Congressional Record, Volume 143 Issue 26 (Tuesday, March 4, 1997)

[Congressional Record Volume 143, Number 26 (Tuesday, March 4, 1997)]
[Senate]
[Pages S1847-S1883]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

BALANCED BUDGET AMENDMENT TO THE CONSTITUTION

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

A joint resolution (Senate Joint Resolution 1) proposing an
amendment to the Constitution of the United States to require
a balanced budget.

The Senate resumed consideration of the joint resolution.
The PRESIDING OFFICER. The time until 12:30 p.m. shall be equally
divided between the two managers. The Senator from Utah.
Mr. HATCH. Mr. President, I am very honored to be able to turn to a
man who has led the fight for the balanced budget amendment ever since
he arrived at the Senate, the most senior Senator in the whole U.S.
Senate, a person all look up to, who has been my mentor on this issue
and so many others, and one of my dearest friends in this world, the
distinguished Senator from South Carolina, Senator Strom Thurmond, for
5 minutes or whatever time he needs.
Mr. THURMOND. Mr. President, I rise today as we draw to a close the
debate on this historic opportunity to adopt Senate Joint Resolution 1,
the balanced budget amendment. This debate is about much more than an
amendment to the Constitution, as significant as that is. It is about
taking action once and for all that will control the size and scope of
the Federal Government.
I have been deeply concerned during my years in the Senate over the
growth of the Federal bureaucracy. The first $100 billion budget in the
history of the Nation occurred in 1962. This was almost 180 years after
the Nation was founded. Yet, it took only 9 years, from 1962 to 1971,
for the Federal budget to reach $200 billion. Then, the Federal budget
continued to skyrocket; $300 billion in 1975, $500 billion in 1979,
$800 billion in 1983, and the first $1 trillion budget in 1987. The
budget for fiscal year 1996 was over $1.5 trillion.

[[Page S1848]]

With this voracious congressional appetite for spending has come
deficit spending. In the past three decades, the Federal Government has
run deficits in every year except one. During the 1960's, deficits were
averaging around $6 billion per year. The following decade, the 1970's,
saw deficits rise an average $36 billion per year. In the last decade,
the 1980's, deficits continued to rise and averaged $156 billion per
year. So far, in the 1990's, deficits have averaged $259 billion per
year. Compare this to 1957, my third year in the Senate, when the
entire national debt was less than $275 billion and there was no
deficit, but rather a $3 billion surplus.
During my service here, there has never been a shortage of
legislation creating new Federal programs or of efforts to increase
spending in existing programs. It has been too easy for the Congress to
pass legislation creating new Federal programs and spending more tax
dollars whenever there is a call for Federal intervention. This Nation
has drifted from its original foundations as a national Government of
limited authority. A balanced budget amendment is the single most
important addition we can propose to the Constitution to begin reducing
the size and scope of the Federal Government.
Mandating balanced Federal budgets is not a new idea. The first
constitutional amendment to balance the budget was proposed in 1936.
Since the beginning of the 84th Congress in 1955, constitutional
amendments to require a balanced Federal budget have been proposed
during each Congress. Finally, in 1982 while I was chairman of the
Judiciary Committee, the Senate passed a balanced budget amendment
which I authored. Our victory was short-lived, however, because the
Speaker and the majority leader at that time led the movement to kill
it in the Democrat-controlled House of Representatives. That was our
high water mark as we fell one vote short in 1986, four votes short in
1994, and one vote short 2 years ago. Once again, we have a historic
opportunity to pass the balanced budget amendment and send it to the
American people for ratification.
I would note that today the Congress is working hard to balance the
Federal budget. However, this is a very recent development brought
about by a change in the control of the Congress, and by this body
finally listening to the will of the people. We must act to instill
legislative accountability that will not waver with the membership of
the majority.
Our third president, Thomas Jefferson, stated:

The question whether one generation has the right to bind
another by the deficit it imposes is a question of such
consequence as to place it among the fundamental principles
of government. We should consider ourselves unauthorized to
saddle posterity with our debts, and morally bound to pay
them ourselves.

Mr. President, it is time we make that moral obligation to pay our
debts a constitutional one. Not only will we restore order to the
fiscal policy of this Nation, we will be making a giant leap toward
restoring the fundamental principle of limited authority to the Federal
Government.
I yield the floor.
Mr. LEAHY addressed the Chair.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. Mr. President, we have been considering this proposed 28th
amendment to the Constitution of the United States since this session
began almost 2 months ago. In fact, we have been engaged in floor
debate for nearly 4 weeks. The distinguished Senator from Utah and I
have begun to think we live on this floor with this debate.
Mr. President, stop and think what we are debating--a proposed 28th
amendment to the Constitution. The Constitution has been amended only
17 times since the Bill of Rights. During this time, the United States
has been through some very, very serious situations--the War of 1812,
the Civil War, two world wars, Korea, Vietnam, the Great Depression,
westward expansion. One would have to assume during that time, there
have been hundreds and hundreds of times that we have seen crises in
our Nation that, some would say, reached a constitutional magnitude. We
know that hundreds, even thousands, of constitutional amendments have
been proposed, but those who have gone before us have seen fit to only
amend the Constitution 17 times--which was very wise--since the Bill of
Rights.
I say this because nobody in the Senate owns a seat in the Senate. We
are only passing through, no matter how long we serve. What we ought to
do is remember that we have a responsibility not only to those who went
before us, but those who will come after. So during this debate, some
of us have tried to look at the substance behind this bumper-sticker
title and even the poll-driven politics that led to this proposal,
again occupying the No. 1 position in the majority's legislative
agenda.
We have examined the resolution in our Judiciary Committee hearings,
markup and report and during the Senate debate. We have become, and
certainly the American people have become, more and more aware of the
serious substantial failings in this proposal. I believe this debate
has shown any objective observer that this resolution fails to meet the
standards set by our founders in article V of the Constitution for its
amendment: It cannot be found necessary by two-thirds of this Senate.
Moreover, the proponents have failed to answer the serious questions
raised about the various provisions over the past several weeks. They
have failed the Byrd challenge by being unable to demonstrate what it
means and how it would work. The distinguished senior Senator from West
Virginia came on this floor and, in his usual careful manner, his usual
sense of history, his usual understanding of the Constitution, asked
the pertinent questions: How would it work? What does it mean? What
does it do? And no answer was forthcoming. Having now had an
opportunity to focus on the language of the resolution before us, none
of us can be confident concerning its meaning or its use.
During the course of this debate, we have had the principal
proponents of the resolution concede that it does not require a
balanced budget, but that it is intended to provide incentive to
balance the Federal budget and exert pressure on Congress. It is
intended just to make us do our job. That is not sufficient reason to
amend the Constitution. As the President said in his State of the Union
Message, we have but to vote a balanced budget, he has but to sign it
to have a balanced budget. We do not have to tinker with the
Constitution in a way that would actually throw the whole matter over
to the courts, not to the President and the Congress.
The President and Congress have shown over the past 4 years that we
can make progress undoing the mistakes of the deficit-building decades
of the 1980's without a proposed amendment to the Constitution. We
succeeded in reducing the deficit in each of the last 4 years. We have
cut the deficit by more than 60 percent. At the same time, we are
pursuing sound economic and fiscal policies doing those things that
have made the United States economy the strongest in the world.
What we are now asked to do is tinker with obvious success. But more
than that, we are asked to give people something they can put on a
bumper sticker that says, ``I voted to balance the budget,'' when,
indeed, it does not do that, instead of saying, ``I voted to really
mess up the Constitution,'' which is what it would do.

I hope that we will think not only of our political fortunes of this
day and the political polls of our State of this moment, but think of
the United States and think of those who will come after us.
I reserve the remainder of my time.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, I yield 10 minutes to the distinguished
Senator from Texas.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mrs. HUTCHISON. Thank you, Mr. President, and I thank the
distinguished Senator from Utah for the fine job he has done in leading
this very important debate, because really this debate is one of the
most defining moments of our times. Will Congress deliver a balanced
budget? Will we set the future economic stability of our country in
place right now? Will we win this fight that we have undertaken on
behalf, not of ourselves, but of our future generations?

[[Page S1849]]

The American dream has always been that a parent could wish that his
children or her children would have a better quality of life than he or
she has had. That is why people came to this country. They wanted to
work harder so that they could give their children a little better
chance in life.
What we are fighting for is a change that will assure that we can
keep the American dream. We are trying to make lower interest rates, a
higher standard of living, more job opportunities, a country liberated
from an ever-increasing debt. Our children will not have a higher
quality of life if we continue to build on this $5 trillion debt, Mr.
President. This debate is about our children. It is not about political
expedience. We know what must be done. Thomas Jefferson told us. Thomas
Jefferson said one of the two things that he was concerned about after
the Constitution was written and adopted was that we had not provided
for the constraints on Congress that would not allow them to spend more
than was in the public Treasury. Jefferson said that. In fact, his
quotes were:

Each successive generation ought to be guaranteed against
the dissipations and corruptions of those preceding it.

Mr. President, Thomas Jefferson was the greatest visionary President
perhaps we have ever had. Even Thomas Jefferson would not have dreamed
our country, that he worked so hard to put together, would one day have
a $5 trillion debt.
Even Jefferson could not have been that visionary, and thank
goodness, because so many of his generation fought and died for this
country to be formed. If they had thought that the stewards of our
future would not have the guts, would not have the ability to constrain
their spending to the tune of $5 trillion, I wonder if they would have
fought so hard.
The idea of saddling generation after generation of Americans with a
suffocating debt would have been unthinkable to those honorable men.
Some say we don't need an amendment. They say we haven't been tuned
in. I am going to tell you something, I have been tuned in. I have been
watching the debate on this floor. I have seen what has happened to
Medicare reform, to Social Security reform, to welfare reform, to
Medicaid reform. It has taken a lot to get one of those four--welfare
reform--and we have failed on the other three. If you think we do not
need an amendment to constrain the appetite of Congress to spend other
people's money, you have not been tuned in.

Some say that this is going to tie the hands of Government.
Hallelujah. That is exactly what we want to do. We want to get big
government out of the hard-working American's pocketbook. Most
Americans pay 50 percent of what they earn in taxes of some kind. All
of us want to pay our fair share. But, Mr. President, 50 percent is too
much. That does not allow the freedom to pursue the American dream. A
balanced budget amendment to the Constitution will cure that appetite
because Congress will be constrained, yes, their hands will be tied,
from getting into the pocketbooks of our children and their children.
So, Mr. President, I think the time has come for us to do what is
right. The greatest issues of our time have taken many years. Americans
debated the evil of slavery from the earliest days of the Republic, but
it was not until 1865 that the 13th amendment to the Constitution was
ratified and slavery was abolished. Women began their fight for
suffrage in the early 19th century, but it was 1920 when the 19th
amendment was ratified giving women the right to vote.
Like these two epic struggles, the balanced budget amendment has been
fought for a long time. It is a fight we are waging on behalf of our
children, our grandchildren, and their grandchildren. And we will not
stop the fight. Each year we lose by a very narrow margin. Last year it
was one vote. This year, unless someone looks up and says, ``My gosh,
what am I doing for my children,'' and changes his or her mind, unless
someone does that, we are going to lose again probably by one vote.
So, Mr. President, I hope that we will not be dissuaded from
continuing this fight, because it is worthy of the other great issues
that have taken so long.
It is very important that we look not to the next election, but to
the next generation, as we are making our decision today. This
amendment is not the panacea, but what it does is give us the
opportunity to make sure that there is a stability in our economy for
evermore, that no Congress of the future will be able to go into a
deficit unless there is a war or an emergency, which there is a safety
valve of a three-fifths vote that can unbalance the budget. Those are
the safety valves, of course, if we are in a war or a dire emergency,
we will do the responsible thing.
But if we can constrain ourselves in normal times, we will have a
stable economy. We will have lower mortgage rates, lower car payments
rates. We will have more jobs, and we will have more expendable money
by the hard-working people of this country if we will face the fact
that we need to tie the hands of a government that is so big, it could
have brought together a $5 trillion debt.
This vote today, if we win, could be the first step in a very long
journey, and, by doing this, we would assure that there is a
destination to the journey, that there is a shining city on the hill
that is America.
If we do not have a balanced budget, and the constraints of an
amendment that would assure that we always will, there may not be a
destination, there may not be a shining city on the hill that is
America because future Congresses will be able to add just a little--it
does not seem like so much, but just a little is now $5 trillion, Mr.
President.
We do need to tie the hands of future Congresses so there will be
economic stability. And, Mr. President, this Congress has the ability
to take the first step in that long journey to put our country back on
track so that our children will have the same American dream that we
have had, which is that they would be able to wish for their children a
better quality of life than they have had because each generation
expects to be able to do better. If we have a balanced budget amendment
to the Constitution, we will assure that that will happen.

Mr. President, this debate is defining of our times. And I hope we
have the will to do what is right for our children and for theirs.
Thank you, Mr. President, and I yield the floor.
Mr. LEAHY addressed the Chair.
The PRESIDING OFFICER (Mr. Hagel). The Senator from Vermont.
Mr. LEAHY. Mr. President, we talk about how many votes there may be
and we talk about this debate, which, incidentally, has been interfered
with in some ways over the weekend, at the same time we talk about evil
money in politics. We have seen some so-called ``independent''
expenditures in running ads on this. They are about as independent as
absolutely nothing. I think it is unfortunate that apparently the
proponents of this constitutional amendment do not feel that they can
make their case well enough on the Senate floor. They have to do this.
We talk about whether it is one vote or not. Let us talk about votes.
In 1993, we started down this road to concerted, consistent deficit
reduction. We did that without a single Republican vote in either the
House or the Senate for the President's budget. After 12 years of ever-
larger deficits, voted for by the Republican Members of Congress, when
we finally started cutting the deficit, not a single Republican Member
voted to do that.
Over the last 4 years, we have succeeded in reducing the deficit by
63 percent. It went up for 12 years; the national debt went up. We
started bringing the deficit down. When President Clinton took office,
the deficit was at its highest point ever--$290 billion. Today, the
deficit is at its lowest dollar figure since 1981, $107 billion. In
fact, it is at the lowest point as a percentage of the economy since
1974.
In his testimony to the committee, Robert Greenstein of the Center on
Budget and Policy Priorities notes that over the past 10 years the
deficit has actually declined 70 percent as a percentage of gross
domestic product--5.1 percent in 1986 to 1.4 percent in 1996. In fact,
as a percentage of gross domestic product, our deficit is now at the
lowest level of any major industrialized nation in the world. The
deficit is at the lowest level of any industrialized nation in the
world. We are the envy of the rest of the world. But it has taken

[[Page S1850]]

some political courage to do that. And the budgets are starting to
bring that deficit down.
I say to my good friends in the Republican Party, it was done without
a single vote from their side of the aisle, notwithstanding those
deficits grew up over 12 years of Republican administrations.
The record of deficit reduction is an accomplishment of the Clinton
administration. It is an accomplishment that the Clinton
administration's policies have restored fiscal sanity and have kept the
economy strong. The result of the recent election is testimony that the
American people recognize these facts. In fact, were it not for the
interest on the $2.462 trillion debt that was rung up during President
Reagan's term and President Bush's term, our budgets over the last
several years would already have been in balance. Just think of that.
They ran up a debt of $2.462 trillion. The rest of the budget,
including entitlements, is already balanced. We didn't need a
constitutional amendment to do that. All we needed was courage. If we
were not paying the interest on that debt run up, we would be totally
in balance.

This deficit progress has been achieved through tough votes over the
last 4 years. But we have seen its impact on our growing economy with
lower interest rates. In 1980, the annual interest on the national debt
accumulated over our entire history was $75 billion. Think about this.
In 1980, when President Reagan came to office, it took a whole national
debt to accumulate over 200 years, and the interest was $75 billion.
Yet, when 12 years of Republican administrations ended, that amount had
skyrocketed. So the interest on the national debt is now $248 billion.
We had failed fiscal economic policies of the last decade, and we are
paying the price. These interest payments on the national debt remain
too high, and they have to be reduced further. But the proposed
constitutional amendment, were it to pass, only allows Members of
Congress who don't want to step up and cast the tough votes to bring
down the deficit to say when the Constitution is going to do it. We can
delay congressional action. Eventually we will toss it into the courts
and let them do it.
Frankly, I wish Congress and the President would, instead of talking
about a debate here that will go nowhere, sit down and do the tough
things that are necessary to bring the budget under control.
Mr. President, I notice that the other side now has another speaker.
I reserve the remainder of my time and yield the floor.
Mr. HATCH. Mr. President, how much time does the Senator need?
Mr. THOMAS. About 10 minutes.
Mr. HATCH. Mr. President, I yield 10 minutes to the Senator from
Wyoming.
The PRESIDING OFFICER. The Senator from Wyoming is recognized.
Mr. THOMAS. Mr. President, I thank my friend from Utah for the time,
but more particularly for the effort and the leadership he has given to
this issue. Interestingly enough, it is one of the toughest issues. One
would think moving to a balanced budget, ensuring a balanced budget,
ensuring financial responsibility would not be such a tough issue. But
this has been going on for a very long time. So I appreciate very much
the job that has been done. We come to the vote on the issue finally.
We have talked quite a little about it this year. We, of course, have
talked for a number of years before.
We can talk about a balanced budget if you choose, but what we are
really talking about is financial responsibility. It is interesting to
me to hear those who oppose it--and for good reason--who have been here
for 20 years and say, ``Let's just do it, take the tough votes.'' But
they haven't done it for 20 years. The monument in front of the
leader's desk represents 28 years of unbalanced budgets. Yet, we hear
all the time, just do it, take the tough votes and do it. Well, the
evidence is that isn't what is done.
We hear the same words every year: ``I am for a balanced budget, but
* * *'' and then they go on to say why it can't be done. They go on to
find reasons for not voting for the kind of discipline that it clearly
takes to balance the budget. That is not a brand new idea. It is
something we do in most of our States. We do it in my State of Wyoming,
and we are proud of that. The legislature doesn't spend any more, under
the constitution, than they take in.
I am always interested in how we seek to shift this to some kind of a
partisan thing and talk about the Presidents. Frankly, the Presidents
don't decide the budget. That is specifically, under the Constitution,
the prerogative and the role of the Congress. It starts in the House of
Representatives. Spending--the President cannot do any spending without
the Congress. So we say, oh, Reagan did this, and Bush did that, and
Bill Clinton did this. I think we ought to get real with ourselves and
say, wait a minute, it is the Congress that does the spending. But we
hear the same thing. Then Senators go home and talk about balancing the
budget, but then come and say, ``But, gosh, there is this little thing,
and I cannot accept it in this present form.'' How many times have we
heard that?
Well, today, we have a chance to vote. I am very proud of the fact
that there will be 55 Republicans and 11 Democrats voting aye, voting
for fiscal responsibility, voting to say $5.5 trillion debt is more
than we want to send off to our kids and grandkids. Other than defense,
interest is the largest item in the budget--interest on the debt. We
pay $270 billion in interest on the debt.
So the real issues here, it seems to me, are broader than the details
of the amendment. They are broader than whether we are going to balance
the budget. They really have to do with your view of how large and
inclusive the central Government is going to be. There is a very real
relationship between the size of spending, the size of the deficit, and
the size of Government.

When I go home--and I think it is true of every other place--I hear
that we have too much Federal Government. Every night on TV, we see all
these things that are being spent. Nearly everyone believes that. Yet,
spending continues to go up. The Senator talked about the great amount
of courage it took to move, in 1993, to seek to balance the budget.
How? The largest tax increase in the history of the world. So you see
Government grow as that tax increase grows. So the real basic issue is
more than just the amendment, more than just arithmetic, more than just
the budget, it is how much Federal Government do you want in your lives
and what are the proper roles of State and Federal Government and the
private sector? Those are the real issues. So it divides pretty clearly
between those who want more Government and want to spend more and
whether or not people ought to be able to keep their own money. After
all, the Government has no money except what it takes from us.
So we hear constantly, ``Let's just do it.'' But the monument stays
right in front of us. We haven't done it. Then we hear, ``Well, but we
are going to do it now.'' But the President's budget has not moved
toward balance. The President promised us a balanced budget, and it is
not a balanced budget. No one would agree it is a balanced budget by
2002. On the contrary, there will probably be a $50 billion to $70
billion more deficit then. It will go up from where it is now.
Furthermore, we don't have the kinds of things we would like to have
that are targeted to needed tax relief for families. We need permanent
tax relief that is not triggered. We need capital gains to encourage
the economy. Instead of that, we have a budget presented--and we are to
accept that as movement toward a balanced budget, by having a 75-
percent backload; temporary tax cuts of $98 billion, but tax increases
of $76 billion? Taxes go up the first year, and the tax cuts are not
phased in until later. More entitlement spending, more Government--$60
billion in new entitlement spending.
Is that called balancing the budget? It is, if you want to continue
raising taxes. That is the real choice you and I have as voters and
taxpayers. If you want more services, you have to pay more. That is the
way that works. You know the best example of a really good government,
I suppose, is on the local level when the school board says we need a
new science room for the high school and it is going to cost you $50 a
year and you get to vote on it and you balance it. You say, is it worth
it, yes; is it worth it, no. Do we get to do that in the Federal
Government? Oh, no, of course not.

[[Page S1851]]

So what we are talking about here is really direction, whether we
have less Government or whether we, on the central level, move more
Government to States and local communities, whether we in fact are able
to spend more money for our families as we choose or whether we spend
more total tax--now the average family in the country spends 39
percent--on our income. I saw a poll the other day in which almost
unanimously they said 25 percent is the maximum that we ought to pay.
We are paying nearly 40.

So, Mr. President, this is our opportunity. This is our chance to put
our money where our mouth is. If we are going to balance the budget,
this is the way to do it. The evidence is that we can't do it any other
way.
So I hope we have our vote this afternoon and it passes. If it
doesn't, it is not the end. We will continue to do this. We will have
to. It is the only way that we can be financially and fiscally
responsible for the future.
Mr. President, I yield the floor.
Mr. LEAHY addressed the Chair.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. Mr. President, as I listened to the debate on the floor of
the Senate, I heard that the budget deficits begin in Congress and not
with the President. Let's look at the facts. During the Reagan years
President Reagan got 99.999 percent of everything he asked for in the
budget, including the deficit. In fact, during those years President
Reagan vetoed only one appropriations bill. Only one spending bill did
President Reagan veto. Why? Because it didn't spend as much money as he
had requested. Congress actually had come back with less money than he
requested. So he vetoed the bill and asked for more money.
So let's just fully understand what happened. It was the same way
with the Bush administration. The budget was what the President asked
for. But let's assume that it begins here in the Congress. Then, I ask
my friends in the Republican majority, where is your budget? You can't
have it both ways. You can't say that the budget deficits are the fault
of the Congress and those who lead the Congress. Republicans lead the
Congress. Where is the budget?
Instead of spending weeks and weeks and weeks on the floor debating
how we might amend the Constitution--it has been amended only 17 times
since the Bill of Rights--instead of debating why we would amend the
Constitution with an amendment that even its proponents can't explain
its consequences, trying to amend the Constitution just because
somebody is taking a poll and says that is popular without going into
the details of what is involved, instead of spending all of the time
doing that, why not actually negotiate the details of the historic
agreement of trying to balance the budget? Why aren't we doing that?
Because it is easier to pass a constitutional amendment which is so
flawed that even its proponents cannot say what it does to Social
Security, what it does to a capital budget, what it does to a court
challenge, what it does to the power of purse. It is easier to do that
than to sit down and say, let's talk about the tough votes, let's talk
about what we do with school lunch, let's talk about what we do with
the defense budget, let's talk about what we do with Medicare, let's
talk about what we do with Medicaid, let's talk about what we do with a
farm program, or a foreign program, and on and on and on.
That means that every time you come up to vote, you are going to
anger somebody; you are going to anger a special interest group on the
right, or you are going to anger a special interest group on the left.
So it is a lot easier to say, let's just toss it over to the courts,
let's toss it over to a constitutional amendment, let's toss it to
something that we can't even explain. We can't even say what it does to
Social Security or to a capital budget or anything else. But we can go
home with a slogan that has been tested by the polls and by focus
groups. We can say, ``I voted to balance the budget.'' Boloney. It is
sort of like me voting to grow hair. It might make me feel good, but
``it ain't gonna work.'' It is the same thing here.
In light of all we have experienced, but also what we have
accomplished in the last 4 years in bringing the deficit down in each
of those 4 years, there is no basis today for seriously contending that
a constitutional amendment is needed or that it is a necessary
substitute for political will or even that it is the only way to
achieve a balanced budget. We have shown in 4 years of bringing down
the deficit--and now going into a fifth--that there are other ways.
During the course of time that has been reserved for debate on this
proposed constitutional amendment, there has been a good deal of talk
about the President's proposed budget. The President made a State of
the Union Address on February 4. He submitted his statement on his
proposed balanced budget the following day. Then on the next day,
February 6, the President sent his proposed budget to Congress. My good
friends in the Republican Party have been quick to criticize that
proposed budget, but they left out one thing in their criticism. They
never said where their budget is or what their budget does. I ask my
friends on the other side of the aisle, Where is your budget? If you
want to say that the budgets really come from the Congress, you are in
the majority. You run the Congress. You turn the lights on in the
morning. You turn them off at night. In between, prepare a budget.
Where is the alternative? Where are the proposed amendments to the
President's plan?

I hope that we do not get into partisan harping and carping and,
instead, get on to the process of developing a bipartisan consensus. It
is not going to be easy, Mr. President. Like so many other Members who
have voted to bring the deficit down 4 years in a row, I bear the scars
of saying no to every special interest group from the right to the left
when I voted for cut after cut after cut--the farm bill being one good
example of that, the Lugar-Leahy farm bill. Item after item, we have
done it not by gimmicks but by solid votes. But it has been a month now
and we have not seen a proposal for modification of the President's
budget nor have we seen an alternative for the majority party. The
President even came to Capitol Hill to meet with congressional leaders,
going the extra mile--going the extra 2 or 3 miles.
We are fast approaching our statutorily imposed deadline of April 15
for a budget resolution. So let's see what this budget resolution is
going to be, and let's debate it. Let's proceed to debate the budget
and, in the words of Secretary Rubin, ``finish the job of balancing the
budget by the year 2002.'' It has been 4 years of bringing the deficit
down, and we are about go into the fifth year of bringing it down.
Let's get a budget that does the job.
What it means is that the Republicans and the Democrats are going to
have to hold hands, and we are going to have to vote in a way that is
going to offend some of our core constituencies. But the American
people in the long run will be better off. Certainly the American
people would be better off and the world's strongest economy would be
better off without tinkering with the Constitution, which basically
becomes a judicial nightmare and does nothing to balance the budget.
Mr. President, I reserve the remainder of my time.
Mr. HATCH. Mr. President, I am delighted to have the relationship
with our cosponsor on this amendment on the Democrat side, Senator
Bryan from Nevada. He has fought a valiant battle here, and I
appreciate the opportunity of working with him on this. We are still
hoping that this vote will turn out all right at the end of the day.
So I am more than delighted to yield 15 minutes to my distinguished
friend and colleague. I thank him for his leadership on this matter.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. BRYAN. Mr. President, I thank the Chair. I thank the
distinguished Senator from Utah for his thoughtful comments.
Mr. President, let me just say, by way of prefacing my comments, that
I have enjoyed being a participant in this debate. And I have enjoyed
the manner in which my colleague, the distinguished Democratic floor
leader--who has a very different point of view from that which Senator
Hatch and I share--has conducted himself and the arguments that he has
made and the responses by the senior Senator from Utah. It seems to me
that that is what this institution is all about--the ability to conduct
an honest debate on the

[[Page S1852]]

floor with different points of view being expressed. Hopefully from
that collision of different points of view will emerge a public policy
which will enable this country to move forward on the correct course.

Mr. President, the Senate will soon cast a historic vote to decide
whether Senate Joint Resolution 1 should become a part of our
Constitution. This may very well be the most significant vote the
Senate will cast in this session of the Congress. If we are successful,
it could dramatically alter the future of our country in a very
positive way. I renew my request and urge my colleagues to vote in
favor of a balanced budget amendment for the sake of future
generations.
The Senate has been debating Senate Joint Resolution 1 for an entire
month, and just as it should when we are considering an amendment to
our Constitution, the debate has been thoughtful and thorough. We have
debated serious and credible amendments on a wide range of topics
including the treatment of Social Security and capital budgeting. The
Senate debated these issues and after debate decided to leave Senate
Joint Resolution 1 intact and rejected each of those proffered
amendments. I supported several of the amendments, but it is now time
to put the debate on those amendments behind us and pass the amendment.
While some of us may have felt that the amendment could be improved
with certain change, all of us must realize that we are better off with
this amendment than with the status quo.
I would like to take a moment to recognize the two of my colleagues
who have spent more time in the Chamber debating this than any of us,
and that would be the senior Senator from Utah [Mr. Hatch], and the
senior Senator from West Virginia [Mr. Byrd]. These men have served in
this institution with distinction for a combined 60 years. During this
past month, each of them has treated us to his own brand of eloquence
in espousing his point of view. It has been a delight for those of us
who are privileged to serve in this institution to hear and to share in
that debate. No one who has observed the floor proceedings can question
the depth of their sincerity about their feelings. It is a tribute to
the democratic process to see this kind of debate occur in this
Chamber.
Mr. President, amending our Constitution is the most significant
action the Senate can take, and it should not be undertaken lightly. In
this case I believe the future of our country is at stake--the ability
of our children and our children's children to have the same economic
choices in their time that our generation has enjoyed.
We are constantly reminded that everyone is for a balanced Federal
budget but not everyone is for a constitutional amendment which puts
that process in place and helps us to achieve that goal. On its face,
this position appears to me to be inconsistent. If you are for a
balanced budget, it would seem the more logical course of action would
be to support a mechanism that would help to facilitate the outcome. I
believe the amendment accomplishes that purpose. The amendment itself
is very straightforward. Congress may not let spending exceed revenues
in a given year unless a 60-percent supermajority of those elected both
in the House and the Senate vote to permit a specific amount of deficit
spending. While this does not guarantee balanced budgets, it will, in
my judgment, make it more difficult to authorize deficit spending if
this process, a constitutional amendment, is in place.
My experience as Governor of Nevada convinces me of the merits of
this process. With a State constitution that requires a balanced
budget, those of us who were privileged to serve as the chief executive
of our States were forced to make hard choices in spending and on
revenues, particularly during the period of economic slowdown during
the 1980's. The year that I assumed the Governorship of Nevada, January
1983, we were concerned that the State payroll would not clear because
budget revenues had fallen far short of their original and earlier
projections. Yet, with that hammer of a constitutional amendment in
place in our own State, it would have been much more difficult, much
more difficult to have ignored the constitutional mandate to balance
the budget. Therefore, both the Governor and the State legislature were
able to resist the pressure of those good people in our State urging
spending for programs that many of us were for.
The point I think, Mr. President, is the hard choice. It is the
nature of those who are advocates for these programs, good people all,
to urge more spending than they know a Governor at the State level or
the legislature at the State level can approve, and it becomes the
responsibility of those of us who have served at the State level as
Governors to submit a balanced budget and for State legislatures to
require a balanced budget.
We did not have the luxury of avoiding the painful cuts by running
deficits. That would have been the easy way out and, unfortunately, the
way the Federal Government has chosen to proceed in 59 of the last 67
years.
My experience as a Senator has also taught me how difficult those
budget choices can be. The process is essentially the same, with a much
greater magnitude, and while we have made impressive progress in
reducing the deficit over the last 4 years--$107 billion in the last
fiscal year, projected at one time to be $292 billion--the President
and Congress can justifiably take pride in what they have accomplished,
but balancing the budget by the year 2002 will require sustained
discipline, the kind of discipline that has not characterized our
actions either from the White House or from the Congress. If we are
successful, we will have accomplished something that has occurred only
once in the last 33 years.

