Congressional Record, Volume 143 Issue 21 (Tuesday, February 25, 1997)

[Congressional Record Volume 143, Number 21 (Tuesday, February 25, 1997)]
[Senate]
[Pages S1495-S1512]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

RECOGNITION OF THE ACTING MAJORITY LEADER

The PRESIDENT pro tempore. The able chairman of the Judiciary
Committee is recognized.

SCHEDULE

Mr. HATCH. Mr. President, on behalf of the majority leader, I
announce today that the Senate will resume consideration of Senator
Reid's amendment to Senate Joint Resolution 1, the balanced budget
amendment. Debate is expected throughout the day on this amendment,
with the vote occurring on or in relation to the Reid amendment at 6
p.m. today.
By previous agreement, at 2:10 p.m. today, the Senate will begin 5
minutes of closing remarks, followed by a rollcall vote on adoption of
House Joint Resolution 36, the resolution regarding U.N. population
control.
On Wednesday, the 26th, the Senate will debate Senator Feinstein's
amendment from 9 a.m. to 11 a.m. Following the vote at 11 a.m. on or in
relation to the Feinstein amendment, Senator Torricelli will be
recognized to offer an amendment relating to capital budgeting. Senator
Torricelli's amendment is limited to 3 hours of debate.
I also remind Senators that on Thursday, February 27, at 10 a.m.,
there will be a joint meeting of Congress for an address by His
Excellency Eduardo Frei, President of Chile. Members are asked to meet
in the Senate Chamber at 9:40 a.m. to proceed as a group to the joint
meeting.
I thank my colleagues for their attention.

AMENDMENT NO. 8

The PRESIDING OFFICER (Mr. Hutchinson). The pending question is
amendment No. 8, offered by the Senator from Nevada [Mr. Reid]. The
time between now and 12:30 is equally divided and controlled in the
usual form.
Who yields time?
Mr. REID. Mr. President, unless my friend from Utah feels
differently, I ask unanimous consent that we initiate a quorum call and
the time be charged equally against the two managers.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. THOMAS. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. THOMAS. I ask unanimous consent I be allowed to speak for a few
minutes.
The PRESIDING OFFICER. The Senator is recognized.
Mr. REID. If I could interrupt my friend from Wyoming, I ask that the
time of my friend from Wyoming be charged against the manager of the
underlying amendment.
The PRESIDING OFFICER. That is the regular order.
The Senator is recognized.
Mr. THOMAS. I shall be brief.
Continuing with this important discussion on the balanced budget
amendment, I specifically, as was the case with most of us, spent last
week in our home districts. I spent last week in Wyoming at town
meetings in places like Sheridan, Buffalo, and Casper, to talk about
what people think about what is happening here.
Of course, the balanced budget was one of the prime issues there, and
continues to be. I think people are increasingly concerned about our
lack of financial fiscal responsibility, of having 28 years without
balancing the budget, of continuing to have a government that grows in
size, continuing to spend more than we take in. I was persuaded,
certainly from those who came to my town meetings, from those I talked
to who say, ``Look, you need to get this job done.'' They say, ``You
all collectively in Washington have been saying every year, yes, we
will balance the budget, I want to balance the budget.

[[Page S1496]]

You have not done it. You have not done it.'' Now they continue to
say, ``Well, we do not need a constitutional amendment. We just need to
balance the budget.'' We have not done it. Even those who have been
here for a very long time and have gone through this whole thing have
not balanced the budget.
The idea you do not need to do something rings a bit hollow to people
at home. The Wyoming Legislature is currently meeting. Wyoming has a
constitutional requirement that the legislature not spend more than it
takes in. It works very well. We will have, I think, certainly a series
of amendments, all of which are designed to simply detract from what we
are seeking to do, all of which are designed to give an option and an
opportunity to not vote for a constitutional amendment, to say, ``Well,
I am for it,

but--'' We have been through that before. We will see that again today.
``I am for it, but . . .'' ``. . . but we do not want Social Security
included.''
Now, we like the President's budget, we are moving toward it. Is
Social Security in there? You bet it is. You bet it is. And it would
not balance without. It does not balance as it is. So we are moving
toward continuing to have an unbalanced budget in this President's
proposal.
I feel even renewed, Mr. President, in my quest for a balanced budget
amendment, having been home, having talked to people who say, ``We do
not want more and more spending. We do not want more and more of a
central government.'' Really, when it comes down to it, that is the
decision. That is really what it is. Those who want to see Government
continue to grow larger, obviously are not for a balanced budget
amendment. Those of us who think that the real message over the last
number of years from home has been, look, we want less central
Government, we want less spending, we want less taxes, those kinds of
activities that can, should be moved to the States, and that is really
the core issue. That is really what it is all about.
I am hopeful we will continue this debate this week and have a chance
to finally vote, have a chance to pass a constitutional amendment, have
a chance to have the discipline that is required to do the things that
everybody says they want to do and have it done.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
Mr. REID. Would my friend withhold his call for a quorum?
Mr. THOMAS. Sure.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, the record is quite clear. The issue on the
balanced budget amendment is quite narrow. The issue is whether or not
we should balance the budget using the Social Security surplus.
The arguments always are, ``Well, we have been doing it in the
past.'' That is my whole premise. Why should we continue to do it in
the future and enshrine it in the Constitution? I say no. I say if we
are going to balance the budget, we should do it the right way, the
hard way, the honest way, and not include in the calculations to arrive
at a balanced budget the Social Security surpluses.
We have a number of amendments, and just speaking for this Senator, I
have not supported any of the other amendments to the underlying
amendment. I want my focus to be very clear. Even though I think when
statements are made, as was made by my friend from Wyoming, that my
State balances its budget, the fact is they really do not. The fact is
that States have their capital expenditures off budget, through their
bonding process. The State of Nevada does this, as do the vast majority
of the other States. That is how they balance their budget. They simply
exclude the costs of building construction and other long-term capital
expenditures. Even though there will be an attempt to amend the
underlying matter now before this body with a capital expenditure
budget, even though I think that makes some sense, I will not support
that. My emphasis, my concerns are about the permanent misuse of the
Social Security trust fund if my amendment is defeated. I have made
that very clear.
As I spoke yesterday, Social Security is a program we have had for
60-plus years. It was a program for dealing with old age, principally.
It was not a giveaway. It was not a handout. It is a program that is
given to people when they reach age 62 or 65, whatever eligibility
might be for that particular person. It is done without any means
testing. Why? Because people have paid into a Social Security trust
fund for purposes of having those moneys set aside when they get old.
An employer pays in, an employee pays in. It is now about 13 percent of
every dollar they earn that is paid into the trust fund for their
future years.
As I indicated, trust funds, whether handled by an insurance
fiduciary or a lawyer, must be treated very carefully. There are
definitions in any dictionary about what a trust fund is. It is
``assured reliance on the character, ability, strength or truth of
someone or something; one in which confidence is placed; reliance on
future payment for property held by one for the benefit of another;
something committed or entrusted for one to be used or cared for in the
interest of another.'' This is how Webster defines it. That being the
case, Mr. President, it seems to me it is unfair that we use Social
Security trust fund moneys for purposes other than for which they were
collected.
It is a trust. It is an agreement between the Federal Government of
the United States and its workers. We hold these moneys in trust in the
interest of the American people. They should not be used for some other
purpose. They should not be used for foreign aid. They should not be
used for any other purpose. They should be used only for the old-age
recipients. I believe Social Security is a binding contract between the
U.S. Government and the American people. We should not violate that.
The fact that we have been using those moneys in the past for other
purposes does not mean we should continue to do it. I think we should
balance the budget, but we should do it in the right way, the fair way,
the honest way, by excluding the Social Security trust fund moneys.
In 1983, a commission headed by Alan Greenspan advised raising
payroll taxes, with the end of achieving long-term actuarial balance,
and hence to ensure that we are prepared for the retirement of the baby
boomers. Congress voted to raise the payroll contribution made by
workers because these funds are not ordinary taxes but are rather
unique moneys contributed to the trust fund that deserve our special
consideration and protection.
In 1990, the Senate, understanding the need to protect these Social
Security funds, voted 98-2 to pull it out of the unified budget,
showing our interest in protecting Social Security trust funds from
misuse. The present chairman of the Budget Committee, the senior
Senator from New Mexico, said at that time that he reluctantly voted
for this amendment, and his reluctance was that it wasn't strong
enough. He felt that these moneys should be set aside and not used to
offset the deficit.
I appeal to everyone to review the statement made by a person that I
believe understands money about as well as anybody in this body. The
underlying balanced budget amendment would effectively overturn the
1990 decision to place Social Security off budget and would undermine
what then the senior Senator from New Mexico said.
Last year, this body went on record again with a huge vote, pledging
we would not raise or cut Social Security in order to balance the
budget. Did that vote mean anything? It didn't mean much, because we
are in the process now of using surpluses this year to again balance
the budget. These votes, the one in 1990 and the one last year,
demonstrate the unique position Social Security holds, as well as our
commitment to the American people to protect this trust fund that we
have set up. It is our obligation to do everything in our power to
protect the Social Security trust fund.
It is no different than when any attorney in the United States takes
a client's money and puts it into a fund. They cannot use that money
for any purpose other than for the client. We can't pay personal
expenses. To do so would cause the attorney to lose his or her license.
The balanced budget amendment, without an express exemption, places
Social Security in serious danger.
So, Mr. President, I believe that we need to step back and understand
what

[[Page S1497]]

a simple message this is. My amendment would simply disallow Social
Security trust fund moneys from being used to offset the deficit. That
seems fair. If we want to balance the budget, let's do it the right
way. The easy way is to use the Social Security moneys. People are
running around pounding their chests about what strong people they are
for taking Social Security money to balance the budget. That is the
easy way. If you really want to balance the budget in 2002, have a
real, honest balanced budget, do it the hard way, not the easy way, and
take--this year, $80 billion--that money to mask the deficit. People
ask, what would we do? We would have to either cut expenses or raise
taxes. That is the only way it can be done--not to circumvent what I
think is the clear intent of the Social Security law, that we should
not use Social Security surpluses to balance the budget.
So, in short, Mr. President, I think we should pass a balanced budget
that isn't a gimmick. It should be a straight on, tough, hard
procedure. We should balance the budget without using these huge
surpluses in Social Security. We have the President of the United
States, among others, including the Congressional Research Service and
the Center for Budget and Policy Review, who say that if this
underlying amendment passes, the courts will be deciding what should be
cut and whether Social Security gets paid.
So the constitutionally permitted raiding of the trust fund would be
devastating to current and future beneficiaries and would undermine
confidence in this Nation's most successful Government program. I
believe Social Security must be viewed as one leg of a three-legged
stool, Mr. President. You should have, in addition to Social Security,
private pensions and savings. However, 50 percent of all Americans do
not have pension protection. Hence, they rely on Social Security checks
as the mainstay of their income in their later years. Letters come in
to me daily from seniors in Nevada saying that, without Social Security
checks, they would be destitute. They plead with me--and I am sure with
others--to protect Social Security. Current polls have shown that young
people are concerned about Social Security, and well they should be
when people are trying to use their moneys to mask the deficit.

A nationwide poll showed that almost 75 percent of the American
public do not want a balanced budget if Social Security surpluses are
used to balance the budget. Misuse of Social Security trust funds
moneys must stop. If we are going to balance the budget, let's do it
the right way. Let's protect Social Security trust funds, as well as
the trust of the American worker. In the language of the honorable
senior Senator from New Mexico on June 10, 1990, ``We need a firewall
around those trust funds to make sure that the reserves are there to
pay Social Security benefits in the next century.''
It could not be said better, because this amendment I have offered
does provide that firewall that my friend, the senior Senator from New
Mexico, the present chairman of the Budget Committee, said was
necessary.
Mr. THOMAS addressed the Chair.
The PRESIDING OFFICER. The Senator from Wyoming [Mr. Thomas] is
recognized.
Mr. THOMAS. Mr. President, I think it is useful for us to talk a
little bit about the relatively little debate that goes on here. I
think it is appropriate to talk a little about that. I know my friend
from Nevada, whom I respect greatly, is sincere in his view. But I
don't agree with what he has had to say. That is what this is all
about. So I think we ought to talk about a combined budget, and talk a
little bit about off-budget kinds of things. Again, my experience comes
from Wyoming. The Wyoming Legislature has control over about 30 percent
of the budget. All the rest of it is earmarked off to other things. I
don't think that is a good idea or a good way to legislate.
Let me, first of all, say that, naturally, if you want to sell a
point, you try and get some kind of an emotional thing to say like
``save Social Security.'' There is not a soul in this place that
doesn't want to protect Social Security. We are not talking about
protecting Social Security. We are talking about the best way to
protect Social Security. Two years from now, when the Social Security
revenues have changed substantially, you are going to have it more
protected by having it as part of the budget than you will by having it
sit off by itself.
Let me talk about this idea of spending it somewhere else. I presume
my friend from Nevada would want to invest those surplus dollars so
they would have some return to the Social Security fund. They are
invested. They are invested in Government securities. They are invested
where the law requires they be invested. It is not a matter of spending
Social Security funds for other things. The fact is, when we have a
deficit in the operating fund of the Government, we have to sell
securities. They can sell them to Social Security, to Japan, to me, or
to you. Nevertheless, we are using borrowed money. It is borrowed from
the Social Security fund. This idea that you are spending it on
something else is absolutely false. They are invested. They are
protected.
Now, he wants to balance the budget without it. All that takes is
$700 billion of new money. Impossible. You can't do that. You just
can't do that. We ought to have a combined budget, and will we be
responsible for Social Security? Of course. Those funds get paid in for
that purpose. They will be repaid. They have to be repaid to somebody.
So this is a difference of view, and I understand that. But the idea
that we take this off budget and set it aside and pass the balanced
budget amendment is, of course, just not the case. The courts will
decide. Again, we have lots and lots of States that have a balanced
budget amendment. Do the courts decide? No, of course not. If the
courts are going to come into play, they say to the legislative body,
``You have overspent, and you have to find a way to reduce it.'' And
there is nothing particularly wrong with that.

