this Government is not going to be 
able to generate, from the sales of surplus, leases, or whatever, 
funding to reduce the deficit or fund the Government, as the case may 
be. So as a consequence, Mr. President, I encourage my colleagues to 
focus in on the real issue at hand here.

  That is the issue specifically of scoring. And that is what the 
Senator from Arkansas is opposed to. That is what this Senator from 
Alaska supports, because without it we simply cannot get there from 
here. We cannot properly address the sale of Government property and 
generate the funding into a worthwhile cause whether it be deficit 
reduction or other budgetary needs. So I encourage my colleagues, Mr. 
President, to vote against this amendment as they did last year and the 
year before, and I believe the year before that.
  Mr. President, I yield the floor.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. BUMPERS. Mr. President, let me say that the Senator from Alaska, 
he is correct, I voted for the sale of the Uranium Enrichment 
Corporation. I did not vote to score the money received from that sale 
on the budget to reduce the deficit, to mask the size of the deficit. 
He is incorrect in characterizing my support for his proposals to sell 
assets. I voted against the reconciliation bill out of our committee.
  Mr. President, my point is this--I do not know how many times I have 
to say it--I am not suggesting we prohibit asset sales. I am suggesting 
that we not mask the size of the deficit by scoring revenue from asset 
sales against the deficit. If you want to put the sale of the Uranium 
Enrichment Corporation into infrastructure that you would otherwise 
spend, be my guest.

[[Page S5334]]

                           Amendment No. 4014

 (Purpose: To restore common sense to the budget rules by eliminating 
                         the defense firewalls)

  Mr. BUMPERS. Mr. President, I ask unanimous consent that the pending 
amendment be temporarily laid aside in order to offer another 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The assistant legislative clerk read as follows:

       The Senator from Arkansas [Mr. Bumpers], for himself, Mr. 
     Simon, and Mr. Kohl proposes amendment numbered 4014.

  Mr. BUMPERS. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Strike line 9 on page 52 through line 22 on page 53 and 
     insert the following:
       ``(1) with respect to fiscal year 1997, for the 
     discretionary category $489,207,000,000 in new budget 
     authority and $531,365,000,000 in outlays;
       ``(2) with respect to fiscal year 1998, for the 
     discretionary category $489,153,000,000 in new budget 
     authority and $521,660,000,000 in outlays;
       ``(3) with respect to fiscal year 1999, for the 
     discretionary category $493,221,000,000 in new budget 
     authority and $525,742,000,000 in outlays;
       ``(4) with respect to fiscal year 2000, for the 
     discretionary category $500,037,000,000 in new budget 
     authority and $525,071,000,000 in outlays;
       ``(5) with respect to fiscal year 2001, for the 
     discretionary category $492,468,000,000 in new budget 
     authority and $517,708,000,000 in outlays;
       ``(6) with respect to fiscal year 2002, for the 
     discretionary category $501,177,000,000 in new budget 
     authority and $515,979,000,000 in outlays;

     as adjusted for changes in concepts and definitions and 
     emergency appropriations.
       ``(b) Point of Order in the Senate.--
       ``(1) In general.--Except as provided in paragraph (2), it 
     shall not be in order in the Senate to consider--
       ``(A) a revision of this resolution of any concurrent 
     resolution on the budget for fiscal year 1998 (or amendment, 
     motion, or conference report on such resolution) that 
     provides discretionary spending in excess of the spending 
     limit for such fiscal year;''.

  Mr. BUMPERS. Mr. President, this amendment would abolish what we 
refer to around here as the firewall that protects the defense budget 
against any diminution if you try to take any money out of defense to 
put it in something else. If you had 5 million homeless people in this 
country that were hungry, and you wanted to decide, as a matter of 
national policy, we did not want those 5 million people on the streets 
hungry, and you felt like you might cut the defense budget it would 
require a supermajority--60 votes.
  Now let me explain what the firewalls do. The 1990 Budget Act 
established caps on discretionary spending and imposed firewalls on the 
defense portion of the discretionary budget for fiscal years 1991 to 
1993. In fiscal years 1994 and 1995, we did not have these so-called 
firewalls. All of a sudden last year it came back. And so the last 2 
years, 1995 and 1996, the firewalls were up again.
  Now, Mr. President, let me tell you, in the 2 years, 1993 and 1994, 
when the firewalls were down, I want anybody here to tell me how 
defense suffered. Did anything happen in those 2 years that would 
jeopardize the national security of this Nation? I can answer that. You 
can answer it. The answer is no.
  I am just offended by the philosophy that every day of every year 
that approximately $270 billion for defense is sacred at the expense of 
everything else. You might have 10 million children unimmunized. You 
might have 5 million children who have been kicked off Medicaid and 
therefore are ineligible for health care. You may have hungry children 
who are not getting fed because the only meal they get is at school. 
Under the firewalls you cannot take $1 to redress any other of the 
millions of problems we have in this country unless you can muster 60 
votes.
  The thing that I think is almost as offensive to me as that is that 
everything around here is couched in terms of either you vote for every 
single dime anybody can conjure up for defense or you are perceived as 
being weak on defense. The Budget Resolution provides more than $11 
billion for defense above what the President asked for. I sit on the 
Defense Appropriations Subcommittee. I get a chance to decide later 
whether I think that is enough money, too much, or not enough.
  Let me discuss what is happening to this country and you tell me 
whether or not you think we can continue with this policy and continue 
to be a great nation. First, the argument I have heard most is that we 
do not spend as much on defense as a percentage of the national budget 
as we did when Jack Kennedy was President. Well what is so startling 
about that? We did not have Medicare then, either. Social Security 
expenditures were around $10 billion to $15 billion a year; now it is 
almost $300 billion. Entitlements did not take 60 percent of the budget 
as it does now. If you take entitlements and interest on the national 
debt it leaves you, out of a $1.650 trillion budget, it leaves you 
approximately $500 billion for discretionary programs. Let me repeat: 
Out of $1.7 trillion, all that is left for defense and all the other 
things that make us a great nation, a civilized nation, a democracy, is 
$500 billion--about 35 percent of the budget.
  So here we are with 35 percent of the budget, $500 billion for 
defense and everything else--the environment, education, law 
enforcement, medical research, you name it. So where are we heading, 
Mr. President? This chart demonstrates what is going to happen. Between 
1997 and 2002 we are going to spend $1.895 trillion on defense. During 
the same period we will spend $1.579 on domestic discretionary 
programs. While defense spending rises during the period, domestic 
programs are cut, down to the point that in the year 2001 defense gets 
$275 billion while everything else gets $218 billion.
  Education, the environment, highways, medical research, law 
enforcement, our system of justice, these programs all get slashed. In 
comparison, defense over the next 6 years get $316 billion more than 
everybody else.
  This budget over a 6-year period cuts $60 billion in education 
spending. The other day, the majority leader of the House suggested 
that we cut education to offset the gas tax cut. He said: ``We are not 
getting a very good return on our dollar, anyway, for education.'' I 
swear, sometimes you would think we are living in the middle ages.
  Mr. President, what has been happening to nondefense discretionary 
spending? We are by far the most powerful nation on Earth. One of the 
reasons is because over the next 6 years we are going to spend $316 
billion more than we spend on nondefense programs. I am not talking 
about Medicare and Medicaid and Social Security, welfare and all the 
entitlement programs. I am talking about just the things where we have 
some discretion. We account for one-third of all the world's military 
spending. We spend twice as much on defense as Russia, China, Iran, 
Iraq, North Korea, Libya, Syria, and Cuba; twice as much as all those 
eight nations combined. We spend 17 times more than the six so-called 
rogue nations, Iran, Iraq, North Korea, Libya, Syria, and Cuba--17 
times more.
  Oh, yes, we are by far the most powerful nation on the Earth 
militarily. This body has said, ``You can't cut a dime of it unless you 
get 60 votes.'' Bear in mind in 1993 and 1994, it did not come up. 
Nobody tried to rob defense to pay for other things. There are some 
things I would have changed. However, let me tell you where the United 
States is not doing so well. Listen to this, colleagues: we are 21st in 
infant mortality rates in the world. Mr. President, 27th in education. 
Let me repeat that: 27th in education by the scores the Department of 
Education keeps.
  Where are we in the immunization of our children? Mr. President, 
61st. Betty Bumpers has spent her entire public life since I was 
elected Governor on childhood immunization programs. I am proud of her. 
I have said many, many times if I died tomorrow, the people of my State 
and this Nation would owe her a much bigger debt of gratitude than they 
will owe me. I do not say that to be gracious. I say that because it is 
true. When I think of the man hours that have been spent, I think of 
the children's lives that have not been lost, when I think of the human 
misery that has not been suffered because of Betty's commitment now, 
and in the last 5 years with

[[Page S5335]]

Rosalynn Carter, traversing this country back and forth, up and down, 
for the past 5 years, trying to get these levels up, and we are 61st in 
immunization levels. I must say, our levels are pretty high, but not as 
high as they ought to be. How many children in this country live below 
the poverty line? Twenty percent of our children live below the poverty 
line.

  Who has the highest teenage murder rate in the world? The United 
States. So how are we going to address that? Not by putting 100,000 
more cops on the beat, because we cannot afford it. While we should be 
spending for the things that make us a great Nation, we have to keep 
that going down, so we can keep defense spending going up.
  So, Mr. President, I can tell you, categorically, that it is not my 
plan. I am just saying it is bad public policy, and it does not reflect 
well on the U.S. Senate and the U.S. Congress to say that we consider 
defense so important that, no matter what happens in this Nation, no 
matter what kind of an epidemic we may have that we need to stomp out, 
no matter how many hurricanes, tornadoes, and floods we have, you 
cannot, without 60 votes, take a dime from defense to address it.
  That is a crazy policy, and it shows how little confidence the people 
who conjured that up have in the U.S. Congress. It is as though we will 
unilaterally disarm. We do not do it for anybody else, and we ought not 
do it for defense. This body is not going to take leave of its senses 
if I or anybody else offers an amendment to take $1 billion out of 
defense. If they do not like it, they can vote against it. That is 
called democracy.
  I ask unanimous consent that it be in order that I be allowed to ask 
for the yeas and nays on both of my amendments dealing with firewalls 
here and also on asset sales.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BUMPERS. I now ask for the yeas and nays on each of those 
amendments.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. THURMOND. Mr. President, I rise in opposition to the amendment 
offered by Senator Simon and Senator Bumpers. The amendment would 
remove the firewall between defense and nondefense discretionary caps 
and would allow defense to be used as a convenient billpayer. This 
amendment encourages raiding defense accounts every time there is a 
fiscal problem. It will not restore flexibility to the budget process, 
nor help avoid any future Government shutdowns, as some would have you 
believe.
  Our flexibility to determine defense spending or reduce defense 
spending, if we so choose, is not restricted by firewalls. The Congress 
will continue to set spending priorities. Firewalls will ensure we live 
by those priorities.
  Firewalls and spending caps are important tools for maintaining 
fiscal discipline. Firewalls guarantee that if defense spending is 
reduced, the savings will go to deficit reduction rather than to other 
Government spending. If the Defense Department develops a requirement 
for additional funding, then firewalls will require the Department to 
provide an offset.
  Hard decisions must be made to balance this budget. We should not 
allow defense to be used as a billpayer without regard to the effects 
of these reductions on our military capabilities.
  Mr. President, the defense budget is in its 12th straight year of 
decline. The Secretary of Defense, service Secretaries, and Chiefs of 
the military services have all testified about their concerns regarding 
modernization funding. But we already have had a good debate on defense 
spending and had a vote. I do not need to waste more time going over 
those arguments. We must maintain discipline in the budget process. 
Firewalls contribute to that discipline. There is no easy way out. 
There is no convenient billpayer that will take care of all of our 
problems.
  I strongly urge all of my colleagues to oppose this amendment.
  Mr. President, I yield the floor.
  Mr. BUMPERS. Mr. President, the Senator from Illinois, Senator Simon, 
has arrived on the floor. He is my No. 1 cosponsor.
  Is the Senator from Illinois willing to defer? Senator Thompson from 
Tennessee has been waiting an inordinate length of time. He has been 
waiting on me to finish speaking. I promised him that he could go 
immediately after me. He will not take very long for his statement. But 
I do want my colleague to be heard on this asset sale amendment.
  Mr. SIMON. I certainly agree to that--particularly if the Senator 
from Tennessee will agree to your amendment. Seriously, I do not have 
the floor, but I am pleased to hear the Senator from Tennessee.
  Mr. THOMPSON. May I inquire of the Senator from Illinois how much 
time he needs? Since we are on that subject, it might be best if he 
goes first.
  Mr. SIMON. I was going to speak for 3 to 5 minutes on the Bumpers 
amendment.
  Mr. THOMPSON. While we are on that subject, if it is agreeable to 
everybody else, I will defer to my friend, if he wishes. Would the 
Senator prefer that, or would he prefer me to go ahead?
  Mr. SIMON. If the Senator from Tennessee has no preference, I welcome 
the opportunity to speak briefly, and I assure him that I will speak 
briefly.
  Mr. THOMPSON. That is fine with me.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Mr. President, I strongly support this amendment offered 
by Senator Bumpers. Let me just remind you of where we were not too 
many years ago. In 1975, I came into the U.S. House of Representatives. 
If you take the defense budget for 1975 and add an inflation factor, 
this year we are going to spend $22 billion more than we spent in 1975. 
In 1975, we were involved in the cold war, a nuclear confrontation. We 
were involved in Vietnam.
  Now, the other side will point out that we had a draft then, and we 
did not spend as much money on personnel. But let us face it, the world 
has changed dramatically and, because of the pressure from our friends 
in the defense industry, we are not changing, and we ought to. Gertrude 
Stein would say, ``Money is money is money.'' For us to say some money 
is more sacred than others, and we are going to give the Pentagon $11 
billion more than they requested, we are going to cut back on education 
$2.3 billion, I do not think that makes sense.

  If someone wants to set up a firewall around education--and I 
strongly support education--I am going to vote against that. I do not 
think we have a firewall for anything. The Senator from Arkansas makes 
good sense, and I hope we will have the good sense to do that.
  I point out, about 3 years ago, by voice vote, without a dissent, I 
offered an amendment to get rid of the firewall, and the Senate 
unanimously adopted that. I remember Bill Bradley and Joe Biden were 
cosponsors of that amendment, along with Senator Bumpers. When we got 
to conference, our friends in the defense industry went to work, and we 
lost. But this amendment makes sense. This is in the best interest of 
our country, and I hope we adopt the Bumpers amendment.


                           Amendment No. 3981

(Purpose: To express the sense of the Senate on the funding levels for 
                the Presidential election campaign fund)

  Mr. THOMPSON. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Tennessee [Mr. Thompson], for himself, Mr. 
     Kerry, Mr. McCain, Mr. Feingold, and Mr. Bradley, proposes an 
     amendment numbered 3981.
       At the appropriate place in the resolution, insert the 
     following:

     SEC.  . SENSE OF THE SENATE ON THE PRESIDENTIAL ELECTION 
                   CAMPAIGN FUND.

       It is the sense of the Senate that the assumptions 
     underlying the functional totals in this resolution assume 
     that when the Finance Committee meets its outlay and revenue 
     obligations under this resolution the committee should not 
     make any changes in the Presidential Election Campaign Fund 
     or its funding mechanism and should meet its revenue and 
     outlay targets through other programs within its 
     jurisdiction.

  Mr. THOMPSON. Mr. President, the purpose of this amendment is to 
delete the mandatory assumption in the pending resolution which directs 
the Finance Committee to repeal the current system of financing the 
Presidential

[[Page S5336]]

election campaign fund. The budget resolution directs the Finance 
Committee to change the checkoff to a direct contribution to be taken 
from tax refunds.
  Mr. President, as you know, we have a system now whereby our 
Presidential election campaigns are funded by a checkoff system where 
taxpayers can check off up to $3 to finance the Presidential campaign. 
What the budget resolution would do is to change that to a situation 
where a person would have to take money out of their own pocket from 
tax refunds in order to voluntarily contribute toward this fund.
  There is no question but what the result of that would be. It would 
be to eventually destroy the fund and the system we have now, at a time 
when everybody is concerned about the way their Government is operated, 
the way their Government is perceived, and the cynicism that so many 
people have toward their Government, toward the role of money in their 
Government, and toward the role of money and the amount of money--
tremendous sums--that is necessary to finance Presidential campaigns, 
Senate campaigns, and congressional campaigns.
  At this particular time, the budget resolution takes exactly the 
wrong move toward all of this. We ought to be going in the opposite 
direction.
  There is a reason that we have the system that we have today. Along 
about 1973, we had an affair called Watergate. We heard testimony 
during that period of time about large suitcases full of money going 
around and cash being collected from around the country from very 
substantial individuals and groups of individuals, and about those 
suitcases of cash being brought back here. In that particular 
Presidential race--it was a bipartisan problem--I remember one of the 
treasurers for one of the Democratic candidates in the primary wound up 
going to jail because of some of the things that we investigated. But 
very substantial with regard to the President's reelection campaign, 
this was a major problem that resulted in them spending that year about 
twice as much in real dollars--in current dollars--as was spent in the 
last Presidential campaign.

  So we were awash with money, we were awash with cash, and we were 
awash with concern in this country that the wrong people were having 
too much influence on the outcome of our Presidential races. So this 
did not just appear out of the blue. It was because of a very real 
concern.
  I hope that we do not have such a short attention span in this 
country that we do not even remember things like that entire affair 
called Watergate back in 1973.
  The result of the reform that came from that--there were several 
reforms, some were good, some were not so good--was PAC contributions 
or the political action system itself which was built up during that 
particular time. But one of the results--on the Presidential level 
anyway--was that we really got more participation and have had more 
participation by American citizens in the Presidential campaign process 
than we have in other elections in this country. Taxpayers somewhere in 
the range of 15 to 20 percent participate in this program. Taxpayers 
participate to other elections in the range of about 7 percent.
  Another result that has been derived from the system that we have now 
is that it has been virtually scandal free. We certainly cannot say 
that about any other part of our system. It has also leveled the 
playing field. I think that many of us are undoubtedly concerned about 
the extraordinary advantages that money brings. And we have this debate 
with regard to Senate campaigns; congressional campaigns. That is 
another debate that we certainly are going to have in this body before 
long, and something that is of concern to me. But because of the 
Presidential system that we have now we really have developed a pretty 
level playing field where there has been an incumbent involved. In 
three out of four of the last Presidential elections challengers have 
had one.
  So by almost any measure at a time when very few things seem to work 
properly, and at a time when people certainly are not satisfied with 
the role of money and the amount of money in our entire political 
system, it would seem that on this Presidential level anyway the system 
has worked better than any other. The question that you have to ask 
yourself is, If we do away with the system that we have now, what are 
we going to replace it with? If we go to a system that is going to 
generate fewer and fewer dollars, as without any question this would, 
we are eventually going to have to have a situation where people opt 
out of it. Only about three people have I think ever opted out of it 
since we have had it. But you will have more and more people who will 
opt out of it and go back under the old system. And if you think 
raising $1 million or $4 million for a Senate campaign in increments of 
$1,000 or less is a lot of fun, somebody ought to try raising $90 
million under that system. So it will be a total impossible mess where 
candidates will be spending absolutely all of their time years in 
advance in trying to raise these relatively small amounts of money, and 
the people who can raise those moneys for them, of course, become more 
and more influential in policy.

  So we are not leaving ourselves any fallback here, and we do not have 
anything to replace the current system with.
  There is no doubt that the current Presidential checkoff system and 
the current Presidential financing system could be improved somewhat. 
It seems that my party has front-end loaded the primaries and pushed 
the convention further back which places great difficulties on 
candidates who have contested primaries. We may have outsmarted 
ourselves there. The President this year does not have a contested 
primary.
  So you must look to see whether or not there are those allotments 
where you can raise so much money and individual States by so much and 
by such and such increments, and all of that. I would not care to put 
all of that on the table.
  I think we can look at absolutely all of that and adjust that in a 
way that would improve our overall system. But the basic proposition 
that we need a system at the Presidential level--I think otherwise, 
too, but again another debate--we need a system at the Presidential 
level where at least the fellow or the person that we elect as 
President of the United States does not have the additional baggage of 
being perceived to be elected by special interests at a time when 
cynicism is the biggest problem probably facing our Government because 
it permeates everything else. As I said, this is exactly the wrong 
direction to go in. Therefore, I urge adoption of this amendment.
  I yield the floor.
  Mr. McCONNELL. Mr. President, Members and their staffs need to be 
clear on what this particular debate is about and what it is not about. 
It is not about the merits of the Presidential campaign fund. It is not 
about the Watergate so-called reforms.
  What this amendment is about is fiscal integrity. Contained within 
the budget resolution is a provision which simply makes the 
Presidential election campaign fund tax form checkoff mechanism truly 
voluntary. In other words, it alters it so that the checkoff no longer 
diverts tax dollars from the Treasury. Instead, checking ``yes'' will 
deduct $3 from that person's tax refund.
  In sum, what this does is change the checkoff mechanism so that the 
nearly 90 percent of Americans who choose not to check ``yes'' are not 
forced to pay for the few who do.
  At the most recent checkoff rate, this modest alteration would save 
taxpayers about $70 million annually.
  As I said, this modest proposal does not abolish the Presidential 
system, as I would like. It does not get rid of the checkoff, as I 
would like. This is not a referendum on the merits of the Presidential 
election system.
  Presently, the checkoff's ``yes'' box constitutes a direct 
appropriation diverting tens of millions from the Treasury at the 
behest of a shrinking pool--13 percent and falling at last count--who 
check ``yes'' on their tax forms.
  As George Will so astutely pointed out in the Washington Post last 
year, the current checkoff mechanism is a bookkeeping dodge. He further 
elaborated: ``The checkoff involves not voluntary contributions but 
rather a diversion of scores of millions of dollars of general revenues 
to an unpopular program.''

[[Page S5337]]

  Mr. President, the public's disdain for taxpayers financing of 
political campaigns is well known so I will not belabor it further at 
this time.
  The budget resolution provision quite simply would modify the 
checkoff mechanism so that people who oppose taxpayer funded political 
campaigns do not have to pay for those who check ``yes.'' The Senate 
has never voted on this specific question--it is not on the merits of 
the Presidential system--so I hope colleagues who support the 
Presidential spending limit system will give careful thought to making 
the checkoff mechanism honest by making it truly voluntary.
  Mr. President, we ought to consider expanding the checkoff format, in 
an add-on form. I am favorably disposed to include such a checkoff to 
raise funds for America's national parks--popular national treasures. 
There are no doubt other worthy endeavors which would be appropriate 
subjects of checkoffs to give Americans an opportunity to directly 
contribute, without impacting the budget.
  The Presidential fund is very unpopular and the checkoff is 
deceptive. To simply make it honest, I urge my colleagues to oppose the 
Thompson amendment.
  I would also advise Senators that the Kerry amendment is strongly 
opposed by the National Taxpayers Union and Citizens Against Government 
Waste. In the view of these good government groups, a vote against the 
Thompson amendment is a vote for taxpayers.
  Mr. KERRY. Mr. President, to quote Yogi Berra, perhaps slightly 
inaccurately, ``This seems like deja vu all over again.''
  It was over 20 years ago now when this Nation suffered through the 
embarrassments and dangers of Watergate. The Nation was treated to the 
spectacle of testimony about the Attorney General of the United States 
and the Secretary of Commerce shaking down the captains of industry for 
campaign contributions, and hauling briefcases full of hundred dollar 
bills. Americans learned about expenditures that totaled over $200 
million in 1996-valued dollars. They saw a genuine constitutional 
crisis that toppled a Presidency and posed much greater risks for our 
constitutional democracy. And they understandably were not pleased.
  In the fallout from Watergate, the Members of Congress got the 
message from their constituents to fix the problems that permitted the 
campaign finance abuses that composed an important part of that 
scandal. The Congress responded by enacting a program of voluntary 
spending limits for Presidential election campaigns in exchange for 
providing public financing for Presidential candidates in both the 
primaries and the general election. And, Mr. President, it has worked. 
It has worked superbly. In all the Presidential elections since 1974, 
we have never again seen the abuses that the 1972 election will 
infamously represent to all who lived through it or have learned about 
it from the history books.
  That makes it doubly difficult to understand, Mr. President, why 
anyone would want to destroy those reforms that have worked so well. 
But that's precisely what some on the other side of the aisle want to 
do. Just 1 year ago, when we were considering the last congressional 
budget resolution, the Republican majority on the Budget Committee at 
the behest of other Republican Senators made an effort to abolish the 
Presidential campaign finance system. At that time, I offered an 
amendment to remove the language from the resolution that would have 
had that effect, and by a vote of 56 to 44, obviously composed of the 
votes of both Democratic and Republican Senators, we succeeded in 
saving the existing system of Presidential campaign spending limits and 
public financing that has removed corruption from Presidential 
elections, limited the amount of money spent in those campaigns, and 
returned to the American people the allegiance of candidates for the 
highest office in the land and the most powerful office on the face of 
the Earth from the special interests which used to so generously pay 
for the campaigns.
  This year, opponents of publicly financed Presidential elections are 
using a different approach, but the intent and the result would be the 
same. It would end the system of spending limits and public financing 
of Presidential elections.
  That is why I stand here with my good friend, the Senator from 
Tennessee, and colleagues from both sides of the aisle. We will oppose, 
and once again we are determined to defeat, this effort to kill the 
system of public financing that is working to keep special interests 
from taking over Presidential politics once again.
  The budget resolution says: ``This proposal would not terminate 
public financing, only the source of the funds.'' Well come on, Mr. 
President, how are we going to have public financing and the spending 
limits and clean campaigns that go with it if we don't fund this proven 
system? Who's attempting to kid whom?
  This is a time for us to win back the collective faith of our 
community members and the rest of the country. We should be committed 
to restoring the American trust in our electoral system. Obliterating a 
system of public financing that has worked for two decades is no way to 
accomplish that.
  Plain and simple, Mr. President, the system works. In 1972, when 
Richard Nixon ran for President, he spent $60 million in that race, the 
equivalent of $200 million today. That is more than the total both 
President Bush and Bill Clinton spent in 1992. I challenge those 
Senators who are the proponents of the provision in the budget 
resolution to find any American who would favor a return to the days 
prior to the Watergate reforms--except, of course, representatives of 
the moneyed special interests who would love to be able to purchase 
special access and influence again if we were to permit them to do so.
  I hope we will not forget the way it used to be. We must not forget 
that a Presidential candidate accepted a $2 million campaign pledge 
from an industry, and then his administration granted that industry an 
increase in price supports that cost the American people far, far more 
than the $2 million contribution. We must not forget the approval of an 
airline's route application shortly after a large corporate 
contribution to the party in power. And we must remember the settlement 
of antitrust litigation on terms favorable to a corporation very soon 
after that corporation agreed to underwrite a large portion of the cost 
of a political convention.
  Those were the bad old days of Presidential elections, Mr. President, 
and I am totally confident the American people do not want to return to 
those kinds of practices. These are the kinds of activities the system 
of voluntary spending limits and public financing has eliminated from 
Presidential elections, and that is why it is so important to preserve 
public financing of Presidential elections.
  Nearly 50 percent of Americans believe lobbyists and special 
interests control Washington, and over 90 percent believe that campaign 
contributions from special interest groups influence members' votes. 
Special interest political action committees [PAC's] contributed a 
record $189 million to congressional candidates during the 1993-94 
election cycle. It is these same PAC's that sniff out the movement of 
power in Washington as their loyalties flip like pancakes on a griddle. 
And in 1994, the Federal campaigns for the House and Senate cost an 
astronomical $600 million. This is a system that is out of control. The 
people know it, and they do not like it one bit.
  But look at the role of PAC's in the presidential election system. 
PAC's provided less than 1 percent of the funding for the Presidential 
campaign in 1992; 1 percent. But that would change if we do not adopt 
this amendment, if we do not save the Presidential campaign financing 
system.
  Mr. President, the American people want the strings of special 
interests cut from their Government. They want to retake control of 
their Government. In fact, Mr. President, that is exactly what this 
campaign fund does with respect to Presidential elections. More people 
participate through the checkoff than contribute voluntarily to 
campaigns in this country. One out of seven Americans participate in 
the checkoff, whereas only 1 in 22 Americans contributed to campaigns 
in 1994. The checkoff could, in fact, be stronger than it is today. No 
American is coerced to participate in the checkoff. It is a voluntary 
system. But it works.

[[Page S5338]]

  The system of financing Presidential elections has no political or 
ideological bias. And the history of Presidential campaigns in the past 
20 years demonstrate that it is warmly embraced by candidates for both 
parties. It has been accepted by both Republican and Democratic 
candidates. Indeed, since 1976, all but one major candidate for the 
Republican or Democratic Party nominations voluntarily chose to 
participate in the Presidential campaign finance system. All major 
party candidates for the general elections have chosen to accept public 
financing since 1976.
  We are faced today with a new, and ever growing sense of urgency to 
fix our campaign system. As the influence of special interests grows, 
the distance between the American people and their Government grows. 
Our citizens, the most fundamental and critical engine to our ability 
to govern, feel they are being cut out of our democratic process. But 
that is a debate for another day.
  The subject for today is not to turn back the clock and retreat from 
the single most beneficial set of changes to our system of financing 
campaigns in our lifetimes.
  We have the honor of representing the public trust and responding to 
their concerns and needs. We did the right thing a year ago when we 
rejected a very similar provision with the identical objective, and I 
urge my colleagues to once again demonstrate conclusively that the 
special interests will not be permitted to regain control of 
Presidential campaigns and, in so doing, unleash unlimited campaign 
expenditures--all financed by moneyed special interests--on the 
American people. I urge my colleagues to support this amendment, and to 
preserve the Presidential Campaign Finance System.
  I compliment the Senator from Tennessee for his leadership on this 
amendment. He knows, from close, firsthand observation, the destruction 
that the abuses in the campaign of 1972 caused, and he was closer than 
most to the further dangers that we fortunately avoided. It is 
reassuring to see him courageously stand up and resist this misguided 
effort, and I am proud to stand with him and with our other colleagues 
who are joining as cosponsors of this amendment.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. I would like to ask the Senator from Tennessee if he would 
give me one minute.
  Mr. THOMPSON. Yes.
  Mr. EXON. Mr. President, I thank the Senator from Tennessee who made 
a very excellent case on a very difficult problem. I happen to feel 
that this amendment should be accepted unanimously, and it might be. If 
not, I hope when we have a rollcall vote that we would recognize and 
agree with the Senator from Tennessee who has a lot of experience in 
the particular field that he partially cited in his remarks.
  I would like to ask the Senator from Tennessee if I might be a 
cosponsor of the amendment.
  Mr. THOMPSON. I thank the Senator. I would be delighted.
  Mr. BUMPERS. Will the Senator from Tennessee yield me up to 5 
minutes?
  Mr. THOMPSON. I am happy to.
  Mr. BUMPERS. Mr. President, I want to profoundly thank the Senator 
from Tennessee for bringing this to the Senate's attention. I think the 
Members of the Senate did not realize an amendment was going to be 
required to do what he wants to do--return the contributions to the 
Presidential race where they were before. As the Senator from Tennessee 
correctly points out, it is one of the few things that has worked, in 
my opinion, perfectly around here. I am one of the people who happen to 
favor public financing of campaigns. We are the only developed nation 
on Earth that does not publicly finance campaigns. To me that is alien 
to most people in this country. They do not like that. But I can tell 
you that it would be the best investment the American taxpayer has ever 
made to finance senatorial and House races and the Presidential race. 
You take money. I do not want to be too caustic and cynical about this. 
But I can tell you, you are never going to get things the way you want 
them around here as long as the money plays the role it does in 
Presidential races, and certainly as long it plays the role it plays 
now in elections for the Senate and the House.
  So I just want to compliment him to make sure we do not move in the 
wrong direction. I would like to think that at some point we will move 
in the right direction and publicly finance these so every Senator can 
vote without worrying about who he might offend that gave him money the 
last time. I do not mean that to be unduly critical of any Member. 
Everybody here has done it. It has become a requirement.
  Let me just say one thing. In 1960, 70 percent of the people of this 
country said they had quite a bit of confidence in Congress. That was 
36 years ago. At that time you could take $100,000 in $100 bills as a 
political contribution and never report it to a soul. You did not have 
to do anything. Put it in your pocket. And unless somebody caught you 
at it, it was perfectly OK. You could take a 2-weeks all-expense-paid 
vacation paid for by some lobbyist. There was nothing wrong with that. 
People who back home came into your office seeking favors, oftentimes 
Members of Congress would send them back to their law firm in their 
hometown and they split the profits of that law firm at the end of the 
year no questions asked. Nobody knew, and nobody the wiser.

  You could take $100,000 in hundred dollar bills for making a speech, 
and nobody knew it. Nobody cared. And 70 percent of the people in this 
country thought Congress was doing a pretty good job.
  All of a sudden, CBS discovered that you could make money off the 
news. So they developed ``60 Minutes.'' They put a little pizzazz in 
the show business end of the news, and you could make it profitable. 
And they did. And ``60 Minutes'' became the most widely watched show in 
America and the most profitable show CBS had.
  Shortly thereafter, as the Senator from Tennessee alluded, the 
Watergate affair developed; scandal after scandal. From 1972 to 1974, 
until 1996, Congress has tried to reform itself all beginning with 
Watergate, and we have. We do not get much credit for it. But if you 
are looking for gratitude resign from the U.S. Senate.
  What has happened? The ethics manual is that thick. Every Senator, if 
he has any thought at all about his future, keeps the Ethics Committee 
on auto dial. His secretary does. Now you have to report every dime you 
take in over $200. You report it faithfully. You do not make speeches 
for honoraria.
  We passed a bill here, one of the best things we ever did, to make us 
comply with the laws that everybody else has to comply with. I can tell 
you a lot of people around here have found out that it was tough for 
the business community of this country to comply with the civil rights 
bill, EEOC, to comply with the Americans With Disabilities Act, to 
comply with the wage and hour laws. We have to do that now. And you 
have to file an ethics report, which every Member of the Senate did 
last week, showing every dime you have, where it is, how you made it, 
every stock you own, every acre of ground you own, everything. And 
after all of that, today 28 percent of the people have quite a bit of 
confidence in Congress.
  On the one hand, you might say, well, what people did not know back 
then was good for them. But the truth of the matter is we did it and we 
did it right. There are about 500 Rush Limbaughs in the country. There 
are about 13 clones of ``60 Minutes.'' And so if you expect those 
people who are in the money making business to compliment you on the 
fact that the ethics manual is that thick, forget it. But it is the 
right thing. We pursued the right course. This body, this Congress is 
better as a result of having cleaned up our own act. The Senator from 
Tennessee is right on course when he says we do not want to go back to 
eventually having to finance the Presidential campaign with private 
contributions. It has worked fine, and again I applaud him for it. I 
wholeheartedly support it. I hope he will ask for the yeas and nays. I 
hate to see it adopted on a voice vote.
  I thank the Senator for yielding.


                           Amendment No. 4015

  (Purpose: To amend the Congressional Budget Act of 1974 to prohibit 
    sense of the Senate amendments from being offered to the budget 
                              resolution)

  Mr. MURKOWSKI addressed the Chair.

[[Page S5339]]

  The PRESIDING OFFICER (Mr. Craig). The Senator from Alaska.
  Mr. MURKOWSKI. Mr. President, I would like to send an amendment to 
the desk and ask for its immediate consideration.
  I ask unanimous consent that we set aside the pending amendments, I 
think amendments by Senator Bumpers.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Alaska [Mr. Murkowski] proposes an 
     amendment numbered 4015.

  Mr. MURKOWSKI. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the end of title III, insert the following:

     SEC.  . AMENDMENT PROHIBITING SENSE OF THE SENATE AMENDMENTS 
                   ON THE BUDGET RESOLUTION.

       Secton 305(b((2) of the Congressional Budget Act of 1974 is 
     amended by inserting after the second sentence the following: 
     ``For purposes of the preceding sentence, an amendment is not 
     germane if it states purely precatory language.''.

