[Congressional Record Volume 143, Number 16 (Monday, February 10, 1997)]
[Senate]
[Pages S1145-S1147]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE PRESIDENT'S BUDGET PLAN

  Mr. CONRAD. Mr. President, the President of the United States has now 
submitted his budget, a plan that extends for 5 years, a plan that 
continues us on the path of deficit reduction, a plan that will 
continue to reduce the role of the Federal Government in the life of 
the country, but one that will emphasize the priorities that he 
stressed in the most recent campaign--an emphasis on improving 
educational opportunity in the United States, a desire to preserve the 
important priorities of caring for our senior citizens through the 
Medicare Program, of also preserving the social safety net, and at the 
same time reforming the welfare program to provide that people who are 
in need of assistance go to work, where possible. All of these are 
contained in the President's latest budget submission.
  I have heard a fair amount of criticism from various circles about 
various elements of the President's plan. I think it's appropriate to 
respond to those criticisms so that people who are

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watching this debate unfold have a balanced view of what the President 
has proposed.
  One of the criticisms that I have heard is that the President is 
proposing significant increases in Federal spending. Mr. President, if 
one looks at the fairest measure of what is happening to Federal 
spending, one comes to quite a different conclusion. I have prepared 
this chart that shows what has happened since 1992, back when the 
deficit was $290 billion. It shows what has happened to Federal 
spending as a percentage of our national income. Also described is the 
gross domestic product. It is perhaps the fairest measure of what is 
happening to the Federal budget, because it looks, in inflation 
adjusted terms, at what is happening to Federal spending.
  One can see by this chart that back in 1992 we were spending, at the 
Federal level, nearly 22 percent of our national income. In fact, it 
was 21.8 percent. Because of the 1993 budget deal that has done a 
dramatic job in reducing the Federal deficit by both cutting spending 
and also raising income taxes on the wealthiest 1 percent in this 
country, you can see what has happened. Spending, as a share of our 
national income by the Federal Government, has gone down--20.8 percent 
in 1996. Revenue went up, narrowing the gap between spending and 
revenue, and as a result, reducing the deficit. You can see, according 
to the President's plan, that Federal spending stabilizes for 1 year at 
20.8 percent of national income and then starts declining each and 
every year until Federal spending declines to 19 percent of our 
national income.
  Mr. President, that is dramatically lower than in any year under 
either the Reagan administration or the Bush administration. In fact, 
if you look back in terms of what the Federal Government was spending 
as a percentage of our national income in the years of President Reagan 
and President Bush, what you will find is that spending ranged between 
22 and 23 percent of our national income. And so President Clinton's 
plan, which is to take us to 19 percent of our national income going to 
the Federal Government, is a dramatic reduction and put us at the 
lowest levels that we have experienced for a very long time.
  Another thing that we have heard is that the President's plan uses a 
rosy scenario.
  Mr. President, I am a former tax commissioner of my State. One of my 
jobs was to project the revenue of the State of North Dakota. One of 
the reasons I am here is I did a pretty good job of that. We are 
conservative. We were able to develop substantial surpluses because we 
had accurate projections of our income. That is critically important at 
the national level. And in order to make a determination as to whether 
or not this administration has been guilty of rosy scenarios perhaps it 
is most helpful to look at the record. What did they project and what 
has happened? Mr. President, the record is abundantly clear.
  This chart shows from 1993 to 1995 the projection for 1996 and what 
has happened. The blue line is the Office of Management and Budget 
controlled by the President. The red line is the Congressional Budget 
Office controlled by Congress. The green line is what has actually 
happened with the deficit. Interesting: What one finds is that both OMB 
and the Congressional Budget Office have been overly pessimistic. The 
fact is the deficit has declined much more sharply than either of them 
predicted. That is the fact. That is the record. The deficit during the 
term of this President has declined much more sharply--on average $50 
billion a year more--than this administration predicted. No rosy 
scenarios here. They have adopted a very conservative fiscal outlook 
not only in the 4 years that they have had responsibility for it but 
also looking forward. In fact, they are right in the mainstream of the 
blue chip economic forecasters that our major corporations rely on for 
their forecasts.
  Mr. President, we have also heard criticism that the President's plan 
is back-end loaded; that is, 75 percent of the savings are in the last 
2 years of this 5-year budget plan. Mr. President, I would like to see 