So, Mr. President, I just want to say again this sort of scare tactic
that somehow if you are included in there, you are going to forget
having it, not think it is important to have Social Security protected,
is a fallacy, simply a fallacy. And I just think that we ought to
challenge those kinds of comments. It is a little like what happened
last year in the election, that the Republicans were going to do away
with Medicare. Well, that is not true. The fact is if you do not make
some changes in these programs, they will not exist. Just to say leave
your hands off of it, leave it alone, is sure death for these kinds of
programs.
So we have a dilemma, and we solve it. We have talked about it for a
very long time. It is time we move forward and make some decisions that
will put us in a financially strong position, that will make us
financially responsible and will include in a combined budget all those
things that are there.
I guess we ought to take the highway trust fund off; we ought to take
the airport trust fund off; we ought to take off everything that has a
designation.
No, we are not going to do that. We are going to use the emotional
issue of Social Security to seek to kill an amendment to the
Constitution which says the Congress ought to exercise the kind of
responsibility that it ought to exercise anyway and has not.
Mr. President, I yield the floor.
Mr. REID addressed the Chair.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. My only statement to my friend from Wyoming--I am happy to
see my western representative friend in the Chamber--is if we have a
unified budget, why did we vote on more than one occasion to take it
off budget? Social Security is not part of the unified budget. And
because we have violated that, what we have done here on the Senate
floor and in the House does not make it right. I believe the highway
trust fund should be taken off budget. I have offered legislation on
this floor--it is pending right now--saying we ought to spend money in
the highway trust fund.
The reason we are talking about the Social Security trust fund is
just like Willie Sutton; when he was asked why he robbed banks, he
said, ``That's where the money is.'' Social Security is where the bucks
are. There is very little money in the highway trust fund on a
comparable basis to Social Security. So that is why we are protecting
Social Security.
Emotional? Yes, it is emotional. It is emotional because people like
my friend, Helen Collins, from Nevada said:

[[Page S1498]]

I have been a widow since age 21. I never considered
applying for any kind of welfare assistance. I worked and
raised and educated my son. He got a master's degree. Sad to
say, at age 71 I am totally on my own on quite a limited
budget. By being very careful, I get by. However, I do worry
about getting more seriously ill and losing Social Security.
For many of us, these are not the golden years. But I, for
one, thank God that good people like you are helping us
maintain our dignity and independence.

The underlined word, Mr. President, is ``independence.''
So there are people who do consider Social Security an emotional
issue because it is emotional.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. I yield such time as may be consumed to my friend, the
Senator from North Dakota.
Mr. DORGAN. Mr. President, I would like to begin by inquiring of the
Senator from Nevada, Mr. Reid, about his perfecting amendment. My
understanding of the perfecting amendment as opposed to a substitute
here--this is a perfecting amendment--is that he would amend the
constitutional amendment to balance the budget in a way that prevents
the counting of Social Security receipts and expenditures in that
constitutional amendment to balance the budget. Is that correct?

Mr. REID. That is absolutely true. It is this Senator's feeling, as
well as the sponsors, of which my friend from North Dakota is one, that
it is unfair to balance the budget the easy way, and that is to use
these huge Social Security surpluses that we have had in the past and
that we will have in the near future to offset the deficit. It is not
fair.
Mr. DORGAN. I ask the Senator from Nevada one additional question.
Why Social Security? I suppose some would say, well, there other areas
that ought to be excluded. The Social Security area is one of the
largest areas of public spending and has had accrued surpluses now
available, needed to be available for meeting the time when the baby
boom generation will retire. So are there other programs like it? Or is
this the major issue that will have a distorted impact if this
constitutional amendment as currently worded would be enacted by
Congress?
Mr. REID. While my friend was coming to the floor, I made an analogy.
Willie Sutton, probably the most famous bank robber of all time, after
he was apprehended and in jail, was interviewed, and they said--I do
not know if they called him ``Willie'' or ``Mr. Sutton,'' but they
said, ``Why did you rob banks?'' He was very succinct and to the point.
``Because that's where the money was.''
And that is why they are doing what they are doing here, I say to my
friend. They are going after Social Security because that is where the
money is. There are huge surpluses in the Social Security trust fund.
There are other trust funds but they are dribbles and drabs compared
with the $80 billion this year alone. So they are going after this
money because that is where it is.
Mr. DORGAN. Mr. President, I appreciate the answer the Senator from
Nevada has provided. He and I have worked on this issue for some long
while, and I want to try to frame this a little differently.
This debate is not about whether the budget is balanced. This debate
is about whether the Constitution is altered. This is a question of
shall we change the Constitution of the United States? I am prepared to
change the Constitution of the United States under certain conditions.
We have had a lot of goofy proposals over time in this country to
change the Constitution. We have had proposals in which there would be
a President from the North followed by a President from the South. That
was one proposal. Let us make sure that the Presidency goes from the
northern part of the country to the southern part of the country on a
rotating basis. That is one. Sound a little strange today? Yes, I think
so. There have been thousands of proposals to amend the Constitution.
We have a bunch of folks around here who think that somehow they are
better than Madison, Mason, Franklin, George Washington, and, yes, even
Thomas Jefferson, although Jefferson was not in Philadelphia at the
writing of the Constitution. He was in Europe at the time but
contributed mightily to the Bill of Rights, and especially the first
amendment. But we have folks who think the Constitution is a rough
draft and that they ought to get a pencil and eraser and every day make
little changes in the Constitution.
In the last session of Congress in 1 month we had three proposals
which came driving through here to change the Constitution of the
United States by in some cases or in most cases people who call
themselves conservatives. It is strange to me that those who call
themselves conservatives would be so quick to alter the Constitution of
the United States but nonetheless there are plenty of proposals to do
so. This is one.
Is there merit in altering the Constitution to require a balanced
budget? I think so. I think the demonstration of the lack of fiscal
discipline is sufficient over the last especially decade and a half
that there is merit in doing so. If there is merit in doing so, why
should we not support any proposals that come to the floor of the
Senate to change the Constitution? The answer is because if we are
going to alter the Constitution let's do it in the right way. Let's
solve problems--not create problems.
This constitutional amendment to balance the budget is enormously
flawed especially in one area as described by the Senator from Nevada,
and that is the area of Social Security. One of the largest programs in
the Federal Government is Social Security. It is not contributing one
penny to the Federal deficit. In fact, this year it will have $70 to
$80 billion more collected in the program than is necessary to be
spent. Why? Because one of the few sober things which was done in
Washington in the 1980's, in my judgment, was the creation of a Social
Security commission which created recommendations which the Congress
enacted which resulted in the accrual of substantial savings year by
year to be used when the baby boomers retire after the turn of the
century.
If this constitutional amendment is enacted by Congress and ratified
by the States, what will the impact be of that on the Social Security
savings that we now have that are necessary to meet the needs of the
baby boomers after the turn of the century? The impact will be that
they will be used as offsets against other revenues, and you will not
have the savings. And in any event, the Congressional Research Service
says that after the turn of the century if you have the savings you
couldn't use them unless you raised other taxes, or cut other spending
in a commensurate amount.
The noise on the floor of the Senate is interesting. We have folks
who rush to the floor to hold up this piece of paper, or that piece of
paper. On the floor of the Senate, because we have a doctrine of free
speech and unlimited speech, and recognition here that when someone is
recognized, even the newest Member, they can be recognized and stand
and hold the floor until they are mentally and physically exhausted. No
one can take it from them. The Senate has worked that way since its
inception for a couple of hundred years. It is a wonderful institution
but allows anybody to come and say anything--anything on the floor of
the Senate. You can hold up this piece of paper and say, ``I have in my
hand a purple piece of paper. Notice this green piece of paper. Notice
this 8,000-page document.'' It doesn't matter. You can say whatever you
like. And that is part of the problem that we face with a stack of
books sitting on a desk over here being used to demonstrate budgets
that have been out of balance.
People say, ``Well, everyone else has to balance their budgets. So
should the Government.'' The Government should balance its budget. But
it is not true that everybody else balances their budgets. We have $21
trillion in debt in this country. We have nearly as much corporate debt
as we have Federal Government debt. We have a substantial amount of
consumer debt. We have a substantial amount, and it is growing at an
alarming rate with credit card debt. We have debt all around this
country. And it is a problem. It is a problem with the Federal
Government, and it is a problem for the entire country.

[[Page S1499]]

We ought to have, in my judgment, a different kind of budget in our
country. We certainly ought to have a capital budget. But I have not
hinged my vote on a constitutional amendment to balance the budget on
that point. But it is interesting. Most of the State Governors who come
here pull out their suspenders and trumpet to anyone who will listen
within a reasonable distance that they have to balance their
constitutional budgets. They have a constitutional amendment to balance
their budgets, and their States have a constitutional amendment
requiring that they balance their budget. Those States are worried
about their credit ratings. Why? Because they are borrowing more? Why,
if they are balancing their budgets? Because they have capital budgets.
And they amortize over a longer period of time the amount of money they
are spending on roads and other things instead of as in the Federal
Government expensing it in the very year in which you do anything. If
you build an aircraft carrier that is going to last 30 years, expense
it all in 1 year. Roads, the same way.

So we ought to have a capital budget. But I have not leveraged my
support for a constitutional amendment on that basis.
The question, however, today is: Shall we put in the Constitution
this proposal, or shall we put in the Constitution a proposal that is
modified in this case by the suggestion of the Senator from Nevada,
which I support? And, if a constitutional amendment is modified with
that provision, I intend to vote for and support the constitutional
amendment. If it is not, I will not vote for it, and will not support
it. I will offer a substitute following this vote, if this vote is
defeated. I will offer a substitute constitutional amendment to balance
the budget that is identical to the one on the floor that includes the
provision offered by the Senator from Nevada as a substitute
constitutional amendment to balance the budget. I will vote for that.
If that passes--and I would say to those on the other side of the aisle
that support that, they would have sufficient votes on this side of the
aisle to perhaps pass it with 75 votes--then we would be done with this
question. Are we going to alter the Constitution of the United States?
Then we would be on to something that is important. I am not suggesting
altering the Constitution isn't important. I am saying that the issue
here is balancing the budget. And you could alter the Constitution at
10 minutes to 10 in the morning. Two minutes from now you can alter the
Constitution to require a balanced budget, and at 10 o'clock--2 minutes
from now--you will not have made 1 penny of difference in balancing the
budget. The only way we will balance the budget is if men and women in
the Senate on a budget document that describes the specific spending
and taxing issues are willing to cast hard votes to do that.
I found it interesting that the people who stand the highest and seem
to speak the loudest on this issue about altering the Constitution were
not around on the floor of the Senate in 1993 except to predict that if
we pass the Deficit Reduction Act of 1993--something I voted for--if we
pass that we would throw the country into a recession; that, if we pass
that, there would be cataclysmic results in impacts on the country, and
the country will be going down the wrong road.
So a group of us by one vote in 1993 passed a bill called the Deficit
Reduction Act, and the deficit has been reduced by 60 percent; 60
percent. Was it a smart thing to do to vote for that? No, not at all.
Was it a smart political thing to do? No, not at all. The smart and the
easy political thing to do was to go out that door and say to anybody
who would listen about how they are doing dumb things in there. But
they are actually casting tough votes to reduce the budget deficit. If
enough of us did that, it would pass by one vote.
That is dealing with the budget deficit. This is altering the
Constitution. And after you alter the Constitution, someone here still
has to decide how we are going to spend the money, where we are going
to cut spending, how are we going to raise the revenue, and how we
balance the budget. And that is the tough part. The easy part is
braying, trumpeting, shouting, and doing all the things that make a lot
of noise that doesn't do anything about reducing the budget deficit.
The tough thing is the quiet negotiations and the quiet agreements that
are necessary to agree on budget cuts, spending cuts, and revenue needs
to balance the Federal budget.
We have had a number of people here on the floor of the Senate who
say that the Social Security issue that has been raised is specious; it
is an irrelevant issue. Those who ought to be concerned about the
Social Security trust fund and the Social Security fund itself would be
better off supporting a balanced budget because the only way to really
guarantee Social Security benefits will be to balance the budget. Let
me respond to that for just a moment.
If we pass this constitutional amendment to balance the budget as it
is currently written the savings that are now accrued in the Social
Security trust fund to be available after the turn of the century will
not be able to be used unless somebody comes along and raises taxes, or
cuts other spending in order to use them. And I do not understand when
folks say, ``Well, the best way to assure the long-term health of the
Social Security system is to pass this amendment.'' I do not understand
that in passing this amendment we are creating a circumstance where it
will prevent the very use of the Social Security funds we are now
collecting to be used after the turn of the century when it is
needed. I mean, that just stands logic on its head. I guess, again, in
a debate forum like this, when you are able to say whatever you want to
say at any time about anything, you can say that. But I am wondering
how many people are willing to believe that. If you tell taxpayers we
are going to take money out of your paychecks, we are going to put it
in a trust fund, and we promise you we will save it and use it for
Social Security, but then use it for something else--I wonder how many
people out there in the country think that is an honest way to behave.

