[Congressional Record Volume 143, Number 19 (Thursday, February 13, 1997)]
[Senate]
[Pages S1372-S1374]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

  Mr. DOMENICI. Mr. President, might I first say that it is a pleasure 
to address this issue with the senior Senator from the State of 
Washington in the chair. I don't know that what the Senator from New 
Mexico is going to speak to today is needed to edify the occupant of 
the chair, but I think it is imperative that, after an awful lot of 
talk about a constitutional balanced budget and its potential effect on 
the Social Security trust fund, that some of us state what we think 
this whole scare about the Social Security trust fund is all about.
  So let me first say to the senior citizens that I gather now that you 
know the emotional ramping up by frightening senior citizens is 
beginning to take place out there in our States and communities. Let 
me, to the extent that I can, say to the seniors who are listening to 
those who would like to make you believe that they are really here 
arguing to save Social Security, suggest to you that what they are 
really arguing about is that they don't want a constitutional amendment 
to balance the budget and they have now hit on what I perceive to be a 
risky gimmick in an effort to frighten seniors and by that approach 
defeat a constitutional balanced budget amendment.
  I might say to the seniors of this country, it is now the almost 
universal consensus of those who look at the next 25 years that the 
most important thing for senior citizens and the best effect on the 
trust fund is that this economy grow and grow and grow and that we have 
low inflation and sustained economic growth. Those who have worked for 
decades, looking at what is going to happen to Social Security and 
putting into that all of the mix that goes into it to see what they can 
project, without exception they testify here and everywhere, do not 
forget that you must have a sustained and growing economy for these 
numbers to be believable about the validity of this trust fund in the 
future.
  Having said that, it would appear that balancing the American budget 
and keeping it balanced is probably in and of itself the single most 
important factor--not the only factor, but the single most important 
factor--to productivity, growth, and prosperity when you already have a 
$5 trillion accumulated series of deficits which now equal the debt.
  So let nobody be fooled, for those who want to inject Social Security 
and are trying to take it off the budget of the United States, the risk 
is we will never get a balanced budget. It is my honest opinion that it 
was not an overstatement of the case when 29 budgets were piled up 
here. In fact, I didn't have time to ask somebody, but how many times 
in those 29 budgets can Presidents say, ``I am giving you a balanced 
budget?'' How many times after they were presented did Congresses of 
the United States say, ``Oh, we are going to do better, we are giving 
you a balanced budget"? It never happened. And it will not happen. In 
fact, we are all dedicated to getting it balanced by 2002. But I am 
suggesting, as one who is as dedicated to that mission as anyone here, 
that you are far more apt to get it and keep it with the organic law of 
this land saying that is the way it is going to be, it is the law of 
the land.
  Having said that, let me see if I can convince senior citizens and 
those in this body who are worried about the issue of should you have 
Social Security on budget or off budget.
  First, just from the standpoint of a budget, you know Social Security 
is now the largest program in America. The tax for it is the largest 
single tax on America and Americans of all the entourage and litany of 
taxes we have. Literally 55 to 60 percent of the public pay more in 
Social Security and Medicare taxes, I say to my friend occupying the 
chair, pay more in that tax than they pay in income taxes.
  Just from the standpoint of a budget, doesn't it seem kind of strange 
that you would say Americans should have a budget and it should be 
balanced, but, oh, let us take all of that big program that I have just 
described and all of those taxes and let us just take them off the 
budget?
  So it is rather ironic that we speak of budgets and leave all of that 
which is so important to our future, so important to our young people 
who have

[[Page S1373]]

