[Congressional Record Volume 143, Number 14 (Thursday, February 6, 1997)]
[Senate]
[Pages S1057-S1071]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
resume consideration of Senate Joint Resolution 1, which the clerk will 
report.
  The legislative clerk read as follows:

       A joint resolution (S.J. Res. 1) proposing an amendment to 
     the Constitution of the United States to require a balanced 
     budget.

  The Senate resumed consideration of the joint resolution.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. I thank the Chair.
  We are returning to the balanced budget constitutional amendment 
debate. This is a singularly important debate in our Nation's history. 
And while I am talking, I am going to constantly refer to just 28 of 
the unbalanced budgets since 1969--28 of them. We had to find a table 
strong enough to hold them, and we could not put them on top of each 
other. As you can see, they are almost as high as I am, stacked in twos 
and threes. If we put them on top of each other, they would reach 
almost to the ceiling. These are our unbalanced budgets over the last 
28 years, every last one. And yet every time we get into this debate, 
our friends on the other side of this issue come in and say, ``Oh, 
let's just have the will to do this. We can do it if we want to, if we 
just have the will.'' And we heard the President the other evening 
talking about all you have to do is pass it and I will sign it.
  Give me a break. That is what was said in every one of these 
instances. And a number of them were listed as balanced budgets during 
this time. It turned out to be horrendous budgetary deficits rather 
than balanced budgets. You can just look at this stack--and this is 
just 28 years. This does not count the other unbalanced budgets for 
most of the last 60 years. This is just 28 years, these stacks right 
here.
  A lot of good intentions, a lot of people working hard to try to do 
what is right but never accomplishing it because they did not have the 
fiscal discipline necessary to get it accomplished. You cannot look at 
this and listen to these arguments of ``Why don't we just do what we 
should do.''
  After 28 years--and we are just using the last 28 years like I am 
saying--after 28 years we have to wake up and say we do need a fiscal 
mechanism to help Congress to do its job because it has not done its 
job in the last 37 years and most of the last 60 years.
  If we put them all up here, we would not have room. Frankly, we are 
worried with this stack that we might be violating OSHA rules. If these 
happen to fall over, somebody's leg could get broken.
  We are returning to this debate, and it is an important debate. It is 
about whether we have reached the turning point in our Nation's history 
in our fiscal affairs which will change the way we have been doing 
business. We are hoping that if we pass this amendment, we will 
profoundly effect a legacy we leave to all future Americans.
  We have, as I have said, had piled on this table the failed budgetary 
history of the last 28 years. These are the unbroken string of 
unbalanced budgets that we have had since 1969.
  As Senator Abraham observed last night, this is about as close to 
balancing the budget as we have come, balancing these budget documents 
on this table so they will not fall over. That is about as close as we 
get to balancing budgets. We are not sure we have it balanced well even 
that way, so you can imagine how difficult it must be to try to balance 
them the real way.
  We received today yet another budget submission. In this one, 
President Clinton has promised to point us to balancing our budget by 
the year 2002. In the coming days and weeks, the Congress will be 
reviewing this budget submission to determine whether it will be just 
another failed attempt that we toss on top of this huge pile. Of 
course, since this budget for fiscal year 1998 will not itself balance, 
it can be placed on this stack of unbalanced budgets. But we have yet 
to see if Congress will be able to work with this budget submission to 
get us on the path to balance by 2002.
  We should all understand that the backdrop to all this is that the 
Congressional Budget Office has recently painted a less rosy picture of 
the deficit in the next few years under current policies. Let me just 
take this chart.
  As this chart shows, CBO predicts that the deficit will begin to rise 
this year and continue rising throughout the foreseeable future. The 
CBO predicts that the deficit will rise to $124 billion in fiscal year 
1997 and continue to rise to $188 billion by fiscal year 2002, the year 
we hope we will have balanced the budget. The deficits just keep rising 
until 2007, as you can see. Our annual deficit is projected to be, at 
that time, $278 billion a year.
  Added up, these deficits will add a total of more than 2 trillion 
additional dollars to the debt from now until the year 2007. That is if 
we do what the President is going to offer today.
  The point is that we cannot yet congratulate ourselves for a job well 
done. There is work ahead for all of us to do, and there is no 
assurance of success. Based on the sad history illustrated by these 28 
years of budgetary submissions, success has to be considered, by any 
reasonable person, to be in serious doubt. That is why we need a 
balanced budget amendment to the Constitution. It has been called an 
insurance policy that we will get the budget actually balanced in the 
year 2002 and, more important, that we keep it balanced afterward, 
instead of doing what it appears will be done up through the year 2007, 
a continual rising deficit each year, well over hundreds of billions of 
dollars.
  I think the combination of these illustrations of the past and the 
projections for the future based on our current policy suggest that the 
past is prologue and should show us that we need a balanced budget 
amendment.
  We have been through debates on this measure before. I would like to 
outline briefly for those watching these debates what they are likely 
to hear from the opponents of this amendment based on past debates and 
the positions outlined to this point in this debate.
  First, let me point out this is not a partisan disagreement or 
debate, and it should not be. That is only fitting and proper for a 
constitutional debate. You have to have people on both sides supporting 
a constitutional amendment or there is no way it even has a chance of 
passing. This is a bipartisan amendment.
  Some opponents of a balanced budget amendment will attempt to paint 
this debate as a battle of parties, of a choice between a Republican 
amendment or a Democrat amendment or Democrat opposition to the 
amendment. While I hasten to point out that all 55 Republican Senators, 
every one of us, are supportive of this balanced

[[Page S1058]]

budget amendment, there are numerous Democrats who support it as well 
and I commend them. Among the original cosponsors are seven Democrats. 
An additional four Democrat Senators voted for this version of the 
balanced budget amendment the last time it was considered in Congress, 
two of whom voted for it in the House and have now joined us in the 
Senate, and two other new Democrat Senators expressed support for the 
balanced budget amendment in their Senate campaigns. That number alone 
will give us sufficient support to send this amendment to the States. 
Other Democrat Members have supported this text in the past, and I hope 
they will return. I would certainly be happy to welcome them back. 
Senate Joint Resolution 1 is a bipartisan undertaking and a bipartisan, 
bicameral consensus amendment.

  The first division of opponents of the balanced budget amendment is 
between those who say that they are for a balanced budget amendment, 
just not this one, and those who are against all balanced budget 
amendments. In effect, the position is the same. Senate Joint 
Resolution 1 is the product of years of refinement and debate. It is 
the only balanced budget amendment which has any chance of being 
adopted by the Congress as a whole.
  In past debates, substitute amendments have been offered, not one of 
which has garnered the support of even a mere majority of the Members 
of this body, let alone approached the 67 Senate votes required for 
Senate approval. Any of us might change a word or two if we were 
writing our own Constitution. We might want the courts to do this or 
the President to do that, or we might want tax limitation or any number 
of other changes. But Senate Joint Resolution 1 is the only version 
that has a chance of passing. So, when someone in this debate says they 
have a better idea, you will know, in effect, that they are working 
against passing a balanced budget constitutional amendment.
  Second, there will be those who propose changes to the amendment to 
exempt certain items from the budget-balancing rule. While they will 
profess that, of course, they are for balancing the budget--we are all 
for balancing the budget now; I don't know of anybody on this floor who 
does not say that. They believe that certain items are just too 
important to be left to congressional prioritizing. Because they are so 
important, they propose pretending that, for purposes of the 
Constitution, these items do not exist in the budget of the Federal 
Government. Of course, these items are items that the Federal 
Government pays for, but never mind, they are not part of the budget 
for purposes of balancing the budget.
  When it comes to this, I have to say the No. 1 scheme on the part of 
these people is to exempt Social Security from the balanced budget 
amendment. We are here to save Social Security. That is what the 
balanced budget amendment is all about. The best way to do that is to 
pass this constitutional amendment. If you take Social Security out 
from the purview of the balanced budget amendment, the highest item in 
the Federal budget, that is a risky gimmick that would endanger Social 
Security's future. So we are very concerned about what is happening 
here.
  Third, we will also hear those who believe that willpower, or another 
statute, will be the discipline we need. Let me say, again, it has been 
28 years, since 1969, since we have balanced the budget. That was the 
only time we did it since 1960--37 years ago. So, in 37 years we have 
only balanced the budget once and we have only 28 of those years up 
here. We could not afford to take the risk of violating OSHA rules by 
piling this any higher. So, willpower has not worked. We have had no 
fewer than five major statutory attempts to rein in our borrowing 
habits since 1978 alone. No statute has worked.
  Finally, there are those who would say that a constitutional 
amendment is unnecessary because Congress and the President both want 
to balance the budget by 2002, we are moving toward that goal. While it 
is true that everyone has adopted the goal of balancing the budget by 
2002, we have not finished that job yet. June O'Neill, the Director of 
the Congressional Budget Office, testified last week before the Budget 
Committee that the good news is pretty much over and the hard work is 
ahead. As I pointed out, CBO projects that the annual deficit will 
begin rising again this year from $107 billion this year, which they 
act like is nothing, to $124 billion next year, to $188 billion in the 
year 2002, the year we all agree we will have a balanced budget, or we 
will have to balance the budget.
  The lesson, then, is we cannot declare victory and go home because 
things have recently improved to some extent. The hard work is ahead, 
and the political pressures that have given us our decades-long debt 
habit will continue to push us off balance, toward mortgaging the 
future. Only the permanent counterweight of the Constitution can get us 
to balance in the short term and keep us in balance for the long term.
  Let me conclude simply by saying that I am pushing for this change in 
our basic charter because I care about the quality of life for all 
Americans, for those now living, and for those future generations that 
cannot make their wishes known at this time. I believe that if our 
colleagues will think about how Washington has worked over the last few 
decades--just look at it, three decades almost--and the price real 
Americans pay now, and especially will pay in the future, that they 
will agree that a vote for the balanced budget amendment is a vote for 
a better future for all Americans.
  We have debated this amendment in Congress for many years. I believe 
it is time to let the American people debate it in their State 
legislatures, but that cannot happen unless we pass it through both 
Houses of Congress. I believe it is time they will adopt a balanced 
budget amendment to the Constitution if we give the people a chance. 
Let the people speak, and let them speak without further delay.
  Let me just say one last thing about Social Security, because I think 
it is one of the phoniest issues I have seen in years. Without a 
credible sustained balanced budget, we will never have the money to pay 
our future benefits. It is just that simple. A balanced budget means 
economic prosperity, producing the revenues necessary to fund the 
program. With a balanced budget, the big spenders in Washington won't 
be able to target Social Security to pay for other programs, just as 
the administration did in 1993.
  By the way, in the President's own words, he said this: ``Neither the 
Republicans nor I could produce a balanced budget tomorrow that could 
pass if Social Security funds cannot be counted.''
  That was said on January 28, 1997, just a week ago. Neither of us can 
do it without that.
  I think it is important to make it clear that opponents of the 
balanced budget will throw out any diversion to confuse the issue. They 
will even use scare tactics. The truth is, excluding Social Security 
does nothing to secure benefits into the future, and the President's 
own budget that is submitted today counts those surpluses to set it in 
balance.
  We have set aside most of our time this afternoon for our newest 
Members of the Senate, our freshman class, to come down and express 
their views on this.
  Mr. LEAHY. Will the Senator yield for a question?
  Mr. HATCH. Yes.
  Mr. LEAHY. The distinguished chairman is not suggesting, and I 
realize by parliamentary form he could arrange that to happen, he is 
not suggesting, is he, that debate would be limited only to those who 
are in favor of the constitutional amendment?
  Mr. HATCH. Of course not. We will go back and forth as we did 
yesterday; either way, as far as I am concerned.
  Mr. LEAHY. I don't object.
  Mr. HATCH. For some of these freshmen Senators, it will be their 
first speech as U.S. Senators. I can't believe that there is anything 
more fitting than the balanced budget amendment in their very first 
speech. This is a historic issue, and I think these freshmen Senators 
will help us understand how truly historic it is.
  Mr. LEAHY. Mr. President, will the Senator yield again?
  Mr. HATCH. I yield.
  Mr. LEAHY. On that point, as the distinguished chairman knows, the 
new Senator from Nebraska was on the floor yesterday. While he took a 
different position than mine on this, I

[[Page S1059]]

commend him for his efforts and his work on this. While the chairman 
and I disagree on the need for this amendment, I think we both agree 
that if somebody is to give their first speech in the Senate, there are 
few issues that will be of such significance as this.
  Anytime one amends the Constitution, something that has been amended 
only 17 times since the Bill of Rights, that is a significant effort. 
As I said yesterday, for 200-some-odd years, we have resisted the 
temptation to amend our Constitution, which is one of the reasons why 
we are such a powerful democracy and one of the reasons why our 
Constitution has stood the test of time.