I would like--and I am still waiting, incidentally--I would like one
Member of the U.S. Senate, just one, to stand up, and maybe this week
we can find one who will, stand up and say this: ``I support telling
those who are going to work and working every day that we want to take
your money from your paycheck, we want to have a little box there on
your paycheck that says we have taken $1,000 out of your paycheck and
we have called it taxing for Social Security, and we promise you we are
going to put it in a trust fund, and then we are going to take the
trust fund and move it over here and use that as other revenue so we
can now say we have balanced the budget.'' I want one Member of the
Senate to stand up and tell me that is a proposal he or she makes to
their constituents. There is not one Member of the Senate, I think,
that would vote for that, yet that is exactly what we have. It is
exactly what we have in this country in our fiscal policy.
And this proposal wants to enshrine it in the Constitution of the
United States. This proposal wants to enshrine it forever in the
Constitution of the United States, and it makes no sense at all. As an
affirmative proposition to misuse these trust funds makes no sense at
all. I do not know of anybody who will say, ``That is my position. Let
me go ahead and push this. That is what I believe in.'' Yet, that is
exactly what will be written in the Constitution of the United States.
This is the Constitution of the United States, in the rules and the
manual of the U.S. Senate. That has the Constitution in it. The
Constitution is actually not a very lengthy document, as most folks
know. The 18th amendment to the Constitution was passed:

After one year from the ratification of this article the
manufacture, sale or transportation of intoxicating liquors
within, the importation thereof into, or the exportation
thereof from the United States and all territories subject to
the jurisdiction thereof for beverage purposes is hereby
prohibited.

That is prohibition. The 18th amendment to the Constitution,
prohibition. Just to demonstrate that in this country we have a right
to make a mistake, the 21st amendment, three amendments later, says the
following:

The 18th article of amendment to the Constitution of the
United States is hereby repealed.

It is a wonderful thing about democracy, we have a right to be wrong.
We have a right to make mistakes. We can even do it in the
Constitution. But we ought to be enormously careful about

[[Page S1500]]

what we do with the Constitution because it is very hard to correct. We
corrected the 18th by passing the 21st amendment to the Constitution.
Let us not create a circumstance where we amend the Constitution and
are required to correct it again. That is not, in my judgment, the sort
of thing we ought to do with the Constitution of the United States.
Let me emphasize this one more time. The Senator from South Carolina
has now come to the floor, Senator Hollings, who has been involved in
this discussion for some while on Social Security. Those who come to
this floor to say this is a specious argument were not in the room in
1983 when we passed the Social Security Reform Act. I was part of the
originating committee that did it, the Ways and Means Committee of the
U.S. House of Representatives. I was part of those, that group of
people who originally debated this in the Ways and Means Committee in
the House of Representatives. And the day it was marked up, I was the
one person in the committee who offered the amendment. That is 14 years
ago. I offered an amendment, on the very day this was considered, to
say if you do not take this money, this Social Security money that we
are going to accrue to be used after the turn of the century, and set
it aside so it is not part of a budget that somebody else can use, if
you do not do it, it is going to be misused. I was defeated that day
with the amendment I offered.
So, when people write to the Washington Post, as someone did last
week, or people come to the floor of the Senate and pop up here and
talk about what they know and what they do not know, I was part of the
group in 1983 that decided to create a surplus in Social Security to be
used when the baby boomers retire and they need it. This constitutional
amendment will enshrine in the Constitution the practice of misusing
that Social Security trust fund, and there is no question about it.
As I said, people can come and protest and hold up purple sheets or
green sheets all day long and it will not alter the facts. If we are
going to amend this Constitution, and I am willing to do that, if we
are deciding to say there is merit in requiring a balanced budget, and
I think there is, then we ought to do it right, not do it wrong. We
ought to do it even if it is hard to do. We ought to do it the right
way, rather than to do it the easy way and misuse $1 trillion in 10
years of Social Security trust funds. That is what this debate is
about. That is what the perfecting amendment by the Senator from Nevada
is about.

I would say to the majority side, if you accept this perfecting
amendment, you will pass this with 75 votes. You want a balanced budget
amendment to the Constitution? You will get it. Accept this perfecting
amendment and you will have it. If you do not get it, it is your fault
because you have decided that you want to do something that, in my
judgment, would not be allowed anywhere in the private sector. But you
want to get away with it in the public sector.
The Senator from North Dakota, Senator Conrad, has said before--and I
will say it before he says it again this morning--if you tried this in
the private sector as an employer, and say to the folks in your
business, ``You know I have been losing money, so what I decided to do,
even though I have been losing money in my business, I will take your
pension funds and bring them into the business, claim I have not lost
money, and use your pension funds to do it,'' you would be on your way
to 2 years in a minimum security prison somewhere in this country,
because it is against the law to do that. You cannot do that.
That is exactly the budget practice of the Government of the United
States. It is wrong, and it ought to be stopped. The last thing that
ought to happen is that we enshrine it in the Constitution of the
United States.
If you accept this proposal, this perfecting amendment by the Senator
from Nevada, then you will pass this amendment; don't, and you may not.
But if you don't, the failure of passing the constitutional amendment
is on the shoulders of those who failed to perfect the amendment in a
way that means something to the American people.
One final point, and I will take 30 seconds. The demonstration of the
naked truth of the bankruptcy of this proposed use of the Social
Security trust funds is this. When the majority party has claimed to
have balanced its budget, the Federal debt will have to be increased by
$130 billion the very year in which they have claimed to balance the
budget. Ask anybody--a fifth grader, seventh grader, high school
sophomore--why, if you balanced the budget, would you have to increase
the Federal defendant limit? The answer: Because it is a scam. The
budget is not balanced. Plain and simple. That is the naked truth, and
that is what exposes this balanced budget amendment for what it is.
Amend it with the perfecting amendment offered by the Senator from
Nevada, and you will have my vote. It is not a bluff. You will have my
vote. Do not amend it with that and you will not have my vote, because
it is the wrong way to alter the Constitution.
I yield the floor.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. Mr. President, I wish to commend the Senator from North
Dakota, and I see the other Senator from North Dakota here about to
speak. I will yield immediately to him.
You know what this debate has shown? The two Senators from North
Dakota have been in the forefront in discussing this, as was the senior
Senator from West Virginia, in describing his own amendment yesterday,
and will be in his discussion in the week coming up. It describes what
would seem to be a very simple concept: have a constitutional amendment
to balance the budget. If you do a poll on this, ``Are you in favor of
a balanced budget,'' everybody says, ``Sure, of course we are.''
Then comes the question: Do we amend the Constitution? It has only
been amended 17 times since the Bill of Rights--only 17 times. Now, we
have another issue. If we are going to do that, do we do it for
something that looks good on a bumper sticker for a slogan, or do we do
it thinking about what we are doing?

Just remember, this Senate has only been involved in successful
amending of the Constitution 17 times since the Bill of Rights. That
means a lot of our predecessors had to think long and hard about
thousands of proposals to amend the Constitution, about what would they
do. The Senators from North Dakota, the Senator from West Virginia, the
Senator from Nevada, and others who have spoken do us service by
saying, ``Just what is it we are buying with this? Is it a balanced
budget?'' No, it is a very, very dangerous monkey wrench in the
Constitution that will cost our children and our children's children a
great deal. It will cost our Social Security recipients, and it will
not do what the President said in the State of the Union Message what
can be done: Do you want to balance the budget? All we have to do is
vote to do that, and he signs it. It is as simple as that. We don't
need to amend the Constitution.
I am delighted to yield to my good friend and colleague, the senior
Senator from North Dakota.
The PRESIDING OFFICER. The Senator from North Dakota is recognized.
Mr. CONRAD. Mr. President, I thank the Senator from Vermont, and I
thank him for his devotion on this issue, spending hours and hours on
the floor to try to make certain people have heard both sides of the
story before a vote is cast in this Chamber.
Mr. President, I come at this issue with a deficiency, and that
deficiency is I have a financial background. My education is in finance
and business. My career was as a tax administrator, somebody who dealt
with finances and budgets on a routine basis. And I must say, when I
hear talk about the need to balance the budget, nobody could agree more
than I do with that concept. I am absolutely in support of balancing
the budget of the United States.
It is imperative that we do that, because we are in a special
circumstance. We are on the eve of the baby-boom generation starting to
retire, and that will put enormous stress on the budget of the United
States if we fail to get our fiscal house in order.
In fact, I think I can say, without fear of contradiction, no Senator
has offered more specific plans to balance the budget than I have. So I
don't take a back seat to anyone with respect to a desire and a
commitment to balance

[[Page S1501]]

the budget. But when I see the balanced budget amendment to the
Constitution that is before us now, I have to say what I believe to be
the absolute truth. This is a giant hoax. To call this a balanced
budget wouldn't pass the laugh test in any corporation in America.
If anybody told a corporate board of directors that they were going
to balance the budget by taking the retirement funds of the employees
and throwing those into the pot, they would be in violation of Federal
law, because that is fraudulent. It is fraudulent to take retirement
funds of employees and use those to balance the operating budget of a
corporation. That is not permitted under Federal law. And yet that is
precisely what this so-called balanced budget amendment to the
Constitution contemplates. They are going to take every penny of the
Social Security trust fund surplus and throw those into the pot to
claim that they have balanced the budget.
(Ms. SNOWE assumed the chair.)
Mr. CONRAD. Madam President, they don't just take every penny of the
Social Security trust fund, they take every penny of every trust fund
and throw it into the pot and say they have balanced the budget.
It is like the story of the emperor who has no clothes and everybody
is afraid to stand up and say it. But that is precisely what is going
on here. When our colleagues come home and say to you, ``We are for a
balanced budget amendment to the Constitution,'' I urge you to ask them
this simple question: What budget is being balanced?
Boy, that sounds awfully elementary, doesn't it? You would think this
is a question that could be easily answered. Unfortunately, when you
examine what is going on here, what you find out is that it is at great
variance from the claims that are being made. Those who beat their
chest and say they are for balancing the budget and that this balanced
budget amendment to the Constitution will do that are engaged in an
enormous hoax.
Let's look at the language. It comes from section 7, and it says:

Total receipts shall include all of the receipts of the
United States Government except those derived from borrowing.
Total outlays shall include all outlays of the United States
Government except for those for repayment of debt principal.

Very simple concepts. What they are saying is they are going to put
all of the revenue of the Federal Government in the pot, and they are
going to look at all of the expenditures of the Federal Government, and
that will be a balanced budget. What is wrong with that concept is that
they are including all of the receipts from the trust funds and using
those, every penny of them, to claim that they have balanced the
budget.
Let me just show it in a different way. When I was growing up in our
State, people would keep money in a pot. A farm wife would keep cash in
a pot. I have this teapot to kind of show what is going on here,
because into the teapot goes all of the taxes, all of the corporate
taxes, all of the other taxes, but in this balanced budget amendment,
they are also including all of the Social Security taxes--all of them,
every penny goes into the pot. And then they are going to balance with
what is being spent. All of the items that the money goes for in the
Federal budget: Social Security is about 22 percent of the money;
interest on the debt, 16 percent; defense, 16 percent; Medicare, 14
percent; Medicaid, 7 percent; all other Federal spending, 25 percent.

Can you imagine that they are trying to claim that this is a balanced
budget, and what they are doing is they are taking trust fund income,
trust funds that are in surplus now, designed to be built up to be used
when the baby boomers retire, and they are using the trust fund
surpluses to claim they have balanced the operating budget. What a
hoax; what a fraud. That is not a balanced budget.
A balanced budget would be if you were saving your trust fund
surpluses for the purposes intended and you are balancing your
operating budget. That would be a balanced budget. This is not a
balanced budget.
Let me demonstrate how massive this hoax is, because it is really
quite stunning in its breathtaking willingness to loot every trust fund
of the United States of every penny. That is what is going on here,
make no mistake, because if this thing is passed and is implemented, we
are going to wake up and find there is no money in any trust fund;
every surplus nickel has been taken.
Look at what is happening. Some will say, ``Senator, that is what is
going on now, that is precisely what is being done.'' That is true,
that is what is happening, and it ought to be stopped, and it ought to
be stopped now, because we are entering the period when those surpluses
explode--they explode--because the baby boomers are getting closer to
retirement, and so the surpluses are being built up for the purpose of
being ready for them when they retire.
Look at how massive these surpluses are. In 1998, $81 billion in that
year alone. By 1999, in just those 2 years, it is up to $169 billion,
and between now and the year 2002, when they are going to claim they
have balanced the budget, they will have used $465 billion of Social
Security trust fund surpluses and claim they have balanced the
budget. Again, if any private company tried to do this, tried to take
the retirement funds of their employees to balance the operating budget
of the company, they would be in violation of Federal law. They would
be headed for a Federal facility, and it would not be Congress. They
would be headed for a prison.