less back-end loading as well. I think it would be better if we have 
less in the way of back-end loading. But our critics on the other side 
of the aisle I think have a credibility problem because if you do a 
fifth of what they proposed last year in the budget resolution that 
they passed right in this Chamber, you take this deficit reduction path 
which is the blue line, and you fit President Clinton's 1998 budget 
submission in his proposed deficit reduction path and put the two 
together, look what you find. They are almost identical. This is what 
our friends on the other side of the Chamber here voted for just last 
year. It was OK then. But all of a sudden now the President proposes a 
deficit reduction path that is almost identical to the one they 
proposed, and all of a sudden it is a gimmick.
  I think we can test the credibility of that statement just based on 
the facts. If one looks at the historical record to make judgments on 
who has credibility with respect to deficit reduction and who does not, 
let us just look at the last three administrations. Let us look at the 
facts that nobody can dispute.
  These are the actual budget deficits year by year during the Reagan 
administration, the Bush administration, and the Clinton 
administration. Look what we see. In 1981 at the start of the Reagan 
administration the deficit was $79 billion. It exploded promptly. Two 
years later we were up to $208 billion. It kept going up to $221 
billion. Only at the end did we see the deficit start to come back 
down. Then the Bush administration took over, and it was all red ink. 
He took the deficit from $153 billion and ran it up to $290 billion.
  This is historical fact. There is no question about these numbers. 
These are the official numbers of the Federal Government. In fact, 
these numbers come from the Congressional Budget Office.
  Then President Clinton came into office, and each and every year the 
deficit has declined. In fact, we have gone from a deficit of $290 
billion in the last year of the Bush administration--this chart shows 
$116 billion deficit for the most recent year. Actually it was somewhat 
better than that. When the final numbers came in, the deficit was down 
to $107 billion. So there is a dramatic reduction in the budget deficit 
during the Clinton years.
  Another way of looking at that is to look at these deficits with what 
is really the best way to measure, and that is as a percentage of our 
national income. That is the best way to measure it because that takes 
account of the inflationary changes over time. So you are comparing 
apples to apples instead of apples to oranges.
  There we see the deficit record of this administration in comparison 
to the previous two administrations in an even more stark way. Because 
when President Reagan came into office, the deficit was 2.6 percent of 
our national income. Within 2 years, it was up to 6 percent of our 
national income. Then it worked its way back down to 3 percent. Again, 
President Bush took over, and in each and every year as a percentage of 
our national income the deficit went up--went up, went up until it was 
4.7 percent of our national income by the last year of the Bush 
administration. And in the 4 years of this administration, each and 
every year, largely because of the 1993 budget deal, which every 
Democrat--or virtually every Democrat--voted for and every Republican 
voted against, we got the deficit going down; not talking about 
reducing the deficit but finally results. It went from 3.9 percent of 
our national income. And this chart shows down to 1.5 percent of our 
national income in the most recent year. Actually, it was somewhat 
better than that, as I indicated on the other chart. We actually got 
down to 1.4 percent of our national income.
  Not only is that good performance when we match against the 
historical record of the United States but, if we look at other 
industrialized countries, we see that we now have the lowest deficit of 
any of the major industrialized countries in the world as measured 
against the size of our national income. In fact, other countries in 
Europe have a deficit as much as 7 percent of their national incomes. 
Most of them are in the 4 and 5 percent range.
  So the United States has not only done well matched against its own 
historical record during the Clinton administration but has done 
remarkably well in comparison to what has happened in other major 
industrialized countries. Partly because we have had that kind of very 
successful deficit reduction, we have seen a remarkable

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economic progress in the United States. And the list is a long one of 
the positive economic results that have come because we put in place a 
plan that actually reduced the budget deficit. That took pressure off 
of interest rates, and that had the very helpful effect of spurring 
economic growth in this country.
  Let us just look at some of the very positive results.
  First of all, we have seen 11 million new jobs created in this 
country in the 4 years of this administration--11 million new jobs. 
That is a remarkable record. We have also seen unemployment come down. 
Unemployment has dropped a full 2 percentage points. caca 
dldllflldlksdklmcdl We have seen inflation at very low levels. In fact, 
we have the best record of sustained low levels of inflation in 20 
years.

