[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
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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
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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,
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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,
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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
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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
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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.
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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.
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