  Mr. MURKOWSKI. Mr. President, I appreciate the attention of my 
colleagues. I have thought a lot about this amendment. First I thought 
perhaps making this the last of the sense-of-the-Senate resolutions on 
the budget resolution debate might be in order. But I decided that I 
would just go ahead with the amendment.
  The purpose of the amendment is very straightforward. I am sure it 
would be welcomed by the managers of the bill. It is designed to 
expedite our proceedings under the Budget Act and ensure that the 
Senate debate on the annual budget is focused on substance rather than 
rhetoric. My amendment simply states that it shall not be in order for 
the Senate to consider sense-of-the-Senate resolutions during debate on 
the budget resolution.
  I see a little grin from my friend who is managing the budget debate. 
I have been around here in this body for 16 years. I have engaged in 
numerous budget debates, and I believe as the years have gone by and as 
our debt has climbed--now it is above $5 trillion--there has been a 
little lessening in the quality of these debates. Perhaps it has been 
declining.
  Now, the budget resolution, is supposed to lay out the framework for 
the authorizing and appropriating committees to meet their obligations 
under a reconciliation process. We establish ceilings for discretionary 
appropriations, and we direct the authorizers to change programs within 
their jurisdiction in an effort to establish what the fiscal priorities 
are and reduce, obviously, the deficit.
  In recent years we have noticed a trend in the budget resolution 
debate that is a little disturbing. We seem to be getting more and more 
bogged down in so-called extended debate of the sense-of-the-Senate 
resolutions, and as we both know, Mr. President, these are resolutions 
that do not carry the force of law. They are resolutions that do not 
shift a single dollar from one program to the other. These resolutions 
merely politicize a budget process that is really creaking under the 
weight of unending, unlimited amendments.
  A brief look at today's Senate Calendar indicates that there are as 
many as 80 amendments that we will be voting on beginning Tuesday or 
Wednesday. Of those amendments, at least 1 in 4, or some 20, are sense-
of-the-Senate amendments. We have already voted on several such sense-
of-the-Senate amendments and more are likely to come.
  The sense-of-the-Senate amendments that are offered on these budget 
resolutions are structured with only one and only one purpose in mind. 
Let us be realistic. That is an opportunity for Senators on either side 
of the aisle, whether it be Democrats or Republicans, to develop 
ammunition to be used in some 30-second spot ad in the next political 
campaign. These votes are not about substance. They are strictly about 
politics, positioning, window dressing, and so forth.
  This Senator from Alaska thinks that enough is enough. We ought to 
strictly limit debate on budget resolutions to the substance of 
spending. These amendments are what a budget resolution should be 
about, and we all know it. Unfortunately, when we begin voting tomorrow 
or the next day, we will be voting on a sense-of-the-Senate series of 
amendments that again will not shift one single dollar of spending and 
will not change a single word in a statute. Instead, these votes, which 
are merely political gestures, will be portrayed by the political ad 
merchants as votes cast for or against the poor, the elderly, the 
environment, the cause, whatever. And when all the dust settles late 
Wednesday night after we have allowed 30 seconds to 1 minute of debate 
on each of these amendments, nothing, absolutely nothing will have 
changed in a substantive sense except the records of all Members of 
this body will have simply been distorted.
  Finally, Mr. President, I would note the irony in the fact that my 
amendment which would provide a real change to our budget process may 
very well be ruled out of order.
  Consider, if you will, that Senate amendments that are not binding, 
sense-of-the-Senate amendments, are in order under our budget process, 
but real, substantive amendments can be ruled out of order. Is it any 
wonder that public cynicism of the Congress is at an all-time high?
  Mr. President, I ask unanimous consent to make one further statement 
relative to the debate that I participated in with the Senator from 
Arkansas on asset sales. It would be simply to add to my remarks a 
point that I think we all have to consider as we vote on asset sales.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 4013

  Mr. MURKOWSKI. Mr. President, with all due respect to my good friend 
from Arkansas, I think his interpretation has a little Alice in 
Wonderland quality to it. What he says, it appears, is if you have a 
piece of property, as an example, that you own, and you rent it out for 
$500 a month, and then, if you sell that property for $75,000 or 
$80,000 to pay off your debts, you cannot use the $75,000 or $80,000 to 
pay off your debts, but in fact you have to count the loss of the $500 
per month rent as an additional debt. That just does not make sense. 
This is a result, if you will, if you adopt the amendment of the 
Senator from Arkansas. You will never be able to sell Government assets 
because it will not be counted as proceeds from the sale.
  So I hope my colleagues will reflect on that.
  I yield the floor at this time and ask my colleagues to consider the 
merits of abolishing the sense-of-the-Senate resolutions as they apply 
to the budget resolution debate.
  The PRESIDING OFFICER. The Senator from New Mexico, the chairman of 
the committee.


                           Amendment No. 4015

  Mr. DOMENICI. Mr. President, before the distinguished junior Senator 
from Alaska leaves the floor, let me talk with him just for a moment 
about sense-of-the-Senate amendments. There are pending 28 amendments, 
and 17 of them are sense-of-the-Senate amendments. That means that 17 
of them have in no way changed the budget resolution. They do not say, 
``Increase taxes to pay for some program the budget does not cover 
adequately.'' They do not say, ``Cut taxes because American families 
need tax cuts.'' They are just sense of the Senates.
  I am going to address my remarks a little differently than the 
Senator. Frankly, it does not matter to me whether the sense-of-the-
Senate amendments are politically motivated or not. I have come to the 
conclusion that when you have budgets on the floor of the Senate, there 
is a lot of politics. There is some very bona fide politics, and that 
is the parties' attempts to distinguish themselves and say this, 
essentially, is what we are for; this is what you are for.
  But I have wondered since the very beginning, and I have managed many 
of these bills, whether the votes with reference to sense-of-the-Senate 
resolutions have had any significant merit in terms of changing how the 
budget ends up, how the appropriators end up spending the money. I have 
not asked whether these sense of the Senates have had any impact as 
people interpret them, but I am going to give you my own 
interpretation. I believe it is close to right, I would say, not over 1 
percent have any impact. Some will come to the floor and say, 
``Senator, we said you should maximize LIHEAP,

[[Page S5340]]

the protection for poor Americans who need help in their heating and 
gas for their homes and electricity. And because we said in a sense of 
the Senate it should be maximized or kept at last year's level, and it 
came out that way, therefore the sense of the Senate was effective.'' I 
would say it probably was coming out that way anyway, in my 
understanding of the appropriators' autonomy in this area in deciding 
how to spend the money, which is exclusively theirs. I do not think we 
have had much impact.
  On the other hand, we have spent an untold number of the 50 hours of 
the debate talking to the American people as if these sense-of-the-
Senate proposals are substantive and are meaningful. Let me venture a 
guess, with my friend from Alaska. There will be advertisements made in 
this next campaign which come right out of a sense of the Senate. It 
will not talk to the public that it is addressing, in the sense that 
this was just a sense of the Senate, one of these, ``Gee, we hope you 
do it,'' or, ``If everything is OK and comes out all right, we would 
like you to do it.'' It comes out as if something substantive was 
changed or not changed with that vote.

  Frankly, I think it is time we come to our senses here and get these 
matters debated here in the Senate, not in manners that will be most 
difficult for the public to understand, confuse them, but rather as 
straightforward and as substantive as you can.
  To that extent, I will stay here the whole 50 hours and gladly debate 
amendments that change the priorities in this budget which I have 
basically produced on the Republican side in coordination with House 
Republicans.
  Having said that, I am going to support the Senator's proposal. There 
may be a little downside. But I am absolutely convinced the upside to 
it for both parties, Democrats and Republicans--for the Senator knows, 
if this becomes law it will clearly mean that when the Democrats are in 
the majority, we are not going to be offering 42--48--35 sense-of-the-
Senate amendments, trying to set forth some feeling of ours that we 
want them to share or not share in a vote. But I believe overall it 
will be very healthy for budgeting if we stuck to budgeting and not to 
expressing our views about how something should be or should not be 
through sense-of-the-Senate proposals.
  I commend the Senator for it. I think he has gotten to the heart of 
some of the problems. I submit we still have a huge number of 
amendments and we are going near--at 10 o'clock tonight we will have 
only 8 hours left on this resolution and we probably will have 30 or 
so, 35, and over half of them will be sense-of-the-Senate proposals.
  Mr. MURKOWSKI. If I may thank the chairman of the Budget Committee?
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. Mr. President, as he so eloquently pointed out, this 
is somewhat of a charade. The American people assume that what we are 
doing here, debating at length, has a binding commitment of some sort. 
But sense-of-the-Senate resolutions, as the Senator from New Mexico 
stated, do not carry the force of law. They do not shift a single 
dollar from one program to another. I guess it is the contention of the 
Senator from Alaska that they politicize, if you will, this process. It 
is heavy enough now. As I stated, it is creaking under its own weight 
of unending amendments, one after the other.
  So I encourage Members to take advantage of an opportunity. As the 
chairman of the Budget Committee pointed out, this works both ways. 
This simply says, in the future it shall not be in order for the Senate 
to consider a sense-of-the-Senate resolution during debate on the 
budget resolution.
  I ask my friend from New Mexico how long might this process go on? It 
might go on for 50 hours, but we would have substantive debates on 
amendments that would change, if you will--a shift of dollars from one 
program to another; meaningful debate instead of assumptions that we 
are debating things that will never become law, that will be little 
more than a pretext, a window-dressing effort. And all without an 
explanation or an addendum of some kind to stipulate that this is 
nonbinding.
  If we started every debate with an explanation of what a sense-of-
the-Senate resolution was and at the end concluded with what it was, 
why, the American public would say, ``What are you doing? You mean you 
took 15 or 20 minutes on a sense-of-the-Senate resolution and it is 
nonbinding and does not shift a dollar, and then you reminded us again 
at the end that that is what it did? Why,'' they would say, ``what are 
you doing? You are simply wasting the Senate's time.''
  So I encourage my colleague to reflect on the merits of that. I see 
we have another Member on the floor.
  I ask that the yeas and nays be ordered on my amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. Is there a sufficient second?
  Mr. EXON. Reserving the right to object.
  The PRESIDING OFFICER. This is not a unanimous-consent request. Is 
there a sufficient second? There is not.
  Mr. DOMENICI. You will get your yeas and nays.
  The PRESIDING OFFICER. The Senator from New Mexico.


                           Amendment No. 4014

  Mr. DOMENICI. I will yield in just a moment to my good friend, 
Senator Exon.
  Could I take just 2 or 3 minutes on one other issue and then yield 
the floor? I think the debate on firewalls occurred. Let me make three 
points.
  One, Senator Bumpers said that outlays over the next 6 years for 
nondefense discretionary are only $1.6 trillion, and then he proceeded 
to compare that with defense discretionary and indicated that, 
obviously, there was too much money being spent on defense.
  Everyone should know that the part of domestic spending that was 
spoken of at $1.6 trillion is only that which appears in the annual 
appropriations bills. If you put the rest of the domestic spending for 
all the other programs that are not there--that are entitlements, that 
are mandatory programs--then we put in perspective defense versus 
domestic because $7.4 trillion over the next 4 years will be spent for 
domestic programs, not $1.6 trillion, a tremendous number that is 
multiples of the defense budget, and that is how it should be. But it 
is not $1.6 trillion; it is $7.4 trillion.
  So, 82 percent of all Federal spending over the next 6 years will be 
in nondefense spending. These are facts right out of the budget. There 
is no attempt on my part to give the Senate anything but the numbers 
that appear there.
  Firewalls. Firewalls in the Senate budget resolution are a creature 
of concern for pressure being put on the defense budget. Whenever 
domestic spending is tightened, the temptation is to take the money out 
of defense.
  At one point in the history of budgeting, perhaps as much as 7 or 8 
years ago, or 10, the Senator from New Mexico came up with an idea that 
once you vote on the defense numbers in the budgets, that you had to 
use all of that for defense, and if you did not, you put the rest of it 
on the deficit; you did not spend it. The definition, therefore, of a 
firewall is, without a 60-vote majority, you cannot spend defense money 
on domestic programs.
  I believe, as we attempt to whittle down the annual deficit, which 
will put pressure on domestic spending, that we ought to leave those 
firewalls up. We ought to be judicious and careful when we set the 
defense amount, but then we ought not subject it to the pressure of 
whether we should take out of it to spend for some program on the 
domestic side that we may not be able to fully fund. Maybe it is low-
income energy assistance. If you cannot fund it totally, do you take 
some money out of what you voted for defense, or are you precluded 
without a supermajority?
  So I think Senator Bumpers' amendment ought to be defeated. For the 
next few years while pressure is on both defense and domestic, we ought 
to have the vote here on the floor on the budget resolution, and the 
debate with reference to defense be the final vote as to how much is 
available.
  I repeat, we do not have to spend it all if the appropriators find 
for some reason it is not necessary, but we ought to then put it on the 
deficit and not turn these accounts into two lines blocking to see 
which one can take money away from the other part of this budget.
  The Bumpers-Simon amendment would eliminate the firewalls between

[[Page S5341]]

defense and nondefense discretionary spending in the resolution for 
fiscal years 1997 and 1998. By eliminating the firewalls, this 
amendment exposes the defense budget to even deeper reductions to pay 
for higher domestic spending. Defense spending is the only category of 
spending that actually has declined over the past decade.
  Firewalls have been a part of congressional budgeting operations this 
past year and from 1991-93. They have been an effective tool to help 
instill discipline in the budget process and to help enforce the 
spending limits Congress sets in budget resolutions. The amendment 
would simply enable backdoor cuts in the defense budget by permitting 
them later in the fiscal year, after Congress has set what it thinks 
are the ceilings for defense and domestic discretionary spending. The 
firewalls are now more important than ever. The reason is simple: The 
defense budget is under more pressure from domestic discretionary 
spending than ever before. We are already seeing several amendments in 
this debate to increase domestic spending either through tax increases 
or cuts in defense.
  There are already too many cuts in the defense budget. Studies from 
CBO, GAO, and others show that there is already not enough money in the 
Clinton defense budget to support even the President's own force 
structure plan. As a result, aircraft, ships, tanks, and helicopters 
are aging beyond what even this administration believes is tolerable. 
Transfers out of defense will just make these and similar problems 
worse.
  Mr. President, I urge Senators to vote against this amendment.
  I yield the floor.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.


                           Amendment No. 4015

  Mr. EXON. Mr. President, I yield myself what time I may need in 
opposition to the sense-of-the-Senate amendment offered by the Senator 
from Alaska.
  The Senator from Nebraska has made several points today with regard 
to the sense-of-the-Senate amendments that are before the body that 
might lead some to expect that the Senator from Nebraska would jump at 
the opportunity that is being offered by the Senator from Alaska to do 
away with sense-of-the-Senate amendments.
  Yes, the Senator from Alaska has offered an amendment to prohibit the 
sense-of-the-Senate amendments. OK, there is some validity for that 
argument. Sense-of-the-Senate amendments do not have, obviously, the 
force of law, as I have made the point on several occasions earlier 
today. But let us stop and think. If we prohibit them, what would be 
the result? Frankly, I do not think very much, because Senators would, 
as a substitute, offer small changes in dollars in a regular amendment 
with some very long statements of the purpose. There is no way, I 
suggest, to get out of such votes, whether they are sense of the Senate 
or not.
  In a way, I will simply say as much as we all may find sense-of-the-
Senate amendments a bother to deal with, the alternative may actually 
be worse. Sense-of-the-Senate amendments allow the Senate to let off 
steam on a particular subject without actually spending any more money 
or, even better, making more laws that have not been thought through. 
Sometimes that can be a useful thing just to let off steam.
  If the Senate adopts the Murkowski amendment, this will be just 
another limitation on the rights of the minority. I will simply say 
that all of those years that we were in the majority, at least while I 
was here, the majority never tried to interfere with the rights of the 
minority. Therefore, while I am not accusing the author of the 
amendment of being devious, the facts are that sense-of-the-Senate 
resolutions all during those years when the Republicans were in the 
minority were used quite successfully to make points that they could 
not make in any other fashion.
  So I simply say the minority should be prevented possibly from even 
changing any language, if we proceed as in the fashion as suggested by 
the Senator from Alaska.

  I point out that this is a tradition in the Senate that has been 
around a long, long time. Maybe it is something that we should take a 
look at. Maybe we could expedite the procedures of the Senate, which I 
think we would all like to do. But let us pause for just a little bit. 
Let us discuss this for a little bit. As far as I know, there have been 
no hearings on this matter, which I think there should be when we are 
making such a fundamental change in the procedures of the Senate.
  Let us talk. Let us investigate the pros and cons of taking the 
action that, as far as this Senator knows, just came out of the blue. 
Let us take a little time before we take this step that has been around 
this Senate and sometimes used successfully, especially by the 
minority, to make a point.
  The reason that I made inquiry when the yeas and nays were asked 
for--I did not have a chance to state my objection then--I just wanted 
to say that the Senator's amendment is not germane, and at the 
appropriate time I will raise a point of order that the amendment 
violates the Budget Act, which would require 60 votes to proceed.
  I simply say that this came upon us rather suddenly. We were not 
fully advised on it. I will raise a point of order at the appropriate 
time before the rollcall vote.
  Mr. MURKOWSKI. Mr. President, if I may respond briefly to my friend 
from Nebraska.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. While it may seem somewhat out of the blue, I think 
the point that 17 out of 28 are sense-of-the-Senate resolutions, that 
is what we have been confronted with. So the reality is, this is not 
something that occasionally comes up. And 17 out of 28 are sense of the 
Senates.
  Whether we are letting off steam or gas, I think is irrelevant. The 
fact is, so much of our time is spent on something that is nonbinding 
that basically puts us in a posture where we are not doing anything 
constructive other than perhaps somehow evaporating in some manner.
  Mr. EXON. It enhances debate.
  Mr. MURKOWSKI. I really think there is a better use of our time on 
other matters. As a consequence of the propensity of the numbers, I 
think it is justified. And 17 out of 28----
  Mr. DOMENICI. That is what is left, the ones left.
  Mr. MURKOWSKI. The ones left. So if there is more justification for 
less steam and less gas, I do not know what it is. The Senator from 
Alaska yields the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. I note the presence of Senator Simpson from Wyoming. We 
had an informal list, and he is next. I am just going to make a couple 
observations.
  The public sometimes, at least the few that watch this on C-SPAN, 
must wonder what is all of this about? How come the U.S. House took the 
budget up, and in 1 day they had whatever votes they have, and now, 
look.
  The Senator from New Mexico is clearly committed to the U.S. Senate. 
I do not want the Senate to become a House. But I should indicate that 
some who are wondering, ``Can't you manage affairs better over here?'' 
well, first of all, the U.S. House establishes amendments on the floor 
through a committee called the Rules Committee. So they have a 
committee in between that decides what amendments are going to be 
allowed on the floor in normal circumstances. There is a way to get 
around that but very seldom. So they sit and listen to the amendments 
and decide which two or three or four are going to be considered.
  Everyone should know that while the Senate is different from that, 
and different in two ways that we are very proud of--one is that there 
is great freedom of amendment on the part of Senators. That is the 
Senate. You can offer amendments in ordinary legislation. You can offer 
them. They do not have to be germane. They can be irrelevant. If you 
want a vote on stopping a war on a bill that is funding education, the 
Senate lets you do that. It is one of the great strengths of this body.

  Mr. EXON. Or weaknesses.
  Mr. DOMENICI. Or weaknesses. Some say it is a strength because it is 
the greatest parliamentary body in that regard in the world. But this 
budget resolution changes all that. It says you can

[[Page S5342]]

only take 50 hours on this bill. You cannot filibuster it.
  The other quality of the Senate that is unique, you can talk forever 
until a very compelling majority says you have to start using less 
time, breaking the filibuster.
  This bill cannot be filibustered, this resolution nor the bills that 
flow from it, because it is very special and important to the public 
that we get it done. So in that 50 hours there are going to be debates. 
The Senator from Alaska is not talking about reducing that. I will tell 
you the truth, I have thought from time to time that it was really too 
long, even though it is limited to 50, it is too long. We get to 
repeating ourselves down here.
  If I look at this list, many of the sense of the Senates are very 
close, one to another. We do it over again, over again. It could be 
lower, incidentally. The bill itself that created this law, this 
resolution, says if the Senate, by a simple majority, wants to reduce 
the time, they just vote. That vote is not debatable, that amendment. 
So if the Senator and I thought we were wasting time and we ought to do 
it in 20 hours, we could move that, and it would be only 20 hours.
  But I believe when you are limited in time, that you ought to use it 
in as substantive a way as possible. This amendment is not going to 
pass, the Murkowski amendment. It is subject to a point of order. 
Clearly, it has to go to the Budget Committee for its formal hearings.
  But I commend him for making a point. The point is not going 
unnoticed by Senators from both sides of the aisle. It is not going 
unnoticed that both sides are using the sense of the Senates, which are 
not binding, to get down here and offer matters that they probably 
could offer nowhere else, could not find a vehicle to offer it on, even 
though it is not binding and changes nothing.
  It is in that context that I commend him. But sooner or later this 
Senate is going to get very upset, more upset than it is today about 
what occurs during this 50 hours. When they get upset enough, you know, 
something else beyond precluding sense of the Senates is going to 
happen with the budget process. I yield the floor.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. I know the Senator from Wyoming is here. I will just be 
very, very brief. I will just respond, if I might. I also thank the 
Senator for bringing this up. I am not saying this is a bad idea per 
se.
  I say two things. First, I do not believe that we should make such a 
dramatic change without hearings or discussions. I have said before, 
there are some problems with sense-of-the-Senate resolutions.
  I will make the point of order, which I hope will be sustained. I 
will be the first to say maybe we should discuss this. I simply say 
that I pointed out in my statement that I am fearful that if we would 
proceed as has been suggested here, that Senators, being very 
ingenious, would come up with another situation and we would have sense 
of Senates without having them called sense of the Senates.
  With regard to who benefits from or who is handicapped with sense-of-
the-Senate amendments, I think I can say very forthrightly, Mr. 
President, when you are in a majority, you do not like sense-of-the-
Senate amendments and you wish that the 50 hours would be cut to 15. 
When you are in the minority, your views change very dramatically, I 
might say, and you think that 50 hours is not enough. But I say, 
speaking for the minority, and I hope the majority, of the Senate, that 
while I would agree we should take a look at this, I do not believe we 
should take action to that effect as suggested by the Senator from the 
great State of Alaska. I thank the Chair and I yield the floor.
  Mr. SIMPSON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. SIMPSON. Certainly this is not obviously the most propitious time 
to come here, just wandering in from my post in the Dirksen Building, 
to find that this spirited debate is being participated in by my 
friends. I have just come to the floor on behalf of my fine, bipartisan 
party crew of Senator Kerrey of Nebraska and Senator Hank Brown of 
Colorado and Senator Sam Nunn and Senator Robb and myself to place 
before the body nothing more than a sense-of-the-Senate resolution--
which that type of resolution has taken certainly some heavy abuse in 
these last moments.
  However, in regard to everything we do here, if everybody else is 
doing it, I get to do it. Therefore, with regard to Senator Murkowski, 
I hope he will repair to his chambers until I finish mine. That would 
be perfectly appropriate.
  I was trying to think of a new name for it. Mr. President, SOS. That 
is what it is, an SOS--sense of the Senate. It means I could not get 
this handled in committee; nobody will vote for it in any other way. I 
thought I would SOS the thing out to see what would happen to it, kind 
of throw it up on the pole, and then people can say when they get home, 
``Well, I voted for it, but it was just a sense-of-the-Senate 
resolution,'' getting you off the hook, or you voted against it, saying 
``Well, it was just a sense-of-the-Senate resolution.'' Thus, it is 
something that enables you to get off the hook.
  So it is. But my friend, Frank Murkowski, is right. So is Senator 
Domenici and so is Senator Exon. They really get to the point of 
wretched excess. But they bring before the body issues which do not 
seem to find their way into any other niche. I think sometimes they 
become, especially in foreign policy, they become quite dramatic.
  I can remember being in other countries and suddenly one of the 
emissaries of that country will come up and say, ``Why does your U.S. 
Senate vote to do this to our country?'' I will say, ``I am not aware 
of that.'' They will say, ``Yes, here is the rollcall vote''--a sense-
of-the-Senate resolution, usually at 2 a.m. in the morning, maybe 11 
o'clock at night. We see them in the Cloakroom. We come out and we pass 
a sense-of-the-Senate resolution that is usually best described in 
foreign policy as ``totally meddlesome,'' usually about religion or 
whatever they do in their own culture. It passes 90 to zip, or 95, and 
we know not what we do on those.
  This is about domestic policy, and we know what we do. You will not 
want to do this if you think about it because this sense of the Senate 
is about the entitlements, the eternal discussion, the eternal plea, 
``Well, if we could just do something with the entitlements.'' I tell 
you, if we could, we would solve all of the problems of this fine 
chairman, Pete Domenici, and his ranking member, Jim Exon, who have 
solved them all because we are in a situation where none of us in this 
body even vote for 67 percent of the national budget--do not cast a 
single vote. It all just ``goes out,'' automatic pilot.


                           Amendment No. 4016

 (Purpose: To express the sense of the Senate on long-term entitlement 
                                reforms)

  Mr. SIMPSON. I send an amendment to the desk with regard to long-term 
entitlement reform.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Wyoming [Mr. Simpson], for Mr. Kerrey, for 
     himself, Mr. Brown, Mr. Nunn, Mr. Robb, and Mr. Simpson, 
     proposes an amendment numbered 4016.

  Mr. SIMPSON. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the end of title III, add the following:

     SEC.   . SENSE OF THE SENATE SUPPORTING LONG TERM ENTITLEMENT 
                   REFORMS.

       It is the sense of the Senate that the assumptions 
     underlying the functional totals in this resolution assume 
     that--
       (1) effective January 1, 1997--
       (A) the age for eligibility for civil service retirement 
     should be increased to--
       (i) 60 years with 30 years of service;
       (ii) 62 years with 25 years of service; and
       (iii) 65 years with 5 years of service; and
       (B) this proposal should not apply to anyone currently or 
     previously employed by the Federal Government as of January 
     1, 1997:
       (2) effective January 1, 1997--
       (A) the age for eligibility for military retirement 
     benefits for active duty personnel should be increased to 50 
     years of age with benefits reductions for personnel retiring 
     before 50; and
       (B) this proposal should not apply to anyone currently or 
     previously serving in the United States military as of 
     January 1, 1997;
       (3) effective January 1, 2000, the age at which a person is 
     eligible for medicare should be gradually adjusted to 
     correspond

[[Page S5343]]

     with the age a person is eligible for normal social security 
     retirement;
       (4) there should be a COLA for only that portion of 
     individual civilian and military pension levels that do not 
     exceed $50,000 per year;
       (5) the eligibility age for social security retirement 
     should be gradually adjusted to 70 years by the year 2030 in 
     2 month increments;
       (6) workers should be allowed to divert 2 percent of their 
     total payroll tax into their own  personal investment  plan 
     as long as there is no effect on the solvency of the social 
     security program;
       (7) the consumer price index should be reduced by .5 
     percentage points so as to more accurately depict the cost of 
     living.

  Mr. SIMPSON. Mr. President, my colleagues will be over momentarily to 
debate this and discuss with you, but let me just say I feel this 
amendment is extremely important to help to establish the greatest 
credibility for this balanced budget resolution. This resolution 
already represents a tremendous, laudable effort on the part of the 
Budget Committee chairman. No one does this with greater energy and 
dedication than Senator Pete Domenici and Senator Exon. They have done 
so much.
  This is the work product we will soon vote upon. I believe we can 
make the effort a bit stronger, a bit more credible, by expressing in 
this resolution how we intend to make good on the promises that it 
contains. All of us have heard the directives leveled at the 
President's budget and on the budgets offered by the Republican 
majority for deferring too many of the ``tough decisions'' until future 
years, leaving them to future Congresses and future Presidents.
  We have a great tendency here to want to take credit for setting up a 
balanced budget path, but not to enact any of the tough choices. We all 
do it. I do it. We all do it. We will not do the tough choices right 
now which would give any force or effect to those aims. So we could 
easily wind up in a situation we could have a balanced budget in the 
year 2002 but it explodes again into massive deficits afterward. Or 
quite likely we might not get there at all, even in the year 2002, 
because we leave too many ``tough calls'' to that Congress legislating 
those last few years. We have all been through that process before and 
we know how it goes. We sure do. It goes nowhere.
  If we are going to make good on the promises of balancing the budget, 
I believe we have to make the choices which once made now will produce 
significant savings in those distant years. This resolution attempts to 
put the Senate on record with respect to the central factors which 
caused the explosive growth caused in this Nation's entitlement 
program. Those factors, my colleagues, are population aging, the 
compounding of generous cost-of-living allowances, COLA's, and our 
total failure to structure our Nation's pension systems, Social 
Security systems, to generate real savings and economic growth.
  This issue of eligibility ages for retirement benefits is a serious 
one. This is one we cannot duck. This country is aiming at a tremendous 
rate. Recently we did away with much of the Social Security earnings 
limit for seniors who work. That has been discussed heavily today. We 
did that because we recognize that America is growing older gracefully. 
People can work longer and be productive longer. We find that very easy 
to do when it comes to handing out benefits, or perhaps I should say, 
shoveling out benefits, regardless of your net worth or income, you get 
it.
  At the same time, we are not dealing with population aging as far as 
it affects the amount of time which people are spending collecting 
retirement benefits. That failure is driving the Federal deficit, the 
Social Security system and the Medicare system to absolute extremity. 
If we ignore that one, I can assure you we are dooming today's young 
American worker. When we started a few months ago, Medicare was going 
to go broke in the year 2002. Then we shaved it a little, broke in 
2001, and now we say 2000.
  With Social Security, we do not even touch that. We are not supposed 
to utter the word or crawl under your desk and try to get out of the 
building before the AARP detonates your chair. That is where we are 
left. If they do not detonate your chair, the great deed will be 
reported by Martha McSteen and her crew, or perhaps by the Gray 
Panthers, who will lob over types of explosive devices.

  That is what we get out of this debate. Do not touch CPI. Do not 
touch this. Do not touch that. We will fix it some day, but we will not 
fix it now. When we do fix it, we know there are three ways to go: 
either you reduce the benefits of that system, you increase the payroll 
taxes, or you borrow more money. That is the subject of another debate. 
Do not think that my colleagues and I are leading you down the path of 
Social Security long-term solvency reform. We are not that dazed.
  So, we are going to have to phase in these changes. We are saying in 
this resolution that we will make the gradual changes in eligibility 
ages to bring some realism to them, that we should phase in the changes 
over generations to give Americans ample time to prepare for the 
changes.
  Consider what it means to be a young worker today to retire on Social 
Security at the age of 70. Hear this one. Today's 26-year-old will turn 
70 in the year 2040. Guess what? If we do not make changes, Social 
Security will be bankrupt a full decade before then. Who will be hurt 
by asking the worker to wait until the age of 70? Certainly not that 
young worker. That is the only way he or she stands to collect one 
single nickel. Today's retirees would not be affected one whit.
  This debate has been polluted by seniors who continue to raise hob 
with us who will not be affected in any way by what we are doing. 
Anybody over 51 might get a little ding and anybody over 55 is not 
going to get a ding at all. They are the ones that show up all the 
time. I think it is not very seemly.
  Another provision in this resolution should be a cost-of-living 
allowance only for that portion of civilian and military pension levels 
that do not exceed $50,000 a year.
  This is an extremely modest gesture. Indeed, I personally have 
concluded, after years of study and my service on the Entitlements 
Commission with Senators Kerrey and Danforth, that we have to take a 
harder look at these COLA's than that--not only within the Federal 
employee COLA's, but also our own COLA's regarding Congress and within 
Social Security. But this provision in our resolution does not even 
suggest that we deal with Social Security COLA's at all. It is an 
extremely tentative step, which I feel represents a bare minimum of 
what this body should support.
  Let me just say that we talk of COLA's and limiting it to the first 
$50,000 of a retirement pension. We do not mean that people with 
pensions greater than $50,000 will get no COLA at all. They will still 
get a COLA no matter how large a pension they are receiving. We simply 
suggest that the cost of living for an individual with a $100,000 
pension is not really any higher than that individual with a $50,000 
pension. So the wealthier individual should not be getting a greater 
cost of living allowance. If you go out in the land and ask them 
whether Federal employees with $50,000 pensions in retirement are able 
to keep up with the cost of living, I can assure you most Americans 
will say that they are and give you a horrid horse laugh in the 
process.
  Only 6 percent of the people in America, while they are working, make 
over $60,000 a year. Here we have a figure that we probably will have 
difficulty dealing with some of the senior groups about. But that is 
part of the problem. The sooner the American people realize it, the 
better off they will be.
  Finally, the key provision in this resolution says that workers will 
be allowed to divert 2 percent of their total payroll tax into their 
own personal investment plan, ``as long as there is no effect on the 
solvency of the Social Security program.'' That last part is a key 
phrase because no one who votes for this can fairly be accused of 
attacking the ``solvency'' of Social Security.
  In fact, quite the contrary is true. The President's own Advisory 
Council on Social Security Produced a series of recommendations about 
how to actually guarantee the solvency of the Social Security program, 
and more than half of the Council suggested that some form of 
personally owned investment accounts must be part of the solution.
  So there are a variety of reasons why that is so. One is that all 
conventional solutions to the solvency problem tend to hurt the very 
people who stand to get a ``raw deal'' from Social Security--today's 
young workers. Already,

[[Page S5344]]

today, they stand to get a ``negative return'' on their Social 
Security, as compared with the bonanza enjoyed by today's retirees--and 
that is so even if the system remains solvent. In order to keep solvent 
via ``conventional'' solutions--raising payroll taxes, delaying 
retirement ages, cutting benefits, all of it, borrowing money--the deal 
for these young Americans gets far, far worse.
  I will let my colleague from Nebraska speak further with regard to 
the personal investment plan, which he and I have been talking about 
for a long time.
  Somewhere along the line, we have to see people saving, let them know 
they own these plans, and that their heirs can inherit it. The 
Government cannot ``get to it,'' or spend it. Hopefully, we can get 
away from the old adage that this Congress steals from the Social 
Security fund and that we pillage the fund and rip, unravel, and ruin 
all the things that go with it.
  Ladies and gentlemen, there is no fund. There is no trust fund. It is 
a great stack of IOU's. You know it, I know it. The trustees of the 
Social Security system know it. It is a huge ``trust fund'' consisting 
only of T-bills, mere ``promises to pay,'' that the Government will 
raise the money at some distant future date through general revenues--
not from such trust fund, but from general revenues, and we have an 
unfunded liability in Social Security of $8 trillion. So here we go.
  I commend my friends, Senators Kerrey, Brown, Nunn, and Robb, for 
their fine work. We have been in this a long time. I think the first 
time we got 18 votes. The second time we got 27 votes. The last time we 
got 43 votes. This time, it will probably drop like a rock. But we are 
going to keep coming right back. Maybe we can get to where we can see 
that the American people see this as a vital vote for the Senate. It 
will reveal much about whether or not we are truly serious about facing 
up to the long-term problems facing this country. I hope we might send 
that message even in the form of a resolution that we can indeed be 
trusted to deal with these long-term challenges, regardless of the 
response from the special interest groups whose sole function in life 
is to terrorize people so they can pick up the dues money. I am tired 
of those people.
  That does not mean that you should not stay at the Westin Hotel for 
$70 a night instead of $140, or not take advantage of all the airline 
discounts and rental car discounts. But whatever they send you about 
legislation, toss it, give it the deep-six, because every bit of it is 
further destined to bring this country to its knees. I do not 
understand that philosophy, unless they have no children or 
grandchildren. To those who are going into the 21st century, I intend 
to be right there with them. But in the year 2030, tap on my box and 
let me know how it is going. Right now, it does not look too good.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. KERREY. Mr. President, I cannot say that I look forward to 
tapping on Senator Simpson's box in 2030. But I am enthusiastic about 
cosponsoring this resolution with him. One of the most difficult things 
to learn in life is that you are wrong. An awful lot of us--and I 
certainly arrived here in 1989 thinking the problem of eliminating the 
deficit--which was, I believe, $270 billion, or something--was going to 
be a relatively easy transaction, that we just needed to get rid of 
waste, fraud, and abuse, cut congressional pay, and all the odds and 
ends that you hear a lot, that it was going to be a relatively easy 
transaction. Then I started to listen to two Senators who, every year, 
came down with an amendment to the budget resolution--Senator Nunn of 
Georgia and Senator Domenici of New Mexico. They came down making this 
argument for reform of our entitlement programs.
  I must say I voted against them the first time it came up. I think 
they had 12 or 13 people who voted for it, and it kept getting larger. 
Eventually, by presenting the facts they persuaded me that looking for 
an easy solution, as I said, like waste, fraud, and abuse, and other 
odds and ends, was not looking in the right place.
  Basically, if you want to balance the budget, or, as important, if 
you want to restore some balance to the expenditures that we make in 
this country, taking us back to a point where we can say we are 
endowing the future with investments in education, transportation, and 
other sorts of things, then you have to change current law to affect 
the proportion of our budget that goes to entitlements. One of the 
pieces of misinformation perpetrated in this country is, A, we are 
broke, which we are not; the Nation is wealthier than any other on 
Earth. Our Nation is wealthier than at any point in the history of our 
country. We are wealthier than we were in the 1980's, 1970's, 1960's, 
and 1950's.