  I also note, I think on both sides of the aisle there is strong 
support to balance the budget, but what I want to remind everybody, as 
the President said in his State of the Union Address, is all it takes 
is our vote and his signature to balance the budget without a 
constitutional amendment. In the last 4 years, the deficit has come 
down. For the first time since I have been able to vote, the President 
4 years in a row brought the deficit down and is now on the fifth time. 
He deserves a great deal of credit for that.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I honor my colleague. He is a very fine 
Senator and does a very good job, but give me a break: All it takes is 
for us to do the job and the President's signature. We have had 28 
years of that philosophy. Here it is. Twenty-eight years on balanced 
budgets and really, in the last 60 years, there have been really very 
few balanced budgets. This would be three times this size if we put it 
up for the last 60 years. This ought to give anybody enough pause to 
say, ``Hey, it's time to get this over with. It's time to let people 
move on from here.''
  Our efforts to pass the balanced budget amendment predate even my own 
election to the Senate some 20 years ago. But these new freshmen 
Senators are absolutely critical and an indispensable factor, it seems 
to me, in this debate. They came to the Senate last month with new 
insights and unbounded enthusiasm and energy and determined that some 
integrity and sanity be restored to the Federal budget process. Their 
commitment to this process, to our children and our grandchildren is an 
inspiration to those of us who have dedicated most of our political 
life to this message. I hope their message is heard around the country.
  All freshmen Senators are original cosponsors and they can work in a 
bipartisan manner with their Democratic counterparts to ensure passage 
of the amendment this month.
  The PRESIDING OFFICER. The Senator from Colorado is recognized.
  Mr. ALLARD. Thank you, Mr. President.
  First of all, Mr. President, I would like to recognize the leadership 
of my colleague, the Senator from Utah, on the balanced budget 
amendment to the Constitution.
  One of my primary campaign promises when I was running for election 
to the U.S. Senate was to push for a balanced budget, and I believe 
that the best way to force us to finally take the courageous steps 
necessary to balance the budget is to establish a constitutional 
balanced budget requirement. Statutory balanced budget requirements 
have proven to be insufficient as Congress has proven its willingness 
to amend any such requirements.
  I must emphasize that the modern congressional movement to establish 
balanced budget requirements is not a partisan issue. In 1935, the 
first bill to establish a statutory balanced budget requirement was 
introduced by Senator Millard Tydings, a Democrat from Maryland. In the 
following year, Congressman Harold Knutson, a Republican from 
Minnesota, introduced the first proposal to place a balanced budget 
requirement in the United States Constitution. In light of the 
bipartisan history of the balanced budget movement, I urge all of my 
colleagues to join together in making the balanced budget amendment the 
first and most important accomplishment of this 105th Congress.
  During the 104th Congress, the Federal Government surpassed a 
milestone that our forefathers would have never thought possible--the 
debt incurred by the Federal Government surpassed $5 trillion dollars. 
This is an astronomical sum of money, and it is something of which we, 
as policymakers, should be ashamed. We owe it to our children and 
grandchildren to do better. We owe it to them to pass a constitutional 
requirement to mandate that the Federal Government balance its budget 
by 2002.
  Most people believe that the issue of balanced budget constitutional 
amendment is a relatively recent issue. But this issue actually 
surfaced before the Constitution was ratified by the States.
  New York and Rhode Island both included requests that the Federal 
government be restricted in its ability to borrow money. Gilbert 
Livingston of New York proposed ``that no money be borrowed on the 
credit of the United States without the assent of two thirds of the 
senators and representatives present in each house.'' Admittedly, Mr. 
Livingston was an anti-Federalist who did not believe in the Union. But 
he and other anti-Federalists realized that forcing the Federal 
Government to live within its means would provide an important check on 
its power. Requiring the Government to go to the people for all of the 
revenues necessary to run its programs would force it to be accountable 
to the people.

  Indeed, in 1779 when the United States was still governed by the 
Articles of Confederation, Benjamin Franklin angrily complained of the 
extravagances of the Federal Government that were afforded by its 
ability to print money to pay its bills. While the Government was 
having difficulties raising the funding to carry out the Revolutionary 
War, it still managed to spend large sums of money to pay for tea and 
other wasteful items.
  The dire financial straits of the Federal Government in the aftermath 
of the Revolutionary War seem to have minimized the concern that the 
founders had to constrain the ability of the Federal Government to 
incur debt. In addition, Framers of the Constitution such as Alexander 
Hamilton believed that the Federal Government would voluntarily 
restrain itself, and that the public would provide an adequate check if 
the Government showed a tendency to get out of line. But it was not 
long before some in the Federalist Party began to voice their support 
for a constitutional balanced budget requirement. Thomas Jefferson was 
concerned with what he considered to be the extravagant spending 
practices of the administration of John Adams and he felt that the best 
way to correct this problem was to take away the ability of the Federal 
Government to incur debt. He wrote to John Taylor on November 26, 1798, 
``I wish it were possible to obtain a single amendment to our 
Constitution. I would be willing to depend on that alone for the 
reduction of the administration of our government to the genuine 
principles of its Constitution; I mean an additional article, taking 
from the Federal Government the power of borrowing.'' Thus, Jefferson 
saw a balanced budget requirement as the proper tool to constrain the 
Federal Government within its proper boundaries and to cure the 
Government of any wasteful tendencies.
  In spite of the concerns of those like Jefferson who felt that the 
Federal Government needed to be constrained by a constitutional 
balanced budget requirement, the Federal Government seemed to be able 
to balance its budget except in times of war and economic downturns 
until the 1930's. Budget deficits were considered to be abnormalities 
and Federal officials felt that they had a moral responsibility to 
their children and grandchildren to balance the budget and even pay 
down the Federal debt. In his first inaugural address, Andrew Jackson 
stated, ``Some of the Topics which shall engage my earliest attention 
as intimately connected with the prosperity of our beloved country, 
are, the liquidation of the national debt, and the introduction and 
observance of the strictest economy in the disbursements of the 
government.''

  Jackson detested debt because of an experience that he had had as a 
young man in which he was nearly ruined financially as a result of a 
debt on a parcel of land that he had acquired as a young man. Jackson 
considered it to be a matter of public honor and morality to retire the 
national debt. In a speech in 1831, he commented that when the debt was 
retired, ``we shall then exhibit the rare example of a great nation,

[[Page S1060]]

abounding in all the means of happiness and security, altogether free 
from debt.'' Although the debt had been paid down on a nearly 
continuous basis after the United States was brought under the 
Constitution in 1789, Jackson finished paying off the debts incurred by 
the Nation in the Revolutionary War and the War of 1812 in 1834--and 
became the first and only administration to ever retire the debt of the 
Federal Government of the United States.
  In 1837, the worst economic downturn in the history of the United 
States aside from the Great Depression caused the Government to resume 
running occasional deficits. But Jackson's successors shared his belief 
in a balanced budget and ran balanced or surplus budgets except in 
times of war or economic downturn. In 1842, President John Tyler wrote 
that Americans were a ``people rendered illustrious among nations by 
having paid off its whole debt.''
  The Republican Party held the White House almost continuously from 
the outbreak of the Civil War until the beginning of the Great 
Depression. And although these Presidents managed to continue the trend 
of balancing the budget or running surpluses except in times of war or 
economic downturn, these Presidents were not the model of efficient 
government that we should aim to follow. Prior to the Civil War, the 
Federal Government spent a record $74 million. After the Civil War, 
Federal Government expenditures never dipped below $244 million and 
often times was in excess of $300 million, an increase of more than 400 
percent. As the Federal Government increased its spending, it expanded 
into new areas of influence. Prior to the Civil War, the Federal 
Government had mainly confined itself to matters relating to the 
national defense. After the war, however, the Federal Government 
increasingly took over waterway and transportation improvement projects 
from the State and local governments. Although the Federal Government 
only spent a total of $3.7 million on river improvement and harbor 
construction between 1850 and 1860, it spent $53.8 million from 1869 to 
1879--an increase of over 1,300 percent.
  Not only did the nature of Federal Government expenditures change, 
the attitude about fiscal responsibility had changed as well. As a 
favor to their business constituencies, the Republicans were intent 
upon maintaining exorbitantly high tariffs ranging from the 20 percent 
Morrill tariff which was enacted to finance the Civil War in 1861 to 
the Dingley tariff of 1898 and the Smoot-Hawley tariff of 1930, both of 
which were in excess of 45 percent. As these tariffs represented an 
enormous tax upon farmers and other consumers, they were very 
unpopular. The tariffs generated enormous budget surpluses and, as a 
result, they were hard to justify to the public. Rather than finding 
ways of returning the money to the people, Congress and the Republican 
administrations engaged in unprecedented spending binges on patronage 
and questionable pork-barrel and logrolling projects to reduce the 
budgetary surpluses to politically acceptable levels. At the same time, 
they proclaimed their support for balanced budgets to the public. Thus, 
President Benjamin Harrison described unnecessary debt as criminal even 
though spending increased during his term from $299 million in 1889 to 
$383 million in 1893.
  The rules of the Federal budgetary game changed with the New Deal 
policies developed by President Franklin Delano Roosevelt in the wake 
of the Great Depression, the worst economic downturn in the history of 
our Nation. FDR was a well-intentioned man whose primary goal was to 
end the suffering that he witnessed with any means at his disposal FDR 
detested the tendency of economists and others around him to try to 
think about the long-term implications of his policies, but instead 
preferred to devise immediate solutions to the problems that the people 
faced. He established numerous agencies and public works projects to 
try to pull the Nation out of the depression while continuing to 
profess a sincere desire to balance the budget. One of FDR's fiscal 
innovations that has had the most profound impact on our economy was 
the widespread use of entitlement programs which are defined as 
programs that make payments to all individuals or companies who are 
eligible by current law and who apply for the benefits. The most 
popular entitlement program created during FDR's administration was 
Social Security. Also created under FDR were the Federal farm 
assistance programs which I am proud to say we successfully reformed 
and made more market-oriented during last year's debate on the farm 
bill.
  Most economists agree that the Great Depression ended only with the 
outbreak of World War II, but the legacy of the Depression era programs 
has lived on. Several new entitlement programs have since been 
established, most notably the Medicare and Medicaid health programs 
which were started as a part of LBJ's Great Society fiscal agenda. 
Although FDR was not completely convinced by Keynesian economic 
theories, in the aftermath of FDR's administration, Keynesian economics 
became an accepted theory in determining fiscal policy. This theory, 
best expressed by the Employment Act of 1946, stated that the 
Government would run balanced or surplus budgets in times of economic 
prosperity, but it would seek to run deficits and stimulate the economy 
during recessions through increases in discretionary spending projects. 
This theory encouraged a reluctant President Eisenhower to run a 
deficit throughout much of his administration stating:

       Balancing the budget will always remain a goal of any 
     administration . . . That does not mean to say that you can 
     pick any specific date and say, ``Here, all things must give 
     way before a balanced budget.'' It is a question of where the 
     importance of a balanced budget comes in; but it must be the 
     aim of any sound money program . . . When it becomes clear 
     that the Government has to step in, as far as I am concerned, 
     the full power of Government, of Government credit, and of 
     everything the Government has will move in to see that there 
     is no widespread unemployment and we never again have a 
     repetition of conditions that so many of you here remember 
     when we had unemployment.