Yet this is what we are talking about putting in the Constitution of
the United States. We are going to put in the organic law of our
country the definition of a balanced budget, that if a private company
were doing it, would be a violation of Federal law. I do not think so.
Not with this Senator's vote. I would not vote, ever, to put that in
the Constitution of the United States, the basic law of our country
that has made this the greatest Nation in human history, the definition
of a balanced budget that is so fraudulent that if any private company
tried to do it, it would be a violation of Federal law.
Now, that is a fact of the balanced budget amendment that is before
the Senate. When I say that is breathtaking, breathtaking in what they
are trying to put in the Constitution of the United States, I meant
just that. The Social Security surpluses I indicated are increasing
dramatically. Indeed, they are. From 1998 to 2013, we will have
surpluses in Social Security, surpluses over and above what the
expenditures are during that period, of $1.8 trillion. The folks who
are advocating this balanced budget--I call it a so-called balanced
budget amendment because this is not a balanced budget, no way. There
is no serious definition of balance that would include this so-called
balanced budget amendment because the fact is if you passed it, you
implement it, the debt would continue to increase. They claim they have
balanced the budget. What a fraud. They are going to take $1.8 trillion
of Social Security surpluses, throw those into the pot, and claim they
have balanced the budget.
It is very interesting if you look at this in another way and try to
determine who is telling it straight here, who is telling it straight,
just looking at the growth of the Federal debt of the United States. If
they are being straight with the American people and they are really
balancing the budget, would that not tell you that in the year 2002,
the year in which we will have claimed balance because that will be an
amendment to the Constitution of the United States, that the debt would
stop increasing? Would that not be a logical conclusion? If we are
going to balance the budget in the year 2002, would you not expect,
then, that the debt of the United States would no longer increase? You
would no longer be running deficits because you would have balanced the
budget.
Well, testing that proposition, this chart shows the gross Federal
debt of the United States. It shows what would happen if this so-called
balanced budget amendment to the Constitution were passed and became
effective by 2002. You can see this is the year 2002, the year in which
it claims balance; this line shows what happens to the Federal debt. It
keeps right on going up. The Federal debt keeps right on increasing. If
we look at it another way, we can see just what a fraud and a hoax this
really is. They call it a balanced budget amendment to the
Constitution. They put this definition into the Constitution of the
United States and let's

[[Page S1502]]

see what would happen in the year 2002. They are claiming the deficit
would be zero. But look what happens to the budget deficit in that
year. When you look at Social Security and the postal service funds,
the so-called on-budget deficit, what you see is not a zero. The budget
is not balanced. The deficit is increasing $103 billion. If you look at
the broadest measure of debt and deficit, you include all of the trust
funds. What you find is that the debt and the deficit will increase in
that year by $110 billion.
Yet they are calling it a balanced budget, and they are putting it in
the Constitution of the United States that this is a balanced budget.
Who are they kidding? There is nobody that has had fifth grade
arithmetic that cannot figure this out. There is nobody. My daughter,
when she was 7 years old, and she was very good at math, I admit that,
she would have been able to figure this out. Just because you are
calling something a balanced budget does not make it one. That is like
the old story in North Dakota, you call the pig a cow, it does not make
it a cow. This is a balanced budget, they claim it is a balanced
budget, but it is not one. The deficit keeps going up, debt keeps going
up, they have looted every penny of every trust fund in sight and
claimed they balanced the budget and put that definition in the
Constitution of the United States. It does not belong there.
If we want to do this as an amendment to the Constitution we ought to
do it right. This amendment does not pass the laugh test. This
amendment is not a balanced budget, No. 1. No. 2, it is fatally flawed
in other ways, as well, because it does not provide enough protection
in the case of a national economic emergency. In addition to that, it
would put us in a circumstance in which the courts could write the
budget of the United States. That was never contemplated by our
forefathers, to have the Members of the Supreme Court--and I can look
through the doors there and almost see the Supreme Court of the United
States--I tell you, our Founding Fathers did not have in mind that the
Justices of the Supreme Court would sit around a table and write the
budget for the United States. That is what would happen under the
amendment that is before the Senate.

Let me just say the amendment by the Senator from Nevada, Senator
Reid, addresses the first problem with the balanced budget amendment
that is before the Senate. He would not permit the looting of $450
billion of Social Security surplus between now and the year 2002, to
claim they balanced the budget. He would not permit the raiding of $1.8
trillion of Social Security surpluses between now and about the year
2019 and take all those moneys and throw them in the pot and claim they
have balanced the budget. It is a substantial improvement over the so-
called balanced budget amendment that is before the Senate now. On that
basis, Senator Reid's amendment deserves support, because it would
begin to address the fatal flaws in this amendment.
I just end where I began. I really wonder what our forefathers who
wrote the Constitution would be thinking about a Congress meeting in
1997 that has so little regard for the organic law of our country that
they would put an amendment into that document that defines a balanced
budget in a way that raids every trust fund surplus in the Federal
budget, to claim that they had balanced the budget. America is a better
country than that. We are a greater country than that, to put in our
Constitution a definition of a balanced budget that is totally without
merit, it is fraudulent, it is fake, it is false, it is not honest.
We should not be putting that in the Constitution of the United
States. When I took the oath of office, I swore to uphold and defend
the Constitution of the United States. I took that pledge very
seriously. I think it is the most serious thing we do as a Member of
this body--swear to uphold and defend the Constitution of the United
States. Well, I believe one responsibility in meeting that affirmative
pledge is to protect the Constitution from amendments that are unworthy
of that great document.
I will ask any of my colleagues to read the amendment before us in
the context of the Constitution. Get out your Constitution and then put
this amendment down and read the two together and see how it fits, see
how it reads, see if it makes any sense to you to have this
constitutional amendment that is before us grafted onto the
Constitution of the United States. It doesn't fit. It sticks out like a
sore thumb. And it is, at its base, utterly fraudulent. It is wrong to
put that amendment into our Constitution.
I thank the Chair and yield the floor.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER. The Senator from Utah is recognized.
Mr. HATCH. Madam President, this is an important amendment, but it is
not as important as the proponents think. The fact of the matter is
that Social Security is much better protected within the purview of the
unified budget than it will be out there standing all by itself where
they can add anything to it, or take anything away from it that they
want to, and where it will become a spending loophole device that I
think will be to the detriment of the senior citizens.
To say that the trust funds are raided is the biggest charade I have
heard in all my time in the Senate. First of all, when the FICA funds
come in, they are immediately invested into U.S. Government bonds, the
best securities anywhere in the world. Those bonds are kept. There is
no great big trust fund or a big place where they keep all this money.
They are bonds due and owing by the American people some time in the
future. The only way we are going to be able to pay back those bonds is
if we get spending under control and get our economy under control. The
only way we are going to do that, after looking at 28 straight years of
unbalanced budgets--those 28 straight years of unbalanced budgets are
represented by these actual unbalanced budgets, since 1969--the only
way we are going to do that is to pass a balanced budget constitutional
amendment.
Some say, well, we want another type of an amendment. The fact is
that this is a bipartisan amendment that has been put together over 21
years. I know because I have participated in every word of it with my
bipartisan colleagues in the House and Senate, on the Democratic side
as well as the Republican side. This is the only amendment that has a
chance of passage, the only thing that actually will give a real sense
of protection and actual protection to those people who are on Social
Security now.
For people to come on this floor and say, They are raiding the trust
funds, because literally they are exchanging bonds for the funds and
helping to balance the budget with whatever surplus exists now, is not
only a charade; it is absolutely false. I get a little tired of people
saying they are raiding the trust funds, not treating the trust funds
right. The fact is, if you take Social Security out of the purview of
the balanced budget amendment--if this amendment passed and we take it
outside the purview of the balanced budget amendment, first of all,
this amendment won't do what they say it will do. It is very poorly
drafted. Even if it does do what they say it would do--and I will, just
for the sake of discussion this morning, argue within that context,
that it will do what they say it will--and you take Social Security out
of the budget, the surpluses that will occur between now and 2008 will
be invested in Federal Government bonds, which is exactly what they are
doing now. The only difference is that the moneys they have then may be
used for social spending programs other than Social Security, and that
means another ability to spend more without making the reforms that
have to be made in programs like Medicaid, Medicare, and so many others
in our society, which are running out of control today. And the people
who are going to be hurt the most are going to be those people who are
counting on the Social Security funds being there some day, because we
will not get Federal spending under control without this balanced
budget amendment. We will continue to have these tremendous stacks of
unbalanced budgets that will go all the way to the ceiling.

When people come to the floor and say, ``Let's just have the will to
do it''--and I have heard it from opponents of the balanced budget
amendment now for 21 years of unbalanced budgets--they ought to look at
this stack and realize it is going up every

[[Page S1503]]

year, and there is no will to do it. It is too easy to spend, too easy
to spend the taxpayers' money. It is too easy to just act
irresponsibly. Putting Social Security outside of the purview of the
unified budget and outside the purview of this balanced budget
amendment would be one of the most reckless things we could do. It
would be the most risky gimmick you could have. I think it is not only
a risky gimmick, it would be a riverboat gamble, where you are almost
guaranteed to lose. Social Security would become a football to be
kicked back and forth by those who want to play games with the budget,
because there would be no fiscal discipline involved in that particular
issue. They want to take the largest item in the budget out of the
unified budget.
Now, to show how ridiculous it is to take that riverboat gamble, put
it out there where it is all by itself, where it could be attacked by
anybody, instead of keeping it within the budget, I ask this one thing.
Why do that when Social Security is the one item in the whole budget
that everybody, every person sitting in the Congress today, be they
Republican or Democrat, would support, would help, would keep viable?
It is the largest item in the budget. I have to tell you that it can
compete better than any other single budgetary issue. So where is the
issue? Where is the meat here?
The fact is that those who are bringing these amendments to the
floor, by and large--and I am not talking about the distinguished
Senator from Nevada; he is very sincere in this amendment, and he
believes this. I don't know why he believes this, if you look at the
facts of the 28 years, and at what all of us have done throughout the
years. But most of the others who are bringing this to the floor and
arguing for this are people who would not want a balanced budget
constitutional amendment in the Constitution for any reason, or for a
variety of reasons, some very sincere and some because they want to
spend and tax more with ease, and they want to do it with voice votes
so they don't have to come here and stand up and let people know how
they voted. I have to tell you, they want to defeat the balanced budget
amendment. Now, that might be all right to have this out there if it
were a better system, but it would not be. You would be exposing Social
Security to direct attack and to direct manipulation over and over.

Madam President, I will have more to say in a few minutes on this. I
notice the distinguished Senator from Michigan is here. He came to
speak.
I yield such time as he needs.
The PRESIDING OFFICER. Senator from Michigan is recognized.
Mr. ABRAHAM. Madam President, I expect to speak more than once on
this issue today. I would like to begin, however, by reiterating some
of the points I made in previous speeches on the amendment, because I
think as we immerse ourselves in the debates on these various
subtopics, we often lose sight of why we are here.
The reason we are here is because of what that pile of unbalanced
budgets reflects--that this country has gone a full generation without
once balancing the budget. It has not balanced it using Social Security
or excluding it. It has not been balanced at all. Therefore, we have
been piling up more and more debt and responsibility, not just on
ourselves but, more importantly, on our children.
Last week, I was looking at what we call the national debt clock.
Some people have questioned the rate at which the clock grows. They
ask, ``Whose calculation are you using?'' It doesn't matter. Even the
slowest calculation of that debt clock suggests that the deficit is
going up to the tune of about $6,374 per second. That is an awful lot
of spending beyond our means. What it has done is--and I think most
Americans understand, even if not most of us in Washington--it has
placed enormous burdens on families of this country, enormous burdens
on enterprise in this country, and, most importantly, enormous burdens
on the children and future children of America.
In terms of its effect on families, this ever rising deficit and the
need of a Federal Government to borrow money to meet its payments has
forced interest rates up dramatically in this country. Interest rates
are estimated to be 2 percent higher because of the deficit. That means
the average price of a new home is $37,000 more because we can't
balance the budget. A student loan is estimated to be some $2,000 more
expensive because we can't balance the budget. A new car, an average-
priced new car, is estimated to be $1,000 more expensive because we
can't balance the budget. For all of the talk that this could be done
if we only had the will and if the White House and the Congress would
only get together, the fact is for 28 years we have not reached the
finish line.
But it is not just families who are paying more. People are paying
more in other ways as well. To the extent the Federal Government
borrows money, it means there is less capital available to create new
businesses, to expand existing businesses, to pay better wages. So our
workers are hurt. Our free enterprise system is hurt. Our chronic
budget deficits mean lower economic growth, fewer jobs, and lower
wages.
Finally, at the top of the list of victims of our budget deficits are
the children of this country. My family was blessed 5 months ago with a
new child. When our son was born, at the very moment that he was born,
he automatically inherited responsibility to support the debt previous
generations have imposed upon him. Over his lifetime, he will be forced
to pay $187,000 in tax payments just to cover the interest on this
debt. If we do not try to bring this under control and do it soon
rather than later, this burden will only get worse for future
generations.
So that is why we are here. We should not lose sight of why we are
here. Our goal is to come to the finish line on an amendment that has
the opportunity and the ability to bring this kind of deficit spending
under control.
At the moment we are discussing a proposal with respect to Social
Security. The distinguished Senator from Utah has referred to this
proposal as a risky gimmick, because it has many consequences that have
not, to my knowledge, been fleshed out in any debate either in the
Judiciary Committee when it was first brought up here or here on the
floor. Most importantly, in terms of the risk involved, is the fact
that as I read this proposal, the Reid amendment, and I have read it
several times, I do not see that additional protection for the benefits
of Social Security are provided. After all, that is really what this
comes down to. Are the beneficiaries going to be protected. The Reid
amendment, in my judgment, doesn't do that at all. It does something
else, though, which I think every Member of this Chamber should be
aware of and have a responsibility to address. That is, it requires a
substantially increased amount of Federal spending to be either reduced
or Federal revenues to be generated in order to meet the terms of this
amendment.
According to calculations of the Congressional Budget Office, during
the years 2002 to 2007, if the Reid amendment were adopted and
ratified, we would have to come up with an additional $706 billion in
either new taxes or spending cuts over and above everything else we
will have to do to keep the budget in balance during those years.
In addition, the Senate Budget Committee has estimated that we will
have to come up with $181 billion more on top of the first $706 billion
in order to reach balance in the year 2002. Those $181 billion would
have to be found during the years between now and 2002. That is a total
of $887 billion beyond all of the other things that we are trying to do
to bring spending under control that would have to be saved if this
amendment went into effect. I think it is important for people who are
advocating this amendment to come to this floor and explain where those
dollars are going to come from, because $800 billion on top of all of
the other things required here, to me at least, does not seem
plausible.
Let me put it in perspective. We would be talking about in addition
to all of the other reductions in spending, in addition to all of the
other taxes the Federal Government currently collects, coming up with a
sum of $800 billion. This sum is more than the 1993 tax hike, the
largest tax hike in history, plus the reductions in Medicare proposed
in last year's budget that was passed by the Congress, plus the
reduction in discretionary spending that was in last year's budget
passed by the Congress.