  The proportion of taxes collected and used for Federal expenditures 
is about the same as in the last 50 years. It went up end of the 
1920's, and during World War II, and then the same during the Vietnam 
war. It is roughly 19 percent. What is changing dramatically is the 
percentage of that 19 percent that goes to entitlements versus what 
goes to those investments in our future. In this year's budget, it is 
about 67 percent. It is drawing to 72 percent at the end of the 2002 
period.
  When the baby boomers start to retire--and demography is doing this, 
and there are 77 million baby boomers. This is not caused by Ronald 
Reagan, or conservatism, or liberals, or anything like that. It is 
caused by demographics. There are 77 million in the baby boom 
generation--the largest generation in the history of this country. When 
they start to retire in very short order, approximately 2013--unless we 
interrupt it with this kind of change--what happens is the entire 
Federal budget is converted to transfer payments. You cannot cut 
welfare enough, and you cannot cut all the other mandatory programs 
enough to be able to make up the difference.
  So this country will have gone in a span of approximately 2\1/2\ 
generations, or about 45, 50 years, from a point where 70 percent of 
the budget was taken up for investments in space, investments in 
transportation and education, all those sorts of things that do produce 
a long-term benefit; 30 percent for entitlements and interest, will 
have gone from that point to a rather balanced approach, where 100 
percent of it will be transferred for current consumption, and will not 
be good for the future or for the economy. We know, looking at the 
numbers, that at some point we have to interrupt that trend. The only 
question is when.
  When we collectively say, ``I wish it were otherwise, I wish it was 
an easier approach, I wish what Senator Nunn and Senator Domenici have 
been talking about all the way through the late 1980's and the 1990's--
I wish they were wrong,'' they, in fact, were not wrong. They were 
right.
  This proposal tends to do something that is actually relatively 
modest. Those who will describe it as Draconian--as the senior Senator 
from Wyoming has said, AARP has already indicated that they are going 
to describe an adjustment in the CPI as Draconian--I remind my 
colleagues that we did not have a cost-of-living adjustment until 1973 
after Wilbur Mills, who was thinking about running for President, 
enacted a back-to-back 20-percent increase in the payments for Social 
Security. After that occurred in 1970 and 1971, along comes the need to 
restrain the Congress. The COLA took place as a method of restraint in 
the initial days. Now it is considered to be sort of a sacred item 
without any regard for how it might adjust in an unfair fashion, 
without any regard for how it might, in fact, not bear resemblance to 
what is going on in the individuals' lives who are receiving the 
payment, and, most particularly, Mr. President, without any regard for 
what is happening for those people who are paying for that COLA; that 
is, to wit those individuals in the work force whose wages are taxed at 
15.4 percent in order to provide not just a COLA but the income and the 
payment for the hospitalization under Medicare.
  Mr. President, I have come to the floor to talk specifically about 
the CPI. The two biggest proposals, the ones that produce the biggest 
benefits out in the future, are the adjustment in the CPI down half a 
point--you can see it is a $35 billion annual savings by the time you 
get out to the year 2003. I just challenge anybody to come up with a 
list of $35 billion worth of cuts in the appropriated accounts. Make a 
list of $35 billion and explain that to people who will be adversely 
impacted by this. Ask them: ``Do you want to cut defense by $17.5 
billion? Do you want to cut the

[[Page S5345]]

Department of Energy, or the Department of Transportation? Are these 
the things that you really want to do?'' Because unless you are 
prepared to walk to the floor--and some are; there are still a few left 
who will want to come down to the floor and say, ``Americans are 
undertaxed. Let us raise their taxes to be able to get the job done.'' 
You have to come to the floor to propose some offsetting cuts to be 
able to make up this kind of money, $35 billion in the year 2003. These 
years, as everybody with gray hair like mine will tell you, go by just 
like that. That 6- or 7-year period of time will be gone in a hurry, 
and we will be wondering as we stare 5 years into the future and see 
the baby boomers coming on line why we did not do it in 1996 when it 
was easy. Understand that it will never get easier than it is right now 
to make these kinds of adjustments. It only will get harder. Every year 
we wait these kinds of adjustments get more difficult.
  The second big item in our proposal is adjusting the eligibility age 
for retirement to 70 years. I caution citizens who are watching this. I 
am not talking about either current beneficiaries who are retired, nor 
am I talking about beneficiaries who are over the age of 50, nor am I 
saying that you have to wait until you are 70 to retire. That is not 
what Social Security is. It does not dictate that you retire at 65 or 
dictate that you retire at 67. What the program does is say this is 
when you are eligible.
  Many of our citizens, in fact, wait now to take a later payment 
knowing it is going to be larger because they have managed to save 
money. They have managed to save money. They have a private pension. 
They have private savings. They wait. They delay the eligibility for 
this collective payment to age 70 right now. This does not affect any 
current beneficiary. It does not affect any beneficiary over the age of 
50. Most importantly, it does not affect the age at which you can 
choose to retire, if you regard Social Security as a supplement.
  One of the problems we have with this program is it began as a 
supplement, and increasingly we have been telling people it should be 
regarded as your only source of retirement income. The more we say that 
to people, the more we encourage people to regard Social Security as 
their only source of retirement and the less likely it is that we pay 
attention to what is going on in private pensions and pay attention to 
other Federal law that needs to be changed in order for people to 
accumulate that supplemental income.
  When Social Security was started in 1935, normal life expectancy was 
about 60 years of age. The normal eligibility age when this program 
began was age 65, 5 years after normal life expectancy. It took 1 
percent of wages to meet that promise. Today normally life expectancy 
is 76 with the promise in payments beginning at 65, and the life 
expectancy by the time you get out to this point--actually this point 
here--life expectancy is forecast to be at 80. That does not take into 
account the possibility that you are going to have a decreasing number 
of people who are smoking and decreased mortality as a consequence and 
increased life expectancy. All sorts of things could happen in this 
crucible of good news that happens every single day. We are discovering 
new ways to prolong people's lives, to enable them to live longer, and 
for many people they are now discovering that they have the glory of 
living longer with the difficulty of trying to figure out how to pay 
the bills over that period of time.
  So the second big change in adjusting the eligibility age for these 
collective payments is 70 years. You can see, Mr. President, again the 
kinds of future savings--nothing in the year 2000 because this thing is 
phased in. I say that because my mailbag fills up every time I talk 
about moving the eligibility age. It does fill up for people who are 35 
or 40 years old, or even 50. It fills up for people already retired. 
``Gosh, are you proposing something to reverse the eligibility age and 
take something away?'' The answer is no. What we are trying to do is 
accommodate this enormous generation that is going to begin to mature 
in the year 2008, or 2010 depending upon how you calculate it. Moving 
the eligibility age for Social Security generates tremendous savings.
  Again, I just challenge colleagues. If they do not like this, imagine 
yourself out here at 2010 coming up with 2.5 billion dollars' worth of 
cuts because you have to do that. We are not going to be able to have 
these bake sales that we have been having in the last couple of years. 
We do not want to raise taxes. We do not want to cut entitlements. As a 
consequence, we sell the spectrum. How many times have we sold the 
spectrum? I mean, I have said facetiously that maybe we should call 
Disney and see if they want to convert the mall into a theme park. At 
some point you run out of assets to sell. You have, if you are not 
willing to come down and propose a tax increase, to get it out of 
entitlements.
  Mr. President, let me add briefly--other Senators want to speak--that 
the CPI adjustment is an entirely fair and appropriate thing for us to 
do. It is justified by economics, if you look and examine what the CPI 
is supposed to cover. It is justified most importantly by the fact 
that, if I do not make this adjustment, I have to get it out of the 
hides of people who are out there right now struggling to pay the cost 
of education and struggling to pay their property taxes.
  It is remarkable if you look at the State expenditures on people in 
the age group 5 to 18 that are in our primary and secondary school 
system versus the expenditures that we make on people over the age of 
65. I am not trying to set up generational warfare here. There is 
strong generational commitment for these programs and intergenerational 
commitment. Social Security is perhaps the most popular program in the 
country. We are not trying to set up generational warfare. We are just 
trying to present the facts. The facts are that we are spending on a 
percentage basis less and less on education and our children and more 
and more on our seniors. As I have said, we have not seen anything yet. 
Wait until the baby boomers retire and the number of people working per 
retiree drops to 2 to 1. Justified by economics, justified by budget 
considerations, and justified by any American who wants to see this 
country become and remain hopefully an endowment rather than an 
entitlement society.
  Of all the things I hope this amendment does, the key amongst them, 
to me, is I hope that it presents an opportunity to change the terms of 
this debate from one of blasts being fired back and forth across the 
aisle between Republicans and Democrats. The facts of the matter, I 
believe, call upon us to come and say, ``Let us just present the truth 
to the American people.'' They may not like the truth any more than 
thousands of us who have discovered it.
  But in presenting the truth, let us not try to level the playing 
field. Give the American people the facts. In my judgment, they will 
level the playing field themselves. To continue to perpetuate a myth 
that all we have here is a paid-up system and have no problems and no 
adjustments are needed and we can solve this deficit by eliminating 
waste, fraud and abuse and all the other sorts of things we talk about, 
Mr. President, we are going to pay a very big price for it. I hope that 
we are able to muster a majority for this amendment. Those of my 
friends who have looked at this thing who are not perhaps as 
politically foolish as I, say you cannot survive this kind of vote. I 
do not believe we can survive the absence of this vote. I believe very 
much, like the votes on the Nunn-Domenici proposal, the more people 
examine the facts, the more they look at the truth, the more they will 
say, ``God help us if we do not change the law in this fashion.''
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. DeWine). Who yields time?
  Mr. ROBB addressed the Chair.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ROBB. Mr. President, I rise as a cosponsor of the pending 
amendment, which simply expresses the sense of the Senate that 
adjustments be made to the eligibility criteria for certain Federal 
benefit programs. It would also permit individuals to designate a 
percentage of their payroll taxes to a private investment plan, and it 
would make an equitable adjustment to the Consumer Price Index.
  I commend my colleagues for their work on this particular amendment. 
I commend them for their candor. This

[[Page S5346]]

could be the most important matter that we pass this Congress, if we 
pass it.
  This amendment would extend the civil service retirement age for 
future Government workers but affect no current Federal employee. It 
would extend the military retirement age for future enlistees but 
affect no current sailor, soldier, airman, or marine. It would limit 
civilian and military COLA's to the first $50,000 of retirement income 
but eliminate COLA's for no one. It would gradually track Medicare 
eligibility with Social Security eligibility. It would extend the 
retirement age for Social Security but affect not a single American who 
retires in the next 16 years.
  The pending amendment would also allow individuals to designate a 
percentage of their payroll taxes to a personal investment plan, if 
there is no impact on the solvency of the Social Security system. This 
ought to engender in our children and our grandchildren a greater sense 
of confidence that they are going to get a return from their 
investments when they retire.
  We face an explosion in entitlement spending not just because we have 
promised too much to too many--we do, of course--but principally due to 
simple demographics. Our people are living longer and the great baby 
boomer generation is getting closer to retirement. In 1940, the average 
woman in America who retired at age 65 received Social Security 
benefits for 13.4 years. By 1995, women and men were living much 
longer, and the average woman retiring in 1995 will receive 19.1 years 
of Social Security or nearly 6 more years of benefits because the 
retirement age remains unchanged at 65. In 1950, seven workers 
supported each Social Security beneficiary. By 1990, there were just 
five workers per beneficiary. By the year 2030, there will be fewer 
than three workers per beneficiary.
  We all know the statistics. By the year 2012, if no changes are made, 
entitlements and interest on the debt by themselves will consume every 
single dollar the Federal Government takes in. This stifles our ability 
to invest in our Nation and protect our most vulnerable citizens, and 
it does not have to be. Small steps today can save billions tomorrow, 
billions of dollars of debt we will not leave to our children--the 
``baby bust generation,'' as Pete Peterson calls those who will inherit 
our debt.
  So I urge my colleagues to support this amendment. Otherwise, the day 
will surely come when we will have to explain to our children why, when 
we could have made a difference, we failed to enact entitlement reform, 
as modest, as fair, and as justified as the proposals contained in this 
amendment.

  These kinds of choices are never easy politically, but they just get 
tougher as the problem becomes more acute. Now is the time to act if we 
are going to act responsibly. Courage, colleagues, it will attract 
attacks from just about everyone, but it is the right thing to do, and 
I commend my colleagues who have worked hard for giving us the 
opportunity to do the right thing.
  With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. BROWN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. BROWN. I yield myself such time as I may consume.
  Mr. President, for those from my generation, they will recall the 
name of James Dean. Some will recall him as a movie actor, others as a 
model for a generation, or at least a portion of a generation. He was a 
free spirit by anyone's description. Some folks may recall a drag race 
in one of his movies. The drag racing was popular at a time when young 
Americans fell in love with their cars, which has been for much of our 
history but, following World War II, gained strength and power.
  In the particular scene of this James Dean movie, he and another 
fellow line up their cars at a cliff overlooking the ocean, and they 
race toward the cliff, both accelerating as hard as they can. Of 
course, the contest is to see who can get ahead and stay in there the 
longest without turning away from the cliff.
  One can see that this is not long-term planning. It did fit the 
particular egos of the characters involved. Some may think that is 
fanciful. Surely, no rational person would point their car toward a 
cliff and accelerate. Some would say, ``Well, they didn't believe a 
cliff was there.'' But, of course, no one who was in that gang in the 
movie was under the impression the cliff was not there. They knew very 
well it was there. It was part of their ego, part of their image to 
show how brave they were to accelerate the cars as they moved toward 
that cliff.
  Mr. President, if somebody can find a better analogy, I would like it 
hear it. There is not anyone in this Chamber, I do not believe--and 
perhaps Members listening in their offices will come and correct me if 
I am mistaken, but I do not believe there is a single Member of this 
Chamber, liberal, conservative, Democrat or Republican, who does not 
think we are heading this country's economy off a cliff. I do not mean 
just unpleasantness, I mean absolutely running the economy off a cliff.
  A few years ago, the President appointed a long-term entitlement 
commission--the Bipartisan Commission on Entitlement Reform--to study 
this question. They looked at the potential problems and opportunities 
for entitlement programs. Here are some of the numbers from the 
Commission's final report that outline the problem. If they do not 
amount to a cliff toward which we are moving this country, I hope 
someone will correct me and let me know what they do mean. The deficit 
as a percent of gross domestic product, of what we produce, was at 
roughly 2.3 percent by 1995. The Commission forecast that this figure 
would increase to 2.5 percent by the year 2000 if changes are not made, 
if we do not address the problems of the entitlement spending. This 
figure more than doubles by the year 2010 to 5.9 percent of our GDP. It 
almost doubles again by the year 2020 to 11.6 percent and by the year 
2030 to 18.9 percent.
  What do all those numbers mean? It means almost a fifth of our GDP 
will be in deficit. It means that we will have astronomical interest 
rates and rising inflation as we attempt to borrow that much money each 
year from the economy. It means the accumulated deficit will swallow 
the future of our children and grandchildren.

  No one could say that we are going to run the car off the cliff, but 
if you point the car off the cliff and you push on the accelerator and 
you guide that car towards the cliff, and if you do not do something to 
stop the car, it is going to go off the cliff. That is where this 
Chamber is right now. We are playing a game of chicken. Each side says 
we are not going to turn back. Of course, we all know of the need to 
reform Medicare, but we sure do not want to get blamed for turning 
away. We do not want to get blamed for making adjustments in the rate 
of growth of Medicare. So the race toward the cliff continues.
  No one can claim that this race to run our economy and our country 
off the cliff is good policy, and no one can claim that running our 
Nation off the cliff shows how much we care, because the fact is, to 
continue on the road we are now shows exactly the opposite. To refuse 
to reform Medicare, to refuse to look at the Social Security Program 
and make lasting changes that make it solvent, shows not ``caring'' but 
the absence of caring--a gross, callous disregard for our children and 
our grandchildren and the future of this Nation that we love so much.
  There is one more thing I ought to mention. Because the Bipartisan 
Commission has used estimates, anyone who has looked at congressional 
estimates over the years, I think, has to be struck by one fact: Our 
estimates have proved consistently too optimistic. We put out 5-year 
reports on the future of Social Security. The Social Security trust 
fund trustees produce these reports. They are remarkable documents. 
They project the assets involved in the fund and the earnings from 
interest and so on. They project future payouts. There is not a single 
one, not one of those 5-year reports from the Social Security trustees, 
that has not been overly optimistic.
  No one expects you to be able to forecast the future with exact 
numbers. We would be foolish to think that any of these are engraved in 
stone or designed to come true without changes. But you would be 
foolish to look at these numbers and not understand the background 
that, consistently, we have

[[Page S5347]]

been too optimistic. We have not been overly pessimistic; we have been 
overly optimistic.
  The estimate that roughly a fourth or fifth of our economy--without 
changes taking place--will be consumed in deficits each year to the 
year 2030, is almost certainly too optimistic as well. If we do not 
make changes and adjustments, the skyrocketing deficit will be worse 
than this projection.
  Here is an interesting fact Social Security trustees put out in their 
report. They used to do an actuarial soundness test. Actuarial 
soundness tests are important because any program in this country is 
required to be actuarially sound. If it is not, what you are in effect 
doing is selling people insurance that you do not have the ability to 
pay off. In the private sector, if you do that and sell it on that 
basis, you are subject to suit and perhaps even imprisonment. It is a 
called fraud.
  What are we doing with these programs? We have them designed in a way 
so they will become insolvent or go bankrupt. The facts are very clear. 
By the year 2013, the long-term report indicates that Social Security 
expenditures will exceed the FICA tax. By 2013--that is not very far 
from now. By 2024, they will exceed not only the tax, but all the 
interest income as well. By 2029, the estimate is the trust funds will 
reach total exhaustion. That is, we are insolvent.
  The Social Security Program is heading toward a cliff, and to refuse 
to make adjustments or changes will destroy Social Security, not save 
it. This amendment is about saving Social Security, saving our 
entitlement programs and making them work, as well as investing in the 
future of our country.
  Anyone who does not believe we need fundamental changes in where we 
are headed now, please come to this floor and debate it. The 
projections of the Commission indicate, as my colleague from Virginia 
just pointed out, that by the year 2012, if we do not change, you can 
literally eliminate all money for Department of Justice and eliminate 
the Army and the Navy and the Air Force and the Marines, you can 
eliminate all costs of Congress, you can eliminate all costs in our 
discretionary programs, and still not have enough money just to cover 
the entitlement programs.

  There is not anybody here who is willing to vote to eliminate all of 
those programs we just mentioned. Trim them back, yes, I think we 
should. There are a lot of programs we can and should trim back. But 
even if we eliminate every one of them by the year 2012, we are not 
going to have money to meet our entitlement obligations and meet 
interest.
  It is a nondebatable fact that we have to make adjustments in these 
programs if this Nation's economy is to survive and thrive. It is a 
fact that we will be unable to fund these programs unless we make 
dramatic changes.
  We can wait until that car is on the edge of the cliff before we 
apply the brakes, or turn in a different direction. I suppose that is 
one thing that some Members of this body will want to do, but I do not 
think anybody thinks that is good policy. A couple of things will 
happen. One is it will be much more difficult to solve the problem. 
Two, it is very likely such attempts will be too late.
  This amendment is very simple. It is very modest. It is not at all 
draconian. What it says is, we see the danger and we want to make a 
modest adjustments so we do not have the kind of problems that lie 
before us.
  The Commission vote, I think, was nearly unanimous, save one person 
who did not vote for the report. That individual did not think the 
forecasts were necessarily inaccurate; rather he had trouble with some 
of the Commission's recommended solutions.
  The fundamental facts, though, are undisputed. We are headed toward a 
cliff. What can we do? Whenever you talk about entitlement programs, 
one of the things that you hear, and hear for valid reasons, is, ``Wait 
a minute, these are programs that people have paid into directly or 
indirectly. If it is civil service retirement, people have paid in 
through much of their service. So do not change the ground rules after 
someone has paid in.''
  That is fair enough. If you have a choice, obviously you should not 
want to change the ground rules, and that is the whole precept of this 
amendment. This amendment says, we are going to make some modest 
reforms, but we are not going to apply them to people who are involved 
in the programs right now.
  I hope Members will keep that in mind as they review this particular 
proposal. It does involve a number of modest changes--a modest change 
in the civil service retirement, a modest change in military 
retirement, a modest change in a variety of other areas--but they do 
not apply to any Federal employee now employed by the Federal 
Government. It only applies to Federal employees hired after January 
1997.
  The choice is not whether you adopt these reforms or not. These 
reforms will be adopted because when the fund runs out of money, you 
simply cannot raise taxes enough to continue on. They are going to be 
changed. The question is whether you are going to change them after 
people have paid into the programs for many of their working years or 
whether you will make the necessary changes before people begin paying 
into them.
  Our suggestion is that you ought to change these programs before 
people pay into them. Thus, the very modest change in civil service 
retirement, very modest change in military retirement, specifically 
excludes anyone who is now in the armed services of the United States 
or works for the Federal Government. They only apply in the future. The 
changes in Social Security are modest. They adjust the retirement age. 
It is phased in so it takes full effect by the year 2030.
  Some would say, ``Why do we have to do that?'' We have already noted 
the problems with Social Security funding. It is quite clear there will 
not be money to meet the obligations by the year 2029. Social Security 
will be insolvent. When Members think about this issue we ought to give 
some thought to what has happened since this program was started, 
because the facts have changed.
  The distinguished Senator from Virginia went through the changes that 
have taken place in the number of workers per the number of retirees. 
That is one of the big dynamics. Perhaps less well known is the fact 
that in 1935, when Social Security began, life expectancy in this 
country was 61 years. In the year 1994, though, it was 76 years; from 
61 to 76, a 15-year change in life expectancy. Can you ignore that when 
you have a program based on retirement? Of course not. The facts have 
changed. There has been a 15-year increase in life expectancy, and I do 
not think you can possibly ignore that when you begin to look at the 
program and how it is designed.

  The Commission indicates life expectancy in the year 2025 is even 2 
years higher, 78. The percent of the population over 65 years old was 7 
percent in 1935 when the program began. It was 13 percent in 1994 when 
the commission began to take its look at this. It goes to 20 percent by 
the year 2025. The facts have changed and we have to change with them. 
The number of Americans over the age of 70 was 24 million in 1995. By 
the year 2030, it will be 48 million.
  Mr. President, the reality is this: If we cannot make modest 
adjustments in the retirement programs, an adjustment to make the CPI 
correct or at least closer to being correct--this does not take it all 
the way, but a little closer--if we cannot make modest adjustments in 
the Social Security retirement age, one of two things will happen: The 
programs will either become insolvent or we will have to raise taxes to 
the point in this country where we simply destroy the economy.
  All of us are familiar with the dramatic differences in economic 
projections and economic philosophy. Some think Arthur Laffer is a 
great visionary; others pooh-pooh his ideas. But, Mr. President, these 
are facts. They are not in the realm of disagreement. The President's 
own budget, brought out by a liberal Democratic administration, 
acknowledges that taxes would have to be raised to 82 percent of the 
gross domestic product simply to fund the programs that are already on 
the books.
  No one contends we will be a competitive, viable economy with taxes 
like that or even taxes half of that. What we are looking at is an 
economy and a plan for entitlements that is racing toward the edge of a 
cliff. The question is, Does this body have any more

[[Page S5348]]

common sense than James Dean did when he got into that racer? The fate 
of our children rests on the answer. The fate of our children and our 
grandchildren rests on our wisdom in taking modest steps in advance of 
the tragedy to make it work.
  I do not know of other proposals that are around that address the 
long-term problem. I was somewhat amused by a former Governor of 
Colorado, Dick Lamm, when he observed some caustic comment that the 
Republican proposals for Medicare reform which received so much 
attention last year were, indeed, outlandish and inaccurate. He said 
they were not near enough. Instead of going too far, they did not go 
far enough, because you see, the goal here is to save the programs. The 
goal here is to make them last.
  In the long run, what this amendment is about is saving those 
entitlement programs. When we cast our votes on this, please do not 
think that we are helping future retirees by ignoring the facts. Those 
who care about retirees, those who care about our future will want to 
vote for this amendment.
  Are the reforms modest? Of course, they are. Do they not have any 
immediate impact? That is probably true, no immediate impact. But, Mr. 
President, 20 to 30 years from now they will have an impact, and the 
impact will be significant. But more important than that, they will 
have an impact today not in financial terms, but they will have an 
impact in terms of hope, hope for our future, confidence in the 
American dream, because facing our problems and solving them is part of 
the strength of this great country.
  I yield back the remainder my time, Mr. President.
  The PRESIDING OFFICER. Who yields time?
  Mr. NUNN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. NUNN. Mr. President, I am pleased to be able to be here on the 
floor and listen to my colleagues and join them in presenting this 
amendment to our Senate colleagues today.
  I certainly subscribe to the comments made by the Senator from 
Colorado, Senator Brown, as well as Senator Kerrey, Senator 
Simpson, and Senator Robb in offering this amendment which provides 
immediate and long-term budget reforms that are absent from the budget 
resolution before the Senate or is absent from any other resolution 
before the Senate that I am aware of.

  In the 1995 Kerrey-Danforth Bipartisan Commission on Entitlement and 
Tax Reform report, the Commission identified the following principles 
for its approach to long-term reform. These principles were:
  No. 1, we must plan for the future by addressing and solving our 
long-term fiscal problem head on. That is exactly what this amendment 
does.
  No. 2, we must lead by example. Congress cannot be exempt. That is 
also what this amendment does.
  No. 3, we must plan for the aging of America's population, and that 
is precisely, again, what this amendment does.
  No. 4, we must address rising health care costs by emphasizing market 
incentives and personal responsibility. Again, what this amendment 
does.
  No. 5, we must fulfill our promises to today's retirees and ensure 
the long-term solvency of Social Security. Again, right on point.
  No. 6, we must design a solution that is fair to all Americans. I am 
not sure we will ever have anything every American considers absolutely 
fair, but we have strived toward that goal.
  No. 7, we must act now to give people time to plan for the future and 
to avoid significant future revenue increases or benefit reductions.
  Again, as the Senator from Colorado laid out, that is what we are 
doing. We either take these steps now in modest steps, in doing what 
everybody who has studied this series of problems and challenges knows 
is inevitable, or we will wait longer and longer and longer, as we have 
been doing, and then the medicine will have to be more and more 
disagreeable in years ahead and even dangerously disagreeable.
  Senators Kerrey, Simpson, Brown, Robb and I are offering an amendment 
which lives up to the principles of the Kerrey-Danforth Commission and 
to put before the Senate and the American people some of the hard 
choices that have to be made in the near term if we are to have any 
hope of fiscal soundness over the next 20 to 30 years.
  A proposal to balance the budget in 6 or 7 years is a necessary 
start, but it is only the beginning step, and that is what we are 
debating on the underlying resolution. We can balance the budget in 
2002. If every projection works out as envisioned, whether it is under 
the proposal presented by the Budget Committee or whether it is under 
the President's proposal or whether it is under the Chafee-Breaux 
proposal--which I support. Even if we do that, however, and get a 
balanced budget in 2002, we will still have a dismal fiscal picture for 
the years following 2002, particularly for our children and children's 
children, because the cost of our entitlement programs, which are 
already the major cause of our persistent budget deficits, will become 
completely unaffordable when the baby boom generation begins to retire 
20 years from now.
  The Chafee-Breaux proposal, I think, is a solid proposal and a solid 
beginning for the first 7 years. This proposal is entirely consistent 
with that, indeed is consistent with the other alternatives, because it 
goes further. It talks about what we call the outyears, but these are 
the crucial years, and these steps have to be taken, in my opinion, 
now.
  To give my colleagues some idea of the challenges ahead of us in 
America, consider the following.
  In 1963, mandatory programs, entitlement programs plus interest on 
the debt--and make no mistake about it, these are the popular programs 
that are supported by the American people--in that year, 1963, this 
spending represented 29.6 percent, or about 30 percent of total Federal 
spending.
  Ten years later, 1973, mandatory spending represented 45 percent of 
overall Federal spending.
  In 1983, mandatory spending represented 56.3 percent of Federal 
spending. In 1993, mandatory spending consumed 61.4 percent of the 
Federal budget. In 2003, 7 years from now, the mandatory spending, or 
entitlement programs plus interest on the debt, is projected to consume 
72 percent of the Federal budget. We have gone from 1963, 30 percent, 
to 2003, 72 percent, of the Federal budget.
  In 2012, less than 20 years from now, mandatory spending is projected 
to consume 100 percent of Federal revenues as the programs are now 
structured.
  Unless things change significantly, Mr. President, before 2012 there 
would be no Federal funds left for the defense of our Nation, no 
Federal funds left for education, no Federal funds left to have a 
Federal court system, environmental protection, transportation, 
prisons, Border Patrol, housing, foreign aid, cancer research, disease 
control, or any other appropriated account. All of these would be gone. 
That is what we are talking about within 20 years. The entire cost of 
all these basic functions of Government which Congress provides each 
year through the appropriations process, as opposed to mandatory 
spending, would have to be financed by deficit spending at the very 
point in time when Social Security itself will start to run huge 
deficits on its own.
  In 2013, as the baby-boom generation begins to retire en masse, 
beneficiary payments for Social Security recipients will exceed 
receipts from working Americans. In 2030, when all the baby-boom 
generation will have reached age 65, Social Security alone will be 
running a cash deficit of $766 billion per year--not million, but 
billion.
  Or consider the following. Because Social Security has been 
considered off limits for so long, the program has not changed with the 
times and with demographic realities the way many other programs have 
had to, and certainly the way the private sector has had to.
  When Social Security was established by law in 1935, the elderly were 
eligible to receive retirement benefits at age 65. In 1935, the life 
expectancy of the average American was 61.4 years. Today, the 
retirement age for full Social Security benefits remains the same: 65 
years. Today, the average life expectancy is almost 76 years. Thirty 
years from now, average Americans, based on projections, will live to 
almost the age of 79.
  Mr. President, if we had this same actuarial plan that President 
Roosevelt and the New Dealers had when they started this important 
Social Security Program, the retirement age for Social

[[Page S5349]]

Security recipients would be almost 80 years old today. We certainly do 
not suggest that, but we do suggest fundamental and modest adjustments.
  The current Social Security Program is unaffordable in the 21st 
century because this increase in life expectancy is occurring at the 
same time as the number of workers supporting each Social Security 
beneficiary is decreasing. I know the American people believe that when 
they pay into Social Security, it all goes into a little account, that 
money sits there and draws interest and waits for them to retire.
  Mr. President, it has never been that way. It never will be that way. 
Perhaps that is the way it should have been set up. It was not set up 
that way. We all know it was set up based on today's workers paying for 
today's retirees.
  In 1950, there were approximately 15 people working to support each 
Social Security retiree or recipient. By 1960, there were five people 
working to support each Social Security recipient. Today, because of 
demographics, because of health care, there are now only----
  The PRESIDING OFFICER. The Chair notifies the Senator that all of the 
time for the proponents has now expired.
  Who yields time?
  Mr. NUNN. Mr. President, would the Senator yield me about 5 minutes 
off the bill?
  Mr. DOMENICI. Ten minutes.
  Mr. NUNN. I thank the Senator.
  Mr. President, today there are now only 3.3 workers per recipient. 
Thirty years from now, the ratio will be two to one. And this ratio 
will continue to decline.
  My friend from Nebraska, did----
  Mr. EXON. I will be glad to yield the Senator time, but I guess he 
has some over there.
  Mr. NUNN. I thank the Senator.
  Mr. President, I know there are many people who will debate this in 
an emotional fashion, but, in my view, this is not a Democratic or 
Republican philosophical debate. It is not about philosophy. It is not 
about anything but basic actuarial statistics and arithmetic. That is 
the way it ought to be debated. I know people get off on an emotional 
binge on this, and I know that it is considered the third rail of 
politics, but the facts are the facts. Two and two is four. The 
actuarial basis of any kind of a retirement program has to be taken 
into account.
  I know that many question what will happen if we do nothing. 
Certainly I do. As our former colleagues, both Senator Tsongas and 
Senator Rudman, correctly noted not long ago, and I quote:

       If we ignore our mounting debt, if we just wish it would go 
     away and do nothing about it, it will grow and grow like a 
     cancer that will eventually overwhelm our economy and our 
     society. The interest we owe on the debt will skyrocket. We 
     will continue our vicious cycle of having to raise taxes, cut 
     spending and borrow more and more to pay interest upon 
     interest. Our productivity growth will remain stagnant; more 
     of our workers will have to settle for low-paying jobs; and 
     our economy will continue its anemic growth. America will 
     decline as a world power.

  Mr. President, this means, in short, that if we refuse to act now, 
future generations will have two choices. The Senator from Colorado has 
alluded to this and my other colleagues have, but it bears repeating. 
The choices will be to drastically cut benefits for people who are 
about to retire or already retired; or the other choice is to increase 
taxes on the working Americans to unsustainable levels to support the 
retiree. I do not know of any other choices. Taxes at the required 
level would not only be a political albatross; it would break our 
economy.
  Mr. President, the sooner we act, the more choices we have, the 
easier it will be over the long run. The longer we wait, the stronger 
the medicine will have to be. The amendment before the Senate is one 
set of choices. Others might come up with a better approach. If so, 
they should come forward with their own amendment. But now is the time 
to join this issue. It needs to be joined.
  We have to know where we are going in the future. We have to make 
tough decisions. Everyone who has studied this challenge realizes that 
we must reduce the future costs of our entitlement programs. We must do 
so without damaging our elderly population and those about to retire.
  We do not pretend here today to have the only approach. We are 
certain, however, that even if we get only five votes--and that is 
entirely possible, I recognize this--the issue must be joined. The 
national debate on entitlements must begin.
  For many years now the word in political circles is--and we all know 
it--the word is, do not talk about entitlement restraint during an 
election year. At least do not do anything about it seriously. Nor can 
you do anything in the year before an election. Mr. President, every 
year is either the election year or the year before the election. So 
that means you never do anything. That means we never do anything but 
talk in very general terms about entitlements.
  Politicians of both parties are reluctant to believe the American 
people will ever understand or agree that these programs must be 
restrained if our children are to have a future.
  With this amendment, we attempt to frame the debate and return our 
Nation to the same path our forefathers blazed for us.
  While the Senate cannot amend all the actual statutes needed to 
implement these changes in a budget resolution, the proposals contained 
in this amendment represent strong but lifesaving medicine.

  We propose the following: First, to adjust the Medicare eligibility 
age to correspond with the Social Security retirement age. This 
adjustment would add 2 months to the Medicare eligibility age each year 
beginning in the year 2000. Not any real big problem for any 
individual. By the year 2003, the Medicare eligibility age would mirror 
that of the Social Security system. Once Medicare and Social Security 
retirement ages are equal, the Medicare eligibility age would mirror 
the increases in retirement age planned for the Social Security system. 
Current Medicare eligibility age is frozen at 65 years.
  The second major step we would take: to accelerate the date of the 
Social Security eligibility age by eliminating the 12-year plateau in 
the law now and increasing the rate of the eligibility age by 2 months 
per year. Eventually, the Social Security and Medicare eligibility 
retirement age would increase to age 67 in 2012 and 70 in the year 
2030. Current law increases the Social Security retirement age to age 
67 in 2026 and does not propose to increase beyond that age. Again, 
current law for Medicare eligibility age is frozen at age 65.
  Third, and this one would apply now. We would limit the full cost-of-
living--COLA's--cost-of-living increases to the first $50,000 in 
Federal retirement benefits. That will affect everybody in this body, 
likely, that retires. It will affect all of the people who retire with 
a very large benefit. For example, if a Federal retiree is eligible to 
receive $60,000 in Federal retirement next year, our proposal would 
allow this retiree to receive a cost-of-living increase on the first 
$50,000 in retirement but not on the other $10,000.
  It seems to me that is a modest and a fair step higher-income 
retirees can be expected to take.
  The fourth thing we would do would be to reduce the Consumer Price 
Index [CPI] inflation calculation by 0.5 percent each year for years 
1996 through 2003. This is identical to the CPI recommended by the so-
called centrist coalition.
  The fifth thing we would do is adjust the civil service retirement 
age by allowing full retirement at age 60 with 30 years of service, age 
62 with 25 years of service, age 65 with 5 to 25 years of service. Mr. 
President, this compares to current law with civil service retirement 
that provides full benefits at age 55 for 30 years of service, age 60 
for 20 years of service, age 62 with 5 years to 25 years of service. 
This does not apply to anyone who is currently in or has been in the 
civil service. It would apply to new people coming in. Again, a very 
fair proposal.
  The same with the military retirement change which is a modest 
proposal that applies to everyone coming into the military after this 
proposal becomes law, if it does. We would adjust active duty military 
retirement by allowing active duty personnel with 20 years of service 
to retire with full benefits at age 50. Benefits would be discounted if 
the person begins drawing them before age 50. There would be no change 
in Reserve retirement. Mr. President, this compares to current

[[Page S5350]]

law for military retirement which provides full retirement benefits 
after 20 years of service, regardless of age.
  This means that some people coming into the military can retire when 
they are 36 years old. Many of them retire when they are 38 or 40 years 
old. That has been based on the old military, where people had to move 
up or out, and you had to have everybody young and vigorous. Today we 
are in an age of technology. It is, fundamentally, time. Military has 
to adjust time in grade and make other adjustments. We do it over a 
long period of time so the military can make those adjustments without 
really having any harm on people who are nearing retirement, or with 
the grandfather provisions on anyone who is in the military today. Both 
the civil service and military retirement changes would be prospective. 
Again, would apply only to new civilian and military personnel entering 
Federal service.
  When you think someone retiring at age 36 will live until they are 76 
years old on average, or something in that neighborhood, they will draw 
retirement for 40 years. Now, we just cannot afford that kind of 
retirement system to continue on and on.
  Seven, we establish a personal investment plan which would allow 
workers to divert 2 percentage points of their monthly payroll taxes to 
their own personnel investment plans. It is our intent to allow the 
personal investment plan to be enacted in a fashion which does not 
adversely impact Social Security long-term solvency.
  Mr. President, this is modest medicine. Some may consider it strong 
medicine. I believe it is required to save the fiscal life of the 
future generations of American citizens. I believe it is fair medicine. 
We offer this amendment in good faith, but we realize we are asking our 
colleagues to join in programs touching the so-called third rail of 
politics in America, the rail which provides programs that affect 
people who are elderly. However, my colleagues should understand that 
this amendment, with the exception of providing a more accurate 
calculation of the Consumer Price Index and the COLA increase 
adjustment for retirees receiving more than $50,000 in Federal benefits 
annually, does not impact current retirees or those about to retire. We 
grandfather and grandmother our constituents who fall into these 
categories.
  Our amendment maintains the important commitments between generations 
that form a foundation of Social Security, Medicare, and other 
programs. Most importantly, this amendment offers a hope that these 
programs and benefits will continue to exist in the future, for future 
generations.
  I say to my colleagues, if you think these choices are unpopular, 
wait until you see the choices you will face if we continue to ignore 
these problems. These problems are not going to go away. They are not 
going to go away. They are not going to get any easier. Arithmetic is 
not going to change.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. NUNN. I will wrap up in 30 seconds.
  Pete Peterson has spoken out on this subject and been a stalwart in 
trying to bring these matters to the attention of the American people. 
He had a recent article, and I will quote from the Atlantic Monthly 
article:

       The long great wave of baby boomers retiring could lead to 
     an all-engulfing economic crisis unless we balance the 
     budget, rein in senior entitlements, raise retirement ages 
     and boost individual and pension savings. Yet politics of 
     both parties say that most of the urgently necessary reforms 
     are off the table.