  Based on Keynesian economic theories, Eisenhower approved 
discretionary spending increases in fiscal year 1958 and fiscal year 
1959 which resulted in deficits of $3 and $13 billion respectively.
  This regard for Keynesian economic theories caused administrations to 
change their views of deficit spending and encouraged the Federal 
Government to try to micromanage the economy and incur massive deficits 
in the process. No longer did policymakers consider it such a moral 
obligation to balance the Federal budget. In the entire postwar period, 
we have run budgetary surpluses only eight times. It is curious to note 
that the surpluses in times of economic prosperity in the Keynesian 
economic theories have almost entirely failed to materialize. The last 
budgetary surplus occurred in 1969 and the deficits run by the Federal 
Government have grown increasingly larger reaching a high of nearly 
$330 million in fiscal year 1992. Luckily, Keynesian economics has 
increasingly been ignored in recent years as a usable guide for fiscal 
policy. It has been realized that the Federal Government does not have 
enough information at its disposal to accurately predict the onset of a 
recession. In addition, by the time a stimulus package can get through 
Congress, economic recovery is often already underway. In cases such as 
these, precious taxpayer dollars are wasted while the economy may be 
overstimulated resulting in inflation.
  In spite of the recent turn away from Keynesian economic theories, in 
general the Federal Government's deficits have been growing larger over 
time, and this trend is only expected to continue. This is due to the 
rapid growth of entitlement and other mandatory spending. About 55 
percent of our spending went to entitlements in fiscal year 1996, and, 
as projected by the CBO in its January 1997 report on the Economic and 
Budget Outlook for fiscal years 1998 to 2007, entitlement spending is 
expected to top $1 trillion in fiscal year 1999. This increased 
entitlement spending is expected to be accompanied by enormous 
deficits. In its January 1997 report, the CBO forecasts the deficit to 
reach roughly $280 billion in fiscal year 2007 if discretionary 
spending is allowed to increase with inflation. This increase in 
entitlement spending also corresponds to a continued large role for the 
Federal Government in the economy, equal to 21 percent of GDP during 
the next decade, of which 14 percent of GDP would be represented by

[[Page S1061]]

spending on entitlements by 2002. We simply cannot allow this to 
happen.
  We must establish efficiency and accountability in the Federal 
Government. Entitlements, which automatically grow without any action 
on the part of Congress, are causing these tremendous deficits. 
Although we can reduce the deficit by freezing discretionary spending, 
entitlement reform that puts these programs on sound economic footing 
is absolutely necessary in order for us to balance the budget. As the 
105th Congress begins, one of the first things that we need to do is to 
get our fiscal house in order and send to the States a balanced budget 
requirement. It is a disgrace that in fiscal year 1996, we burdened the 
hard-working taxpayer with $241 billion in net interest charges on the 
national debt. It is even more disgraceful that if we fail to balance 
the budget, the resulting higher interest rates and lower foreign 
exchange rate will doom our children to a lower standard of living than 
they otherwise would have. For our children and our grandchildren, we, 
the Members of the 105th Congress must be courageous and pass a 
balanced budget amendment to the U.S. Constitution.
  Mr. HATCH. Mr. President, I thank the distinguished Senator from 
Colorado for making such an impassioned statement on how important this 
balanced budget amendment is. We are so glad to have you in the Senate. 
You are making a difference and we appreciate and thank you so much for 
your good comments. You are speaking for the vast majority of people in 
this country, 68 percent of whom, according to the latest polls, want 
this amendment passed. I personally thank you and congratulate you for 
your speech.
  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. GORDON SMITH. Mr. President, it is an honor to rise in this 
Chamber to make my first remarks as a U.S. Senator. I'd like to begin 
by paying tribute to Senator Orrin Hatch of Utah for the leadership he 
has shown on this issue for many sessions of Congress, to help focus 
us, the American people, upon this important and overriding issue of 
balancing our Federal budget.
  I come to this Chamber, to this service at the Federal level, from 
the State legislature in Oregon--where I served as a State senator and 
as the Senate president. It was our highest priority in the State 
legislature to balance our budget. Indeed, it was our constitutional 
responsibility to balance the budget. Every session, we would convene 
in Salem; coming together as Republicans and Democrats, liberals and 
conservatives, to have an honest debate about how we spent public 
money, and what taxes, if any, should be raised or reduced, and how 
best to be good public stewards. I say it was an honest debate because 
we did not have the recourse of deficit spending--of going to the 
credit card of our children. I took pride in the kinds of debates we 
had. Sometimes they were tough, but always they ended with our budget 
balanced and Oregon's fiscal house being in order.
  Today we come to a decision about whether or not our Government needs 
to have the same kind of commitment, that constitutional commitment 
that we have in most States. My colleague, Senator Allard, read 
repeatedly from the words of Thomas Jefferson. I like Jefferson's words 
in which he counseled us that it should be unthinkable for us to spend 
the money of the next generation for our consumption in this 
generation. Indeed, we have done this to a degree, now, that we begin 
to hamstring our economy and threaten the future in ways that ought to 
make us ashamed.
  During the course of a yearlong campaign, I would go home as often as 
I could. But always when I did, I was very tired from long hours of 
campaigning. On one occasion, I sat in my living room and began to fall 
asleep. My son, who was 6 years old at the time, toddled over to me and 
tapped me on the wrist. As I was waking up, he asked me the question, 
``Daddy, can I have your watch when you're dead?''
  At that time, and since then, I have laughed at that comment many 
times because it was a question from an innocent child. I have thought 
humorously about it since and yet, also, soberly. I would like my sons 
and daughters, and your sons and daughters, to be able to inherit more 
than just a watch, to be able to inherit the kind of future and the 
kind of America that we have had, and the kind which we have an 
obligation to pass on.
  What drives our need for a balanced budget amendment? Pure and 
simple, it is the growth in spending that is out of control. It is 
immoral. It ought to be illegal. I would like to use the growth of four 
programs to demonstrate how, frankly, when coupled with interest on the 
national debt, we are spending ourselves into oblivion. The four 
programs are entitlements. They are important programs, and they have 
done great things for the American people--for the needy and the 
elderly--to take them out of poverty. Entitlements don't require a vote 
of Congress each year. And interest on the debt is something we have to 
pay, again; it is not voted upon.
  Thirty years ago, in 1967, the Federal Government's spending on these 
four programs--Medicare, Medicaid, Social Security, Federal and 
military pensions, and then interest on the national debt--represented 
just 25 percent of our budget. Ten years later, in 1977, just these 
four programs, plus interest, had grown to 41 percent of the budget. In 
1987, just these four programs, plus interest, had grown to 50 percent 
of the budget. In 1997, these four programs, plus interest, have grown 
to 61 percent of our budget. In 2007, just 10 years from now, they will 
make up more than two-thirds of our Federal expenditures, if we don't 
change our spending habits now. What will be left, then, for schools, 
roads and bridges, for police and for our national defense? If we don't 
do something right now, then each year the deficit will grow higher and 
higher. We must have a mechanism that will ensure that deficit spending 
will stop. We must have an amendment that will ensure a balanced 
budget.
  I understand, as a former legislator at the State level, how 
difficult it is to say ``no,'' because whether you are a Republican or 
a Democrat, you go through the fire and pain of a campaign because you 
care about people, you want to leave your community better off. 
Everyone who comes to your door has a legitimate and often heartrending 
story to tell. And if you could, you would say ``yes'' every time. But 
the problem in this Federal city is that we never say ``no'' when we 
ought to say ``no'' for the betterment of our whole society.
  I spoke about these programs, these entitlements that help our 
Nation's elderly. I believe that to preserve and protect and strengthen 
Medicare and Social Security, we have to have a debate about the whole 
problem. Many have talked about how Social Security needs to be 
protected. I share that concern, and I will always talk about that, and 
I will vote to protect Social Security. But it is not right to say that 
this program--in order to protect it--should be taken off budget as 
part of the balanced budget amendment. Not even our current President 
believes that and, therefore, when speaking about his administration's 
deficits, always including the Social Security trust funds.
  There are those in the Senate that say that we should exempt Social 
Security from the balanced budget amendment. I disagree with that. I 
say that passing the balanced budget amendment, which both Republicans 
and Democrats have proposed, is the most important thing we can do to 
protect Social Security and our seniors. If Social Security balances 
are exempted, additional cuts will have to be made during years of 
surpluses. For example, in the year 2002, Congress will already have to 
save, in order to balance the budget, $188 billion. If those trust 
funds are exempted, then Congress will have to cut an additional $104 
billion from the budget. Thus, Congress will have to radically cut 
programs by $292 billion. Just making the cuts to reach the $188 
billion mark will be difficult. An extra $104 billion will be 
incredibly difficult and will, undoubtedly, cut discretionary and 
mandatory programs, many of which will help America's aged, those 65 
and over.

  What does a balanced budget mean to Oregon, my State, and to your 
State, and to America? It guarantees that we will be fiscally 
responsible. It means that we will restrain the rate of growth of 
deficit spending by the Federal Government, and that we will increase 
the rate of growth in the private sector. It means that interest rates 
will be lower for all Americans. That means lower mortgage payments.

[[Page S1062]]

  For example, if you have a $100,000 mortgage payment, on a 30-year 
basis, a 2 percent drop in the interest rate would result in a $140 
per-month reduction in your mortgage payments. At the same time, it 
means lower car payments. For a $15,000, 5-year auto loan at 9 percent, 
this would represent savings of $1,200 over the life of the loan. Well, 
lower interest rates also means lower interest on your credit cards. On 
a credit card balance of $1,000, with a rate of 14 percent, it would 
save you $20.
  That is real money to real people who have real problems in their 
lives. It means more money in your pocket, as an American citizen, to 
be saved, if you choose, for things that are important to your family, 
like buying a home, providing for a child's education, for food, for 
clothing, all the things that real people need more than Government 
needs them.
  This is a choice about a brighter future for America. I am very 
pleased that I was able to support a balanced budget amendment to the 
U.S. Constitution in my first remarks on the floor of the U.S. Senate. 
It will send a credible message to all of the world and its economic 
markets. It will mean long-term economic growth. It will give greater 
control of our foreign-held debt. It will restore integrity to our 
budget process. Finally, this debate will show American families that 
they have a choice for a brighter future.
  Thank you, Mr. President.
  Mr. HATCH. Mr. President, I compliment our distinguished colleague 
from Oregon. He became the president of the Oregon Senate shortly after 
he was elected to the Oregon Senate. I think we are very privileged to 
have him in our body today. He has made his maiden speech, and I can't 
imagine any subject that would be more meaningful than this one. I am 
pleased he took the time to make that speech on the balanced budget 
amendment. It also shows there is a new wave coming through this body. 
People are now getting serious, after 28 years of unbalanced budgets. 
This stack represents the 28 unbalanced budgets over the last 28 years. 
These folks are coming in here saying it is time to change it. You can 
hardly see me behind this stack. But this has to be changed, and the 
only way we are going to change it is with a balanced budget amendment. 
When people come on the floor and just say, ``Let's have the will to do 
it,'' the only will they need to show is to pass the balanced budget 
amendment so we will do it. For 28 years--really, for most of the last 
60 years, we haven't had the will to do it. I compliment my colleague 
and thank him for his cogent, good remarks here today.