After 2002, the deficit picture gets worse, and gets dramatically
worse, when the baby-boom generation, a tidal wave, begins to impact
the programs that we have put in place for the elderly in America.
Without the balanced budget amendment, the temptation will always be
there, the temptation to avoid making the hard choices.
History shows us all too well that at the Federal level both the
White House and the Congress, without reference to partisan
affiliation, has tended to take the easy road. It is true that Senate
Joint Resolution 1 does not guarantee that we will not take the easy
road, but I submit it would make it much harder to do so.
Many of my colleagues who have indicated they plan to vote against
Senate Joint Resolution 1 have stated their concerns over not excluding
Social Security from the budget calculations. While I agree that
excluding Social Security would be in our long-term best interests, I
believe they are mistaken if they believe that Social Security will be
better off without the balanced budget. I believe our best option would
be to exclude Social Security from a balanced budget amendment, and I
have so voted. But our next best option is enacting the balanced budget
amendment as it appears in the Chamber today and as we will vote on it
this afternoon. Our worst option is to preserve or to retain the status
quo, and that is to do nothing, to reject this proposed balanced budget
amendment.
No one disputes that a balanced budget amendment will help end our
string of deficits. Some will argue that we do not need it to achieve
our goal, but no one says it will not help. And while the amendment
does not mandate a balanced budget, it does, in my opinion, make it
more likely. Therefore, I think it is reasonable to conclude that a
balanced budget amendment will lead to less deficit spending than if we
fail to enact the balanced budget amendment.
If a balanced budget amendment will help cut deficit spending, what
will the effects of less deficit spending be on programs that we all
support, like Social Security? Every dollar of deficit spending that
occurs now is a dollar that will not be available to pay Social
Security retirees when they need it. And even worse, we lose not only
that dollar but we lose the interest that we pay on it, which
multiplies rapidly with the magic of compounding.
The best example of this can be illustrated by looking at where we
were in 1980. If we had adopted a balanced budget amendment in 1980, 17
years ago, and had not increased the national debt from about $1
trillion to more than $5 trillion today, we would not have to cut a
single dollar from this year's budget to achieve balance. In other
words, we would be in surplus if we did not have to make the interest
payments on the deficits that were run up over the last 20 years.

[[Page S1853]]

I do not want Senators years from now to say, ``Gee, if they had only
adopted a balanced budget amendment in 1997, we would not have added
trillions more to our national debt. We would not have added billions
more in interest payments in servicing that debt. We would not have to
be cutting the worthwhile spending programs because of the larger
national debt.''
Mr. President, the trend line is both alarming and disturbing. Since
1980, the percentage of our budget dedicated to servicing the debt has
risen from 7 to 15 percent. This year's budget contains a line item of
$245 billion for interest payment on the national debt. That is the net
interest payment. In other words, almost $1 out of every $6 in our
budget goes to servicing the $5.3 trillion national debt.
Worse than that, if the interest we earn from Social Security and
other trust funds which is supposed to be saved to be paid out in
future years is excluded, the gross interest we owe is really $350
billion.
No one claims running a Federal budget deficit actually helps Social
Security or other Federal program over the long haul. Congressman Joe
Kennedy who is an undisputed champion of social programs to help the
poor makes this point very eloquently. He maintains that deficit
spending has not helped, but has hurt, spending for social programs.
Every dollar that must go to servicing the national debt is a dollar
that cannot go to school lunch programs, paving roads, or repairing our
neglected national parks. Interest payments are now the second largest
Federal spending item following Social Security in our budget.
I must ask my colleagues who support taking Social Security out of
the balanced budget amendment, as I do, whether their interests are not
better served by a constitutional amendment that helps facilitate a
balanced budget.
This is now my 9th year in the Senate. I do not recall a single
Senator getting up and offering a budget that excluded Social Security
from the budget calculations. For those who profess to feel so strongly
about Social Security that they cannot vote for a balanced budget
amendment, why have they never attempted to exclude Social Security
from past budgets?
While it is wrong to use Social Security to mask the true size of the
deficit, including Social Security, that is no reason to vote against a
balanced budget amendment, in my view.
The greatest threat to Social Security is the debt. There are real
and tangible benefits for every American family if we balance the
Federal budget.
Interest rates are estimated to be 2 percent higher because of the
deficit. 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 almost
$2,000 more expensive and a new car $1,000 more expensive because we
haven't balanced the budget.
Under current trends, a child born today will have to pay $180,000
over their lifetime to service the national debt. What kind of burden
are we passing on to future generations?
Given the overwhelming benefits of a balanced Federal budget, I
strongly believe this country needs a balanced budget amendment to help
us achieve this goal. Yes, there are some risks that a minority of our
legislators will act irresponsibly--but that can happen today if 41
Senators choose to filibuster. Therefore, I believe we gain the
benefits of greater pressure to achieve a balanced budget without
incurring additional risks.
We have a historic opportunity this afternoon to change the future
course of our country in a very positive way. If we fail, I am afraid
we will look back 20 years from now and be even further in debt, with
fewer economic choices for that generation, and regret that we had not
taken this important step today.
I urge my colleagues to vote in favor of Senate Joint Resolution 1.
This vote will be your legacy to your children and to our country's
future economic well-being.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, I thank my distinguished friend and
colleague, and certainly for his kind remarks regarding me. I take
those as a special feeling of friendship and love for the work he has
done and the kindness he has shown to me. I want to personally express
my appreciation for how hard he has worked on this amendment, how much
it has meant to me and others on this side--very much--and, I think, to
his colleagues who are voting with him on his side. I just want to
personally express my gratitude to him for the good work he has done.
I reserve the remainder of my time.
Mr. LEAHY addressed the Chair.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. Mr. President, I also have great affection and respect for
the Senator from Nevada. I know to err is human and to forgive divine.
While I make no claims of divinity, I forgive him for his position on
this.
I also point out both the distinguished Senator from Nevada and the
distinguished Senator from Utah are two of the hardest working Members
of this body. In their debate, they have been strong and forthright, as
has the distinguished Presiding Officer, who made his first speech on
the Senate floor on this issue. I noted at that time, so many times
when one gives his or her first speech on the floor it is on an
inconsequential item. This time, it was one of the most important items
that the distinguished Presiding Officer will have a chance to debate
during his tenure in this body.
I say this because I think during the past weeks of debate, all of
us, Republicans and Democrats, have tried to fulfill our responsibility
as one of the two Houses of Congress to create a full and fair record.
Sometimes it may have seemed tiring, for the distinguished Senator from
Utah and myself, as floor managers, to be here. But the more we have
listened, the more we have realized that this is one of those issues
where a strong and full debate record has been made. Even if those of
us who have been here may not realize that at this moment, certainly
historians will.
I believe most of the men and women in this body, in both parties,
have approached this historic debate with a seriousness the
consideration of a constitutional amendment requires. Every one of us
should pause and think: We vote either to amend the Constitution or not
to amend the Constitution. With the exception of a vote to declare war
or with the exception of one or two other areas, I cannot think of
anything that approaches the seriousness of voting on a constitutional
amendment. No Member of the Senate should take that lightly. All
Members of the Senate should think they may only once in their
lifetimes actually have a vote that will determine whether the long and
almost sacred process of amending our Constitution begins. So we should
think long and hard how we vote.
Those of us who expressed our reluctance to amend the Constitution,
for this or many other issues, have at least said, if we are going to
amend the Constitution, let us make sure the amendment is as good as
can be written.
We have offered serious and substantial amendments to this proposal.
I believe the amendments that we have offered--all from this side of
the aisle--have revealed serious and substantial flaws in this proposed
change to our Constitution.
What has bothered me in this debate is instead of addressing these
serious and substantial flaws, instead of acknowledging what writers
outside the Senate have acknowledged, that the proposed change to the
Constitution is flawed, but instead of addressing the substantial
flaws, the sponsors of the resolution have proceeded with a no-
amendment strategy, in which they have failed to consider the merits of
the amendments. I think there was an up-or-down vote only one of the
amendments. The others were all tabled. The sponsors of this proposed
constitutional amendment have taken the unyielding position that no
changes in the language are acceptable.
I cannot think of an instance that a major and contentious issue has
reached the Senate floor where Members have not realized, before its
conclusion, that there may well have to be some changes. During the
weeks of debate on Senate Joint Resolution 1, this no-amendment
strategy has been a disappointment to many, certainly to the senior
Senator from Vermont. I do not believe this is the way to debate an
amendment to the Constitution of the United States. Both proponents and
opponents of this proposed constitutional change should be searching
for the best

[[Page S1854]]

language possible to propose to the States.
My own feelings, as a Member of the U.S. Senate, is that if this is
going to pass, let it at least pass in the best possible form. Today,
it is a long way from that.
As the distinguished Senator from New Jersey [Mr. Torricelli], said,
``Good is simply not good enough when we are amending the Constitution
of the United States.''
Frankly, Mr. President, constitutional amendments are held to a
higher standard. The perfecting and substitute amendments offered
during the debate on this amendment showed the serious and substantial
flaws, and I will recall a few of them.
I will continue speaking. I have already talked with my good friend
from Utah about when a Member on the other side comes and seeks
recognition, I will, of course, yield for him or her to speak. But
while waiting for that, let me talk about a few of these amendments.
We had the Durbin amendment. The distinguished Senator from Illinois
[Mr. Durbin], offered the first amendment during our debate, and it
highlighted the fact that Senate Joint Resolution 1 is unsound economic
policy. What he did in his amendment would have allowed us to waive
this article by majority vote in the event of an economic recession or
a serious economic emergency.
His amendment had the underpinning of the statements of more than a
thousand of the Nation's most respected economists, including at least
11 Nobel laureates and the former chairman of President Nixon's Council
of Economic Advisers, the current and former Federal Reserve Board
Chairman, the former Democratic and Republican directors of the
Congressional Budget Office. All agreed that the underlying resolution,
Senate Joint Resolution 1, was unsound economic policy. They all agreed
that it would hamper the Government's ability to cope with economic
downturns.
Treasury Secretary Rubin, one of the most respected Treasury
Secretaries I have served with in my 22 years here, testified before
the Judiciary Committee:

A balanced budget amendment would subject the Nation to
unacceptable economic risk in perpetuity. This balanced
budget amendment could turn slowdowns into recessions and
recessions into more severe recessions or even depressions.

I think of the history books that tell us that as the United States
was going into its greatest depression, President Herbert Hoover,
wanting to give credibility to the American people and hope to them,
instituted a balanced-budget policy. It was like throwing gasoline on
to the smoldering embers of an embryonic depression, and what might
have been only a slight recession became a depression that destroyed
the hopes and dreams of many of our parents and grandparents. It was a
depression that wreaked the greatest havoc in the lives of American
people in this century. It was a depression that caused great migration
of people from various parts of our country, nearly wreaked our farm
economy, our agrarian economy, and destroyed the hopes and dreams of
families in every part of America.

What we have done now is say if your State or region is hit by a
major recession or emergency that a minority of Senators or a minority
of Representatives could stop a Federal response to that major
recession or emergency. Although the sponsors of this measure
repeatedly outline the dangers of a budget deficit, they fail to
address how the proposed constitutional amendment will provide for the
flexibility needed in economic downturns without holding working
families in hard-hit regions hostage to a supermajority vote. Senator
Durbin's amendment would have restored that flexibility by requiring a
majority vote to respond to economic recessions and emergencies.
But the sponsors and proponents of Senate Joint Resolution 1 opposed
the Durbin amendment. The sponsors and proponents of the underlying
resolution did not offer alternative language to address the real
economic concerns surrounding Senate Joint Resolution 1. Instead, with
lockstep voting, they defeated the Durbin amendment by a vote of 64 to
35. Having forced this effort to be tabled on February 10, and they
rejected the Torricelli amendment on February 26, the Republican
leadership hinted this weekend that they are now themselves finally
considering an amendment along these lines but have not brought one
forward.
It is ironic, last Friday, the Senate passed an air ticket tax--they
reinstated one that had lapsed--imposed a significant tax without a
recorded vote by unanimous consent. I wonder whether the proponents of
the provisions of the underlying resolution would draft in the
Constitution a requirement that such measures only be passed by a
constitutional majority after a recorded vote. In this body the
majority leader called up the matter, and, in moments, it was done. I
am not suggesting it should not have been done, but it is also reality.
This is a significant tax. It is a significant tax from which the
American people benefit. Hopefully, it will make our airports safer,
air traffic more efficient and safer, and we benefit by it. But it was
not reinstated with a recorded vote.
I withhold the remainder of my time. Mr. President, I had other
amendments I was going to speak to, but I see the distinguished Senator
from Maryland on the floor who is seeking time. How much time does the
Senator from Maryland want?
Mr. SARBANES. Twelve minutes.
Mr. LEAHY. Mr. President, I yield 12 minutes to the distinguished
Senator from Maryland. And, Mr. President, before doing that, I
understand this, that we are going back and forth. Does the
distinguished Senator from Utah have any objection?
Mr. HATCH. I have no objection. This is fine. I am happy to
accommodate the minority on this.
Mr. LEAHY. Mr. President, I was going to speak about the Dodd
amendment, but I will withhold on that and will do that at another
time. I yield 12 minutes to the distinguished Senator from Maryland.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. SARBANES. Mr. President, I thank the distinguished Senator from
Vermont for yielding me this time.
Mr. President, there is no doubt that this is an extremely important
vote that Senators are about to cast this afternoon. An amendment to
the Constitution to require a balanced budget ought to give every
Senator great pause.
First of all, amending the Constitution is no light enterprise under
any circumstances. Second, we ought to be certain that we are not
falling into the trap of unintended consequences, that we do not pass
an amendment that does more harm than good. In this respect, we ought
to heed the advice which we have been receiving from many quarters with
respect to the potential impact of this amendment to the Constitution
on our ability to conduct wise economic policy.
In this respect let me make four points in opposition to the balanced
budget amendment.
First, let me discuss the effect of this amendment on our ability to
avert or slow economic downturns.
Mr. President, over 1,100 economists have taken out an advertisement
condemning the balanced budget amendment as unsound and unnecessary.
Its signers include 11 Nobel laureates in economics, and they state--
and I quote:

We condemn the proposed ``balanced-budget'' amendment to
the Federal Constitution. It is unsound and unnecessary.

They then go on to say--and I think this is an extremely important
statement:

The proposed amendment mandates perverse actions in the
face of recessions.

I repeat: ``The proposed amendment mandates perverse actions in the
face of recessions.'' The statement continues:

In economic downturns, tax revenues fall and some outlays,
such as unemployment benefits, rise. These so-called built-in
stabilizers limit declines of after-tax income and purchasing
power. To keep the budget balanced every year would aggravate
recessions.

Secretary Rubin, the Secretary of the Treasury, testifying before the
Senate Judiciary Committee, echoed these sentiments when he stated that
the balanced budget amendment threatens to turn economic downturns into
recessions and recessions into depressions.
Mr. President, along these lines, I want to draw attention to this
chart beside me which shows the fluctuations in real economic growth
from 1870 to

[[Page S1855]]

1995. This is 1870 here. This is 1995 out here. What this chart shows
is that since the end of World War II, when we began using automatic
fiscal stabilizers--what the 1,100 economists call the ``so-called
built-in stabilizers''--we have been able to greatly ameliorate the
fluctuations in the business cycle. You still get business cycle
fluctuations, but you do not get the boom-and-bust pattern which
characterized the pre-World War II period in which a downturn would
become a recession, and a recession would become a depression.
We have had fluctuations since 1945. But they have almost always been
in the positive range in terms of economic growth. Our economy has
benefited enormously from this stability. When the economy slows down,
unemployment rises, tax revenues fall off, and the paying out of
unemployment benefits increases. We therefore automatically start
incurring deficits which serve to slow down and head off the economic
downturn. These automatic stabilizers have enabled us to significantly
ameliorate the business cycle.

As the economists' statement says, an amendment to the Constitution
requiring a balanced budget would prevent this kind of countercyclical
fiscal policy and, therefore, would greatly increase the risk of severe
economic fluctuations during an economic downturn.
Amendment supporters say, well, we will be able to see an economic
downturn begin and we will get a supermajority to waive the amendment's
balancing requirements. The fact of the matter is, however, that it is
very difficult to tell when you are in an economic downturn. The beauty
of the current system is that it automatically adjusts as the economy
goes soft. As the economists said in this full-page ad in the paper,
``The proposed amendment mandates perverse actions in the face of
recessions. In economic downturns, tax revenues fall and some outlays,
such as unemployment benefits, rise.'' No congressional action is
required for this system to go into effect.
If, in an economic downturn, you try to balance the budget by cutting
back on unemployment benefits and raising taxes in order to balance it,
you will just drive the economy even deeper.
In short, Mr. President, this amendment prevents us from doing the
very things that have allowed our economy to stay on an even keel for
the last 50-plus years.
Second, Mr. President, it is very important to understand that we do
not have a capital budget at the Federal level. The argument is being
used by the proponents of this amendment that because State governments
have to balance their budgets, local governments have to balance their
budgets, business firms balance their budgets, and private individuals
balance their budgets that the Federal Government should have to
balance its budget. But none of these entities--not States, local
governments, private companies, or households--would balance their
budgets if they kept their budget the way the Federal Government does
in accounting terms. There is no capital budget at the Federal level.
State and local governments have a capital budget, and they borrow in
order to finance it. I sat on a committee that received testimony from
two State Governors in favor of the balanced budget amendment to the
U.S. Constitution. One of the arguments they made in favor of the
balanced budget amendment to the Constitution was that their State
balanced budget amendments gave them a better credit rating for when
they went into the bond market to borrow, allowing them to borrow at
lower interest rates.
Of course, my question to these Governors was, if you are required by
your Constitution to have a balanced budget, why do you have to borrow?
Their response was, ``Well, Senator, you don't understand. We borrow to
finance the capital budget. Our constitutional requirement for a
balanced budget is for the operating budget, but we can have a capital
budget for which we borrow.''
Of course, it makes good sense to borrow for capital items.
Businesses do it when they invest in new plant equipment and private
individuals do it when they buy a home or a car. Very few people can
afford to buy those items out of cash in the year of purchase. If you
calculate prudently in terms of your expected income flow and the
amount you are spending for the capital asset, it makes good sense to
borrow in order to finance the capital asset, have the use of it over
time, and pay it off over that period as you amortize the use of that
capital asset. Business does it all the time. Private individuals do it
all the time.

So this analogy that amendment proponents draw to State and local
government, private individuals, and business does not work because
there is no capital budget at the Federal level. And amendments that
were offered on the floor to introduce capital budgeting into the
Federal accounting process were rejected.
Third, it is argued that if we face an economic or military
emergency, you will get a supermajority in this body in order to waive
the amendment's balancing requirements. Well, Mr. President, we have
seen the difficulty we have around here extending the debt limit by a
simple majority. This legislation requires a three-fifths
supermajority, three-fifths of the total membership of the body, in
order to raise the debt limit. Very few of the efforts to raise the
debt limit in recent years have had that kind of support.
I have voted for debt-limit increases with Republican Presidents
because I thought it was the responsible thing to do. But in many of
those instances, even where there was some bipartisanship involved, the
vote to increase the debt limit failed to garner 60 votes.
The difficulty of gathering a supermajority simply cannot be
overestimated. Yet amendment supporters assert, well, clearly, Congress
will see a crisis and make the proper response. Our history, however,
simply does not support that contention.
Let me give you just one example, involving national security,
because proponents of this amendment contend that it will not inhibit
us from addressing our national security needs. In 1940, on the
recommendation of President Roosevelt, the United States enacted a 1-
year draft. The draft came up for renewal a year later, in the fall of
1941, not too long before Pearl Harbor.
At this point, the House of Representatives had an intense debate
about extension of the draft. Speaker Rayburn, in fact, went into the
well of the House to appeal for the extension of the draft, saying it
was essential for the security of our country. That extension passed in
the House on a vote of 203 to 202. That vote would not meet the
requirements of this balanced budget amendment, because to meet the
requirements of the balanced budget amendment, you have to have a
majority of the whole membership to waive the balanced budget amendment
in time of national security emergency. The majority of the whole
then--as now--would have been 218; 203 falls short of the majority of
the whole requirement in the balanced budget amendment, let alone the
supermajority requirements that are contained in the amendment. So
those who place faith in the assumption that the Congress would easily
waive the balancing requirements are much too sanguine. I am very
apprehensive as to whether, either in a national security crisis or an
economic crisis, we would be able to respond. In both instances, it is
imperative to be able to respond early. The longer you wait, the more
serious the problem, the further you fall behind the curve. This
balanced budget amendment has the effect, at best, of delaying
essential action, and at worst, of preventing such action at all.
Fourth and finally, let me very quickly make the point that the way
to balance the budget is to make the budget decisions that we are
confronted with, not to amend the Constitution. We have been trying to
do that, and we have had some good success over the last 4 years. We
have brought the deficit down.
How do you actually bring down the deficit? How do you really address
this problem? What I have argued here this morning is that amending the
Constitution carries with it great risks, as the economists in this
article have indicated, and that we can do the job--and have been doing
it--without a balanced budget amendment.
I ask unanimous consent that the full economists' statement be
printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:

[[Page S1856]]

1,100 Economists Condemn Balanced Budget Amendment: ``Unsound and
Unnecessary''

The statement below has been signed by over 1,100 prominent
economists, more than double the number who signed a similar
statement in 1992.
The signers include 11 Nobel laureates in economics:
Kenneth J. Arrow and William Sharpe of Stanford University;
Gerard Debreu and John Harsanyi of the University of
California-Berkeley; Lawrence R. Klein of the University of
Pennsylvania; Wassily Leontieff of New York University;
Herbert A. Simon of Carnegie Mellon University; James Tobin
of Yale University; and Franco Modigliani, Paul A. Samuelson
and Robert Solow of M.I.T. The statement was drafted by
Robert Eisner, James Tobin and Robert Solow.
``We condemn the proposed `balanced-budget' amendment to
the federal Constitution. It is unsound and unnecessary.
``The proposed amendment mandates perverse actions in the
face of recessions. In economic downturns, tax revenues fall
and some outlays, such as unemployment benefits, rise. These
so-called built-in stabilizers limit declines of after-tax
income and purchasing power. To keep the budget balanced
every year would aggravate recessions.
``Unlike many state constitutions, which permit borrowing
to finance capital expenditures, the proposed federal
amendment makes no distinction between capital investments
and current outlays. Private businesses and households borrow
all the time to finance capital spending. The amendment would
prevent federal borrowing to finance expenditures for
infrastructure, education, research and development,
environmental protection, and other investment vital to the
nation's future well-being.
``The amendment invites Congress to require states and
localities and private businesses to do what it cannot
finance itself. It also invites more cosmetic accounting,
such as increased sales of public lands and other assets
counted as deficit-reducing revenues. Disputes on the meaning
of budget balance could end up in the courts.
``The amendment does contain escape hatches, but they
require super-majorities in peacetime, three-fifths of the
`whole number' (including absentees and non-voters) of each
House to adopt an unbalanced budget or to raise the debt and
a majority of these whole numbers to pass a bill to raise
taxes. These provisions are recipes for gridlock and
opportunities for irresponsible minorities to insist on their
agendas.
``The amendment is not needed to balance the budget. The
measured deficit has fallen dramatically in recent years,
from $290 billion in 1992 to $107 billion in 1996, to some
1.3 percent of gross domestic product, a smaller proportion
than that of any other major nation, none of which hobbles
its economy with a balanced-budget mandate. Congress and the
President can reduce the deficit to zero, that is, balance
the budget, or even create budget surpluses, without a
constitutional amendment.
``There is no need to put the nation in an economic strait-
jacket. Let the President and Congress make fiscal policies
in response to national needs and priorities as the authors
of our Constitution wisely provided.

Mr. SARBANES. To summarize once again the economists' statement,
first of all, the balanced budget amendment would not enable us to
respond automatically to economic downturns, running the risk,
therefore, of turning recessions into depressions. Second, and I quote,
``Unlike many State constitutions, which permit borrowing of financed
capital expenditures, the proposed Federal amendment makes no
distinction between capital investments and current outlays. Private
businesses and households borrow all the time to finance capital
spending. The amendment would prevent Federal borrowing to finance
expenditures for infrastructure, education, research and development,
environmental protection, and other investment vital to the Nation's
future well-being.''
If we had a capital budget right now, we would have a balanced
budget, because there is well over $107 billion worth of capital items
in the Federal budget.
Third, I addressed the escape hatches and the difficulty of obtaining
these supermajorities. That is really a recipe for gridlock.
Fourth, and this leads again to my final point, we have brought the
deficit down consecutively now for 4 straight years. How? We made tough
decisions on spending and taxing. We voted for the 1993 economic plan.
Many of those pushing the balanced budget amendment to the Constitution
voted against that economic plan with respect to the budget. That was
the plan that enabled us to bring the deficit down from $290 billion in
1992 to $107 billion in the past fiscal year--a cut of almost two-
thirds in the deficit. That was done by making tough decisions. The
chart beside me reveals this progress.
An amendment to the Constitution, by itself, does nothing. You still
have to make the budget decisions. We have been doing a good job of it.
In fact, as this next chart shows, we have brought the deficit down
from 4.9 percent of our gross domestic product down to 1.4 percent.
This is the best performance in a quarter of a century, as a percent of
GDP.
So, Mr. President, we have been doing the job. And the way to
continue to do the job is to address the deficit. As I noted, it is now
down to 1.4 percent of GDP. This is better than any other major
industrial power in the world. Chairman Stiglitz of the Council of
Economic Advisors says he now goes to international conferences and
everyone is talking about how well and how successfully the American
economy is working. This figure--deficit as a percent of GDP, 1.4
percent--is better than any of the other major industrial countries.
Consider this chart beside me. This is the U.S. deficit as a share of
GDP, 1.4 percent. Here is Japan at 3.1 percent; Germany at 3.5 percent;
Canada, 4.2 percent; France, 5 percent; the United Kingdom, 5.1
percent; Italy, 7.2 percent. So we have been doing the job, and we have
been doing the job the way it needs to be done.
In short, Mr. President, we ought not to meddle with the
Constitution. We ought not run the risk of provoking economic prices,
of preventing a timely response to a national security threat, of
failing to make capital investments in the future of our country. Mr.
President, I urge the rejection of this amendment to the Constitution.
I thank the Senator from Vermont for yielding me time.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER (Mr. Enzi). The Senator from Utah is
recognized.
Mr. HATCH. Mr. President, I have enjoyed listening to the
distinguished Senator from Maryland. He has made these points before.
Let me tell you something. It is easy to bring the deficit down when
you pass the largest tax increase in history, and when you have just
ended paying for the savings and loan crisis. In all honesty, that is
what happened. But, we still have, for the next 4 years, the deficit
going back up. Only in Washington, DC, when you talk about reducing the
increase in the amount of money the deficit goes up, do you call it
cutting the budget.