  Mr. President, we have to take these matters and put them on the 
table. That is what we seek to do here today. I have great faith in the 
American people. I think they have good judgment. With the facts, I 
think they will make fair judgments. I believe if we present the 
American people with the facts about our future, they will support 
sensible and fair conclusions what we must do today if we are to 
preserve the future for our children and for our grandchildren.
  Mr. DOMENICI. Mr. President, how much time did the proponents use?
  The PRESIDING OFFICER. The proponents have consumed their entire 
hour.
  Mr. DOMENICI. Senator Exon, I know we have two different amendments 
waiting here on the floor. Senator Snowe has an amendment that was 
scheduled for some time ago but it did not get worked in. How much time 
would you need?
  Ms. SNOWE. Less than 5 minutes.
  Mr. DOMENICI. And we have Senator Breaux to be accompanied by Senator 
Chafee, and you want about 3 hours.
  Mr. BREAUX. Yes.
  Mr. DOMENICI. We want to work until 10 o'clock tonight if we can.
  Mr. EXON. Senator Simon wants to be recognized.
  Mr. SIMON. If I could have 4 minutes in the process of this.
  Mr. DOMENICI. We are not finished with the previous amendment.
  Mr. SIMON. I wanted to speak on that amendment.
  Mr. DOMENICI. So we could get Senator Snowe in, and then the 
bipartisan proposal, and still try to get a couple more amendments 
after that this evening.
  Could I ask the Parliamentarian, if we went until 10 o'clock tomorrow 
and all of that time was used because there would be no votes, how much 
time would we have used of the 50 hours?
  The PRESIDING OFFICER. The Parliamentarian advises the Chair we are 
up to 41 hours.
  Mr. DOMENICI. So it would be approximately 9 hours left.
  The PRESIDING OFFICER. That is correct.
  Mr. DOMENICI. I thank the Chair. I thank the Parliamentarian. I 
should not have asked such a complicated question. He is a 
Parliamentarian, not a budgeteer. Maybe Parliamentarians would do 
better than budgeteers.
  Mr. EXON. Or vice versa.
  Mr. DOMENICI. I wonder if we might suggest to our leadership, because 
tomorrow they want to take off around 10:30 for a while, that we come 
in again in the morning at 9 o'clock, and for an hour and a half take 
amendments up and then continue right on through the afternoon with as 
many amendments as we can get in, and try to get some unanimous consent 
on how we take up amendments, and then start tomorrow night around 5 
o'clock or 6 o'clock with a series of amendments and return on 
Wednesday with a series that would be all the rest of the amendments.
  Mr. BREAUX. It was our understanding we would try the so-called 
Chafee-Breaux substitute, use 3 hours this evening and have an hour to 
conclude tomorrow, sometime. I do not know if that fits in with your 
plan.
  Mr. DOMENICI. It fits in fine.
  Mr. EXON. How much time is allowed?
  Mr. BREAUX. Four hours.
  Mr. EXON. You would use 3 hours tonight and 1 hour tomorrow?
  Mr. BREAUX. Yes, equally divided.
  Mr. DOMENICI. To the extent the opposition does not use that much 
time, we could have less time.
  Mr. CHAFEE. Or you could always give it to us.
  Mr. DOMENICI. I assume 2 hours of discussion on a budget like yours 
ought to be more than adequate. That is not true. It is a great budget. 
We could spend a whole evening on it.
  In any event, let me make sure that everybody understands. We are 
getting to a situation where, because we have to take off a little bit 
tomorrow, we are probably going to start voting no sooner than tomorrow 
night.
  Mr. EXON. From what I can gather, probably in the neighborhood of 6 
o'clock.
  Mr. DOMENICI. That is correct. We will have a series of votes. We 
will strike some agreement on a tiny amount of time for each one for 
Senator Exon and I to explain the amendment. Then we will come back in 
on Wednesday, and there will still be a long list of amendments--unless 
we stay in all night, which I do not think we want to do Tuesday. We 
are not going to have a series of votes of five or six amendments. We 
are going to try to do it this way. If you can help us by not insisting 
that your amendment be voted on, maybe we can voice vote some. But that 
is the way things look right now.
  Having said that, I yield myself 5 minutes in opposition to the 
amendment offered by Senators Simpson, Kerrey, Nunn, and Robb.
  First of all, Mr. President, these Senators who offered this sense-
of-the-Senate amendment deserve the highest accolades. They are 
attempting, in this sense-of-the-Senate resolution, to address issues 
that are profoundly important to the future. What we have the

[[Page S5351]]

most difficulty with as legislators, Senators, Representatives and, I 
must say, even Presidents, is addressing future problems, because it is 
so easy to talk about only current problems and the current status of 
programs, and, for some reason, it is very difficult, even if the facts 
are known, to address issues that are clearly out there, which are 
going to be very damaging to our seniors, or to young people, or to our 
economy 10, 12, 15, 20 years out.
  In fact, I think that the distinguishing feature for modern times 
between leaders that lead and leaders that propose to do things that do 
not require any leadership is those who deal with today only are not 
really leading very much, because today's problems and solving them 
right now is pretty easy. What is difficult is to solve problems that 
have long-term implications and you must convince yourself and people 
that you have to start solving them or they will not be solved right.
  An example is, if one were a mayor of a city where a huge plant 
closed down and thousands of people were put out of work, you could get 
the community together quickly and rapidly, and they would join forces 
almost with one voice of harmony to do something about it. But if you 
talk about a master plan for highways for a city, it is pretty hard to 
get everybody together, because you do not need the highways tomorrow 
or next week. It is the same for our Federal Government. You have to 
start fixing entitlement programs today, because the handwriting is on 
the wall. You can tell the public precisely what is going to happen and 
what the options and alternatives are 6, 8, 10, 20 years out.
  In that context, those who offered this sense-of-the-Senate 
resolution had the courage to do that. I wish it was not a sense-of-
the-Senate resolution. I wish that we had a budget before us that 
literally did these things, or a mechanism for having a real vote on 
those kinds of issues. To some extent, in terms of the Consumer Price 
Index, the bipartisan proposal that is coming up shortly does address 
that. But I personally believe that the problem with the resolution 
offered by the four distinguished Senators, led by Senator Simpson, is 
that they have included in it that we fix the Consumer Price Index 
right now, that we change it to limit it and reduce it by five-tenths 
of 1 percent.

  Frankly, I am not going to take a lot of time tonight. I believe I 
could convince Senators that we do not know enough about it to do five-
tenths right now, and that there are real reasons to debate some 
alternatives. I believe I could spend time convincing the Senate that 
the small group of economists that came up with the conclusion that we 
were off by anywhere from 1 percent to 2.7 percent are not an official 
commission of the Congress, or of the President, and that we should not 
be changing Social Security based upon their reasoning.
  But I also believe that we made a commitment this year that we were 
going to take some very tough medicine with reference to some of the 
entitlement programs--welfare, Medicaid, Medicare, public employees, on 
and on--but the commitment was that we would not touch Social Security 
in this round of budgeting, where we were attempting to reduce the 
budget deficits and ultimately to be in balance.
  I believe we should live up to that commitment through this year. I 
believe, under whatever guise anyone wants to make it, a five-tenths 
mandatory change in the Consumer Price Index is changing that 
commitment and is going to impact on Social Security. I believe that 
the arguments made here today may very well be correct. We may get to 
that point. But I also believe that when we get to that point, it is 
going to have to be a very broad-based, bipartisan effort. I am 
beginning to think that you cannot do it without a President of the 
United States joining. If you are going to change the Consumer Price 
Index, and even if you want to make the point and even if you are 
right that it should be changed because it is not as accurate as it 
should be, I do not believe you can do that in the same year that you 
are reforming Medicare, welfare, and Medicaid, without the President of 
the United States and a bipartisan coalition saying let us change it.

  We have part of that in this institution, for there is a large group 
of bipartisan Senators--not large enough to equal 51, but a large 
group--that will be in support of this approach. I have never shirked 
from making long-term budget decisions when they are clearly understood 
and when you can see the handwriting on the wall. I have never been 
afraid to tell those who are getting benefits from the Government that 
we overpromised. I have never been afraid of that. I believe we have 
overpromised in a lot of areas. I believe the reason Senator Simon 
stands on the floor and so eloquently says, ``Let us have a 
constitutional amendment for a balanced budget,'' is because he, too, 
believes--perhaps not in the same areas--we have overpromised, 
overcommitted, and we too easily tell the populace we are going to do 
more for them.
  I believe the time has come when more and more of us have to stand up 
and say, in the interest of the future, in the interest of a growing 
economy and a better opportunity for our children and the next 
generation, we have to kind of harness in some of those commitments and 
make some changes, do them prudently. Most of the suggestions in this 
sense of the Senate are prudent and are way out there.
  I want to close tonight by saying every one of those Senators have 
joined me--all four of them--in the past when we were on the cutting 
edge. We were there ahead of everybody saying let us fix the 
entitlements. My friend from Washington remembers, and Senator Nunn and 
the Senator from New Mexico. We almost shocked this place by passing a 
mandatory change in the growth of the entitlement programs. It came as 
a shock that Senators were finally opening their ears, minds and eyes 
to these problems. That was a few years ago. We are making headway on a 
number of those programs. We need to make more. The idea of changing 
the law in the future so that anybody who is now a beneficiary of one 
of the pension programs does not get affected is a brilliant 
idea. Eventually it will be done, or you will not be able to change 
those programs. But I repeat: You cannot avoid the reality that 0.5 
percent on CPI is a change in Social Security. I truly believe we made 
a commitment to the contrary. We need more of an authentic commission 
and bipartisan support, along with a President to get it done. Maybe I 
am wrong. But that is how I feel here tonight.

  What that means is that I will argue less on the total budget that 
Senator Chafee has so diligently--along with Senator Breaux--put 
together. But I will have a few words about it, and most of it will be 
complimentary.
  I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. EXON. Mr. President, will the Senator yield me time?
  Mr. DOMENICI. Of course, in opposition, as much as you want.
  Mr. EXON. Mr. President, I would first like to yield 4 minutes of the 
opposition time to the Senator from Illinois, who has been patiently 
waiting.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Mr. President, I confess I have some mixed feelings on 
this. While I have been recognized on opposition time, it is possible 
that I will vote for it because there are things that I think are very 
good in this.
  Mr. EXON. You just lost your time.
  Mr. SIMON. Mr. President, let me say that there is one area where I 
differ with my colleague from New Mexico, and I have great respect for 
him. I think he is one of the finest Members of this body, and his 
leadership in trying to move us toward a balanced budget I applaud. But 
I think, outside of the philosophy in the budget where the two sides 
differ--here you see fundamental differences. How much should go for 
education? How much for this? But two basic deficiencies are: First, we 
are having a tax cut when we have not balanced the budget. I just do 
not think that makes sense at all. Our colleague, Senator Feingold, is 
going to have an amendment on that.
  Second, we have to deal with the CPI. Senator Moynihan has been 
excellent and eloquent on this. Senator Nunn was great. Pete Peterson 
had the article in the Atlantic Monthly. Anyone who is serious about 
this question, take a look at Pete Peterson's article. We simply have 
to balance the budget,

[[Page S5352]]

and that means we are going to have to address the CPI question sooner 
than later, and the sooner we do it, the better. It is politically 
awkward. There is no question about that.
  I have to say, the other side of this, without having studied where 
we are going, to say that we want to divert 2 percent of the total tax 
payroll to a private investment plan without doing any studying on it 
and without having hearings on it, I think is a questionable procedure. 
I really have qualms about doing something like that. So I have real 
unease about that portion of the amendment, but facing up to the CPI 
problem is something that we ought to be doing.
  I yield the time, and I thank my colleague from Nebraska as well as 
my colleague from New Mexico.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I thank my friend from Illinois. I was going 
to ask him a question. I am going to be addressing this matter a little 
bit more in response to the Breaux-Chafee amendment. I think there are 
a lot of good things in the Breaux-Chafee amendment, and there are some 
good things in this amendment, which, as far as I can tell, is similar 
to Breaux-Chafee, but evidently this particular proposition is not 
entirely subscribed to nor is it endorsed by all 11 Democrats and 11 
Republicans who make up the people who have been doing the good work 
under the direction of Senator Chafee and Senator Breaux.
  Let me say briefly about the CPI that we have to do something about 
Government and about Government overspending, but for the life of me I 
have never been able to figure out how we can justify, with the 
upcoming problems that we obviously have in Social Security and its 
solvency around the year 2030, changing the CPI without looking at the 
larger question of making solvent the Social Security trust funds or 
the Medicare fund.

  I am not for making arbitrary adjustments other than those 
recommended by the Bureau of Labor Statistics. They have told us there 
should be an adjustment of, I believe, about 0.3 percent to make it 
fair and equitable, the way it was intended. I am for that. But these 
automatic, arbitrary cuts in CPI, it seems to me, is robbing Peter to 
pay Paul, Paul in this case being the budget deficit.
  I think that is not well thought through. I simply say that rushing 
into things from time to time just because they sound good might not be 
the smartest thing to do.
  If there are any sponsors of the amendment on the floor, I would like 
to pose a question to any of them, or to anyone who can explain this. 
On page 2 of the amendment before us, line 24, under 6 it states: 
``Workers should be allowed to divert 2 percent of their total payroll 
taxes into their own personal investment plan.'' Then listen to this: 
``As long as there is no effect on the solvency of the Social Security 
Program.''
  I wish someone could explain that to me. I do not know what they are 
saying. Are they saying that they want to make a fundamental change 
without hearings in the U.S. Senate on the historic Social Security 
plan by diverting 2 percent of the total payroll taxes into a personal 
fund so long as there is no effect on the solvency of the Social 
Security Program? What does that mean? Does that mean that the 2 
percent would not be paid or could not be taken out unless it had an 
ill effect on the program? Does that mean we would have to have a 
massive tax increase to make up for the difference of money that is 
coming out of the Social Security trust fund that is already projected 
to go bust by the year 2030? Does that mean that we would have to have 
significant reductions in Social Security payments at that time? Can 
anyone explain to me what that phrase means, we can take 2 percent and 
put it in your own personal fund ``as long as it has no effect on the 
solvency of the Social Security Program?'' Can anyone explain that?
  Hearing no one, I can only assume that there is no explanation, or at 
least the people that know the answer to the question that I posed are 
not here to answer it. I hope they will take the opportunity to do that 
at another time.
  I am going to be very brief on this. I first want to commend the 
motivations of the sponsors of this amendment, most all of whom are 
close friends and associates of this Senator during the years I have 
been in the Senate. We all can agree that we need to look at 
entitlement reform. Chairman Domenici said much the same in remarks he 
just concluded. But I will have to oppose the amendment because it 
calls for piecemeal changes to the Social Security system that may 
compromise reform of that program and endanger rather than ensure its 
solvency.

  In addition, this is, once again, one of those famous sense-of-the-
Senate resolutions. Sometimes these sense-of-the-Senate resolutions 
take on a life of their own. We all agree that sometime in the not too 
distant future we are going to have to address this problem. We need to 
look at the entire pie before we decide to endorse these piecemeal 
changes.
  We have, for example, Mr. President, a Social Security advisory 
council due to report, as I understand it, very soon their findings. 
They are not an official body of the Senate. I am very much interested 
in what they have to recommend. We should also have hearings. We have 
seen neither their report, nor their recommendations. So although the 
proponents are well-intentioned, before we get into an area like these 
we need to make reasonably sure you know what you are doing before you 
do it.
  We all recognize we will have to make substantial changes in Social 
Security to ensure the solvency of the program for the baby boom 
generation, but we should think those proposals through. We should have 
hearings. We should know for sure, as best we can, what we are doing. 
The relevant committees should study, have hearings, debate the issue 
and make a recommendation to the floor of the Senate for action. We 
have not done that in a comprehensive way as far as I know in this 
case.
  This amendment also contains two proposals--cutting the cost of 
living adjustments and moving back the age at which seniors become 
eligible for Medicare. These proposals are similar to a very large 
extent under the Chafee-Breaux budget substitute, which, I understand, 
we are going into as soon as we finish the remarks of the Senator from 
Maine. I will have something more to say on that.
  I think that basically covers some of my concerns with regard to the 
sense-of-the-Senate resolution presently before us.
  I yield the floor.
  Ms. SNOWE addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  The Senator from New Mexico.
  Mr. DOMENICI. I ask unanimous consent that the pending sense-of-the-
Senate amendment be set aside so that Senator Snowe can proceed with 
her amendment in the normal fashion and that she be recognized to do 
that.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Maine is recognized.


                           Amendment No. 4017

 (Purpose: Expressing the sense of the Senate that the aggregates and 
   functional levels included in this budget resolution assume that 
  savings in student loans can be achieved without any program change 
     that would increase costs to students and parents or decrease 
                    accessibility to student loans)

  Ms. SNOWE. Mr. President, I have an amendment which I send to the 
desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Maine [Ms. Snowe] proposes an amendment 
     numbered 4017.

  Ms. SNOWE. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       (a) Findings.--The Senate finds that--
       (1) over the last 60 years, education and advancements in 
     knowledge have accounted for 37% of our nation's economic 
     growth.
       (2) a college degree significantly increases job stability, 
     resulting in an unemployment rate among college graduates 
     less than half that of those with high school diplomas.
       (3) a person with a bachelor's degree will average 50-55% 
     more in lifetime earnings than a person with a high school 
     diploma.
       (4) education is a key to providing alternatives to crime 
     and violence, and is a cost effective strategy for breaking 
     cycles of poverty and moving welfare recipients to work.
       (5) a highly educated populace is necessary to the 
     effective functioning of democracy and to a growing economy, 
     and the opportunity to gain a college education helps advance 
     the American ideals of progress and social equality.

[[Page S5353]]

       (6) a highly educated and flexible work force is an 
     essential component of economic growth and competitiveness.
       (7) for many families, federal student aid programs make 
     the difference in the ability of students to attend college.
       (8) in 1994, nearly 6 million postsecondary students 
     received some kind of financial assistance to help them pay 
     for the costs of schooling.
       (9) since 1988, college costs have risen by 54%, and 
     student borrowing has increased by 219%.
       (10) in fiscal year 1996, the Balanced Budget Act achieved 
     savings without reducing student loan limits or increasing 
     fees to students or parents.
       (b) Sense of Senate.--It is the sense of the Senate that--
       (1) the aggregates and functional levels included in this 
     budget resolution assume that savings in student loans can be 
     achieved without any program change that would increase costs 
     to students and parents or decrease accessibility to student 
     loans.

  The PRESIDING OFFICER. The Senator from Maine.
  Ms. SNOWE. I thank the Chair.
  I thank, first of all, the distinguished chairman from New Mexico, 
Senator Domenici, for his tremendous efforts on this budget resolution. 
As chairman of the Budget Committee, he has an unusually difficult 
responsibility to set a fiscal course for this country. Although faced 
with great challenges, he certainly has assumed those responsibilities 
time and time again with great skill and has demonstrated true 
leadership. I truly wish to express my appreciation to him for what he 
has tried to accomplish this year as well as in the past in trying to 
achieve a balanced budget.
  The sense-of-the-Senate resolution I am proposing addresses the issue 
of education. I think it is critically important that the Senate go on 
record to reaffirm its commitment to higher education and to education 
in general. I think it is important that we establish a reaffirmation 
and support for a student loan program. I cannot think of a greater 
issue for the future of this country than to ensure that we provide an 
adequate funding level for higher education and in particular for 
student loans.
  That is one of the greatest issues to the American people at this 
point. In fact, a recent USA Today/CNN poll indicated for the first 
time the American people regarded education as the top priority beating 
out all other issues, and regardless of party, regardless of age, 
regardless of income group, it crossed all party lines, all age groups, 
all income groups with respect to this issue. In fact, two-thirds of 
the American people feel that their children will be no better off than 
they are, and they see education as the key to survival.
  That is why I think it is important to recognize just how significant 
student loans are. In the last resolution that we adopted and 
ultimately in the balanced budget reconciliation package that was 
passed by the Congress, we, indeed, restored almost $3.1 billion in 
funding to the student loan program. The final analysis was that there 
was no increase in cost to students or their parents, and that is what 
this sense-of-the-Senate resolution is all about. It is to restate that 
position and commitment for this fiscal year and for the process that 
we are adopting in this budget resolution, and with final acts down the 
road with respect to budget reconciliation.
  So my sense-of-the-Senate resolution would build upon the work we did 
last year. It would restate our commitment to the student loan program, 
and that in fact we would not increase the cost to students or their 
parents or decrease accessibility to student loans. Half of the 
students who are enrolled in classes today rely on the student loan 
program. As we look at the skills and the occupations that will be 
developing over the rest of this decade and into the next century, only 
27 percent will be in the low-skill occupation categories. So it is 
going to require in the future higher education.
  In fact, today we have 40 percent of those jobs with low skills in 
that category, but those jobs will now require higher education in the 
future. And so it is all the more important that we here in the 
Congress make sure we provide adequate funding for the student loan 
program. We have seen that in the past it has contributed to our income 
growth as a country. In fact, the Brookings Institution did a study to 
look at the contributions that higher education funding by the Congress 
has made, that in fact it has contributed 37 percent to the income 
growth in America. For every dollar, based on another study that was 
done, the Federal Government has contributed to the student loan 
program, it has a return of more than $4, so you can see it makes an 
enormous difference to this country as well as to the collective 
ability of families and individuals to be able to achieve the American 
dream. And education and higher education has given that opportunity to 
so many who would otherwise not be able to afford a higher education.
  So it is not just an individual problem that they cannot afford an 
education. It is not just a State problem. It is a national problem. We 
are seeing the cost of higher education increasing by 6 percent over 
the last few years, and that cost is only going to continue to grow. So 
we must as a Nation try to do everything we can to support an 
individual and their families by providing this access to an affordable 
college education.
  It clearly is in our interest if we are going to remain as a major 
competitor in the global economy, particularly as we approach the 21st 
century, and we are going to have to emphasize continuing education and 
lifelong learning. The only way we can do that is to provide adequate 
support to the student loan program. If there is one issue that I hear 
from my constituents time and time again, it is the issue about having 
an affordable education for their children. Never have we had a 
generation that has not aspired to present a better world for the next 
generation.
  But now that is a cause of concern to so many people across America, 
because they see America as the opportunity to a better life and a 
higher standard of living than even their parents enjoy. So if they do 
not have that opportunity, clearly they are going to see the future 
with pessimism rather than with optimism.
  I hope we will get broad bipartisan support for this sense-of-the-
Senate resolution to ensure that we maintain the commitment, not only 
to Americans all across this country, but to our Nation. I cannot think 
of a greater gift that we could give to the American people and to 
their families and to their children and grandchildren than the 
opportunity to better themselves. It is certainly a step forward.
  John F. Kennedy once said that the task for every generation is to 
build a road for the next generation. I cannot think of a more 
important road to build than education. So I hope the Senate will 
unanimously adopt this sense-of-the-Senate resolution.
  I yield the floor.
  Mr. CHAFEE addressed the Chair.
  The PRESIDING OFFICER. Does the Senator from New Mexico yield time?
  Mr. DOMENICI. Mr. President, I ask unanimous consent the Snowe 
amendment be temporarily set aside and Senator Chafee be recognized to 
offer his amendment, on which we understand there was an agreement we 
will take 4 hours equally divided, 3 of which will be spent this 
evening and 1 hour tomorrow.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The Senator from Rhode Island is recognized.


                           Amendment No. 4018

(Purpose: Setting forth the congressional budget for the United States 
  Government for fiscal years 1997, 1998, 1999, 2000, 2001, 2002, and 
                                 2003)

  Mr. CHAFEE. Mr. President, on behalf of myself, Mr. Breaux, Mr. 
Bennett, Mr. Brown, Mr. Bryan, Mr. Cohen, Mr. Conrad, Mrs. Feinstein, 
Mr. Graham, Mr. Gorton, Mr. Jeffords, Mr. Johnston, Mrs. Kassebaum, Mr. 
Kerrey, Mr. Kohl, Mr. Lieberman, Mr. Nunn, Mr. Robb, Mr. Simpson, Mr. 
Specter, and Ms. Snowe, I send to the desk an amendment and ask for its 
immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Rhode Island [Mr. Chafee], for himself, 
     Mr. Breaux, Mr. Bennett, Mr. Brown, Mr. Bryan, Mr. Cohen, Mr. 
     Conrad, Mrs. Feinstein, Mr. Graham, Mr. Gorton, Mr. Jeffords, 
     Mr. Johnston, Mrs. Kassebaum, Mr. Kerrey, Mr. Kohl, Mr. 
     Lieberman, Mr. Nunn, Mr. Robb, Mr. Simpson, Mr. Specter, and 
     Ms. Snowe, proposes an amendment numbered 4018.

  Mr. CHAFEE. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.

[[Page S5354]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. CHAFEE. I know Senator Snowe has further engagements, so if she 
would like to proceed for a few minutes now before I start, she is very 
familiar with the amendment as a cosponsor. I will be glad to yield to 
her such time as she needed.
  Ms. SNOWE. I thank the Senator. I certainly appreciate that 
consideration. I rise in support of the bipartisan balanced budget that 
was worked on by more than 20 Members. There were numerous discussions, 
negotiations and votes in the course of the last few months. I commend 
Senator Chafee and Senator Breaux for their outstanding work and 
leadership in guiding us through those difficult negotiations.
  This has been an extraordinary effort and undertaking by more than 20 
Members on a bipartisan basis to present a balanced budget plan. This 
effort really was derived from the time in which the balanced budget 
negotiations between the President and the Congress failed and we also 
had the subsequent Government shutdown. We were committed to the idea 
of creating a balanced budget plan and we feel the only way we can pass 
a balanced budget plan is on the basis of bipartisanship.
  I commend Senator Domenici for his work and the work he has done in 
the past on the issue of a balanced budget. One of the things we have 
recognized and have acknowledged is clearly we cannot get a balanced 
budget plan through this Congress unless we have strong bipartisan 
support. So our effort is not to condemn any other alternatives or the 
budget resolution that has been put forward by Senator Domenici and the 
Budget Committee, because it has been outstanding. Our effort is to 
move forward in unison, together, so we can pass a balanced budget 
plan. If you look to the future and the escalation of deficits, it is 
staggering. In the year 2002 we will have a $6.4 trillion debt. In the 
next 15 years it will double, 5 years thereafter it will double. And in 
the year 2025, in that year alone we will have a $2 trillion deficit.
  Given that current spending spurt, we will definitely be requiring 
the next generation to pay an 82-percent tax rate and they will see a 
reduction of benefits by more than 50 percent. I do not think that is 
the kind of legacy we want to leave to the next generation.
  That is why this proposal is so important. We made decisions that 
were not simple. We did not agree with all the proposals that were 
incorporated in this balanced budget plan. If we all had our druthers, 
we would probably make different recommendations. But we came together 
on a broad, bipartisan basis, to ensure in the final analysis we would 
develop a bipartisan balanced budget plan that could get the support of 
the majority here in the Congress.
  I hope Members of this Senate will look at this plan very carefully, 
because clearly it does split the differences on some very contentious 
issues between the President and this Congress. Although we might not 
like everything that is in this balanced budget plan, I daresay there 
would not be any balanced budget plan everybody would agree with when 
you are talking about reducing Federal spending by more than $700 
billion.
  The deficits we are facing in the future, as I said earlier, are the 
ones we have to be concerned about. Everybody can make projections 
about how the deficit is coming down and the CBO reestimates based on 
previous efforts has reduced the deficit. The fact of the matter is, 
the deficits are astronomical in the next century and will only 
continue to grow. I do not think that is the kind of legacy we want to 
leave for future generations.

  If you look at the current indicators, we should be concerned. If you 
look at the Treasury bonds of 30 years, which is a good indication of 
the economic health in America, that interest rate has gone up by more 
than 1 percentage point over a 3-month period. We have seen this is the 
weakest recovery in more than 28 years, if you look at the job growth 
rate. So we really have to address the issue of the debt and the 
current deficit because, if we fail to do that, then clearly we are not 
going to show that we have the capacity to grow as a nation. We cannot 
grow with the kind of debt we are compiling for now as well as into the 
future.
  Again, I express my appreciation to Senator Chafee and Senator Breaux 
for giving me this opportunity to speak first on this amendment. I hope 
we will get some very good consideration for its passage.
  I yield the floor.
  Mr. CHAFEE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. CHAFEE. Mr. President, I thank the distinguished Senator from 
Maine. She has been a very loyal and superb contributor to our 
deliberations which have gone on since last October. We greatly 
appreciate the fine support the Senator from Maine has given us.
  Mr. President, Senator Breaux and I, along with 19 of our colleagues, 
are offering this alternative, centrist budget resolution in the hopes 
that we can provide a bridge between the two parties. We strongly 
believe, and I will challenge anybody here to say something to the 
contrary, that this plan we have represents the only hope of obtaining 
a balanced budget.

  Why do I say that? Because Democrats will oppose the Republicans' 
proposals. And Republicans already have shot down the Democrats' 
proposal, the administration's proposal, the President's proposal. That 
leaves us in exactly the same place we were in at the end of last year, 
having done little to address the real reforms to put this country's 
fiscal house in order.
  The plan that the centrist coalition, which is the name of the group 
that Senator Breaux and I have the privilege of leading, is presenting 
today, offers a way to reach a consensus on fixing this problem. It 
balances the budget in 7 years using the Congressional Budget Office 
assumptions. We do not have any gimmicks here. We do not have any 
sunsetting of tax cuts. We do not have any triggering of additional 
income in the outyears. These represent both reforms in the entitlement 
programs and a modest tax cut for working families.
  I invite Senators' attention to be directed to this chart. This is 
1996, where the deficit is something around $150 billion. If we do not 
do anything in connection with balancing this budget, this is the way 
it will go, up, so that 10 years from now the deficit will be $400 
billion. Everybody who spent any time on this problem at all knows it 
keeps on going upward. Something has to be done about these deficits 
and nothing will occur in reducing them unless we make some changes, 
not solely in the discretionary programs but in the entitlement 
programs as well.
  Where does all this leave us? As I mentioned before, the Republicans 
have shot down the Democrats' proposal. The budget will pass here but 
when it comes to the reconciliation bills, undoubtedly those will have 
no Democratic votes and will have a high probability of being vetoed by 
the President. So what happens then? Republicans and Democrats both 
will have offered budgets that they like but which are unacceptable to 
the other side. Each side will proclaim itself a champion of fiscal 
responsibility. But at the end of the process, we will have failed to 
solve this problem. The country will not be on the path toward a 
balanced budget. Instead, higher and higher deficits will result.

  Now I will turn to the second chart.
  Here in the red at the bottom, we have what is known as discretionary 
spending. This is spending that deals with all the programs we are 
familiar with--the FBI, the State Department, the parks, health care 
and education. All of these are under this so-called discretionary 
spending.
  As anyone will note looking at this chart, it goes up very, very 
slightly. This is not where the problem is. The problem is in the 
green. The green is what is known as the entitlements. The entitlements 
are Medicaid, Medicare, welfare, Social Security, and this is where the 
great portion of the budget not only is now, but it increases. You can 
see that what goes up is not the red of the discretionary programs. 
What goes up is the green of the entitlement programs.
  In the budget that has been presented by the Budget Committee, it is 
projected that over the next 6 years, $300 billion will be saved from 
the discretionary accounts. What that means is

[[Page S5355]]

that what you see here, these tiny little increases, will be held flat 
and, indeed, decrease over the next several years, over the next 6 
years.
  The President does something quite similar and did something quite 
similar in his budget. He proposed that there be $229 billion of 
savings in these programs. I think it is safe to say that very, very 
few Members of this Senate believe that either of those levels of cuts 
in discretionary spending can be achieved. They are just plain not 
going to be there, particularly in the last 2 years of the plan.
  In our plan, which we have submitted, we recognize the near 
impossibility of those savings being made in discretionary accounts. 
Our proposal saves $179 billion from those programs over the next 6 
years--$179 billion, not $300 billion as is proposed by the Budget 
Committee, not $229 billion as the President proposed, but a far more 
realistic $179 billion.
  We recognize that even getting the $179 billion savings represents a 
monumental effort to extract that money from NIH research or law 
enforcement or environmental protection or whatever it might be.
  However, we believe that these savings can be achieved. It will be 
difficult but certainly far easier than doing anything like $300 
billion or $229 billion, as the other programs have suggested.
  Now let us talk a bit about the entitlement programs. As you can see, 
this is the great bulk of the spending of the Nation. This is where the 
increases are. These are very politically popular programs. The 
Bipartisan Commission on Entitlements and Tax Reform laid out the 
problem very succinctly in its August 1994 report.
  The commission found that by the year 2010, spending on entitlement 
programs--now listen to this carefully because this is very dramatic. 
This is not me saying this. This is a bipartisan commission. This is 
what they said: The spending on entitlement programs--namely Social 
Security, Medicare, Medicaid, welfare--and interest on the national 
debt by the year 2010, the spending on that will exceed all of the 
Federal tax revenues that come in. That will leave no money to pay for 
the FBI, the Park Service, or all the other discretionary programs that 
we previously mentioned.
  The centrist plan addresses that problem by making changes that will 
bring the entitlement programs under control. I know that my fellow 
Senators who are part of this will go into these in greater detail, but 
I will briefly touch on them.