jobs--because the taxes there must be compared with what? With the 
taxes that the rest of society imposes on us. You cannot leave those 
taxes and those payments out there untouched, unrelated as if they have 
nothing to do with the corporate income tax and the individual income 
tax and the State taxes. They are all related, and they should all be 
part of our budget as we look at it.
  Now, I am not sufficiently versed in economics, but I have learned 
something because New Mexicans have sent me here long enough that, if 
nothing else, by osmosis I learn something about it because I sit there 
with my colleagues most of the time and they talk and I listen. 
Frankly, the United States made a decision that to be real about its 
budget, you ought to use a unified budget. We decided that more than 
two decades ago. And it serves us very well in trying to look at the 
effect of taxes and expenditures on the American economy and our 
people.
  Therefore, point No. 1. For those who are talking about gimmicks to 
frighten us into not passing the constitutional amendment, the first 
thing that is happening that is very, very dangerous is they are 
denying senior citizens the most significant tool to assure the success 
of Social Security.
  Now, a second point.
  Since Social Security is on budget now and it has a surplus now and 
the surplus will go away at some point in the future and we will be 
starting to spend that, there are some now who are saying to seniors we 
better take it off budget so they cannot spend it. Get it. Take it off 
budget so they cannot spend it. Take it off budget so you cannot borrow 
from it.
  Listen for a minute. You take the Social Security trust fund. It is 
defined by statute law. It is not going to be in the Constitution. Who 
defines statute law? Who defines statute law? Congress. Congress 
defines statute law. So you take off a huge amount of money and a huge 
amount of taxes and you say it is no longer in this budget because we 
do not want anybody to spend it or borrow it.
  Friends, in particular senior citizens, do you believe your trust 
fund is protected by being out there all alone, running up huge 
surpluses, subject to whom? Who can spend it? Who can spend that 
surplus? Oh, the same Congress that has been creating all these 
deficits.
  You mean they cannot spend it? somebody is going to stand up and ask. 
Of course, they can. All they have to do is pass a statute and spend 
that surplus. On what? On what? Right now you have to invest it in 
Treasury bills of the United States. But I say to our friend from 
Michigan, over the next 20 years as that surplus is there and as 
Congress feels the pinch of not having money to spend over here and 
perhaps a Medicare system that is really hurting; 6 years from now we 
have not helped it very much, or 8, and it is hurting for money to pay 
the bills, what do you think is going to happen? Congress is going to 
say, well, it is all seniors, right? Let us spend $48 billion for what 
we need for the next 6 months for Medicare. Let us take it out of the 
trust fund.
  Mr. GORTON. Will the Senator from New Mexico yield for a question?
  Mr. DOMENICI. Of course,
  Mr. GORTON. Is that not exactly one of the forms of risky gimmicks 
that the Senator spoke of should we adopt this amendment?
  Mr. DOMENICI. My friend, it is the biggest potential gimmick I have 
ever seen. And let me tell you, if there are those who say this cannot 
happen, I will give you one. The President in this year's budget 
decided that another trust fund, the Medicare trust fund--in this case 
it was running out of money, but the President decided I am going to 
tell Congress to just take out $82 billion of the expenditures that are 
in that trust fund, right, by fiat, by law. Who is going to do that? 
Congress is going to pass a law, he says, take out the $82 billion and 
let somebody else pay for it.
  Now, if you can do that, you can take a trust fund that is very 
solvent and do the exact same thing. A President says, well, look, it 
is going to take us 5 more years to fix this Medicare mess so why not 
just borrow from that trust fund. It is sitting out there. It is all 
alone, right, and we do not want to count it over here on our budget 
because we thought it was really going to be protected if we took it 
out there, and lo and behold, that budget could have that very same 
thing in it. That is the real kind of gimmick that is going to be used.
  Mr. GORTON. Will the Senator from New Mexico yield to another more 
general question?
  Mr. DOMENICI. Sure.
  Mr. GORTON. Am I not correct in remembering that we went through 
exactly this same debate 2 years ago at the time at which the balanced 
budget constitutional amendment ultimately was defeated by one vote in 
the Chamber of the Senate?
  Mr. DOMENICI. Absolutely.
  Mr. GORTON. And we heard all of the same alarms from those who 
ultimately opposed the balanced budget amendment about the future of 
Social Security at that point?

  Mr. DOMENICI. No question about it.
  Mr. GORTON. Now, perhaps my friend from New Mexico, who is the 
chairman of the Budget Committee, and who has totally immersed himself 
in these problems, has a better memory than I have, but does the 
Senator from New Mexico remember any proposal after the defeat of the 
constitutional amendment last time by those who opposed it that would 
buttress or build up the Social Security trust fund, any changes in 
eligibility, any increases in the payroll tax or not? I remember no 
attempts in this last 2 years to do anything about this imminent or 
future insolvency of the Social Security trust fund. Does my friend 
from New Mexico?
  Mr. DOMENICI. I think the Senator is absolutely correct.
  Mr. GORTON. So is it the net result of the defeat of the 
constitutional amendment 2 years ago that we are simply 2 years closer 
to the insolvency of the Social Security trust fund and the Medicare 
hospital insurance trust fund?
  Mr. DOMENICI. Absolutely right, without a question.
  Mr. GORTON. Is it not also true that all of those, almost all of 
those who opposed the balanced budget constitutional amendment 2 years 
ago told us all that was required to balance the budget was courage and 
dedication on the part of the Congress itself? Is that not pretty much 
the message that we constantly get from them?
  Mr. DOMENICI. That is absolutely right.
  Mr. GORTON. And did we not take them up on that proposal and did we 
not, in fact, pass through the Congress of the United States a budget 
that would have been balanced by the year specified in the 
constitutional amendment and would have postponed for an extended 
period of time the insolvency of the Medicare hospital insurance trust 
fund?
  Mr. DOMENICI. Absolutely.
  Mr. GORTON. And was that not opposed by all of the people who opposed 
the constitutional amendment with the single exception of the then 
Senator from Oregon and vetoed by the President of the United States?
  Mr. DOMENICI. I think that is right.
  I might also say to the Senator I am going to give myself enough 
latitude so that I know I am right, but I think that same balanced 
budget to which the Senator alludes, if carried out and all of the 
changes made in it and projected it out beyond that time, would be 
balanced 3 years, no longer than 3 years thereafter without using the 
Social Security trust fund.
  So what I am saying, you put yourself on a trend line by entitlement 
reform to where you cannot get to balance without the Social Security 
trust fund in the process of accomplishing your major goal of getting 
it balanced within the unified budget with everything on budget.
  Mr. GORTON. And is it not also true that whether this constitutional 
amendment passed or not, there would be no impact on the actual total 
spending of the Government of the United States or the total receipts 
of the United States; we would simply pretend that the largest single 
spending and social program were not a part of a budget or of balancing 
the budget?
  Mr. DOMENICI. That is exactly right.
  Mr. GORTON. And then in several years, in a few years when the Social 
Security trust fund is paying out more money than it is taking in, 
Congress would be able to pretend that the budget was balanced when, in 
fact, we were