The fact is that, under the best of circumstances, we have at least a
$107 billion annual deficit. It is going up to $200 billion by the year
2002, by the budget the President submitted. So it is nice to talk in
terms of how the deficit seems to be coming down for the last 4 years,
after the largest tax increase in history, and the fact that the
deficit was artificially high in 1992 because we got through paying for
the debacle of the S&L crisis. I am not sure who to blame there. There
is more than enough blame to go around for who created the debt, the
question for today is who will vote to fix it?
President Reagan's desire to have marginal tax rate reductions to
spur economic growth proved to be the right policy. The marginal tax
rate reductions in 1981, actually, according to many observers,
resulted in an increase in revenues of over 40 percent during the
additional years. At the lowest, it was 28 percent. Really, I think it
was closer to 40 percent. But the real problem was that our friends of
the more liberal persuasion kept spending, and President Reagan himself
spent more on defense. So there is no question that all of that was
what caused the high deficits, not the tax rate reductions.
Having said all of that, we also know that automatic stabilizers are
not what they claim to be. There are many reasons why we come out of
recessions and why we haven't had deeper ones than we have had.
Automatic stabilizers is probably a very minor part of that, according
to most economists today.
Today is the day of decision for Senate Joint Resolution 1, which
proposes to amend the Constitution and provide for a means of getting
us to a balanced budget. The sad reality is that if we do not adopt the
balanced budget amendment to the Constitution, then the bridge to the
21st century is likely to be washed out with a flood of debt.
The amendment we will vote on this afternoon is the bipartisan,
bicameral consensus. Everybody knows it is the only one that has a
chance of passing and the only chance we have of getting things under
control. It is recommended to the American people by

[[Page S1857]]

us for their deliberation and their State legislatures by Americans of
good will who will have reached across party lines to do what is right
for our country's future.
Some have suggested that it is somehow inappropriate to suggest that
we amend the Constitution to correct the Federal Government's borrowing
and spending habits. I would like to emphasize. What is the
Constitution for? It seems to me that it's primary purpose is to limit
the Federal Government's power to act in ways destructive of the
liberties of the people. And the most central power of Government,
especially of the Congress, is the power of the purse. That should not
seem like a new idea. Ever since the nobles of England forced King John
to sign the Magna Carta at Runnymede, our constitutional history has
been a series of actions to rein in the abuse of power of the purse to
protect the freedoms of the people. That is what we want to do here
because it is apparent. If you look at these last 28 years of budgets,
all unbalanced, none of which has done the job, that have put us where
we are, it wasn't just Reagan, Bush, Clinton, or Carter. It is 28 years
of this. And, if you really want to stop things, yes, we have to have
better Presidential leadership on the budget. But ultimately, the
fiscal buck stops right here in Congress, and the Congress is the body
that can't get its spending habits under control.
For the first century and a half of our Nation's history our Nation--
it literally went without saying--the Government would only borrow in
times of supreme emergency, and then would repay the debt in good
times. That began to be abandoned in the 1930's and was entirely
abandoned in the 1960's and 1970's. In 58 of the last 66 years, and for
the last straight 28 years, the Federal Government has spent more money
than it has taken in. Yet, we have these people coming to the floor
saying, ``All we have to do is do it, and the President will sign it.''
Give me a break.
Mr. SARBANES. Will the Senator yield for a question?
Mr. HATCH. I do not have the time to yield, or I would be happy to.
Let me just finish my remarks.
This pile of books illustrate the nearly three decades of unbroken
deficits. Think of it. Nearly 30 years in an unbroken line, and 58 of
the last 66 years during good times and bad times the Federal
Government has simply spent money that it didn't have. And, frankly, it
is our fault in Congress for allowing this condition to continue.
Some question. ``Who has this hurt? We owe the money to ourselves. It
has no effect.'' Right? Wrong. It has hurt average Americans by
reducing their wealth and by reducing the Nation's economic sovereignty
as we have relied on foreign creditors, and foreign creditors are
starting to control our country. Because the Government is competing
for money to borrow, it has driven up the interest rates making home
mortgages, student loans, and automobile loans even more expensive.
The Joint Economic Committee has estimated that the average family
will save about $1,500 if we implemented a balanced budget amendment.
Our debt has made it more difficult for small businesses to grow and to
expand, and so has decreased the number of new jobs that we might have
created.
In these and many other ways, real wealth has been taken away from
the American people and from the American families throughout this
country. Who else does it hurt? Certainly our children and our
grandchildren. A child born today enters life with about $20,000 of
debt as his or her share of our $5.3 trillion national debt. It has
been estimated that this same child will pay $200,000 in extra taxes
just to pay the interest on the national debt over the lifetime of that
child. In fact, that child will pay over $94,000 in extra taxes just to
pay the interest on the national debt, up until that child's first 18
years are completed. These children did not get to vote on this debt
and tax burden. They didn't vote on the spending programs that they
will be paying for. Mr. President, I have called this ``fiscal child
abuse,'' and that is exactly what it is. It is also taxation without
representation in its purest form.

The clear fact is that the Federal Government's debt habit is hurting
current and future Americans. But in a way that avoids direct electoral
accountability. By taking the easy course to borrowing, the Government
can hand out Federal money without having to raise Federal money
directly through taxes.
Over the period of debt financing the Government has grown and has
intruded itself into every area of life but has become even less and
less accountable for the people. Some say, ``Let's just do it,''
meaning that we can balance the budget right now, if we will. We have
tried all of that. Republicans, Democrats, and the White House have
promised balanced budgets, and the debt just continued to go up.
Democrats and Republicans promised balanced budgets, and the debt went
up. We had recessions and wars, and the debt went up. We had peace and
prosperity, and the debt went up. Since 1978, we passed no fewer than
five major budgetary regimes to force us to balance the budget, and the
debt went up.
Just think about it. In the last Congress, we even passed a balanced
budget. But the President vetoed it. And the debt went up again. We
have tried promises. We have tried statutes. They don't work.
Look at this stack of failed attempts of 28 straight years; 58 of the
last 66 year of unbalanced budgets. ``Let's just do it'' just doesn't
do it. That line may be great for selling sneakers, but it has not
helped us to balance the budget. I will tell you that.
We have a fundamental problem with the way our Government operates.
We need a constitutional solution because that is what the Constitution
is for--to fix basic problems of Government, and to limit the ability
of Government to act in ways that are harmful to the people. It seems
to me quite clear that to remedy this fundamental problem in our
National Government that it is entirely appropriate to amend our basic
charter to say to the Government, ``Stop spending our national
inheritance.'' By limiting the Federal Government's ability to borrow
and spend and spend away our American legacy, we will be protecting the
liberties of all Americans.
Mr. President, there is still time for Senators to reconsider their
position. I hope that those who have shown that changing their minds is
not out of character will think twice again and decide to vote the
right way--in the way they promised their constituents, in the way they
ran upon it, and in the way they were elected upon it. The balanced
budget is the right thing to do for our children, our grandchildren,
and for all Americans.
I reserve the remainder of my time.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. SARBANES. Mr. President, will the Senator yield me 2 minutes?
Mr. LEAHY. I yield 2 minutes.
Mr. SARBANES. Mr. President, I simply want to make this observation.
Well over half of those budgets that the Senator from Utah points to
in that pile would have been in balance if we had a capital budget. The
fact of the matter is we didn't--and don't--have capital budgets. State
and local governments have capital budgets. Businesses and private
individuals have capital budgets. But we have a budget accounting
system that requires us to cover the capital items as well as the
operating items. If we had done budget keeping the way everyone else
does budget keeping, well over half of those budgets would have been in
balance.
He talks about young people being born with a debt hanging over them.
They are also born with a tremendous number of physical assets that
have been purchased that are available to them for their use--a
transportation network, a communication network, a research and
development network, and an educational infrastructure. All have been
paid for by previous generations for their use out into the future.
Mr. HATCH. Will the Senator yield on my time?
Mr. SARBANES. Yes.
Mr. HATCH. Is that why you want a capital budget? I guess it is so
you can continue what you have been doing. Sure. So you can continue to
just spend, and just call it a capital budget. My gosh. It suddenly
dawned on me. I was starting to think maybe a capital budget was a good
thing. But there is no bond rating system to restrain the Federal
Government, as is the case in the States. We make the money. We

[[Page S1858]]

print it ourselves. We do whatever we want to. I guess we could just
continue business as it is, and just call it a capital budget. Put all
of these things that we should have to pay for into a capital budget,
and say, ``We balanced the budget.'' Just continue the same system.
That is what we are talking about.
Mr. LEAHY addressed the Chair.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. Mr. President, on my time, if we are going to go by
rating, I say to my friend from Maryland, let's see how we would rate.
I think probably one way of rating is our deficit as a share of GDP. I
say this because we do it for ourselves. We talk about having our
household budgets in line. As a U.S. Senator, I own a home, of course.
But my real home is in Vermont. But I have a home to use when I am down
in the Senate. Now, I do as almost all Vermonters, unless they have a
lot more money than I do. I buy that with a mortgage. I could not pay
for those homes all in 1 year. I am in deficit.

Mr. SARBANES. If the Senator will yield.
Mr. LEAHY. I am in deficit on that.
Mr. SARBANES. Exactly. The year the Senator took out the mortgage, he
was in violation of the concept of the balanced budget amendment to the
Constitution.
Mr. LEAHY. Exactly.
Mr. SARBANES. Any business that borrowed to expand plant and
equipment--and virtually all businesses do it--violates the concept of
this balanced budget amendment to the Constitution.
Mr. LEAHY. In fact, I might say to my friend from Maryland, we talk
about how they might rate us if we had a capital budget. I look at the
chart that he has been good enough to bring up, and I think that the
United States is rating pretty darned good. We are an awful lot better
in our deficit than all the rest of the First World--Japan, Germany,
Canada, France, UK, Italy. I think our bonds would be pretty darned
good. I say this to my friend from Maryland. We all know we are in
about as much of a global market certainly as at any time in the
Senator's lifetime or my lifetime, and markets become even more global
as we go on with everything from the Internet to plants worldwide. I
ask my friend, what is the dominant currency when we talk about that
global market? Is it not the dollar?
Mr. SARBANES. If the Senator will yield, it is certainly the dollar.
Everyone is anxious to hold U.S. Treasury bonds. Let me say to my
colleague, the Maastricht Agreement for the European Union set out
certain criteria that countries had to meet in order to qualify for the
monetary unit. These were regarded as extremely severe criteria. One
criterion set out in the Maastricht Agreement was that they had to
bring their deficit as a share of GDP down to 3 percent--3 percent.
That is the target that those countries are working to achieve.
Everyone says, well, that is a really tough standard that these
European countries are trying to meet.
The United States is at 1.4 percent.
Mr. LEAHY. We have cut in half what they have set as that tough
target. We have done half again better. Is that what the Senator from
Maryland is saying?
Mr. SARBANES. The Senator is absolutely correct. Another criterion
they had was that your debt, your total debt had to be at 60 percent of
your GDP. We are at 50 percent. I do not have a chart on that one. But
we are at 50 percent. We easily meet both of the criteria that are
being used by the European countries pursuant to the Maastricht
Convention guidelines. And everyone is saying, boy, this is a tough
job. If you get to it, you are showing tremendous fiscal discipline.
We are already well within both of those targets. None of the 15
countries that are members of the European Union have done as well as
the United States on these two criteria, with the exception of
Luxembourg.
Mr. LEAHY. Mr. President, I see now that my distinguished colleague
from Utah has someone to speak on the other side. I am about to yield
to him. I hope, though, that those who watch this debate around the
world will realize that we are making debate on what is the world's
strongest economy, the strongest economy recorded history has ever
shown. I worry sometimes when I hear this denigration of our economy
and that we need gimmicks to fix it. It is like some of the debate on
the military budget during the cold war: Oh, my God, we are falling so
far behind, until someone said, well, would we trade our Air Force for
the Soviet Air Force or our Navy for the Soviet Navy or our Army for
the Soviet Army? And everybody said, Oh, of course not. I ask just one
question. Would we trade the U.S. economy for any economy in the world?
I yield the floor.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. The only gimmicks I have seen are the gimmicks of these
amendments that are really filed for one purpose and that is to cover
what really is a very difficult vote, voting against the balanced
budget amendment.
I yield 4 minutes to the distinguished Senator from Tennessee.
The PRESIDING OFFICER. The Chair recognizes the Senator from
Tennessee.
Mr. FRIST. Mr. President, I rise today in strong support of Senate
Joint Resolution 1, the balanced budget amendment to the Constitution.
I especially want to commend my good friend, Senator Hatch, for his
tireless dedication to passing this amendment.
Mr. President, our Nation faces a critical choice about our economic
future: Are we going to continue to shackle our children and
grandchildren with debt or are we going to curtail the excessive
spending habits of Washington? Passing the balanced budget amendment
signals a choice for fiscal discipline, economic prosperity, and a
better future for our children.
Federal spending cannot continue indefinitely on its current course.
If we continue on our current path, entitlements and interest on the
debt will consume all Federal revenues by 2012--leaving not a single
tax dollar for defense, education, medical research, national parks,
and other important government functions. For 28 years, we have
continued on this path. We cannot continue on it for the next 28.
Today, the Federal debt stands at $5.3 trillion. Grasping the concept
of a trillion dollars is difficult, but let me try. If you started a
business in the year 1 and that business lost $1 million every day
since then, you still would not have lost your first trillion dollars.
Paying interest alone on America's debt costs taxpayers about $300
million a year. Thus, a child born today will pay more than $180,000 on
the debt over his or her lifetime--just in interest.
The balanced budget amendment will take a bold step toward reversing
this trend by adding a simple rule to the Constitution, a rule followed
by families when they draw up their own budgets and by businesses when
they forecast their finances. This rule says, ``total outlays in a
particular year will not exceed total receipts in that year.'' That is
legalese for forcing Congress to live within its means.
Some people have asked me why Congress and the President need to
enshrine this rule in a document as important as the Constitution.
Especially given today's new commitment to bipartisanship, some wonder
why their lawmakers cannot agree to make the tough choices necessary to
balance the budget. The simple answer is that Congress and the
President need the amendment to guarantee fiscal discipline whether or
not that political commitment to a balanced budget exists. We need the
amendment to ensure the budget is balanced in 2002 and 2012 and 2022.
Opponents of the amendment cite four objections. First, they claim we
should exempt Social Security from budget calculations to protect
seniors and preserve the program. However, exempting Social Security
from the balanced budget amendment will not strengthen Social Security
in any way, will not add a single year to the Social Security trust
fund, and will make balancing the budget even more difficult. Simply
moving Social Security off budget does not address the structural
challenges the program will face when the baby boomers begin to retire.
The President knows this. He cites Social Security as one of his
reasons for opposing the amendment but does not exempt it in his own
budget. The greatest threat to Social Security is not the

[[Page S1859]]

balanced budget amendment; it is the unrestrained growth of debt that
jeopardizes every single Federal program, especially Social Security
because it is the largest.
The second objection is that the amendment restricts our ability to
run deficits in times of emergency or recession. Running deficits is,
at times, unavoidable. But recent budget history shows that deficit
spending has become the rule rather than the exception in Washington, a
trend that is unacceptable to the American taxpayer. The first sentence
of the amendment provides appropriate flexibility to permit deficits
when a three-fifths majority of Congress deems it necessary.
Third, opponents claim that the amendment risks judicial interference
in budget decisions. In his State of the Union Address, the President
himself cited his concern of ``unwanted results such as judges halting
Social Security checks.'' The balanced budget amendment does not
allocate power to the courts to decide budget and economic matters.
Rather, it establishes a procedure to restrict Congress' budget
authority--a supermajority vote to run deficits.
Fourth, opponents say we should include an exemption for capital
budgets. Capital investments are very important. Everyone knows that.
However, as I discussed earlier, we will have no money for capital
investments in just 15 years if we continue on our current budget
course. As with Social Security, the debt is the greatest threat to
these investments.
Furthermore, if we created a separate capital budget, the process of
defining ``capital spending'' could be abused--opening a huge loophole
for deficit spending. We have seen this happen in the States. In New
York City, for example, they declared the useful life of a school
textbook to be 30 years, stretching out spending far beyond the book's
actual existence.
All of these arguments are a smoke screen that obscures the real
issue at stake: constitutionally mandated fiscal discipline.
If we can enact and sustain this discipline, the economic rewards are
considerable. Looking back, if we had not run deficits the past two
decades, the average American family's annual income would be $15,500
higher. Looking ahead, if we balance our budget now, we can increase
per capita income by 26 percent over the next 20 years.
Passing the balanced budget amendment represents the first step down
this road to economic prosperity. With a fiscal discipline embedded in
the Constitution, Congress will be forced to confront tough problems
sooner--rather than pushing mountains of debt on to future generations
to endure.
I urge my colleagues to pass the balanced budget amendment.
Mr. HATCH. I thank my colleague for his excellent statement, Mr.
President. I yield 6 minutes to the distinguished Senator from
Virginia. And I want to personally thank him and express my gratitude
for the good leadership and hard work he has shown in trying to pass
this amendment.
The PRESIDING OFFICER. The Chair recognizes the Senator from
Virginia.
Mr. ROBB. Mr. President, I must confess that I am not particularly
comfortable as a proponent of adding a balanced budget amendment to the
Constitution, and I never have been.
Many of those with whom I am frequently aligned on issues that don't
enjoy much popular political support yet represent sound public policy
are very much opposed to this amendment--and cannot understand why I am
supporting it.
But I am not persuaded by the impassioned arguments against it, and,
regrettably, that leaves me at odds with the President, the leadership
of my party, most editorial writers, and virtually all of the
progressive organizations with which I often find common cause.
It was out of frustration that I first came to support the amendment
well over a decade ago during the time the Federal Government began to
run huge annual deficits year after year, with no evidence of the
discipline necessary to rein them in and I have been a reluctant backer
ever since.
As most of our colleagues know, however, I've always been far more
committed to a balanced budget than to a balanced budget amendment and
I would not be supporting an amendment now, if I held out any hope that
we would actually reach that goal without it.
In truth, actually achieving a balanced budget will be extremely
difficult and there is no guarantee that we'll reach it, with or
without the amendment, because we will have to make some politically
painful decisions to get there--either way.
And that is really the point.
Why fear the amendment if it will only put more pressure on us to
make the same tough decisions we're going to have to make anyway if
we're serious about balancing the budget.
We owe it to the American people, and to future generations in
particular to be a whole lot more candid about the choices we face, and
the decisions we are going to have to make.
We cannot keep promising that we will not touch Social Security or
Medicare or Medicaid or veteran's pensions or any other entitlement
program, because we are going to have to make some adjustments to all
of these programs, or we will put them all at risk.
I am particularly concerned about arguments that suggest we threaten
Social Security if we pass a balanced budget amendment. That is just
not true.
The greatest risk for Social Security is not taking the need to
balance the budget seriously.
The real threat to our security, to our Social Security, to our
economic security, and to our national security is the national debt.
Each year we pay more interest, on more debt, and that leaves fewer
dollars to spend on everything else we look to Government to provide.
And if we don't make some changes soon, in just 15 years every cent
the Government takes in will be required just to pay for entitlement
programs and interest on the national debt--every cent.
Now that is really something to worry about.
The other argument heard so often is that the balanced budget
amendment, will not permit us to respond to national emergencies.
That is nonsense.
To be sure it is designed to increase the pressure on us to make the
politically difficult choices we keep avoiding.
But for any real emergency we can override it with 60 votes, as we
have in the past.
Just look at how many votes we get on our routine emergency
supplemental appropriations bills.
In times of true national emergencies, we will have virtually
unanimous support to waive the limitation and in the interim, we will
have an added incentive, to be more fiscally responsible.
Mr. President, notwithstanding good intentions and despite the
rhetoric to the contrary, I just do not believe either the executive
branch of the Federal Government or the legislative branch of the
Federal Government have the collective will to make the really tough
but necessary decisions without the added pressure the balanced budget
amendment will help guarantee.
So, the die may well be cast. It may be it will fall one vote short.
But I hope all of those who profess to support a balanced budget,
whether with or without an amendment, will keep those commitments in
mind as we approach the very difficult choices that we inevitably face
if we are ever to get to that particular goal.
Mr. President, I yield any time I have remaining, and I thank the
Chair.
Mr. DOMENICI addressed the Chair.
Mr. HATCH. How much time does the distinguished Senator from New
Mexico need? We are running out of time on this side, but I think the
distinguished chairman of the Budget Committee deserves to take
whatever he wants to.
Mr. DOMENICI. Mr. President, 7 or 8 minutes?
Mr. HATCH. All right, I yield 8 minutes to the distinguished Senator.
The PRESIDING OFFICER. The Chair recognizes the Senator from New
Mexico.
Mr. DOMENICI. Mr. President, I just listened to my good friend from
Virginia talk about whether we have the will or not without a
constitutional amendment mandating a balanced budget. Let me say to
everyone, the

[[Page S1860]]

President of the United States has been saying he has the will; the
will to get a balanced budget by 2002 has been a cornerstone to what he
has been saying during his campaign and during the last couple of
months.
The truth of the matter is, I say to my friend from Virginia, he did
not present a balanced budget. Last night, the Congressional Budget
Office told us that the President's budget, in the last year, the year
it is supposed to be in balance, is $70 billion in the red. You know,
we are only starting this exercise at $106 billion. Mr. President, $106
billion is where we are, and after all the Presidential hoopla, sending
us this great budget, those who estimate say it is still $70 billion in
the red in 2002.
If that is not enough, let me tell you, the will seems to be to
delay, delay, delay. A constitutional amendment would put a finality to
that and you would reach the time when you could delay no more, which I
believe is the reason that my good friend has decided that he must go
for this amendment, even though we would all prefer to balance the
budget on our own. Is delay part of the President's budget, while he
admonishes us not to adopt a constitutional amendment? You bet. The
Congressional Budget Office just told us that next year, the first year
we are supposed to be moving toward balance, the deficit goes up $25
billion. Can you imagine a deficit increase, from a President telling
us not to adopt a constitutional amendment because it is too rigid and
he would like the flexibility, and stating he just sent Congress a
balanced budget?
My friend, Congressman John Kasich, tried to explain this, and I must
borrow his analogy. He talked about somebody going on a diet and
deciding that the first 4 years of the diet, you will increase your
weight preposterously--$25 billion worth, in the first year--and then
when you finally get to the year you are supposed to actually lose
weight, you all of a sudden, in that last year, you are going to lose
100 pounds.
This budget is before us now, brought to us by a President who is
telling us, I will balance the budget myself--right? That is what he is
saying. Do you know how much of this deficit reduction, according to
the experts that we must listen to, occurs in the last 2 years of this
budget? I assume you were appalled, I say to Senator Robb, when you
heard 75 percent as the estimate 2 weeks ago. That is wrong. Mr.
President, 98.5 percent of the President's deficit reduction occurs in
the fourth and fifth year of this budget. Do you believe it? Do you
believe that will happen? Of course not. You will have another budget
stacked up here, saying, ``Well, we thought we were getting there, but
we are not.''
As a matter of fact, the response of the administration today is, we
are not changing a thing because, come that final year, we have a
trigger. Did you ever hear of a trigger in budgeting? You pull a
trigger and you cut spending. Why don't you pull the trigger next year
and start cutting spending? You wait until the end and you ``trigger''
out--neat word--trigger out the tax cuts that you put in place. So you
raise taxes, because you were wrong and you could not get to balance,
so you say, we will cut your taxes for 3 years but in the fourth and
fifth years, when we are out of balance, we will put the taxes right
back on. That is a neat trigger, isn't it? It is a trigger, so clearly
we ought to be down here saying, ``We do not need a constitutional
amendment" --this is a new one--``we have a trigger. Forget the
amendment. We will balance the budget with a trigger.''

And then the President says, ``Of course, we cannot do it all by
taxes.'' So, what we are going to do is we are going to trigger an
across-the-board cut, 4 percent across-the-board on almost everything.
Do you believe it? Of course not. It will not happen. It is an absolute
phony device.
For those who think we do not need a constitutional amendment because
we will balance the budget ourselves, I submit, with great regret, that
the President's budget is not an example of doing it ourselves, for it
will not achieve the goal. As a matter of fact, it obfuscates, it
hides, it delays, it terminates a bunch of programs.
One big program is terminated in the fifth year, even though it is an
entitlement. And guess the rhetoric? The rhetoric is, ``Well, the
President promised to do it for only 5 years in his campaign, so it is
in the budget for 5 years.'' A new entitlement, but at the end of 5
years, it is out. That won't happen. You already have hundreds of
thousands of Americans on this entitlement to help pay for health care
of one type or another. But because we had a campaign that said we are
going to do this for 5 years, we will stop it.
You see, the President has just given us, in his budget, I regret to
say, the best example of why we need a constitutional amendment. We
just absolutely cannot put ourselves to making tough decisions. I say
to those negotiating for the President, I remain hopeful that there are
two things at play that may still get us to the Holy Land, and the two
things are that this President cannot live with 4 years of a sustained
fight with a Republican Congress--he cannot--because what kind of a
legacy is that? ``I did battle with the Republicans for 4 years, and
that is my legacy.'' Of course that is no legacy. Nor can the
Republicans who control this place--and thanks to Senator Robb for
helping us on these matters. We don't draw lines. He is one of the most
committed Senators to getting a balanced budget, and I compliment him
for it. But we can't live fighting the President for 2 years or 4
years. So I think maybe the pot may be able to get stewed up moving in
the right direction of getting a balanced budget.
Let me say, for those who claim we will do it ourselves, they better
do a lot better than the President, because he is not doing it himself.
His budget needs a constitutional amendment almost as bad as any of
those budgets we have up here. How many years is that, I ask the
Senator from Utah? Twenty-nine? Twenty-eight? We probably need it as
bad on the President's budget as any of those budgets out here which
caused us to go into this 5 trillion dollars worth of debt.
Mr. HATCH. Will the Senator yield?
Mr. DOMENICI. I will be delighted to.
Mr. HATCH. The President himself, in his budget, says by the fourth
and fifth year, 75 percent of the savings or cuts, whatever, have to be
obtained in the 2 years after he leaves office.
Mr. DOMENICI. Actually, it is 98 now. I gave you a new number.
Mr. HATCH. I was going to ask you, you said 98. He was off by that
much?
Mr. DOMENICI. That's correct.
Mr. HATCH. He himself admitted to 75 percent.
Mr. DOMENICI. The number in his budget was 75. Now we have another
party, a neutral party saying----
Mr. HATCH. Am I correct in my understanding? I was led to believe
there was only a $49 billion deficit in the fifth year of the
President's budget; in other words, it wasn't balanced by $49 billion.
If I heard the distinguished Senator correctly, that is now up to $70
billion, according to the Congressional Budget Office?
Mr. DOMENICI. That's correct.
The PRESIDING OFFICER. The 8 minutes have expired.
Mr. HATCH. I don't know when I have heard a better speech on the
balanced budget amendment than the Senator from New Mexico has just
given, or a better set of arguments for it.
Mr. DOMENICI. I know I don't have any time left, but I would like to
repeat something. Can I just have 30 seconds?
Mr. HATCH. I yield 30 seconds.
Mr. DOMENICI. Mr. President, the best thing the President can offer
in his budget, in lieu of a constitutional amendment to do the job, is
a trigger. This trigger is not going to get us where we have to be, but
it is the only answer the President has to saying he will get us there.
There is a newfangled procedure in budgeting that says when the time
comes to do what we should have already done, we will use a gun and we
will call it a trigger, and we will automatically cut things that we
didn't have the courage to do anything about for the 4 preceding years.

Now, that is not doing it yourself and it is not anything that would
justify our throwing away this constitutional amendment. However, I do
believe we are not going to pass it because I think those opposed to it
are still convinced we need bigger Government, and the constitutional
amendment is an instrument for less Government rather than more, and
that is the reason we are going to lose. I yield the floor.
Several Senators addressed the Chair.

[[Page S1861]]

The PRESIDING OFFICER. The Chair recognizes the Senator from Vermont.
Mr. LEAHY. Mr. President, I will not take long. I hear these debates,
and I still say the same thing: All we need is the courage to vote. We
all give great speeches about the need for a balanced budget, but I
remember the Senate and the Senate leadership during the time of
President Reagan endorsing huge deficits. In fact, we are still paying
the interest on the deficits run up during the Reagan and Bush
administrations, as contrasted to the Clinton administration where the
deficit has come down 4 years in a row and is about to come down for
the fifth year, something that has not happened in the lifetime of most
of us in this body.
But to bring it down, you don't pass a bumper-sticker slogan and
stick it on the Constitution of the United States of America. To bring
it down, you cast difficult votes, unpopular votes, votes that make you
stand up to special interests and single-issue groups from the right to
the left.
What we are trying to do is to pass some kind of a feel-good
amendment that would send most of this to the courts, that would
cripple the strongest economy in the world. Let us remember that, with
all those who come and talk about the dangers of our economy, I ask
them, what country in the world would they trade economies with? We
have the strongest economy in the world. It is like the days of the
Soviet Union when everybody said, ``Well, our military is falling
apart,'' and we say, ``Do you want to trade our Air Force for theirs,
our Army for theirs, our Navy for theirs?'' We have to say no.
When we have the strongest economy in the world, when we have a
deficit that is the smallest as percentage of our gross domestic
product of any in the industrialized world, let's not start talking
about trading what is working for countries that do not work anywhere
near as well as what we have. Let us back off from the political siren
call of saying, ``We'll do this on a bumper-sticker slogan slapped on
to the Constitution,'' the greatest Constitution in the world, because
then some day somebody else, probably a Federal court, will do what we
can do today.
I know that we cannot legislate political courage and responsibility,
but that is what we are trying to say we are going to do. No amendment
to the Constitution can supply the representatives of the people of
this great country with political courage and responsibility. Indeed,
the majority report on this amendment concludes that the ultimate
enforcement mechanism that can lead to balancing the budget is the
electorate's power to vote. How true, but that power to vote doesn't
come in 10 years from now in a constitutional amendment. That power to
vote has been there throughout the history of this great country. The
underlying resolution would actually cut, rather than enhance, our
democratic principles of majority rule and separation of powers but
ultimately lead to less accountability to the electorate. Why would it
do that? Because it would destroy majority rule, and it would turn all
contested issues of the budget over to the courts, not to the elected
people of this country.
Political courage has been an essential ingredient that has helped us
achieve remarkable deficit reduction over the past 4 years. That is a
history that those who support this flimflam on the Constitution choose
to ignore. We have succeeded in reducing the deficit every year of the
past 4, we have cut the deficit by more than 60 percent in that time,
and we have had a strong economy and sound fiscal policy. We did not do
that through a flimflam amendment. We did that through political
courage. It meant that some Members of this body and some Members of
the other body actually lost their seats in the Congress by voting for
what was right--but they did it--and reminds all of us that nobody owns
a seat in the U.S. Senate. Nobody should have their decisions guided
solely by polls, but rather by what is right.

So why do we not stay the course of what we have been doing, bringing
the deficit down and use bipartisan work for further progress? It is an
illusionary quick fix by constitutional amendment, and it makes the job
more difficult.
The questions raised during this debate will not go away and cannot
be ignored. They point to a series of fatal flaws in proposing and
conducting our economic and budgetary functions this way.
A recent editorial in Vermont by the Burlington Free Press said it:

Amending the Constitution to require a balanced budget
amendment would be like using a sledgehammer to nail a picket
in a fence. The picket might stand, but at great risk to the
fence.

I think of what Senator Hatfield said when he stood up and opposed
this. Senator Hatfield, then the chairman of the Senate Appropriations
Committee, said:

The debate on the balanced budget amendment is not about
reducing the budget deficit. It is about amending the
Constitution of the United States with a procedural gimmick.

What I say is, it is amending the Constitution with a bumper-sticker
flimflam. That is what it is doing.
Senator Hatfield said:

As I stated during the debate on the balanced budget
amendment last year, a vote for this balanced budget
amendment is not a vote for a balanced budget, it is a vote
for a figleaf.

Mr. President, it is a pretty small figleaf. We ought to be
embarrassed to put that figleaf on anything, especially on the greatest
Constitution democracy has ever known.
Senator Hatfield said:

Congress should not promise to the people to balance the
Federal budget through a procedural gimmick. If the Congress
has a political will to balance the budget, it should simply
use the power that it already has to do so. There is no
substitute for political will. And there never will be.