  In Medicare, our plan makes substantial reforms to improve the 
program's effectiveness and to shore up the trust fund solvency. We 
maintain the traditional fee-for-service programs, but also pave the 
way for a broad range of managed care plans.
  We propose that there be affluence testing for the so-called part B 
premium. Others will touch on this, but that is a program that ought to 
be inaugurated under the Medicare Program and, thus, reduce the drain 
on the Federal Treasury, because what the individual does not pay for, 
some 70 percent, comes directly out of the General Treasury.
  We address the long-term viability of the Medicare Program by 
conforming Medicare eligibility age to the Social Security Program. 
Under current law, Social Security retirement age is scheduled to 
increase from 65 currently to 67 years beginning in the year 2003. This 
increase will occur gradually, taking 22 years to become fully 
effective. In other words, starting in 2003, it goes up.
  The plan we have significantly improves the current Medicaid Program. 
This is something that greatly concerns the States. We give the States 
far greater flexibility in delivering health care to the aged and to 
the poor. States will be able to design systems which best suit their 
needs without having to go through the lengthy waiver process with the 
Federal Government.
  We repeal the so-called Boren amendment, which will allow States to 
establish their own reimbursement rates and free them from much of the 
litigation that now exists.
  Importantly, the centrist plan maintains a national guarantee of 
coverage for low-income pregnant women, for children, for the elderly, 
and the disabled. We also have important safeguards to prevent States 
from shifting their Medicaid costs to the American taxpayers.
  We make needed improvements in the welfare system. Our plan is based 
upon the welfare reform bill that passed this Senate 87 to 12 last 
year. That plan stresses going to work. It requires States to meet a 
50-percent work requirement by the year 2002. We accept many of the 
recommendations of the National Governors Association, particularly for 
greater child care funding.
  Over the next 7 years, the centrist plan also provides tax relief in 
the shape of $130 billion, much of that going to working families and 
to small businesses. This includes a $250 per child tax credit.
  We have capital gains relief, incentives for families to save by 
expanding individual retirement accounts, and a State tax relief for 
family-owned businesses.
  Finally, our plan incorporates a one-half percentage point correction 
in the Consumer Price Index. The Consumer Price Index, as most of us 
know, is used to calculate cost-of-living adjustments to Social 
Security and other Federal retirement programs and also for indexing 
the Tax Code. The problem is the following, Mr. President: The CPI 
overstates inflation. This is not just me saying this, this is not just 
the members of the 19 or 21 of us, it comes from lengthy testimony that 
we have had before the Finance Committee in the U.S. Senate.
  The Chairman of the Federal Reserve, Alan Greenspan, believes that 
the CPI is overstated by 1 percentage point. The Boskin Commission, 
which was established by the Senate Finance Committee to study this 
measure, has reported that the overstatement ranges from seven-tenths 
of 1 percent up to 2 full percentage points.
  Our proposal does not go the 2 percentage points, it does not do the 
0.7 percent. We go lower than all of those. We take a modest five-
tenths of a 1 percent adjustment to the CPI to correct this error. That 
change will reduce the deficit by $126 billion over the next 7 years 
and will continue to provide tremendous savings in the outyears.
  Over the past few months I have had the privilege, as many of us have 
here, to discuss this program with my colleagues and with others. 
Usually there is approval. But then there is the ``but,'' ``But I do 
not like this.'' ``I would like your proposal, except the cap on direct 
lending is too low'' or ``the tax cuts should be larger'' or ``there 
shouldn't be any tax cuts'' or ``the Medicare savings are too large'' 
or ``the welfare savings are too small.'' Everybody has some small 
reason.
  These are all important considerations, Mr. President. I understand 
that many Members have strongly held views on these subjects. But we 
are never going to tackle and succeed in reducing this deficit if we 
let the perfect be the enemy of the good. If everybody takes a way out 
by saying, ``I like it, but I don't like any tax cuts,'' we do not have 
as many tax cuts as the other programs do. We have more than the 
President's, but certainly less than the Budget Committee has.
  Yes, we do not do everything everybody likes. As the Senator from 
Maine indicated, she and I believe every single member of our group has 
some better way of doing it than this. But we all stood together and we 
voted, and we do not all get what we wanted, but we decided to hang 
together or otherwise nothing will be achieved.
  So, Mr. President, the alternative that Senator Breaux and I and the 
others present today offers the Senate the only opportunity to have a 
balanced budget for this Nation this year. Is it tough? Certainly it is 
tough. The CPI change is not an easy vote, nor is the vote to shore up 
Medicare and the affluence testing on Medicare, for example. But here 
you have a group of Democrats and a group of Republicans who have 
joined hands to take these important steps forward and to end the 
partisanship and to move forward in doing something about these 
horrible deficits that our country faces.
  So we ask each of you to join our efforts. For the sake of our 
children and our grandchildren, and the young people, all the young 
people of our Nation, we want to pass this country on in better shape 
than we found it. Here is the way to do it. I want to thank the Chair.
  The PRESIDING OFFICER. Who yields time?

[[Page S5356]]

  Mr. BREAUX addressed the Chair.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. Mr. President, I make an inquiry. It is my understanding, 
under the agreement, that there are 3 hours equally divided among the 
proponents and the opponents.
  Mr. CHAFEE. I yield whatever time Senator Breaux uses.
  The PRESIDING OFFICER. The Chair informs the Senator from Louisiana, 
there are 3 hours this evening, 1 hour tomorrow.
  Mr. BREAUX. I ask, if it is possible, if the Chair could notify the 
Senate when the Republican side has used 45 minutes in support of the 
amendment and when the Democrats have used 45 minutes also so we can 
divide the time.
  The PRESIDING OFFICER. The Chair will make that notification at that 
time.
  Mr. BREAUX. I yield myself 10 minutes. I ask the Chair to notify me 
when 10 minutes is used.
  Mr. President, I first start by commending both the distinguished 
ranking member, the Senator from Nebraska, Senator Exon, and the 
chairman of the Budget Committee, the Senator from New Mexico, Senator 
Domenici, for the good work that they have done. This is not an easy 
task. These two gentlemen have worked tirelessly, been here every day. 
They have worked very, very hard in trying to get this accomplished.

  Having said that, I start my remarks by saying, well, here we are 
again. Yogi Berra also said it in a different way. He said, ``It's deja 
vu all over again.'' The younger generation sort of uses a different 
term. They say, ``Been there. Done that.'' But it all really adds up to 
the same thing, that we have been through this practice once before.
  Does anybody remember last year? Does anybody remember, despite the 
good efforts of the chairman, the ranking member, and the 
administration, that the end result of last year's effort is we had two 
partial Government shutdowns, 13 Government continuing resolutions, 
which were sort of like sort of funding the Government but not really 
doing it? All of that was because we on this side could not agree with 
our colleagues on that side, and neither could agree with the 
administration down Pennsylvania Avenue on how to run the Government. 
Is it any wonder that the numbers I saw in the Wall Street Journal, I 
think Friday, said that 68 percent of the American people do not today 
trust Congress to get the job done that they feel they elected us to 
do?
  Yet, despite those numbers and despite the failures, I am very 
concerned that here we go again. Deja vu all over again. Been there. 
Done that. Because what I see so far in this session of this Congress, 
is going along the same paths that brought us to almost a disastrous 
shutdown of the Government that we could not keep going. Yet we are 
starting out this time the same way.
  The Democrats have all voted for the Democratic proposal. The 
Republicans all voted against it. Ultimately, when the distinguished 
Senator from New Mexico presents his budget, I imagine just the 
opposite is going to occur, all the Democrats will vote no, all the 
Republicans will vote yes. Because our Republican colleagues are in the 
majority, their budget will pass. But then you have a person down on 
Pennsylvania Avenue, the President of the United States, who is going 
to disagree with many of the things in that budget, and therefore when 
those programs come before him to reach those numbers, he is going to 
veto that.
  Have we not done that before? Have we not been there before? Is there 
not a better way to do it? The economist and sometimes humorist Herb 
Stein had a great quote I was reading the other day. It said, ``If your 
horse dies, we suggest you dismount.''
  What he was trying to say is, ``If it doesn't work, try something 
else. Get off the dead horse.'' Yet I am very afraid we are going right 
down that same path we just tried. Everybody in this Chamber, and 
probably in the other Chamber as well, and everybody in the public 
knows that it is not going to work.
  We have suggested a better way, a different way, maybe a 
revolutionary way in the sense that we are asking both sides to 
cooperate and make tough decisions together. There is no more gain to 
be gained from the blame game. We can no longer say it is the 
Republicans' fault, and they can no longer say it is the Democrats' 
fault and make any headway in getting the people to believe that we are 
really serious about getting the job of Government done.
  Senator Chafee has outlined the fact that there were 22 Senators who 
have worked since October of 1995, sometimes three and four times a 
week, in the Chamber here in the Senate and Senator Chafee's office, 
and generally, and worked up an agreement that says, ``Yes, there is a 
better way.'' The only way we are going to get it done is by making 
these tough decisions together.

  Senator Chafee is exactly right. Some will say the tax cut is too 
high. Some will say not high enough. Some will say the Medicare cuts 
are too big. Some will say they are not big enough. But we have come 
together in what I think is the last best effort to say, yes, we still 
can govern this country, and, yes, the only way we are going to do it 
is working from the center out.
  Is there anybody here who still believes we are going to be working 
the Government, working from the far left or far right, to come 
together to make a majority? We have proven that will not work.
  We have a 7-year balanced budget. Seven years is what most people 
have talked about for over a year. We decided to stick to those 
numbers. Here are our numbers. We compared our numbers of 6 years to 
the President's 6-year proposal and to the Republican 6-year proposal. 
Then we looked at it from a 7-year plan. It makes it a little easier to 
get to the balance. The bottom number is $679 billion over 7 years that 
we save, that we get to balance in those 7 years.
  It has not been easy, but it is not impossible. It is not impossible 
if you do it in a bipartisan way. It is impossible if you do it in a 
partisan way. I believe what we are presenting is the last best 
opportunity to get the job done.
  Senator Chafee has gone over what we do on Medicare. We save $154 
billion out of Medicare. Look how our 6-year number compares to the 
President's. It is lower than the President's. Ours is only $106 
billion in savings. We do it by giving people a lot of different 
options. Fee for service is one, HMO's, points-of-service plans, 
provider-sponsored networks. We make some substantive changes.
  The same thing on Medicaid. We save $62 billion out of Medicaid. We 
do it by taking a lot of the Governors' proposals and recommendations 
and modifying them. We did not give them everything they wanted, but we 
made substantive changes in Medicaid, giving a great deal more 
flexibility to the States, which I think most of the States want. I 
think, quite frankly, it is the right thing to do.
  In welfare, the earned-income tax credit, $58 billion. The numbers 
are very close to the administration's. The $70 billion from the 
Republicans, I think, is higher than is justified. We come in somewhere 
down the middle, which most of our numbers do.
  We are tough on work, good for kids, provide more child care money 
for children. But we have a time limit. We end the old program. We make 
some major changes in welfare, which I think is important. We have a 
tax cut, a $105 billion net tax cut. Some will say it is not big 
enough. Some will say it is too large. We come down the middle.
  We have about a $25 billion so-called corporate welfare adjustment, 
but a real net tax cut for families with children, a $250 tax credit, 
and are working to try to get it up to $500 if they invest in an IRA 
account.
  We also have estate tax relief for small businesses. We increase the 
tax deduction for health care for self-employed people. Yes, we have a 
capital gains tax cut in this package both for businesses and 
individuals.
  I want to talk about the CPI because some say you cannot do the CPI; 
that is something that is absolutely impossible. We did it because 
economists have all said the Consumer Price Index that is used to base 
all the entitlement increases overstates the cost of inflation in this 
country by anywhere from between 0.7 and up to 2 percent. We take 0.5 
percent and say we will have an adjustment in the Consumer Price Index 
over what the Bureau of Labor Statistics is talking about of 0.5 
percent. That saves us, over a 7-year period, $126 billion.

[[Page S5357]]

  We are saying to the American public who are beneficiaries of 
entitlement programs, we will try and save those programs. We say to 
Social Security recipients, just like they told us, we will extend the 
year of solvency in the Social Security Program from the year 2030 to 
the year 2036. We are giving it at least 6 extra years, just based on 
our Consumer Price Index.
  In addition to that, we cut the long-term imbalance of Social 
Security funds, the imbalance of the trust fund by one-third over the 
next 75 years and extend the life of Social Security by an additional 6 
years by making this adjustment. I want to show the chart. Some say you 
cannot do that. The only thing we are saying to the people in this 
country who get automatic adjustments in their cost of living is that 
we will ask that adjustment more accurately reflect the real cost of 
inflation to you. That is not asking from people too much. We are still 
saying, you will get an increase. We are simply saying, your increase 
will be more accurately reflective of the cost of living.
  I ask unanimous consent for an additional 2 minutes.
  The PRESIDING OFFICER (Mr. GORTON). The Senator has that right.
  Mr. BREAUX. What we are saying is, people who get Social Security 
retirement, railroad retirement, all the other benefit programs, when 
you look at the recommendations from the special commission which has 
given us an interim report, that report says very clearly that the 
Consumer Price Index overstates the cost of inflation and adjustments 
in these entitlement programs. They say, ``Changes in the CPI will 
overstate changes in the true cost of living for the next few years.''
  The commission's interim best estimate of the size of upward bias 
looking forward is 1 percent per year. The range of plausible values is 
0.7 of 1 percent to 2 percent. We picked a number in between, 0.5, 
actually lower than their estimated range, a 0.5 percent adjustment.
  I was saying what it would mean with an adjustment, using a CPI 
adjustment between 1996 and 1997. You are talking a difference of only 
$3 per month, we say to Social Security retirees, what they would get 
less under a CPI-adjusted Social Security increase. I think to say to 
people on retirement programs that if you are going to help everybody 
solve this problem, I think you should be very pleased to receive an 
increase that more accurately reflects what the real cost of living is, 
I do not think there is a senior in this country that says, ``I want to 
get more than it costs to keep up with inflation.'' I do not hear a 
senior citizen saying, ``I want to get more than I am entitled to.'' 
They say, ``I want to make sure I get what I am entitled to, our 
contract with our Government, but I do not want to get more than I am 
entitled to.''
  This small adjustment guarantees the solvency of the program for an 
additional 6 years. It saves us $126 billion over 7 years and allows us 
to get to a balanced budget in 7 years, I think with the least amount 
of difficulty and trouble.
  In conclusion, the only way we will get it done is if we work 
together. We will never get it done if we continue to try the same path 
we have tried in the past. We suggest there is a better way. We suggest 
an amendment offered by Senator Chafee and myself on behalf of some 20-
odd other Members of the Senate should be the way to go.
  Mr. President, I ask unanimous consent an actuarial statement 
regarding the CPI be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                     May 16, 1996.
     From: Harry C. Ballantyne.
     Subject: Long-Range Effects of Reducing Automatic Benefit 
         Increases--Information.
       In response to a request from Cynthia Rice in Senator 
     Breaux's Office, we have prepared estimates of the long-range 
     effects, on the OASDI Trust Funds, of reducing future 
     automatic benefit increases by 0.5 percent, beginning with 
     the increase effective for December 1996. Estimates are shown 
     below under the program modified by the reduced benefit 
     increases, as well as under present law. The estimates are 
     based on the intermediate assumptions in the 1995 Trustees 
     Report.

                                                                        
------------------------------------------------------------------------
                                                     Present    Modified
                                                       law      program 
------------------------------------------------------------------------
Actuarial balance over next 75 years, as a percent                      
 of taxable earnings..............................      -2.17      -1.44
First year in which expenditures exceed tax income       2013       2015
First year in which expenditures exceed total                           
 income...........................................       2020       2024
Year of exhaustion................................       2030       2036
------------------------------------------------------------------------

                                              Harry C. Ballantyne,
                                                    Chief Actuary.

  Mr. NUNN. Mr. President, I rise today in support of the so-called 
centrist coalition's substitute for the fiscal year 1997 budget 
resolution. I congratulate Senator Chafee and Senator Breaux for their 
leadership in bringing this substitute before the Senate.
  As Senator Chafee and Senator Breaux have indicated, this bipartisan 
substitute is offered by 22 Senators--11 Republicans and 11 Democrats. 
The substitute is the result of many months of bipartisan work. I 
believe it is a sustainable package which if enacted would bring the 
Federal budget into balance in 7 years.
  We offer this Chafee-Breaux substitute in the spirit of compromise. 
Each one of its sponsors can point to elements which he or she 
disagrees with. However, on the whole, we believe it to be more 
realistic than the proposals offered by the White House or the Senate 
Budget Committee. For instance on entitlement reform, the substitute 
reduces the expected growth rates for Medicare, Medicaid, welfare and 
other mandatory programs more than the proposal President Clinton 
offered in January, but less than reductions offered by the Senate 
Republicans in the underlying budget resolution. The same is true with 
respect to the proposed tax cuts included in the substitute.
  For the record, I question the necessity and the wisdom of a tax cut 
at this time. For Congress to propose to enact a tax cut which runs 
concurrent with or actually precedes the spending reductions set forth 
in the budget resolution is akin to the board of trustees for a 
bankrupt company declaring a dividend before it begins the necessary 
steps to bring the company's operations into balance.
  However, I realize that compromise is an essential part of this 
process and I support the Chafee-Breaux substitute's tax provisions. 
These provisions call for a net tax reduction of $105 billion over 7 
years--which is roughly two-thirds the size of the proposed cuts in the 
Senate budget resolution, but larger than those cuts proposed by the 
President.
  The areas where the Chafee-Breaux substitute diverges dramatically 
from either the Budget Committee proposal or the White House's proposal 
are: First, the change in the calculation of the consumer price index 
[CPI]; and second, the proposed reductions in discretionary spending.
  With respect to the CPI calculation, the Chafee-Breaux substitute 
calls for a reduction of .5 percent per year every year for 7 years. 
Such a change would produce $126 billion in savings over 7 years. 
Almost every economist agrees that our current method of calculating 
CPI overstates inflation due to substitution bias, the difficulty in 
measuring changes in quality, and other factors. The Boskin Commission, 
headed up by Michael Boskin, the chief economic advisor to President 
Bush, believed that the CPI should be reduced from between .7 percent 
to 2.0 percent annually. I realize this component of the substitute 
will not be popular with many of our colleagues and our constituents, 
but such a step is necessary not only to reach our short-term goal of 
balancing the budget in seven years but in order to sustain a balanced 
budget in the longer term when the ``baby boom'' generation begins to 
retire.
  The budget resolution before the Senate proposes to reduce 
discretionary spending by over $296 billion over 6 years. I do not 
believe such reductions are realistic or sustainable. This figures 
amount to a hard freeze plus about $30 billion in additional 
discretionary spending cuts. If enacted, I foresee future Congresses 
faced with the choice of devastating popular domestic programs like 
Head Start or the space station, or foregoing the defense modernization 
needed to make sure our military maintains its technological edge in 
the next century.
  The Chafee-Breaux substitute calls a reduction of $268 billion in 
discretionary spending over 7 years. These are significant, but 
sustainable savings.

[[Page S5358]]

  I would like to add a final note. If we do enact this proposal and 
get the budget balanced in 7 years, we still have a long way to go. 
This Congress and this country will have to look at a 20- to 30-year 
fiscal picture. We will have to set in motion today reforms that can be 
implemented very gradually and very slowly. We have to reform Social 
Security. We have to reform Medicare. We can do both gradually so that 
retired people or people about to retire are not harmed, but we must 
address these issues now for the generations that will follow us.
  Mr. President, the Chafee-Breaux proposal is the last train in the 
congressional station if we are going to enact a balanced budget 
proposal this session. The proposal shows that a bipartisan agreement 
on balancing the budget is achievable--we only need the willpower to 
achieve it. An agreement is within reach. If we fail to act, it will 
only make future efforts more difficult.
  Our forefathers worked and toiled to provide us with our current 
prosperity. If we fail to do the same, by continuing to ignore the 
deficit problem, our legacy to our children and grandchildren will be a 
higher debt and a lower standard of living. But if we succeed, once we 
get beyond the difficulties of adjusting our spending down to what we 
can actually afford, we will start to reap the benefits that flow from 
a balanced budget: higher investment, higher productivity, more 
economic growth, and higher standards of living.
  Mr. BREAUX. Mr. President, I yield to the distinguished Senator from 
California 10 minutes.
  Mrs. FEINSTEIN. I thank the Senator from Louisiana. I thank the 
Chair.
  Mr. President, in my short 3-year tenure in this body, I have never 
seen a better experience in working across the aisle than the effort 
that the centrist coalition has gone through since last October. I can 
only give my strongest accolades to Senator Chafee and to Senator 
Breaux, who called us together in meeting after meeting and listened 
patiently to what each one of us had to say. We discussed it. We voted. 
We went back and forth, figures and calculations were done and redone 
when they had to be, and decisions were made.
  I think everyone in this coalition, all 22 of us, 11 Republicans, 11 
Democrats, accepts a basic premise that we have to address the budget 
deficit. I want to give you three basic facts on which this premise is 
based. In 1963, less than 30 percent of all Federal spending paid for 
interest and entitlements; more than 70 percent of our spending paid 
for discretionary programs--defense, education, training, R&D, roads, 
and bridges. Today, it is reversed. Two-thirds of spending addresses 
entitlements, not on budget, and interest, about which we can do 
nothing. Only one-third goes for discretionary programs.
  By 2003, more than 70 percent of all spending will be directed at 
interest and entitlements, blocking our ability to make needed 
investments in education, research, and strengthen the economy. I will 
never forget when friend and colleague Senator Conrad, in one of our 
meetings, said in a very emotional and very forthright way, ``You know, 
the choices are twofold: Either we agree to act now or we agree to 
reduce all benefits across the board by one-third and set tax rates at 
80 percent or more for our children.'' In fact, that is the choice. 
Either do one of those options or do something that crosses party 
lines.
  I, like Senator Chafee, like Senator Breaux, like the others amongst 
us, truly believes that unless we have something that is bipartisan and 
crosses the aisle, we will not have the votes to affect a 7-year 
balanced budget. If we do nothing, by the year 2012 entitlements and 
interest payments will grow so rapidly that they will consume all tax 
revenues. By 2000, interest payments will increase by more than 50 
percent, pass national defense in size, and trail only Social Security 
as the second-largest Federal expenditure.
  So we have to move. The bottom line of this budget is that it is 
balanced over 7 years after thorough and comprehensive review of all 
areas of spending and continues the strict spending discipline for 
discretionary spending.
  As you have heard, the centrist plan includes approximately $154 
billion in Medicare savings, $62 billion in Medicaid savings, $50 
billion in welfare savings, and more than $50 billion from a diverse 
range of other programs, including housing, energy, natural resources, 
civil service retirement, veterans, debt collections and 
telecommunications. Additionally, the plan adopts $25 billion in 
savings by closing tax loopholes.

  Let me quickly walk through some of the elements of the plan. For 
Medicare, the plan adopts about $154 billion in savings over the next 7 
years. The centrist plan rejects the steep cuts in Medicare to pay for 
tax breaks, but generates the needed savings through sound and 
pragmatic steps. It reduces the rate of increases for payments to 
physicians, hospitals, and nursing homes, outpatient services, durable 
medical equipment, and other payments. It establishes means testing on 
part B premiums for the wealthy. It freezes certain payments for home 
health agencies, such as visiting nurses in the home, while a system of 
fixed, preset payments is implemented. It strengthens enforcement 
against fraud and abuse. If the savings are applied to the trust fund, 
the funds solvency is extended just like the other budget plans.
  I would also like to address Medicaid. The centrist plan preserves 
Medicaid as the insurer for the disabled, the elderly in nursing homes, 
and low-income Americans, who have no other coverage. It reduces 
taxpayer costs by changing to fixed allocations and fixed growth rates. 
It facilitates expansion of managed care, a cost savings trend that 
California has led. However, we offer a balanced plan. It rejects the 
idea of permitting each Governor to define disabled, continues the 
current State partnership matching rates and it retains Federal nursing 
home standards.
  We also enact substantial welfare reform. The centrist plan creates a 
welfare block grant, and requires States to continue to pay their fair 
share. It creates a contingency fund, provides more child care funding 
than the other plans, with about $14.7 billion, requires 100 percent 
maintenance of effort and a State matching fund. It has 50 percent work 
standard by the year 2006, but maintains the Nation's safety net. It 
allows a waiver for work for single parents with children who cannot 
work or have no access to child care. It has a 20-hour work option for 
States, and a State would have the option to deny benefits to 
additional children born while on welfare. It clamps down on SSI, 
denying benefits for addicts or alcoholics.
  The CPI, which Senator Breaux has just addressed, is an important 
element of the plan. Senator Breaux raises an important point that we 
should all keep in mind. This centrist plan will continue to provide 
that someone receiving a COLA for a Federal benefit will, in fact, 
receive a full, accurate COLA. They will be able to count on it.
  I want to touch on the tax plan. Some say we should adopt no tax plan 
at all and that has been a point of contention between the two parties. 
We take what I believe is a modest, fair tax plan--providing a net $105 
billion in tax cuts and a gross $130 billion of tax cuts.
  This is how the plan works out: About $67 billion of the tax cut is 
our child tax credit. We all agreed to a plan put forward by Senator 
Lieberman of Connecticut creating a KidSave IRA, where there is a $250 
child tax credit, which increases to $500 if that money is put into an 
IRA. The plan seeks to provide about $11 billion for IRA increases and 
$1 billion is for educational assistance, offering a deduction for 
higher education expenses, interest on student loans, and penalty-free 
IRA withdrawals for education. Additionally, our centrist plan raises 
the self-employed deduction for health expenses from 30 to 50 percent.
  I would also like to address capital gains tax reform. I am one 
Democrat that ran for this office on capital gains reductions. Why? 
Because it makes sense. It helps the economy create jobs. It spurs 
investment. Our plan includes capital gains reform, dropping the 
corporate capital gains rate, from 34 to 31 percent, and seeks to cut 
individual capital gains, maximum bracket, from 28 to 19 percent. Our 
plan also provides estate tax reform to assist family-owned businesses 
and extends important, expired tax provisions like the R&D tax credit 
and the orphan drug

[[Page S5359]]

tax credit and others on a revenue-neutral basis.

  This plan may not have everything. In fact, it includes some things I 
do not support. However, I am never going to get everything I want. Nor 
is anyone else in this body. So maybe by acknowledging that is sort of 
the first point of a budget anonymous program, somewhat like Alcoholics 
Anonymous. The only way to stop is to agree to something that, in the 
main, meets our basic contention and goals.
  This plan will help strengthen the economy. It will promote economic 
growth. It is fair, it is just, it is balanced, and it affects everyone 
evenly, right across the board. I believe the other House can support 
it, and I believe that, if the President takes a good look at it, he 
can support it, too. If we enact this plan, this Congress will have 
delivered on its commitment to enact a balanced budget within the 7-
year period.
  I thank the Chair and yield the floor.
  Mr. CHAFEE. Mr. President, first, I congratulate all the speakers 
that have spoken so far this evening.
  Now I will yield such time as the Senator from Utah would like. Would 
he suggest 10 minutes?
  Mr. BENNETT. Yes.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. BENNETT. Thank you. Mr. President, I want to join in paying 
tribute to Senators Chafee, Breaux, and Domenici. Even though Senator 
Domenici is not part of our group, he has given us at least a friendly 
handshake as we have gone about this and made it clear that he is not 
opposed to our effort. I certify my support for these Members of the 
Senate because, as I sit here and listen to them, I realize that unlike 
some of our colleagues on both sides of the aisle, indeed, unlike 
myself on occasion, they have approached this problem with a desire to 
legislate the solution rather than craft a political position. And I 
think that is in the highest tradition of this body. I am proud to be 
associated with them, and I am proud of them.
  There are those who have tried to craft a political position out of 
the budget on both sides of the extreme. And there are those, frankly, 
who have tried to craft a political position in the middle and posture 
as the reasonable ones in the middle. The problem with those who have 
tried that is that they have never reached across the partisan aisle 
and tried to bring in people who really disagree with them in an effort 
to legislate. My father used to say, ``We legislate at the highest 
level at which we can obtain a majority.'' I find that to be a good 
summary of the process around here. I congratulate, again, these 
Senators for their effort to try to obtain a majority and try to 
legislate the problem.
  Now, when I am out in my home State and I tell people about this 
group and then say to them that I am part of it, I receive the highest 
applause and the highest praise of any position that I take. The people 
of my State, who are viewed generally in the Nation as being fairly 
right-wing--Utah is viewed as being the most reliable Republican State 
in the Nation--are as excited about the idea of a bipartisan solution 
to this problem as they are about any Republican position that I 
present to them as I am there in town meetings and in other 
conversations.
  Now, this is an enormously complicated problem. We have heard some of 
the details from the Senator from California, and we have heard some of 
the statistics and details from the Senator from Rhode Island. We will 
hear more as this goes on.
  Whenever you are faced with a problem as complicated as this one--I 
know of none more complicated--the one thing you want to be absolutely 
sure you are working with is correct numbers. You cannot run the risk 
of making these gigantic decisions on the basis of numbers that are 
wrong because, if you do, you are going to get a result that is wrong 
sure as you are sitting here.
  If I may go back to my private life experience and give you an 
example that comes to mind as I deal with this, I was once a consultant 
to a business that was having some problems. One of their problems was 
that they were shifting from a manual accounting system over to a 
computer accounting system. That dates me, I suppose. This obviously 
took place in the last decade when computers were new. As a result of 
their shifting from a manual accounting system to a computer-driven 
system, they flew for about 6 months without any accurate numbers. They 
did not really know what their sales were. They did not really know 
what their costs were. Most important, in retrospect, they did not know 
that they had by a very small amount missed the percentage of their 
sales that should be ascribed to inventory costs. Their inventory costs 
were off just a small percentage all the way through. When they finally 
finished the transfer from the manual accounting to the computer 
accounting, now they were 6 months behind and they had to bring these 
other statements up to speed.
  Finally, they got to the end of the year and they did what every 
business does at the end of the year. They took physical inventory. 
They were flying along knowing that they were losing a little bit of 
money, and they took physical inventory where they were forced to 
adjust to reality, and, instead of a narrow loss, they had a $3 million 
loss. For a company that size, that was sufficient to cause the bank to 
call the loan, the board to fire the chief executive officer, and a 
series of assets to be sold to try to make up the difference. If they 
had only known while they were flying in that mission that they had 
made this small adjustment that kept chipping away at their profits at 
every single sale, a few cents here, a few cents there, a dollar or two 
here, a dollar or two there, and as the sales washed through for a 
whole year, a $3 million inventory adjustment at the end of the year.
  We are doing the same thing, Mr. President. The CPI is wrong. It is 
wrong on the high side, and everybody knows it. But we are flying just 
as blind as that business did, and we are letting that adjustment chip 
away every day in every Social Security check, in every Medicare 
payment, and in every wage adjustment that little error gets chipped 
away again and again and again. When the bill finally comes, not in the 
form of the physical inventory at the end of the year but in the form 
of an enormous national debt and national deficit, we will not be able 
to solve it by firing the Chief Executive. We renew his contract every 
4 years anyway, and we only give him two shots at the job by the 
Constitution.
  We will not be able to solve it by selling off a few assets. We will 
not be able to solve it by renegotiating our line of credit at the 
bank.
  The most important thing in this centrist coalition proposal is the 
courage to face the facts that the CPI is wrong. I have heard on the 
floor we have not had hearings on this. Yes, we have. The Finance 
Committee has had enough hearings. The leading and senior members of 
the Finance Committee take the floor and say to us that this is 
something we must do. We are being told it is going to hurt people too 
much. Is it going to hurt people as much as having the whole program go 
bankrupt? Is it going to hurt people too much to make that little 
adjustment and thereby avoid the end of the year inventory adjustment 
that hits you like an atomic bomb? No; Mr. President, the most 
important thing you have to do when you are faced with the problem of 
this complexity is to have good numbers. The most important people in 
the world, dry and dull as they may be in this kind of a circumstance, 
are the cost accountants, the ones who give you the sound numbers that 
you are dealing with. Once they have given you the numbers, fine, get 
them out of the room and let the policymakers make the decisions, but 
let them make the decisions on sound numbers.

  So there are many things in this proposal that I disagree with. There 
are many things in this proposal that I really do not like, and I would 
have gone a lot farther than the centrist coalition would have gone in 
a number of areas. There were times when I was willing to walk out of 
the room and say, ``No. You have crafted something I can't possibly 
support.''
  The thing that brings me back and the thing that brings me to the 
floor tonight is the courage of this group to move in the direction of 
right numbers, to move in the direction of properly monitoring what is 
really happening in the economy and thereby avoiding that

[[Page S5360]]

inevitable day of reckoning that comes when you let the wrong numbers 
chip away at you day after day, month after month, and year after year.
  In the chart that the Senator from Rhode Island gave us, we see the 
result of that constant chipping away, and we see the projection of 
where it will be.
  Mr. President, this is a courageous act of proper legislation, and I 
am happy to be a part of the effort.
  Mr. BREAUX addressed the Chair.
  The PRESIDING OFFICER (Mr. Bennett). The Senator from Louisiana.
  Mr. BREAUX. I commend the statement of the Senator, and I yield 10 
minutes to Senator Conrad.
  Mr. CONRAD. Mr. President, I thank the Senator from Louisiana. I, 
too, want to join our group in thanking Senator Chafee and Senator 
Breaux for an outstanding effort to have the two sides, Republicans and 
Democrats, join together in an attempt to bring our fiscal house into 
order.
  Mr. President, I have been in the Senate now 9 years. As I look back, 
I have never been more proud to be part of a group than I am proud to 
be part of this one because I think for 5 months--maybe 6 months now--
we have worked together in good faith to do something important for our 
country.
  I just say that this is the way I think the Senate ought to operate. 
There were no raised voices. There were no press conferences. There was 
no political posturing. There were honest disagreements. There were 
serious debates. At the end of the day, we resolved matters, we reached 
agreement, we bridged differences, and we came to a conclusion.
  That conclusion is a plan that is before us now; a 7-year plan to 
bring unified balance to our budget. I stress unified balance to our 
budget and doing it in a way that is, I believe, a fair and responsible 
compromise between two sides that have some distances on many issues.
  Mr. President, again I want to salute Senator Chafee and Senator 
Breaux. They provided outstanding leadership in keeping this group 
together.
  But I also wanted to commend publicly each and every member of this 
group because they were willing to put partisan differences aside in 
order to accomplish a larger result.
  I commend the statement that was earlier made by my colleague from 
California, Senator Feinstein. I thought it was an outstanding 
statement of why this group hung together and why this group felt it 
was important to reach a result. I thank her not only for her 
outstanding statement here on the floor this evening but for the 
excellent work that she did in participating in the efforts of this 22-
member group.
  I thank Senator Feinstein.
  I also want to thank the Senator in the chair, Senator Bennett, who I 
have come to appreciate greatly for the kind of background that he has 
as evidenced by the story he told tonight, an excellent story that 
applies to what was happening in the real world in business to what is 
happening to our country, because there is no question that we are 
headed for a cliff.
  Our colleague from Colorado this afternoon described it well. We are 
headed for a cliff in this country. There is absolutely no question 
about it. There is nobody in this Chamber who can stand up and dispute 
the fact that we are headed for a circumstance in which future 
generations either face a lifetime net tax rate of over 80 percent or a 
one-third cut in benefits.
  Maybe we are off by a couple of percentage points here or there. 
Maybe the entitlements commission, maybe the generational accounting 
effort are off by a few percentage points, but the unmistakable 
conclusion that any rational person can arrive at is that we are on a 
course that cannot be sustained. It must be changed. And the sooner we 
do it, the better off we are.
  I see my colleague from Washington, Senator Gorton, on the floor. He 
made a significant contribution to this group as well, willing to 
debate and discuss these differences and to resolve them in a way that 
did not satisfy either side completely. There is no question the 
Presiding Officer, Senator Bennett, would have preferred more Medicare 
reform--very clear to this Senator. The Senator from Utah was ready to 
go further in cuts in many of these categories. I think that is true of 
the Senator from Washington as well.
  On the other hand, I would have preferred no tax cut until we balance 
the budget--my own preference. But that was not the consensus of the 
group. Those in this group believed that achieving a result was more 
important than any one of us getting exactly what we wanted. That is 
exactly the example that needs to be set for this body and for the 
other one, because if we are going to act like grownups, we are not 
going to get precisely what we want. But for the good of the country, 
we desperately need to achieve the result of moving toward balance and 
getting our fiscal house in order.
  I feel very, very strongly about the need for us to come together to 
achieve this result. We all know where we are headed. We are headed for 
a calamity. I think very often about what I am going to say to my 
daughter, who is 18 years old, 10 years from now, 20 years from now 
when she asks me: ``Dad, what were you doing there in the Senate? You 
were on the Budget Committee. You were on the Finance Committee. Our 
country is in deep trouble now and all of this must have been known 
when you were there. Why didn't you act?''
  Mr. President, all of us are going to face those questions at some 
time in the future if we continue to fail to act, because it is 
abundantly clear where we are headed.
  I am going to speak just momentarily on the question of the CPI. I 
know there are people who feel very strongly in opposition to that 
proposal. I feel very strongly in support of it because I think it is 
clear that measures like a technical correction in the CPI are 
absolutely essential if we are going to get our fiscal house in order. 
If we are going to preserve Social Security, if we are going to 
preserve an economic system in this country that is strong and 
competitive, we have no choice.
  We are headed for a circumstance in which Social Security is 
exhausted of funds in the year 2030. The first year in which 
expenditures exceed total income will be 2020. The first year in which 
expenditures exceed tax income will come in 2013. These are not my 
numbers. These are not the numbers of the centrist coalition. These are 
the numbers of Harry Ballantyne, the chief actuary for the Social 
Security system. He says we are headed for the cliff.
  It was said earlier in the Chamber that there have been no hearings 
on the question of CPI. That is not the case. We have had three 
hearings in the Senate Finance Committee--March 13 of 1995, April 6, 
and June 6 of 1995--three hearings on this question. And it is very 
interesting to recount what happened in those hearings. We had witness 
after witness who told us the CPI, the Consumer Price Index, is 
overstating the cost of living.
  Let me just put in perspective what that means. A 1 percent 
overstatement, a mistake by 1 percent, will cost this country 
$600 billion over 10 years--not $600 million, $600 billion. That is a 
mistake, a mistake that is going to cost this country $600 billion. Can 
we not correct a mistake in this Chamber?

  Now, let us look at the evidence. What did the experts who came and 
testified before the Senate Finance Committee tell us? And I might add, 
a bipartisan group--a bipartisan group.
  Chairman Greenspan, head of the Federal Reserve, came in in the first 
hearing, and he said the overstatement is from 0.5 to 1.5; Dr. Robert 
Gordon, Northwestern University, Department of Economics, minimum 
overstatement, 1.7 percent; Director June O'Neill of the Congressional 
Budget Office, 0.2 to 0.8. At the April 6 hearing, Dale Jorgenson, 
Harvard University, chairman of economics, overstatement of the CPI, 1 
percent; Dr. Erwin Diewert, University of British Columbia, Department 
of Economics, acknowledged expert in the field, overstatement, 1.3 to 
1.7 percent; Dr. Ariel Pakes, Yale University, Department of Economics, 
overstatement of 0.8 percent. June 6 hearing, Dr. Michael Boskin, 
senior fellow, Hoover Institute, Stanford University, overstatement of 
the CPI, of the cost of living, at least 1 percentage point, maybe 2; 
Dr. Ellen Dulberger, director, strategy and economic analysis for IBM, 
CPI overstatement is greater than others have stated and likely to 
grow; Dr. Zvi Griliches, Harvard University, Department of Economics, 
overstatement is 0.4 to 1.6 percent.