[[Page S1504]]

When the tax increase in 1993 was passed, many of us on the
Republican side said that was too much of a tax burden to place on the
American people. We argued that it was far too great. It was the
largest in history. When Republicans brought to the floor a budget with
a discretionary spending cuts and reforms in Medicare last year, we
were told by the other side that those were reductions that were too
great, that that those savings were unacceptable, and that is why the
President refused to go along and sign the various bills that would
have effectuated that budget. Now we are talking about doing all of the
things required to bring the budget into balance in 2002, and then on
top of that, if this amendment went into effect, replicating the
process one more time--in fact, more than what we have done--in order
to meet the terms of this amendment.
I do not believe there is anybody in the Senate who is capable of, or
prepared to produce any sort of plan that would even remotely
accomplish those objectives. For that reason, Madam President, I cannot
support this amendment. I have no idea how it could be effectuated, and
I have not heard one Member on either side come forward and explain
that to me.
Moreover, even if we went through an exercise to accomplish it, why
we would be doing it? The terms of the amendment would not in any way
protect the benefits of Social Security even if we did raise taxes $800
billion more dollars, or cut spending on programs like education, law
enforcement, or infrastructure by $800 billion more.
In short, the amendment doesn't accomplish the goals for which it is
being proposed, but the pain complying with its requirements would be
enormous.
So, for those reasons, Madam President, I cannot support this
amendment. I would be happy, and will watch the debate today, to see if
someone comes to the floor with a proposal of how to bring about these
reductions that could give some assurance that they could be
accomplished. I hope someone will. But during the debate in committee
and in the discussions since --and certainly this has been something
discussed very publicly in the last few weeks--no one has offered a
plan, or even anything close to a plan, that could accomplish this.
While I think and I am confident that advocates of the amendment are
sincere in their advocacy, I just do not believe this is an amendment
that could ever been effectuated by this Congress, or any future
Congress. I do not believe it would be feasible to do it because I do
not think, as I say, anyone has brought forth any solution or plan or
proposal that would live up to the terms of the amendment.
For those reasons, I certainly have no intention of supporting it.
But maybe before the end of the day we will hear a response that
explains where the spending cuts are going to come from or how the
taxes are going to be increased or provide some insight into how this
really would protect Social Security benefits later on when the trust
fund begins to run a deficit, because as I read the terms of this, it
in no way does that, either.
So, Madam President, at this time, I yield the floor. I expect later,
as the day goes on, that I will be back to speak a little bit more on
this. But I thank the Presiding Officer and yield the floor.
Mr. HATCH. I suggest the absence of a quorum, with the time equally
charged.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will call the roll.
The legislative clerk proceeded to call the roll.
Mr. LEAHY. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LEAHY. Madam President, I know the distinguished Senator from
South Carolina [Mr. Hollings] will be here soon, as will the
distinguished Senator from Nevada [Mr. Reid]. They are involved in
another discussion of the issue that is pending in the Chamber.
Again, I will say, as I said over and over again, we have to separate
the difference between a balanced budget amendment to the Constitution
and a balanced budget. There is nothing to stop us today, this moment,
right now, from bringing about a balanced budget. It could be done. It
could be done very easily. We could vote for it. The President could
sign it.
A balanced budget amendment to the Constitution means that we amend
the Constitution for only 18 times since the Bill of Rights. Now,
thousands of amendments have been proposed to the Constitution during
that time. The Senate and the House and the States have been wise
enough to reject them. Otherwise, had they not, we would have a
Constitution about 5 or 6 or 7 or 8 times bigger than it is today. We
would not have the bulwark of the most powerful nation known in
history. But we also would not have just reflected the passing fancy of
the moment, and that is what this is. Not a balanced budget. We can do
that. All we need is the courage for it.
After watching the Reagan administration and the Bush administration
and the nearly quadrupling of our national debt as they spoke of having
a balanced budget, two administrations that took all the debt of this
Nation for 200 years and tripled, quadrupled it in a matter of 12
years, all the time talking about the need for a balanced budget, that
was the easy way. Talk about it and increase the deficit.
What has happened under President Clinton for the first time in my
lifetime is that the deficit has come down 4 years in a row. It has
meant some very tough votes. Members of the House and Senate have lost
their seats in these bodies because of these tough votes. But what they
did was the right thing. They left a legacy for their children and
their children's children.
Let us stop the sloganeering. Let us talk about the tough votes. As I
recall, in the first two efforts, first two successful efforts to bring
down the deficit, most of the people now talking about the need for a
balanced budget amendment did not even cast a vote to bring it down.
Let us go for reality, not rhetoric.
I see the distinguished Senator from Nevada and the distinguished
Senator from South Carolina in the Chamber, and I will yield the floor,
Madam President.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, I yield whatever time the Senator from
South Carolina consumes.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. HOLLINGS. Madam President, this crowd on the other side of the
aisle has no shame. Let me make it absolutely clear. They come here and
use the floor of the Senate for these demonstrations. What that pile of
books over there on the other side of the aisle says is any time that
you can flash on C-SPAN, that side of the aisle is for cutting
spending, reducing deficits, and balancing the budget, and this side of
the aisle is for spending--you know, tax and spend, liberal Democrats.

Let us find out what the record is. I believe it is too much, but let
us just say my pile of books is about one-tenth of that pile over
there. If you take the average real deficit--and I put a table on
everyone's desk so you can verify the CBO figures, Madam President--in
the 36 years from Harry Truman up until President Reagan--ah, those
were a tough 36 years; we had to pay for World War II; we had to pay
for Korea; we had to pay for Vietnam; and we had to pay for the Great
Society that Lyndon Johnson started. During that 36 years, the actual
average of real deficits is $20.41 billion.
Now, in the last 16 years, from 1982 to 1997, without the cost of a
single war or the Great Society, the average deficit is $277.58
billion. We have gone from $20 billion deficits with the cost of all
the wars to the Republican initiative of growth, growth, growth. My
friend, Steve Forbes, is running around again saying, ``Hope, growth
and opportunity.''
What a charade. What a farce. They ought to be ashamed of
themselves--the unmitigated gall to put those books up there and try to
demonstrate that they are for cutting spending, that those are the
deficits that we piled up casually. The truth is we balanced the budget
under President Lyndon Baines Johnson, and the reason this growth
started was that silly Reaganomics, which Howard Baker, who sat in that
chair as the Republican leader, called a riverboat gamble, and which
then Vice President George Herbert Walker Bush

[[Page S1505]]

called voodoo. But there is no historical memory under these youngsters
who come here to the Senate floor and try to demonstrate, with a
pictorial thing here, with a pile of books: Now, we are concerned about
these deficits, and the other side does not have any regard for them.
They are the ones who caused it.
That is the Reagan-Bush memorial deficit pile right there. That is
what it is. In fact, Madam President, you can go back to 1776 and take
38 Presidents, 205 years of history, the cost of the Revolution and all
the other wars, and we never got to a $1 trillion debt. When President
Reagan took over, it was $909 billion, still not a $1 trillion debt.
Now, under Reagan-Bush, President Reagan and President Bush, they have
gone to $5.3 trillion. And do not blame President Clinton. Gosh knows,
he did not know how to take credit. He went down there to Texas. I
guess we all make mistakes running for office, but I think he
overspoke. He said he raised taxes too much. But that did not take away
from my vote.
In 1993, we had a budget plan, and the budget plan was to reduce the
deficit by $500 billion. It was to raise taxes on gasoline, and, yes,
Social Security. And over on that side they said, pointing at us, you
raise taxes on Social Security, they will be hunting you down like dogs
in the street and shooting you. They said, ``We are going to have a
recession.'' Ah, not even a recession, but a depression. Instead, the
stock market is going through the roof. Inflation is down, jobs are up,
and now they want to manufacture a problem.
I say that is their problem. We did not get a single Republican vote
in the Senate, we did not get a single Republican vote in the House of
Representatives to do anything. We passed it by ourselves. And
President William Jefferson Clinton is the only President since Lyndon
Johnson to reduce the deficit. He spent 10 years as Governor down in
Arkansas, each with a balanced budget. Then he comes to Washington and
he changes the direction of increased deficits. You can see the real
deficit under the last year of President Bush exceeded $400 billion.
Madam President, $400 billion. The exact CBO figure for 1992 was $403.6
billion. That is where the spending comes from. And they get up here
and put on these silly shows of piling up books and everything else to
appear on C-SPAN and make the most extravagant statements you have ever
heard, really totally out of whole cloth.

Where is the spending? Interestingly, Madam President--and I wish
someone would give my table of spending in real and unified deficits to
our distinguished Presiding Officer so this can be followed. Madam
President, I ask unanimous consent that this table be printed in the
Record at this point.
There being no objection, the table was ordered to be printed in the
Record, as follows:

BUDGET REALITIES
[In trillions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gross Federal
President and year U.S. Budget Unified deficit Trust funds Real deficit debt Gross interest
--------------------------------------------------------------------------------------------------------------------------------------------------------
Truman:
1945.............................. 92.7 -47.6 5.4 ................. 260.1 .................
1946.............................. 55.2 -15.9 -5.0 -10.9 271.0 .................
1947.............................. 34.5 4.0 -9.9 +13.9 257.1 .................
1948.............................. 29.8 11.8 6.7 +5.1 252.0 .................
1949.............................. 38.8 0.6 1.2 -0.6 252.6 .................
1950.............................. 42.6 -3.1 1.2 -4.3 256.9 .................
1951.............................. 45.5 6.1 4.5 +1.6 255.3 .................
1952.............................. 67.7 -1.5 2.3 -3.8 259.1 .................
1953.............................. 76.1 -6.5 0.4 -6.9 266.0 .................
Eisenhower:
1954.............................. 70.9 -1.2 3.6 -4.8 270.8 .................
1955.............................. 68.4 -3.0 0.6 -3.6 274.4 .................
1956.............................. 70.6 3.9 2.2 +1.7 272.7 .................
1957.............................. 76.6 3.4 3.0 +0.4 272.3 .................
1958.............................. 82.4 -2.8 4.6 -7.4 279.7 .................
1959.............................. 92.1 -12.8 -5.0 -7.8 287.5 .................
1960.............................. 92.2 0.3 3.3 -3.0 290.5 .................
1961.............................. 97.7 -3.3 -1.2 -2.1 292.6 .................
Kennedy:
1962.............................. 106.8 -7.1 3.2 -10.3 302.9 9.1
1963.............................. 111.3 -4.8 2.6 -7.4 310.3 9.9
Johnson:
1964.............................. 118.5 -5.9 -0.1 -5.8 316.1 10.7
1965.............................. 118.2 -1.4 4.8 -6.2 322.3 11.3
1966.............................. 134.5 -3.7 2.5 -6.2 328.5 12.0
1967.............................. 157.5 -8.6 3.3 -11.9 340.4 13.4
1968.............................. 178.1 -25.2 3.1 -28.3 368.7 14.6
1969.............................. 183.6 3.2 0.3 +2.9 365.8 16.6
Nixon:
1970.............................. 195.6 -2.8 12.3 -15.1 380.9 19.3
1971.............................. 210.2 -23.0 4.3 -27.3 408.2 21.0
1972.............................. 230.7 -23.4 4.3 -27.7 435.9 21.8
1973.............................. 245.7 -14.9 15.5 -30.4 466.3 24.2
Ford:
1974.............................. 269.4 -6.1 11.5 -17.6 483.9 29.3
1975.............................. 332.3 -53.2 4.8 -58.0 541.9 32.7
1976.............................. 371.8 -73.7 13.4 -87.1 629.0 37.1
Carter:
1977.............................. 409.2 -53.7 23.7 -77.4 706.4 41.9
1978.............................. 458.7 -59.2 11.0 -70.2 776.6 48.7
1979.............................. 503.5 -40.7 12.2 -52.9 829.5 59.9
1980.............................. 590.9 -73.8 5.8 -79.6 909.1 74.8
Reagan:
1981.............................. 678.2 -79.0 6.7 -85.7 994.8 95.5
1982.............................. 745.8 -128.0 14.5 -142.5 1,137.3 117.2
1983.............................. 808.4 -207.8 26.6 -234.4 1,371.7 128.7
1984.............................. 851.8 -185.4 7.6 -193.0 1,564.7 153.9
1985.............................. 946.4 -212.3 40.5 -252.8 1,817.5 178.9
1986.............................. 990.3 -221.2 81.9 -303.1 2,120.6 190.3
1987.............................. 1,003.9 -149.8 75.7 -225.5 2,346.1 195.3
1988.............................. 1,064.1 -155.2 100.0 -255.2 2,601.3 214.1
Bush:
1989.............................. 1,143.2 -152.5 114.2 -266.7 2,868.0 240.9
1990.............................. 1,252.7 -221.2 117.4 -338.6 3,206.6 264.7
1991.............................. 1,323.8 -269.4 122.5 -391.9 3,598.5 285.5
1992.............................. 1,380.9 -290.4 113.2 -403.6 4,002.1 292.3
Clinton:
1993.............................. 1.408.2 -255.0 94.3 -349.3 4,351.4 292.5
1994.............................. 1,460.6 -203.1 89.2 -292.3 4,643.7 296.3
1995.............................. 1,514.4 -163.9 113.4 -277.3 4,921.0 332.4
1996.............................. 1,560.0 -107.0 154.0 -261.0 5,182.0 344.0
1997.............................. 1,632.0 -124.0 130.0 -254.0 5,436.0 360.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Historical tables, ``Budget of the U.S. Government, FY 1998;'' Beginning in 1962 CBO's ``1997 Economic and Budget Outlook.''

Mr. HOLLINGS. Madam President, if you look back to 1968-69, back when
we used to have budgets from July 1 around the clock to June 30. We
have changed now the fiscal year, so October 1 is the beginning of the
fiscal year.

