[Congressional Record Volume 143, Number 57 (Tuesday, May 6, 1997)]
[Senate]
[Pages S3985-S3986]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           SHAM BALANCING ACT

  Mr. HOLLINGS. Mr. President, as some say, ``Eureka, I have found an 
honest man.'' Well, here, I have found an honest journalist. I don't 
know who wrote the editorial in USA Today on yesterday, but it is 
entitled ``Sham Balancing Act Hides True Scope of the Deficit.''
  It is not my intent to come out and immediately take the so-called 
balanced budget plan and trash it. It moves in the right direction. But 
I want to be constant and persistent until we finally have not just the 
USA Today realize it has been a sham balancing act, but I want everyone 
to realize that it is in the law. Section 13301, signed by President 
Bush on November 5, 1990, says that thou shalt not in this Government 
use Social Security trust funds in any report of a so-called unified 
budget or unified deficit. It is the most fraudulent use of the word 
unified because, to the lay person, unified suggests it is net. In 
other words, the Government spends money and it also receives receipts 
or receives money. And the inference is, with unified budgets and 
deficits, that is the real net or true balance or true deficit. Totally 
false.
  The truth of the matter is that we have been engaged in a sham now 
for several years respecting the use of trust funds. Right to the 
point, Mr. President, what we have is a list of these trust funds here 
that have been consumed and spent, not just borrowed. I have the March 
figures. As of the end of March--this is the most updated figure--
Social Security will be owed $582 billion; Medicare, HI, $122 billion; 
SMI, $31 billion, for a total of $153 billion in Medicare.
  Military retirees the land around, you should know they are spending 
your money, which has been set aside under the law for your retirement. 
That particular fund is $129 billion shy because of this deceit. 
Civilian retirement--all civil servants within the sound of my voice, 
remember, the civil service retirement trust fund has now been spent to 
the tune of $395 billion. Unemployment compensation that the small 
employer in America pays in regularly, as well as the large ones, that 
is shy some $51 billion, that particular savings amount. The highway 
trust fund--we borrowed that money, too, but not for highways. If 
anybody says a bridge is down, like in my backyard where we have been 
trying to get a river bridge that has been declared unsafe for 20 years 
now, that money is already spent to the tune of $22 billion. We can 
build a river bridge in each of the 50 States with the highway money 
used to obscure the size of the deficit, the debt, and the interest 
cost on that national debt. Airports and airways, $6 billion; railroad 
retirement, $18 billion; $63 billion in the Federal finance bank and 
the other particular trust funds, for a total of how much? $1.419 
trillion. Now, we owe $1.419 trillion.

  I have the updated figure just for Social Security as it relates to 
this particular editorial. I ask unanimous consent that this editorial 
be printed in the Record at this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                     [From USA Today, May 5, 1997]

           Sham Balancing Act Hides True Scope of the Deficit

       Over exuberance isn't just a disease of the stock market. 
     Just consider the expansive praise surrounding last week's 
     budget deal between the White House and GOP congressional 
     leaders.
       ``This balanced-budget plan is in balance with our values. 
     It will help prepare our people for a new century,'' 
     President Clinton declared of the five-year outline.
       House Speaker Newt Gingrich was even more effusive: ``We 
     spent four months (with) people saying, `What are you going 
     to do? * * * Well, my answer is balance the budget, cut 
     taxes, reform entitlements.''
       Not quite.
       The deal, with $350 billion in spending reductions over 
     five years, is a modest step forward. But it is more a 
     product of good fortune than hard work.
       The end of the Cold War has trimmed tens of billions from 
     defense needs. And a high-employment, low-inflation economy 
     has provided a $45 billion-a-year windfall in revenues.
       Those factors alone have cut the budget balancers' work by 
     about a third.
       But good fortune takes second place to the budget tricks 
     Clinton and Congress have performed and the blind eye they've 
     given entitlement problems.
       The fact is that the balanced budget in 2002 won't be 
     balanced. Clinton and Congress avoided dealing with $450 
     billion worth of overspending over the next five years by 
     simply counting surpluses borrowed from Social Security and 
     other federal trust funds as income. In 2002, they rely on 
     $100 billion borrowed from Social Security and other trust 
     funds that year.
       Worse, Clinton and Congress put off meaningful entitlement 
     reform. The $23 billion a year in Medicare savings they 
     agreed to will keep its trust fund solvent only until 2008--
     the year 76 million baby boomers begin flooding into 
     retirement. Ignored totally was Social Security's need for an 
     infusion of an extra $60 billion a year, starting now, to 
     keep it viable.
       Instead, Clinton and Congress passed out tax goodies that 
     will sap $20 billion worth of revenue a year, with much of 
     the benefit going to the rich.
       The budget deal has its high points. It will trim the 
     health-care bureaucracy and promote greater use of managed 
     care. It cuts back some wasteful corporate welfare even as it 
     invests more in a healthy start for kids that could provide 
     savings later.
       But tax giveaways promise to balloon the deficit when good 
     economic times end, and lack of entitlement reform means the 
     toughest budget work lies ahead.
       Last week's deal thus earns some polite applause but no 
     standing ovation.