  I yield the floor.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER (Mr. Enzi). The Senator from Texas.
  Mr. GRAMM. Mr. President, I rise today to talk about the issue which 
is before us, the balanced budget amendment to the Constitution. But I 
don't think today we can talk about this babble about putting the 
Federal Government on a budget like everybody else, except in the 
context of the latest edition to this big stack of budgets over here 
which have failed America and failed the working people of our country 
and piled hundreds of billions of dollars of debt on generations yet 
unborn, without looking at the newest installment of this debate; that 
is, the budget that the President has sent to us this morning.
  I want to make it clear, Mr. President, that I am rising to talk 
about this budget and to criticize it, in some ways in harsh terms. I 
want to begin by pointing out that I rise to criticize this budget more 
in disappointment than in anger. I believe with the rhetoric that both 
parties have been using that it is essential that we work together with 
the administration. I do not believe we are going to balance the budget 
based on the efforts of one party, though I think both parties need to 
do a better job of doing their part.
  I am the new chairman of the Medicare Subcommittee. I would like to 
do something worthy of being remembered by taking major, bold steps 
towards saving Medicare, and I know we can't do that if we do not work 
with the President.
  So I would like to focus my comments on the President's budget today, 
and really focus not so much on the deficiencies of this budget and on 
those aspects of this budget which represent really a political shield 
that the President has erected to protect himself from having to make 
hard decisions; I would like to couch my comments about this budget in 
terms of what is left to be done, and what we have to do if we begin 
with the President's budget and we decide we are going to go from here 
to a balanced Federal budget. I would like to talk about that first. 
Then I would like to talk about where we differ with the President. 
What is the real issue that we are going to have to decide in writing 
the budget of the United States of America for this year? Then I would 
like to sum up.
  First of all, let me say that, like most of my colleagues, I was 
disappointed when our President the night before last told us that we 
do not need a balanced budget amendment to the Constitution of the 
United States.
  My guess is that at the founding of the Republic, when the Bill of 
Rights was set out as the immediate follow-on to the Constitution, 
there were those who said, ``Well, we do not need to guarantee freedom 
of speech. We do not need to guarantee freedom of religion. We do not 
need to guarantee freedom of assembly. Let us do it ourselves. Let us 
let the Congress do it. We do not need to guarantee the protection of 
the rights of the States in those areas where the Federal Government 
doesn't have specific enumeration in the Constitution. Congress is 
capable of making those decisions.''
  Our Founders decided that trust Congress to guarantee freedom of 
speech, that they couldn't. That logic didn't make any sense. Our 
Founders decided that they couldn't trust Congress to guarantee freedom 
of religion. So they put it in the fundamental contract which bypasses 
Congress, which bypasses the President, and that is the contract 
between the Government and its people. That is what the Constitution 
is.
  The difference between our position and the President's position is 
the President is saying after 28 years of failure in a row, after 
piling now trillions of dollars of debt on generations yet unborn, that 
we ought to trust Congress; that we ought to trust the President to 
balance the budget without being required to do it. Obviously, if you 
look at that big stack of budgets over there on Senator Hatch's desk, 
for 28 years in a row under Democrat and Republican Presidents, under 
Democrat and Republican Congresses, we have not done the job. I point 
out that many of those budgets claim to be in balance. But as I will 
make clear in my comments about the newest installment, the 29th budget 
to go on top of 28 budgets that failed to get the job done, if we took 
this budget on its face and assumed that it was adopted whole by this 
Congress, it is probably the poorest blueprint among the 28 to get the 
job done.

  In fact, for a President who says we do not need to require a 
balanced budget, that we can do it, it is very instructive to look at 
the fine print in the President's budget. In fact, it is not even in 
the budget document itself. You have to get over into the analytical 
perspectives to find any word as to how the administration actually is 
going to ensure that the budget is balanced. In fact, it is the very 
last paragraph in the section of the President's budget that is 
entitled ``Preview Report.'' In other words, it is about as hidden as 
you can make something hidden.
  Let me read basically what it says. It says in very small italic 
print, ``Mechanism to ensure balance in the year 2002. The budget 
includes a mechanism to ensure that the President's plan reaches 
balance in 2002 under OMB or CBO assumptions.''
  What is that mechanism? Here is the mechanism. The mechanism is that 
if things don't work out, the tax cuts that the President has in his 
budget this year would in the future be taken back. But the tax 
increases the President has in his budget this year would be forever. 
The President proposes spending more money now and increasing the 
deficit now over the last year where we have an actual figure on the 
deficit, and that is fiscal year 1996. The deficit would rise from $107 
billion in 1996 to $121 billion in 1998. But what the President says 
is, let me raise taxes this year. Let me increase spending this year. 
And then, if we do not balance the budget in 4 years, I want to

[[Page S1063]]

take back the tax cuts that we would have given you 4 years from now. 
And let me spend the money on all of these new programs--which we heard 
about the other night--but if, in fact, the budget is not balanced, 
then we are going to have a mechanism to take that money back. Where is 
the mechanism? We do not know. Nowhere does the President tell us where 
this mechanism is.
  Mr. President, this is no guideline for balancing the budget. This is 
no program for achieving what the President says he is committed to. 
What we need more than anything else is to, No. 1, sign a contract with 
the American people through the Constitution that President Clinton 
can't change and the Republican Congress can't change committing that 
we are going to do it. And then, second, we need to buy an insurance 
policy by setting out a program that makes changes now--not 4 years 
from now--if we fail to get this job done.
  So I think it is very instructive in this debate about a balanced 
budget amendment to the Constitution that when our President adds the 
29th failed budget in a row, nowhere in the budget itself does he talk 
about how we are going to achieve a balanced budget and an enforcement 
mechanism. But in one paragraph in Analytical Perspective, he tells us 
that ``most of the President's tax cuts would sunset, and discretionary 
budget authority and identified entitlement programs would face an 
across-the-board limit.'' No one knows what that mechanism really is. 
But it is very clear what the President intends here, and that is tax 
now, spend now, and then 4 years from now let somebody else worry about 
it.
  President Clinton is not alone in these failures. We have budgets 
over there in that stack from Republican Presidents who have done the 
same. Isn't it time that we stop this process with a balanced budget? I 
say yes. God willing, we will.
  Let me turn to a discussion of the President's budget. It is hard to 
come up with analogies because accounting, especially when you are 
dealing with billions of dollars, bores people to death. Quite frankly, 
most of us do not know what $1 million is. I have one constituent, Ross 
Perot, who knows what $1 billion is. Nobody knows what $1 trillion is. 
But let me try to set it in perspective. Let me just run through and 
talk about a few of the things that the President is proposing in his 
budget.
  No. 1, think of the Government as being overweight and think of what 
we are trying to do here as going on a 4-year diet. We have been 
overweight, and we have been claiming to be on a diet for 28 years, but 
we have a new diet that the President is going to put us on here. Let 
me start and go through the diet and I am sure at least--well, let me 
be careful-- some of my colleagues have been on diets as I have been. 
Others probably are so blessed that they have not, but judge this diet 
if you needed to lose weight for your happiness or health.
  First of all, the President takes the amount of weight we need to 
lose and, by assuming different things, he says let us assume half of 
the weight loss is going to occur naturally.
  The first thing the President does in his budget is he changes the 
economic assumptions of the nonpartisan Congressional Budget Office 
which gave him their outline that we are required by law to follow in 
our budget. Before he ever wrote his budget, they told him the rules 
Congress will be bound by in writing our budget.
  What the President says in essence is that to achieve a balanced 
budget we have to have a certain amount of savings. I am going to 
change assumptions, the President in essence says in his budget, so we 
assume that half the weight loss is just going to occur naturally. So 
the President is talking about, if you look at a budget, in this case 
for a bloated Government which has not been on a real diet in 28 years 
and shows it, losing half the weight that Congress is bound in writing 
in our budget to lose--to be able to claim that in fact we have a diet 
which will achieve our goal, the President assumes half the problem 
away right off the top.
  Second, we heard the other night about the President's tax cut and 
what it was going to provide, but now that we have the numbers--and I 
do not think it is unusual. I am not trying to be partisan with regard 
to the President. But let me just give you the rest of the story. The 
President the other night talked about a $98 billion tax cut and all 
the good things we were going to get.
  Now that we get the President's budget, we discover some very 
startling things. First of all, in the first year, 1997, taxes go up, 
not down. No. 2, the President has in his only enforcement mechanism a 
provision that says, 4 years from now, if we do not lose half this 
weight by assumption and good wishes, he is going to take back the tax 
cut. So the first year he raises taxes out and out, no doubt about it. 
Then he is going to give us a tax cut in the future, but he has 
provisions in the bill that say, if we do not lose half the weight we 
need on this diet automatically, he is going to take the tax cuts back. 
The President's tax increases are forever, but the tax cuts are 
temporary.
  Also, the President has all kinds of offsetting receipts and hidden 
taxes and user fees that let the President claim we are controlling 
spending when we are not.
  For example, the President assumes we are going to sell spectrum, 
sell the right to use the radio waves of the country, and that we are 
going to get $36 billion from that, and that he is going to spend every 
penny of that $36 billion. The President has nearly $47 billion in new 
fees that he would have us impose. The President increases nondefense 
spending. In an era where, the President told us last year, big 
Government was over, the President proposes in his budget increasing 
nondefense discretionary spending by $73 billion.
  And with this increase in spending, guess what. Discretionary 
spending goes up next year, the deficit from the last real number we 
have in 1996 goes up next year, taxes go up next year. Next year, taxes 
will be at the highest level in the history of the United States of 
America. Defense will be at the lowest level as a percentage of the 
budget since the mid 1930's. And yet the deficit will be rising 
relative to what we have achieved in fiscal year 1996. Why? Because of 
new spending. There are 101 other little tricks in the budget, and each 
of these tricks is aimed basically at having it both ways.
  Let me get down to the fundamental choice we are going to have to 
make. First of all, if we are going to lose this weight, if we are 
going to balance the budget, we cannot start by assuming that half the 
problem is going to solve itself. We have to assume that we are going 
to have to do every bit of it. We are going to have to make the tough 
choices. And if we really want to do it, we need to be conservative in 
making choices so that if things do not quite work out, we still get 
the job done.
  We cannot get where we are going by beginning in the wrong direction. 
If our goal is to spend less, why spend more in the first year, the 
only year of the budget that is binding? If our objective it is to 
lower taxes, why raise taxes the first year with a program that will 
cut taxes in the future--but only if you achieve the deficit reduction 
targets.
  However, there is a more fundamental issue here, and this is one 
where there is a legitimate difference, and that is we have two 
competing visions. The President's vision, despite all the rhetoric of 
a year ago, is a vision of Government providing more benefits and more 
services to more people. The President gives us a budget where 
discretionary spending grows by $73 billion. The President believes, 
obviously, as reflected in this budget, that Government can spend the 
money of working families better than they can spend it themselves. The 
fundamental difference between the President's budget and the vision 
that most Republicans share is, at its very root, a philosophical issue 
and a legitimate issue and it is what we ought to be deciding in the 
budget, and that is what kind of America do we want?

  The President wants an America with taxes at the highest level in 
history, spending at the highest level in history for nondefense 
programs, spending on defense at the lowest level as a share of the 
budget in a half century. That is his vision, as reflected in this 
budget. Our vision is different. Our vision is the vision that we want 
families to spend more money, whereas the President wants Government to 
spend

[[Page S1064]]

$73 billion more on nondefense discretionary programs alone. And, look, 
he wants Government to spend it on good things. He wants Government to 
spend it on education. He wants Government to spend it on health. He 
wants Government to spend it on building schools. He wants Government 
to spend it on all kinds of programs to help people. There is no evil 
or sinister scheme in what the President wants here. He wants 
Government to help you with $73 billion in new spending. The fact that 
it will mean that social spending will be at the highest level in 
American history and taxes will be at the highest level in American 
history, that does not change the fact that the President's intentions 
are both good, from his point of view, and they are honorable.
  But here is the difference. We are not debating how much money is 
going to be spent on education. We are not debating how much money is 
going to be spent on nutrition or health. We are debating who is going 
to do the spending. President Clinton wants the Government to do the 
spending and we want the family to do the spending. We want to take 
this $73 billion of spending increases on all the good things the 
President wants to spend it on and we want to give that money back to 
the families who earned it to begin with and we want to let them spend 
it on education and housing and nutrition. It is fundamentally an issue 
of whether Government can make better decisions for working families or 
whether working families can make better decisions.
  Let me give an example, the most heartrending part of the President's 
program, health care for children. Who wants to debate health care for 
children and be against it? Nobody. The President spoke with great 
eloquence and passion about it. He said 80 percent of the families that 
do not have private health insurance pay taxes; 20 percent that do not 
have it, by and large qualify for Medicaid but have never bothered to 
fill out the papers, in many cases because when a child gets sick and 
they go into the hospital, at that point they join Medicaid.
  Now, here is the fundamental issue. The President says working 
moderate-income families are having trouble making ends meet and, as a 
result, many of them do not have private health insurance for their 
children. We agree, Mr. President. We are in total agreement.
  But the issue is this. Is the solution to create another Government 
program to help these people? Or is the solution to let these working 
families keep more of what they earn so they can buy private health 
insurance for their children? Is the solution more Government? Or is 
the solution to let families have more freedom about spending their 
money? Is the solution to spend 73 billion more dollars, as the 
President has proposed, sitting around the Cabinet table at the White 
House, sitting around the committee tables here in Congress? Or is the 
solution to let working families keep more of what they earn and let 
them spend the money sitting around their kitchen tables? That is the 
fundamental issue. It is two different visions for two different 
Americas.
  If you want to go to the analogy about bridges to the 21st century, 
it is the debate about, not how we are going to get to the century--we 
are certainly going to get there. I can guarantee you today that, 
barring a calamity, we will have a 21st century. The debate is not 
about building a bridge to it, we are going to get there. The debate is 
what is the century going to be like when we get there. Is it going to 
be a century dominated by Government? Is it going to be a century where 
Government is taking care of us? We started out with a Government 
taking care of the poorest of the poor. Now the Government is taking 
care of more and more and more Americans. We are going to take care of 
moderate-income people because they cannot take care of themselves with 
the confiscatory tax burden that has them paying 15 cents out of every 
dollar in payroll taxes and often 28 cents of the last dollar they 
earn, or certainly 15 cents of the last dollar they earn to the Federal 
Government, and then State and local taxes on top of it. Is the 
solution, when families are taxed so they cannot meet their fundamental 
needs, to tax them more and to give them benefits? I don't think so.

