[Congressional Record Volume 143, Number 56 (Monday, May 5, 1997)]
[Senate]
[Pages S3946-S3947]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          THE BUDGET AGREEMENT

  Mr. BENNETT. Mr. President, I have several matters to discuss with 
the Senate this afternoon. The first one I would like to touch upon has 
to do with the budget agreement that was reached over the weekend 
between negotiators on behalf of the Congress and the President of the 
United States.
  There has been a lot of conversation over the weekend on the talk 
shows about how terrible this agreement is. I have read where Democrats 
have attacked the agreement on the grounds that President Clinton has 
caved in to Republican demands. One Democratic commentator, a former 
staffer to the President, has said this deal guarantees the reelection 
of a Republican-controlled Congress in 1998. It is just awful.
  Then another commentator says this deal demonstrates how badly the 
Republicans have caved in to the President. It means the President can 
no longer be attacked for his failure to step up to the responsibility 
of dealing with taxes in a logical way or of dealing with Medicare in a 
responsible way. It is just awful.
  There are some who say, when both sides say it is just awful, that 
means it is truly awful. And then there are others who say, no, when 
both sides agree it is not what they want, it means we have finally 
arrived at the logical answer, somewhere down the middle.
  I think all of this is a little bit shortsighted. I want to stand and 
commend those who were involved in the negotiations for having 
accomplished something truly worthwhile. Does it do what I would like 
it to do in relation to the Tax Code? The answer is, ``Clearly not.'' 
We need to do far more about our taxes than this deal will do. Does it 
solve the Medicare problem in a responsible, long-term way? The answer 
is, ``Clearly not.'' It simply postpones the issue until we will have 
to deal with Medicare again. This, too, I find disappointing. In both 
instances we will see the details come up in the Finance Committee, and 
I hope the Finance Committee, within the parameters of the deal, can 
fashion resolutions to these problems that are better than the ones 
that we have seen talked about in the press up until now.
  But as we complain, one side and the other, about the deal not being 
what we would like, we overlook what I think is a truly significant 
accomplishment. For the first time in my watching of this process, 
either as a Member of the Senate or as an observer from the outside, we 
have a budget deal that does not depend upon smoke and mirrors for its 
budget figures to be reliable. We have a budget deal that does not say 
we will postpone all of the hard decisions to the fourth and fifth or 
sixth years. Instead, it says we will start to face the realities of 
what is happening around us right now. That is a very significant 
thing.
  The second thing I would like to comment on with respect to this deal 
was given reference to in this morning's Wall Street Journal in their 
editorial. They said the real hero of these budget negotiations is 
neither the administration nor the Congress, but the American economy. 
The reason we were able to finally arrive at a conclusion that seemed 
to satisfy temporarily both sides is because the economy is doing so 
well that the projections indicate that we will have more tax revenue 
than the earlier projections would have shown. I want to dwell on that 
for a moment. I gave a major speech on the floor a week or so ago in 
which I tried to get across the importance of the overall growth of the 
economy in our budget discussions. We talk about the budget as if 
everything is a sum zero game, that is, if we take it away from here, 
you must give it someplace else, and everything adds up to a single 
sum.