  Those are not the only outstanding economic results. We have also 
seen median household income up, the largest increase in a decade. We 
have seen the largest decline in income inequality in 27 years in this 
country. I think that is something of great concern to anybody who is 
worried about the future of America. That has happened as a result of 
an economic plan that was put in place in 1993.
  There are 1.6 million fewer people in poverty. That is as of last 
year. That is now over 2 million fewer people in poverty, the largest 
drop in 27 years.
  The poverty rate for the elderly in America is at 10.5 percent, its 
lowest level ever, lowest level of elderly poverty in the history of 
our country, and the biggest drop in child poverty in 20 years.
  These are facts. This is a remarkable economic record and one of 
which this administration can be justifiably proud.
  We used to talk in America a lot about the misery index. Our friends 
on the other side of the aisle always used to like to talk about the 
misery index and how bad a thing that was and how bad the situation was 
in America. Well, we have good news to report because the misery index, 
which is a combination of the unemployment and inflation rate, is at 
its lowest level in 28 years--lowest level since 1968.
  These are facts. These are facts of deficit reduction because of a 
plan that some of us had the courage to vote for in 1993, a plan that 
worked--a plan that has made dramatic progress in reducing the budget 
deficit but one that has also had extremely good effects in the rest of 
our economy, creating jobs, building economic growth, lowering poverty, 
and doing a whole series of things that have made America now the most 
competitive nation on the face of the globe.
  For a number of years there, we were very concerned that the United 
States could not remain competitive, and we thought the Asians were 
passing us. We thought the Japanese were passing us. We were concerned 
the Germans were on the march and on the move and we were stopped dead 
in our tracks.
  For the last 2 years, when the experts analyzed the competitive 
position of the countries, the major industrialized countries in the 
world, the United States was No. 1. We have resumed our top position. 
It is due in no small measure to the economic plan that we put in place 
in 1993.
  Some who are listening might say, well, this is a Democratic Senator 
speaking, and he is being partisan in terms of analyzing who should get 
the credit for what has happened since that 1993 financial plan was put 
into place. It is not just the view of this Senator. It is not just a 
review of the facts that lead us to this conclusion. Mr. Greenspan, 
testifying last year at about this time, said the deficit reduction in 
President Clinton's 1993 economic plan was:

       An unquestioned factor in contributing to the improvement 
     in economic activity that occurred thereafter.

  Mr. Greenspan is not a partisan. Mr. Greenspan, in fact, I think is a 
prominent member of the other party, but he acknowledges what is true, 
and what is true is very clear. This administration has made the hard 
choices. They made them in 1993, when a lot of us stood up and joined 
them in making the hard choices, and we paid a terrible price in this 
party at the polls in 1994 because those hard choices did cut spending. 
Yes, they did raise revenue, raised incomes taxes on the wealthiest 1 
percent in this country.
  I had a woman stop me the other day in Fargo, ND, and she said, ``You 
have to quit raising taxes down there in Washington.'' I asked her if 
she made $140,000 a year. She said, ``Oh, certainly not.'' I said, 
``Well, you did not have your taxes raised. You did not have your taxes 
raised unless you are making $140,000 a year. Your income taxes have 
not gone up.''
  That is the reality. That is the truth of the matter. I think as we 
go through this budget debate we ought to remember precisely how we got 
to where we are. The fact is that 1993 budget plan, which some of us 
voted for that has made such a profound difference, by the year 2002 
will reduce the indebtedness that would have otherwise occurred by $2.5 
trillion. Incredible. You look back to 1993. All of the projections 
were that the debt and deficits were going to skyrocket, they were 
going right off the charts. But we took action. Some of us voted for a 
plan that has produced real results, and the day before yesterday Mr. 
Raines, the head of the Office of Management and Budget in this 
administration, was able to report that by the year 2002 the 1993 
budget plan will have reduced what would have otherwise occurred in 
terms of the growth of the debt by $2.5 trillion.
  Those were hard choices that had to be made in 1993, and they were 
made, and the result is that we are in very a fortuitous position of 
having more to do, we need to do more, but we are pretty close to where 
we want to get.
  Mr. President, how much time remains on our side?
  The PRESIDING OFFICER. There are 4 minutes remaining.

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