[[Page S1374]]

running a huge deficit in the Social Security trust fund. And, in fact, 
the Social Security trust fund could go absolutely bankrupt, could it 
not, and yet under that proposal the budget would still be balanced?
  Mr. DOMENICI. The Senator is correct. In fact, I did not bring to the 
floor a chart showing that, but it is one of the wonderful, factual 
presentations about how, after a few years, what they have been talking 
about down here, about ``the Social Security fund ought to be off 
budget so we can handle our matters within the rest of the budget and 
how we can protect its solvency,'' it turns out that down the line a 
little--and if we do a constitutional amendment, it is going to be down 
the line for a long time, it should be here forever--when the Social 
Security fund starts to spend out and go in the red, guess what we can 
do? We can let it go right on in the red and spend. But over here on 
the rest of the budget, which we call the unified budget less Social 
Security, you can spend so much money in that budget and still be in 
balance because you are not charged with the deficit in Social 
Security. It is billions, about 18 or 20 years from now. You are going 
to be able to spend on this unified budget, less Social Security, 
something like $7 trillion more than you are currently expecting to 
spend, and be in balance, because you let this other big deficit occur 
and you do not do anything about it.
  I want to add one thing. You could have asked me, ``Senator, when you 
have this trust fund sitting out here all by itself and it starts to go 
in the red, because we did not have the guts to fix it, and over here 
is the rest of this budget, it has been kind of wallowing around, now, 
Congress gets together and says, `How do we fix that Social 
Security?''' Guess what, they can borrow money without being subject to 
the constitutional amendment and put it in that trust fund. They could 
borrow $5 trillion. And guess what we would be doing? We would be 
getting ourselves right back in the mess of borrowing to pay deficits.
  Mr. GORTON. That $5 trillion figure, you did not pull that out of 
thin air, did you? That is what the indicators show we would have?
  Mr. DOMENICI. That is correct. And, frankly, I have to say, in all 
honesty--I had a group of seniors I talked to today. They said to me, 
``You may be right, and you may be more right than them.'' But then 
they said, ``Can't Congress, if you take it off budget, can't you just 
pass a law so none of these terrible things will happen to this 
wonderful trust fund?"
  And I said, ``By asking me if we could pass a law, you have just 
answered your own question. Of course we could.'' But Congress makes 
the laws and Congress changes the laws. Consequently, we could protect 
it by statute and then, when it got in trouble, we could unprotect it 
by statute. But if you insist that it be counted in the unified budget, 
then what you are saying is when money is spent out of it, it counts. 
And you have to find, within a budget, some cuts to make up for it. And 
that is especially the case when Social Security starts to go in the 
red, if it does, and probably at some period in its history it will for 
awhile.
  Mr. GORTON. In summary, then, I ask my friend from New Mexico, that 
is just one of the reasons that this proposed change in the balanced 
budget constitutional amendment is a risky gimmick, and the risk is to 
Social Security and its beneficiaries themselves; is that not correct?
  Mr. DOMENICI. That is absolutely right.
  Mr. GORTON. I thank my colleague.
  Mr. DOMENICI. So I want to wrap up my few minutes. I thank the 
Senator for his questions which made my presentation far more 
understandable than had I gone on rambling for 15 minutes.
  But essentially the truth of the matter is, if the risky gimmick 
being offered by some defeats the constitutional amendment, that will 
inure to the detriment of senior citizens, for we will probably never 
have a sustained and long-term balanced budget, and that is what Social 
Security needs more than anything else.
  Second, the risky gimmick is to take it off budget and subject the 
entire trust fund to the will and whim of Congress and Presidents, 
without any of the discipline that would come from the spending and 
borrowing that you must account for within a unified budget.
  I have a couple of graphs that explicitly show what I have been 
showing. I am going to have them printed in the Record, especially with 
respect to what happens when Social Security starts to spend out more 
than it has taken in, the future amount of money that is then available 
on budget to spend without having any effect on the budget.
  I yield the floor and thank the Chair.
  The PRESIDING OFFICER (Mr. Abraham). The Senator from North Dakota.
  Mr. DORGAN. Mr. President, are we in morning business?
  The PRESIDING OFFICER. We are. The Senator is authorized to speak for 
up to 5 minutes.
  Mr. DORGAN. Mr. President, the Senator from New Mexico is one of 
those I admire most in this Chamber. He is one of the brightest and 
most interesting Members to serve with. He has demonstrated over many 
years and many disciplines a great knowledge and great intellect. I 
have always enjoyed serving with him.

  With great respect, I think he is so wrong on this issue, but I say 
that with the greatest respect.
  Mr. DOMENICI. I thank the Senator for his kind remarks.

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