[[Page S5361]]

  I would ask my colleague for one additional minute.
  Mr. BREAUX. One additional minute.
  Mr. CONRAD. Two other witnesses on that day offered no estimate as to 
the overstatement.
  The evidence is clear and abundant. The Consumer Price Index 
overstates the cost of living. If that is true, and I believe it is, 
then we know that if it is a 1 percent overstatement, it is costing 
this country $600 billion over the next 10 years.
  We are on a course now we know cannot be sustained. Why would we not 
correct a mistake if we know it is occurring?
  It was earlier stated that correcting the CPI will not improve the 
solvency of the Social Security trust fund. That is not accurate. We 
have a memo from Mr. Ballantyne, the chief actuary, in which he says: 
The actuarial balance over the next 75 years as a percentage of taxable 
earnings is out of balance by a negative 2.17 percent. Just this 
change, a modest correction of one-half of 1 percent, will improve that 
actuarial balance by a factor of one-third. It does one-third of what 
we need to do if we are to secure the future solvency of the Social 
Security trust fund.
  Mr. President, I yield the floor and again commend my colleagues for 
what I think has been an outstanding effort.
  Mr. CHAFEE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. CHAFEE. Mr. President, I thank the distinguished Senator for a 
very powerful statement. He has always made outstanding contributions 
and continued those contributions today.
  I yield 10 minutes to the Senator from Washington.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, the function of the debate in this U.S. 
Senate is only on rare occasions designed to persuade other Members of 
the U.S. Senate to adopt a particular position. This is one of those 
occasions. If we reflect on previous budgets, we understand that if the 
majority party in Congress is the party opposite the President, the 
operative phrase is, ``The President's budget is dead on arrival.'' If 
the majority party is the same as that of the President, all 
reservations about a budget are withheld and that party will defend 
even those elements in a budget it knows to be fraudulent or unsound.
  In other words, most of the time we use our opportunities here, not 
to talk to our colleagues, but to talk either to the people of the 
United States as a whole or in an attempt to come up with some blithe 
phrase that will appear in television or in the morning newspaper. But 
again, Mr. President, this is not such an occasion. It is an occasion 
on which we are genuinely addressing ourselves to many of our 
colleagues on a vitally important issue on which they have not entirely 
made up their minds.
  Why? Because for years, perhaps for decades, we have not had a sound 
and thorough and broadly supported bipartisan approach to the major 
fiscal and budgetary issues that are facing this country. So many of 
the colleagues beyond the 11 of us on each side who have prepared this 
have talked to us privately and said, ``I really sort of like what you 
are doing. Gosh, I don't know whether I can afford to vote for it if it 
doesn't have any chance for success, but I think you are moving in the 
right direction.'' We are here to persuade them that not only are we 
moving in the right direction, but the time has come for them to move 
in that direction with us.
  First, of course, because this is the first truly bipartisan 
opportunity we have had to pass something that will be accepted by the 
country as a whole and, we hope, ultimately by the President of the 
United States. One of the reasons that it should be so is that this is 
substantively the soundest of all the proposals with which we have been 
presented. It has the best and most effective and broadest based 
reforms of entitlement programs, some of which do not even appear in 
the statistics for these 6 years because their impact will primarily or 
solely be felt after the 6 years are up, but will have a tremendous 
positive impact toward solving challenges that we know will exist at 
that particular period of time: The age of Medicare eligibility, the 
Consumer Price Index, means testing the premiums for Medicare part B, a 
pretty thorough welfare reform.
  Second, this is the most realistic budget because it deals most 
fairly and realistically with domestic discretionary spending. The 
President's budget allows it to go up in the immediate future and then 
it drops off the cliff in the end. We know that will not happen. The 
Republican budget does much less than that, but nonetheless the further 
we get down the road, the more unrealistic its figures for domestic 
discretionary spending are. What is that? Spending on education, on law 
enforcement, on medical research, on all forms of transportation, on 
the environment, on national parks, on myriad responsibilities which 
have been increasingly squeezed.
  As the Senator from New Mexico knows very well, dozens of the 
amendments that he has had to deal with in the last 2 or 3 days have 
said, ``hold harmless--'' you fill in the blank, whatever the 
individual sponsor's pet project is, hold that harmless. We will 
probably vote for a bunch of those, but we know they are utterly 
unrealistic. If we follow the road we are on today, there will not be 
any money left for them. None of them, not even the defense of the 
United States of America, will be held harmless.

  This is a good budget because it does provide for tax reductions for 
Americans who feel they are overtaxed. It spreads them out more 
modestly than do some other budget proposals, but nonetheless in all of 
the areas in which legitimately people can claim that they are too 
highly taxed.
  My friend, perhaps my closest friend in this body, the chairman of 
the Budget Committee, the Senator from New Mexico, said something a 
couple of hours ago which really struck home. He said maybe we will 
never get to this real solution, including the hard kind of choices 
that are involved in this budget, until we have Presidential 
leadership. For years at home I was saying exactly that, maybe even 
more pessimistically. I felt you would never get to it except in the 
first year after a brand new Presidency, when a new President can say 
that none of this was his or her fault. Yet I think the actions of my 
friend, the Senator from New Mexico, belie that statement because last 
year he led us in this body and in the House of Representatives to pass 
an honest balanced budget, the first one in 30 years. It was, 
unfortunately, vetoed, but he must be eternally optimistic. He has 
another one for us here. The problem is, if we enforce it, it will 
probably be vetoed as well.
  So it seems to me that we ought to try a different course of action, 
a course of action that binds together Members of both parties. Maybe 
it will not work. It certainly will not work if those Members who 
privately agree with us say, ``It will not work and I do not dare vote 
for it.'' Maybe if it does work in this body, it will not work in the 
House of Representatives. But we will never know unless we pass it in 
this body. Maybe if it passes both this body and the House of 
Representatives, the President will still veto whatever enforcement 
mechanisms come out of it. Certainly he has given us no encouragement 
so far. But we will never know unless we give him that opportunity. 
That veto would be in the teeth of almost every important group and, I 
suspect, newspaper and editorial writer in this country who really does 
long for a solution like this one proposed by Senator Chafee and by 
Senator Breaux.

  So, to those in this body who say privately this is a good idea if 
only someone else higher up would go along with it, I say, ``Please 
come on in. You have an opportunity that you and your predecessors have 
not had perhaps for decades. The time is now. The challenge is 
tremendous. We need to do it for ourselves, for our children, for our 
grandchildren, for our country.''
  The PRESIDING OFFICER (Mr. Bennett). The Senator from Rhode Island.
  Mr. CHAFEE. Mr. President, I congratulate the Senator from Washington 
for a very, very powerful statement. I think it greatly helps our 
cause. I thank him very much.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. Mr. President, I yield 5 minutes to the distinguished 
Senator from Nevada.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. BRYAN. Mr. President, let me join with my colleagues on the floor 
in

[[Page S5362]]

commending Senators Breaux and Chafee for their bipartisan leadership 
in bringing us to this moment. I think for the American people who have 
watched this body from the viewpoint of their television sets in their 
homes, or who have listened to what we have said about each other in 
countless news reports, it will come as a complete surprise that during 
a very labored and extended period of negotiations on this budget there 
was an absence of recrimination, there was an absence of harsh, 
partisan rhetoric at all points throughout the entire period of the 
past 7 months where we have endured two Government shutdowns and 13 
continuing resolutions. Always we pushed forward, trying to achieve 
ultimately a balanced budget agreement that represented a consensus.
  Our coalition considered a number of balanced budget proposals. We 
looked at the President's proposal, we looked at the National 
Governors' proposal, and we looked at the House and Senate versions of 
the bill, and we included elements of each of these proposals in our 
final plan. Our burgeoning Federal deficit is the greatest domestic 
crisis facing our country today. It is devouring our savings, robbing 
our ability to invest in infrastructure and education, and saddling our 
children with a staggering debt that will eventually have to be paid.
  As recently as 1980, cumulative Federal debt in this country was $910 
billion. A decade later that debt tripled. Today it stands at nearly $5 
trillion. If we do not balance the budget today and if we continue on 
our path of irresponsible spending, here are a few examples of what 
will occur.
  In the year 2000, annual interest payments on the Federal deficit 
will grow to approximately $305 billion, an increase of more than 50 
percent in just 4 years. And in that same year, interest payments on 
the debt will surpass defense spending and become the largest Federal 
expenditure.
  By the year 2012, unless policies changes are enacted, projected 
spending on entitlement programs and interest on the debt will grow so 
rapidly that they will consume all tax revenues collected by the 
Federal Government.
  In that same year of 2012, unless changes are made, theoretically we 
could close all Federal prisons, national parks, the Pentagon and 
eliminate spending and research and development, education, roads and 
bridges and still not have enough savings to eliminate the deficit.
  By the year 2030, to bring the deficit down to the current level, the 
Bipartisan Commission on Entitlements and Tax Reform has concluded that 
either all Federal taxes would have to be increased by 85 percent or 
all Federal spending programs would have to be cut in half.
  Mr. President, history has shown that nothing is more desired and yet 
nothing is more avoided than the will to make the tough choices. The 
last time that we balanced the Federal budget, Richard Nixon was in the 
White House and the year was 1969.
  The centrist coalition balanced budget plan is fair. It restructures 
and reforms Federal programs that are inefficient while scaling back 
spending. We have adopted a responsible policy of gradual reduction in 
spending over 7 years to reach a true balanced budget.
  For instance, our balanced budget plan saves $106 billion in Medicare 
over 6 years and protects its long-term solvency. We expand the choices 
for Medicare beneficiaries by allowing them to remain in the 
traditional fee-for-service Medicare Program or to choose from a range 
of private managed care plans.
  By creating a new payment system for managed care and by slowing the 
rate of growth in payments to hospitals, physicians and other service 
providers, our plan extends the solvency of the Medicare trust fund.
  Our Medicare reform plan saves $41 billion over 6 years and protects 
the most vulnerable in our Nation. In so doing, we incorporated another 
series of proposals advanced in a bipartisan fashion by our Nation's 
Governors. Our plan maintains a national guarantee of coverage for low-
income pregnant women, children, the elderly and the disabled, and we 
allow States to design health care delivery systems which best suit 
their needs without obtaining waivers from the Federal Government.
  Under this plan, States can determine provider rates, create managed 
care programs and development home and community based options for 
seniors to help them out of their problems.
  Our welfare reform language saves $45 billion in 6 years and includes 
very strong work provisions as well.
  The PRESIDING OFFICER. The time yielded to the Senator has expired.
  Mr. BRYAN. Mr. President, I ask the distinguished Senator for another 
minute.
  Mr. BREAUX. I yield another minute to the Senator.
  Mr. BRYAN. Let me just say, although a number of us would have 
preferred our focus be exclusively balancing the budget and deferring 
any tax reductions until after that balanced budget was achieved, we 
recognized that the only way we could build a consensus to bring 22 of 
us together was if we yielded to those concessions by striking what I 
believe is a responsible compromise with those who would offer far more 
in terms of tax cuts, which I believe we can ill-afford to incur until 
we do balance the budget with a reasonable midline approach.

  Finally, let me just say, Mr. President, that I think the window of 
opportunity is narrowing. We have an opportunity in this Congress, with 
the momentum that this coalition has brought together, to achieve a 
positive and lasting result. I urge my colleagues to accept this 
proposal.
  I yield the floor, and I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. BREAUX. Mr. President, how much time do I have remaining on the 
allocation of time?
  The PRESIDING OFFICER. Three minutes.
  Mr. EXON. Mr. President, I yield the additional 3 minutes that the 
Senator from Louisiana needs to assist the Senator from Virginia.
  Mr. BREAUX. I thank very much the distinguished Senator from Nebraska 
and yield 5 minutes to the Senator from Virginia, Senator Robb.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ROBB. Thank you, Mr. President, and I thank my fellow Senators.
  Mr. President, I rise in strong support of the centrist coalition 
substitute budget resolution. I join in commending Senators Chafee and 
Breaux for their leadership in this effort. This resolution reflects 
the hard work and compromise of over 20 Senators, Republicans and 
Democrats, who came together months ago in search of a realistic 
solution to a serious problem. We came together out of a sense of 
frustration, but we worked together with a sense of purpose, believing 
that our fiscal problems really can be solved. We vowed at the outset 
that we would produce a balanced budget plan that was credible, and we 
did. We vowed we would confront the tough choices, and we did. The 
budget we produced deserves the serious consideration of every Member 
of this body because it is real, it is tough, it is principled, and it 
reaches balance in 7 years.
  Mr. President, as we craft a blueprint for the way we spend our 
Federal dollars in the next few years, we have a responsibility to find 
ways to continue to strengthen our Nation economically.
  How can we do that? We strengthen our Nation when we reduce the level 
of Government borrowing from the private sector. We strengthen our 
Nation when we make investments that enhance productivity and increase 
wages. We strengthen our Nation when we provide real economic 
opportunity to all of our citizens. And while these are bedrock 
principles of our centrist plan, the existing budget plans backload 
cuts in discretionary spending which make it virtually impossible to 
get there from here. Either discretionary programs will be decimated in 
the outyears or the budget will go right back in the red.
  The other plans being considered require deeper cuts with respect to 
discretionary spending than our plan because they include either too 
large a tax cut or they refuse to tackle absolutely essential 
entitlement reform. In both cases, critical investments in people, like 
education and training, and important investments in technology, like 
research and development, are jeopardized. The cuts in discretionary 
spending included in existing budget plans should be of enormous 
concern to

[[Page S5363]]

Members of my own party who understand, as I do, the ability of 
Government to improve people's lives, indeed, who believe in its 
responsibility of Government to invest in our people and to serve as a 
catalyst for hope and opportunity where none exists.

  Mr. President, if we do not end up with a responsible budget 
agreement, how many children will get Head Start in the year 2002? How 
many Pell grants will go to poor children in the South? How many 
mothers will get WIC? How many Federal research dollars will go to 
colleges? How many Federal highways will be built in our States?
  If we fail to make these kinds of investments, we will weaken our 
Nation. So how do we craft an honest budget that allows us to continue 
to invest in our Nation? The answer is tough medicine for everyone. It 
is forsaking the large tax cut and making significant, but principled, 
reductions in entitlements, and our centrist budget does both.
  We include a more modest tax cut, even though most of us are very 
much opposed to any tax cut until we actually balance the budget, and 
we make a solid start on entitlement reform. By adjusting the Consumer 
Price Index and asking that those seniors who can afford to pay more 
for their health coverage do so, we spread the sacrifice and protect 
our Nation's ability to provide a safety net for our most vulnerable 
citizens.
  But we all know, Mr. President, that the 7-year budget we offer today 
is just a downpayment on our sacrifice. We are going to need to ask a 
whole lot more of our people, even though this is an essential 
downpayment. For if we move outside our 7-year budget window to the 
year 2012, we see an even bleaker future with entitlements and interest 
on the debt consuming every single tax dollar the Federal Government 
will take in. And after that, it gets even worse.
  So I urge my colleagues to give this centrist budget resolution their 
careful and thoughtful consideration.
  It reflects bipartisanship, moderation, compromise, and a willingness 
to tackle entitlement reform. It reflects good public policy as well. 
With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. CHAFEE. Mr. President, I yield to the Senator from Vermont. I 
believe I have 6 minutes left.
  The PRESIDING OFFICER. That is correct.
  Mr. CHAFEE. I yield him 5 minutes.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. JEFFORDS. Mr. President, I am pleased to be here to speak in 
favor of the centrist budget request. I remember so many years ago when 
I was in the House when we had a similar problem with the inability to 
get together on a budget.
  A number of us in the middle decided we would put together the answer 
to the budget. We worked very hard on it. We did a good job. We then 
went to the votes. There were three choices. There was the liberal, 
there was the conservative, and there was the middle.
  The liberal budget went down by a fair number of votes. The 
conservative budget went down by a fair number of votes. We thought, 
Wow, we're right in the middle here. We're going to get all the votes. 
We got fewer than anybody. My point is, perhaps I know we are not going 
to win tonight, but I bet the budget we end up with in the final 
analysis is going to be very close to what we are proposing here 
tonight.
  Let me talk a little bit about what the major problems are. First of 
all, we have accomplished quite a bit this year. We recognize there is 
a problem. For the first time in my memory in this Congress for over 23 
years, there is a consensus that we have to have a balanced budget. The 
President agrees we have to have a balanced budget. The House and 
Senate do.
  But how do you get there? You do not get there by any easy way. There 
is no easy way to a balanced budget. You have to tackle the toughest 
aspects of it.
  One of those, which I spoke about at some length on Friday, is health 
care. One-half of the budget problem is the fact that we have not a 
health care system where the Federal costs are under control. That can 
be done, but only if we have the willpower to do it and to get to 
capitated payments on the Federal side.
  Previously, I have spoken about the need for us to look to the 
future. All you have to do is buy the Atlantic Monthly if you want to 
see how deep the trouble is that we are in. This month's Atlantic 
Monthly shows, if we do not do something about Social Security, if we 
do not change the rate at which it is paid out, by the year 2040, I 
think it is, they say the annual deficit in Social Security will be 
$766 billion.
  We cannot wait until then. What is one thing we can do? We can take a 
realistic look at that thing here that controls our entitlement 
programs. That is the CPI. It takes courage to do that because every 
interest group is going to be screaming at you if you do. But not too 
long from now we will find there will be revealed to us the experts' 
analysis of what that CPI ought to be. It will be somewhere between 0.7 
and 2 percent.
  No one is willing to argue that we should decrease the CPI by 2 
percent, but we have had the courage to come forward and say we must 
make a change in this direction. So we have done so with a 0.5 percent 
decrease in the CPI that, because of the exponential results that you 
have by going forward with this change, whether it be Social Security 
or all the other things which are affected by a Consumer Price Index, 
it will be lower and lower and lower as we go to the future. So if we 
are ever going to get this budget under control, first we have to get 
health care costs under control and, secondly, we have to reduce the 
CPI to a more realistic number. Those two things alone will do it.

  I speak also because I am on the discretionary spending committee, 
the biggest one, Labor and Human Resources. I am also on the 
Appropriations Committee and on the subcommittee that is in those 
areas. I know, as a leader of that committee, that there is no way that 
we are going to be able to do the things that need to be done, in the 
area of education in particular, unless we get the costs of the 
entitlements and the costs of health care under control. What do we 
have to do for education?
  Another thing we have accomplished this year. If we do nothing else, 
we have agreed, the House, the Senate and the President, that we should 
not cut education. For many years now we have had the realization that 
we have a horrendous problem of training our young people for 
employment. That is the other thing which is so critically important, 
and that is to have a good job. If people do not have good jobs, we do 
not have the kind of revenues that we can have, we do not have the kind 
of productivity that this Nation needs and must have in order for us to 
balance the budget.
  In the area of education, we have finally agreed we should not cut. 
But there is much more that needs to be done in that. I want to say 
again, I commend Senator Chafee and Senator Breaux for bringing us 
together to bring us to what we can do to bring this budget under 
control.
  Mr. President, balancing the budget is a task that is long overdue, 
one that we should have tackled long before the Federal debt began to 
escalate in the early 1980's. Our carelessness in financial planning is 
a terrible legacy to leave our children and grandchildren.
  When I voted in the House in 1986 against the balanced budget 
constitutional amendment, I stated at the time we could not wait to 
balance the budget the number of years required to get it approved by 
the States. However, 10 years later the situation has become much 
worse. Now I realize that is imperative we move forward without the 
amendment. Any further delay will greatly increase the damage to 
national economic stability.
  If we do not begin to balance the budget before the year 2002 our 
national debt will be a staggering $6.4 trillion. The debt will double 
again over the next 15 years and quickly redouble again within the next 
7 years.
  The basic problem is the increasing cost of entitlement programs. 
These are programs outside of the appropriations process. They have 
increased well beyond the growth of revenues and population. In 
addition, it appears through generosity or otherwise they have 
increased at a rate greater than the actual cost of living created by 
inflation. Our proposal recognizes this for the future. This will make 
additional cuts in

[[Page S5364]]

discretionary programs such as education less necessary. But it does so 
in a way which may actually protect these programs from a greater 
decrease which will be recommended this June by a panel of experts.
  The entitlements that have provided the greatest problems are in the 
area of health care. The increasing projected costs in Medicaid and 
Medicare represent about one-half of the increasing cost problem. We 
cannot continue to run a Federal fee for service system. Trying to 
control costs without controlling utilization has not worked, there are 
too many ways that costs can be shifted to these programs. Progress in 
this area will be controlled by more State responsibility. But my 
colleagues who are on committees of relevant jurisdiction must work to 
move to a Federal capitated system combined with utilization of private 
insurance methodologies and Federal guidelines to get these costs under 
control. It is interesting to note that in 1954 the Eisenhower 
administration introduced legislation along these lines when it 
recognized some Federal system was required. The purpose of the bill 
was, ``to encourage and stimulate private initiative in making good and 
comprehensive services generally accessible on reasonable terms through 
adequate health prepayment plans, to the maximum number of people * * * 
by making a form of reinsurance available for voluntary health service 
prepayment plans where such reinsurance is needed in order to stimulate 
the establishment and maintenance of adequate prepayment plans in 
areas, and with respect to services and classes of persons, for which 
they are needed.'' I believe this gives us a possible route implemented 
through individual choice to get us out of our present health care cost 
mess. We must find the way to control uncontrolled cost shifts and to 
spread the cost of the sick over the widest base. Hopefully the Finance 
Committee and the Labor and Human Resource Committee will join in 
achieving this goal.

  Mr. President, like my colleagues in this centrist coalition, I want 
a Federal budget that is balanced in an equitable manner. In reaching a 
balanced budget we must be careful not to cut those programs which 
could be counterproductive to balancing the budget. In other words, 
cuts in one program can result in increased costs in other programs, 
thus making it more difficult to balance the budget.
  This budget proposal accomplishes this goal by making the tough 
decisions necessary to balance the budget within 7 years and still 
maintain a strong commitment to discretionary spending. Unlike other 
budget proposals, this plan provides for cuts to the overall 
discretionary spending that are both achievable and modest.
  Mr. President, there are many important programs within the 
discretionary accounts that needed to be maintained. The centrist group 
realizing the importance of discretionary spending provided modest 
increases to the discretionary accounts, such as in education and the 
environment.
  Our bipartisian plan contains some $50 million less in discretionary 
cuts than the latest President's budget, and $121 billion less than the 
Republican plan. Our plan will leave future Congresses with the ability 
to adequately fund discretionary programs, while these other plans will 
leave future Congresses with no choice but to eliminate many important 
programs. It is unrealistic to think that some future Congress will 
make these tough decisions, decisions that this Congress is unwilling 
to do.
  I would like to highlight just a few examples of the important of 
maintaining the discretionary accounts. One example can be seen in 
Federal health research spending. We are nearing discoveries and new 
treatments to the causes of many illnesses and diseases, such as 
Alzheimers and Parkinsons. The centrist coalition provides the 
flexibility to maintain spending on medical research. It is well known 
that for every dollar spent on health research, several dollars are 
saved by the Federal Government. This spending on health research could 
allow for the ptential to eliminate tens of billions of dollars in 
Federal health care costs over the next decade or more.
  Another example of this group's commitment is in providing adequate 
education funding. As a group we understand that this Nation faces a 
crisis--a crisis which is costing us hundreds of billions of dollars in 
lost revenues, decreased economic productivity and increased social 
costs, such as welfare, crime, and health care.
  Mr. President, business leaders warn us that unless improvements are 
made in our educational system, our futrue will be even bleaker. The 
rising costs of higher education combined with the lower income levels 
of middle-income families is causing thousands not to finish college, 
and fewer to attend grduate school in critical areas such as math, 
science, and engineering. As chairman of the Education Subcommittee, I 
am particulalry concerned about maintaining funding for education, and 
I have worked with my colleagues in this centrist group to ensure that 
adequate funding will be protected within education programs.
  In order to help solve the deficit problem, and as importantly, to 
prevent unnecessary hardship to individuals, this group's plan protects 
the Federal commitment to education, health research, and many other 
discretionary spending areas by providing the least amount of cuts of 
any plan yet offered.
  Mr. President, I am committed to balancing this budget, but not on 
the backs of the poor, the elderly, and our children. This budget 
proposal is the only plan that protects the neediest Americans while 
balancing the budget.
  Now, Mr. President, I would like to comment more specifically on the 
role of education in our deficit problem.
  Today, I will talk about the need to be careful on how we cut, 
especially in the field of education. I am the chairman of the Senate 
Education Subcommittee and, therefore, have a particular responsibility 
to make sure that what we do from this point on does not in any way 
inhibit the ability of this Nation to be able to meet its commitments 
to its young, but most importantly its commitments to this Nation that 
we maintain our ability to be the most competitive and the most 
economically sound nation in the world.
  I am afraid, as I look across the Congress to see where cuts are 
being made. I also recognize the future needs of our Nation, especially 
in the area of education. For without immediate attention by this 
Nation on our educational system, we are facing incredible danger for 
our economic future. We cannot move forward without recognizing that 
cuts within the educational system may well prove to be 
counterproductive--counterproductive in that they will reduce the 
potential revenues that we would otherwise have and that they will only 
increase the social costs that we are presently experiencing.
  So let me now, as we go into the 21st century, take a look at where 
we are with respect to education and the need for us, a Nation, to 
place ourselves in a more competitive position within the international 
economic community.
  In order for our country to remain viable in the global economy we 
must not only be free from crippling interest payments on our debt, but 
we must also prioritize our spending so that we maneuver ourselves to 
be ready to face the challenges of the new millennium. If we do not act 
now, we will destroy the dreams that we cherish--good health, a good 
education, a good job, and a good retirement.
  Some have proposed that we reduce the deficit simply by making 
across-the-board cuts on all programs. Such cuts might provide a 
solution to our financial woes in the short term, but they only 
exacerbate the deficit in the long term. Here is why. If we cut back on 
programs for education and training, we lose our competitive edge in 
the marketplace, resulting in a lower standard of living, fewer high 
paying jobs, less Federal revenues in taxes, and, naturally, a larger 
deficit.
  On the other hand, if we work to improve our education system, we not 
only increase our national productivity, but our standard of living 
will increase, resulting in greater Federal revenues and a decreased 
need to invest in our social programs.
  The deficit will not be solved unless we're willing to solve the 
causes. Education is critical. It must be improved.
  General Marshall stated years ago in his frustration over delays in 
designing the Marshall plan ``stop kicking the problem around, just 
solve it.''
  I believe this advice applies to the larger problem that we face 
today. If we solve the larger problem, then this

[[Page S5365]]

will solve those immediate ones that we look at with respect to our 
inability to fund the various programs we all desire to fund. For if we 
do not improve our educational system, and if we are unable to solve 
the deficit problem, we cannot ensure that we have the capacity to 
provide for the programs we need. And then we will find that the 
problem of balancing our budget is unsolvable and that this Nation will 
disappear in the next millennium as a lesser nation.
  The way to solve the problem of our deficit is not, as some suggest, 
mindless across-the-board cuts. Solutions to our financial woes are 
long-term investments--specifically in our education system. By not 
solving the problem of reduced productivity and higher costs through 
education failures, interest payments will keep increasing, tax 
revenues will keep decreasing, and our deficit will only grow larger. 
More mindless cuts is not the answer. Instead, thoughtful investments 
and adequate resources are the solution to our long-term fiscal 
concerns.
  Consider for a moment the education spending patterns over the last 
decade. Since the beginning of the 1980's overall Federal support for 
education, after adjusting for inflation, has decreased by 5-percent. 
Funds for elementary and secondary education declined 15 percent, while 
postsecondary education funds declined 24 percent. Where has that led 
us? Certainly, not to the first class education system we all support. 
In fact, using the six education goals developed by a bipartisan group 
of Governors in 1989 as our barometer, we are not close to reaching our 
mark of excellence in education.
  Among the goals for our future is that our children come to school 
ready to learn, that they come without hunger, and that they come with 
the capacity to be able to understand the education that they are going 
to be faced with. That means they must first be fed, immunized, and, 
hopefully, have had some preschool experience. However, only 45 percent 
of young children from low-income families are enrolled in preschool 
programs and only 55 percent of infants have been fully immunized, 
protecting them against childhood diseases. Head Start continues to 
only serve one-fourth of all eligible children in this Nation.
  We also recognize that educated people who can compete in the global 
marketplace require a mastery in challenging core subject areas--such 
as math and science--and that all adults be literate and prepared for 
life-long learning. Unfortunately, in these basic areas, we are far 
from the finish line.
  The 1993 National Assessment of Educational Progress indicates more 
than 75 percent of students at all grade levels failed to achieve even 
the basic level of proficiency, and over 60 percent failed to meet the 
proficiency level in English.
  In international comparisons, American students consistently score 
below most other industrialized nations.
  In the 1992 international assessment of education progress U.S. 13-
year-olds scored second to last among the nations in mathematics 
achievement, and similarly in science.
  More recently, a report recently came out that investigated the 
literacy of children that graduate from high school. The report found 
that 51 percent of the students now graduating from our high schools 
were functionally illiterate. That is, incapable of handling an entry-
level job with their educational achievement.
  Make no mistake about it. These disturbing statistics are not about 
someone else's children. They are not someone else's problem. These are 
our children. These are our problems. Our future work force and our 
future leaders. The quality of our public schools in America is 
directly related to the standard of living of each and every citizen. 
Without a strong investment ion education, this Nation will not be able 
to maintain an adequate number of highly skilled workers. These workers 
are necessary if our country is to maintain a competitive position 
within the global marketplace.
  To give you a quick idea of why curing our educational ills is 
critical and key to our future, we will examine a yearly cost of our 
failing educational system. The total cost of our failure in education 
to our economy has been estimated to be one-half trillion dollars each 
year to our economy.
  The lost revenue alone has been estimated to be about $125 billion. 
That is, if the educational levels were where they should be, the 
income to the Nation, relative to furnishing our budget, could be 
higher by $125 billion, putting us a long ways toward being able to 
have the budget balanced.
  For example, American business spends approximately $200 billion a 
year to perform training for employees which is necessary to provide 
those individual minimum skills required to perform on the job, skills 
most of which should have been taught in the schools.
  The Department of Education estimates that 30 million Americans are 
functionally illiterate, another 46 million are marginally literate. 
This creates a significant problem for our economy. ``Combating 
Illiteracy in the Workplace,'' by Robert Goddard, puts the cost of this 
illiteracy at a staggering $225 billion a year. This includes lost 
productivity, unrealized taxes, crime, welfare, health, housing, and 
other social costs.
  We pay for our failed educational system every time an individual 
drops out of high school. Lack of a high school degree costs an 
individual $440,000 in lifetime earnings. These lost earnings often 
drive these individuals into welfare, crime, and drugs. Up to 80 
percent of our people that are incarcerated in our State jails are 
functionally illiterate, school dropouts.
  Federal expenditures for welfare were $208 billion in the fiscal year 
1992. The cost of incarceration, which I mentioned, is $25 billion per 
year and growing, and the medical costs of violent crime is another $18 
billion per year. Illegal drugs cost the economy $238 billion a year, 
as estimated by Brandeis University. These difficult circumstances 
perpetuate themselves generation after generation.

  I think most Americans agree, and in poll after poll people cite the 
quality of education as a paramount concern. And this view is growing 
each year. The support for education in these polls is often cited as 
one of the most important roles of Government. Americans understand 
intuitively that investing wisely in education is the key to our future 
success and the best possible national investment we can make for the 
country. The evidence is clear: Countries which spend more on education 
per pupil have higher levels of per capita GDP. Institutions like 
Motorola report corporate savings of $30 to $35 for every dollar on 
training. That is a 3000- to 3500-percent rate of return. But most of 
that education, if you read the report, was to make their students 
literate to put them in a position where they could read.
  They found, amazingly in their study, they were having trouble with 
their employees answering simple math problems and they could not 
believe they do not have the capacity to do the math, when they found 
out the problem was they could not read the problems. Thus they had to 
teach them how to read to do simple math problems. That is the state of 
the situation, and that is Motorola, one who can be selective in their 
employees.
  People, as rational consumers, also realize investing in their own 
education leads to substantially higher lifetime earnings. A person 
with a bachelor's degree earns over 1.5 times of the person with a high 
school degree. A professional degree earns over 350 percent higher 
lifetime earnings than a high school diploma in itself.
  While we recognize both intuitively and through research the economic 
rewards of education, we do not simultaneously invest the funds 
necessary to support the position. Many of my colleagues, while 
acknowledging the importance of educational investments, argue that 
throwing money at education is not the solution. I could not agree 
more. Increasing educational expenditures in itself will not solve our 
country's educational deficiencies.
  We have a responsibility to invest educational dollars wisely, 
including more active congressional oversight over Federal initiatives. 
Simultaneously, we must also reinvigorate our schools by demanding that 
students learn to high academic standards.
  Why? Because the status quo in our schools has failed. Too many of 
our graduates finish school without knowing the three R's, much less 
more rigorous academic standards. Clearly,

[[Page S5366]]

there is no room for federally mandated standards. We should be 
providing incentives for States and communities to set up goals for 
student achievement--pupil by pupil, and school by school.
  More importantly, they must know what standards this Nation must 
reach, if we are going to be able to continue to compete 
internationally. It is one thing to believe that our education, as most 
people in this country do, has improved over the time they were in 
school, and I find that is true for myself. I am amazed that the 
students in high schools are taking subjects which I did not get until 
college.
  What they do not realize, for instance, in a recent report on the 
comparison of our students to other nation's students we fared poorly. 
One example is with Taiwanese students. These students when they 
graduate are 2 years ahead of our students in many subjects, such as in 
math. Is it any wonder we come out last in these tests, or next to 
last?
  What is important is that we know and that the States know that we do 
have a problem. That this Nation is faced with a very serious 
educational problem, and if we do not do something about it, we will 
not be the Nation we must and should be in the next generation.
  So we must be sure that when we begin to reduce the budget to try and 
balance it that we do not do counterproductive cuts which will decrease 
our revenues and increase our social costs. rather than cutting the 
deficit it will increase the deficit.
  The dreams of good health, a good education, a good life, and a good 
retirement can only be realized by setting high priorities on education 
and educational investment. These increases are essential if our 
country wishes to remain viable into and throughout the next century.
  The PRESIDING OFFICER. The Senator from Rhode Island has 1 minute 
remaining. Who yields time?
  Mr. DOMENICI. Does the Senator need more time than that?
  Mr. CHAFEE. I might like a little time, if I could, at the end for 
rebuttal. If the Senator is prepared to go now--
  Mr. DOMENICI. Right now I will yield the Senator some time, 3 or 4 
minutes.
  Mr. CHAFEE. Yes, I will take 2 minutes.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. CHAFEE. The arguments, I believe, have been very, very forcefully 
set forth this evening by the speakers on our side, Democrats and 
Republicans.
  What are we talking about? We are talking as a bipartisan group that 
something has to be done about the deficit of this Nation or future 
generations are going to be in terrible trouble. We heard the 
statistics from the Senator from South Dakota in connection with this, 
and others likewise who talked about what Social Security is going to 
look like or Medicare or the other entitlement programs unless in some 
fashion we get control.
  This budget that we are presenting does that. This budget not only 
balances itself in the 7 years, but in the outyears, that is where the 
tremendous savings are. So I commend my colleagues to come forward and 
join us.
  As the Presiding Officer in his remarks pointed out, there are those 
who are saying, ``We would be with you, but we're not sure you have 
enough votes.'' If we spent all our time going only with those who have 
a majority, we would not stand for anything. We are not sent down here 
as weather vanes to go where the majority is. We are sent down here, it 
seems to me, not only to look after this generation, but future 
generations as well.