Our Senate oath of office has in it a promise to support and defend
the Constitution of the United States. We owe to our constituents our
best judgment on this. We owe to our children and our children's
children our best judgment.
My children will live most of their lives in the next century. I want
them to live in that century with the best Constitution democracy has
ever known. We demean the Constitution with this amendment. I yield the
floor.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. I yield 6 minutes to the distinguished Senator from
Oklahoma.
The PRESIDING OFFICER. The Chair recognizes the Senator from
Oklahoma.
Mr. NICKLES. Mr. President, I would like to thank my colleague,
Senator Hatch, for his outstanding leadership on this very important
constitutional amendment to balance the budget, as well as Senator
Craig and others who have worked very hard to put us in a position to
be able to pass this amendment.
Mr. President, I have been here now for 17 years. I cannot think of a
more important vote that I have ever cast than the vote we will be
casting today. If we cast a vote in favor of passing a constitutional
amendment to balance the budget, we will change the way we do business
in Washington, DC.
When we are sworn into office, we stand right here on the floor of
the Senate, most of us with a hand on the Bible, saying we swear to
uphold the Constitution of the United States. It will change the way we
do business. It will mean we are going to start being responsible; we
are going to quit spending more than we take in. It will not be easy.
It will be a challenge, but we can do it. Almost all States do it. It
does not mean it is easy, but they do it. And we should do it as well.
I will read something from Thomas Jefferson.

I wish it were possible to obtain a single amendment to our
Constitution. I would be willing to depend on that alone for
the reduction of administration of our Government to the
genuine principles of its Constitution; I mean an additional
article, taking from the Federal Government the power of
borrowing.

Thomas Jefferson was right. He also said:

He was exactly right.
Mr. President, there is an article where countless Presidents, almost
every President when they made a State of the Union Address, said they

[[Page S1862]]

were going to lead us toward a balanced budget, including Bill Clinton,
including Ronald Reagan, including George Bush, including almost all
Presidents. But, unfortunately, we have not done it. And I say we. It
is not just the administration. It is Congress. I think we need the
constitutional constraint to get us there.

In the last election, President Clinton and Bob Dole said, hey, we
need a balanced budget. Some people said, well, that means that it is a
done deal. That is not really the case. I heard my colleague and
friend, Senator Leahy, say, well, the last 4 years we have brought the
deficit down. The deficit has come down. What he did not say is the
deficit last year was $107 billion. What he did not say is the next 4
years it goes up. According to CBO, the deficit goes up from $107
billion to, in 1997, $116 billion, and under President Clinton's budget
to $142 billion in 1999, and $135 billion in the year 2000.
Mr. LEAHY. Would the Senator yield?
Mr. NICKLES. No; I have only a couple minutes. I will be quick.
The point is, even under the President's budget, the deficit goes up.
We have made some progress--and I think we can argue on who should take
credit for that--but we are not making progress when the deficit is
going up and it is higher in the year 2000 than it is in the year 1996.
That is not balancing the budget. That is like somebody saying they are
going to go on a diet, but first they want to gain 10 pounds for each
of the next 3 years and, oh, yes, in the last year we are going to lose
40 pounds. That is what we have before us under the President's
document.
I think we need a constitutional amendment to make the President and
to make Congress be responsible, to make the tough decisions.
I am pleased that we are going to have 55 Republicans vote for this.
I am disappointed that we do not have 12 Democrats to vote for it to
make it happen. I wish we did. I think we are going to come up with 11.
One of my jobs is to count votes. A couple of people basically are
going to vote different than what they said they were going to do. That
disappoints me. But regardless, we still have to roll up our sleeves,
and I think we still have to balance the budget. I do not know there is
the collective will to do it unless we have the constitutional
restraint to make us do it.
When an administration campaigns on a balanced budget and says, ``Oh,
yes, we brought the deficit down every year,'' and then have the
deficit go up in the next 4 years, I find a lot of shell games going on
in budgeteering. That bothers me. I hope we will be responsible. I hope
we will work together as Democrats and Republicans, not have a
Republican budget, not have a Democratic budget, but work together to
actually balance the budget and provide some tax relief. We can do it.
But it is a lot easier said than done.
I think we need a constitutional amendment to make us do it, to tell
us to do it. One of the reasons I think we continually have a deficit
is you are a lot more popular spending money for people than taking it
away from people.
Mr. President, I believe this is one of the most important issues we
will have confronting us this Congress, maybe in our lifetimes. If we
really do want to have Government act responsibly and quit saddling our
children with additional debt --right now, per capita, that debt is
over $19,000 per child, per person, per American. I do not think it is
responsible for us to continue to add more debt on future generations.
So I urge my colleagues to support a constitutional amendment to
balance the budget later this afternoon. I yield the floor.
Mr. LEAHY addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the Senator from Vermont.
Mr. LEAHY. Mr. President, I am sorry the Republican whip was unable
to yield to me for an observation, but I will make this observation. He
condemns President Clinton, who is the only President since he has been
here in the Senate who has brought the deficit down 4 years in a row.
He says it may go up in future years. I remind the Republican whip, my
good friend from Oklahoma, that the Republicans have the majority of
Senators and the Republicans have the majority of House Members. If
they do not like the budget of the President, all they have to do is
pass their own. But to this day they have not brought forward one page,
one paragraph, one sentence or one word of a budget that would do
better than what Bill Clinton has done.
Mr. NICKLES. Will the Senator yield?
Mr. LEAHY. We are now running out of time. I am going to have to do
the same thing that the Republican whip did to me in not being willing
to yield. I yield 5 minutes to the distinguished Senator from Arkansas.
Mr. BUMPERS. I thank the Senator. No. 1, Mr. President, as much
respect as I have for a number of Members of the Senate--and we have
some very bright people in the Senate--there isn't anybody here,
really, that I want tinkering with what James Madison, John Adams,
Alexander Hamilton, and all of the rest of those brilliant people, the
most important assemblage of brilliant minds under one roof in the
history of the world, did. Not only do I not want anybody tinkering
with it, I do not want to adopt something as sloppily crafted as this
amendment is.
As Senator Byrd has said time and time again, it is not even
constitution-like language. It doesn't provide for a simple majority
vote to unbalance the budget in case of depression. It doesn't provide
for a simple majority vote in case we know we are going to war, as we
did in Desert Storm. You would not have spent an extra dollar, under
this amendment, to prepare for Desert Storm. You could not spend an
extra dollar to have prepared for World War II, which everybody knew
was coming, if it unbalanced the budget.
You talk about a minority, listen to this, Mr. President. With 435
House Members, 100 Senators, if we want to unbalance the budget, it is
going to require 60 percent of both Houses. Let's assume that every
single House Member, all 435, vote aye to unbalance the budget, bring
it over to the Senate, and let us assume that 59 Senators vote aye to
unbalance the budget, 41 obstreperous Senators--494 people favoring
unbalancing the budget and 41 Senators oppose it. It will not be
unbalanced.
What else? If we can't resolve the thousands of questions that this
amendment leaves to be answered, then nobody has an answer and you go
to court. Yes, coffee shop bantering is, ``I'm so tired of the courts
making laws. I just want them to interpret the laws.'' Well, they are
going to have to make a lot of laws if we are foolish enough to adopt
this one.
In 1993, the Republicans in this body had an opportunity to do
something courageous. The people back home always say, ``Why don't you
people screw up your nerve and do something courageous?'' You know what
that means? It sometimes means unpopular votes. ``Why don't you screw
up your courage and vote for something that is worthwhile, even though
it is unpopular?'' Well, happily, 50 Democrats did just that. Al Gore,
the Vice President, broke the tie and the debt went down because of
their courage. Everybody on that side prospered because they said,
``I'm tired of taxes.'' Do you know what they are proposing now? With a
sanctimonious look on their faces, they are saying, ``We want a
balanced budget amendment.'' What else? We want to cut taxes $238
billion over the next 5 years. We tried that snake oil in 1981, and we
got a $3 trillion addition to the national debt.
What is the deficit going to be if we adopt a capital gains tax,
which costs $33 billion the first 5 years, $133 billion the second 5
years--and who does it go to? The wealthiest people in America; 67
percent of it goes to the richest 1 percent of the people in America.
How are we going to pay for it? Cut Medicare. Think of it. Cutting
Medicare $100 billion to $200 billion in order to pass a tax, 67
percent of which goes to the richest 1 percent of the people in
America. I will say one thing for the people on that side of the aisle.
They are not covert about it; they are overt. Make no mistake about it,
I have just told you precisely how it will work.
So, Mr. President, I am hoping that everybody holds fast. If we can
beat this amendment today, which I think we can do, the American people
are going to begin to hone in on it, and by this time next year, you
won't even have it brought up. It will be just like term limits. It is
going to go the same

[[Page S1863]]

way term limits went. That never was a good idea, and it is dead now.
So, Mr. President, I hope my colleagues will stand fast. I understand
the politics of this. The majority leader was willing to tinker with
this amendment. ``I will fix it. Will anybody vote for it if I change
this?'' ``Will somebody else vote for it if we change that?'' That is
how political it is.
I yield the floor.
Mr. HATCH. Mr. President, I yield 5 minutes to the distinguished
Senator from Idaho.
Mr. CRAIG. Mr. President, I thank my colleague for yielding.
Let me say to the Senator from Arkansas, if our Founding Fathers were
here today, they would suggest that Thomas Jefferson was right. They
would also have suggested that tinkering with the Constitution gave us
the 13th amendment, which abolished slavery. I know the Senator from
Arkansas would agree with me that it was a good amendment. He would
probably also agree that the 19th amendment, when Congress tinkered
with the idea that women should have a right to vote, was the right
thing to do. Tinkering, generationally, has produced 27 amendments to
our Constitution that, my guess is, the Senator from Arkansas and the
Senator from Idaho would agree were generally the right things to do at
those times in our Nation's history.
Mr. President, I rise in support today of what could become the 28th
amendment to our Constitution. Let me thank the leadership that has
worked so hard on this. Of course, there is Senator Orrin Hatch, the
chairman of the Judiciary Committee; our majority leader, Trent Lott;
majority whip, Don Nickles; the President pro tempore; certainly, the
Senator from Nevada, Senator Bryan; Senator Graham from Florida; the
Senator from Illinois, Carol Moseley-Braun. They deserve recognition
for bringing this critical issue to the floor. It is not a sunshine
amendment. I first helped introduce this in 1982. It will not go away
tomorrow. If we fail today, we will be back next year and the next and
the next, until the American people gain their wish, which is to
convince this Congress, with the power of the Constitution, that we
should become fiscally responsible.
Let me also recognize the national, grass roots coalition that was
formed under the leadership of Al Cors of the National Taxpayers Union
in support of this amendment. I ask unanimous consent that a letter
from that coalition be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The Balanced Budget

Amendment Coalition,

Alexandria, VA., February 26, 1997.
Dear Senator: The undersigned organizations strongly urge
you to vote for and support the Balanced Budget Amendment,
S.J. Res. 1. This bipartisan proposal (with over 60 total
Senate cosponsors) has already passed the Senate Judiciary
Committee on a 13 to 5 vote, and a Senate vote on S.J. Res. 1
is expected later this week.
The framers of the U.S. Constitution assumed each
generation of Americans would pay its own bills--and that the
federal budget would, over time, remain roughly in balance.
According to Thomas Jefferson, ``we should consider ourselves
unauthorized to saddle posterity with our debts, and morally
bound to pay them ourselves.''
In today's era of mass media, special interest politics,
and expensive and sophisticated election campaigns, the
checks and balances established 200 years ago are not up to
the job of controlling the federal deficit. Recent Congresses
and presidents have proven themselves incapable of acting in
the broader national interest on fiscal matters. Whenever
Congress considers spending cuts that could help balance the
budget, only a few Americans are aware of it, and fewer still
express their views about it. By contrast, those who stand to
lost from budget restraint--typically the beneficiaries and
administrators of spending programs--are well aware of what
they stand to lose. They mount intensive lobbying campaigns
to stop fiscal restraint.
This pro-spending and pro-debt bias has led to 27 straight
unbalanced budgets. It took our nation 205 years--from 1776
to 1981--to reach a $1 trillion debt. Now, just 16 years
later, the debt is $5.3 trillion. Each year, interest
payments rise as the overall debt grows. These payments have
been one of the fastest-rising items in the federal budget--
they now account for more than the entire deficit, all by
themselves. A succession of statutory remedies has failed to
stem this historic and highly dangerous turn of events.
S.J. Res. 1 is a sound amendment that has evolved through
years of work by the principal sponsors. It provides the
constitutional discipline needed to make balanced federal
budgets the norm, rather than the rare exception (once in the
past 36 years), and it offers the proper flexibility to deal
with national emergencies.
In addition to requiring a three-fifths majority vote to
deficit spend or increase the federal debt limit, S.J. Res. 1
is designed to make raising federal taxes more difficult. It
would require the approval of a majority of the whole number
of members in both the House and Senate--by roll call votes--
in order to pass any tax increase. This adds much-needed
accountability.
Unless action is taken now, higher federal spending and
debt will continue to cripple our economy and mortgage our
children's future. We urge you to support S.J. Res. 1, the
Balanced Budget Amendment.
Sincerely,
National Taxpayers Union.
American Bakers Association.
American Legislative Exchange Council.
American Subcontractors Association.
Americans for Financial Security.
Amway Corporation.
Associated Equipment Distributors.
Christian Coalition.
Council for Citizens Against Government Waste.
Family Research Council.
Food Distributors International.
Independent Bakers Association.
International Mass Retail Association.
National Association for the Self-Employed.
National Association of Manufacturers.
National Association of Wholesaler-Distributors.
National Federation of Independent Business.
National Restaurant Association.
Printing Industries of America.
Sixty Plus Association.
Textile Rental Services Association.
United Seniors Association.
U.S. Business and Industrial Council.
U.S. Federation of Small Business.
Alliance for Affordable Health Care.
American Farm Bureau Federation.
American Small Business Association.
Americans for a Balanced Budget.
Americans for Tax Reform.
Associated Builders and Contractors.
The Business Roundtable.
The Concord Coalition.
Electronic Industries Association.
Financial Executives Institute.
FMC Corporation.
International Dairy Foods Association.
Motorcycle Industry Council.
National Association of Home Builders.
National Association of Realtors.
National Cattlemen's Beef Association.
National Ready Mixed Concrete Association.
National Truck Equipment Association.
Reform Party.
Small Business Survival Committee.
Traditional Values Coalition.
United We Stand America.
U.S. Chamber of Commerce.

Mr. CRAIG. The question of whether Congress should pass a balanced
budget amendment to the Constitution is one of the few truly momentous
votes facing this country and the Congress today. The decision we face
is in a class of votes like that of a declaration of war. The vote this
afternoon will be a vote to end a war.
For more than 28 years, the national debt and the special interest
groups that feed off the taxpayers have waged a war against our economy
and, most importantly, a brutal war against the integrity of the
investment of the senior citizens and the opportunity of our children
and our Nation's future. The spoils of that war is a $5.3 trillion
debt. That debt fuels inflation and squeezes the senior community that
lives on fixed incomes. That debt already depresses wages and living
standards of the working families.
More than one-half of all personal income taxes paid--let me repeat
that, Mr. President--more than one-half of all personal income taxes
that are paid today go to pay interest on debt alone.
The costs of unbalanced budgets will be the most oppressive to our
children. A child born today will pay nearly $200,000 in additional
taxes, not to pay down the debt, but to pay interest on that debt.
Under today's trends, when a child born today is fully grown and
reaches his or her most productive years, not just the Government, but
the entire economy could well be in bankruptcy.
The nonpartisan Congressional Budget Office puts it this way: The
Federal ``debt would exceed levels the economy could reasonably
support.'' In other words, somehow, a generation from now, we could
actually see that generation having to jettison a debt under a
declaration of bankruptcy as a nation. That should not be allowed to
happen, and this Congress and this Senate this afternoon have an
opportunity to make the kind of change that is needed. We can offer to
the American people an opportunity for them to debate this issue and,
in every State's capital around

[[Page S1864]]

the Nation, reclaim their authority over their central Government, by
placing into the Constitution the restriction and the positive
guidelines that this and every Congress must balance its budget.
Some who vote ``no'' today may claim that they want a balanced
budget, or even a balanced budget amendment. They may use some other
amendment as an excuse. But it should be said, and it should be said
often, until the vote occurs this afternoon, a ``no'' vote today is a
vote for the status quo, which means a growing Federal debt and a
borrow-and-spend policy that has dominated this Government and this
Congress for well over 30 years.
No wonder our former colleague Paul Simon calls it ``fiscal child
abuse'' to continue this binge of borrow-and-spend.
This is a moral issue.
The money being borrowed and spent today belongs to our children.
They will pay the bill for years of profligate spending.
Thomas Jefferson said it well:

INTEREST IS DOMINATING OTHER PRIORITIES

When a family takes out a mortgage on a house, or a business builds
an addition to its shop, it borrows. But that family or business then
spends the next few years balancing their budgets to pay off that debt.
The Federal Government, unfortunately, does not operate like that.
Every family and every farm or small business knows what happens when
you borrow: You pay interest.
Gross interest, at $360 billion, is already the second largest item
of spending in the Federal budget, almost exactly equal to the largest
program--Social Security.
And what do we get for those interest payments? Nothing--except
another year older and deeper in debt.
Not one more school, not one more meal for a hungry child, and no
relief for overtaxed, overworked, families of modest and middle-class
means.
Interest payments act like a giant sponge, soaking up money that we
all want to go to other priorities.
They have already forced cuts in many Federal programs. They will
continue to crowd out other public priorities, including, eventually,
Social Security and Medicare.
In 1996, we sent $67.7 billion overseas in interest payments to
foreign bondholders, because of the debt.
How can any Senator stand on this floor, say we should use our wealth
at home to solve our problems, and then vote against this balanced
budget amendment?
By default, it is the national debt--not Congress--that more and more
decides how we spend the taxpayers dollars.

THE BBA IS THE ANSWER TO THE THREAT

The debt is the threat--to our children, our parents, and the way of
life we cherish in this country.
The U.S. Senate has a chance today to begin putting an end to that
threat--by passing the balanced budget amendment to the Constitution.
Balancing the budget means real benefits to real people.
If we balance the budget by the year 2002 and keep it balanced, that
will create 2.5 million new jobs. It will save the typical family
$1,500 a year in interest costs on mortgages, student loans, and car
loans. It will raise wages and incomes for working Americans and their
families.
Yes, the President has promised a balanced budget. Yes, Congress has
tried to pass a balanced budget.
But we have had standing on the Senate floor during this debate an 8-
foot-tall stack of books.
This is the leaning tower of budgets--the last 28 budgets submitted
by President Clinton and his predecessors.
In half of those budgets, the President who submitted them promised
balanced budgets. Between them, those Presidents and past Congresses
broke every promise.
Yes, deficits have declined. Congress has made some progress in
controlling the year-to-year growth of spending. But deficits are
already projected to go back up and--in a few years--off the charts.
Maybe the President and this Congress can bind a future President and a
future Congress to finish balancing the budget in 2002. Maybe. But
then, what about 2003? And 2004?

Only one thing will impose a rule that Presidents can't ignore with
impunity, that Congresses can't repeal or delay; only one thing will
make Presidents and Congresses keep their promises; only one thing will
make fiscal responsibility and tough choices the norm instead of the
exception; the bridge to the 21st century may be paved with good
intentions, but it will be a rickety, dangerous bridge unless it is
constructed with the steel of the balanced budget amendment.

WILL THE SENATE SAY ``YES'' OR ``NO'' TO THE PEOPLE?

Unfortunately, this President--and a host of special interest groups
comfortably feeding at the public trough--have put incredible pressure
on the Senate to defeat this amendment. They want to say ``no'' to the
people. But the people say, by a 70-to-30 percent margin in the latest
poll, that they want us to pass the amendment; they want to say ``no''
to the people, who deserve the right to examine, debate, and decide on
this amendment through their State legislatures.
Congressional passage would only be the start. The people deserve the
final word on what goes in their Constitution. After passing Congress,
the amendment would go to all 50 State legislatures for ratification.
And that would begin one of the greatest public debates, one of the
greatest civics lessons, in the history of our Nation.

FINAL PASSAGE IS THE VOTE THAT COUNTS

Some who vote ``no'' today may try to claim they want a balanced
budget, or even a balanced budget amendment. They may use some other
amendment as an excuse. But a ``no'' vote today is a vote for the
status quo of borrow-and-spend. A ``no'' vote today is a vote in favor
of the $3 trillion scheduled to be added to the debt over the next 10
years. How will another $3 trillion in debt help seniors on Social
Security? No matter what you think is the best way to save Social
Security, passing this balanced budget amendment is the certain way to
save it.
Opponents have not made a case against this amendment--they have only
shown they are afraid of balancing the budget. That's what it means
when they say, ``If we can't run deficits, we may not be able to spend
on this or that.'' Take so-called capital budgeting, for example: If we
exempt narrowest category of investment spending in the President's
budget, major physical capital, we could have run a larger deficit last
year than we did. These pleas to exempt this or that item are not sound
budgeting; they are a plea to continue the status quo.
It defies common sense: Opponents believe Congress will only do the
right thing if we are allowed infinite borrowing and unlimited
spending.
But we who support the amendment believe Congress will begin to do
the right thing if it is required to live within its means and set
priorities.
Our balanced budget amendment is a bipartisan amendment, written with
painstaking care over several years by Democrats and Republicans,
liberals and conservatives. It is the bipartisan, bicameral, consensus
amendment. If we do not pass it today, we will be back until we do.
Why are we working so hard to pass it? Because we want economic
security for our senior citizens. We want to preserve the American
dream of growth and opportunity. We want a better world for our
children.
The balanced budget amendment deserves to pass the Congress, and go
to the people for their final, wise judgment.
Mr. President, I ask unanimous consent that I may have printed in the
Record several fact sheets that my office, working with others, have
prepared during this debate.
There being no objection, the material was ordered to be printed in
the Record, as follows:

CLUBB

Congressional Leaders United for a Balanced Budget

Top Ten Reasons to Support the Balanced Budget Amendment to the
Constitution (H.J.Res. 1/S.J.Res. 1)

No. 1 Kids: The future for our children depends on the
future of the economy. Their standard of living could be 7 to
36 percent better by the year 2020, if we balance the

[[Page S1865]]

budget and keep it balanced.\1\ In contrast, under current
trends, in less than two generations, the size of the Federal
debt is ``not computable . . . [because the] debt would
exceed levels that the economy could reasonably support''.\2\
In other words, the debt would bankrupt, not only the
government, but the entire economy.
---------------------------------------------------------------------------
* Footnotes at end of article.
---------------------------------------------------------------------------
No. 2 Seniors: The debt is the threat to Social Security--
and to Medicare and other priorities. Gross interest payments
are already the second-largest single item of federal
spending ($344 billion in FY 1996), nipping at the heels of
Social Security, the largest ($347 billion).\3\ An ever-
growing debt makes it less and less likely that the
government will have the cash it needs to meet future
obligations and priorities.
No. 3 Interest Savings to Families. A typical family could
save $1,500 or more every year because balanced budgets would
reduce interest costs--$1,230 on a $50,000 mortgage, $216 on
a student loan, $180 on a typical auto loan.\4\
No. 4 Jobs and Economic Growth: Balancing the federal
budget can create 2.5 million new jobs and boost
nonresidential investment by 4 to 5 percent.\5\
No. 5 Lower Taxes: According to analysis cited by both the
Congressional Budget Office and the President's Office of
Management and Budget, failing to change current trends in
government debt could leave future generations with a
lifetime net tax rate of up to 84 percent, counting taxes at
all levels of government.\6\ A child born today faces nearly
$200,000 in additional taxes just to pay the interest on the
federal debt.\7\
No. 6 The People: Public opinion surveys consistently show
70-80 percent of the American people support passing a
Balanced Budget Amendment to the Constitution.
No. 7 Keeping Our Wealth at Home: Interest on the federal
debt is largely a transfer from middle-income taxpayers to
large institutions, wealthy individuals and foreign
investors. In FY 1996, the U.S. Government sent $67.7 billion
overseas in interest payments on Treasury securities held by
foreign investors. This transfer amounts to 27.4 percent of
all net interest--a steadily growing percentage; it was five
times the amount of total spending on all programs in the
``International Affairs'' budget function \8\ and is the
largest ``foreign aid program'' in history.
No. 8 More Resources for Congress to Do the Will of the
People: Moving toward a balanced budget during FY 1998-2002
should reduce federal debt service costs over that period by
$36 billion and improve economic performance enough to
produce a ``fiscal dividend'' of another $77 billion in
revenues and interest rate savings--all of which would become
newly-available for priorities within a balanced budget.
Committing to a balanced budget helps pay for itself.\9\
No. 9 Reasonable Glide Path: Achieving balance requires
discipline, but not draconian measures. Under the BBA,
overall federal spending can continue to increase by more
than 2.6 percent a year through FY 2002 (compared with more
than 4.6 percent under current projections). To maintain
balance after 2002, spending could continue to grow at more
than 4.6 percent a year.\10\
No. 10 Letting the Constitution Work and the People Decide:
A vote for the BBA in Congress is a vote to let the People
and their state legislatures exercise their constitutional
right to make the ultimate decision on this issue. Three-
fourths (38) of the states would have to ratify any amendment
to add it to the Constitution. Sending the BBA to the states
would begin a great debate--from state capitols to coffee
shops--on the appropriate size and role of government.

NOTES:

\1\ General Accounting Office, Prompt Action Necessary to
Avert Long-Term Damage to the Economy, June 1992. (More
recent developments still would keep projections reasonably
within this range.)
\2\ Congressional Budget Office, The Economic and Budget
Outlook: Fiscal Years 1997-2006, May 1996.
\3\ Congressional Budget Office, The Economic and Budget
Outlook: Fiscal Years 1998-2007, January 1997.
\4\ Committee on the Budget, U.S. House of Representatives,
based on a DRI-McGraw Hill study which assumed a 2% drop in
interest rates resulting from balancing the budget.
\5\ DRI-McGraw Hill, January 1995. Projections covered the
years 1995-2002.
\6\ Congressional Budget Office, May 1996 (up to 84%). Also,
Budget of the United States, Analytical Perspectives, FY 1995
(up to 82%).
\7\ House Budget Committee.
\8\ Budget of the United States, Analytical Perspectives, FY
1998.
\9\ Congressional Budget Office, January 1997.
\10\ Congressional Budget Office, January 1997.
____

The Balanced Budget Amendment--Safeguarding Social Security

The BBA Will Protect This and Other Programs Vital to our Seniors

Passage of the Balanced Budget Amendment to the
Constitution (H.J. Res. 1/S.J. Res. 1) is critically needed
to ensure that the federal government will continue to have
the means to honor our obligations to our senior citizens.
The best guarantee of the economic security of our seniors,
today and in the future, would be the ironclad commitment of
the Constitution to restore and maintain fiscal
responsibility.
Balancing the budget and keeping it balanced means less
debt, lower interest costs, rising living standards--and more
money made available for seniors' priorities. If today's debt
had been paid off in years past, the government would have
run a $134 billion surplus last year.
Escalating interest payments crowd out ALL other
priorities.
In 1976, 7.2 percent of the federal budget went to make
interest payments on the federal debt. In 1996, net interest
consumed 15.5 percent of the budget. As a result, other
programs have already felt the budget knife. Social Security
and Medicare are the first and third largest federal
programs; these two programs alone made up more than 33
percent of last year's spending. All seniors and retirement
programs make up about 40 percent of the budget, not counting
seniors' participation in non-seniors programs.
We are all familiar with what happens to households and
businesses that run up too much debt--the burden of interest
payments on the debt becomes so great that they eventually
have to go without necessities or face total bankruptcy.
Unbalanced federal budgets mean growing interest payments
(which are mandatory, to prevent default) that will
increasingly crowd out all other public priorities--including
those vitally important to seniors.
The debt is the threat to Social Security. Decades of
borrow-and-spend government have produced a $5.3 trillion
gross federal debt. About $600 billion of that is owed to the
Social Security trust funds. (The law creating Social
Security requires that any accumulated surpluses be invested
in U.S. Treasury securities (i.e., loaned to the ``general
fund'').) Under current trends, the total debt will double
over the next dozen years and seniors will wonder--rightly--
about the Treasury's ability to repay those debts. In the
long run, a bankrupt federal government will not be able to
send out ANY checks--to Social Security beneficiaries or any
other debtor.
Balanced Budget Prosperity is a Senior's Best Friend.
Past promises regarding Social Security have been fulfilled
because of a growing economy, enabling workers to pay into
the system. Higher wages mean greater retirement benefits.
Unfortunately, seniors are already paying for today's debt
burden. A Federal Reserve Bank of New York study found that
the federal debt accumulated in the 1980s already pinched our
standard of living by 5 percent. The Concord Coalition
estimates that the debt has taken $15,000 off the typical
family's income. Continued deficit spending weakens the
economy, deteriorates living standards for younger workers
and seniors, and fuels resistance to the taxes that fund the
growing requirements of Social Security and other seniors'
programs.
The BBA would ensure TIMELY action to protect Social
Security in the future.
The Social Security Trustees predict that benefits will
exceed Social Security tax revenues by the year 2012--based
on optimistic assumptions. Passing the BBA now promises to
stem the tide of red ink spent on all other programs, in time
to prevent a double-whammy when Social Security's financing
needs escalate in a few years because of the retirement of
baby boomers.