  I think the solution is to let them keep more of what they earn and 
let them decide. That is the fundamental issue. That is what we ought 
to be debating. My appeal to the administration is: Look, let's clear 
all these other issues off the table. Let's not start out assuming that 
half of the work to be done is just going to happen miraculously. Let's 
not tell people we are giving them tax cuts and then take them away 4 
years from now, or tell them we are giving them tax cuts when, in fact, 
in the first year we are raising their taxes even if you believe 
everything in the President's budget. Let's not say we are going to 
make tough decisions in the sweet by-and-by, but in the first year have 
the deficit rising from 1996 and have taxes rising and have spending 
rising. If we are going to start on this diet, let's not wait until 
next week and go on a feeding binge this week. Let us start today.
  So, let's debate real, permanent tax cuts. Let's debate real 
decisionmaking. And then let's have the debate that America deserves, 
and the debate is a simple debate but it is fundamental to the future 
of our country. Do we have too much Government or too little? Can 
Government take care of you better than you can take care of yourself? 
Does Government love your children more than you do? Has Government 
proven that it can educate your children better than you could, if you 
got to keep more of what you earn and could invest it in their 
education? Would you rather have a new health care program or would you 
rather have us cut your taxes so you could buy health insurance that 
you choose for your children? That is a fundamental issue and that is 
what we ought to be deciding. But we cannot debate those issues when we 
are not debating apples to apples.
  So, my urging today to the President is: Let's go back and rewrite 
these budgets. Let's assume the same things about where the goalpost is 
and what we have to do to get to it. And then let's explain to America 
how we are going to do it, not with a sleight-of-hand, where we are 
going to come in 4 years from now with an unspecified policy and raise 
taxes and cut spending but we are not going to tell people how we are 
going to do it now. Let's put it all out on the table, let the American 
people look at it, and then let's make a fundamental decision.
  Finally, and I have spoken too long, but let me end on a note about 
cooperation. There is one area where we are going to have to have 
bipartisanship. If all else fails, it is an area where it is absolutely 
essential that we not let partisanship stop us from acting, and that 
area is Medicare. I know we talk about gloom and doom and the world 
coming to an end, and it does not come to an end. And it is not going 
to end until somebody more powerful by far than we are makes that 
decision. But Medicare is going broke. It is in the red this year. It 
will be bankrupt in 4 years. It will have a cumulative deficit of a 
half a trillion dollars in 10 years. We have a crisis in Medicare that 
is far beyond the comprehension of most people, as to how big this 
problem is. If we set out today to fix Medicare permanently, it would 
cost more money to fix Medicare and guarantee it for our parents and 
our children than it cost in real dollars to fight and win World War 
II.
  Those are the facts. So the one thing we must do, if we are going to 
do anything this year worthy of being remembered, is we have to begin 
to address the problems in Medicare. The President has made a bunch of 
proposals, and in some form or another, I can support virtually 
everything the President has proposed. I think, obviously, there are 
areas, with some debate, where the administration would make some 
changes, but here is the point. We are going to have to do some 
fundamental reforms in the system, and we are going to have to do them 
this year.
  In a sense, I will tell you the sky is falling in Medicare by saying 
if we don't start this year fixing Medicare, within a decade, we are 
going to be denying benefits to people, within a decade we are going to 
have a tax rate on the payroll tax that is going to be substantially 
higher than it is today, and the crisis is going to be greater even 
then than it is now. So this is one area where every person who 
represents the good interest of the country should work together. I am 
certainly interested in working with the President.

[[Page S1065]]

  We need a balanced budget amendment to the Constitution. I plan to 
speak at some length on this subject later. But I thought it was 
important to note, when we have stacked up 28 budget failures, 
Democratic and Republican budget failures that have not gotten the job 
done, that have failed the American people, that have mortgaged the 
future of our children, in the current form, the President's budget 
issued today will fail. It cannot and will not balance the budget, and 
our goal has to be to work with the President, if we can, to make this 
budget a real budget that will do the job. I, for one, am willing to 
work for that goal.
  I yield the floor.
  Ms. SNOWE addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Maine.
  Ms. SNOWE. Mr. President, I think we all accept the fact that this 
body faces so many great decisions on such a regular basis that it is 
sometimes difficult to focus on one vote or one debate that stands 
apart as a truly monumental decision, a truly monumental vote.
  But, let me be clear. I think the Senate is now entering such a 
debate, and later this month, this body will face such a vote. The 
stakes could not be higher. With a balanced budget constitutional 
amendment, this Senate will face perhaps its defining moment as we lay 
the foundation for our fiscal agenda of our Nation's coming century--as 
we decide how this Nation will conduct its affairs. Who can doubt that 
future generations will look upon this debate and this vote with great 
historical interest as a crossroads in our country's national affairs. 
Who can doubt, with this vote, these future generations will praise us 
for bringing America's economic house in order, or they will blame us 
for simply passing the buck when we could have stopped a mounting 
national crisis.
  Mr. President, as an idea, the concept of a balanced budget is hardly 
new. Many in this body have rightly championed it for many, many years. 
Leading economists across our Nation have spoken and written of its 
value, and many of the Nation's brightest business minds from Wall 
Street to Main Street have urged its passage. There is no politics in 
any of these voices. They simply speak the truth: A balanced budget is 
the first step on the road to long-term prosperity for America.
  But perhaps most convincingly, Mr. President, the balanced budget 
constitutional amendment is not just supported by these impressive 
voices. It is also championed by a nation of citizens who, for months 
and years, have been urging this body to take action, to pass the 
balanced budget constitutional amendment for the sake of our Nation and 
our children. According to a CBS-New York Times poll conducted January 
30 and February 1, an astounding 76 percent of our citizens favor this 
amendment. From parents who care about the economic future of their 
children to teenagers who are worried about their future, the call for 
a balanced budget has been loud. Some would say it has been deafening.
  Yet, the regrettable reality still exists. Unable to pass the 
balanced budget amendment, our Nation has run staggering deficits year 
after year that stifle our Nation's economic growth and prosperity, 
suffocate our future generations, and ultimately eradicate public 
confidence in our Nation's fiscal management to the point where only 12 
percent of the American people, according to a CBS-New York Times poll, 
think we will balance the budget by the year 2002. Unfortunately, Mr. 
President, the American people are losing confidence in our willingness 
and ability to act. They have lost confidence in our ability as a 
nation to face the challenges as we approach the 21st century.
  So let us in this debate consider some of the facts, because facts, 
as has often been said, are stubborn things. And the facts, when 
properly considered, point us unequivocally toward the merit of a 
balanced budget amendment.
  First, I want this body to listen carefully to an assessment issued 
just last May by the Congressional Budget Office. The CBO, as my 
colleagues well know, is not a partisan voice; it has no real stake in 
this debate, except to ensure the facts are properly considered. But 
its assessment of deficit spending could not be more troubling.
  According to the CBO report: ``The budget deficits projected for 
future years are so large that they could put an end to the upward 
trend in living standards that the Nation has long enjoyed. Thus, 
current U.S. budget policies cannot be sustained without risking 
substantial economic damage.''
  Substantial economic damage, that's right, Mr. President, is what we 
run the risk of bringing to this Nation if we do not act now. The CBO 
report goes further. Should we fail to bring our deficits to a halt, 
our economy will enter what CBO calls a period of ``accelerating 
decline.''
  ``Accelerating decline,'' ``substantial economic damage''--in my 18 
years in Congress, I have read a lot of CBO reports, a lot of analyses 
of our Nation's economy, and I can tell you, the warnings and the 
wordings do not get more dire than these.
  I know there are some who may say, ``Yes, I, too, support balanced 
budgets, and I, too, oppose deficits, but a balanced budget amendment, 
well, that goes too far, that binds us unnecessarily.''
  Mr. President, let us be clear about two further facts. First, these 
past three decades have shown that our political culture, the ways of 
our democratic governance, great as they are, do not always lend 
themselves well to fiscal prudence. My colleagues will recall that we 
tried before to reduce our deficits through statutory means. You can 
see right here that these number of budgets for the last 28 years have 
shown that we have failed. Let's look at the history of our efforts.
  Next to me, I have two charts. The first documents 33 years of good 
intentions--5 more years than these unbalanced budgets--statutory 
efforts that required or promised to balance the budget of our Nation. 
All the greatest hits from the past are here from the Revenue Act of 
1964 through Gramm-Rudman-Hollings of 1987, and more recently was the 
infamous Budget Act.
  But as we can see on this chart, the statutes don't work. Gramm-
Rudman-Hollings II; Gramm-Rudman-Hollings I; Recodification of title 
31, 1982; Bretton Woods agreement, 1980; debt limit increase, 1979; 
Byrd amendment; Humphrey-Hawkins Act; Revenue Act of 1978; and Revenue 
Act of 1964. These are just some of the examples of our statutory 
efforts in the past.
  I might also add, over the years, we have had a number of balanced 
budget amendments in both the House and the Senate, and I point back to 
October 1, 1982. The House failed to pass a resolution getting two-
thirds, and the Senate adopted a balanced budget constitutional 
amendment, August 4, 1982. Unfortunately, we didn't pass it in 
Congress, but as far back as 1982, we debated a balanced budget 
amendment. Each and every time, when we have had those debates on the 
amendments, everybody said, ``We can do it on our own if we only have 
the will. We really don't need a constitutional amendment.''
  Yet, Mr. President, this graph speaks for itself. Statute after 
statute has been passed by this body, but this deficit has kept right 
on marching. The lesson, I think, is clear--fail to pass this amendment 
and we reject perhaps the greatest fiscal lesson of modern times.
  This deficit is not going to be halted through statutes. I think this 
is a good indication with these 28 years of unbalanced budgets. The 
last time we had a balanced budget is when Neil Armstrong landed on the 
Moon. The only way we are going to stop deficit spending and reach a 
balanced budget is through an amendment.
  The second chart I have behind me reveals some other important 
aspects to this entire debate. First, a close examination of our budget 
history dating back, I might add, to 1905, reveals that deficits have 
been the norm, not the exception, as we can see. The deficits are in 
the red bars below the line. And the green--you can barely see it--is 
above the line, which would represent the years in which we have had 
surpluses between 1905 and 2005. Some of those are estimates for the 
projections by CBO for future years. That is last year's estimate. They 
may be a little bit better than that with this year's estimate. But, 
nevertheless, it gives a broad indication of the fact that we are going 
to continue to have major deficits in the future. It also has shown 
that we have had generally a century of deficits with very few 
exceptions.