  That is not the case. The economy is like a business, constantly 
growing, constantly changing. I made the point in that previous speech 
that a sound business executive running a $1.7 trillion corporation 
would not have the simple choice of either raising prices or cutting 
spending. We hear the discussion on the floor so often that those are 
our only two choices in Government. We can either raise tax rates, 
which is the same thing as raising prices for a business, or we can cut 
spending, when, in fact, every business executive knows there are times 
when you can raise your prices and get away with it, and there are 
times when you should cut your prices in order to increase your market 
share. There are times when you do need to cut spending if it is 
wasteful or improper, but there are other times, when you are investing 
in the future, where you need to increase spending. This budget, for 
the first time in many years, seems to go down those roads.
  There are some areas where we are cutting tax rates, as we should--
cutting prices, if you will--to increase our market share and make the 
economy healthier. There are other places where we do need to cut some 
spending, and some places where we need to increase some spending. That 
is what upsets so many of my colleagues on the right side of the aisle. 
They treat all Government spending as if it is, per se, evil, and any 
single dollar they can cut out of the budget they assume is good.
  They remind me a little of an executive I knew in a company who was 
under heavy pressure to start to produce profits in his division. He 
responded to that pressure, and pretty soon the profits started to come 
in. His boss thought he was a hero. He said, ``Well, I did it by 
cutting spending.''
  It was a year or so later that we discovered in that company what 
kind of spending he had cut. He had cut routine maintenance, and the 
physical plant over which he had responsibility was literally falling 
apart because the routine maintenance had not been done. He was a 
temporary hero by cutting spending, but, long term, he damaged the 
business and did damage to the interests of the shareholders.
  Our Nation's infrastructure has some significant problems. The air 
transport problems are very obvious to all. The highway problems are 
fairly significant and obvious. We need to be doing something about 
that. This budget allows us to have some of that, yes, increased 
spending in areas where it makes some sense. Why? Again, because the 
economy is doing so well.
  I have been on this floor when some of my friends have berated Alan 
Greenspan and said what a terrible job he is doing at the Fed because 
he has controlled the money supply in a way that they do not like. Can 
we now suggest it may well be that the current growth of the economy 
stems from wise stewardship at the Fed, and that, indeed, the reason we 
can afford some of these increased spending activities called for in 
this budget come from an intelligent management of the economy long 
term. Can we also suggest that this has come from an attitude at the 
Federal Reserve Board that says we must put price stability above all 
else and it will pay long-term dividends? Maybe it is those dividends 
we are beginning to cash in on in this budget deal.
  There is another thought I would like to leave with you, Mr. 
President, in terms of the economy and how well it is doing. I have 
spoken on this floor before about my experience as a business executive 
during what many people

[[Page S3947]]

called the decade of greed, the 1980's, when we took a small company, 
so small it had four full-time employees, and saw it grow to the point, 
when I left prior to my run for the Senate, when it had 700 employees. 
I have commented it was the tax policies that were pursued in those 
years, pursued primarily by President Ronald Reagan, that made it 
possible for us to grow that company. But we were attacked because it 
was the decade of greed, and, yes, indeed, we did do well.
  I would like to point out that that company that grew in that period 
from 4 employees to 700, now has over 3,000. The momentum that was set 
in place in the 1980's is carrying forward into the 1990's, and it is 
that company and others like it that are providing the income taxes 
that make it possible for us to have this kind of a budget deal.

  So, as we look at the whole thing, let us understand that there are 
many things about it that I do not like. There are many things about it 
that many of the rest of us do not like. But the reason we were able to 
get this degree of agreement comes from the strength of the economy, 
and the one lesson we should learn, as we look at this budget 
agreement, is simply this: As important as anything else we do around 
here are those things that we do that will cause the economy to grow at 
a more rapid rate. Whether it is increasing taxes in a certain area or 
decreasing tax rates in another area, whether it is increasing spending 
on things like infrastructure and other investments, or whether it is 
decreasing spending on areas where there is a degree of waste and 
fraud, all of these things need to be done with the primary goal of 
seeing that the economy will increase in size.
  As it does, a number of things happen. The demand on our social 
spending goes down. There is no better welfare project in the world 
than a job, and a booming economy creates more jobs for more people. 
And we see it in terms of the impact on Government. We should pay 
attention to those kinds of things.
  Mr. President, I will have more to say on this as the budget process 
goes forward, but, while the weekend talk shows were still ringing in 
our ears, I wanted to make this general statement.
  Mr. President, I ask unanimous consent that I be allowed to continue 
as in morning business, on another subject, for up to another 5 
minutes.
  The PRESIDING OFFICER (Mr. Hutchinson). Without objection, it is so 
ordered.
  Mr. BENNETT. I thank the Chair.
  (The remarks of Mr. Bennett pertaining to the introduction of Senate 
Resolution 82 are located in today's Record under ``Submissions of 
Concurrent and Senate Resolutions.'')
  Mr. BENNETT. I thank the Chair for his time and attention and yield 
the floor.

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