Quotable:

``[T]he most serious threat to Social Security is the
federal government's fiscal irresponsibility. If we continue
to run federal deficits year after year, and if interest
payments continue to rise at an alarming rate, . . . [e]ither
we will raid the trust funds to pay for our current
profligacy, or we will print money, dishonestly inflating our
way out of indebtedness. Both cases would devastate the real
value of the Social Security trust funds.
``Regaining control of our fiscal affairs is the most
important step that we can take to protect the soundness of
the Social Security trust funds. I urge the Congress to make
that goal a reality--and to pass the Balanced Budget
Amendment without delay.''--Robert J. Myers, former Chief
Actuary and Deputy Commissioner for the Social Security
Administration, former Executive Director of the National
Commission on Social Security Reform

``Dorcas Hardy, the former commissioner of Social Security,
emphasized this point in her book, Social Insecurity. Her
number one recommendation for protecting the Social Security
Trust Fund: Balance the federal budget.
``The fact that I have spent my legislative career fighting
for seniors, for health care, and for other needed social
programs would, I hope, at least cause some to pause in their
passionate rhetoric to listen, and examine. . . . Only with
this Amendment can we be confident that all of us will have a
secure economic future.''--Former U.S. Senator Paul Simon (D-
Illinois).
____

A Capital Spending Exemption--Not a Capital Idea for the Constitution

A special exemption for ``capital'' or ``investment''
spending does not belong in the Balanced Budget Amendment to
the Constitution. A constitution deals with the most
fundamental responsibilities of the government and the
broadest, timeless principles of governance. It should not
set budget priorities or contain narrow policy decisions such
as defining a capital budget.
Whatever the merits are of making such spending a higher or
lower priority than it has been, this question is best
addressed in the annual budget process.
The debt is the threat to capital investment. Escalating
interest payments on the huge federal debt are crowding out
all other priorities. According to the National Entitlement
Commission's 1995 report: ``By 2012, unless appropriate
policy changes are made in

[[Page S1866]]

the interim, projected outlays for entitlements and interest
on the national debt will consume all tax revenues collected
by the federal government.'' That means no money left for
capital investment--or defense, education, the environment,
law enforcement, science, or other domestic discretionary
programs.
If states, businesses, and families can borrow, why
shouldn't the federal government? Everyone else repays the
principal they have borrowed. Families take out a mortgage
and then spend years paying it down. The same is true of
capital investments by businesses and state and local
governments. But the federal government just keeps borrowing
more. And more.
Unlike state budgets or family finances, the federal budget
is large enough to accommodate virtually all capital
expenditures on a regular, ongoing basis. The justification
that most businesses and state and local governments have for
capital budgeting is that they occasionally need to make one-
time, extraordinary expenditures that are amortized over a
long period of time.
The federal budget is so huge--now more than $1.6
trillion--that almost no conceivable, one-shot project would
make even a small dent in it.
Even the federal Interstate Highway System, which has been
called the largest peacetime undertaking in all of human
history, was financed on a pay-as-you-go basis. President
Eisenhower initially proposed that the Interstate System be
financed through borrowing by selling special bonds. However,
Congress kept it on-budget and financed it through a gas tax
at the urging of then-Senator Albert Gore, Sr.
There are protections against the abuse of capital budgets
in state budgeting that do not constrain federal borrowing.
State and local governments have a check on their use of
capital budgets through bond ratings. If a state government
were to abuse its capital budget, then its bond rating would
drop and it would become difficult or impossible to continue
borrowing to finance additional expenditures. In addition,
many states require that bond issues be approved by the
voters.
While state capital spending is often placed off-budget, so
are state trust fund surpluses. According to a Price-
Waterhouse study, in recent years, state budgets would have
been roughly in balance if both capital expenditures and
trust funds (such as retirement funds) were included on-
budget.
The process of defining ``capital spending'' could be
abused. Even a category of ``capital'' or ``investment''
spending that appeared to be tightly defined at first could
become a tempting loophole to future Congresses and
Presidents. For example, New York City, prior to its
financial crisis in the 1970s, amortized spending for school
textbooks by declaring their ``useful life'' to be 30 years.
Virtually any form of ``capital spending'' exemption would
perpetuate the crisis of deficit spending. Even an exemption
from the Balanced Budget Amendment for a narrow category in
the President's budget, major public physical capital
investment, would have allowed a deficit larger than the one
that actually occurred in FY 1996 ($116 billion vs. $107
billion). It would result in an FY 1997 deficit that would
be, at most, 9 percent lower than current CBO projections
($113 billion vs. $124 billion). Allowing deficit spending
for total federal investment outlays would have allowed
deficits larger than those that actually occurred in 28 of
the last 35 years. These estimates, of course, assume no
manipulation of definitions or accounting that would allow
still larger deficits.
The concept of a ``capital budget'' is too poorly defined
to put in the Constitution. Estimates of ``capital spending''
could vary widely. There is wide disagreement among
policymakers about what should be included in a federal
capital budget. There is no commonly accepted federal budget
concept of this term. Therefore, any capital spending
exemption included in the Constitution would be left open to
a wide range of interpretations. In fact, the President's
budget includes several different categories of ``capital''
and ``investment'' spending. For fiscal years 1996 and 1997,
these include:

[In billions of dollars]
------------------------------------------------------------------------
Fiscal year--
---------------
1996 1997
------------------------------------------------------------------------
Major physical capital investment....................... 115.9 113.0
Net miscellaneous physical investment................... 3.1 3.1
Research and development................................ 68.4 70.3
Education and training.................................. 43.6 42.5
---------------
Total federal investment outlays.................... 230.9 228.9
------------------------------------------------------------------------

The Balanced Budget Amendment already allows for the
establishment of a capital budget--within the context of
regularly balanced budgets. The amendment does not prevent
the creation of separate operating and capital accounts. But
extraordinary expenditures which are large enough and unusual
enough to require significant new borrowing should be subject
to a higher threshold of approval, such as a three-fifth
majority vote. This is consistent with the recommendations of
General Accounting Office, which stated in its 1992 report,
Prompt Action Necessary to Avert Long-Term Damage to the
Economy:
. . . [t]he creation of explicit categories for government
capital and investment expenditures should not be viewed as a
license to run deficits to finance those categories . . . .
The choice between spending for investment and spending for
consumption should be seen as setting priorities within an
overall fiscal constraint, not as a reason for relaxing that
constraint and permitting a larger deficit.''

Mr. CRAIG. Mr. President, again, I thank my colleague from Utah for
the tremendous leadership he has displayed.
I yield the floor.
(Mr. Kyl assumed the chair.)
Mr. LEAHY. Mr. President, I yield 10 minutes to the distinguished
senior Senator from Massachusetts.
Mr. KENNEDY. Mr. President, there is a right way and a wrong way to
balance the budget. And a constitutional amendment is the wrong way.
The choice is not whether to balance the Federal budget, but how to
do it. I believe we will adopt a budget this year that is balanced by
the year 2002. President Clinton has already submitted a budget to
accomplish this goal. Democrats and Republicans alike in Congress are
prepared to work together to enact a balanced budget.
We can balance the budget by statute, while setting appropriate
spending priorities for the future. We can protect Social Security for
senior citizens. We can give priority to education and assure that
funds for schools will not be cut in the middle of the year. We can
deal with vital issues of national defense. We can deal with the need
for capital investments in highways, public transportation, and the
environment.
Balancing the budget the right way is of special concern to the
people of Massachusetts. A new study by the Twentieth Century Fund
concludes that enactment of the balanced budget constitutional
amendment would have dire consequences for the State of Massachusetts
and its residents. The study finds that Massachusetts health and human
services programs and educational programs receive more than three-
quarters of their funds from the Federal Government. Three hundred
thousand Massachusetts residents are employed in my State's health care
sector alone.
This includes the work and the investment that the United States has
in terms of the National Institutes of Health, since the nature of
quality research really is unsurpassed in our part of the country. That
whole effort would be threatened, as would many other areas of research
and technology which help to move our whole economy, our national
security defense, and the quality of health care forward.
That is 10.5 percent of our work force. Balancing the budget the
wrong way by failing to give priority to these key programs would place
at risk hundreds of thousands of Massachusetts residents and tens of
thousands of jobs.
Republicans had the opportunity to address all of these concerns
during the Senate's debate on the balanced budget constitutional
amendment. But they refused to do so.
When the Judiciary Committee considered the proposed constitutional
amendment in January, I offered an amendment to protect Social
Security. My amendment separated Social Security from the rest of the
Federal budget, just as Congress has done by law for most of the past
15 years. Senator Reid offered the same amendment here on the Senate
floor last week. But the Republican majority opposed this important
protection for the Nation's senior citizens.
Senator Torricelli offered an amendment to permit a capital budget,
just as most States and most families do, as a way of investing for the
long run. Yet Republicans opposed this provision that is so important
to the future of the economy.
If families were subjected to this rigid constitutional amendment,
they could never make long-term purchases. They couldn't buy a home
through a mortgage, borrow money to send their children to college, or
buy a new car on credit.
This amendment flunks the kitchen table test. Families don't balance
their budgets this way. Why should Uncle Sam?
Senator Durbin offered an amendment to allow greater spending
flexibility during recessions to protect jobs and assist laid off
workers. More than 1,000 of the Nation's leading economists, including
11 Nobel Prize winners, warned that the constitutional amendment
proposed by the Republicans would put a straightjacket on the economy
that would make recessions worse. But Republicans ignored

[[Page S1867]]

the economic evidence and opposed our pro-family, pro-worker amendment.
The proposed constitutional amendment would also empower unelected
judges to stop payments on Social Security checks or Medicare, or cut
the defense budget. It would have allowed the President to impound
funds appropriated by Congress, even though impoundment was outlawed in
1974. But Republicans opposed our amendment to eliminate this problem.
All our efforts to change the proposed constitutional amendment--to
protect senior citizens, protect the national defense, protect workers
in recessions--were summarily rejected by supporters of the
constitutional amendment.
In my view, the most serious defect in the proposed constitutional
amendment is its threat to Social Security.
Social Security is a contract with the Nation's senior citizens to
guarantee at least a minimum level of security in their retirement
years.
In recognition of its special status, the Greenspan Commission
recommended in 1983 that Congress should place Social Security outside
the Federal budget. The Commission said we need to build up a
sufficient surplus in the trust funds now, in order to have enough
funds to provide benefits to the current generation when they begin to
retire.
Both Democrats and Republicans supported that result. In 1983, the
Commission's recommendations were enacted in a law sponsored by Senator
Dole and Senator Moynihan. Their bill required Social Security to be
placed off-budget within 10 years. A bipartisan 58 to 14 vote,
including 32 Republicans and 26 Democrats approved this important
legislation.
In 1985, Congress accelerated the process of placing Social Security
outside the rest of the Federal budget. The Deficit Control Act of
1985--the so-called Gramm-Rudman-Hollings law--exempted Social Security
from across-the-board cuts or sequestration.
That said, if they were not going to meet the budget titles, we were
going to eliminate the cuts in Social Security from being sequestered
like other programs would be. The reason for that is, unlike other
kinds of spending programs, people have paid in over their working
lives into this fund and should be entitled to receive it at the time
of their retirement. That is different from all of the other kinds of
programs. It was recognized by the Greenspan commission for that very
reason--the contract with the American people, the contract with our
senior citizens--that they had paid in, and we should not undermine
their sacred trust into which they paid in; unique in terms of all of
the Federal budget; recognized in a bipartisan way by the Greenspan
Commission; recognized in the Gramm-Rudman proposal to be excluded and
not be subject to sequestration; recognized again in 1990 during the
budget debate.
When there was any question about it, a vote of 98 to 2 said they
will put Social Security outside of the consideration. There was a
bipartisan commitment to do so. And, nonetheless, at the time we had
the markup in the Judiciary Committee--and here on the Senate floor--
those individuals that talk about Social Security state that Social
Security recipients will have to fight it out with the rest of the
inclusions in the budget.
That is not what this Congress said and the American people wanted--
over 15 years, and a bipartisan effort. But that is what has been
excluded. And the answer that our friends give to that question is,
``Oh, well, Social Security recipients will be further threatened if we
have a demise or a threat to our economy.''
Mr. President, we can deal with the economy of the United States,
which is the strongest in the world. We should not be using the Social
Security trust fund as a piggy bank either for tax cuts, as was
threatened in the course of last year, or other kinds of cuts. We had
the opportunity to support the Reid amendment, and that was rejected
and turned down.
The Gramm-Rudman-Hollings law also said that Social Security could no
longer be included in the unified budget of the U.S. Government.
From that point on, when Congress has adopted the annual Federal
budget resolutions, Social Security is not included. The last time the
Congress of the United States voted on a budget that included Social
Security was 1985.
Congress supported this change by wide bipartisan majorities. The
Gramm-Rudman-Hollings law was approved by a 61 to 31 vote in the Senate
and a 271 to 154 vote in the House of Representatives.
In 1990, some Members of Congress proposed to put Social Security
back into the Federal budget. But Senator Hollings and Senator Heinz
rejected this unwise suggestion. They insisted that Social Security
remain off budget, and the Senate approved an amendment to protect
Social Security by a 98 to 2 vote.
Again in 1995, section 22 of the congressional budget resolution
amended the Budget Act to strengthen even further the firewall
protecting the Social Security Program.
The proposed balanced budget constitutional amendment would change
all that. It would reverse 15 years of steady progress in protecting
Social Security. It would turn its back on all this recent history, and
expose Social Security to unwise and unacceptable cuts in the years
ahead
Employees may have worked hard all their lives. Social Security has
been withheld from their paychecks month after month. They are
expecting the money to be available when they retire. But this
constitutional amendment places the entire program at risk.
This constitutional amendment is a back-door raid on Social Security,
and all of us who have worked hard to protect Social Security in recent
years should reject it.
Another serious defect in the proposed constitutional amendment is
its enforcement.
Thirteen of our Nation's most distinguished constitutional scholars
wrote to me only yesterday expressing their deep concern about the
proposed balanced budget constitutional amendment. The scholars include
Harvard professor, Archibald Cox; former Attorney General, Nicholas
Katzenbach; Yale professor, Burke Marshall; Stanford professor,
Kathleen Sullivan; Harvard professor, Larry Tribe; and others. They
stated:

Whatever our differences about budget policy, we share the
conviction that enacting the proposed balanced budget
amendment would be a serious mistake. We believe that the
amendment would depart unwisely and unnecessarily from our
constitutional scheme.

These eminent constitutional experts further concluded that it
``would transfer power over government spending from the Congress,
where the Framers deliberately reposed it, to the President and the
courts.''
What happens when we find in the middle of the year that revenues are
lower or expenses are higher than we thought and the budget for that
year will be unbalanced?
This constitutional amendment allows unelected judges to step in and
draw up a Federal budget of their own.
That was an issue that was debated in the last two Congresses. It was
the decision and the determination in the last two Congresses when we
debated this to limit the authority of the judges under the old
Danforth amendment to permit courts only to make declaratory judgments.
Do you think that has been included in this balanced budget amendment?
Absolutely not.
We saw in the last Congress the amendment that was prepared by
Senator Nunn and others which was virtually unanimously accepted to
also exclude and limit further the power of the courts. Was that
included? No. And all we can conclude is what was testified during the
course of the Judiciary Committee hearings, and that is that the
opportunity for the courts to interject themselves in making these
budgetary decisions will be available to them unless we pass other
kinds of laws, and the other laws that we might pass may very well be
unconstitutional. Why leave that up in the air? These were attempts to
address that issue, and they were rejected.
Judges are appointed to interpret the Constitution and the laws. They
are respected legal experts. But they do not know what priority to give
to Social Security or education, or defense, or the public health. They
don't know whether it is better in a particular year to reduce highway
funding or medical research. Congress is elected to set those
priorities and make those changes, and we should not surrender

[[Page S1868]]

that power to the judicial branch of government.
Proponents of the amendment say that they oppose judicial activism.
Yet this proposed constitutional amendment would be an invitation to
judicial activism of the worst sort.
President Clinton wrote to Senator Daschle on January 28, reaffirming
his commitment to balance the Federal budget by the year 2002. The
President also emphasized his view that a constitutional amendment was
unacceptable. he stated,

We should not lock into the Constitution a form of
budgeting that simply may not be appropriate at another time.
. . . We must give future generations the freedom to
formulate the federal budget in ways they deem most
appropriate.

I urge the Senate to defeat this proposal. We are very close to
balancing the budget the right way. It makes no sense to do it the
wrong way, by locking the country into a constitutional straightjacket.
I ask unanimous consent that a letter addressed to me dated March 3,
1997 be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

March 3, 1997.
Dear Senator Kennedy: The undersigned join in urging
Congress to reject the proposed Balanced Budget Amendment.
Whatever our disagreements about budget policy, we share the
conviction that enacting the proposed Balanced Budget
Amendment would be a serious mistake. We believe that the
Amendment would depart unwisely and unnecessarily from our
constitutional scheme in the following ways:
It would transfer power over government spending from the
Congress, where the Framers deliberately reposed it, to the
President and the courts. Under the Amendment as drafted, the
President could assert the power or the obligation to impound
funds that Congress had authorized and appropriated. And
under the Amendment as drafted, the courts could be drawn
into extensive litigation over fiscal forecasts and policy
for which they are surely ill-equipped.
It would substitute minority rule for majority rule in
fiscal legislation, by way of the proposed three-fifths
voting requirements for deficit spending or increased
borrowing. As James Madison warned in The Federalist No. 58,
such supermajority requirements would allow a few to extract
``unreasonable indulgences'' from the many.
It would invite Congress to shift the burden of national
policy objectives ``off-budget'' either to the States or to
the private sector through unfunded mandates or regulatory
burdens.
It would deprive Congress and the President of needed
flexibility to deal with economic circumstances that are
likely to change over time.
It would enact controversial socioeconomic policy into our
fundamental charter, which has maintained its authority since
the Founding by standing outside and above politics. The only
amendment to enact such a controversial policy in the past
was a failure: the 18th Amendment imposed Prohibition and the
21st repealed it.
It would use the Constitution needlessly to promote
objectives that are already fully capable of being achieved
through ordinary legislation. To the extent it proved
unenforceable, it would undermine respect for other
constitutional guarantees.
Sincerely,
Boris I. Bittker, Professor Emeritus, Yale Law School;
Archibald Cox, Professor Emeritus, Harvard Law School;
Lawrence M. Friedman, Professor, Stanford Law School;
Gerald Gunther, Professor Emeritus, Stanford Law School;
Louis Henkin, Professor Emeritus, Columbia Law School;
Nicholas Katzenbach, former Attorney General of the
United States;
Burke Marshall, Professor Emeritus, Yale Law School;
Norman Redlich, Dean Emeritus, New York University Law
School;
Peter M. Shane, Dean, University of Pittsburgh School of
Law;
Geoffrey R. Stone, Provost, University of Chicago;
Kathleen M. Sullivan, Professor, Stanford Law School;
Laurence H. Tribe, Professor, Harvard Law School;
Harry Wellington, Dean, New York Law School.
(Institutional affiliations are listed for identification
purposes only.)

Mrs. MURRAY. Mr. President, I rise today to the pending
constitutional amendment. The authors of the amendment have called it
the balanced budget amendment. However, our vote today is not about
balancing the budget, but rather about jeopardizing the future economic
stability of the United States and eliminating the carefully crafted
constitutional balance of powers. The amendment simply requires the
President to submit a balanced budget; it does not mandate that
Congress enact a balanced budget and it establishes no guidelines on
enacting a balanced budget. This is not only the most dangerous budget
gimmick put before this body, but it sets a dangerous precedent for
addressing important issues facing us today and in the future.
What the supporters of this amendment fail to point out is that we do
not need to amend the U.S. Constitution to balance the budget. The
President recently submitted to Congress a budget plan that does
balance by the year 2002 and still protects our most vulnerable
citizens; children, the disabled, and senior citizens. The President's
proposal also continues our investment in education, environmental
protection, biomedical research, and criminal justice. Instead of
working on this proposal and enacting a budget for fiscal year 1998, we
have spent almost a month debating an empty promise. Congress has a
statutory requirement to pass a budget resolution by April 15, yet
neither body has begun this process. We have spent valuable time
debating an amendment that will not get us any closer to a balanced
budget. I support a balanced budget; I have supported a balanced
budget. What I cannot support is the misuse of the Constitution. The
Constitution should only be used to expand rights and protections for
citizens excluded from the original document. Our Constitution should
not be used to limit the rights of our citizens or the obligations of
the Federal Government.
When I first came to Congress in 1993, the deficit was close to $300
billion. I made a decision to try and secure a position on the Senate
Budget Committee because I realized the most important thing I could do
for the families in Washington State was to reduce the deficit. I
worked with my colleagues in 1993 and passed a successful deficit
reduction package. The deficit reduction proposal enacted in 1993,
without one Republican vote, has cut the deficit in half. For 4
straight years in a row the deficit has declined. We reversed the
trends of the 1980's and restored fiscal restraint to the Federal
budget process. Enacting this landmark deficit reduction package,
required tough and difficult choices. But, that is why my constituents
sent me to the U.S. Senate. I am willing to make those difficult
choices as long as they are fair and balanced. A constitutional
amendment to balance the budget does not force us to make those tough
choices. Keep in mind that this amendment does not go into effect until
the States adopt it. The States will have 7 years to ratify. Seven
years is a long time when you are trying to balance the budget. I
supported a revision to the amendment that would have shortened from 7
to 3 years that time allowed for the States to ratify. Unfortunately,
this change was rejected. We should not wait even 3 years; we should
start now.
There is no one in this Chamber who will deny that our Constitution
has served us well. It established the longest continuous democratic
government in the world. This document and the Bill of Rights are the
envy of the world. Within this document our Founding Fathers
spelled out the role of each branch of government. The responsibilities
of the legislative, judicial, and executive branches were all clearly
spelled out and a system of checks and balances was added so as to
ensure that no one branch unduly influenced the other. One of the most
important responsibilities entrusted to the legislative branch was the
power to tax and spend. Our Founding Fathers felt very strongly that
elected representatives of the people must be responsible for deciding
on spending and taxes. As a member of both the Senate Budget Committee
and Appropriations Committee, I do not take this responsibility
lightly. But, a vote in support of this amendment will forever alter
the role of Congress and the courts in deciding on spending priorities
for the Federal Government. For the first time in history, the courts
could decide how we spend tax dollars and how we raise tax dollars. A
group of nine unelected officials could establish budget policy that
conflicts with the wishes of the people solely because they believe
that receipts will not cover outlays. Every time the Federal Government
wishes to spend for Social Security or for a natural disaster, the
courts could simply

[[Page S1869]]

say that this obligation would push spending beyond receipts.

One need only look at the current difference between the
Congressional Budget Office and the Office of Management and Budget.
OMB has estimated that the President's budget gets to balance by the
year 2002. However, CBO disputes the estimates on revenues and economic
growth used by OMB. Who decides? The courts? Who decides what will be
cut or what taxes raised to bring the budget into balance if Congress
and the White House fail to agree? Judicial oversight of the Federal
budget process violates the clear role of Congress and puts greater
powers into the hands of unelected, life-time appointed Justices on the
Supreme Court.
In an effort to clarify any questions about the role of the courts,
Senator Kennedy offered an amendment that would prohibit judicial
control of the budget process. This amendment was defeated and rejected
by the supporters of the constitutional amendment who claimed it was
not necessary. Yet many legal and constitutional scholars have made it
clear that the way the current amendment is written will allow for
court challenges to Federal budget policy and decisions.
In 1983, Congress enacted several measures aimed at protecting the
long term financial stability of the Social Security trust fund. The
intent of these measures was to build a large surplus and reserve in
the trust fund that could be drawn down when the baby boomers started
to retire. The 1983 legislation included tax increases, benefit
reductions, and other structural reforms, all with the goal of
protecting the system. Those who supported the 1983 legislation did so
to protect the greater good, namely Social Security benefits for
millions of current and future retirees. As a result, it is estimated
that Social Security will not need to draw on these reserves until the
year 2019. But, at that point, total spending will outpace receipts
into the system. Under the current language in the amendment, we could
not pay benefits using the surplus that we have intentionally allowed
to accumulate. Regardless of any effort to maintain a surplus over the
years, benefits would be in jeopardy, unless we raise payroll taxes or
drastically cut spending in other areas, like Medicare, Medicaid, or
education.
This is not just my opinion. Recently a report from the nonpartisan
American Law Division of the Congressional Research Service determined
that we would be prohibited from drawing down the surplus in the trust
fund in order to pay benefits unless there was a surplus in the
remaining portion of the budget. Maintaining a large enough surplus in
the remaining portion of the Federal budget would require significant
reductions in many other important programs like Medicare, defense,
education, environmental protection, and law enforcement. Passage of
this amendment violates the current contract with today's workers that
if you pay into the system now, Social Security will be there when you
retire. There were several attempts to correct this flaw and exclude
Social Security from the balanced budget amendment, but all attempts
failed as the supporters of the amendment claimed that we did not need
to protect Social Security.
I have heard that voting for this amendment is the courageous vote.
Nothing could be further from the truth. The courageous vote is the
vote in support of a plan that actually reduces the deficit and puts us
on a real path to balancing the budget by the year 2002. Today's vote
is about political rhetoric, not reality. I hope that the political
rhetoric is over and that we can begin the real task of balancing the
budget.
Mr. DODD. Mr. President, I wanted to take this opportunity to make
clear my feelings on one particular aspect of the debate over the
balanced budget constitutional amendment.
My opposition to Senate Joint Resolution 1 is strongly felt and
clearly stated. I simply do not believe that it is appropriate to
enshrine a restrictive fiscal policy in our Nation's most sacred text.
The balanced budget amendment would seriously inhibit our ability to
set prudent fiscal policy and respond to cyclical patterns in economic
growth. Moreover, the amendment has serious implications for our
foreign policy.
I am also concerned about the balanced budget amendment's effect on
Social Security. The Social Security Program is one of the longest
running and most successful programs this country has ever undertaken.
It has succeeded in virtually eliminating poverty among our Nation's
senior citizens. I yield to no one in my commitment to preserving and
protecting it.
In 1983, when Social Security was faced with changing demographics
that threatened its very existence, I supported the reforms that
ensured that this vital program would survive to meet the needs of
future generations. Today, I am very concerned that the program is
threatened by the restrictive provisions of the balanced budget
constitutional amendment. If Congress is allowed to count Social
Security surpluses when determining if the budget is in balance, this
critical safety net for our Nation's seniors could be placed in
jeopardy.
For these reasons, I support efforts to protect the Social Security
trust funds. If a balanced budget amendment to the Constitution is to
be enacted, certainly, it should not be one that endangers the
retirement security of American families. This is why I supported the
amendment offered by my colleague, Senator Reid, which modified the
underlying resolution to state that the Social Security trust funds
could not be used to achieve balance.
But I am afraid I could not support the amendment offered by my
colleague Senator Dorgan. This amendment would have also protected
Social Security, but, unlike Senator Reid's amendment, it was a
substitute amendment, a fully crafted, alternative balanced budget
amendment to the Constitution.
Mr. President, I have grave concerns about any attempt to amend the
Constitution to require a balanced budget. These concerns cannot be
satisfied simply by changing one or two components of the legislation,
as sincere and as sensible as those changes might be. I find any
balanced budget amendment highly problematic, and this is why I have
voted against the alternative balanced budget amendment offered by my
good friend from North Dakota.
I am a stalwart defender of Social Security, and I am committed to
seeing that it protects future generations as well as it has protected
previous ones. But I remain opposed to any amendment that would taint
the language of the Constitution and weaken our ability to make prudent
policy.
Ms. MIKULSKI. Mr. President, I rise today in opposition to the
balanced budget amendment to the Constitution. Let me be very clear, I
want a balanced budget, and I am committed to do everything I can to
achieve this goal. However, I do not believe we must amend the
Constitution in order to balance the budget.
I will oppose this amendment because it is unnecessary; because I am
convinced that it threatens the viability of Social Security, and
because it makes no provisions for investing in our infrastructure.
This amendment does nothing to balance the budget. We already have
the tools to do that. Since President Clinton's first term in the White
House and my second term in the Senate, the deficit has fallen
dramatically from $290 billion in 1992 to $107 billion in 1996. This
amount represents just 1.4 percent of our gross domestic product, the
smallest percentage of any industrialized nation. Clearly, as the past
few years have shown us, we can continue to reduce the deficit--until
it is balanced--without amending the Constitution.
Many supporters of the balanced budget amendment believe that if you
can balance the family budget, you can balance the Federal budget. But
if each family lived by a balanced budget amendment, then mortgages,
car loans, and student loans would be prohibited. In effect, a balanced
budget amendment would prohibit the Federal Government from making the
kind of investments for our future that our families make every day.
Investments in our infrastructure would be threatened because the
balanced budget amendment makes no provisions for a capital budget.
Even State governments that require a balanced budget have a separate
budget for capital projects, such as

[[Page S1870]]

highways, schools, et cetera. The balanced budget amendment would
restrict our ability to improve our infrastructure.
To address this issue, Senator Feinstein and Senator Torricelli each
offered an amendment to provide for a capital budget for infrastructure
investments. I voted for both the Feinstein and Torricelli amendments.
Unfortunately, both amendments were defeated.
Recently, 11 Nobel prize-winning economists announced their
opposition to the balanced budget amendment because they felt it would
put the country in an economic straitjacket. They make a very
compelling case. I have no doubt that the balanced budget amendment
would tie the Federal Government in knots, restricting our ability to
respond to emergencies and economic downturns. Even the Wall Street
Journal referred to the balanced budget amendment as politically empty
symbolism. I agree with them.
Finally, I believe the balanced budget amendment threatens the Social
Security system. Under the balanced budget amendment, there is no
protection for Social Security benefits. If the Government finds that
the budget is not balanced, the Social Security trust fund could be
used to make up the difference. I voted for the Reid amendment which
would have exempted the Social Security trust fund from the balanced
budget amendment. I regret that this amendment was defeated.
Mr. President, I will not allow the Social Security trust fund to be
used to balance the budget. We have a contract with our senior citizens
and I plan to honor that contract. A promise made must be a promise
kept. Without protections for Social Security, I will have to vote
against the balanced budget amendment.
I fully support the goal of balancing the budget but a constitutional
amendment is not the way to do it. We need to continue to reduce
spending to reach a balanced budget in an orderly manner that
recognizes national priorities such as Social Security and the
importance of making investments in our future.
Mr. President, I stand ready to continue working toward a balanced
budget but tampering with the Constitution is not the way to do it.
Mr. MOYNIHAN. Mr. President, this afternoon, the Senate will vote for
the third time in 2 years on a balanced budget amendment to the
Constitution. Two years ago, during our first debate on this amendment,
I argued that

[T]here is nothing inherent in American democracy that
suggests we amend our basic and abiding law to deal with the
fugitive tendencies of a given moment.