  Mr. HOLLINGS. Mr. President, it is another $456 billion that will be 
spent. So as of the year 2002, we look around at Social Security and 
everybody is saying, wait a minute, the baby boomers are going to come 
in 15 years, and the baby boomers will be in a foot race trying to get 
ahead of us politicians because we are way ahead of them spending this 
money. We will owe, in the year 2002, in excess of a trillion dollars. 
That is why this chart has been brought forward. Last year, when we 
said the annual deficit was $107 billion, the truth of the matter is, 
it was $261 billion. We borrowed, in order to make it $107 billion, or 
we spent from the various savings funds here at the Federal level, $154 
billion. Why not borrow another $107 billion and call it balanced? That 
is the gamesmanship that is going on.
  I went home over the weekend and they found $225 billion over at CBO. 
I have heard that my colleagues on the other side of the aisle were 
informed of this revenue before the Democratic negotiators were. They 
went back and forth with respect to OMB and CBO while knowing this 
extra money was available. You can see the gamesmanship involved. But 
the hard-core fact is

[[Page S3986]]

that they have projected, up until now, $360 billion in interest costs 
on the national debt. That is, while we are debating, we are increasing 
spending a billion dollars a day for absolutely nothing and adding it 
to the national debt. So that by the end of the 2002, the debt will 
exceed $6 trillion, and the interest costs on that will be in excess of 
$500 billion.
  So what will occur is, at the end of this particular budget that we 
are all talking about as balanced, domestic spending, which is cut from 
current policy, defense, which is cut from current policy, will be 
exceeded by the interest costs on the national debt. The whole time we 
are going through this charade, they said ``sham balancing act'' in 
this particular editorial, they totally ignore section 13301 of the 
Budget Act and ignore the reality that we will have spent in excess of 
$2 trillion in trust funds when we get through.
  Mr. President, what we really have is a disaster on our hands. While 
we are talking about waiting for the baby boomers 15 years out, Social 
Security is paid for. The taxes are there. We have a surplus, 
supposedly, of $581 billion. But that $581 billion is not in the desk 
drawer; it is a little old IOU. We have a surplus in Medicare right 
this minute, which they are talking about going broke; in Medicare we 
have a $153 billion surplus. That is paid for. But they are all talking 
about deficits. Why? Because we are spending it and using this 
subterfuge of a unified budget, a unified deficit. Until we sober up 
from that, Mr. President, we are going down, down, down, adding to the 
debt each year, adding then to the interest cost each year, and then 
adding to the automatic spending, the spending on automatic pilot at a 
billion dollars a day. That is spending for absolutely nothing.
  If we had been responsible--interest payments were only $75 billion 
when President Reagan came to town; we have added over $285 billion in 
interest spending; that $285 billion is what all of the particular 
negotiating since January has been about--we could have taken defense, 
research, technology, education, the environment, and all of these 
particular needs.
  Point: We are spending the trust fund money up here in Washington. We 
are telling the people we are not spending it. ``It is unified. Don't 
worry about it.'' And we are taking their savings fund and running away 
with it. And whoever is going to be around here on the bridge to the 
next century, remember. It is not going to be a bridge. We are going 
right straight over the cliff.
  I yield the floor.

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