  So, Mr. President, we put forward a tough program, but the solutions 
to the problems of this Nation are not going to be sugar candy. They 
are going to have to be by facing up to difficult decisions. Is 
reducing the CPI by 0.5 percent a difficult decision? Sure it is. The 
easy way is to do nothing, continue the reckless course we are on now 
in this Nation of ours.
  But I want to pay tribute to every single one of those who have 
joined with us in putting forward this budget on behalf of Senator 
Breaux and myself.
  Mr. President, I will never forget a movie I saw during the war. The 
colonel comes before the pilots who have just graduated from pilot 
school, and some are going into fighters and some are going into 
bombers. The colonel who was addressing them happened to be a bomber 
pilot. He said, ``Here's where we separate the men from the boys.''
  I am not taking any sides of pilots being fighter pilots or bomber 
pilots. But I will say that this is a tough decision that we are facing 
very shortly in this Congress. I hope that those colleagues who are not 
here this evening who are still doubtful, will say that program is a 
good one. It is not only a good one for now, but it is a good one, even 
more importantly, for future generations. I thank the Chair.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I yield myself as much time as I use. I 
understand Senator Exon wants to be recognized at some point. If there 
are any members of the centrist coalition, Senator Chafee and Senator 
Breaux, that have not had enough time, I will give them part of my 
time.
  Mr. President, fellow Senators, I guess I can say in all honesty that 
after more than 20 years on the Budget Committee, tonight is indeed an 
exhilarating evening for me, because I believe if anybody listened to 
the debate here tonight--and I regret to say, in my own way, in the 
next 30 or 40 minutes I am going to suggest why I am not going to vote 
for this tonight--but if anybody listened to the debate tonight and saw 
this bipartisan array of Senators, all of them, all of them excellent 
Senators, none of them known for demagoguery, but for being problem 
solvers--five of them are on the Budget Committee that I can recollect, 
five are on the Finance Committee, which, in all fairness to all the 
other committees of jurisdiction, would probably have about 85 percent 
of the say in whether we get to a balance and whether we stop the kind 
of future damage that has been explained here today.
  When we first started at budgeting, six or seven Senators understood. 
They would think when you made a $5 billion change in one little part 
of the budget that you are really making some headway. When you look 
down and see in 10 or 12 years--that is 10 or 12 years from then--you 
see a Medicare Program going bankrupt. They did not go bankrupt 
yesterday. We did not know it was going to be in trouble yesterday. We 
knew it years ago, just like we know we will not be able to pay for all 
the things we have promised Americans in just a few years.
  It is not a question of whether you want to be mean, whether you want 
to live up to your commitment. The truth of the matter is, as 
prosperous and powerful as we are, we have set in motion programs, 
commitments to our people that we cannot possibly live up to.
  For those who are wondering whether the giant programs and 
commitments of our Government can long endure, let me say they can. But 
they cannot long endure if we wait until they are in serious trouble 
and then try to fix them.
  Let me tell you what will happen. I quote from Robert Samuelson, who 
writes editorial pieces. Everybody thinks he is an economist. He is not 
an economist. He knows as much as many and he speaks more forthrightly 
than many and he makes more sense than many. Let me tell what you he 
said in an editorial piece. Listen carefully, if you do not think he is 
telling us why we are here tonight listening to this debate:

       At some point spending and benefits will be cut to avoid 
     costs that seem politically intolerable. The trouble is that 
     the longer the changes are delayed, the more abrupt and the 
     more unfair they will be.

  The last sentence reads:

       That's why silence is irresponsible.

  Frankly, to the eight or nine Senators who spoke in behalf of this 
bipartisan proposal, you have chosen not to be irresponsible, for 
silence here tonight would have been irresponsible. I only wish we 
would have started this process and have a bipartisan budget here on 
the floor, and I only wish the President would be in support of the 
major ingredient in your budget. I do not think there is a lot of doubt 
that if he were, it would be done.
  Now, let me tell you why I am concerned. I borrowed the chart from 
Senator Breaux. He has no idea why I borrowed it. I only borrowed it 
for one

[[Page S5367]]

number, Senator, the year 1997, the change in the CPI--$7. You have 
argued that is a small amount to pay to benefit this Nation so greatly. 
I say $7 is enough to make a case to the American people that one group 
of politicians is doing the wrong thing and another is doing the right 
thing--$7.
  Let me tell you the difference between the Republican plan to save 
Medicare, and it was not even part of the trust fund, but the 
difference between our first proposal in June of last year and the 
President's was $7. It went across America as if it were a torrent, a 
tornado destroying the benefits for senior citizens. If you can do it 
once, you can do it again.
  I submit it will be done again. That $7 increase in the average 
monthly check for senior citizens, if it is not destroyed here tonight 
by the opposition, it will be destroyed tomorrow if you pass it, or a 
week from now if you pass it, by the President of the United States, 
for he will make that as big an issue as he made the $7 in Medicare, 
the insurance premium change that was first in the budget that you 
alluded to, Senator Gorton, earlier in the evening.

  Mr. BREAUX. Will the Senator yield?
  Mr. DOMENICI. I am happy to yield to the Senator.
  Mr. BREAUX. I think I understand, and I appreciate the point the 
Senator is making, but does the Senator not make the point we were 
trying to make, that the only way we will get it done is in a 
bipartisan fashion, where we both can hold hands and say, ``Yes, this 
has to be done in a bipartisan way.''
  Mr. DOMENICI. Yes, indeed.
  I believe, however, in this year, 5 months before a Presidential 
election, with all the water that has gone under the bridge, I do not 
believe it can be done with a bipartisan group of Senators.
  I believe at some point--and that point may not be too distant, 
Senator, and I believe you will still be here when that point arrives, 
I hope, and Senator Chafee, because I do not think it is a long way 
off--I believe bipartisan Senators may put that budget together. I just 
do not think it will work this year. I do not in any way want to 
detract from the courage and hard work, from the dedicated commitment 
that went into this budget.
  I think, in all honesty, a Republican budget of last year and this 
year have a lot to do with the momentum that brought you together and 
the momentum that kept you together. I am not here trying to draw 
comparisons between your budget and our budget and the President's. But 
I will say it would not be difficult for this Senator to put a budget 
together and speak with high praise for it with your number on welfare, 
your number on Medicaid, and, yes, your number on Medicare. In fact, I 
think we are so close that it might be decided in the Finance Committee 
and Agriculture Committee on matters of policy because I do not believe 
the numbers would be very far apart.
  Maybe we will hear differently tonight when the distinguished Senator 
from Nebraska talks about this role. Perhaps we will. I am not here 
tonight to criticize this bipartisan group on any aspect of its budget. 
I am here tonight to congratulate them. I think I am even prepared to 
say for those out in America that watch budgeting and watch our future 
with grave concern, this might be a red letter day for your becoming 
buoyant and positive about America sooner rather than later, getting a 
balanced budget and putting its fiscal house in order.
  The issues encapsulated in your budget are for real. Again, I say I 
am sorry I cannot support it, but I feel I have made a commitment not 
to touch Social Security in this year's budget. I believe, just as 
certainly as you do, that I have to live up to that commitment.
  I remind some people around here that they should not leave tonight 
thinking that the Senator from New Mexico needs to be separated, the 
men from the boys, and that I am in the boy's department, to borrow 
your war story. I voted for about every kind of change that we could 
make to get this budget of the United States under control. I have had 
about as much positive thinking as you do tonight about how wonderful 
your plan is. I did one of those, only to find that then-President 
Ronald Reagan and Tip O'Neill, within 5 days, somewhere, somehow, 
decided to destroy it. And it was about similar issues, I might say, 
without digging up a whole bunch of linen that is now soiled. It had to 
do with the same big-ticket item we are talking about here. So I have 
been there.

  I also want to suggest that you have approached another issue very 
realistically--Senators Chafee, Breaux, and those 22 supporting you. 
And I will say this, without any hesitation: It is going to be very, 
very tough--if, indeed, it will be possible--for the President of the 
United States to get a balanced budget using the assumptions he is 
making, because, in fact, I do not believe you can possibly reduce the 
expenditures that come out of that $275 billion pot called the 
discretionary accounts, everything from the National Science Foundation 
to our little bit of education money--and it is not a lot; $23 billion 
is all we fund for kindergarten through 12th grade. But there are a 
myriad of programs in that package. I do not believe he can get the 
amount of savings in the last 2 years that the President says he will.
  I will submit that it may be very, very difficult to get the 
Republican savings, although they are more realistic in that they are 
gradual rather than precipitous. They do not go up only to come down--
and, incidentally, go up in an election year only to come down in the 
nonelection years. But they will be difficult. You have decided that 
you want to do something about that, and I understand Senator Chafee's 
explanation. You want to be more realistic and not have as many assumed 
reductions in those accounts. I do not know if we are going to get 
there or not. But, sooner or later, the reality of those numbers, which 
will be looked at each year--although, sooner or later, you have to 
bind them, but the reality of it will come up.
  I want to say one more time tonight, for a few minutes, that these 22 
Senators, those who agreed to support my budget--those who really want 
to get a balanced budget--do not do this because they love changing 
American commitments, or deciding to reform programs where people might 
get a little bit less than they expected. This is not some glorious 
kind of achievement. We do this because to continue with the kind of 
budget we have in place flies in the face and against the reality of 
America having any kind of real, sustained economic growth and our 
children having a better life than us.
  That is the issue. Can an America that already owes almost $6 
trillion, and over $215 billion in interest payments, continue to have 
a buoyant economy, with business having money to invest because they 
can borrow it at reasonable interest rates? Do we have that or not? 
Unless and until we get this to a zero and then begin, at some 
reasonable point, to get that debt under control, all of the money 
saved by the American people that is supposed to go into growth, 
prosperity, a better future for the next generation, the American 
dream, and all of the wonderful things we speak of, it all gets gobbled 
up by the debt instead of being invested in a plan that increases 
productivity and brings better jobs to Louisiana, or Albuquerque, or 
New Mexico, or Nebraska.
  Yet, we want our economy to give us better jobs, more stable jobs, 
and we continue to rob the job creation part of this economy. The 
Government does not create jobs, except for the Federal employees. So 
when we speak of job creation, we are really talking about having a 
situation in the marketplace in the private sector, because of well-
trained employees, because of money they can invest, and low interest 
rates, so that they can grow, prosper, and hire more people, and pay 
better salaries. That is job creation; it is not the Government. We 
stand in the way of it every time we fail to come up with a balanced 
budget that is for real in good economic times, for we take the money 
from the hands of the working people and put it in the coffers of banks 
and insurance companies and other lenders that have given us their 
money, and we give them back a note from the U.S. Government because we 
do not have the courage to pay our own bills. We say, let another 
generation pay them. Let us charge it. That is why we are here and why 
we are encouraged tonight, because of the group of 22, under the 
leadership of Senators Chafee and Breaux, have come so very far in 
moving in the right direction.

[[Page S5368]]

  I want to say to the U.S. Senate, to the President of the United 
States, and to many of those who are going to see fit to attack the 
budget that I put before the Senate, which is pending. I just look up 
here on this chart and say, as far as Medicare, the most challenged of 
the programs--and I have already suggested to you all that if you 
wondered how big the gap between the President and the Republicans was 
in June of last year, it was $7, and I showed you that on the other 
chart. But I would think if you look in the last column of the $167, 
and the first column at $154--and I understand one is a 6-year and one 
is 7. If you look at the assumptions made and where they are going, and 
where we are going, as I said a while ago, we could resolve our 
differences in a wink.
  If you look at welfare and EITC, while there is a big difference, 
most of that difference has to do with the earned-income tax credit--
almost all of it. That is an issue we can talk a while over and see if 
we can resolve.

  The important thing is that the welfare reform in this proposal is 
very, very close to what will be recommended and, hopefully, will be 
bipartisan when it comes out of this Senate and ultimately out of the 
House and goes down to the President for signature. I hate to be 
partisan, but it might seem like I am going with the Wisconsin plan. 
But as you read it, it seems like it was not. We will produce something 
like the Wisconsin plan, and it will be close to those goals without 
the EITC.
  Then if you want to look at Medicaid, clearly, there are policy 
differences with reference to how much is guaranteed and how much is 
totally blocked into the States. I have heard my friend, Senator 
Chafee, allude and speak to that, such that I think we could write a 
Medicaid bill pretty easily that would have bipartisan support. So I 
did this in no way to take advantage of your budget and try to enhance 
the one I have produced--in no way.
  What I have done is to make sure that everybody understands that my 
statement of about 12 minutes ago, when I said this is a truly 
important day because it probably sends the signal that we are going to 
get this deficit fixed, and if we do not get it fixed right now, for 
this year, because of the things I have spoken of, and a few others, it 
will never go unnoticed that you all probably had more to do with 
getting us there than we have, and probably more than the President has 
had, for you will have moved us in the right direction with an awful 
lot of real courage.
  Now, having said that, I want to make my own observation about why 
this is an important debate for our future. I have made it with 
reference to interest rates and the legacy that we leave our children. 
Is it going to be a legacy of debt or a legacy of opportunity?
  But I also submit that America's economy has to grow more than it has 
been growing. I do not think we can accept any longer from economists 
the notion that it cannot grow any more--2.3, 2.4 percent is it. For 
those who say it could be 6 or 8, we are not talking about that. That 
is clearly wishful thinking and dreaming. But it has to grow at more 
than it has been growing if we are going to get rid of stagnation, if 
we are going to get rid of the fear and anxiety about whether the jobs 
are going to be good sooner rather than later as they are now.

  I add one observation. If you get the budget under control where more 
of the savings of the American people can go into building businesses 
of our country so that jobs can be improved which are higher paying and 
more competitive, and if you add to that reforming the Tax Code which 
is antigrowth in every respect--and in a sense, those who save in 
America today are kind of dumb because we have a Tax Code that says, 
``do not save'' to those who invest instead of saying, ``If you make 
some money, you can keep it and invest in the growth of the economy.'' 
We say, ``You cannot do that because we will tax you as if it is 
ordinary income.''
  I believe the time is right to solve them both: fix the deficit and 
fix the Tax Code--whether it is flat or just more flat than it is, 
whether it is totally simple or more simple than it is. The most 
important thing is that it be a part of a twin set of halfbacks that 
hit the line traveling at 9.4 seconds per 100-yard dash and move the 
American economy forward. And it will come from those two sources.
  So it is not just talk here tonight. It is the most profound 
discussion of where we are going. And when you say no one is ultimately 
going to be precluded from some sacrifice, I believe that when it is 
finally accomplished, this bipartisan budget will show there is 
evidence that many, many people want to sacrifice, and many Senators 
want to be on the side of courage in behalf of our future.
  I will wish that my comments be totally in error and that tomorrow 
morning, or 2 days from now, we get a call from the President, and he 
would say, ``Let us have some Democrats and Republicans come down here; 
I will accept this'' in which event, I say to Senator Chafee, not only 
would I be speaking what I speak tonight but I believe it would be a 
breakthrough.

  I yield the floor.
  Mr. EXON. Mr. President, I ask for about 15 minutes.
  Mr. DOMENICI. I yield the Senator 20 minutes, in opposition.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I thank my friend and colleague from New 
Mexico.
  Mr. President, to rephrase the statement that the chairman of the 
committee just indicated, he yielded me 15 minutes in opposition. Well, 
it puts it in a negative term that I did not want to put it in. But I 
am going to outline some of the concerns that I have here.
  But I agree that this has been a very informative discussion tonight 
and it will be informative tomorrow. I want to join in the general 
tenor of what I have heard here on the floor tonight. I would like to 
have one of those charts, if you could leave them here for me.
  I was going to say, Mr. President, that most of the Members of the 
coalition group--at least on the Democratic side--have been Senators 
that I have been intimately involved with on fiscal matters ever since 
I have been in the U.S. Senate. I agree with Chairman Domenici that 
possibly out of these discussions tonight and the general tenor of the 
responses on each side lead me to also agree that we can have a 
breakthrough.
  I would simply say that I happen to feel that the President of the 
United States has been trying very, very hard to have a breakthrough. 
Maybe we are sowing the seeds of that accomplishment tonight. I will be 
consulting with the minority leader tomorrow on this. And in the next 
few days, if we can just separate our differences for what they are--
firm differences of opinion--and maybe come to the realization that, 
indeed, we are closer perhaps than we think, just let me note for the 
Record that, I think, further substantiates this. And in conversations 
that I have had with members of the 22-member coalition, just let me 
note that for the record the Chafee-Breaux budget is closer to the 
President's budget than to the Republican budget in all key areas.
  I ask unanimous consent that a table demonstrating this be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               COMPARISON OF BUDGET PLANS: 6-YEAR SAVINGS               
                        [In billions of dollars]                        
------------------------------------------------------------------------
                                                     Chafee-            
                                       President's   Breaux   Republican
                                          budget     budget     budget  
------------------------------------------------------------------------
Spending cuts:                                                          
  Discretionary......................        -230       -179       -296 
  Mandatory:                                                            
    Medicare.........................        -117       -106       -167 
    Medicaid.........................         -54        -41        -72 
    Other health.....................           9          0         10 
    Welfare/EITC.....................         -43        -45        -70 
    CPI outlays \1\..................           0        -56          0 
    Spectrum auctions................         -37   ........        -19 
    Other mandatory..................         -24        -37        -19 
                                      ----------------------------------
      Subtotal.......................        -265       -284       -337 
                                      ==================================
Revenues:                                                               
    Tax relief and other.............          99        107        180 
    Corporate reforms \2\............         -40        -20        -21 
    CPI revenues \1\.................           0        -35          0 
    Other proposals..................          -5          0  ..........
    Expiring provisions \2\..........         -43         -0        -36 
                                      ----------------------------------
      Subtotal.......................          11         51        122 
                                      ==================================
Policy savings.......................        -485       -412       -511 
Debt service.........................         -41        -40        -56 
                                      ----------------------------------
      Total savings..................        -525       -452       -567 
2002 Deficit/Surplus.................           0        -49          0 
------------------------------------------------------------------------
\1\ Assumes a 0.5% reduction in CPI.                                    
\2\ The Republican plan reconciles a net tax change of $122 billion over
  6 years, but includes reserve fund language that allows for additional
  tax cuts on a revenue neutral basis. The revenue figures for the      
  Republican plan show gross tax cuts assuming that the Republicans     
  adopt the corporate reforms contained in the Balanced Budget Act and  
  certain tax provisions that have expired since last year.             



[[Page S5369]]


  Mr. EXON. Mr. President, it seems to me, if I heard the leader of the 
committee correctly, that he has essentially all but endorsed the 
bipartisan commission with the one exception of Social Security. And if 
we are that close maybe--just maybe--we can solve the problem. But I 
would remind all that when we get that close there is going to have to 
be some give and take on both sides in a compromise.
  So, Mr. President, I want to salute my friends, Senator Chafee from 
Rhode Island, Senator Breaux from Louisiana, and all of their 
associates for their stamina in their efforts to find a middle ground 
in this very, very important debate. Yet, I must say that, while I 
think this has been extremely helpful, I suggest that they keep on 
searching. But since I am convinced that they are searching in the 
crunch of numbers much closer to the President's budget than the 
Republican budget, there is no question in my mind that they can be 
helpful in reaching a workable compromise that I have not heard anybody 
object to tonight. I think everybody is saying we are closer than some 
people think. But I suggest that they keep working, and I will outline 
some of the--only three--key points that I have some concern about, and 
I suggest that the President might have some concerns about. That does 
not mean that we do not want to talk. That does not mean that we are 
saying the Republican budget is impossible to work with. That does not 
mean to say that we do not think that the coalition budget is a sincere 
effort because obviously it is.
  So there is much merit to the Breaux-Chafee budget et al. There are 
many savings that I would simply emphasize once again are very close to 
those contained in proposals that I have made and, indeed, close to the 
numbers in the President's budget. But there are three areas--three 
glaring problems--that I see that I want to comment on that force me to 
say we have to do better. That does not mean that we are not willing to 
compromise. That does not mean we are not willing to talk.
  The chairman of the committee said that he hoped maybe that as a 
result of these discussions the President would call us down to the 
White House in the morning. Well, the President has had an invitation 
out for us to come down to the White House every day on the hour, it 
seems to me, in the past several weeks, and he has been frustrated, I 
am sure, with the fact that the Republicans will not come down. In 
fact, the chairman of the Budget Committee on the Republican majority 
on the House as much as said that there is no reason to go down there 
because we are so far apart. But I see that there are problems in three 
areas which I want to discuss for just a little bit to show that, while 
we are close, everything is not hunky-dory.
  We can stand out on the floor of the Senate and pat each other on the 
back, but I, for one, am saying there are still some problems. They are 
not insurmountable, but there are problems.
  The first problem that I have is the change in the Consumer Price 
Index; second, the cuts and the change in the direction of the Medicare 
Program; and third, the tax cuts.
  Nonetheless, this proposal is far superior, in my view, than the one 
offered out of the Budget Committee. The proposed adjustment in CPI, I 
simply say, is no small matter, and it should be fully understood. It 
amounts to $126 billion. The numbers speak for themselves.
  Mr. President, it would be very difficult, if not impossible, to 
scrap the CPI adjustments and not bring down the entire Breaux-Chafee 
budget. I believe that was discussed in some detail in the negotiations 
that were held between the chairman of the committee and the Breaux-
Chafee group. Therefore, the CPI and the amount of the CPI is 
absolutely essential to make the Breaux-Chafee budget work unless--
unless--the Breaux-Chafee group is willing to forgo most of their big 
tax cut.
  I oppose the change in CPI for the reason that it asks the most from 
those who have the least. A change in the CPI will not affect the 
lifestyles of Senators or the wealthiest Americans, but it could 
deliver a devastating blow to seniors and the disabled who depend 
solely on Social Security and supplemental security income, commonly 
known as SSI, or those low-income families who get little relief from 
the earned income tax credit. More than 40 percent of the dollars the 
proposal raises comes from a reduction in projected Social 
Security benefits. That is plain and that is simple.

  Mr. President, when one says ``adjust the Consumer Price Index,'' it 
almost sounds reasonable. Everyone is in favor of an accurate CPI. But 
let us call this proposal for what it really is--a proposal to cut 
cost-of-living adjustments by half a percent no matter what the 
accurate CPI would be. What that means is that benefits will be cut 
below projected levels for Social Security, for earned income tax 
credit and supplemental Social Security income, for veterans' 
compensation and pensions for the elderly.
  Is that where we as a government should be looking first for deficit 
reduction? I suggest not. Over the next 10 years, a half-percent COLA 
change means $110 billion in less Social Security benefits, $16 billion 
less in EITC, earned-income tax credits, $11 billion less in SSI 
benefits, and $5 billion less in veterans' compensation and veterans' 
pensions.
  Let me take a moment to talk about the chart that has been moved over 
here behind me now. It is a very interesting chart, and it tends to 
show the minimal differences. While they appear minimal, I suggest, to 
people with the income of those of us in the Senate, it purports to 
show how little one-half a percent Consumer Price Index change would 
actually cost the beneficiaries, if you do the arithmetic, Mr. 
President, and you add up all the cuts that are suggested on that 
chart, they come up to $1,200 per beneficiary, which is real money, 
which is real money for people on Social Security.
  I am not saying that we are not willing to talk about this, but to 
minimize how small this is should be put in the context of the lowest 
income Americans as far as the fairness test is concerned. And, oh, by 
the way, there is something that has not been mentioned that we should 
look into. It seems to me, if we were to proceed along this basis, it 
also means about a $106 billion tax increase over the same period 
because it would bring back bracket creep that we thought we had 
eliminated.
  Mr. President, I have a table which shows the current estimates of 
the Congressional Budget Office as to where these savings would come. I 
ask unanimous consent that this table be printed in the Record.
  There being no objection, the chart was ordered to be printed in the 
Record, as follows:

           CHANGE IN DEFICIT DUE TO 0.5-PERCENT ADJUSTMENT OF CPI-INDEXING, CBO ESTIMATES MAY 7, 1996           
----------------------------------------------------------------------------------------------------------------
                                                  1997-2002                              1997-2006              
                                   -----------------------------------------------------------------------------
                                                                Percent                                Percent  
                                      Billions   Percent All     Policy      Billions   Percent All     Policy  
                                                   Savings    Savings \2\                 Savings    Savings \2\
----------------------------------------------------------------------------------------------------------------
Revenues \1\......................       -$35.4         35.1         38.8      -$105.8         33.6         39.3
Change in Outlays.................        -55.7         55.3         61.0       -163.0         51.7         60.6
  Social Security & RR Ret........        -38.4         38.1         42.1       -110.5         35.1         41.1
  SSI.............................         -3.4          3.4          3.7        -11.1          3.5          4.1
  Civil Service Ret...............         -4.4          4.4          4.8        -12.6          4.0          4.7
  Military Ret....................         -3.2          3.2          3.5         -9.3          3.0          3.5
  Veterans Comp. and Pensions.....         -1.9          1.9          2.1         -5.4          1.7          2.0
  EITC............................         -4.8          4.8          5.3        -15.8          5.0          5.9
  Other...........................          0.4         -0.4         -0.4          1.3         -0.4         -0.5
Debt Service......................         -9.5          9.4           NA        -46.1         14.6           NA
Change in Deficit.................       -100.8        100.0           NA       -315.1        100.0           NA
----------------------------------------------------------------------------------------------------------------
\1\ Revenue increases are shown with a minus sign because they reduce the deficit.                              
\2\ Policy savings exclude debt service savings.                                                                


[[Page S5370]]



                               CHANGE IN DEFICIT DUE TO 0.5-PERCENT ADJUSTMENT OF CPI-INDEXING, CBO ESTIMATES MAY 7, 1996                               
                                                                [In billions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     1997        1998        1999        2000        2001        2002        2003        2004        2005        2006   
--------------------------------------------------------------------------------------------------------------------------------------------------------
Revenues \1\....................        -2.5        -2.4        -4.7        -6.5        -7.9       -11.4       -13.6       -16.9       -19.1       -20.8
Change in Outlays...............        -1.8        -4.7        -7.4       -10.7       -13.8       -17.3       -20.9       -24.6       -28.9       -32.9
  Social Security & RR Ret......        -1.4        -3.2        -5.2        -7.3        -9.5       -11.8       -14.2       -16.6       -19.3       -22.0
  SSI...........................        -0.1        -0.3        -0.4        -0.7        -0.8        -1.1        -1.4        -1.7        -2.2        -2.4
  Civil Service Ret.............        -0.2        -0.4        -0.6        -0.8        -1.1        -1.3        -1.6        -1.9        -2.2        -2.5
  Military Ret..................        -0.1        -0.3        -0.4        -0.6        -0.8        -1.0        -1.2        -1.4        -1.6        -1.9
  Veterans Comp. and Pension....        -0.1        -0.2        -0.3        -0.3        -0.4        -0.6        -0.7        -0.8        -1.0        -1.0
  EITC..........................        -0.0        -0.4        -0.5        -1.0        -1.3        -1.6        -2.1        -2.5        -3.0        -3.4
  Other.........................         0.0         0.0         0.1         0.1         0.1         0.1         0.1         0.2         0.3         0.3
Debt Service....................        -0.1        -0.4        -0.9        -1.6        -2.6        -3.9        -5.6        -7.7       -10.2       -13.1
Change in Deficit...............        -4.4        -7.5       -13.1       -18.8       -24.4       -32.6       -40.1       -49.2       -58.2       -66.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Revenue increases are shown with a minus sign because they reduce the deficit.                                                                      

  Mr. EXON. Mr. President, more than a third of the savings from a CPI 
adjustment suggested here would come from families with annual incomes 
under $30,000 per year. Ratchet it up just a little bit and 56 percent 
of the burden falls on families with incomes under $50,000 per year.
  This proposed change in the CPI will hit most middle and lower income 
American families. I suggest, for this reason, this is not shared 
sacrifice, at least in this Senator's book.
  As I previously mentioned, the proposed change in the CPI exacts too 
much from another group of our citizens, the retirees. Under the 
Breaux-Chafee budget, two-thirds of the savings come from retirees 
regardless of income. Let us not forget that Social Security 
contributes 90 percent or more of the income for about a third of our 
beneficiaries. It is also the major source of income for two-thirds of 
all of our beneficiaries. When we come up with these easy charts that 
show how simple and really ``no hurt'' this proposition is, I think we 
need to look at where it is coming from and who is taking the hit.
  In addition, the very oldest American would be hit the hardest. COLA 
reductions accumulate, so that the biggest reductions are experienced 
by the retirees at the very end of their lives. It is simply not right 
to take the bread off the table of an elderly citizen--in many cases, a 
widow who is really now counting every penny. Yes, that is hard for 
many of us to believe, but that is going on today with many of our 
citizens who are certainly not well off.
  Mr. BREAUX. Will the Senator yield for a question?
  Mr. EXON. I will yield at the end of my remarks, and I will be happy 
to do it at that time.
  It is not right and it is something that I cannot do. That does not 
mean there cannot be changes in COLA's. During the Senate Budget 
Committee markup of the budget resolution, I supported Senator Brown's 
amendment to cap COLA's for upper income Federal and military retirees 
within the context of means testing. Some adjustments to cost of living 
may very well be warranted, but I cannot support a broad CPI adjustment 
that does nothing to protect the very neediest.
  I also point my colleagues to the fact that those areas where a firm 
scientific consensus exists about CPI bias have already been 
incorporated into the budget baselines both of the Office of Management 
and Budget and the Congressional Budget Office. So the changes that 
have been suggested by the bureau are already in place. It is being 
suggested here that we add 0.5, a half of 1 percent, on top of that. 
That is where I think we should take a look, take a listen and have 
more talk. Beyond these areas, there is wide disagreement on many 
subjects. I, for one, do not believe that we should hazard the 
livelihoods of the elderly or the working families on such speculation 
to reach a balance. Let us let the professionals at the Bureau of Labor 
Statistics improve the CPI based on sound logic and not political 
necessity. Indeed, research done at the Bureau of Labor Statistics, 
which produces the CPI, suggests that the elderly's cost of living may 
increase faster than the CPI because they, the elderly, spend far more 
for out-of-pocket medical expenses than do consumers generally.

  Back to the situation in another way that I mentioned earlier, when 
you spend every dollar you receive, these kinds of changes must be 
looked at very carefully to make sure they are fair.
  Mr. President, I ask unanimous consent that a copy of the research 
paper to which I referred just a moment ago be printed in the Record at 
the conclusion of my remarks.
  That is entitled ``Experimental price index for elderly consumers.''
  The PRESIDING OFFICER (Mr. Gorton). Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. EXON. Another thing, it seems to me we should realize and 
recognize it is one thing to ask Social Security beneficiaries to 
contribute more as a part of a general reform of the Social Security 
system, but it is another thing, another thing altogether, to get 
savings out of Social Security to help make room for maybe a tax cut.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. EXON. I yield myself additional time off the resolution that is 
held in my name.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. EXON. I would be willing to consider changes to the COLA's, if 
they would be used as part of a Social Security overall reform package 
which we all know we are going to have to face. But I suggest we should 
not foreclose that next option and use it in the context that it is 
being advanced in this area at this time.
  Mr. President, I believe, and I hope others will believe, we will 
need a whole lot of savings to address the needs of the baby boom 
generation in the next century, especially with regard to Social 
Security and Medicare. I believe we would be better served if we 
reserved any savings from Social Security for legislation that will 
address that problem so that we can ensure that the burden is going to 
be shared fairly and equitably.
  In short, I am for honest changes in the cost-of-living adjustment. I 
am not for cuts in COLA's that are not a part of a major overhaul of 
the Social Security fund, which everyone agrees is not the case in the 
present legislation.
  Mr. President, I have concerns about the Breaux-Chafee centrist 
budget. And I also think there are some excellent things in there. I 
think it is unnecessary, though, to go after Medicare beneficiaries for 
the amount of savings that they have outlined. Once again, I will say 
in the spirit I started with, it seems to me the Breaux-Chafee group 
and the Democrats and the President are not far apart on those numbers. 
I think they can be worked out. Although it does shield those in the 
very lowest income brackets, vast numbers of Americans making less than 
$50,000 would see their share of the premium costs rise, as proposed, 
rise from 25 to 31 percent. The President's budget, I might say, 
maintains a 25-percent level and still ensures the solvency of the 
trust fund through the year 2005. Let us not forget, too, that Medicare 
beneficiaries already pay 21 percent of their income for health care 
expenses. We should not add to their burden now.

  In addition, by raising the eligibility age from 65 to 67 years of 
age--I am willing to look at that, but I want to look at both the 
upside and the downside. This amendment also denies Medicare benefits 
to a significant number of elderly Americans who have planned on that 
coverage in their retirement. Remember, most of the 65 and 66-year-olds 
are by no means affluent.
  As well, Mr. President, the tax cuts in the amendment are larger than 
those in the President's budget. Again I say--and it has been said by 
several Senators here on the floor--I wish we could put off all tax 
cuts of any kind until we are better assured that we will balance the 
budget by the year 2002.

[[Page S5371]]

 That is the way I would like to have it. But I think it is clear that 
there is such a drive for this, and there has been so much publicity 
about it that, notwithstanding the concerns of this Senator, it is 
obvious, realistically, that some tax cut will be included because the 
President is for it as well.
  In conclusion, I believe the amendment drafters need to keep working. 
They do not have to start all over again but I think they have to keep 
working with us. I simply say without the Breaux-Chafee group, or the 
Chafee-Breaux group, we probably would not have much of a chance to 
come up with a workable package. While I have some concerns about their 
proposal that I have outlined in an honest fashion tonight, I want to 
join with them in an effort to challenge and change and bring us 
around, and we can bring them around, maybe we can bring the 
Republicans around, to begin negotiations once again with the President 
at the White House. As we compare budgets, all of the budgets that are 
on the table, I still believe--even with its warts, and I think there 
are some warts in the President's budget, and I introduced and asked us 
to use that as the mark--I think the President's budget is the best 
standing alone of any that I have seen.
  Having said that, I realize and recognize and want to emphasize once 
again that the President wants to work together. He has met at the 
White House with the Chafee-Breaux group and he has told me that he was 
very much interested in their presence, their attitude, and what he 
interpreted as a very sincere effort to get something done. That is the 
bottom line.
  I say, let us keep working. But I, like the other Members of the 
Senate who have spoken on this tonight, feel this has been a very 
interesting, very challenging debate, and I am more optimistic than I 
was, when we started the debate on the budget resolution, of reaching 
some kind of compromise after the talks tonight than I was when we 
began this important exercise.
  I yield 5 minutes of my time to the Senator from Illinois.

               [From the Monthly Labor Review, May 1994]

                               Exhibit 1

             Experimental Price Index for Elderly Consumers

                   (By Nathan Amble and Ken Stewart)

       (An experimental consumer price index for older Americans 
     rose somewhat faster than each of two published BLS Consumer 
     Price Indexes; as might be expected, expenditures for medical 
     care accounted almost entirely for this difference)
       The Consumer Price Index (CPI) of the Bureau of Labor 
     Statistics measures the average change in prices over time 
     for a fixed market basket of goods and services for two 
     population groups. The CPI for All Urban Consumers (CPI-U) 
     represents the spending habits of about 80 percent of the 
     population of the United States. The CPI for Urban Wage 
     Earners and Clerical Workers (CPI-W) is a subset of the CPI-U 
     and represents about 32 percent of the total U.S. population.
       The 1987 amendments to the Older Americans Act of 1965 
     directed the BLS to develop an experimental index for a third 
     population of consumers: those 62 years of age and older. In 
     its 1988 report to Congress, the BLS observed that from 
     December 1982 to December 1987, the experimental consumer 
     price index for older Americans rose slightly faster than the 
     CPI-U and CPI-W.\1\ (See table 1.)
---------------------------------------------------------------------------
     \1\ Charles C. Mason, ``An Analysis of the Rates of Inflation 
     Affecting Older Americans Based on an Experimental Reweighted 
     Consumer Price Index,'' report presented to Congress, June 
     1988. During the period from December 1982 through December 
     1987, the CPI-U rose 18.2 percent, the CPI-W increased 16.5 
     percent, and the experimental index for older Americans grew 
     19.5 percent. Over the 11-year period from December 1982 
     through December 1993, the CPI-U rose 49.4 percent, the CPI-W 
     increased 46.2 percent, and the experimental CPI for older 
     Americans grew 53.8 percent.