[[Page S1506]]

But under that last year of President Johnson, let us credit him, you
can see going right straight across the board we had a surplus of $2.9
billion. Trust funds were only $300 million--but dispel from your mind
that President Johnson used trust funds because even using trust funds
he would have had a surplus. So, here comes President Lyndon Baines
Johnson with a surplus that year, and all he had to spend was $16.6
billion on interest costs.
Now, Madam President, do you see today's interest costs of $360
billion at the bottom of the page--$360 billion? This is how we have
increased spending. The Grace Commission, upon which I served, came to
town to do away with waste, fraud, and abuse. The biggest waste is
spending money for nothing, just for extravagance. The biggest waste is
the past profligacy of not paying the bills and actually increasing
spending on interest payments by some $344 billion during that period
of time for absolutely nothing.
President Clinton is working on it. He has slowed it down. But they
are the ones who increased it with Reaganomics, ``hope, growth and
opportunity,'' and television buzz words they can buy up. But let us
get to the truth. That is why I put this table here, so we can look at
the unified deficit, the real deficit, and gross interest, Madam
President, which is forced spending, just like taxes.
It is an insidious way to raise taxes. We have $360 billion to be
expended this year on interest costs. Because these interest costs
continue to grow, the debt goes up, up and away. This year, it is
estimated that the debt will go from $5.182 trillion to $5.436
trillion, an increase of $254 billion. So, while we are increasing the
debt, we are spending $1 billion a day in interest. In essence, we are
increasing taxes $1 billion a day. Because, like taxes, it has to be
paid. It has to be paid. So the crowd against taxes is insidiously
increasing taxes $1 billion a day. That is where the spending is.
Let me get back up here where my file is, Madam President, and get to
the proposition and join issue, if you please, with the statements made
by the distinguished chairman of the Budget Committee, the Senator from
New Mexico, Senator Domenici. Again yesterday, and he continues this
wherever he goes, he referred to the Concord Coalition report as
evidence that the matter of Social Security, again, was a gimmick, that
is was just all nonsense.
I had hoped we could really avoid that, because I have tried my best
to counsel the Concord Coalition. To justify the sincerity of my
remarks, let me go back and show that I am not just saying so today. I
will read into the Record part of my letter of August 16, 1996 to the
Concord Coalition.
(Mr. SMITH of Oregon assumed the Chair.)
Mr. HOLLINGS. Mr. President, this is addressed to the Honorable
Warren B. Rudman and the Honorable late Paul Tsongas. We lost Paul. I
have the greatest respect for these gentlemen. They are the best of the
best. I say here in this letter:

Dear Warren and Paul: You two friends should be ashamed of
yourselves. I have just received the Concord Coalition Social
Security mailout, and in four pages and in a 13-item
questionnaire, there is no mention of the willful bankrupting
of the Social Security trust fund in violation of section
13301 of the Budget Act. Mind you me, I support such
coalition initiatives as the age increase for retirement to
help strengthen the trust fund, and I have voted three times,
now, for the Danforth-Kerrey recommendations. But back in
1983, the Greenspan commission recommended that Social
Security be put off budget so that we could take care of the
baby boomers through the fiscal year 2056. President Bush
signed this provision, making it illegal to borrow from the
fund or use Social Security moneys to obscure the size of the
deficit. Now we know both the President and the Congress
violated this. We know both parties violated this. But if we
cannot get the truth out of esteemed colleagues like you two,
instead of being fiscally in balance until the year 2029 we
will be fiscally bankrupt by the year 2002.

Mr. President, I ask that my letter be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

U.S. Senate,

Washington, DC,

August 2, 1996.
Hon. Warren B. Rudman,
Hon. Paul Tsongas,
The Concord Coalition, Washington, DC.
Dear Warren and Paul: You two friends should be ashamed of
yourselves. I have just received The Concord Coalition Social
Security mail-out and in four pages and a 13-item
questionnaire, there is no mention of the willful bankrupting
of the Social Security trust fund in violation of Section
13301 of the Budget Act. Mind you me, I support such
Coalition initiatives as the age increase for retirement to
help strengthen the trust fund and I have voted three times
now for the Danforth-Kerry recommendations. But back in 1983,
the Greenspan Commission recommended that Social Security be
put off-budget so that we could take care of the baby boomers
through FY 2056. Responding in interim steps, the Congress
did this in 1990 when President Bush signed the provision
making it illegal to borrow from the fund or use Social
Security monies to obscure the size of the deficit. Now we
know both the President and the Congress violated this, we
know both parties violated this but if we can't get the truth
out of esteemed colleagues like you two, instead of being
fiscally in balance until the year 2029, we will have it
fiscally bankrupt by the year 2002.
At the moment, Social Security is paid for and has a
surplus of $531 billion. What is not paid for, what is
causing the deficit and debt are the general functions of
government such as defense, housing, law enforcement,
education, etc. Working against the deficit and debt, the
coalition would better gain the public's attention and
support on this immediate problem rather than worrying about
the next century. In ``Breaking the News,'' James Fallows
outlines how the people in a democracy will do the right
thing if properly engaged. The reason this cancerous nonsense
continues in Washington is that the responsible Rudmans and
Tsongases are afraid to tell the people the truth.
Sincerely,
Ernest F. Hollings.

Mr. HOLLINGS. I have the greatest respect for our friends there in
the Concord Coalition, the former Secretary of Commerce, Secretary Pete
Peterson--I worked with him way back under the initial days of
President Reagan when I opposed Reaganomics. We got Senator Mathias,
the distinguished Republican Senator from Maryland, to go along with
us. But there were only 11 of us here that were fighting at that
particular time against this. What you do is you cut all your revenues
and the money because, ``The people back home will know better than the
politicians in Washington and they will have so much money, there will
be so much spending, there will be so much income tax and sales tax
that, my heavens, we will have growth and we will grow out of this.''
Go ask the mayor of a city to cut his revenues 25 percent. Go ask a
Governor to cut his revenues some 25 percent. They work with common
sense because they cannot print money like us up here in Washington.
They have to have a credit rating. They have to be able to keep
interest rates down and get the investments in their communities and in
their States. But we come to Washington and lose all common sense. We
engage in a tremendous charade up here about piling up books, and how
sincere we are, when we disregard the Greenspan commission and we
disregard the law.
I have here the report of the National Commission on Social Security
Reform dated January 1983. From that report I read, ``A majority of the
members of the national commission recommends that the operation of
these''--these are fancy words, but ``Social Security trust funds''--
they use the word ``trust funds,''--this is a study commission--
``should be removed from the unified budget.''
They go right on down, ``The national commission believes the changes
in the Social Security Program should be made only for programmatic
reasons and not for the purposes of balancing the budget.''
So, pursuant to taking it out of the unified budget and building up
the surplus funds, that is how we got the votes. If we had said at that
particular time, ``Look, we are going to use this money for foreign
aid, we are going to use this money for welfare, food stamps, anything
else of that kind,'' you could not have gotten the votes.
We had a horrendous tax increase in 1983, in a conscientious fashion,
to build up surpluses to the year 2056. I can show you that right here
in the 75-year period. But don't depend on just what the Senator from
South Carolina says. Let's get back to the vote and the actions at that
time of my distinguished colleague, the now chairman of the Budget
Committee.
At that particular time, the Senator from New Mexico--and I refer now
to the committee report, Calendar No. 781, Committee on the Budget,
U.S. Senate, dated July 10, 1990, on page 29.

[[Page S1507]]

I ask unanimous consent to have printed in the Record the additional
views of Mr. Domenici.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Additional Views of Mr. Domenici

It is somewhat ironic that the first legislative mark-up in
the 16 year history of the Senate Budget Committee produced a
bill that does not do what its authors suggest and, more
importantly, weakens the fiscal discipline inherent in the
Gramm-Rudman-Hollings budget law.
I voted for Senator Hollings' proposal because I support
the concept of taking Social Security out of the budget
deficit calculation. But I cast this vote with reservations.
The best way to protect Social Security is to reduce the
Federal budget deficit. We need to balance our non-Social
Security budget so that the Social Security trust fund
surpluses can be invested (by lowering our national debt)
instead of used to pay for other Federal operating costs. We
could move toward this goal without changing the unified
budget, a concept which has served us well for over twenty
years now.
Changes in our accounting rules without real deficit
reduction will not make Social Security more sound. In fact,
we could make matters worse by opening up the trust funds to
unrestrained spending. Under current law, the trust funds are
protected by the budget process. Congress cannot spend the
trust fund reserves without new spending cuts or revenue
increases in the rest of the budget to meet Gramm-Rudman-
Hollings deficit reduction requirements. If we take Social
Security out of GRH without any new protection for the trust
funds. Congress could spend the reserves without facing new
spending cuts or revenue increases in other programs. And if
we spend the trust fund reserves today, we will threaten the
solvency of the Social Security program, putting at risk the
benefits we have promised to today's workers.
Of course, I also understand that we might be able to
restore some public trust by taking Social Security out of
the deficit calculation. Trust that we in Congress are not
``masking the budget deficit'' with Social Security. That is
why I believe we should take Social Security out of the
deficit, but only if we provide strong protection against
spending the trust fund reserves. We need a ``firewall''
around those trust funds to make sure the reserves are there
to pay Social Security benefits in the next century. Without
a ``firewall'' or the discipline of budget constraints, the
trust funds would be unprotected and could be spent on any
number of costly programs.
Unfortunately, the Hollings bill does not protect Social
Security, which is why Senator Nickles and I offered our
``firewall'' amendment, defeated by a vote of 8 to 13. The
amendment, drafted over the last six months by myself and
Senators Heinz, Rudman, Gramm, and DeConcini, included: a 60
vote point of order against legislation which would reduce
the 75 year actuarial balance of the Social Security trust
funds; additional Gramm-Rudman-Hollings deficit reduction
requirements in all years in which legislation lowered the
Social Security surpluses; and notification to Social
Security taxpayer on the Personal Earnings and Benefit
Estimate Statements (PEBES) each time Congress lowered the
reserves available to pay benefits to future retirees.
With just one exception, the other side of the aisle voted
against this protection for Social Security beneficiaries.
Furthermore, the Hollings bill says nothing about how or
when we will achieve balance in the non-Social Security
budget. The bill simply takes Social Security out of the
deficit calculation. If enacted, the Hollings bill would
require $173 billion in deficit reduction in 1991 to meet the
statutory GRH target (see attached table). Obviously, that is
not going to happen.
I believe we need to extend Gramm-Rudman-Hollings to ensure
we have the discipline to achieve balance in the non-Social
Security portion of the budget. The Budget Summit negotiators
are discussing a goal of $450 to $500 billion in deficit
reduction over the next five years. Once we reach an
agreement, that plan should be the framework for extending
the GRH law.
I offered a Sense of the Congress amendment during the
mark-up expressing this view. I offered this to put the
Hollings bill in some context.
But the Democratic members of the Committee refused to
consider even an amendment acknowledging the facts about our
budget situation, rejecting my proposal by another 8 to 13
vote. In fact, the Chairman indicated that there was some
concern on his side of the aisle about extending the Gramm-
Rudman-Hollings discipline. One might infer that, for some,
this mark-up was really an effort to kill Gramm-Rudman-
Hollings.
I am not sure what we accomplished in reporting out a bill
with no protection for Social Security and with no suggestion
of what we think should happen regarding the deficit targets.
I, for one, do not want to do anything which could endanger
Social Security or Gramm-Rudman-Hollings budget discipline.
At a minimum, I will offer the ``firewall'' amendment to
protect Social Security should the reported bill be
considered by the full Senate.
Pete V. Domenici.

Mr. HOLLINGS. Mr. President, I moved at that particular time that we
comply with the Greenspan commission and we put Social Security off
budget, out of the unified deficit, so we could build up these
surpluses so that the baby boomers and the next generation could be
sure of receiving their money. We have lost trust in Government with
the present activity. But here is what the distinguished chairman of
the Budget Committee, Senator Domenici, stated at that time:

I voted for Senator Hollings' proposal because I support
the concept of taking Social Security out of the budget
deficit calculation.

I am going to read that again. Here is what the gentleman calls
gimmick, here is what the gentleman called nonsense when referring to
the Concord coalition's report yesterday.
Senator Domenici:

I voted for Senator Hollings' proposal because I support
the concept of taking Social Security out of the budget
deficit calculation.

Then reading further:

But I cast this vote with reservations.

He says about my particular amendment:

Unfortunately, the Hollings bill does not protect Social
Security sufficiently.

He says further:

That's why Senator Nickles and I offered our firewall
amendment. This amendment, drafted over the last 6 months by
myself, Senator Heinz, Senator Rudman, Senator Gramm and
Senator DeConcini, included a 60-vote point of order against
legislation which would reduce the 75-year actuarial balance
of the Social Security trust fund.

There is the Concord coalition, the president, the former Senator
Warren Rudman, the best of the best, saying, ``Fine, I'm voting for the
Hollings amendment to put Social Security off budget, make it a trust
fund, build up the surpluses so that the younger generation, who is
working and paying their taxes, knows the money is not being frittered
away by an irresponsible Congress.'' And we are going to go even
further. We are going to say you have to get a 60-vote majority in
order to reduce the 75-year actuarial balance.
Now, they knew at that particular time it was going to be for 75
years, and here is the committee vote on July 10, 20 to 1. The one
Senator voting against it at that time was our distinguished colleague
from Texas, Senator Gramm.
I ask unanimous consent to have printed in the Record the vote
record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Hollings Motion To Report the Social Security Preservation Act

The Committee agreed to the Hollings motion to report the
Social Security Preservation Act by a vote of 20 yeas to 1
nay.
Yeas: Mr. Sasser, Mr. Hollings, Mr. Johnston, Mr. Riegle,
Mr. Exon, Mr. Lautenberg, Mr. Simon, Mr. Sanford, Mr. Wirth,
Mr. Fowler, Mr. Conrad, Mr. Dodd, Mr. Robb, Mr. Domenici, Mr.
Boschwitz, Mr. Symms, Mr. Grassley, Mr. Kasten, Mr. Nickles,
Mr. Bond.
Nays: Mr. Gramm.