My point was that a series of one-time events in the 1980s had given
rise to our recent fiscal disorders, and that a constitutional
amendment was an inappropriate and indeed unnecessary response.
Enactment of the Omnibus Budget Reconciliation Act of 1993 had, after
a decade of reckless deficit spending, returned us to a path of fiscal
responsibility. At the time of its enactment, OBRA 93 was estimated to
bring about $500 billion in deficit reduction over 5 years. Three and
one-half years later, estimates are that the total deficit reduction
under the 1993 legislation will be more like $924 billion. So we are on
the right track.
In fact, we are even closer to a balanced budget than one might
imagine--and a balanced budget amendment to the Constitution has
nothing to do with how to achieve it.
A balanced budget is easily within reach, if only we have the courage
to seize the opportunity soon. In January 1996 and again in January
1997, I proposed a simple plan to balance the budget by the year 2002.
In addition to recommendations that were generally in both the
President's budget proposal and the budget proposals offered by the
Republicans, my plan requires only two actions:
First, correct by 1.1 percentage points the overindexation of
Government programs and tax laws; and
Second, postpone tax cuts.
That is all that needs to be done. It is all that ought to be done.
It is not the time for tax cuts. Nor it is the time for crippling cuts
in domestic discretionary spending. A correction of 1.1 percentage
points, as recommended in December by the Advisory Commission to Study
the Consumer Price Index appointed by the Finance Committee, or the
Boskin Commission as it has come to be known, would save $1 trillion in
12 years --and it would put Social Security into actuarial balance
until the year 2052.
The economics profession is behind this proposal, as is the Chairman
of the Board of Governors of the Federal Reserve System, Dr. Alan
Greenspan, who testified before the Finance Committee on January 30 of
this year. Dr. Greenspan's own estimate of the overstatement of the
cost of living by the Consumer Price Index is 0.5 to 1.5 percentage
points per year, which is quite close to the estimate of the Boskin
Commission. Notably, referring to the familiar argument that the
decision to correct cost of living adjustment factors should not be
politicized, Dr. Greenspan had the definitive response: not to act,
given the overwhelming evidence that the CPI is an upwardly biased
measure of inflation, is the political fix.
Let us be absolutely clear about the direction of this bias. BLS
Commissioner Katharine Abraham acknowledged at a February 11 Finance
Committee hearing that the CPI is ``an upper bound measure on change in
the cost of living.''
So there is broad agreement in the economics community. And
encouragingly, it appears we are close to agreement in Congress and the
Executive Branch. Last week, Majority Leader Lott suggested that the
appointment of a panel of graybeards on the issue was in order. The
President immediately said he would take the Leader's suggestion under
advisement. Then on Friday, in a meeting with editors and reporters at
the Washington Post, OMB Director Franklin Raines expressed support for
Senator Lott's proposal. Director Raines noted that the ``CPI is a very
accurate price index, while only being an okay cost of living index.''
And now in this morning's New York Times, there is an article by
Richard W. Stevenson headlined ``Clinton Wants Deal With Congress on
Cost-of-Living Adjustments.'' It begins:

President Clinton gave his aides the go-ahead today to try
to forge a deal with Congress to reduce cost-of-living
adjustments for Social Security and other benefit programs,
White House officials said.

This is an important step forward by the Administration. Getting an
accurate measure of the cost of living is the right thing to do, and it
is the only way to put our fiscal affairs in order.

I should add that although this issue has reemerged only recently,
the fact that the CPI overstates the cost of living is not a new
understanding. I came to Washington with the Kennedy Administration 35
years ago. Upon our arrival in 1961, we had waiting for us a report by
a National Bureau of Economic Research committee on ``The Price Indexes
of the Federal Government.'' The committee was headed by George J.
Stigler, who went on to win a Nobel Prize in economics. The report
noted that:

If a poll were taken of professional economists and
statisticians, in all probability they would designate (and
by a wide majority) the failure of the price indexes to take
full account of quality changes as the most important defect
in these indexes. And by almost as large a majority, they
would believe that this failure introduces a systematic
upward bias in the price indexes--that quality changes have
on average been quality improvements.

Mr. President, I hope we don't allow this moment to pass us by. It is
the right thing to do, and we ought to do it soon. We could have a
balanced budget plan in place and forget this foolishness about
amending the Constitution.
If you don't think it is foolish, ask any economist. Last month, as
the Senate began this debate, more than 1,000 economists, including 11
Nobel Prize winners, signed a statement imploring Congress to reject
Senate Joint Resolution 1, the balanced budget amendment to the
Constitution. The economists wrote:

We condemn the proposed ``balanced budget'' amendment to the federal
Constitution. It is unsound and unnecessary.
The proposed amendment mandates perverse actions in the
face of recessions. In economic downturns, tax revenues fall
and some outlays, such as unemployment benefits, rise. These
so-called ``built-in stabilizers'' limit declines of after-
tax income and purchasing power. To keep the budget balanced
every year would aggravate recessions.

May I say, to paraphrase Santayana, that we may be condemned to
repeat

[[Page S1871]]

an awful period in our history if this amendment is adopted. The
historical precedent is chilling: in 1930, 1,028 economists implored
President Hoover to veto the Smoot-Hawley tariff legislation. He
ignored their pleas, with disastrous consequences. A 60 percent drop in
trade; worldwide depression; the rise of totalitarian regimes; and in
the wake of such events, the Second World War.
Now, with the list of signatories growing, the economics profession
is again pleading with us to reject this constitutional amendment. If
we defeat the amendment, we will preserve the sanctity of our
Constitution and promote economic stability. If we adopt it and it is
ratified by the states, we will return to the dark ages of economic
policy, having disregarded 60 years of social learning.
As I indicated earlier, a great part of the rationale for the
balanced budget amendment has been the problem of deficits and the
rising national debt. Yet our problems with deficits are quite recent,
having been generated in the relatively brief period of the 1980's.
These deficits marked a sharp departure from the fiscal problems of
earlier administrations, which were directed primarily to the problem
of a persistent full employment surplus, with its accompanying downward
pressure on consumer demand.
The full-employment budget concept was explained by then-OMB Director
George P. Shultz in his fiscal year 1973 budget:

. . . expenditures should not exceed the level at which the
budget would be balanced under conditions of full employment.

Which is to say that in the absence of full employment, as was the
case in fiscal year 1973, the Federal Government should deliberately
contrive to incur a deficit equal to the difference between the
revenues that would actually come in at levels of underemployment, and
those that would come in at full employment. Far from being inevitable
and unavoidable, there were points in the business cycle where a
deficit had to be created. Otherwise surpluses would choke off
recovery.
The term ``full employment surplus'' had originated earlier. The
January 1962 report of the Council of Economic Advisers explained that
as the recovery from the recession of 1958 got underway, economic
activity grew and so did the revenues of the Federal Government. But
Congress would not spend the additional revenue. As a result, the
recovery stalled. This untoward event was ascribed to ``fiscal drag.''
Beginning in 1980, the Reagan White House and Office of Management
and Budget set about creating a crisis by creating deficits intended to
force Congress to cut certain programs. In a television address 16 days
after his inauguration, President Reagan said:

There were always those who told us that taxes couldn't be
cut until spending was reduced. Well, you know we can lecture
our children about extravagance until we run out of voice and
breath. Or we can cut their extravagance by simply reducing
their allowance.

Haynes Johnson wrote of this in ``Sleepwalking Through History:
America Through the Reagan Years'' (1991). I will simply quote a
footnote on page 111:

[Stockman's] former mentor Moynihan was the first to charge
that the Reagan Administration ``consciously and deliberately
brought about'' higher deficits to force congressional
domestic cuts. Moynihan was denounced and then proven
correct, except that the cuts to achieve balanced budgets
were never made and the deficits ballooned even higher.

The point is that the huge deficits and debt of the 1980's were
intentional and anomalous, and therefore the balanced budget amendment
is an inappropriate response. A balanced budget amendment would undo
all that we have learned about economic policy over the past six
decades--a lesson that can be easily seen in the fluctuations of the
business cycle over the last 125 years. We had enormous volatility in
economic activity prior to 1945--volatility that would be unacceptable
today. For example, in 1905, output increased by 9.2 percent, to be
followed 2 years later by declines of 1.6 and 5.5 percent in 1907 and
1908 respectively, and an increase of 11.7 percent in 1909. Output
increased by 16.2 percent in 1916 and by 7.7 percent in 1918, to be
followed by 3 consecutive years of negative growth. And then, of course
there was the Great Depression. After increasing by 6.4 percent in
1929, output fell by 8.9 percent in 1930, another 7.8 percent in 1931,
and then a further decline of an incredible 13.3 percent in 1932. After
World War II all this changed, following a brief adjustment period, as
the country converted from a wartime to peacetime economy. Since then
the largest reduction in output was 2.3 percent in 1982.
In the 1970's, I asked Council of Economic Advisers Chairman Charles
L. Schultze to analyze what would have happened if a balanced budget
amendment had been in force in the middle of the 1975 recession. He
reported back that the computers at the Council ``blew up.'' GDP--then
called GNP--would have dropped another 12 percent in an economy in
which output was already 5 percent below capacity. During the debate in
the last Congress, this simulation was repeated by the Treasury
Department and by our minority Finance Committee staff, with the same
results. With a balanced budget amendment, a moderate recession in
which the unemployment rate increases by 2-3 percent becomes a major
contraction--may I say depression--in which unemployment soars over 10
percent and output falls by 15 percent or more. In the entire post-
World War II era the unemployment rate exceeded 10 percent only for a
brief 10 months during the 1981-82 recession.
Just as importantly, a balanced budget amendment would undo the
progress we have already made, which I referred to earlier. Two years
ago, in arguing against House Joint Resolution 1, I noted:

As a result of the deficit reduction policies [put in place
by the Omnibus Budget Reconciliation Act of 1993] we have had
three straight years of deficit reduction--the first such
string of declines since the administration of Harry S.
Truman. Here are the numbers: FY 1992 $290.4 billion; FY 1993
$255.1 billion; FY 1994 $203.2 billion; OMB 1995 est., $192.5
billion; and CBO 1995 est. $176 billion.

As I have said, our progress has been even better than expected.
Remarkably, the deficit for fiscal year 1995 was lower than projected:
$163.8 billion compared to projections of $176-$192 billion. The fiscal
1996 deficit is even lower--$107.3 billion, just 1.4 percent of GDP,
resulting in 4 consecutive years of deficit reduction. And, for the
first time since the 1960's, we have a primary surplus--that is,
excluding interest payments, revenues exceed outlays.
Adoption of a balanced budget amendment--which as I said last year
would be tantamount to ``writing algebra into the Constitution''--can
only jeopardize the progress we have made. We can and will complete the
job of balancing the budget without this amendment. It would be
disastrous for our economy, and I hope it will once again be defeated.
Mr. BINGAMAN. Mr. President, I rise today to take a few minutes of
the Senate's time to comment about the balanced budget amendment on
which we will be voting today.
I came to the Senate in January 1983, at a point in time when the
Federal Government was making terribly unwise choices about spending
and revenues. Our budget deficits were off the charts during these
Reagan years, and I felt that the very foundation of sound fiscal
policy was being undermined. These were the years when we needed to
have more serious debate about bringing spending under control--and
when we needed to at least consider a more serious response such as
amending the Constitution to require balanced budgets.
We have a very different situation today. During the last 4 years,
the budget deficit has declined remarkably. Tough choices are being
made about spending and revenue which are bringing the deficit down to
levels thought unimaginable only a few years ago. And today we nearly
have unanimous bipartisan support to bring the budget into balance by
2002. The Nation's budget deficit, as a percentage of gross national
product, is the smallest it has been in decades and the least of all
the great industrial powers.
The difference between today and 14 years ago is that we are clearly
moving strongly in the right direction, not through amendments to our
Nation's most important legal document, but by debating our national
priorities and making our spending better reflect those priorities.
I believe in balancing the budget, but sound fiscal management
demands that such balance be achieved by responsible choices that
reflect our values--

[[Page S1872]]

helping those in need, promoting long-term infrastructure investment,
and promoting high-wage job growth in our Nation. Those who have
doggedly pursued this amendment to the Constitution did not do so when
the budget imbalances were growing by great leaps during the Reagan
administration; a balanced budget was not their concern. But cutting
taxes on those who are best off is one of their primary concerns--and
it was in part the spending profligacy of the early Reagan years
combined with the ill-considered and regressive Kemp-Roth tax cut that
created the enormous deficits we are financing today. We are actually
spending less today than the Treasury is taking in--but because of
enormous interest payments which take up nearly 20 percent of our
entire annual spending, our budget is still in the red.
We must be careful about confusing serious budget balancing efforts
with partisan exercises that could disrupt the fiscal foundation of the
country.
One of my major concerns about this amendment 2 years ago which
remains today is that the House still has in place a rule requiring
three-fifths supermajority vote to raise income tax rates and income
tax rates alone. Under the House rule, other taxes--such as the gas
tax, Social Security tax, or other excise taxes--can still be raised by
a simple majority, taxes that impact far more many of the working
families from New Mexico whom I represent. This House rule stands as an
obstacle to efforts to use the income tax, our most progressive tax, to
raise revenues for deficit reduction.
The balanced budget amendment that has been proposed does not help us
resolve many of the problems that challenge our future economic health.
Passing this resolution does not help us solve the challenge to Social
Security that looms in our future. It is clear that we must address the
problem of solvency of the Social Security trust fund, but as written
this amendment could cause a train wreck at the point when Social
Security disbursements become greater than Social Security receipts. At
least under one interpretation of the proposed amendment, countless
seniors could experience disruption in receiving their checks.

During a time of severe economic hardship and recession, the
Government has traditionally helped by using fiscal policy to prime the
economy and jolt it toward growth. Such a strategy would not be
possible given the requirements outlined in the balanced budget
amendment. In addition, national security demands, the need to increase
spending to thwart aggressive moves by some future enemy, or to respond
to some military crisis might also be improperly constrained by the
balanced budget amendment as written. There is also no provision in the
balanced budget amendment permitting Congress to develop a capital
budget, a budget capable of distinguishing between spending to meet
current operating expenses and spending over a series of years for
major capital improvements, such as highways, buildings, or a Federal
agency's computer systems. I voted for amendments that would have made
improvements in the balanced budget amendment and which would have made
this a more workable piece of legislation, but all of these improving
amendments were defeated.
The authors of this amendment are pursuing too rigid a course--and
are bent more on a theology of balanced budgets without taxes than they
are on the economic health of the Nation.
Also left unaddressed in this proposed amendment is the enforcing
mechanism. When the Congress fails to govern responsibly and does not
produce a balanced budget as called for by the Constitution, does the
Supreme Court, as the chief interpreter of the Nation's Constitution,
decide what accounts will be advanced and what accounts cut in order to
achieve balance? These matters are unresolved and threaten to create
confusion and harm our Nation's fiscal solvency--rather than create the
order and balance that the Nation needs and wants.
I will oppose the balanced budget amendment today because I believe
that we should leave the question of how to achieve sound fiscal policy
to a vote of a majority here in Congress. We should not try, by rule or
other provision, to determine how future Congresses choose to reduce
the deficit or keep the budget in balance. We should not dictate
whether they cut spending or raise taxes. We should not try to
predetermine for future Congresses, as this amendment would, which
group of taxpayers will pay the taxes and which group will suffer the
spending cuts. Because of the way that the balanced budget amendment is
constructed, our decisions would be locked in permanently if this
amendment were to become part of the Constitution. This is not wise,
and I cannot support such an effort.
The framers of the Constitution chose to leave neutral the way in
which sound fiscal policy is achieved. We are well advised to defer to
their good judgment on that subject, to cease our efforts to solve this
problem by changing the Constitution, and instead, to solve it as we
should--by continuing to make tough choices that reflect the priorities
of our Nation.
Mr. CRAIG. Mr. President, during this year's debate on the balanced
budget constitutional amendment the Senate Republican Policy Committee
prepared more than 20 papers to assist Republican Senators with our
deliberations. Some of these papers have particular importance for the
constitutional and political debate which has been going on for decades
and which is going to continue.
I ask unanimous consent that several of these papers be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the U.S. Republican Policy Committee, Feb. 25, 1997]

Overlooked Effects of Excluding Social Security From BBCA

For years, leading opponents of the bipartisan balanced
budget constitutional amendment (BBCA) have been hiding
behind the gimmick of excluding Social Security from the
calculation of a balanced budget. While it is difficult to
take their proposal (S.J. Res. 12) seriously, it is
imperative to realize its very serious effects.

what s.j. res. 12 would do

The actual consequences of S.J. Res. 12 would be the direct
opposite of the positive economic effects provided by a real
balanced budget requirement.
S.J. Res. 12, over 30 years, would start with decreasing
deficits--achieve a moment of surplus (requiring enormous new
taxes or spending cuts)--enter a phase of declining surpluses
(to perhaps one-year's balance)--and then revert to
skyrocketing deficits.
It would create $2.3 trillion in ``gimmick deficits''
between 1998 and 2018.
It would result in tax hikes and/or spending cuts of $1.935
trillion from 2002 to 2018.
That $1.935 trillion is more than eight times Clinton's
largest-ever 1993 tax hike of $240 billion and almost five
times the amount of CBO's estimated savings ($423 billion) of
what it will take to reach balance between today and 2002.
While surpluses are not bad per se, this enormous level over
such short duration would produce massive fiscal strain.
It would result in less than two decades of nondeficit
spending, and just one year in which the federal budget might
actually balance.
It would provide no possibility for tax cut or spending
increase unless a recession occurs.
It would require absolute spending cuts in five of the
first six years after the amendment, and a return to huge
federal deficits in little more than two decades--$700
billion from 2019-2024 and $2.474 trillion from 2019-2028,
all perfectly off-budget and constitutionally legal.
S.J. Res. 12 could be worse than doing nothing because of
the high probability of massive tax increases that would
destroy economic growth.

what s.j. res. 12 would not do

S.J. Res. 12 would not provide any additional support for
Social Security.
It would not protect the trust fund--it will begin running
deficits just seven years after its outlays begin exceeding
revenues in 2012--exactly the current estimation. The trust
fund would be bankrupt just 10 years after that (2029)--also
the current estimation.
The trust fund balance sheet would not change by a single
dime and its solvency calendar would not be altered by a
single day.
S.J. Res. 12 would not alter the fact that Social Security
is a pay-as-you-go system and always has been.
It would not provide a long-term solution. By pretending
there exists some hidden balance, it would forestall a real
solution to Social Security's long-term imbalance.
Simultaneously, S.J. Res. 12 would damage Social Security
because Social Security's existence depends on a growing
economy to meet its growing commitments--something S.J. Res.
12's likely tax hikes would seriously jeopardize.

how implausible are s.j. res. 12's requirements?

Every dime of the $1.935 trillion that would be
artificially added to the deficit between

[[Page S1873]]

2002 and 2018 would have to be payed for with tax hikes and/
or spending cuts.
In the 2002-2007 period, spending literally would have to
be cut in five of the six years under S.J. Res. 12, even
under CBO's most recent baseline spending estimates for a
balanced budget. By contrast, Congress's failed 1995 effort
to balance the budget was vetoed by Clinton, and it merely
slowed the rate of spending's growth.
Spending would decline in absolute terms--not just
reductions in the rate of growth.
How rare are absolute spending cuts? Only nine times since
1933 have they occurred. Eight were due to severe economic
contraction or postwar economies: 1935, 1937, and 1938 during
the Depression, the first three years following World War II,
and the first two years after the Korean War.
____

[From the U.S. Senate Republican Policy Committee, Jan. 29, 1997]

A Gimmick Even the President Won't Embrace--Clinton's Remarks Undercut
BBCA Opponents

``We couldn't right now, neither the Republicans nor I and
the Congress, could produce a balanced budget tomorrow that
could pass with, if you said the Social Security funds cannot
be counted, if you will, as part of the budget.'' --President
Clinton at his January 28th press conference.
President Clinton does not support a balanced budget
constitutional amendment (BBCA), but yesterday, on the
record, he refused to accept the flimsy, implausible cover
being used by some of its congressional opponents who are
going to vote against the amendment unless Social Security is
taken out of it.
The sentence from the transcript of the President's press
conference that is quoted above is not the clearest example
of oral expression that we have ever seen, but, clearly what
the President was saying was: A balanced budget is not
possible if Social Security is taken off budget and not taken
into account in calculating the deficit.
Simply, Social Security is currently running a surplus and
is expected to do so for the near term. Thus, if Social
Security is removed from the budget calculations, the deficit
will be falsely inflated by hundreds of billions of dollars.
For example, if Social Security were to be omitted, the
deficit would grow by an additional $465 billion during
fiscal years 1998 through 2002 and by another $602 billion
during fiscal years 2003-2007, for a total of $1.067 trillion
over the 10-year period. This is on top of the very real
deficits with which Congress has been struggling for years.
Last year, the President and the Congress each made
proposals that would have cut the deficit by about $500
billion for fiscal years 1997 through 2002. $500 billion is a
lot of money, but it is less than one-half of the amount that
the opponents' proposal would falsely add to the deficit if
Social Security is taken out of the balanced budget
calculations.
It's interesting when the President, no stranger to
gimmicks, is willing to expose the ruse of his friends.
Recall that this president offered a budget that used
``triggers'' to precipitously cut off spending programs in
its final two years in order to be able to claim to teach
``balance.'' And, he offered a budget which shifts the
fastest growing portion of Medicare--Home Health Care--from
Medicare to the general taxpayer in order to claim he is
``saving'' Medicare.
If the opponents of a Balanced Budget Constitutional
Amendment are fiscally responsible, they will show us the tax
increases and spending cuts that they propose to enact to
make up for the $1.067 trillion that would artificially be
added to the deficit under their proposal by taking Social
Security out of the calculation. After all, those hiding
behind Social Security's exclusion to cover their opposition
are proposing to add to the deficit twice the amount that
Congress and Clinton proposed to cut! If they do not really
support an additional $1.067 trillion in new taxes and
spending cuts--and we doubt that they do--what do they really
support? The answer is evident: More of the same tired,
liberal approach to governing--more taxes, more spending,
more debt.
____

[From the U.S. Senate Republican Policy Committee, Feb. 24, 1997]

BBCA, Super-Majorities, and The Federalist--Madison and Hamilton
Supported Super-Majorities

The writers of the Federalist said some hard words about
super-majorities which are trotted out whenever Congress
debates the Balanced Budget Constitutional Amendment (BBCA).
Unfortunately, those hard words are almost always misused.

the federalist on super-majorities

James Madison said that super-majorities transfer power
from the majority to the minority and thereby ``reverse'' the
``fundamental principle of free government.'' A minority can
then frustrate the purposes of the majority even when
``justice or the general good might require new laws to be
passed or active measures to be pursued.'' The Federalist No.
58, at 397 (J.E. Cooke ed. 1961). Alexander Hamilton said
that super-majorities may look like a remedy but are ``in
reality a poison.'' They operate ``to embarrass the
administration, to destroy the energy of the government, and
to substitute the pleasure, caprice or artifices of an
insignificant, turbulent, or corrupt junto for the regular
deliberations and decisions of a respectable majority.'' The
Federalist No. 22, at 140.
This is strong stuff from two of America's giants. However,
both Madison and Hamilton were strong supporters of super-
majority requirements, and only by using The Federalist out
of context can they be made to appear otherwise.

the constitution itself, which the federalist was written to promote,
contains super-majorities

The Federalist was written to explain and promote a
Constitution which, in its original version, contained super-
majority requirements in seven places: Article I requires
votes of two-thirds to convict on impeachment (Sec. 3, cl.
6), to expel a Senator or Representative (Sec. 5, cl. 2), and
to override a presidential veto (Sec. 7, cls. 2 & 3). Article
II requires a two-thirds vote in the Senate to consent to
treaties (Sec. 2, cl. 2) and called for special majorities if
the election of the President should be referred to the House
of Representatives (Sec. 1, cl. 3). Article V requires two-
thirds of Congress and three-fourths of the States to amend
the Constitution. Article VII required ratifications from 9
of the original 13 States before the Constitution could go
into effect.
Madison (always) and Hamilton (sometimes) were in
attendance at the convention when these super-majority
requirements were adopted, and Madison himself was
responsible for some of them. They signed the Constitution.
They became its most able advocates. Snippets from Federalist
No. 58 and No. 22 cannot obviate the fact that Madison and
Hamilton strongly supported the Constitution with all of its
super-majority requirements.

the federalist, which itself supports super-majorities, must be read in
context to be understood

But how do we account for The Federalist's hard words on
super-majorities? Quite easily, actually. The words merely
need to be read in context:
What Madison was opposing in No. 58 was the suggestion that
the House of Representatives should require a super-majority
for a quorum and more than a majority of a quorum for a
decision. Madison did not, of course, oppose all super-
majority requirements for the House, but he did oppose
suggestions put forward by opponents of the Constitution that
additional super-majorities were desirable.
What Hamilton was opposing in No. 22 was the gridlock
occasioned by the Articles of Confederation with its super-
majority requirements and unit voting (each State had one
vote).
Hamilton also said (in Federalist No. 75), ``All provisions
which require more than the majority of any body to its
resolutions have a direct tendency to embarrass the
operations of the government and an indirect one to subject
the sense of the majority to that of the minority.'' Id., at
507. This sounds hard enough, but it appears in a paper about
the making of treaties, and Hamilton strongly supported the
two-thirds vote of the Senate as ``one of the best digested
and most unexceptionable parts of the plan.'' Id., at 503.
What Hamilton was opposing in No. 75 was the suggestion that
two-thirds of all members should be required on a vote rather
than two-thirds of those members present.
Keep in mind, too, that complaints about super-majorities
(especially for quorums) were a product of the times--a
horse-and-buggy era when interstate travel was long,
difficult, and dangerous, and many legislators shunned
regular travel to the seat of a weak central government.

Madison and Hamilton Supported Super-Majorities Independently

Finally, we know that both Madison and Hamilton thought
super-majorities were sometimes necessary because they
advocated them separately. In convention, Madison moved that
a vote of two-thirds be required to expel a Senator or
Representative. His motion carried 10 States to none. 2
Farrand, The Records of the Federal Convention of 1787 at 254
(1937 rev. ed.). It was also Madison who moved that if the
choice of a President should fall to Congress, a quorum must
consist of two-thirds. Id., at 526. Hamilton outlined his own
plan for a government, but did not present it to the
convention. He did, however, draw upon its principles in
debate. That plan contained at least five requirements for
super-majorities. 3 Farrand at 620, 623, 625, 627, 630.
Far from being opponents of super-majorities, Madison and
Hamilton supported them. They supported them in the
Constitution, in The Federalist, and in the convention. They
supported them because some rights are ``too important to be
exercised by a bare majority of a quorum.'' 2 Farrand at 254
(Madison speaking on expulsion). Spending our children's
inheritance is one of these rights--a right too important to
be exercised by a bare majority.

[Some of the quotations from The Federalist have been edited
slightly.]
____

[From the U.S. Senate Republican Policy Committee, Feb. 20, 1997]

The Constitution and BBCA's Super-Majorities

Some opponents of the super-majority requirements in the
Balanced Budget Constitutional Amendment (BBCA) must suffer
from an irony deficiency. Only the irony-deprived could
complain about BBCA's super-majorities while trying to cobble
together a minority of Senators (just 34) to defeat the
proposed amendment.

[[Page S1874]]

super-majority in the bbca

S.J. Res. 1 requires ``three-fifths of the whole number of
each House of Congress'' to ``unbalance'' the budget (section
1) and to increase the debt limit (section 2). It requires
``a majority of the whole number of each House'' to increase
revenues (section 4) and to permit a waiver because of a
threat to national security (section 5).

Super-majorities in the Constitution

Framers of the original Constitution and framers of its
amendments regularly called for super-majorities. Congress
has used super-majority votes hundreds and hundreds of times
for seven purposes in three general areas:
Area One: To Change the Laws
Super-majority votes are required sometimes to enact laws.
These laws become the ``supreme law of the land.'' See Art.
VI.
A two-thirds vote is required to override a presidential
veto. Art. I, Sec. 7, cls, 2 & 3. Congress has overridden a
veto 105 times (averaging once every Congress).
Treaties require a two-thirds vote of the Senate. Art. II,
Sec. 2, cl. 2. The Senate has voted on an estimated 2,000
treaties (averaging about ten every year).
Constitutional amendments require a two-thirds vote in
Congress (and ratification by three-fourths of States). Art.
V. The Constitution has been amended 27 times; there were 17
votes on those successful amendments. There were another five
votes on proposed amendments that cleared the Congress but
were never ratified by the States.
Certain persons who ``engaged in insurrection or
rebellion'' against the United States are prohibited from
holding public office, but that disability may be removed by
a two-thirds vote of Congress. Amend. XIV, Sec. 3. By our
count, Congress legislated under this provision 191 times
from 1868 through 1898 (averaging about six per year).
Area Two: To Remove from Office
There is a second category of constitutional provisions
requiring a super-majority, namely those that allow Congress
to remove a person from office.
Conviction on impeachment requires a two-thirds vote of the
Senate. Art. I, Sec. 3, cl. 6. Seven persons (all district
court judges) have been convicted by the Senate after
impeachment. Seven others (including an associate justice of
the Supreme Court, a Secretary of War, and President Andrew
Johnson) were tried and acquitted.
Expulsion from the Senate or House requires a two-thirds
vote of the body. Art. I, Sec. 5, cl. 2. Fifteen Senators and
four Representatives have been expelled from Congress (the
great majority for disloyalty to the Union).
(A President may be removed by a two-thirds vote of
Congress for inability to discharge his duties. Amend. XXV,
Sec. 4. This particular provision has never been used,
however.)
Area Three: To Elect to Office
If election of the President should fall to the House or
election of the Vice President should fall to the Senate, the
12th Amendment has special super-majority rules with respect
to quorums and voting. (These requirements supersede Art. II,
Sec. 1, cl. 3 which also contained super-majority
requirements.)
After adoption of the 12th Amendment in 1804, the House has
had to act once (in 1825, electing John Quincy Adams) and the
Senate has had to act once (in 1837, electing Richard M.
Johnson to serve with Martin Van Buren).
An Additional, Unique Super-Majority
The Constitution itself provided that it would not go into
effect unless ratified by nine of the original 13 States.
Art. VII.

bbca is consistent with constitutional text and practice

The Framers put super-majority votes within the four walls
of the Constitution, and throughout the years Congress has
regularly and unremarkably operated under those super-
majority requirements. In fact, the Senate acts by super-
majority vote about once every month. Super-majority votes
are reserved for matters of special importance; they are not
daily events, but they are not rarities either. They are
about as rare as a new moon.
Like the constitutional policies described above, spending
our children's inheritance is a matter of special
significance that should require an occasional super-majority
vote.