    TABLE 1--EXPERIMENTAL CONSUMER PRICE INDEX FOR OLDER AMERICANS, DECEMBER 1982 THROUGH DECEMBER 1993, FOR ALL ITEMS AND FOR MAJOR CPI EXPENDITURE    
                                                                       COMPONENTS                                                                       
                                                                   [December 1982=100]                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Other goods
               Month and year                 All items     Food and     Housing    Apparel and  Transportation    Medical    Entertainment      and    
                                                           beverages                   upkeep                        care                      services 
--------------------------------------------------------------------------------------------------------------------------------------------------------
1982: December.............................        100.0        100.0        100.0        100.0          100.0         100.0         100.0         100.0
1983:                                                                                                                                                   
  January..................................        100.4        100.5        100.5         99.0           99.5         101.0         100.6         101.2
  February.................................        100.5        100.9        100.6         98.5           98.5         102.1         101.3         101.9
  March....................................        100.6        101.5        100.6        100.3           97.7         102.4         101.8         101.9
  April....................................        101.2        102.0        101.1        100.9           99.4         102.7         101.9         102.5
  May......................................        101.7        102.2        101.6        101.2          100.6         102.9         102.0         102.7
  June.....................................        102.0        102.2        102.0        101.1          101.3         103.2         102.3         103.0
  July.....................................        102.4        102.3        102.4        100.7          101.9         103.8         102.7         104.0
  August...................................        102.7        102.3        102.6        102.2          102.4         104.5         102.8         104.7
  September................................        103.2        102.4        103.1        104.0          102.7         104.8         103.4         105.9
  October..................................        103.4        102.5        103.2        104.0          103.1         105.3         104.2         106.3
  November.................................        103.5        102.2        103.3        103.9          103.4         105.8         104.5         106.9
  December.................................        103.7        102.7        103.4        103.2          103.4         106.2         104.6         107.2
1984:                                                                                                                                                   
  January..................................        104.4        104.9        104.0        101.5          103.4         107.2         104.8         107.8
  February.................................        105.1        106.0        104.7        101.4          103.4         108.3         105.4         108.2
  March....................................        105.3        106.0        104.8        103.3          103.7         108.7         105.4         108.4
  April....................................        105.7        106.0        105.3        103.5          104.4         109.0         106.4         108.7
  May......................................        106.0        105.6        105.7        103.3          105.2         109.3         106.3         108.9
  June.....................................        106.3        105.9        106.1        102.5          105.4         109.6         106.9         109.4
  July.....................................        107.7        106.3        106.8        101.7          105.4         110.3         107.2         110.2
  August...................................        107.2        106.9        107.2        103.7          105.5         110.8         107.7         110.5
  September................................        107.6        106.6        107.7        106.0          105.7         111.1         108.1         111.8
  October..................................        107.8        106.7        107.7        106.7          106.3         111.7         108.7         112.3
  November.................................        107.9        106.5        107.6        106.3          106.5         112.3         109.1         112.7
  December.................................        108.0        106.8        107.8        105.3          106.5         112.7         109.5         112.8
1985:                                                                                                                                                   
  January..................................        108.3        107.6        108.0        103.4          106.2         113.5         109.9         113.6
  February.................................        108.8        108.5        108.5        104.3          106.1         114.3         110.0         114.2
  March....................................        109.2        108.6        108.9        106.4          106.9         115.0         110.5         114.4
  April....................................        109.7        108.5        109.3        106.9          108.0         115.5         111.0         114.8
  May......................................        110.1        108.3        110.1        106.5          108.6         116.0         111.2         115.1
  June.....................................        110.5        108.4        110.7        106.0          108.8         116.6         111.8         115.4
  July.....................................        110.8        108.5        111.0        104.8          109.0         117.3         112.4         116.1
  August...................................        111.1        108.5        111.4        106.2          108.7         118.1         112.4         116.5
  September................................        111.4        108.5        111.7        108.7          108.5         118.6         112.9         117.9
  October..................................        111.7        108.6        111.9        109.5          108.9         119.2         113.7         118.5
  November.................................        112.1        108.9        112.2        109.6          109.7         120.0         113.9         118.6
  December.................................        112.4        109.7        112.5        108.4          110.0         120.5         113.7         119.0
1986:                                                                                                                                                   
  January..................................        112.9        110.7        112.8        106.0          110.1         121.6         114.6         119.9
  February.................................        112.7        110.7        112.6        105.7          108.6         122.9         115.2         120.4
  March....................................        112.3        110.8        112.6        107.0          105.5         123.9         115.4         120.8
  April....................................        112.3        111.1        113.0        107.5          103.4         124.6         115.6         121.1
  May......................................        112.6        111.4        113.1        106.8          104.3         125.1         115.8         121.3
  June.....................................        113.1        111.4        113.8        105.7          105.3         125.8         116.2         121.5
  July.....................................        113.3        112.5        113.9        105.2          104.2         126.7         116.5         122.3
  August...................................        113.6        113.4        114.1        107.3          103.1         127.5         116.7         122.7
  September................................        114.1        113.5        114.5        110.0          103.4         128.1         117.1         123.9
  October..................................        114.2        113.7        114.3        110.5          103.5         128.9         117.7         124.3
  November.................................        114.2        113.9        114.0        110.4          104.2         129.6         118.2         124.5
  December.................................        114.4        114.1        114.1        109.1          104.5         130.3         118.1         124.8
1987:                                                                                                                                                   
  January..................................        115.2        115.5        114.8        107.1          105.8         131.0         118.4         125.8
  February.................................        115.7        116.0        115.2        107.8          106.3         131.8         118.6         126.4
  March....................................        116.1        115.9        115.7        111.5          106.5         132.5         119.0         126.8

[[Page S5372]]

                                                                                                                                                        
  April....................................        116.7        116.2        116.1        113.5          107.3         133.0         119.6         127.1
  May......................................        117.1        116.9        116.6        113.0          107.7         133.4         119.9         127.5
  June.....................................        117.7        117.5        117.3        110.9          108.4         134.0         120.1         127.9
  July.....................................        117.9        117.2        117.7        108.4          109.0         134.8         120.8         128.7
  August...................................        118.8        117.2        118.5        111.1          109.6         135.3         120.7         129.3
  September................................        119.0        117.6        118.6        115.5          109.7         135.8         121.2         130.5
  October..................................        119.3        117.7        118.6        117.6          110.0         136.4         122.0         130.9
  November.................................        119.5        117.5        118.6        117.8          110.8         136.9         122.3         131.1
  December.................................        119.5        118.2        118.7        114.3          110.5         137.2         122.5         131.4
1988:                                                                                                                                                   
  January..................................        120.0        119.2        119.5        111.9          110.1         138.5         123.4         132.7
  February.................................        120.3        119.2        119.9        112.0          109.7         139.5         123.7         133.8
  March....................................        120.9        119.4        120.5        116.3          109.5         140.4         124.4         134.3
  April....................................        121.5        120.1        120.8        119.6          110.2         141.0         125.1         134.5
  May......................................        121.9        120.6        121.2        118.9          111.1         141.8         125.2         134.9
  June.....................................        122.5        121.1        122.0        116.8          111.5         142.3         125.6         135.3
  July.....................................        123.0        122.4        122.5        114.6          111.9         143.7         126.2         136.4
  August...................................        123.6        123.0        123.1        114.8          112.5         144.4         126.5         137.0
  September................................        124.2        123.9        123.3        120.1          112.6         145.2         127.0         138.6
  October..................................        124.6        124.0        123.3        123.3          112.8         146.2         127.5         139.1
  November.................................        124.8        123.8        123.4        122.4          113.5         146.9         127.8         139.6
  December.................................        124.9        124.2        123.7        120.0          113.7         147.5         128.4         140.1
1989:                                                                                                                                                   
  January..................................        125.7        125.8        124.3        117.0          114.0         149.1         129.8         142.2
  February.................................        126.3        126.6        124.7        117.2          114.5         150.6         130.2         143.0
  March....................................        127.1        127.3        125.4        122.0          114.8         151.7         130.6         143.5
  April....................................        127.9        128.1        125.6        124.2          117.6         152.5         131.5         143.9
  May......................................        128.6        128.9        126.1        123.2          119.0         153.3         131.6         144.9
  June.....................................        129.0        129.0        126.9        120.2          118.9         154.4         132.3         145.9
  July.....................................        129.6        129.6        128.0        117.4          118.4         155.8         133.2         146.8
  August...................................        129.8        129.8        128.4        116.9          117.4         156.9         133.4         148.1
  September................................        130.0        130.1        128.5        117.1          117.7         157.5         133.7         148.5
  October..................................        130.8        130.8        128.9        120.5          118.5         158.7         134.3         149.0
  November.................................        131.1        131.1        129.2        120.1          119.1         160.1         134.7         149.2
  December.................................        131.4        131.6        129.6        116.6          119.3         160.8         135.1         150.4
1990:                                                                                                                                                   
  January..................................        133.0        135.2        130.9        114.0          121.4         162.6         136.0         151.7
  February.................................        133.6        136.2        131.0        118.0          121.4         164.4         136.4         152.4
  March....................................        134.4        136.2        131.8        123.0          121.3         166.1         137.0         153.2
  April....................................        134.6        135.7        131.7        124.3          121.8         167.3         137.5         154.0
  May......................................        134.9        135.8        132.0        123.4          122.3         168.7         137.8         154.7
  June.....................................        135.8        136.5        133.2        121.0          122.8         170.0         138.3         156.0
  July.....................................        136.6        137.4        134.3        118.5          123.0         172.0         139.2         157.4
  August...................................        137.9        137.5        135.6        120.0          125.3         173.7         139.4         158.1
  September................................        138.8        137.7        135.8        123.9          128.0         174.7         140.5         159.3
  October..................................        139.6        138.1        136.1        126.0          130.8         176.3         140.7         159.8
  November.................................        140.0        138.5        136.0        124.8          132.1         177.8         141.0         160.3
  December.................................        140.1        138.7        136.1        122.4          132.6         178.9         141.3         161.3
1991:                                                                                                                                                   
  January..................................        141.2        141.1        137.6        121.5          130.9         180.9         142.5         163.2
  February.................................        141.6        141.1        138.2        124.5          129.1         182.9         143.1         164.4
  March....................................        141.9        141.5        138.5        127.1          127.6         184.4         143.9         165.1
  April....................................        142.0        142.5        138.1        128.1          127.4         185.2         145.0         166.0
  May......................................        142.4        142.6        138.3        127.7          128.5         186.1         145.3         166.5
  June.....................................        142.9        143.2        139.0        125.0          128.8         187.2         145.3         167.5
  July.....................................        143.2        142.2        139.9        123.5          128.6         188.7         145.9         168.0
  August...................................        143.6        141.5        140.3        125.6          129.0         190.1         146.7         169.2
  September................................        144.0        141.5        140.3        129.1          129.0         191.1         147.5         170.7
  October..................................        144.1        141.0        140.3        129.8          129.2         192.1         147.9         171.3
  November.................................        144.5        141.5        140.4        129.6          130.5         193.2         147.9         171.9
  December.................................        144.8        142.0        140.8        126.5          130.8         194.1         147.5         172.7
1992:                                                                                                                                                   
  January..................................        145.4        142.6        141.7        125.2          130.3         195.9         147.8         173.7
  February.................................        146.0        143.0        142.2        127.8          129.9         197.9         148.5         174.6
  March....................................        146.7        143.7        142.7        130.5          130.5         199.2         149.0         175.2
  April....................................        146.8        143.7        142.5        130.7          131.2         199.9         150.1         175.7
  May......................................        147.0        142.9        142.6        130.7          132.1         200.6         150.0         176.8
  June.....................................        147.3        142.1        143.5        130.2          131.8         201.3         150.3         177.2
  July.....................................        147.8        142.0        144.3        128.3          132.2         202.6         150.7         177.8
  August...................................        148.2        142.9        144.7        128.9          131.9         203.4         150.9         179.0
  September................................        148.4        143.3        144.3        131.9          131.8         204.1         151.6         180.4
  October..................................        149.0        143.2        144.5        135.0          133.3         205.3         151.9         181.1
  November.................................        149.2        143.0        144.4        134.6          134.7         206.3         152.0         181.2
  December.................................        149.2        143.4        144.5        131.2          134.6         206.9         152.2         182.3
1993:                                                                                                                                                   
  January..................................        150.1        144.7        145.4        129.7          134.9         208.8         152.8         184.5
  February.................................        150.7        144.8        145.9        133.3          135.1         210.5         153.0         185.1
  March....................................        151.2        145.1        146.5        135.9          134.8         211.2         153.3         186.0
  April....................................        151.7        145.6        146.7        137.1          135.2         212.0         154.0         186.5
  May......................................        152.0        146.2        146.8        135.4          136.0         213.3         153.7         187.7
  June.....................................        152.2        145.2        147.8        131.5          135.9         214.0         154.5         187.6
  July.....................................        152.4        145.2        148.2        129.3          136.0         215.0         154.1         188.0
  August...................................        152.8        145.8        148.6        132.7          136.0         216.0         154.7         186.9
  September................................        152.9        146.0        148.5        135.4          135.8         216.6         155.5         185.0
  October..................................        153.4        146.7        148.4        136.1          137.5         217.7         156.2         185.3
  November.................................        153.6        146.9        148.2        136.1          138.5         218.3         156.8         185.7
  December.................................        153.8        147.7        148.6        133.2          138.1         218.7         157.0         186.3
--------------------------------------------------------------------------------------------------------------------------------------------------------



       This article updates the analysis of the behavior of the 
     experimental index for older Americans for the period from 
     December 1987 through December 1993. Over this 6-year period, 
     the experimental price index rose 28.7 percent, slightly more 
     than the increases of 26.3 percent for the CPI-U and 25.5 
     percent of the CPI-W.


                   methodology, data, and limitations

       Although the study discussed in this article indicates a 
     higher overall inflation rate for older Americans compared 
     with the rates for the official CPI population groups, any 
     conclusions drawn should be used with caution because of the 
     various limitations inherent in the methodology.
       Expenditure weights. For each CPI population group, item 
     strata are weighted according to their importance in the 
     spending patterns of the population. The population older 
     Americans used for the experimental price index was defined 
     to be all urban noninstitutionalized consumers units that 
     were either
       1. unattached individuals who were at least 62 years of 
     age; or
       2. members of families whose reference person (as defined 
     in the Consumer Expenditure Survey) or spouse was at least 62 
     years of age; or
       3. members of groups of unrelated individuals living 
     together who pool their resources to meet their living 
     expenses and whose reference person was at least 62 years of 
     age.
       In the 1982-84 Consumer Expenditure Survey, which is used 
     as the source of expenditure weights in the current CPI. 19 
     percent of

[[Page S5373]]

     the total sample of eligible urban consumer units (3.135 out 
     of 16.500) met this definition. Because the number of 
     consumer units used for determining weights in the 
     experimental index as relatively small, expenditure weights 
     used in the construction of the experimental price index have 
     a higher sampling error than those used for the large 
     populations.
       For each population group, the base expenditure weight of 
     any component represents the actual expenditure on that 
     component in the base period. The relative importance of any 
     component is its expenditure weight (updated for changes in 
     relative prices) and represents the proportion of that weight 
     to total expenditures for the population. The relative 
     importances of selected components for each of the three 
     population groups are shown in table 2 for December 1987, the 
     first month of this study.

   TABLE 2.--COMPARATIVE ANALYSIS OF RELATIVE IMPORTANCES OF SELECTED   
           COMPONENTS OF CONSUMER PRICE INDEXES, DECEMBER 1987          
------------------------------------------------------------------------
                                                            Experimental
                                                              index for 
              Component                 CPI-U       CPI-W       older   
                                                              Americans 
------------------------------------------------------------------------
    All items.......................     100.00     100.00       100.00 
                                     -----------------------------------
Food and beverages..................      17.61      19.45        15.49 
  Food at home......................       9.86      11.14         9.79 
  Food away from home...............       6.19       6.65         4.57 
  Alcoholic beverages...............       1.55       1.66         1.13 
Housing.............................      42.48      39.95        48.30 
  Owners' equivalent rent...........      19.26      16.84        25.47 
Apparel and upkeep..................       6.34       6.36         4.68 
Medical care........................       5.83       4.95         9.47 
Transportation......................      17.45      19.41        14.43 
  Motor fuels.......................       3.29       4.03         2.67 
Entertainment.......................       4.37       4.04         3.34 
Other goods and services............       5.93       5.84         4.31 
  College tuition...................       1.13        .84          .46 
  Tobacco and other smoking products       1.29       1.70         1.02 
------------------------------------------------------------------------

       Areas and outlets priced. The experimental consumer price 
     index for older consumers is a weighted average of price 
     changes for the same set of item strata collected from the 
     same sample of urban areas as are used in calculating the 
     CPI-U and CPI-W.
       Retail outlets are selected for pricing in the CPI based on 
     data reported in a separate survey representing all urban 
     households. The experimental index also uses the same retail 
     outlet sample. Thus, the outlets selected may not be 
     representative of the places where older persons purchase 
     their goods and services.\2\
---------------------------------------------------------------------------
     \2\ The sample size of the current point-of-purchase survey 
     is not adequate to determine whether older Americans 
     typically shop in different types of outlets from those 
     frequented by the general population.
---------------------------------------------------------------------------
       Items priced. As with retail outlets, a major limitation of 
     the experimental index is that the categories of items to be 
     priced are selected using expenditure weights calculated from 
     the expenditure surveys for the urban population. As a 
     result, the specific item classes selected for each stratum 
     may not be representative of those classes used by the older 
     population.
       Prices collected. A final source of uncertainty about the 
     appropriateness of using the CPI-U prices for the index of 
     the older population concerns the availability of discount 
     prices for older Americans. For example, senior-citizen 
     discount rates are used in the CPI-U in proportion to their 
     use by the urban population as a whole. To the extent that 
     senior-citizen discounts take the form of a percentage 
     discount from the regular price, this may not be a problem. 
     If, however, the discount is not a fixed percentage of the 
     price, the scarcity of senior-citizen discount prices in the 
     current CPI could lead to error in the experimental index.
       Because of the preceding limitations, any conclusions drawn 
     from the analyses presented in this article should be treated 
     as tentative.


                   relative behavior of price indexes

       Table 3 gives the annual price changes in the all-items 
     CPI-U, CPI-W, and experimental price index during the period 
     1988-93. Table 4 shows the behavior of these three indexes at 
     the major component levels during the same period.

   TABLE 3.--PERCENT CHANGE IN ALTERNATIVE CONSUMER PRICE INDEXES, ALL  
                ITEMS, 12 MONTHS ENDED DECEMBER, 1988-93                
------------------------------------------------------------------------
                                                            Experimental
                                                              index for 
                Year                    CPI-U      CPI-W        older   
                                                              Americans 
------------------------------------------------------------------------
1988................................        4.4        4.4          4.5 
1989................................        4.6        4.5          5.2 
1990................................        6.1        6.1          6.6 
1991................................        3.1        2.8          3.4 
1992................................        2.9        2.9          3.0 
1993................................        2.7        2.5          3.1 
Cumulative change, December 1987-                                       
 December 1993......................       26.3       25.5         28.7 
------------------------------------------------------------------------


TABLE 4.--PERCENT CHANGE IN ALTERNATIVE CONSUMER PRICE INDEXES, BY MAJOR
              COMPONENTS, 12 MONTHS ENDED DECEMBER, 1987-93             
------------------------------------------------------------------------
                                                            Experimental
                                                              index for 
              Component                 CPI-U      CPI-W        older   
                                                              Americans 
------------------------------------------------------------------------
    All items.......................       26.3       25.5         28.7 
                                     -----------------------------------
Food and beverages..................       24.8       24.8         25.0 
Housing.............................       23.1       22.4         25.1 
Apparel and upkeep..................       17.7       16.6         16.6 
Transportation......................       22.8       21.9         25.0 
Medical care........................       54.2       53.3         59.4 
Entertainment.......................       25.9       25.0         28.2 
Other goods and services............       47.0       46.2         41.8 
------------------------------------------------------------------------

       Over the 6-year period from December 1987 through December 
     1993, the reweighted experimental price index for older 
     Americans rose 28.7 percent. This compares with increases of 
     26.3 percent for the CPI-U and 25.5 percent for the CPI-W.
       Examining the indexes in more detail, we see that medical 
     care prices during the period rose slightly more than twice 
     as fast as the average for all items in each population 
     group. Because the elderly typically spend more on medical 
     care than does the population as a whole (see table 2), the 
     medical care component accounted for most of the difference 
     between the experimental index and either of CPI-U and CPI-W. 
     In the experimental index, this component increase 59.4 
     percent during the period 1988-93. By contrast, inflation for 
     the medical care component of the CPI-U was 54.2 percent and 
     that for the CPI-W was 53.3 percent.
       The price change for each major expenditure component 
     varied by population because the expenditure weights of the 
     items that comprised the major components varied among the 
     three population groups the indexes served. The expenditure 
     weight that an item had in a particular population reflected 
     the importance of that item as a proportion of the total 
     expenditures of that population. For example, the relatively 
     high expenditure weights of the medical care component of the 
     experimental index may largely be attributed to the 
     differences in the nature of the demand for medical care 
     services by the elderly, compared with the demand for such 
     services by all urban consumers or by urban wage earners and 
     clerical workers. Within the medical care component, the 
     elderly had larger out-of-pocket costs relative to both of 
     the other groups chiefly because those groups had employer-
     provided health care benefits more readily available to them. 
     An analysis of the relative importance of the various 
     subcomponents making up the medical care component for the 
     elderly and for all urban consumers indicates that older 
     Americans devote a substantially larger share of their 
     medical care budget to physicians' services, followed by 
     hospital room stays and commercial health insurance coverage.
       Of the seven major expenditure components, the apparel 
     category registered the smallest price change for all three 
     population groups over the 1988-93 period.
       Within the transaportation component, public transportation 
     items such as airline fare, intercity bus fare, intercity 
     train fare, and taxi fare had higher relative importance for 
     the elderly than for all urban consumers. These items 
     contributed to the observed overall higher inflation rates in 
     the transportation component of the experimental index.
       Like medical care, another expenditure component that rose 
     significantly in all three indexes during the study period 
     was the ``other goods and services'' category. However, 
     unlike medical care, this component recorded the smallest 
     increase in the experimental price index (41.8 percent), 
     compared with the cpi-u (47.0 percent) and the cpi-w(46.2 
     percent). The reason for the lesser rise could be found in 
     differences in the composition of the three populations. For 
     instance, the cpi-u and cpi-w, with their relatively larger 
     concentration of younger people,had a significantly higher 
     relative importance for college tuition, which increased 
     faster than the average of all items in each year of the 
     study. In addition, the populations of all urban consumers 
     and urban wage earners and clerical workers spend 
     proportionately more for tobacco and other smoking products, 
     which have also typically increased faster in price than the 
     ``other goods and services'' component, of which they are a 
     subcomponent. These items have thus contributed to the faster 
     rise in the ``other goods and services'' component of the 
     cpi-u and cpi-w relative to the experimental price index for 
     older Americans.


                       Cost-of-living adjustments

       Adjustments to Social Security benefits are currently based 
     on the percentage change in the cpi-w, measured from the 
     average of the third quarter of one year to the third quarter 
     of the succeeding year.
       While the Senate Special Committee on Aging stipulated that 
     the current study covers persons 62 years of age and older, 
     this population is not likely to be the most appropriate one 
     for defining and developing an index for use in indexing 
     Social Security benefits. The reason is two-fold. First, many 
     Social Security beneficiaries are younger than 62 years and 
     receive benefits because they are surviving spouses or minor 
     children of covered workers or because they are disabled. The 
     spending patterns of this younger group are excluded in the 
     weights for the experimental index for older Americans. 
     Second, a substantial number of persons 62 years of age and 
     older--especially those 62 to 64 years--do not receive Social 
     Security benefits at all. Although these older consumers are 
     included in the population covered by the reweighted 
     experimental index, they presumably should be excluded from 
     an index designed to reflect the experience of Social 
     Security pensioners. In short, an index designed specifically 
     to measure price changes for Social Security beneficiaries--
     that is, one that excludes older persons who do not receive 
     benefits, but include younger persons who receive survival 
     and disability benefits--might well show price movements that 
     differ significantly from those of the experimental index set 
     out in this article.

[[Page S5374]]

                              conclusions

       This article examined changes in three distinct Consumer 
     Price Indexes--the Index for All Urban Consumers (CPI-U), 
     Index for Urban Wage Earners and Clerical Workers (CPI-W), 
     and experimental index for Americans 62 years of age and 
     older--for the period December 1987 through December 1993. 
     Analysis of the relative behavior of the three indexes at the 
     all-items level reveals that the experimental index rose 
     slightly faster than the two published indexes.
       The experimental price index, reweighted to incorporate the 
     spending patterns of older consumers, behaves more like the 
     CPI-U than the CPI-W. This is to be expected, because the 
     CPI-U comprises the expenditures of all urban consumers, 
     including those 62 years of age and over. The CPI-W, on the 
     other hand, is limited to the spending patterns of families 
     of wage earners and of clerical workers and, therefore, 
     specifically excludes the experience of families whose 
     primary source of income is from retirement pensions.
       As an estimate of the inflation rate experienced by older 
     Americans, the experimental index has several limitations. 
     One of these is that the samples from which expenditure 
     weights for the index were calculated are substantially 
     smaller than those used in either the CPI-U or the CPI-W. 
     This means that the experimental price index is subject to 
     larger sampling errors than either of the two official 
     indexes.
       To produce a more precise CPI for older Americans, sample 
     sizes would need to be strengthened for the Consumer 
     Expenditure Survey to reflect the spending habits of the 
     elderly more accurately. In addition, the point-of-purchase 
     survey and the pricing surveys would need to be improved to 
     reflect which retail outlets and items should be sampled for 
     older Americans. These improvements in the sample design 
     could yield altogether different results from those obtained 
     in the study described in this article. Finally, it should be 
     noted that the medical care component of the CPI has a 
     substantially larger relative weight in the experimental 
     index than in the CPI-U or CPI-W. As a result, this component 
     of the experimental index tends to have a larger impact on 
     the elderly than it does on either all urban consumers or 
     urban wage earners and clerical workers.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Mr. President, I thank my colleague from Nebraska. There 
is much that is good in this amendment. First of all, I applaud the 
bipartisan effort. We have had excessive partisanship in this body. So 
I like that, No. 1.
  No. 2, I do differ with my friend from Nebraska in that you do not 
tackle the CPI. I think that has to be done. We cannot play games 
anymore with the American public. We cannot pander, and that is what we 
have been doing too much of.
  But I say to my friends from Louisiana and Rhode Island, and they are 
my friends for whom I have a high regard, what you do in here--and I 
have talked to both of them about this--you limit direct lending for 
student aid to 40 percent.
  It is very interesting that we finally passed an appropriations bill 
that knocked out that limit, and today, a committee made up by the Ford 
Foundation, the Rockefeller Foundation, and groups from the Business 
Roundtable picked--and I would like the attention of my colleagues from 
Rhode Island and Louisiana, because I am going to be asking them a 
question. Today, they made their annual clearance for finals in a 
governmental award that is given annually for innovation in Government 
that saves paperwork and saves money.
  Mr. President, there were 1,656 nominations for various things that 
happened in the Federal Government. They have narrowed the list to 25. 
And guess what? Direct lending is 1 of the 25 that saves money and 
saves paperwork.
  The State auditor of Colorado says the University of Colorado alone 
saves $191,000 a year on direct lending. The Department of Education, 
as a result of the appropriations bill, has increased the number of 
schools, colleges, and universities that can have direct lending from 
1,350 to 1,800, about 45 percent of the colleges and universities of 
this Nation. Not a single 1 of the 1,350 who are on new direct lending 
want to go back to the old system. Not a single one. Now we have gone 
from 1,350 to 1,800.
  I ask my friends from Louisiana and Rhode Island, which schools in 
Rhode Island and Louisiana do you want to tell you have to go back to 
the old system, you have to have more paperwork, more costs, and you 
cannot help your students as much?
  Mr. BREAUX. Will the Senator yield?
  Mr. SIMON. I yield to my friend from Louisiana.
  Mr. BREAUX. I thank the Senator from Illinois for his comment. I 
particularly appreciate the comment on probably the most difficult 
point of our recommendation in our budget resolution, and that is the 
adjustment of the Consumer Price Index, which I think is critically 
important.
  In order to specifically answer the Senator's question, we do not in 
this resolution make a decision at all on direct lending. We have a 
number for the committees. Your committee, the Labor and Human 
Resources Committee, will actually have to enact the legislative 
changes to reach the number we have suggested. They could do that by 
mandating 100 percent of the money be directly loaned or they can do a 
combination. We have suggested there be a cap to 40 percent, but that 
decision is going to be left uniquely to the committee of jurisdiction. 
I think the Senator from Illinois serves on that committee.
  So this budget resolution is totally silent on whether there is a cap 
or whether there is not a cap on direct lending. That would be a 
legislative decision under the budget reconciliation of the Senator's 
committee as to whether that is a good thing to do or not.

  Mr. SIMON. But my staff tells me that if this amendment is adopted, 
we have a 40 percent cap.
  Mr. BREAUX. I will respond to the Senator, if he will yield further, 
that really is not correct. The only thing our budget resolution does 
is have a figure for the amount of money that can be spent on 
education. Your committee, when you get that resolution, will make a 
decision as to whether there is a cap on direct lending or whether 
there is no cap at all, as long as you can meet the budget 
reconciliation numbers.
  Mr. SIMON. I think we can meet the numbers, frankly. I am going to 
check with my staff again. I have been told you have this 40 percent 
cap.
  The PRESIDING OFFICER. The time of the Senator from Illinois has 
expired.
  Mr. DOMENICI. Can I yield some time to Senator Simon? I would like to 
make an observation to you and have an exchange with you on this. In my 
opinion, it is not the prerogative of a budget resolution, nor can it 
set the level of funding between those two programs.
  If there is some assumption here, that is nothing more than an 
assumption. If there is a dollar number, that means that the committees 
of jurisdiction can proceed to do whatever they see fit within that 
dollar number. You cannot have something binding in that regard. You 
may have such a low number that you might conclude something is going 
to happen to my favorite program, but I do not believe there can be 
anything in the resolution that says that.
  Mr. SIMON. The reality is, of course--if I may ask for an additional 
60 seconds.
  Mr. DOMENICI. You have 1 minute.
  Mr. SIMON. The reality is direct lending under balanced scorekeeping, 
and we are trying to work that out with your staff right now. Direct 
lending saves money by any normal procedure, as the awards today have 
indicated. I will check this out with my staff. But if there is any 
kind of 40-percent limitation, frankly, I am going to have to oppose 
this, because I think it just tries to move us in the wrong direction.
  I yield the floor.


                           Amendment No. 4002

  Mrs. FEINSTEIN. Mr. President, I rise in opposition to amendment 4002 
offered by the distinguished Senator from Mississippi, Senator Lott. 
While its intent is surely positive, the effect would be to badly 
undermine United States interests with regard to Iraq.
  First of all, it calls on the President to do something that is 
beyond is authority. The President does not have the power to 
unilaterally renegotiate the terms of U.N. Security Council Resolution 
986, which the United States voted for.
  Resolution 986 was passed in 1995 to provide humanitarian assistance 
to the Iraqi people, whose suffering Saddam Hussein was cynically 
exploiting to fracture the anti-Iraq coalition.
  At that time, calls for sanctions to be lifted were increasing in the 
Arab world, and even from U.N. Security

[[Page S5375]]

Council members France and Russia. The consensus on maintaining 
sanctions was eroding.
  Resolution 986 was a way of demonstrating to the world that our 
quarrel is with Saddam, not the Iraqi people, and to try to relieve 
some of their suffering, about which Saddam clearly does not care one 
bit.
  The resolution requires an iron-clad U.N. monitoring program to 
ensure that the proceeds from up to $2 billion of oil sales over 6 
months are deposited in a U.N. escrow account, which Saddam cannot 
touch. They would then be used primarily for humanitarian relief.
  This morning, Iraq and the United Nations reached an agreement on 
implementing Resolution 986. Iraq will begin selling its oil within a 
few weeks. At that time, U.N. monitors will move in to ensure that the 
food and medicine is used properly and distributed equitably.
  In addition to humanitarian relief, the funds will be used for two 
other important purposes: To support the U.N. Special Commission on 
Iraq, or UNSCOM, which is responsible for finding and dismantling 
Iraq's weapons of mass destruction, and which is badly in need of 
funds; and to support the U.N. Compensation Commission, which settles 
international claims against Iraq, for Kuwait, but also for U.S. 
companies and individuals harmed by the Iraqi invasion.
  If we attempt to divert money from these causes, we will send a 
message that we don't care about the suffering of the Iraqi people. I 
cannot think of a better way for us to strengthen Saddam's standing 
inside Iraq. He would be able to blame the United States for his 
people's suffering.
  Diverting money from humanitarian aid would also threaten to split 
the coalition. There would be renewed calls for lifting sanctions 
outright, especially in the Arab world. Resolution 986 maintains all 
sanctions on Iraq.
  We would also undermine UNSCOM's crucial mission to ensure that 
Iraq's nuclear, chemical, biological, and missile programs are dead and 
buried. And we would send a message that we do not care about Kuwait, 
or even U.S. citizens, being compensated for losses suffered on account 
of Saddam's invasion.
  It is certainly reasonable for the United States to seek compensation 
whenever possible for U.S. operations that support U.N. missions. But 
when those operations are in our interest, we need to be prepared to 
shoulder the burden.
  Operation Provide Comfort and Operation Southern Watch both serve 
U.S. interests by containing Saddam's military and protecting the Kurds 
and Shiites (not the Sunnis, as erroneously stated in the amendment) of 
Iraq. That is why President Bush started both these operations after 
the Gulf War and why President Clinton has continued them.
  In 1996, $646 million was authorized for Operation Provide Comfort 
and Operation Southern Watch, out of a total defense budget of $264.7 
billion. Do you know what percentage of our defense budget that is? It 
is two-tenths of one percent of our total defense budget.
  That's right. For two-tenths of one percent of our defense budget, we 
are containing Saddam Hussein's military, preventing him from flying 
his aircraft or threatening Kuwait, and providing crucial protection to 
the Kurds and Shiites of Iraq.
  By any standard, that is a bargain. If we are not prepared to spend 
two-tenths of one percent of our defense budget to contain one of our 
most dangerous adversaries in a crucial part of the world, then why do 
we even have a defense budget?
  We shouldn't jeopardize our interests in Iraq by insisting on 
compensation for conducting operations that are so clearly in our 
Nation's national interests. Britain, France, and Turkey also 
participate in these operations without compensation.
  Although conducted with our allies, these operations are primarily 
U.S. operations, which means that we make decisions on how they are 
conducted. If we demand U.N. compensation for these operations, it is 
only a short leap to granting the United Nations greater say about the 
conduct of the mission.
  I doubt that the sponsors of the amendment would advocate giving the 
United Nations greater control over U.S. troops conducting Operation 
Provide Comfort and Operation Southern Watch, but it seems to be the 
inevitable outcome of demanding compensation.
  In short, this amendment urges the President to do something that (a) 
he cannot do, and (b) would badly undermine U.S. interests in Iraq. I 
urge my colleagues to oppose the amendment.


                        military infrastructure

  Mr. DODD. Mr. President, I would like to take a brief moment to 
discuss our nation's security and the importance of adequate support 
for our military infrastructure.
  I have long supported maintaining the level of military funding 
necessary to advance American interests, to honor our commitments 
abroad, and to continue to be an effective advocate for democracy and 
freedom throughout the world. In my view, we simply cannot expect to 
maintain our position of world leadership if we do not also maintain 
the strong military capabilities we have developed in recent years.
  It was for these reasons that I voted against the amendment recently 
offered on the floor by my good friend and colleague from Iowa, Senator 
Grassley. In my view, the cuts proposed in that amendment are simply 
too deep, and could jeopardize vital programs that are instrumental to 
protecting our national security.
  I would like to take this opportunity to make clear my views on this 
issue. In committee, I voted for a similar amendment offered by Senator 
Grassley, and I must say in all candor that I was under the wrong 
impression at that time, Mr. President. My vote in committee was 
inadvertent.
  I do not mean to say that efforts to achieve more moderate savings 
are not worthwhile. Defense spending without limits, and without regard 
to the recommendations that the Defense Department itself has made, is 
irresponsible. We must continue to balance the very important priority 
such as education and the environment.
  Mr. President, some say that the real threats to our Nation's 
security are not as great as they once were. I would only respond by 
saying that the potential threats are greater than ever. The advances 
in defense technology we have seen in recent years make possible wholly 
new capabilities for our military forces, but also require even greater 
effort to avoid losing our edge. Savings are possible, but we must not 
ignore the necessity of protecting our Nation's interests. For these 
reasons, I continue to support a level of military spending that 
maintains the effectiveness of the American fighting force.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, might I inquire of the Senators on the 
floor, how much time do they want to wrap up the evening? Are there 
some on your side?
  Mr. EXON. I have not been advised, but I see the Senator from 
Wisconsin seeking recognition. Can he tell us about how much time he 
would like to have?
  Mr. FEINGOLD. Fifteen minutes to offer an amendment.
  Mr. EXON. We knew about that. There is one amendment over here; is 
that not right?
  Mr. DOMENICI. Yes.
  Mr. EXON. We have two amendments to dispose of. I hope the people 
offering those amendments will recognize we hope to leave by 10. So 
other than the Senator from Wisconsin on our side, who we agreed will 
offer an amendment, I have no further requests here.
  Mr. DOMENICI. Might I just ask, how long did you say you might speak?
  Mr. FEINGOLD. Up to 15 minutes.
  Mr. CHAFEE. Mr. President, I have no further discussion on our 
amendment tonight. As I understand it, we have 1 hour equally divided 
tomorrow morning. The plan, as I understand it, is for us to start on 
our hour at 9:30. That is equally divided.
  Mr. EXON. Is that the plan, to go on that at 9:30 in the morning?
  Mr. DOMENICI. I believe we have reached an accommodation. They will 
be glad to be here at 9:30. They will take the first hour. That goes 
right up to departure time. There will be some Senators staying here 
during that hour and a half.
  Mr. EXON. Oh, we are going to keep the Senate open?
  Mr. DOMENICI. We plan to. That is how we are going to get things 
done.
  Mr. EXON. That seems very reasonable to me.

[[Page S5376]]

  Mr. DOMENICI. I wonder if I can propose this so perhaps the Senator 
from New Mexico can depart the Chamber. I want to offer an amendment 
that will take me 1 minute on behalf of Senator Dole, and it will take 
its place among the amendments to be voted on in due course.
  Senator Feingold can go next for 15 minutes, and since there is no 
other Senator to be heard, that will be the extent of what we do here 
this evening.

                          ____________________