[[Page S1066]]

  These deficits go back decades. Very rarely we found efforts in which 
we have been able to have a surplus. So I think that this chart reveals 
that we have had a century of failure of statutory efforts to balance 
the budget.
  Now, some have said, well, a balanced budget amendment is just a 
gimmick. As I have said before on the floor, and I will say it again, 
if this amendment was really a gimmick, we would have passed it long 
ago because Congress loves gimmicks.
  Mr. President, this is no gimmick. This is the first necessary step--
a brave, bold and thoughtful step--on the road to fiscal sanity.
  The second point, in response to these critics, is that the balanced 
budget amendment does allow us in the event of some national crisis, 
disaster or massive economic downturn to run a deficit. With a three-
fifths majority we can take the steps necessary to address any existing 
crisis that threatens our Nation and requires a commitment of our 
national financial resources above and beyond a balanced budget.
  When Members of this body vote yes for a balanced budget amendment, 
they are not prohibiting our country from ever running a deficit. We 
are simply making it the rare exception. So, Mr. President, I view this 
as a most responsible approach to the problem.
  I know some may be thinking that certainly we can escape this debate 
one more time, we can duck the big question one more time, we can 
conveniently leave this decision to others one more time. Well, again, 
Mr. President, facts are stubborn things, and they suggest a very 
different reality.
  The deficit of this Nation was $107 billion last year. Left 
unchecked, according to CBO, it will double by the year 2004. And by 
the year 2007, if we fail to act, it is expected to reach a staggering 
$278 billion. Put another way, the deficit comprised 2 percent of the 
GDP in 1995. Should we stand aside and do nothing? According again to 
statistics from CBO, this deficit will rise to 5 percent of the GDP by 
the year 2010 and 37 percent by the year 2030. The message of those 
statistics could not be more blunt: Time is ticking.
  In fact, in the year 2025 alone--in that year alone--the deficit will 
be $2 trillion. So the deficit, obviously, in future years is going to 
double and triple.
  Lest there be any doubt about the ramifications of all this, consider 
this. If we can prevent these staggering deficits and bring the budget 
into balance permanently through this constitutional amendment, our 
Nation will be the big winner. We will experience a 25 percent growth 
in the GNP per capita by the year 2030, according to CBO--a 25 percent 
growth per person, Mr. President. That means growth for our Nation's 
economy. It means jobs. It means higher standards of living. It means a 
positive difference in people's lives and their futures and their 
children's futures. These are the things that this Senate must take 
very, very seriously.

  So to those who say, well, the balanced budget amendment is just a 
product of deficit hawks, I say, take a close look at these CBO 
numbers. This is an economic growth initiative. This is about the 
future. This is about our children and our grandchildren. This is about 
economic security. It is about providing for a stronger standard of 
living, not a lower standard of living, because we are incurring debts 
and deficits to bequeath to the next generation.
  What about interest rates? I know this body knows well that growth is 
intimately linked to the rates of borrowing. That is no secret. Pay 
higher interest rates for a car, higher interest rates for a house, and 
you soon find less and less people able or willing to make that 
purchase. Production goes down, jobs get fewer. That, too, is no 
secret.
  But consider for a moment, Mr. President, the actual impact the 
amendment can have on our citizens. Look at the projections for lower 
interest rates if we pass a constitutional amendment to ensure the 
continuity of balanced budgets into the future, year after year after 
year, not just the year 2002.
  We have had estimates by the Joint Economic Committee that says that 
we could have a 2 percentage point decline in interest rates by the 
year 2002 if we have a balanced budget. The DRI-McGraw-Hill projection 
says that interest rates could drop even further, could drop more than 
2.5 percent if we pass this amendment.
  That means lower cost to people in terms of their mortgages and car 
loans and student loans, whatever the case may be in terms of 
borrowing. And that is real money to the average American family.
  It means that Americans who now pay $570 a month on an $80,000 
mortgage, when that mortgage is paid at an interest rate of 7.7 
percent, if we pass the constitutional amendment, this rate would fall 
to an estimated 5.7 percent, bringing that mortgage payment down to 
$464 a month according to the Joint Economic Committee. The result is a 
$1,272 mortgage savings per year for this family, all because we have 
taken the right steps through an amendment.
  That again is real money to the average American family who works 
hard and sees more of their hard-earned dollars being taken in terms of 
taxes. We have seen the tax burden escalate in this country. It is the 
highest historically because taxes consume more now than food, shelter 
and clothing combined.
  But also look at what a balanced budget amendment would mean in 
savings--in excess of $1,500 to the typical middle-income family, 
counting their interest savings on all of these loans, on mortgage 
loans and car loans and student loans, according to the Joint Economic 
Committee.
  Now, Mr. President, President Clinton is talking about building a 
bridge to the 21st century. That is fine. But, with this vote, we will 
go far in defining what kind of bridge this will be. This bridge to the 
21st century can be solid, constructed on strong beams, capable of 
moving the American people safely and securely, or it can be a 
hazardous and rickety bamboo bridge suspended by worn ropes over the 
chasm of our national deficit.
  Pass the balanced budget amendment and we lay the ground for a solid 
foundation for this bridge into the next century. Pass the buck on the 
balanced budget amendment and we cross this bamboo bridge literally on 
borrowed time.
  So the decision will be ours. I think we know the right thing to do. 
We know the danger, indeed, the very threat, to our Nation of ongoing 
deficits and deficits. We know that we need stronger steps of fiscal 
self-discipline. I doubt that any Member of this great body, knowing 
what they know about the dangers of deficits and our historical 
inability to end them without this amendment and the many benefits of 
this amendment, can rise in good conscience to defend the status quo.
  Now only one question remains, and it is this: Will we have the 
strength and the courage and the wisdom to implement it? Mr. President, 
let this Senate answer this vital question without hesitation. For the 
sake of our Nation and its future, let this answer be yes. Mr. 
President, I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from North 
Dakota.
  Mr. DORGAN. Mr. President, I have been very interested in the 
discussion today about a constitutional amendment to balance the 
budget. It is a serious subject and one which the Senate should take 
seriously. We should have a robust, aggressive, provocative and 
interesting debate on a question of this magnitude.
  I have told the Senate before, and I would like to again at the risk 
of being redundant, that I was privileged to be one of 55 people to go 
back into the room in Constitution Hall in Philadelphia on the 200th 
anniversary of the writing of the Constitution. 200 years previous, 55 
white men went into the room in Philadelphia Hall, some very great men, 
and they wrote a Constitution for this country. George Washington's 
chair is still in that room. You can see where he sat in the front of 
the room and presided over the Constitutional Convention.

  Mr. President, 200 years later 55 people--men and women, people from 
all ethnic and racial backgrounds--went in and had a celebration in 
that room.
  Coming from a very small town in southwestern North Dakota, I kind of 
got goose bumps that day because I was sitting in the very room where 
they wrote the Constitution of the

[[Page S1067]]

United States. It was a unique and special privilege for me to be 
present and to be one of those participants.
  Senator Byrd, the distinguished Senator from West Virginia, and I 
were just visiting moments ago about the U.S. Constitution and he gave 
me a copy of the Constitution that he carries in his pocket. It is a 
very small document, one of the most remarkable documents ever written 
by people who live on this Earth. It is the framework for the most 
successful democracy in the history of the world.
  It is this document, the Constitution of the United States, that we 
are talking about amending. We are debating whether or not to alter 
this document. And we are in the midst of a blizzard of rhetoric about 
a stack of 6 or 8 feet of budget documents spanning some 29 or 30 
years.
  Well, those budget documents do not read like this:

       ``We The People of the United States, in Order to form a 
     more perfect Union, establish Justice, insure domestic 
     Tranquility, provide for the common defence, promote the 
     general Welfare, and secure the Blessings of Liberty to 
     ourselves and our Posterity, do ordain and establish this 
     Constitution for the United States of America.''

  You will not find this language in that stack of documents.
  This Constitution has a provision in it by which it can be amended. 
We have some people in politics today who believe that this is an 
imperfect document. Some, in fact, in the last session of Congress, 
some proposed three separate amendments in the period of 3 months. Over 
the years we have had thousands of proposals to change this document. I 
do not see many people who look like Madison, Mason, Franklin, or 
Washington walking around making these proposals. I see a lot of other 
folks making these proposals.
  My point is this: When we debate how and whether we should alter the 
Constitution of the United States, we ought to be mindful of the need 
to get it right. Be careful. Do not dishonor this great document by 
making alterations that will in the long run weaken our country.
  That brings me to the debate about the current constitutional 
amendment to balance the budget.
  Mr. BYRD. Mr. President, would the distinguished Senator yield at 
this point without losing his right to the floor?
  Mr. DORGAN. I am happy to yield.
  Mr. BYRD. The distinguished Senator talked about the language of the 
Constitution. In reading this amendment, this proposed amendment to the 
Constitution, I have been struck as I read it by the contrast in this 
language in the proposed amendment in contrast to the language of the 
Constitution.
  Would the Senator be surprised if I were to say to him that the 
Constitution of the United States provides for a Congress of two 
bodies, the Senate and the House of Representatives, provides for the 
creation of the House of Representatives, provides for the 
establishment of the Senate of the United States, provides for the 
establishment of the Presidency, provides for the establishment of the 
Supreme Court of the United States, and provides for the mode by which 
that Constitution would come into being? Would the Senator be surprised 
if I were to say to him that the language in the Constitution that does 
all of these things that I just enumerated constitutes fewer words than 
are used in this proposed amendment to the Constitution? Would the 
Senator be surprised at my saying that?
  Mr. DORGAN. Well, I am not surprised because I have read those 
provisions. But I fully understand the point the Senator from West 
Virginia has made.

  Mr. BYRD. This is not Constitution-like language, to start with.
  Has the Senator heard any proponent of this amendment come to the 
Senate floor and explain to the Senate and to the people watching and 
listening to the debate through the electronic eye, has the Senator 
heard any proponent come to the floor and, section by section by 
section, explain this amendment, how each section would work, why each 
section is there, what each section means?
  I have heard quite a number of Senators come to the floor and talk 
about the need for balancing the budget. I think we are all in 
agreement on that and I think there is a consensus here as to a need 
for balancing the budget at some point, bringing down the deficits, but 
I have not heard a single Senator--and I have not been able to listen 
to all of the debate; I tried to listen to as much as possible, but the 
Senator has heard most of the debate--has the Senator heard any 
proponent of this amendment come fully explain this amendment, talk 
about the amendment? Not about the need for balancing the budget, not 
about the need for getting the deficits down, about which we all agree. 
I would be greatly enlightened if a Senator would take the time not to 
talk about something we all agree on, but to talk about how this 
amendment will balance the budget, how it will eliminate the deficits. 
Has the Senator heard any proponent do that thus far?
  Mr. DORGAN. I say to the Senator I have not. Again, the Senator makes 
a good point. There is a difference between balancing the budget and 
amending the Constitution to require that it be done.
  Mr. BYRD. I thank the distinguished Senator.
  Mr. DORGAN. I appreciate the comments by the Senator from West 
Virginia.
  I will talk just for a moment about this issue of debt. Clearly, the 
amount of Federal debt that we have is excessive. The deficits that we 
have experienced in recent years, in the last couple of decades, 
especially, saddle our children with interest payments that we do not 
want to have to have them meet. Clearly, we need to make progress in 
balancing the budget and finally achieve fiscal stability and have a 
budget that is balanced. That is clear.
  We have a debt problem. That is clear as a bell.
  I say to people who come to the floor and talk about this issue, 
however, it is not just the Federal debt. We have corporate debt that 
is rising just exactly like the Federal debt is. We have credit card 
debt that is rising faster. We have consumer debt that is rising just 
as fast. We have $21 trillion in debt out there in this country.
  In fact, you walk down the street, you walk past a picture window of 
a business someplace, and you almost hear the invisible tapping on the 
windowpane behind the bright red letter sign that says to you ``Say, 
consumer, come over here a second. It does not matter you cannot afford 
this. It does not matter that you do not have money for it. Come and 
buy this product. Come over here and buy this product. We will give you 
the product. You take the product home. We will give you a rebate. You 
do not make a payment for 6 months. Come over here. Credit bad, it does 
not matter. We will give you credit. Are you in college and have no 
job? We will give you a credit card. In fact, we will give you four of 
them, from four different companies. You do not have to have a job and 
you can be in college and you get a pen pal or a dozen of them, saying 
`Take our credit card, buy our product. It does not matter that you 
cannot afford it.'''
  We have a debt problem in this country. It is an addiction and it is 
a problem in a range of areas in our economy. One area we can do 
something about is the Federal Government's spending and the Federal 
Government's fiscal policy. I want to talk about that. In 1993, 
President Clinton won his election to the Presidency. He came to this 
Congress and he said the Federal deficit is a problem and he proposed 
that we do something about it. He proposed a deficit reduction act. It 
included some tough medicine, some things people did not like, some 
controversial items, spending cuts, yes, real spending cuts. Some tax 
increases, yes, very unpopular. We passed it here in the Senate by one 
vote. I voted for it. Was it the popular thing to do? Of course not. 
The popular thing to do would have been to have voted against it and go 
home and crow about having voted in opposition to this proposal. Now, 
that would have been the political thing to do--go home and crow about 
your opposition to this proposal. We didn't get one vote from the other 
side of the aisle, not one, not even by accident. You would think maybe 
someone on that side would have made a mistake and voted for it. No. We 
passed it by one vote.