Note on Estimate of Treaties. Counts of Senate action on
treaties vary widely because of differing methods and
judgments. In the original version of this paper we used an
estimate of 2,500. That number was based on data in Lyn
Ragsdale, Vital Statistics on the Presidency: Washington to
Clinton, Tables 7-1 & 7-2 (1996) (showing 1,955 treaties,
protocols, and conventions issued from 1789 through 1984 [all
of which appeared to require Senate action] and 1,542 total
international agreements from 1985 through 1993). After our
first version of this paper was released, CRS provided us
with an estimate of 1,704 treaties approved by the Senate
through 1996.
____

OVERALL EFFECTS OF S.J. RES. 12
----------------------------------------------------------------------------------------------------------------
Years On-budget Off-budget True budget Fiscal effect
----------------------------------------------------------------------------------------------------------------
1998-2001...................... Declining deficit Running Surplus.. Declining Large cuts or taxes to
deficit--$361 offset ``double
billion. surplus'' ($361
billion from 98-01)
Social Security
Revenue surplus &
interest income.
2002-2012...................... Balanced: But Dual surplus of Surplus of SS TF-- Enormous $1,395
must run Social Security $1.395 trillion. trillion ``double
surpluses to TF: Both revenue surplus'' offset by
offset SS and interest. tax hikes or spending
revenue removal cuts.
and interest
transfer to off-
budget.
2013-2018...................... Balanced: Must Deficit: Balanced Diminishing Larger $539.4 billion
run surplus to via transfer surplus--$539.4 ``single surplus''
make interest interest payment billion. transfer via tax
payment to SS TF. from on-budget. hikes or spending
cuts to offset Social
Security interest
surplus.
2019........................... Balanced: Must Social Security Balance for 1 Transfer of Social
run surplus to TF runs first year?--$2.6 Security interest
make SS interest deficit in billion deficit payment in slightly
payment. excess of both projected off- less ($2.6 billion)
interest and budget. than Social
revenue receipts. Security's revenue
shortfall.
2020-2029...................... Balanced: SS Mounting SS Rising deficits-- Diminishing Social
interest payment deficits. $3.122 trillion Security interest
diminishing. (2019-2029). surplus transfer as
trust fund begins
being consumed until
exhausted in 2029.
Increasing Social
Security operating
deficit must be
absorbed. How? \1\.
2030-Beyond.................... Balanced: No SS Social Security $744 billion Social Security trust
interest payment. trust fund deficit in 2030 fund bankrupted.
bankrupt. alone. Enormous deficits,
though economically
adverse, all off-
budget and therefore
legal.
----------------------------------------------------------------------------------------------------------------
\1\ The federal government would be faced with at least three possible budget alternatives: (1) The federal
government borrows for Social Security and that money is put on-budget. Remember: the Social Security
amendment only addresses the receipts and outlays of Social Security. Once trust fund receipts are no longer
sufficient to cover Social Security's obligations, the shortfall must come from somewhere. Such a scenario
would require commensurate deficit reduction on-budget to cover the transfer to the off-budget trust fund. (2)
An off-budget entity borrows for Social Security. The result would be substantially higher borrowing costs for
the off-budget entity than if the money were borrowed by the federal government. However since this borrowing
would be off-budget, the additional cost would not be constitutionally prohibited--this despite the fact that
it would exacerbate the already very adverse true budget effect. (3) The federal government borrows for Social
Security and that money is put off-budget. But this obvious liability of the government could be completely
ignored for constitutional purposes. Again, it would accommodate substantial deficits in the true budget.

Mr. KERREY. Mr. President, I do not intend to support this
constitutional amendment. During previous debates on this issue, I have
said that I believe that an amendment dictating a balanced budget does
not belong in our Constitution but that the path to balance belongs in
our laws. I continue to believe that. And, I hope I am not being too
optimistic when I say that I honestly believe we have an opportunity to
set our budget on the path to balance this year through legislation and
we have the chance to do so in a reasoned and bipartisan way.
I believe it is important to balance the budget as a way to promote
economic growth. And any effort to achieve a balanced budget must be
done fairly and equitably. But I'm not convinced that the
constitutional amendment before us will ensure a budget balanced fairly
or a budget that will ensure economic growth.
In particular, I do not think it is wise to require a three-fifths
vote to waive this amendment in times of economic emergency. This gives
entirely too much power to larger population States in the House and
would hurt smaller States like my home State of Nebraska. In addition,
the national security waiver provision in this amendment is too
restrictive. And, I do not think it is a good idea to allow Congress to
rely on estimates to determine whether or not the budget is in balance.
As previous experience has shown us, when you lead with estimates,
gimmicks are soon to follow.
Still, even if we were voting on some other variation of this
amendment, I'm not persuaded a constitutional amendment is the best way
to mend our budget woes. I still believe that if we can succeed through
a statute rather than through a constitututional amendment, we should
leave the Constitution alone.
All of this being said, I do not question the intentions of the
authors of this amendment. Given our track record on living within our
means, there are good arguments to be made for this amendment. I have
long said that as 1 of the 535 Members of Congress we can, and should,
get down to the work of crafting a reasoned, bipartisan balanced budget
plan. But we have not managed to do so. We have not managed to muster
the political will to tackle some of the tougher issues that stand in
the way of a credible path to balance. We have not managed to talk in a
meaningful way about how to control our entitlement spending and how to
prevent that spending from consuming an ever-larger share of our

[[Page S1875]]

Federal budget as time goes by. Absent change, a full 70 percent of the
Federal budget will be consumed by mandatory spending and interest on
the debt by the year 2000 and that percentage will continue to climb.
That is a scary statistic.
But I think, or at least I very much hope, that we are getting closer
to having those conversations. Last year, I was part of the centrist
coalition, a bipartisan group that included 11 Democrats and 11
Republicans. The coalition spent approximately 5 months putting
together a balanced budget package which contained significant
entitlement reform, a reasonable discretionary spending number and
modest tax relief. The centrist package was offered as a substitute
budget in May 1996 and received 46 votes in the Senate. As far as I am
concerned, those 46 votes represent the start of a meaningful effort to
balance the budget in a bipartisan, credible way.
Regardless of how today's vote turns out, I hope we will not lose the
will to move forward to balance the budget. If this amendment were to
pass both Houses, I would hope that we would not use that passage as an
excuse to delay balancing the budget while we wait to see if the
amendment is ratified. And if this amendment fails, I hope that we--
particularly people like me who maintain that we can balance the budget
without this amendment--will redouble our efforts to get the budget on
the path to balance in this Congress.
Mr. MURKOWSKI. Mr. President, in this debate on the balanced budget
amendment, I believe the Senate has lived up to its reputation as the
greatest deliberative body in the world, bar none. We have spent nearly
a month debating this measure and I want to especially commend the
distinguished chairman of the Judiciary Committee, Senator Hatch, for
his stamina and intellect in managing this measure.
Now as the time for debate draws to a close, I hope all of my
colleagues will reflect on the simple principle that we are attempting
to incorporate into our Constitution. It is simply that one generation
of Americans has no right to mortgage future generations to finance our
daily spending habits. Think about it.
There is one thing for certain, Mr. President. When the clock strikes
midnight on December 31, 1999, and we enter the new century, America
will have run deficits for 31 consecutive years and we will have a
national debt of more than $6 trillion.
If we are ever going to reverse that endless tide of red ink, if we
are going to ease the economic burdens on our children and
grandchildren, then as a matter of moral responsibility, we will adopt
this constitutional amendment. If we don't pass the amendment this will
truly be an American tragedy.
Mr. LEVIN. Mr. President, once again the Senate is considering a
constitutional amendment which some claim will lead to a balanced
Federal budget. The Senate debated and defeated this amendment in the
last Congress. It has been reported once again by the Senate Judiciary
Committee, and has received the careful and thorough deliberation by
the Senate which it deserves.
Except in unusual circumstances, balancing the budget is the
responsible thing to do. That is why I have repeatedly supported
balanced budgets. And, we have made significant progress in the past 4
years. We have reduced the Federal deficit for 4 years in a row,
cutting the deficit by more than half from $290 billion in fiscal year
1992 to $107 billion in fiscal year 1996, from 4.7 percent of the GDP
in 1992 to 1.4 percent in fiscal year 1996, the lowest in more than 20
years. In fact, for the first time in years, the real possibility of
agreement to balance the budget in the next 5 years looms before us.
At the outset, let's be clear about one thing. The proposed
constitutional amendment doesn't balance the budget. It tells a future
Congress to pass legislation to balance the budget. Unless that future
Congress agrees on legislation, the amendment will not be implemented.
Why not try to pass the implementation language now before the vote on
the constitutional amendment so everybody could see how it would work
and if it would work? Again, without that implementation legislation,
we're left with a feel good gimmick which would allow Members of
Congress to claim that the deficit will be cured without actually
taking the tough steps necessary to do the job. It takes Congress off
the hook for 5 years or more. And then, Mr. President, there is no
hook. As the distinguished past president of the American Economic
Association, Professor Robert Eisner, put it in his excellent article
January 22 in the Wall Street Journal, the amendment ``might as well
assert that the waves of the Atlantic Ocean shall not cross a certain
line''. In other words, the language kicks in in 2002, or later, and
then there might be no kick.
As we have seen in the most recent Congress, the debate arises not
over whether to balance the budget, but rather how to reach that
balance. The issues which make agreement difficult grow out of
differences in priorities. The President, in his budget last year and
again this year, has shown a path to a balanced budget which also
provides for adequate funding for education, environmental protection,
Medicare, Medicaid, and other essential Government functions. Many of
the proponents of this constitutional amendment support a large tax
break, paid for by larger reductions in Medicare than the President
proposes. It is in hammering out these priorities that the difficult
decisions arise. The constitutional amendment before us does nothing to
advance that process. In fact, since implementing legislation will not
be required for 5 years at the earliest, it may indeed provide the
excuse to delay those tough decisions.
We are told that if Congress is required by the Constitution to pass
a law to implement a balanced budget, surely Congress will pass such a
law. Well in 1979, 18 years ago, we passed a law that said, ``Congress
shall balance the Federal budget.'' That law, Public Law 96-5, was the
law of the land. Although the Senate passed that provision by a 96 to 2
vote and the President signed it into law, it did not happen. Saying we
must balance the budget will not make it happen; unless and until we do
the hard work of budgeting, it's all just a dodge, and worse, because
it encourages people to say we are cured before we've taken the
medicine.
Mr. President, the plain truth is whether we pass a balanced budget
amendment or not, it will still take a majority of the votes of the
Members of each House to make the tough choices needed to cut spending
or raise taxes. Unless and until we make those choices or adopt some
process to implement the constitutional amendment, in the absence of a
congressional majority agreement on how to balance the budget, we will
not have a balanced budget.
Every Member of this body knows that we will not get to a balanced
budget without tough decisions. Adopting a constitutional amendment
saying some future Congress must make the tough decisions and balance
the budget not only isn't a substitute for our acting or adopting an
enforcement mechanism, it will delay those actions because people might
think we have acted.
If we are going to get to a balanced budget by 2002, there is a real,
practical need to adopt the enforcement mechanism now. We all remember
that, back in 1985, we passed the Gramm-Rudman-Hollings bill, requiring
a balanced budget by 1991. Two years later, we modified that
requirement to call for a balanced budget by 1993. Well, 1991 and 1993
have come and gone, and we still don't have a balanced budget. The
reason is simple: the Congress never laid out an enforceable mechanism
of how we were going to get there. Like the balanced budget amendment,
Gramm-Rudman laid out the targets without enough provisions for how
they were to be achieved.
Without any enforceable blueprint, we found ourselves pushed up
against deadlines we could not meet. We got to the deadline and found
ourselves confronted with a dropping stock market and the prospect of
sudden budget cuts that could throw the country into a deep recession.
We made the only choice we could, protecting the Nation and the economy
at the cost of not meeting the budget targets.
The current congressional majority appears committed to marching down
this same road again. The constitutional amendment before us, like the
Gramm-Rudman law, would require us to achieve a balanced budget in a
fixed period of time. It doesn't say how we are supposed to get there
and stay there.

[[Page S1876]]

If this Congress fails to face up to the obligation of laying out a
detailed enforceable plan to reach and maintain a balanced budget as
required by the amendment, why should we expect future Congresses to be
any more responsible? If we duck the task of outlining the enforceable
mechanism and/or the cuts that will get us to a balanced budget by
2002, and keep us at balance thereafter, we can only expect that the
next Congress, and the next one after that, will follow the same
course. If we don't do the hard work this year, we can't expect
somebody else to do it for us next year.
If we pass a constitutional amendment requiring a balanced budget
amendment without an enforcement mechanism, we are going to face the
same kind of choices we faced with the Gramm-Rudman law. If we don't
have the will now to plot our course to reach and maintain a balanced
budget, we will get to 2002 and find that we have to either abandon the
goal with the increase in cynicism which would accompany it, or risk
undermining the national defense or pushing the economy into a deep
recession.
There is a way to avoid that fate. We can lay out an honest plan and
an enforceable mechanism, telling the American people how we intend to
achieve and keep a balanced budget. That would be the honest approach,
the approach that the American public would respect.
Even the Wall Street Journal editorial on February 4 stated,

The notion of amending the Constitution to outlaw budget
deficits is silly on any number of counts. Politically it's
empty symbolism. Legally it clutters the Constitution with
dubious prose * * * The concept embodied in the proposed
amendment measures nothing useful; it is at best a
distraction, and at worst spreads confusion that will make
the right things harder to do, not easier.

The proposed amendment is full of loopholes and ambiguities, all
usable when 2002 arrives. For example: First, the implementation of the
amendment depends on economic estimates that can be made overly
optimistic if that is what is necessary to project a balanced budget.
We have seen enough rosy scenarios in the budgets of both Republican
and Democratic administrations to know how this game is likely to be
played. For example, in 1981, our estimates were off by $58 billion. In
1982, our estimates were off by $73 billion. In 1983, our estimates
were off by $91 billion, and on and on. In 1991, they were off by $119
billion--$119 billion in one year. You talk about a loophole. This one
is big enough to drive a $119 billion deficit through. That's bigger
than our current deficit.
Second, the amendment requires a balanced budget in each fiscal year.
Throughout the 1980's Congress and the President artificially lowered
the reported deficit and met Gramm-Rudman targets by delaying spending
a few days thereby pushing it from one fiscal year to another. Under
the proposed amendment, we can expect similar budgetary shell games.
Third, States with balanced budget requirements have frequently
avoided them by creating independent or quasi-public agencies and
placing their expenditures off-budget. We did much the same thing in
the 1980's with the costs of the savings and loan bail-out. Because the
amendment does not define key terms such as receipts and outlays, it is
certain to lead to similar manipulations.
Fourth, the deficit could be artificially reduced by selling off
valuable public assets, such as public lands. This approach might
enable the Federal Government to report a smaller deficit for a few
years, but would have no impact at all on the structural gap between
revenues and outlays.
There are numerous technical problems with the amendment. It does not
tell us what an outlay is, what a receipt is, or how the Congress will
monitor and regulate the precise levels of outlays and receipts. But,
perhaps most importantly, it does not tell us what will happen if
outlays in fact exceed receipts.
What would happen if the amendment were ratified, and, by the end of
a fiscal year, outlays were to exceed revenues, a clear violation of
the amendment. What would happen? Could the courts step in and enforce
the amendment?
According to the authors of the resolution, there would be no remedy,
unless provided by future legislation. As Senator Hatch explained on
March 7, 1986, ``[T]here is no question that Congress would have to
pass implementing legislation to make it effective. In that sense, it
is not self-executing. . . . It would be the obligation of Cong-ress .
. . [to] enact legislation that would cause this to come about.''

The unenforceability of the amendment should not be a problem, the
authors tell us, because future Congresses would be bound to respect
the provisions of the amendment and the will of the voters and to
comply with it in good faith by enacting suitable implementing
legislation.
But this argument has two flaws. First, the amendment, if ratified,
wouldn't take effect until 2002 at the earliest. This Congress wouldn't
be bound by the provisions of the amendment. The next Congress wouldn't
be bound. The Congress after that wouldn't be bound. In fact, no
Congress would be bound by the terms of the amendment to enact
implementing legislation until 2002 at the earliest, and by then it
would be too late to take the actions necessary to comply.
Second, the legislation required to implement this amendment will be
extremely complex, and, even if everyone acted in good faith, there
still might be no agreement. Over the last decade, we have enacted into
law some 50 single-spaced pages of procedures, governing the
congressional budget process and attempting to rein in uncontrolled
budget deficits. These provisions set timetables for the congressional
budget process. They provide the rules for debate for budget matters.
They spell out points of order that may be raised to keep the budget
under control. They establish the role of the Congressional Budget
Office. They provide controls on legislation providing spending
authority and rules for legislation providing entitlement authority.
They limit the use of off-budget agencies, programs and activities.
They establish regulations for the sequestrations and procedures for
the rescission of appropriated funds.
Similarly detailed legislation would be required to implement and
enforce the balanced budget amendment. To give just one example of the
complex issues that would have to be addressed by such legislation, the
resolution before us would require that outlays may not exceed
receipts. However, Congress does not legislate either outlays or
receipts. The appropriations and revenue measures that we enact lead to
outlays and receipts, but do not dictate the exact levels of outlays or
receipts in any given year.
So Congress would have to establish new mechanisms to control outlays
and receipts. This raises many difficult questions, on which reasonable
people could disagree. Let me read from a colloquy between myself and
Senator Simon about some of these questions:

Senator LEVIN. How would the monitoring of the flow of
receipts and outlays be done to determine whether the budget
for any fiscal year is on the track of being balanced? Would
this require implementing legislation?
Senator SIMON. There would have to be monitoring and future
legislation would have to take care of the implementation of
that monitoring.
Senator LEVIN. What exactly is the definition of receipts
and outlays? Specifically, would the receipts and outlays of
Bonneville Power Administration be receipts and outlays of
the United States pursuant to this constitutional amendment?
Would the answer to these questions require implementing
legislation?
Senator SIMON. Implementing legislation will be needed on
some of these peripheral questions, but the intent is clear.
Senator LEVIN. In an instance in which the OMB and the CBO
disagree with each other on what a level of outlays is, how
will the dispute be resolved so that it can be determined
whether or not outlays exceed receipts?
Senator SIMON. Future legislation will have to take care of
this.
Senator LEVIN. Who will determine the level of receipts and
whether a revenue bill is ``a bill to increase revenues?'' .
. . . My question is, what happens if the revenue estimators
in the Treasury Department say the bill is revenue neutral,
and the Joint Committee on Taxation say the bill will result
in a net increase in revenues? Whose estimate will prevail?
How will the dispute be resolved?
Senator SIMON. Future legislation will have to take care of
this.
Senator LEVIN. At what point will it be determined that
outlays will in fact exceed revenues and that actions such as
a tax increase, spending cuts, or tapping into a rainy

[[Page S1877]]

day fund will be required? August 1? September 15? Who will
make that determination?
Senator SIMON. There will have to be regular monitoring and
future legislation will work out the details.

Mr. President, these are difficult questions, on which reasonable
people could disagree. The assumption of the authors that future
Members of Congress will try, in good faith, to comply with the
amendment does not mean that a majority of Members of each House of
Congress will agree on the many issues involved or on whether to
require sequestration of funds if outlays are determined to exceed
revenues, or that they will agree on whether to exempt the national
defense or Social Security payments from such sequestration.
And what if the future Congress to which we leave these questions
can't agree? Would dozens of unelected judges assert jurisdiction and
order spending cuts or tax increases? When the Senate during the 104th
Congress considered this constitutional amendment, we adopted by a 92
to 8 vote an amendment offered by Senator Nunn which added language to
section 6 making it clear that ``the judicial power of the United
States shall not extend to any case or controversy arising under this
article except as may be specifically authorized by legislation. . .''
This safeguard has been omitted from the version of the constitutional
amendment which is before us today.
Since implementation legislation is the essential need, why not pass
it now? In the 104th Congress, I offered an amendment, defeated on a 62
to 38 vote, which would have required us to pass the legislation, not
pass the buck. It provided that the constitutional amendment would be
submitted to the States for ratification only upon enactment of
legislation specifying the means for implementing and enforcing the
provisions of the constitutional amendment. There are two advantages to
this approach. First, it places the responsibility on this Congress
instead of leaving it to a future Congress, by delaying the sending of
the amendment to the States until we act. Second, the States would be
informed how the enforcement mechanism would work so they could
consider that in their ratification deliberations. Since it has become
clear that the majority is unwilling to amend its language in any way
and is defeating all efforts to improve it, I have decided not to offer
my amendment again this year.

I am also concerned that the proposed amendment would permit future
Congresses to use Social Security funds for balancing the budget. I
believe that we have a special obligation to protect the Social
Security trust fund, and that we should not rob that fund to balance
the budget. The Social Security system is a contract which we have made
with our senior citizens. We should not allow a circumstance in which
even unintended effects of a constitutional amendment like the one
before us could lead to the failure or inability to meet our
obligations under Social Security. The proponents will claim that this
would never happen because the constituencies supporting that program
are politically strong. But, the Constitution is permanent. Political
circumstance is subject to change. We should not enshrine in the
Constitution the use of Social Security funds for any purpose other
than Social Security.
As the President stated in his letter of January 28, 1997:

* * * [T]he constitutional amendment to balance the budget
could pose grave risks to the Social Security system. In the
event of an impasse in which the budget requirements can
neither be waived nor met, disbursement of Social Security
checks could cease or unelected judges could reduce benefits
to comply with this constitutional mandate.

I am also deeply concerned about the supermajority requirement in
section 2 of the amendment. This would require 60 percent of the whole
number of each House in order to raise the debt ceiling. As we learned
in the last Congress, this represents a grave risk to the ability of
the Federal Government to meet its obligations. In 1995 and 1996, we
saw a determined minority, especially in the House of Representatives
plan and carry out an effort to hold the President hostage by refusing
to agree to lift the debt ceiling unless he accepted all of the details
of their budget proposal. The strategy was rejected by the American
people, in part because a vote to increase the debt ceiling is simply a
vote to pay the bills we owe: it is simply a vote to honor the
obligations that the Federal Government has already incurred.
Reasonable people may differ on whether we should limit future
obligations and by how much, but I hope nobody in this body believes
that we should not honor the obligations we have already incurred.
As Secretary of the Treasury Rubin put it in his testimony before the
Judiciary Committee:

The possibility of default should never be on the table.
Our creditworthiness is an invaluable national asset that
should not be subject to question. Default on payment of our
debt would undermine our credibility with respect to meeting
financial commitments, and that in turn would have adverse
effects for decades to come, especially when our reputation
is most important, that is, when the national economy is not
healthy. Moreover, a failure to pay interest on our debt
could raise the cost of borrowing not only for Government,
but for private borrowers from companies to homeowners making
payments on an adjustable mortgage.

Just a year ago we witnessed Secretary Rubin forced to use every
innovative move within his authority to avoid just such a default while
incredibly the Chairman of the House Rules Committee was calling for
his impeachment for doing so.
The one road we should never take to a balanced budget is the failure
to pay our lawful debts. But, this amendment would make permanent in
the Constitution a shift of power to a minority in either House of
Congress over the issue of whether we pay our bills for our lawful
debts.
Some opponents who have addressed this amendment have emphasized the
danger of putting a rigid straightjacket in the Constitution which
could deepen an economic emergency. Indeed, more than a thousand
distinguished economists, including eleven Nobel laureates have
expressed their opposition to such a constitutional amendment for this
reason. Some opponents have emphasized the danger of the inclusion of
Social Security and the unwise requirement of a supermajority in order
to permit the United States to pay its debts. Others have argued, as
The Wall Street Journal has, that this amendment is an empty gimmick.
While it is true that not all of these flaws can be true at the same
time, it is also true that whether it is a dangerous straight jacket,
or a dodge which won't work, it's a mistake either way.
Mr. President, if we want to achieve a balanced budget, there is one
way to do it. Don't push the problem off onto future Congresses with a
balanced budget amendment that doesn't even become effective until 2002
at the earliest. Keep doing the hard work as we have started. Set out a
plan with real spending targets, real budget cuts laid out on a
program-by-program and year-by-year basis, and real enforcement
mechanisms. I believe we are on verge of a plan to reach a balanced
budget in 5 years in this Congress. We have lowered the deficit for 4
consecutive years, cutting it by more than half. Let's not be delayed
or diverted. Let's do the hard work. At best, this amendment is merely
irrelevant to balancing the budget. At worst, it threatens damage to
the economy, the Social Security system, and the confidence of the
American people in their Government. Either way it's a mistake.
Mr. McCAIN. Mr. President, I rise in strong support of the balanced
budget constitutional amendment. Passage of this constitutional
amendment to balance the budget is the only way to provide the needed
discipline to guarantee our Government's fiscal restraint.
This constitutional amendment simply requires the Federal
Government's total outlays not exceed total receipts for any fiscal
year. It is important to note that Congress may waive this requirement
if 60 percent of each body votes to do so. The amendment can also be
waived in times of war. In order to become part of the Constitution,
two-thirds of the House and Senate must vote in favor of the amendment,
and then it must be ratified by three-fourths of the States.
The facts are clear. History has proven that Washington is incapable
of making the tough spending decisions necessary to put our fiscal
house in order. Despite endless debate and support for a balanced
budget, our Federal budget has not been in balance since Neil Armstrong
landed on the moon 28 years ago.

[[Page S1878]]

For years, politicians--in Congress and in the White House--have
talked incessantly about the need and their desire to balance the
budget. Listen to the following quotes:

We must balance the federal budget . . . I shall recommend
a balanced budget . . .

--Richard Nixon

January 22, 1970

With careful planning, efficient management and proper
restraint on spending we can move rapidly toward a balanced
budget--and we will.

--Jimmy Carter

January 19, 1978

The path I've outlined is fair, balanced and realistic . .
. aiming toward a balanced budget by the end of the decade.''

--Ronald Reagan

January 25, 1983

If only talk meant action.
Neither the current rhetoric about balancing the budget nor the
momentary good news that our annual deficits have been coming down more
than was expected should trick us into believing that we are on the
right path.
According to a January 1997 report by the nonpartisan Congressional
Budget Office [CBO], the deficit will climb from the current $107
billion to $124 billion this year. And it will not stop there. It will
increase to $188 billion in 2002 and reach $278 billion in 2007. In 10
years, without fundamental changes in our spending habits, the deficit
will be over 2\1/2\ times what it was in 1996. CBO's assessment of
these skyrocketing deficits is very disturbing:

The budget deficits projected for the future years are so
large that they could put an end to the upward trend in
living standards that the Nation has long enjoyed. Thus
current U.S. budget policies cannot be sustained without
risking substantial economic damage.

Talk about a risky scheme. ``Substantial economic damage''--the CBO
report went further, stating that if we fail to bring our deficits to a
halt, our economy will enter a period of ``accelerating decline.''
How many warnings will it take to spur us to action? Are there any
words strong enough to force us to act?
The number crunchers show us that if we do not act, our children will
face tax rates of 82 percent. Talk about taxation without
representation. Staggering statistics show that a child born today will
have to pay nearly $200,000 in taxes over his or her lifetime just to
pay interest on the debt.
Have we completely forgotten Thomas Jefferson's stern warning?

We should consider ourselves unauthorized to saddle
posterity with our debts, and morally bound to pay them
ourselves.

Mr. President, it is clear we have dismissed the moral implications
of deficit spending. We only need look at the buildup of our national
debt as proof. Although it took us over 200 years to reach the $1
trillion debt mark, in less than 20 years the debt has grown more than
five times. It now stands at a staggering $5.3 trillion. Do you realize
to pay off this debt, every family of four would have to pay $1,156 a
month for the next 5 years? That is $38 per day.

As more than 200 economists told the Congress in an open letter, in
which they urged support to the balanced budget constitutional
amendment:

We have lost the moral sense of fiscal responsibility that
served to make formal constitutional restraints unnecessary.
We cannot legislate a change in political morality; we can
put formal constitutional constraints in place.

We have a moral obligation to ensure that our children and
grandchildren and their grandchildren are not burdened with
backbreaking debt. We are snatching away their prospects of ever
achieving the American dream. I was struck by a recent report on
generational accounting that showed a child born today will keep just
16 percent of their lifetime wages if we do not change the course of
our Government spending. How can we believe that we are preserving
liberty and freedom if we are asking our children to surrender 84
percent of their lifetime earnings to feed the Federal trough? I have
seven children and three grandchildren. It is simply not fair to my
children or anyone's children to pass down this legacy of debt.
Even in this time of some optimism about balancing the budget by the
year 2002, there are no assurances that we will actually achieve that
goal or that we will keep the budget in balance beyond 2002. One year
in balance is not enough. Let us not forget that Congress and the
President have been trying with little success to balance the budget
for almost three decades.
Time and time again, Congress has passed statutes that were supposed
to restore fiscal discipline--the 1990 budget agreement, Gramm-Rudman-
Hollings I, Gramm-Rudman-Hollings II, just to name a few.
Unfortunately, good intentions have not produced the desired results.
Spending targets were adjusted and readjusted. Deadlines came and went.
Promises of spending restraint were broken again and again. We cannot
afford any more empty promises.
Opponents of this amendment will tell you we do not need this
amendment to balance the budget because both the President and the
Congress have agreed to work together to balance the budget by the year
2002. Our well-intentioned colleagues should not be lured into this
false sense of security that ignores history.

Since 1960, we have had a balanced Federal budget only one time. Why?
People in public office like to do popular things. One need only look
at the budget fiasco of 1995 to realize that balancing the budget is
neither popular nor easily achievable in today's political climate.
The late Senator Paul Tsongas put it best:

If you ask yourself why are these deficits always voted
for, the answer is very simple * * * There are a lot of votes
in deficit spending. There are no votes in fiscal discipline.
What you have here is a sad case of pursuit of self as
opposed to pursuit of what is in the national interest. The
balanced budget amendment is simply a recognition of that
human behavior.

Now, I want to talk for a moment about Social Security. I had hoped
that Social Security would have been exempted from the balanced budget
constitutional amendment, and I voted twice to remove Social Security
from the effects of this amendment. I believe that exempting Social
Security--with the caveat that it is administered honestly and we do
not turn the trust fund into a slush fund for other Federal spending--
would have protected the Social Security trust funds and ensured the
viability of the system for our current and future retirees.
At the same time, I fully recognize that exempting Social Security
from this amendment would force us to address the need for real
spending reductions in other Federal programs. I believe my record on
cutting Government spending is pretty clear--I have proven time and
time again I am willing to make the tough votes to cut popular
programs. However, I am not sure that some of my colleagues who
supported the Reid and Dorgan amendments to exempt Social Security
would actually be willing to rein in spending by the additional $700
billion necessary to balance the budget without including the Social
Security trust funds in the calculations.
Our efforts to exempt Social Security did not prevail. Nonetheless, I
will be vigilant in my fight to protect the Social Security trust fund
and end this charade of using trust fund moneys to mask the deficit. I
know Arizonans do not want their hard-earned dollars invested in the
Social Security system to be used for studying cow flatulence, shrimp
aquaculture centers, wood utilization research programs, or potato
research programs, just to name a few.