Mr. HOLLINGS. Mr. President, that was before the Budget Committee.
Again, on the Hollings-Heinz amendment, I got together with my good
friend, the late Senator John Heinz, and we worked in a bipartisan
fashion, and we got an overwhelming bipartisan vote--98 Senators out of
the 100. We missed two of them, Senator Armstrong and Senator Wallop.
But we got 98 Senators, and any Senator, Republican or Democrat, who
was a Member of this body back in 1990 who votes for the proposed
Senate Joint Resolution 1 that would eviscerate the Social Security
trust fund, that would turn the trust fund into a slush fund,
constitutionally, is breaching the trust that he voted for on October
18, 1990 at 4:41.
I ask unanimous consent to have printed in the Record that vote
record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Hollings--Heinz, et al., Amendment Which Excludes the Social Security
Trust Funds From the Budget Deficit Calculation, Beginning in Fiscal
Year 1991.

YEAS (98)

Democrats: Adams, Akaka, Baucus, Bentsen, Biden, Bingaman,
Boren, Bradley, Breaux, Bryan, Bumpers, Burdick, Byrd,
Conrad, Cranston, Daschle, DeConcini, Dixon, Dodd, Exon,
Ford, Fowler, Glenn, Gore, Graham, Harkin, Heflin, Hollings,
Inouye, Johnston, Kennedy, Kerrey, Kerry, Kohl, Lautenberg,
Leahy, Levin, Lieberman, Metzenbaum, Mikulski, Mitchell,
Moynihan, Nunn, Pell, Pryor, Reid, Riegle, Robb, Rockefeller,
Sanford, Sarbanes, Sasser, Shelby, Simon, Wirth.

[[Page S1508]]

Republicans: Bond, Boschwitz, Burns, Chafee, Coats,
Cochran, Cohen, D'Amato, Danforth, Dole, Domenici,
Durenberger, Garn, Gorton, Gramm, Grassley, Hatch, Hatfield,
Heinz, Helms, Humphrey, Jeffords, Kassebaum, Kasten, Lott,
Lugar, Mack, McCain, McClure, McConnell, Murkowski, Nickles,
Packwood, Pressler, Roth, Rudman, Simpson, Specter, Stevens,
Symms, Thurmond, Warner, Wilson.

NAYS (2)

Democrats: None.
Republicans: Armstrong, Wallop.

Mr. HOLLINGS. Mr. President, here is the former law, section 13301,
off-budget status of the Social Security trust fund. I ask unanimous
consent to have that statute printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Subtitle C--Social Security

SEC. 13301. OFF-BUDGET STATUS OF OASDI TRUST FUNDS.

(a) Exclusion of Social Security From All budgets.--
Notwithstanding any other provision of law, the receipts and
disbursements of the Federal Old-Age and Survivors Insurance
Trust Fund and the Federal Disability Insurance Trust Fund
shall not be counted as new budget authority, outlays,
receipts, or deficit or surplus for purposes of--
(1) the budget of the United States Government as submitted
by the President,
(2) the congressional budget, or
(3) the Balanced Budget and Emergency Deficit Control Act
of 1985.
(b) Exclusion of Social Security From Congressional
Budget.--Section 301(a) of the Congressional Budget Act of
1974 is amended by adding at the end the following: ``The
concurrent resolution shall not include the outlays and
revenue totals of the old age, survivors, and disability
insurance program established under title II of the Social
Security Act or the related provisions of the Internal
Revenue Code of 1986 in the surplus or deficit totals
required by this subsection or in any other surplus or
deficit totals required by this title.''.

Mr. HOLLINGS. Mr. President, now we have a complete picture. They are
running around here with demonstrations, with piles of books and their
pile of books is the quintupling of the national debt under their
particular leadership and trust, the 12 years really of Reagan-Bush,
because we have reduced the deficit since then under President Clinton.
Here is one-tenth that amount for the 205 years of our history, and
they have the unmitigated gall to come here and continue with that
demonstration. It is the Reagan-Bush memorial deficit pile. They are
the ones who ran up the national debt. They are the ones who quintupled
the national debt, and we are fighting in order to protect the Social
Security trust fund.
I could go into other reports, but I have received a note from my
distinguished leader, Harry Reid, of Searchlight, NV. What we are going
to do is have a vote for the balanced budget amendment. I have
cosponsored one. I have been working in the vineyards for years. I
balanced the budget back in the fifties in the State of South Carolina
and got for the first time in its history a triple A credit rating. I
was the first State from Texas up to Maryland to ever receive that from
Moody's and Standard & Poor's.
I voted for a balanced budget. I worked with George Mahon in 1968. I
worked in a bipartisan fashion with Senators Gramm and Rudman in the
mideighties to cut deficits, and I am willing to work with them anytime
anywhere. This is not a partisan fight. This is a bipartisan fight to
keep the trust. The distinguished Senator from Nevada will have a
balanced budget amendment to the Constitution that we can support that
will protect Social Security, and I intend to vote for it. But I am not
voting, Mr. President, to breach the trust to vote against my own bill
that I worked so hard for that we got President Bush to sign into law.
Mr. President, here is what really happens. Here is the President's
budget, and on page 2--literally on page 2--you will find that in the
year 2002, we have a surplus of $17 billion. But if you turn--this is
the gamesmanship on both sides, both in the White House and the
Congress--but if you turn to page 331, you find a deficit in 2002 of
$167.3 billion. Why do we have to borrow $167.3 billion? That is
because we increase the debt that amount, and we are going to have to
go out and borrow to pay the interest costs. That is the real deficit.
It is not a $17 billion surplus.
If you don't protect Social Security, then I come as a budgeteer and
say, ``Now, wait a minute, the other side is going to have $543
billion,'' which is how much they will have borrowed from Social
Security under this particular budget that we are discussing. If they
are going to use $543 billion, some will want to use it on defense,
some will want to use it on education, and some will want to use it on
highways. If they are going to use and spend the money, I might as well
get my projects in there. That is wherein the discipline breaks. If you
are going to use Social Security and turn it from a trust fund into a
slush fund, you do not have the discipline.

Again, Mr. President, I thank my distinguished colleague for yielding
the floor.
Mr. ABRAHAM. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. ABRAHAM. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ABRAHAM. Mr. President, could I inquire as to how much time is
left?
The PRESIDING OFFICER. The Senator from Michigan has 65 minutes, and
the Senator from Nevada has 8 minutes and 34 seconds.
Mr. ABRAHAM. It is my understanding, Mr. President, the Senator from
Nevada has one additional speaker who will not be coming for a bit. I
think what we will do is the following: I will speak briefly in
response to the last comments that were made, and I believe the Senator
from Maine wishes to speak, and then we have some additional speakers
who will be here, I am told, around 11:30. We will proceed and try to
reduce the discrepancies in time between the two sides.
I want to focus this discussion on the amendment before the Senate,
but I cannot ignore some of the comments that were made by the previous
speaker, the Senator from South Carolina, who was pointing to these
budgets and somehow reaching a conclusion based on his experience, that
these budgets that are not in balance somehow are primarily the
responsibility of Republican Presidents.
Mr. President, I was not here during all these Congresses. In fact,
the last budget is the only one where I was present. The Senator from
South Carolina was here during all these Congresses when these deficits
were accumulated, and I think he knows, as we all know, that the
Congress of the United States, specifically the House of
Representatives, during this period of time was controlled by the
Democratic Party. And, as we all know, all spending bills are required,
by the Constitution, to originate in the House.
This is not a case of trying to blame each side. We are here today
trying to solve a problem. Indeed, it may be that a lot of the spending
that took place was during the 1980's, but the problems were created
during the 1960's. The spending kept escalating because the programs
were established in a way so that there was no choice but to see the
spending programs increased. I do not believe there were a lot of calls
for pulling in that spending from either side, but particularly from
the Democratic side.
The other thing I wish to comment on is the issue of what took place
in the 1980's, and the implication has been frequently made here on the
floor that somehow the deficits were created because tax revenues to
the Federal Government were starved because we let more people keep
more of what they earned during the 1980's. It is true, Mr. President,
that tax rates were reduced in the early 1980's. It is also true that
after those tax cuts, the economy soared in ways that we could only
hope to see continue into the future. It is also the case, Mr.
President, that revenues to the Federal Government from the income
taxes and other taxes increased dramatically during the 1980's, as
well, increased substantially beyond what had been the case in the
beginning of that decade.
What increased faster than tax revenues to Washington and what
resulted in the deficits that we saw was Federal spending. Federal
spending increased, I believe, something in the vicinity of 69 percent.
It was not one party's fault. It was not one part of the Government. It
was across the board. Whether it was

[[Page S1509]]

defense spending, discretionary domestic spending, or spending on
mandatory entitlement programs, spending went up faster than tax
revenues to Washington went up.
So the problem in the 1980's wasn't that we let people keep more of
what they earned and somehow punished Washington; it is that we could
not tighten the belt at the Federal level, reduce the growth of Federal
spending in order to keep the deficits under control. We all are
suffering today, as I said in my initial comments. The people suffering
the most are families who are paying higher interest rates because of
this deficit--2 percent higher rates--which produces higher prices,
higher costs to finance the purchase of a new home or a new car, to
finance student loans. Wage earners and those who create jobs suffer
because of the higher interest rates and crowding out of markets. The
Federal Government needs to borrow more. The children suffer because,
to the extent that this debt falls on the responsibility of children in
America and will continue to fall on them, much more of their working
lives will be committed to paying taxes to finance just the interest on
this deficit.
So, Mr. President, we have to address the problem now. We can't,
today, get into exclusively a question of who is in charge of the
Congress and who was the President during all these deficits. The
visual we have today for the American people to see is the fact that,
without a constitutional amendment, for nearly 30 years we have not
been able to balance the budget. In fact, you can go all the way back
to 1960 before you find a budget that was balanced without using the
Social Security surplus. That is what we ought to address, and that is
what I hope to see us accomplish today.
So, as I said earlier, there are a lot of issues involved in the
amendment before us. I have raised questions as to how it could
possibly be financed because, as I said, without, to my knowledge, any
specific additional protections of the benefits of Social Security from
the amendment, we will add a burden of some $706 billion between 2002
and 2007, a burden of either additional taxes or reductions in spending
on programs like education and law enforcement, which will have to be
met to effectuate this amendment. I have not heard from any side a
proposal to deal with that $706 billion. I don't believe it is going to
be feasible because I don't think we are going to see an alternative
proposal today. And because of the absence of that alternative, I
cannot support this amendment. I know other Senators here wish to
speak. So, at this time, I yield to the Senator from Maine such time as
she may need.
The PRESIDING OFFICER. The Senator from Maine [Ms. Snowe], is
recognized.
Ms. SNOWE. Mr. President, I think that it is interesting to hear the
debate that has been underway this morning with respect to the
constitutional amendment to balance the budget. Frankly, this is
probably--and is in many instances--the same debate we have had over
and over and over again on this issue. I served 16 years in the House
of Representatives, and we debated this issue. We debated this issue 2
years ago here in the U.S. Senate and lost by one vote, regrettably.
But we hear the same arguments over and over again. I have been in
Congress now for a total of 19 years, in both the House and Senate. We
have debated this issue approximately eight times. What we have heard
time and time again is, if we only had the will, or the courage, we
would not need a constitutional amendment to balance the budget, that
we should, as an institution, collectively be able to balance the
budget without a constitutional requirement. Even the President stated
that fact in his State of the Union Address to the Congress on February
4. He said, ``Rewriting the Constitution isn't necessary to balance the
budget. All we need is your vote and my signature.''

Well, the fact of the matter is, he got our vote in the bill, which
was a balanced budget submitted to the President, but we didn't get the
President's signature. That's the problem. We don't have a
constitutional requirement because there will always be a reason or an
excuse as to why we can't balance the budget. Governors can't evade
that constitutional requirement. Most Governors in this country today
are required by their own constitutions, and they don't avoid that
responsibility. The problem here is, there is a significant amount of
avoidance because there is not an institutional will, or discipline, to
balance the budget because it's difficult to make choices.
So no one is willing to set any priorities. If we don't have a
constitutional amendment, we are not required to establish these
priorities and we are not willing to exhibit leadership on our own
initiative. So Congress has had decades and decades of good intentions.
History is replete with good intentions on imposing fiscal discipline.
But we have failed in achieving a balanced budget.
Now, we have heard a lot of discussion today about the past. We heard
about the last 15 years. They talked about the Reagan Presidency and
the Bush Presidency. But what was omitted from that discussion was the
fact that we also had a Congress, and it happened to be a Democratic
Congress. Now, does anyone happen to believe that these budgets that
are down here, which are unbalanced, didn't have the support of the
Democratic Congress? I think we all know the answer to that question.
Congress played a very significant role in the adoption of the budget.
There is blame to go around on both sides. I think we all recognize
that. But to sit here and say that blame for the last 15 years of
budget deficits can be placed on the Reagan and Bush Presidencies
clearly is ignoring reality, because that is not what happened.
In fact, I can recall back in the early eighties--in fact, I think it
was 1983--there was an agreement between President Reagan and the
Congress that for every dollar increase in taxes, there would be a $3
reduction in spending. Guess what? We got the dollar increase in taxes,
but we didn't get the $3 reduction in spending.
I should also say that there was a budget agreement in 1990 that
certainly contributed to the declining deficits that we are
experiencing right now, and everybody is referring to the Clinton
administration and declining deficits. But what's ironic about those
declining deficits--and we know there are serious problems beyond the
turn of the century, but for now the deficits are declining compared to
previous years--in talking about those declining deficits, the other
side fails to mention that they also include the Social Security trust
fund surpluses. So they want to sort of have it both ways. Look, the
deficits are coming down. Yet, they do include the Social Security
trust fund. If we are going to talk about honesty in budgeting, they
ought to exclude them to show what the real deficit is.
Every President has used the Social Security trust fund surpluses.
There is no question that we have a serious problem beyond the turn of
the century when we have the beginning of the baby boomers retiring. We
have had an obligation, as we have always shown, since the inception of
the Social Security trust funds, to pay those benefits to
beneficiaries. That has been and will always be a sacred trust between
the Government and the American people.
We want to preserve and protect the Social Security trust fund. What
is the best way to do it? It is to balance the budget so that we can
rein in spending, so that we will be in a position to pay out the baby
boomers' retirement. And that is the issue that is confronting us. If
we rein in the debt, we have a better ability to preserve and protect
the Social Security trust fund.
I find it interesting that the debate today has centered around the
constitutional amendment to balance the budget, not passing the
straight face test, because it includes the trust funds of Social
Security. What I find interesting about the amendment that has been
offered by the Senator from Nevada is that it doesn't take off budget
all the other trust funds--the highway trust fund, the aviation trust
fund, and the numerous other trust funds that represent billions of
dollars. If we are going to talk about honesty in budgeting, they don't
include that. In fact, here we have an enormous list of trust funds. If
we are talking about truth in budgeting, then we are talking about many
other trust funds as well.
The point is that the best way to preserve the Social Security trust
fund is to balance the budget. The best way to protect the Social
Security beneficiary