  I will read for my colleagues some of the comments during that 
debate. If you pass this legislation to tackle the deficit in this way, 
some of my colleagues said, what is going to happen?

[[Page S1068]]

 ``This bill is going to cost America jobs.'' ``It will kill jobs.'' 
``It's going to be devastating.'' ``We are buying a one-way ticket to a 
recession.'' Another Senator said, ``It will turn a fragile recovery 
into a solid recession.'' Another said, ``It will lead to a 
recession.'' All of that was said here on the floor of the Senate. ``Do 
this and you kill this economy.''
  But we did it, and here is what happened to the Federal budget 
deficit since then: 4 straight years of reduced deficits; the unified 
deficit cut in real terms by 60 percent--60 percent.
  Now, this isn't the deficit the Republicans use or the President uses 
because neither one use the right numbers. This is a deficit without 
the Social Security funds in it, because you ought not be able to 
misuse those funds. A 60-percent reduction in real terms in the unified 
deficit.
  What happened to the economy? We have seen record numbers of new 
jobs. The economy continues to grow.
  What did we do? We cut the deficit by 60 percent. I am glad I did 
that. Was there a price to pay for that? Yes. The popular thing would 
have been to do something different. But we did this.
  Now, how do you cut the deficit from here to zero? Well, you can get 
a costume and suit up and strut around and bellow or bray or crow, or 
whatever it is one wants to do. Or you can decide that the way to 
reduce the budget deficit is by individual spending and taxing choices 
that we must make in a budget document.
  You can alter the Constitution of the United States, I guess. You can 
take this little Constitution and alter it in a hundred places and when 
it's done, in 5 seconds, not one penny will have been altered from this 
budget deficit. You can change the Constitution at 2:10 today and you 
won't have done one thing to change the budget deficit. Why? Because 
changing the Constitution doesn't change the deficit. Only men and 
women making individual decisions on spending and taxing can change the 
budget deficit. We did that in 1993. We didn't have many friends when 
we did it, but we did it. It's tough medicine, but it's the medicine we 
have to take.
  Now, some come to us today and say that if we simply change the 
Constitution, we will solve this problem. I have taken the position 
that I am willing to alter the Constitution of this country. I have not 
been willing to do it often. I voted against most of the proposals--
term limits and dozens of proposals around here--to alter the 
Constitution. I have not been very willing to change the Constitution. 
But I have said I think there is some merit in fiscal discipline. I 
would vote to alter the Constitution.
  But I will not, under any condition, vote to alter this Constitution 
in a manner that, as the majority proposal does, takes the Social 
Security trust funds, adds them in, and then claims to have balanced 
the budget when they haven't. That happens today in normal fiscal 
policy practice, and it is wrong today. It was wrong last year and, 
especially, it will be wrong and devastating to this country if you 
enshrine that practice into the Constitution of the United States.
  I want to ask one question, and I want to come here this coming week 
and ask it repeatedly because I want to find someone who will stand up 
and answer the question.
  To frame the question, I want to give a little history. In 1983, the 
Congress said, ``We have problems financing the Social Security 
system.'' We formed a commission, headed by Mr. Greenspan, who now 
chairs the Federal Reserve Board. Mr. Greenspan and the commission 
reported to Congress and said that the way we are going to solve the 
Social Security problem in the long-term is we are going to increase 
payroll taxes, we are going to increase the age of retirement in the 
outyears, far out in the outyears, and make a number of other changes. 
When we do that, we are going to deliberately develop a Social Security 
surplus--this year, incidentally, it's $78 billion--and that surplus 
will be available when the baby boomers need it and retire, well after 
the turn of the century.
  Why was that necessary? Because after the Second World War there was 
this massive outpouring of love and affection when our young men came 
home. Guess what? There was something called the World War II baby 
boomers, the largest baby crop in the history of our country. That 
large baby crop has worked its way through our society. When it reaches 
retirement age, we have a demographic problem in Social Security. That 
is what the Greenspan commission said. The Congress recognized that and 
they said, ``Let us save for that period of time, collect more money 
now in the Social Security system so that we have it available later 
when we need it.''
  Now, the reason I say that they did that, here is the commission 
testimony before the Ways and Means Committee on which I sat. It is 
what they claimed, what they said and recommended to us. Create the 
surplus now so that it's available later when we need it. It was the 
sober and right thing to do. That is exactly what was done.
  In fact, on the chart here are the Social Security surpluses that are 
going to accrue. This simply goes to 2010-- actually, the trust fund is 
in surplus out to about 2018, and in 2019 begins to run a deficit. You 
will see the surpluses. These are not insignificant amounts of money. 
We are talking a trillion dollars in the next 10 years alone.
  Now, unfortunately, what has happened as a result of all of this is, 
instead of this money being saved, it has been used as an offset 
against other spending. Some say, well, that is all technical garble. 
It is not technical garble.
  I want to ask this question as a result of all of this: In the year 
2002, when we are told by this constitutional mandate and by a budget 
that calls for a balanced budget--and this would be true of the 
administration's budget and also true of the majority party's budget--
in 2002, if the budget is in balance, why in that year will the 
Congress be required to increase by $130 billion the limit on total 
Federal debt?
  I want to ask this question again. I want to ask this a fair amount 
and get an answer to it. If the budget is balanced by constitutional 
mandate, if the budget is balanced by a budget plan submitted by 
anybody in the year 2002, why in the year in which the budget is 
balanced does CBO tell us that the debt limit will have to be increased 
by $130 billion?
  I will give you my answer. My answer is that the reason the debt 
limit has to be increased the very year they say the budget is in 
balance is because the budget isn't in balance, and everybody here 
knows it. It's a charade.
  I want to ask that question and ask someone to come and answer it. I 
certainly intend to ask the sponsors to answer it. If the budget is in 
balance, why are you then required to increase the Federal debt?
  Does anybody sitting around their dinner table talking about how they 
balance their checkbooks believe that is what would happen? We are in 
perfect balance, our spending is meeting the amount of money we have to 
spend and, therefore, our debt is increasing. Does anybody believe that 
would meet the test of credibility in business? I don't think so. It 
doesn't meet the test of credibility here.
  I will support a constitutional amendment to balance the budget. I 
have introduced one with six of my colleagues, which does not misuse 
the Social Security trust funds to the tune of a trillion dollars. I 
challenge those who say they want to alter the Constitution of the 
United States to join us. We can pass it in 10 minutes, pass it with 75 
votes. But that's not what is at stake here. What is at stake are 
people who want to talk about balancing the budget.
  We did more than talk in 1993. We cut the unified budget deficit by 
60 percent in real terms, at some political peril, and we paid a price 
for it. Some people want to talk about balancing the budget and about 
altering the Constitution. What I want to talk about is doing what we 
promised the American people we would do--saving over a trillion 
dollars in the next 10 years of Social Security dedicated trust funds 
that are taken from workers' paychecks. We promised those workers their 
money would be saved in a trust fund, saved for when we need it after 
the turn of the century. Yet here we see a Constitutional proposal to 
misuse those trust funds and claim that we have balanced the budget.
  A columnist in the Washington Post, who I shall not name--Charles 
Krauthammer--wrote a column last week about this matter. This was his

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third column on this issue. He is all cranky about it. He basically 
said, ``Dorgan and those folks don't know what they are talking 
about.''
  There is no Social Security trust fund? Social Security is pay as you 
go? Nonsense. What a bunch of nonsense.
  You have a right to be wrong in this country. God bless political 
pundits who are wrong. You have a right to be wrong. But if you want to 
see the Social Security trust fund securities, go to Parkersburg, WV. 
The bonds are under armed guard. The trust funds exist under law. Bonds 
are in the trust fund.
  Pay as you go? Nonsense. The Commission in 1983 said it was not going 
to be a pay-as-you-go system anymore, that we will raise more money--
$78 billion this year alone--and save that money for the future. So Mr. 
Krauthammer is just flat wrong.
  A group that is right is the well-respected Center on Budget and 
Policy Priorities. They published something on this issue this week. I 
want to read part of it into the Record because I heard some discussion 
here today saying if we do not pass our constitutional amendment to 
balance the budget, the one that misuses all of these Social Security 
revenues, it is going to hurt our kids.
  You want to hurt kids? I will tell you how, and do it quickly. It is 
confirmed by this study. What you do is take the savings that are 
designed to be spent in the Social Security system when our kids are 
going to be out there working and you use the surplus now in order to 
claim that you are balancing the budget and continue running the 
deficit. That is why you are still increasing the Federal debt even as 
you claim you have a balanced budget.
  That will really hurt kids, because 10, 15 or 20 years from now you 
will have to have massive tax increases on our kids to pay for the baby 
boomers' retirement. The Center on Budget and Policy Priorities lays 
the whole scenario out in this document.
  Pass the constitutional amendment that I have talked about, and you 
do the honest thing. You save the money we said we would save and you 
are balancing the budget.
  But let me go through this quickly. The report by the Center on 
Budget and Policy Priorities reads as follows:

       The version that includes the Social Security revenues in 
     the unified budget poses serious dangers for the Social 
     Security system. It also is inequitable to younger 
     generations, as it would likely cause those who are children 
     today to have to bear substantial payroll tax increases when 
     they reach their peak earning years.

  The reason? Because the money we said was going to save the day is 
not going to be saved by those who want to enshrine the misuse of it in 
the U.S. Constitution.
  I will read another piece of this.

       Unfortunately, the balanced budget amendment pushed by the 
     Leadership would undermine this approach to protecting Social 
     Security and promoting generational equity. Under this 
     version of the balanced budget amendment, total government 
     expenditures in any year--including expenditures for Social 
     Security benefits--could not exceed total revenues collected 
     in the same year, including revenues from Social Security 
     payroll taxes.

  What are the implications of that? It is pretty clear. We envisioned 
when we passed the Social Security Reform Act that we were going to 
have a circumstance where we save now and spend out later. The balanced 
budget amendment reported by the Judiciary Committee would not only 
allow the misuse of the savings now but also would prevent the 
expenditure later when it was necessary to meet future needs.
  The leadership version, according to the Center on Budget and Policy 
Priorities, ``would eviscerate the essential achievements of the 
Greenspan commission.''
  I ask unanimous consent to have this printed in the Record. This is 
an excellent piece that has been written by the Center on Budget and 
Policy Priorities on exactly this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

           The Balanced Budget Amendment and Social Security

       In recent years, Congress has considered two versions of 
     the balanced budget amendment. The version supported by the 
     Republican Congressional leadership (herein termed the 
     ``Leadership version'') requires the ``unified budget'' to be 
     balanced each year, including Social Security. The other 
     version, which Senators Feinstein, Wyden, Dorgan and others 
     introduced in the last Congress, requires the budget 
     exclusive of Social Security to be in balance.
       The version that includes Social Security in the unified 
     budget poses serious dangers for the Social Security system. 
     It also is inequitable to younger generations, as it would 
     likely cause those who are children today to have to bear 
     substantial payroll tax increases when they reach their peak 
     earnings years. The Feinstein/Wyden/Dorgan version introduced 
     in 1996 does not pose these problems.