Mr. President, I firmly believe that the most serious threat to
Social Security at this time is deficit spending and our ever-growing
national debt. As Robert Myers, the Chief Actuary of the Social
Security Administration from 1947-1970, stated recently:

[T]he most serious threat to Social Security is the federal
government's fiscal irresponsibility. If we continue to run
federal deficits year after year, we will face two dangerous
possibilities. Either we will raid the trust funds to pay for
our current profligacy, or we will print money, dishonestly
inflating our way out of indebtedness. Both cases would
devastate the real value of the Social Security Trust Funds.
Regaining control of our fiscal affairs is the most important
step that we can take to protect the soundness of the Social
Security Trust Funds.

Mr. President, that is exactly what the balanced budget amendment
would do--it would force us to control our fiscal affairs. Passage of
this amendment in the Senate is only one small step toward fiscal
responsibility. This amendment still has a way to go before becoming
part of our Constitution--the

[[Page S1879]]

most sacred and important document underpinning our Nation's history
and Government. A tough vote awaits in the House, and then three-
fourths of the States must ratify the amendment.
But we must move this process forward. The mere fact that this
amendment has been trapped in Washington for so many years proves just
how out of touch we are with those we supposedly represent. Poll after
poll of the American people shows the balanced budget amendment winning
approval ratings of nearly 80 percent. Yet, Washington politicians want
to keep this debate inside the beltway, probably because they fear what
might happen if we let the people decide.
What are the opponents of this amendment afraid of? Quite simply,
they are afraid that it will pass. I can understand why they are
scared. You see, many are spending addicts who have built their entire
political careers spending other people's money on their own
priorities. They do not want to part with their Federal credit card
that has no limits and never comes due. They hide behind excuses about
why a constitutional amendment requiring a balanced Federal budget will
not work. They say they support a balanced budget amendment, just not
this one. Or they talk about balancing the budget, but refuse to
actually do it.

In short, they want to protect themselves from making tough spending
decisions. They prefer the status quo.
Opponents of this amendment probably understand best the real effect
of this amendment. They understand that it will be a straitjacket on
spending.
However, let me be perfectly clear that nothing in the balanced
budget amendment precludes Congress from continuing on our current
path. We could still deficit-spend even with this amendment in effect,
so long as 60 percent of each House votes in favor of doing so.
Granted, this would be a tougher hurdle to clear. But why not force
Congress to live up to a higher standard, to be more accountable, when
the future prosperity of our country is at stake.
Finally, the games that politicians in Washington have long played
will be exposed for what they really are--to use a favorite phrase of
President Clinton and Vice President Gore from the election--a ``risky
scheme'' that threatens to devastate Social Security, Medicare,
education, and the environment.
Passage of this amendment would finally force Washington to do what
needs to be done, namely, determine our long-term spending priorities;
address projected deficits in important programs; shift power back to
the States, local communities, and families; and provide incentives for
savings and investment. Perhaps the real fear of this amendment's
opponents is that President Clinton's own words would finally come to
fruition--the era of big government would be over.
Mr. President, we cannot allow career politicians seeking to preserve
their own interests to hold this amendment hostage any longer. In State
Houses across the country, we must begin the debate about whether the
Federal Government should be forced to live within its means.
I call on every American to read carefully this proposed
constitutional amendment. Do not be fooled by the scare tactics of
those who cannot control their hunger for Federal spending. Decide for
yourself whether it will help or hurt our current state of fiscal
affairs.
It is time for real Americans to closely examine all the what ifs and
the excuses about why we should pass this disciplinary tool, and see if
they hold water. Unfortunately, we know all too well that all of the
what ifs and excuses cannot erase the facts.
In January 1995, the Bipartisan Commission on Entitlement and Tax
Reform, chaired by Senators Bob Kerrey and John Danforth, warned us
that in the year 2012, projected spending for entitlements and interest
on the national debt will consume all tax revenues collected by the
Federal Government. By 2030, projected spending for Medicare, Medicaid,
Social Security, and Federal employee retirement programs alone will
consume all our tax revenues, leaving us nothing to educate our kids,
keep our streets safe or protect our environment.
The warnings are clear. Time is wasting. Since we last voted on the
balanced budget amendment in June 1996, our national debt has increased
nearly $200 billion. We would be wise to remember the words of one of
our great founding fathers, Thomas Jefferson:

I place economy among the first and most important of
republican virtues, and public debt as the greatest of
dangers to be feared.

I hope my colleagues will pay heed to Jefferson's sage advice and
support the balanced budget amendment.
Mr. KERRY. Mr. President, this has been an unusually enlightening--if
a bit protracted--debate. We have had this discussion before on a
number of occasions and I assume we will have it again during this
Congress. It is my fervent hope that emerging from all this discussion
will be a general understanding on the part of the American people that
there is a discernable difference between a balanced budget amendment
to the Constitution and a balanced budget itself.
Mr. President, this amendment is as fundamentally flawed this year as
it was last year. As it is currently drafted, I cannot support it.
I have come to the floor previously to discuss the detrimental
effects of this proposed amendment to the Constitution.
I have discussed at length the particularly odious issue of the
amendment's supermajority requirement. As I have illustrated in the
past, Mr. President, the most compelling arguments against this
amendment as drafted come from the real experts, the Framers of the
Constitution. I would contend that were they here on the floor of the
Senate today, they would to a person vote against this amendment
because it violates the Constitution's most basic tenet--majority rule.
I have researched this issue, Mr. President; allow me to review it
briefly. In Federalist 22, Alexander Hamilton called a requirement for
a quorum of more than a majority poison for a deliberative body.
Poison, Mr. President, is Hamilton's word, chosen by a Founding Father
of our democracy, not this Senator from Massachusetts in 1997.
Let me explore Hamilton's thought further. He elaborates pointedly
that:

The necessity of unanimity in public bodies, or something
approaching toward it, has been founded upon a supposition
that it would contribute to security. But its real operation
is to embarrass the administration, to destroy the energy of
the Government, and to substitute the pleasure, caprice, or
artifices of an insignificant, turbulent, or corrupt junto to
the regular deliberations and decisions of a respectable
majority.
Hamilton, Mr. President, was concerned that the requirement of more
than a majority would allow the minority to rule simply by not showing
up. ``This situation,'' he said, ``must always savor of weakness--
sometimes border on anarchy.''
Harsh words, Mr. President, but again, not mine. They were written
two centuries ago but could not be more prescient and more appropriate
for this debate.
Knowing his thoughts on the issue of a supermajority quorum, how do
you think Hamilton would vote if he stood among us today?
And how do you think Hamilton and the rest of our Founding Fathers
would feel if they knew that a collection of Members of Congress could
pass a constitutional amendment which contains a provision allowing it
to be waived? Mr. President, the notion that a part of our most
fundamental document of law can be set aside for a time is ludicrous
and anathema to the very reasons for having such a governing document
at all. That's not to say that, given the wording of this
constitutional amendment proposal, the capability to waive is not
needed; emphatically, it is. But that necessity does not remove the
strong undesirability of permitting a waiver of a provision of our
fundamental governing document.
Mr. President, if that is not enough to dissuade Senators from
supporting such a poorly drafted amendment to our Constitution, let me
explore further what is wrong with the proposal before us. I have come
to the floor previously and discussed the inherent and
unprecedented problems with a process which would lead to the Congress
ceding to the judiciary the power vested in it by the citizenry of this
Nation to formulate a budget.

Last year when we considered this amendment, Walter Dellinger, an
assistant attorney general, testified before the Judiciary Committee.
Let me remind my colleagues of his analysis. He testified that:

[[Page S1880]]

should the measure be enforced by the Judiciary, it would
produce an unprecendented restructuring of the balance of
power between the branches of government. If it proves
unenforceable, it would create a quite different but equally
troubling hazard; by writing an empty promise into the
fundamental charter of our government, it would breed
cynicism about our government and diminish respect for the
Constitution of the United States and for the rule of law.

The distinguished professor of law Archibald Cox concurred with this
view. He states that this amendment:

would spawn disputes and charges of violation without
providing either the means of resolving the disputes or
remedies for the actual threatened violations, except to
bring the courts * * * into a field for which they are
totally unequipped by experience.

Indeed, the courts are totally unequipped by experience, Mr.
President, to contend with this amendment should it be made part of our
Constitution. Unelected judges would be forced to order the Government
to reduce or stop paying benefits--like Social Security or Medicare--or
to cut Federal spending. Perhaps the current majority in the Senate has
no dispute with that. But think of it, Mr. President, unelected judges
also could order Congress to increase taxes to enforce the
constitutional requirement to balance the budget. And this has happened
in our country, I tell my friends on the other side of the aisle, in
the case of Missouri versus Jenkins.
But Mr. President, what I believe most renders this amendment as
drafted unacceptable is that it would achieve the exact opposition of
its ostensible intention.
I suppose the proponents believe that this amendment to the
Constitution would restore and demand fiscal discipline of the Congress
and the Government. But, Mr. President, deficit reduction, in and of
itself, is not an economic policy. The jagged, complex, and sometimes
unpredictable nexus between fiscal and monetary policy forces us to
maintain comprehensive economic foresight and vision--be vigilant of
budget constraints, mindful of the markets, cooperative with our chief
trading partners, careful with inflation and unemployment, responsive
to the needy, and watchful of the business cycle.
Those are the ingredients of the plan the Democrats enacted in 1993.
That's why we reduced the deficit by two-thirds in 4 years. By 1996,
the Federal deficit had shrunk to 1.4 percent of the gross domestic
product from 4.7 percent in 1993. That's why inflation and interest
rates and unemployment are at an all-time low. That's why the market is
breaking records. That's why the current economic expansion is one of
the most prolonged positive business cycles in this century. And,
that's what makes the current debate on this amendment all the more
ironic.
Economist after economist including Nobel laureates and Alan
Greenspan will tell you that this amendment, as drafted, will wreak
havoc on the Nation's economy. The amendment before us requires the
budget to operate at balance or surplus, whether economic growth is
strong or weak. It requires a balanced budget even if economic growth
is negative. Let me take a moment and explore the consequences of that,
Mr. President.
One of the greatest economic achievements of the 20th century has
been the unglamorous but vital responsive economic system installed by
the U.S. Government in the aftermath of the Second World War. It is
obvious in periods of stagnant economic growth that revenues rise more
slowly. Higher unemployment, fewer people working, fewer people
paying taxes; slower growth, economic and business contraction, fewer
companies paying taxes. Mr. President, this is not difficult to
understand. When these unfortunate economic slowdowns occur now, we
have a system which alleviates some of the pain felt by individuals and
companies, and eases us back into economic growth. Federal spending
increases--especially on programs like unemployment insurance--and
outlays necessarily exceed revenues. That is economic sense, Mr.
President.

This amendment, as it is drafted, works against economic reality and
risks making recessions more frequent and turning recessions into
depressions. And I make this statement not based on economic theory
cooked up in an ivory tower or a think-tank downtown. I make it based
on the real-life experience of this country during the dark days of the
1930's. After the stock market crashed in 1929, revenues dropped and
Congress pursued an economic program which consisted of spending cuts
and tax increases: the exact course which this amendment would dictate.
What was the result then, Mr. President? This country experienced its
most destructive depression. The spending cuts and tax increases
drained purchasing power from the country and helped make the downturn
deeper. This amendment will exacerbate the natural business cycle of
expansion and recession.
Since the Great Depression and World War II, we have made enormous
progress in reducing the rollercoaster of the boom and bust cycles and
this amendment would strip us of that progress and its protections. It
would remove the fiscal buffer the Federal Government has in place and
leave the States and individual Americans and American companies to
bear the brunt of economic downturns.
The former Director of the Congressional Budget Office, Robert
Reischauer, agrees. He argues:

A balanced budget rule could make it even harder to conduct
discussions of policies on their own merits, and could lead
to distortions of policies simply to meet budget goals. * * *
Burdens might be shifted to State and local governments or to
the private sector even when the public good would be
enhanced by keeping the programs at the Federal level.
Well, Mr. President, my State can't handle this. For the last two
decades, Massachusetts has been a recession-prone State. In the late
1980's, the economy of New England collapsed. While we have crept out
of the ruins of unemployment and business loss, we must be vigilant not
to return. Back in the 1980's and early 1990's, I fought hard to
alleviate the recession in Massachusetts by continuing the flow of
Federal dollars into the Commonwealth and easing its credit crunch. Mr.
President, Federal funds were instrumental in jump-starting economic
growth in Massachusetts: My home State receives more Federal funding
than 43 other States on a per capita basis and 17 percent more than the
average State. Massachusetts State secretariats are highly dependent on
Federal expenditures to help residents of the State overcome the
negative effects of recessions: In the last fiscal year, Federal
dollars provided nearly 80 percent of the funding for Massachusetts'
Health and Human Services secretariat, 77 percent of the education
secretariat budget, more than half of the housing and community
development budget and 43 percent of the transportation and
construction spending.
If an amendment to the Constitution mandates a balanced budget and my
State experiences an economic downturn, it will be at the mercy of the
supermajority of 65 Senators who would have to join me and Senator
Kennedy in releasing more funds, if necessary, to combat that recession
and prevent it from wreaking greater havoc.
Again, Mr. President, this is not pie-in-the-sky speculation. The
Commonwealth Center for Fiscal Policy predicts that ``a fiscal crisis
looms for Massachusetts.'' Our fragile State economy will be tested at
a time when the Federal Government continues to threaten cuts to
vital transfer payments to States.

Mr. President, I oppose this amendment as it is drafted for all the
constitutional and economic reasons I have outlined. Before I conclude,
I must note to my colleagues that I find it enormously ironic that over
the next few weeks, we will all line up to vote for one budget or
another that balances by the year 2002. In fact, the President has
already submitted his plan and it is, as far as I know, the first one
on the table to reach balance by that date. I have not yet seen any
plan from my Republican colleagues, but I am confident that when they
assemble one, it, too, will balance by 2002. So, you see, Mr.
President, we all agree on that. Isn't it ironic that now, of all
times, the drumbeat for a constitutional amendment grows louder? Mr.
President, where was that drumbeat in the 1980's, when President Reagan
was running unprecedented deficits? When no balanced budget was in
sight?
Let us call this exercise what it is and get back to work to restore
fiscal responsibility the old-fashioned way--through hard work, not by
headline grabbing. I yield the floor.

[[Page S1881]]

Mr. BAUCUS. Mr. President, I rise in support of the balanced budget
amendment.
Amending our Constitution is not an action that anyone in this body
should take lightly. I did not reach my conclusion without a great deal
of thought and consideration.
It is time for Congress to pass this amendment and open it up to the
scrutiny of the State legislatures, the Governors, and the citizens.

a brief history

``Max, Congress needs to get its act in gear. We need to balance the
budget.'' Four years ago I heard that everywhere I went in Montana. It
didn't matter if I was out on one of my workdays or at the county
fairs; spending time on a dusty ranch, or in the growing cities.
The deficit had ballooned to $290 billion and it showed no signs of
shrinking. The deficit was not only running up our national debt, it
was eating away at the public's confidence in their Government.
Then, 4 years ago, an interesting thing happened. Congress passed,
and President Clinton signed, a budget that actually cut our deficit.
And now for the past 4 years we have shrunk the deficit. Last year the
Congressional Budget Office estimated that the deficit was down to $107
billion.
We can all agree that these are steps in the right direction. But not
is not the time to start patting ourselves on the back.
These steps toward solvency are not enough. Montanans still tell me
that balancing the budget is one of their highest priorities. And it
should be our top priority.
I have worked toward a balanced budget for a long time. I believe
that we need to cut spending, eliminate Government waste, and to create
a Tax Code which is fair to Montana families.
I have often been in pretty small company as I have worked for the
first of those priorities--cutting spending. In 1984, I was joined by
former Senator Kassebaum, and Senators Grassley and Biden in sponsoring
an across-the-board freeze on all Government spending. This 1-year
freeze got just 33 votes. While it would have caused pain in Montana,
it spread the cuts out to many programs and shared the pain. That's how
this process must work if we are to get to a balanced budget.

In 1986, I was the only member of Montana's congressional
delegation--and the delegation was 33 percent larger then--to vote for
the Gramm-Rudman-Hollings act. That bill required Congress to meet a
set of progressively lower budget targets each year. But that bill
included no plan to get us to our targets.
I was just one of 31 Senators to join Senator Kerrey in 1994 on a
bill to cut $9 billion from a number of programs. This package included
cuts to programs which benefit Montana, like the food aid programs
which help our wheat farmers and the honey program. And the means
testing for Medicare part B would have increased medical expenses for
some Montanans. But it was fair and it represents the task before us.
There are no simple cuts.
I have fought Government waste for years. I have long opposed the
star wars defense system and the space station. In the 103d Congress,
as chairman of the Committee on the Environment and Public Works, I cut
$120 million from the Federal courthouse construction budget. Prior to
that I worked with then-Senator DeConcini to cut $50 million from the
CIA's National Reconnaissance Office after we caught them wasting money
on a building with a fountain and a sauna. I am not a newcomer to this
fight.

rationale

On this floor there has been a lively, principled debate about if,
when, and how easily this country should run a deficit.
I do believe that in times of crisis, such as an act of war, we
should be allowed to run a deficit--temporarily. The last time there
was a balanced budget or a budget surplus was fiscal year 1969. We have
been running at a deficit for 28 years now--through three expansions
and two recessions. To run a deficit for that long--without a clear and
pressing need--is wrong.
The time to balance the budget is now.

reservations: social security

I also recognize that we have a commitment to Social Security that we
cannot ignore. Many Montanans and Americans depend on these benefits
when they retire.
We are all aware of the far-reaching budget consequences that will
result when my generation, the baby boomers, reaches retirement age.
The strain on the system will be unprecedented, but not insurmountable.
Through careful planning we can preserve Social Security for all.
However, I fear that it would only be a matter of time before a mid-
year scramble to meet budget requirements would lead some legislators
to consider cutting benefits. We cannot let that happen. We must
protect the Social Security system for our Nation's seniors. I will
work very hard to do just that.

conclusion

So I urge you all to speak to your constituents. Look deep within
yourselves and examine your values. Amending our Constitution is--by
design--a difficult task. Something that cannot be done on a whim.
I have thought long and hard. And I've concluded that we need to make
a clean break with the past. We need to establish a new ethic of
responsibility.
As I said earlier, there has been a lively and principled debate here
on the Senate floor. It is now time to expand the debate. Let the
people decide. I am confident that they will be as cautious and
thoughtful as we have been.
The PRESIDING OFFICER. Who yields time?
Mr. LEAHY. Mr. President, I know that we are supposed to break at
12:30 unless with consent the managers get more time.
What is the time situation for the distinguished Senator from Utah
and the Senator from Vermont?
The PRESIDING OFFICER. The Senator is correct. The Senator from
Vermont has 2 minutes and 50 seconds remaining. The Senator from Utah
has 5 minutes 40 seconds remaining.
Mr. HATCH. It is my understanding that the distinguished Senator from
Texas would like to speak. I think he is on his way. As soon as he
arrives, I would be happy to yield whatever time I have to him.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. LEAHY. 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. LEAHY. Mr. President, how much time does the Senator from Vermont
have?
The PRESIDING OFFICER. The Senator from Vermont has 2\1/2\ minutes,
the Senator from Utah has 3 minutes 20 seconds.
Mr. LEAHY. I ask unanimous consent that the Senator from Utah and the
Senator from Vermont be granted an additional 5 minutes each prior to
breaking for the caucus lunches.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
Mr. LEAHY. Mr. President, I yield 6 minutes to the distinguished
Senator from New Jersey [Mr. Torricelli].
The PRESIDING OFFICER. The Chair would note that in 6 minutes the
hour of 12:30 will have arrived and the Senate will then stand in
recess.
Mr. LEAHY. No. Mr. President, the unanimous consent was that we go
beyond that time.
The PRESIDING OFFICER. If that is the understanding, if there is no
objection, it is so ordered.
The Senator from New Jersey is recognized.
Mr. TORRICELLI. I thank the Chair.
I thank the Senator from Vermont for yielding.
Mr. President, several days ago, in an unfortunate and I believe in
an intemperate moment that does not characterize the distinguished
majority leader, he made some regrettable comments with regard to
Members of this institution who as a matter of conscience have decided
they either needed to change or oppose the resolution offered by the
Senator from Utah.
I will not respond in kind to Senator Lott's comments, but I do find
it necessary today to rise to address once again the question of the
balanced budget amendment. The issue was raised whether those of us who
have

[[Page S1882]]

supported a balanced budget amendment were keeping faith with our
commitments to our constituents by opposing this resolution today.
I would remind Senator Lott that not only have I supported a balanced
budget amendment but last week I voted for a balanced budget amendment.
It is simply not the version he preferred.
I rise also, Mr. President, because I do believe as well there is a
burden that has not been met in this institution to those of us who
support a balanced budget amendment. And that is the concern raised by
the Treasury Department. The amendment as currently drafted would
forever preclude the development of a capital budget by the U.S.
Government. We have asked the majority to address how in voting for a
balanced budget amendment this concern could be accommodated. We have
been met by silence. We have asked to have addressed the concerns of
the CRS and the Treasury Department of how we could ensure the
integrity and the continuance of our obligations to those on Social
Security, and it has been met by silence.
But most interestingly, last week during his otherwise unfortunate
comments, we were assured by the majority leader that efforts were now
being taken to reach an accommodation on Senator Feinstein's concerns
about the development of a capital budget, Senator Johnson's concerns
about the protection of Social Security, and my concerns with each,
including the ability of the United States to defend itself militarily
and to deal with serious economic recessions. Each of us waited since
Mr. Lott's comments of last Friday for this attempt at reconciliation.
I was certain, based on Senator Lott's comments repeated again in the
news on Sunday, that there was a decision to seek some accommodation
that would allow all of us who believe in a balanced budget amendment
to vote affirmatively today.
I regret to inform my colleagues that I have received no such
communication. I know of no other Member of the Senate who has received
such communication. I assume, therefore, that either Senator Lott
misspoke or, somehow, there was something disingenuous about his offer.
Because my concerns remain. I have voted for a balanced budget
amendment to the Constitution last week. I would vote for this, but,
like Senator Johnson, like Senator Feinstein, I have real and lasting
concerns.
I want to know that if there is military aggression against the
United States, we are able to respond with other than a declaration of
war. I offered an amendment to accommodate those security interests. It
was defeated. I remain interested, and I believed I was going to
receive from Senator Lott some communication to accommodate it.
I remain concerned that, in a serious economic recession or
depression, the U.S. Government is able to respond, to provide for
economic needs. I believed, in Senator Lott's communication, he was
interested in accommodating that concern. It has not happened.
And I remain concerned, like other Members of the Senate, how we can
ensure the integrity of Social Security and maintain that commitment to
our constituents, and how, indeed, we could provide in the future for
at least the possibility of a capital budget.
Mr. President, now, only hours before the vote, I am left with this
question. It seems to be relatively simple to reach some accommodation,
to engage in some compromise, to reach the concerns of at least one
Senator on at least one of these issues. The question, therefore,
before the body is this: Did Senator Lott really ever seek to win this
fight, or is this an attempt to amend the Constitution that was never
really designed to succeed? We have waited these several days to hear
what compromises or new communications the majority leader wanted to
share with Members of the Senate. Since none have been received, I
assume none were ever intended.
I have said previously that I believe the Senator from Utah has a
good amendment. I also concluded that good was not good enough in
dealing with an amendment to the Constitution of the United States. The
Senate can do better. National security, severe economic recessions,
and the integrity of Social Security are real and lasting concerns.
My commitment to my constituents is to use my best judgment. My best
judgment is that there should and can be an amendment to the
Constitution of the United States to provide for a balanced budget. But
we accomplish nothing, indeed, do a disservice to the United States, if
we cannot accommodate the real possibility of dealing with military and
economic emergencies, and the genuine concern of our constituents in
dealing with the problems, potentially, of interrupting Social Security
checks.
Therefore, Mr. President, with regret, I rise to inform my colleagues
that what I supposed was an effort at accommodation was never tried
and, therefore, inevitably failed.
I thank the Senator from Vermont for yielding time.
The PRESIDING OFFICER. The time of the Senator has expired. The
Senator from Utah.
Mr. HATCH. Mr. President, I yield the remainder of my time to the
distinguished Senator from Texas, who has played a significant role in
this and who is one of the brightest people to ever sit in Congress
with regard to budgetary matters.
Mr. LEAHY. Is it my understanding, Mr. President, at that time, then,
all time would be expired?
The PRESIDING OFFICER. The Senator is correct. The Senator from
Vermont has 1 second remaining.
Mr. GRAMM. How much time is there remaining?
The PRESIDING OFFICER. Seven minutes.
Mr. GRAMM. Mr. President, first let me thank our dear colleague from
Utah, Senator Hatch, who has been a great and effective leader on this
issue. We would not be where we are--that is, as close to the goal line
as we are--without him.
Our Senate Democratic colleagues are concerned. We hear it
everywhere. They are really concerned. I went back this morning and
looked at every amendment they have offered to the balanced budget
amendment to the Constitution of the United States and found that they
are so concerned that they have offered amendments on the floor of the
Senate to exempt 95 percent of the domestic budget from the balanced
budget requirement. They are so concerned about balancing the budget
that they think 95 percent of the things we spend money on domestically
ought to be exempt. They are so concerned about Social Security that
they believe we ought to continue to pile up debts.
We balanced the budget last in 1969. Since 1969, we have piled on
some $4.8 trillion worth of debt. In fact, just on the debt we have
incurred since 1969, the last year we balanced the budget, we paid a
gross interest payment of $320 billion last year. And the Democrats are
very concerned. They are concerned that if we do not keep piling up
debt, we may not pay for Social Security. But, since 1969, in piling up
$4.8 trillion worth of debt, we are paying more interest on that debt
than we are paying for Social Security retirees today.
Our Democratic colleagues are so concerned, they remind me of someone
who would be advising young parents, who have very small children, who
want to be able to afford for them to go to college--who might advise
those parents, saying: Don't get in the habit of balancing your budget
because then you may not send your children to college.
How in the world can anybody with a straight face--and I understand
politics--but how can anybody with a straight face stand on the floor
of the U.S. Senate and say we are in a better position to protect
Social Security today, paying $320 billion of interest payments per
year on the debt piled up since 1969, than we would have been if we had
never incurred that debt, when the interest payment is bigger than what
we are paying into Social Security for retirees? Does logic have no
meaning?
Finally, there is the argument about, well, this is not perfect. This
just is not quite perfect. Let me say to my colleagues--and this is an
experience I have had in working with Senator Hatch--we have been
trying to find perfection here. You know, the Founding Fathers didn't
find it. If those who remember the story of the miracle at Philadelphia
will remember back, when Franklin stood to speak he said that he

[[Page S1883]]

didn't believe what they had done was perfect, but he doubted that they
would do better.
I have found that every time we try to find perfection, every time we
try to offer to accept this concern that our Democratic colleagues
have, they end up backing away from it. There is no one so
unconvincible as a person who will not be convinced.
So, I think it is important that the American people understand some
basic facts about all we are going to do today, since the balanced
budget amendment to the Constitution is going to fail by one vote. Two
Members, who voted for this very amendment in the House and who
campaigned for it, are going to cast votes to kill it today. What are
we getting out of all this? Let me tell you what the lesson is to the
Nation. There are 55 Republicans in the Senate, and every one of them--
and I am proud to say every one of them--is going to vote for the
balanced budget amendment to the Constitution of the United States. Our
Democratic colleagues, in their concern for everything but deficit
reduction, have offered amendments to exempt 95 percent of all domestic
spending from the balanced budget. How can you balance the Federal
budget when you don't count 95 percent of the domestic items that the
Government spends money on?
The plain lesson here is this: Despite all we say in our campaigns,
despite the fact that there are so many who want the public to listen
to what they say at home and not look at what they do in Washington,
the bottom line is, over and over and over again, what our Democratic
colleagues have shown is that they are not for a balanced budget
amendment. How can you vote to exempt 95 percent of the budget from the
balanced budget amendment and be for it? You can always find an excuse
to not balance the Federal budget. You can always be for it in the
abstract and not in reality.
What I want America to get out of this 3-week debate that we have had
is, there is a clear difference. There is a clear difference.
Republicans, I am proud to say, are absolutely united, 55 out of 55, in
favor of requiring, constitutionally, a balanced budget.
This is not our idea. Thomas Jefferson had come back from France
where he had been Minister to France during the Constitutional
Convention, and when he first saw the Constitution, he said if he could
change one thing, he would limit the ability of Government to borrow
money to incur debt. And we are here today, over 200 years later,
trying to fix this problem in the Constitution.
Some say this is not perfect. Some say, ``Shouldn't we exempt all
these programs?'' What is more important than the future of our
children? A baby born in America today, if this current trend of
spending continues--and it will without this amendment--will pay
$187,000 of income tax during their working lifetime just to pay
interest on the public debt.
When does it end? Obviously, in the minds of our Democratic
colleagues, not today. We are going to pass a balanced budget
amendment, but I am very concerned that we are not going to pass it
until we have a financial crisis, until we are all brought to our
senses that this debt binge that we are on, mortgaging the future of
our children, taxing people yet unborn to pay benefits to people today,
has to end. I wish it were ending today. It is a profound
disappointment.
I yield the floor.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. MURKOWSKI addressed the Chair.
The PRESIDING OFFICER. The Senator from Alaska.
Mr. MURKOWSKI. Mr. President, has all time expired on the pending
issue?
The PRESIDING OFFICER. The Senator is correct. Under the previous
order, the Senate is set to go into recess.
Mr. MURKOWSKI. I ask unanimous consent that I may speak in morning
business for 5 or 6 minutes.
Mr. LEAHY. Reserving the right to object.
Mr. MURKOWSKI. Not on this subject.
Mr. LEAHY. Reserving the right to object, and I will not object, if--
I want to accommodate my friend from Alaska--after that, we then recess
for the party conferences. If he can include that in his unanimous
consent request, I have no objection.
The PRESIDING OFFICER. Is there objection to the request as
propounded? Without objection, it is so ordered.

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