[[Page S1510]]

payment checks is to keep it on budget, because that is the system that
we have known. We have known how that system has worked. We have paid
the benefits, and when there has been a problem with Social Security,
we have addressed it, as was the case in 1983 with the bipartisan
commission. But no one has told us on the other side exactly how this
trust fund off budget is going to work. We have had no indication of
what exactly is going to happen with those surpluses. Will they
continue to be invested in Government bonds as they are today to pay
off the debt and to write off the deficit, or are they going to be
invested in private securities? Because that is also an issue.
It raises a concern for me because I am now asking the question: If
you place the Social Security trust fund off budget, what exactly is
going to happen to those surpluses? In what way are they going to be
used? Are they going to be privatized? I think that is an issue and a
consequence that should be addressed, because that does raise some
significant concerns. Will they be placed in noninterest-bearing
accounts because we cannot buy Government bonds? If the other side
says, ``Yes, we are going to buy Government bonds with it,'' that is
exactly what we are doing right now. That is precisely the point.
So, then, the amendment really isn't changing what we are doing right
now. So essentially the amendment places us full circle in terms of
what we are doing with the Social Security trust fund surplus. Because
I have not heard how the surpluses are going to be used off budget. How
are they going to be invested? That is a significant question.
Two years ago when we had this debate on the constitutional
amendment, there was a right-to-know amendment that was offered by the
Democratic leader that would have required that Congress provide a
detailed budget plan with binding reconciliation instructions before
the amendment could even be sent to the States for ratification. And
the intent of that amendment was essentially to say that Congress has a
right to know how the budget is going to be balanced if this
constitutional amendment were to pass and were to be ratified by the
States. I think it is an interesting concept.
We did present a balanced budget to the President, as I mentioned
earlier. But it was vetoed. The fact is, we have a right to know, as
was mentioned earlier by the Senator from Michigan, about exactly how
we would accommodate the $295 billion in cuts that would be required in
addition to the cuts that would be required in the balanced budget
amendment. But $295 billion would have to be cut if we didn't take into
account the surpluses in the Social Security trust fund just between
now and the year 2002. But no one on the other side has identified
exactly how we achieve that goal. That is double the amount of cuts
that President Clinton submitted in his plan to the Congress that he
declared to be balanced. So there would be $295 billion in cuts over
and above the cuts that will be required as well to balance the budget
if we could not use the surpluses.
Then the period between the year 2002 and 2007 would require the
Congress to come up with an additional $706 billion. And, again, we
have not heard from the other side exactly how that would be achieved
because that would be over and above what we would be required to do in
order to balance the budget without the surpluses.
So we are talking close to $1 trillion--more than $1 trillion--in
additional cuts that will be required by Congress over and above what
we have presented. These are difficult choices and difficult times. So
we have to account for $1 trillion more. And we have yet to hear how
that will be accomplished. We have not seen a detailed plan, and we
have a right to know, as the other side declared 2 years ago in
suggesting that they had the right to know what would be the detailed
balanced budget plan to balance the budget if we were to pass a
constitutional amendment. They demanded a right to know. We demand a
right to know because many have said on the other side that if we pass
the Reid amendment, we can vote for the constitutional amendment to
balance the budget. But we need to know. What is their plan for coming
up with $1 trillion in additional cuts? One trillion dollars is a
significant amount over and above what we have already proposed to do.
But we have yet to hear the details.

I think, frankly, since they insisted 2 years ago that we apply the
standard of right to know, that we should apply the same standard to
the Reid amendment today that we have a right to know, because to do
otherwise, I think, is failing to meet their responsibility in meeting
the standard of honesty in budgeting. The American people have a right
to know exactly how that will be accommodated.
We have known that when the Social Security trust fund has been on
budget that we have met our obligations, and we will continue to meet
our obligations. We also know that by balancing the budget, it will
constantly make us aware of our obligation to the Social Security trust
fund in what we can anticipate beyond the turn of the century in more
people beginning to retire and with the onset of the baby-boomer
retirements. We think that it is important to stay with the system that
has worked since the inception of the Social Security system. But with
the Reid amendment, we are being asked to act in blind faith.
The Social Security trust fund, as we know it, has had proven
success. But they have failed to answer the question of what occurs
when this trust fund is off budget. What happens to the trust fund?
What happens to the surpluses? We have not heard those questions
answered. And how will those trust funds be used?

So I think that these are some serious questions that need to be
addressed and have certainly broad implications because we certainly
should worry that these questions remain unanswered. We understand the
trust fund within the context of the budget that we know. We have
always met our obligations under the trust fund, and we will continue
to meet our obligations under the trust fund. But we need to hear from
the proponents of the Reid amendment exactly what is going to happen
with this trust fund off budget. Will the surpluses be diverted for
other purposes? That is a possibility. The amendment is poorly drafted.
Will the surpluses be invested in private securities? It is a major
problem. It may have major consequences. That has yet to be thoroughly
explored. Will they be invested in Government bonds? That is exactly
what is happening here today.
So then I think one could conclude that really this is not
necessarily changing what we do today but just making a political point
because, unfortunately, there are those who are not committed to a
constitutional amendment and do not want to see the reality of such an
amendment because of what it would require of this Congress and a
President to make certain decisions in reaching a balanced budget.
So I hope that in the course of this debate we will hear some of the
answers to these questions because I certainly am troubled by the
prospects of some of the issues that this amendment raises.
I am a strong supporter of the Social Security system. I want a
strong system. We have known how it has worked on budget, but we have
not heard the questions answered about how it is going to work off
budget, and I repeat that because that in the final analysis I think
underscores the issues before us today. I think it unfortunate that the
Social Security issue has been used so many times in the past as a
political issue. And from this debate at times we would know there are
strong supporters of the Social Security trust fund on this side. I
have been a very strong supporter over the years, and I just want to
assure senior citizens in America that we will continue to preserve and
protect them, and the best way to do it is to contain Federal spending
and reduce the interest rates in America so that we can prepare
ourselves for the commitments we must make in the 21st century to the
younger generations as well as to retirees.
Mr. President, I yield the floor.
Mr. REID addressed the Chair.
The PRESIDING OFFICER. The Senator from Nevada is recognized.
Mr. REID. I would like to yield 15 minutes to my friend from
California, but I do not have 15 minutes. I am wondering if my friend,
the manager of the bill, could spare me 7 minutes out of their time?
Mr. ABRAHAM. Mr. President, let me, if I could, consult in terms of
other speakers coming down here.

[[Page S1511]]

Mr. REID. In the meantime, I will have her go ahead.
Mr. ABRAHAM. Yes. I have been told we have some other people who have
indicated they are coming, and I would like to find out if that is true
before I relinquish any other time.
Mr. REID. Mr. President, I yield such time as I have remaining to the
Senator from California.
Mrs. FEINSTEIN. I thank the distinguished Senator from Nevada.
The PRESIDING OFFICER. The Senator from California is recognized.
Mrs. FEINSTEIN. I thank the Chair.
Mr. President, I rise in support of the Reid amendment to the
majority resolution to provide a balanced budget constitutional
amendment.
As everyone in this body knows, the Reid amendment would exclude
Social Security trust funds from the balancing requirement of the
proposed constitutional amendment. This exclusion is the only matter in
which the Reid amendment differs from the majority's balanced budget
amendment. I think the amendment addresses a fundamental question to
all of us who are in this body: Will we accept the responsibility to
bring the Federal budget in balance without placing at risk the funds
our constituents depend on for their retirement?
It must be remembered that every American worker pays 6.2 percent of
their paycheck, matched by 6.2 percent from the employer, for a total
12.4 percent, which is paid into Social Security for their retirement.
What has happened is that the Social Security trust fund has been
incorporated as part of the unified budget. Therefore, those moneys
actually go into balancing the budget, and the majority amendment would
freeze this practice into the Constitution for all time--for all time--
so that forever Social Security trust funds are used to pay the salary
of a clerk or a lawyer or build a highway or buy a battleship or do any
number of the myriad of things the Federal Government does through its
operating budget. I believe that this is the soft underbelly of this
constitutional amendment. This is the Achilles heel. Even if this
amendment passes both of these bodies, I do not for a minute believe
that three-quarters of the people of each legislature in our 50 States
will ratify this amendment.
This morning we had signatures from 890,000 Social Security
recipients, urging our opposition to any balanced budget amendment
which does not protect Social Security. Those signatures represent just
the current recipients today. People like my daughter, who is in her
midthirties, is working and providing that money said to me, ``Mother,
you know that isn't going to be there when I retire. Why don't you just
let me have the money now. There are better things I can do with it. I
could use it right now.''
Social Security is a sacred trust with the public.
If I may, let me make the picture for not enshrining it into the
Constitution with this chart.
What this chart does is show the amount of Social Security surplus--
that is all of this--that goes into balancing the budget. Up to 2002 it
is in the vicinity of $500 billion.
By 2013, it is $2 trillion that is utilized cumulatively to balance
the budget. From 2002 to 2019, the amount that Senate Joint Resolution
1 takes from the trust fund to balance the budget is $1.8 trillion.
Now, what happens after the year around 2019 when the surplus begins
to fall? When Social Security revenue drops below Social Security
outlays to beneficiaries, according to the Congressional Research
Service report, that is when this body will have to raise taxes or cut
Social Security payments or cut some other Federal programs and find
some way to balance the budget.

Under the majority's proposed constitutional amendment, outlays must
match revenue in the fiscal year. If Social Security revenue falls, the
revenue needs to be made up through higher taxes or we have to cut
spending through reduced Social Security payments or spending
reductions elsewhere in the budget.
The majority's amendment is unfair because it enshrines in the
Constitution, the principle that Social Security receipts and Social
Security payments to beneficiaries are at risk. Because, at some point
along the way, push is going to come to shove, expenditures are going
to exceed outlays, and then there is going to be a problem.
There are some in this body who will say, ``Well, that forces us to
reform Social Security.'' That may be and it may not be, I don't know.
But it is not the right thing to do.
In 1990, adopting the Hollings amendment, which Senator Hollings has
so eloquently described, this body said we are not going to include
Social Security as part of the unified budget anymore. The votes were
virtually unanimous. Yet, voila, the Federal Government continues to
include Social Security as part of the unified budget. I think that is
wrong. That is the soft underbelly, that is the Achilles heel. It is
just plain wrong.
I support the Reid amendment. The Reid amendment's only difference
from the majority resolution is the exclusion of Social Security from
the balancing requirement.
In the event that the Reid amendment is not successful, tomorrow
morning I will propose another version, along with Senators Cleland,
Torricelli, and Durbin. This amendment would say: All right, we lost in
our effort to take Social Security out of the balancing requirement for
the very reason that it is too difficult to achieve balance. We all
admit that, that there needs to be some time to adjust to the removal
of Social Security from the unified budget. So I will propose an
amendment which essentially would do the following. It would say that
Social Security will be used up to the year 2002. After the year 2002,
when balance is achieved, Social Security will be withdrawn from the
unified budget and, therefore, $1.8 trillion will be preserved for
retirees. The integrity will be saved. It will not be an IOU. It will
be saved. Additionally, my amendment would change extending the debt
limit from the three-fifths requirement of the majority balanced budget
amendment to a constitutional majority of both bodies. It would also
provide an exception for an economic emergency, and that way the
stabilizers can function, and it would also clarify that the amendment
will not prohibit the enactment of a capital budget as well.
So, I believe that, in the year 2002, Congress would have the
opportunity to develop a capital budget. At 2 percent of GDP, that
capital budget would be around $160 billion a year. We utilize about
$140 billion a year now, so it would make some sense and it would fill
the gap.
If there is an interest in having a balanced budget amendment, this
might be a way of going about it and correcting some of the problems.
The Reid amendment, which I have voted for in past years, indicates
that the enshrinement of Social Security into the Constitution of the
United States is not something that this body is going to do. We are
not going to take those trust funds and use them to buy battleships or
provide park services or pay the salaries of 96,000 workers at the
Department of Justice, or to provide anything else. It will be invested
as trust funds, as it should be, separate and discrete and held for the
retirement of every person who pays that FICA tax every year.
I yield the remainder of my time.
Mr. President, may I ask to spend a few minutes as in morning
business to introduce a matter?
Mr. ABRAHAM. Mr. President, I think we would be in a position, until
the hour of 12 noon, to grant that request.
Mr. REID. Mr. President, the manager of the bill for the majority
very graciously extended additional time, if Senator Feinstein needed
that time. It was not necessary that she use that time. So, if she goes
into morning business that will be charged not against either one of
us, is that right?
Mr. ABRAHAM. What I propose is that Senator Feinstein have up to 12
noon to finish her statement or add whatever she would like. I believe
we will have another speaker or speakers here by then, and I have
additional comments to fill the remainder of our time between what
would then be 12 and 12:30. As I understand it, we have 30 minutes,
approximately, left then?
The PRESIDING OFFICER. At 12 noon the Senator would have 30 minutes,
yes.
Mr. REID. I will say, Mr. President, I would not be in debt to the
majority for any time, 2:30, 2:40, whatever it is?
The PRESIDING OFFICER. The Senator is correct.

[[Page S1512]]

The Chair recognizes the Senator from California.

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