                               Background

       In coming decades, Social Security faces a demographic 
     bulge. The baby boomers are so numerous that when they 
     retire, the ratio of workers to retirees will fall to a low 
     level.
       This poses a problem because Social Security has 
     traditionally operated on a ``pay-as-you-go'' basis. The 
     payroll taxes contributed by today's workers finance the 
     benefits of today's retirees. Because there will be so many 
     retirees when the baby boomers grow old, however, it will be 
     difficult for the workers of that period to carry the load 
     without large increases in payroll taxes.
       The acclaimed 1983 bipartisan Social Security commission 
     headed by Alan Greenspan recognized this problem. It moved 
     Social Security from a pure ``pay-as-you-go'' system to one 
     under which the baby boomers would contribute more toward 
     their own retirement. As a result, the Social Security system 
     is now building up surpluses. By 2019, these surpluses will 
     equal $3 trillion. After that, as the bulk of the baby boom 
     generation moves into retirement, the system will draw down 
     the surpluses (although it is likely that Congress will act 
     to bolster Social Security's finances by reducing benefits or 
     increasing revenues before then, thereby causing the 
     surpluses to grow larger and last longer than current 
     projections indicate). This practice of building up the 
     surpluses while most baby boomers are still working and 
     drawing them down after they retire is akin to what families 
     do by saving for retirement during their working years and 
     drawing down their savings after they reach retirement.
       This approach has important merits. It promotes 
     generational equity by keeping the burden on younger 
     generations from becoming too high. In addition, if the 
     Social Security surpluses were to be used in the next two 
     decades to increase national saving rather than to offset the 
     deficit in the rest of the budget, that would likely result 
     in stronger economic growth, which in turn would better 
     enable the country to afford to support the baby boomers when 
     they reach their twilight years.
       To pursue this approach, the deficit in the non-Social 
     Security budget will need to be reduced significantly or 
     eliminated in coming years--so the surpluses in the Social 
     Security trust funds contribute in whole or large part to 
     national saving--and further reforms in Social Security will 
     need to be instituted to restore it to long-term actuarial 
     balance.


                 The Leadership BBA and Social Security

       Unfortunately, the balanced budget amendment pushed by the 
     Leadership would undermine this approach to protecting Social 
     Security and promoting generational equity. Under this 
     version of the balanced budget amendment, total government 
     expenditures in any year--including expenditures for Social 
     Security benefits--could not exceed total revenues collected 
     in the same year, including revenues from Social Security 
     payroll taxes. The implications of this requirement for 
     Social Security are profound.
       First, the budget would be considered balanced when the 
     deficit outside Social Security exactly offset the surplus 
     inside Social Security. But when that occurred, the sound 
     objective of the Greenspan commission--to accumulate a Social 
     Security surplus partly to help build the nation's capital 
     stock and productive capacity so we can better afford to pay 
     for the baby boomers' retirement--would be stymied.
       Second, the benefits of the baby boomers would have to be 
     financed in full by the taxes of those working in the years 
     the baby boomers are retired.
       The Leadership version thus would eviscerate the central 
     achievements of the Greenspan commission.
       One reason the Leadership version would have this effect is 
     that even though the Social Security trust funds would have 
     been accumulating large balances, drawing down those balances 
     when the baby boomers retired would mean the trust funds were 
     spending more in benefits in those years than they were 
     receiving in taxes. Under the Leadership version, that would 
     result in impermissible deficit spending (unless it were 
     offset by a corresponding surplus in the rest of the budget, 
     a daunting and possibly unachievable task, especially since 
     Medicare and Medicaid costs also will rise when the baby 
     boomers retire.)
       By precluding use of the Social Security surpluses in the 
     manner the 1983 legislation intended, the Leadership version 
     would be virtually certain to precipitate a massive crisis in 
     Social Security about 20 years from now, even if legislation 
     had been passed in the meantime putting Social Security in 
     long-term actuarial balance. To help pay the benefits of the 
     baby boom generation, the nation would face an excruciating 
     choice at

[[Page S1070]]

     that time between much deeper cuts in Social Security 
     benefits than were needed to make Social Security solvent and 
     much larger increases in payroll taxes than would otherwise 
     be required. There would be only one other alternative--to 
     finance Social Security deficits in those years not by 
     drawing down the Social Security surplus but by raising other 
     taxes substantially or slashing the rest of government 
     severely. As a result, the government might fail to provide 
     adequately for other basic services, potentially including 
     health care and national defense.
       Given the numbers of baby boomers who will be retired or on 
     the verge of retirement in those years, deep cuts in Social 
     Security benefits are not likely at that time. Thus, under 
     the leadership version, it is almost inevitable that younger 
     generations will face a combination of sharp payroll tax 
     increases and deep reductions in basic government services.
       For these reasons, the Leadership version is inequitable to 
     younger generations. Aggravating this problem, the Leadership 
     version would undermine efforts to pass Social Security 
     reforms in the near future. Why should Congress and the 
     President bother to make hard choices now in Social Security 
     that would build the surpluses to more ample levels if these 
     surpluses can't be used when the boomers retire? Under the 
     leadership version, there is no longer any reason to act now 
     rather than to let Social Security's financing problems 
     fester.


    leadership version also poses other problems for social security

       Under the Leadership version, reductions in Social Security 
     could be used to help Congress and the President balance the 
     budget when they faced a budget crunch. This could lead to 
     too little being done to reduce or eliminate deficits in the 
     non-Social Security part of the budget and unnecessary 
     benefit cutbacks in Social Security.
       At first blush, that may sound implausible politically. But 
     the balanced budget amendment is likely to lead to periodic 
     mid-year crises, when budgets thought to be balanced at the 
     start of a fiscal year out of balance during the year, as a 
     result of factors such as slower-than-expected economic 
     growth. When sizable deficits emerge with only part of the 
     year remaining, they will often be very difficult to address. 
     Congress and the President may be unable to agree on a 
     package of budget cuts of the magnitude needed to restore 
     balance in the remaining months of the year. Congress also 
     may be unable to amass three-fifths majorities in both 
     chambers to raise the debt limit and allow a deficit.
       In such circumstances, the President or possibly the courts 
     may feel compelled to act to uphold the Constitutional 
     requirement for budget balance. In documents circulated in 
     November 1996 explaining how the amendment would work, the 
     House co-authors of the amendment--Reps. Dan Schaefer and 
     Charles Stenholm--write that in such circumstances, ``The 
     President would be bound, at the point at which the 
     `Government runs out of money' to stop issuing checks.'' This 
     would place Social Security benefits at risk.


                  the feinstein/wyden/dorgan approach

       The Feinstein/Wyden/Dorgan approach resolves the problems 
     the Leadership version creates in the Social Security area. 
     It reinforces the 1983 Social Security legislation rather 
     than undermining that legislation. It does so by requiring 
     that the surpluses in the Social Security system contribute 
     to national saving rather than be used to finance deficits in 
     the rest of the budget and by enabling the surpluses to be 
     drawn down when the baby boomers retire.
       The Feinstein/Wyden/Dorgan version thus improves 
     intergenerational equity rather than undermining it. It 
     ensures the surpluses will be intact when they are needed. It 
     also allows these surpluses to be drawn down when the baby 
     boomers are retired, rather than forcing large payroll tax 
     increases and benefit cuts at that time that go well beyond 
     what is needed to make the trust fund solvent.
       This version of the amendment also ensures that Social 
     Security benefits will not be cut--and Social Security checks 
     not placed in jeopardy--if the balanced budget amendment 
     leads to future budget crises and showdowns. However such 
     crises are resolved, Social Security would not be involved, 
     because cuts in Social Security would not count toward 
     achieving budget balance.

  Mr. DORGAN. Mr. President, I will come back to the floor and ask this 
question again: If the budget is balanced, why is the Federal debt 
increasing? Why do you want to put a process in and enshrine a practice 
in the Constitution that reaches this result, a budget that you claim 
is in balance when the Federal debt is continuing to rise?
  I will continue to ask that question and ask if there isn't a better 
way to decide to alter the Constitution of the United States.
  I want to just respond for one moment to some of what we heard on the 
floor about how we got to where we are now. I will be very brief on 
this final point.
  We are constantly told--in fact, one of my colleagues last year, and 
I will never forget this, talked about how we ought to somehow regret 
the last 50 years in our country. ``Gee, what an awful place. What 
terrible decisions were made in America in the last 50 years.''
  In November I was in several countries in Asia, and one of the 
interesting things that I discovered is that when you talk to most of 
the citizens of those countries, they want to come to the United 
States. Why? They think this is a wonderful place because of the things 
that we have created--our education policies, our achievements in a 
whole range of areas such as health care, education, and the 
environment.
  Most people see America as a beacon of hope and opportunity. Most 
people around the world see this as a wonderful place in which to live. 
And much of what makes us a great country is Medicare, Social Security, 
Head Start programs, and so many other things, almost all of which had 
to be done by people standing up on the floor of the Senate saying let 
us do these things, let us improve this country, this is a step 
forward.
  And others are standing up saying, ``Oh, Lord no, we can't do this.'' 
I know people who are just opposed to everything for the first time. We 
all know people like that. No matter what it is, they oppose it for the 
first time, and 10 years later, of course, they think it is just fine 
because they then understood that it worked.
  We have done some good things in this country. And we have made some 
mistakes.
  David Stockman, the Director of the Office of Management and Budget 
under President Reagan, has written about one of our mistakes. And he 
was one of the architects of what was done. One of the mistakes made in 
the early 1980's, as he tells it, was this. ``The root problem''--he is 
talking about the deficits now and where we are financially as a 
nation--``The root problem goes back to July 1981, the frenzy of 
excessive and imprudent tax cutting that shattered the Nation's fiscal 
stability * * *'' He says, ``A noisy faction of Republicans willfully 
denied this giant mistake of fiscal governance and their own 
culpability in it ever since. Instead they have excessively poisoned 
the political debate pretending that economic growth and spending cuts 
alone will cure the deficit.''
  That is David Stockman. That is a Republican.
  The only point I am raising is not to point back and forth but just 
to say here is where we are. Here is how we got here. Let all of us 
decide, yes, let us balance the budget. Let us put this country on a 
fiscal policy plane that makes some sense. Let us do this for the 
benefit of our kids.
  But let us not enshrine in the Constitution a practice that is not 
honest budgeting. Let us not do something that ends with this result of 
people crowing about how we are balancing the budget, even for their 
children's benefit, who come to vote for increasing the Federal debt 
and the same year claim the budget is balanced. How do they explain 
that to their kids?
  If we are going to do something on this floor, especially with this 
document, let us do it the right way and not the wrong way.
  Mr. LEAHY. Mr. President, will the Senator yield for a question?
  Mr. DORGAN. Yes.
  Mr. LEAHY. I ask the Senator: The Senator is aware, I am sure, that 
during the first 7 or 8 years of the 1980's the national debt was 
doubled and tripled; that the administration, then President Reagan's 
administration and the budget they proposed and received, took all the 
national debt that this country had built up over 200 years, first 
doubled it, and then they tripled it.
  The Senator, I believe, pointed that out. Is that correct?
  Mr. DORGAN. That is the point I was making. It is the point David 
Stockman made.
  It was the fiscal policy recommended and designed by them. However, 
we also have a responsibility. Democrats and Republicans all have a 
responsibility for this problem and to solve it together but not create 
circumstances where we can claim a balanced budget as the Federal debt 
continues to increase. That is my point.
  Mr. LEAHY. I agree with the Senator's point. Would the Senator not

[[Page S1071]]

also agree with what President Clinton said in the State of the Union 
Message that we want a balanced budget? The answer is right there in 
the Chamber where he spoke. We can vote for it, and he can sign it, and 
we can do that without amending the Constitution.
  The Constitution has been amended only 17 times since the Bill of 
Rights.
  Is that correct?
  Mr. DORGAN. That is correct. As I pointed out, if the Constitution is 
amended at 2:25 today, at 2:26 the deficit will not have decreased by 
one penny. Why? Because altering the Constitution will not decrease the 
deficit. Only individual choices by men and women of goodwill in this 
Chamber who are willing to take some risks and take a little heat for 
it will cut the deficit and finally balance the budget.
  I am willing to do that. I demonstrated that in 1993, as did the 
Senator from Vermont. We had the fiscal discipline.
  If we can get some others to join us, we can balance this Federal 
budget. I just do not want us to play games, saying we balanced the 
budget, only then trying to explain to our children why the Federal 
debt continues to increase at the same time. That is not balancing the 
budget.
  Mr. President, I yield the floor.
  Mr. LEAHY. Mr. President, I thank the Senator. I believe the other 
side wishes to have time, and I yield the floor.
  Ms. SNOWE addressed the Chair.
  The PRESIDING OFFICER (Mr. Sessions). The Senator from Maine.

                          ____________________