[Congressional Record Volume 143, Number 70 (Friday, May 23, 1997)]
[Senate]
[Pages S5089-S5091]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   FISCAL YEAR 1998 BUDGET RESOLUTION

  Mr. GRAMS. Mr. President, I should like to talk a little bit about 
today's budget vote and some reasons why I had to anguish over it and 
vote no on this budget, a budget that I hoped we could all be proud of 
and we could go home and really tell our constituents we had done the 
best job we could and we were providing an honest budget that was going 
to provide the things we had talked about--smaller Government, less 
taxes, et cetera.
  But, Mr. President, there is an old saying that if something seems 
too good to be true, then it probably is. In Washington, that scene can 
be taken one step further. If something seems too good to be true, then 
it probably is and the taxpayers are somehow going to get stuck paying 
for it.
  Such is the case with the budget resolution passed by the Senate 
earlier today. On paper, the plan purports to eliminate the deficit by 
the year 2002 by reining in Federal spending while providing 
significant tax relief for America's working families.
  I appreciate all the efforts that were made to try to reach a good 
budget agreement I hoped I could support, and I know how hard Senators 
Domenici and Lautenberg and the leadership on both sides of the aisle 
worked to bang out this budget. But in reality, this budget will 
ultimately create bigger Government, a budget that is going to demand 
more dollars from the taxpayers rather than giving them most of the tax 
relief they have been promised.
  It is, in other words, a deal between politicians here in Washington, 
not between the taxpayers and the people they elected to represent 
them.
  I have made the pursuit of a balanced budget my top priority here in 
the Congress, and I have always said I would support a budget plan 
which meets just three basic specific criteria. First, it must shrink 
the size and scope of Government and return money and the power that 
those dollars represent to the tax people. It must balance the budget 
by the year 2002 with steadily declining deficits each year and without 
the use of rosy economic scenarios. And it must provide meaningful and 
broadbased tax relief to working families.

  Now, while I would like to join the bandwagon in supporting the 
budget resolution, this Washington budget does not meet those 
protaxpayer standards.
  First, shrink Government and return power to the taxpayers. Balancing 
the budget by the year 2002 is a responsibility we must meet, but it is 
simply the beginning. If we intend to reduce the $5.3 trillion national 
debt that will remain even after the deficit is eliminated, and take 
power from Washington and return it to the taxpayers, we must do more 
than simply balance the budget. We were not elected to serve as the 
Nation's accountants, simply trying to make sure the numbers all add up 
on paper. We were elected to be policymakers--and balancing the budget 
is just one of these policies.
  We cannot lose sight of the overall goal of shrinking the size of the 
Washington bureaucracy and sending those dollars back to the taxpayers. 
Yet, this budget plan does just the opposite. It increases the size of 
Government by giving President Clinton even more money for pet projects 
than he originally requested--$74 billion more than he requested in his 
budget just last year, and $5 billion more than the budget he put 
forward in February of this year.
  Mr. President, instead of eliminating wasteful programs to reduce the 
Federal deficit, this budget plan actually creates numerous new 
programs, including $34 billion in new entitlement programs that will 
cost billions of the taxpayers hard-earned dollars.
  Now, if some of these new programs have merit, they should be 
authorized and appropriated through open hearings and through normal 
committee process. Total spending in this budget plan for all programs 
is $18 billion higher than President Clinton's budget request for the 
next 5 years. So where is that in shrinking the size of Government? It 
is increasing the size of Government. The discretionary spending for 
the next year alone will be $6.3 billion more than even what the 
President had requested back in February.
  Compared to the budget resolution we passed last year, this budget 
plan has significantly increased discretionary spending. In fiscal year 
1998, discretionary spending will be $26 billion higher, $26 billion 
more than last year's budget, while the total discretionary spending 
for the next 5 years will be $194 billion higher than last year's 
budget request.
  I do not believe this is what the taxpayers had in mind when they 
heard the President declare that the era of big Government is over. 
During the last 5 years, Congress spent an additional $240 billion 
raising the size of Government that much over the years, but over the 
next 5 years we are going to increase the size of the Government 
another $270 billion. Again, plus the $34 billion in new spending 
initiatives, not just fattening some of the old programs but actually 
creating, giving birth to $34 billion in new programs that will have to 
be supported even more in the outyears.
  By increasing discretionary spending and creating new entitlement 
programs, this budget plan would ensure that big Government is not only 
here to stay, but that it will grow even bigger, and it will ultimately 
mean higher taxes in the future. In the continuing struggle between 
taxpayers and big Government, this budget deal takes the wrong side, 
and I cannot be a part of it.
  Second, the claim of balancing the budget with steadily declining 
deficits, not through rosy scenarios. One of the dirtiest little 
secrets in Washington is the economic hocus-pocus that goes on in the 
budgeting process. The Washington folks seem to believe that as long as 
they have a balanced budget on paper, however they can reshape the 
numbers to fit their goals, it does not matter how they got there 
because the end will justify the means. But, as everyone knows, you 
can't write a household budget with inflated numbers or unrealistic 
assumptions, and you should not be able to write a Federal budget that 
way as well.
  Any honest budget plan must reach balance through steadily declining 
deficits every year. The deficit must be lower each year than the 
preceding one. But this year's 5-year budget agreement actually 
increases the deficits for the first 2 years, then projects enough of a 
reduction in the final 2 years to reach balance. So, in other words, 
let's spend more now and then we will cut later. In other words, this 
President will be out of office, this Congress will have many new 
faces, probably, but they are going to let the next President and the 
next Congresses make the tough decisions that this Congress has turned 
its back on making.
  Mr. President, James Glassman wrote on this subject in Tuesday's 
Washington Post, and I found this observation to be most appropriate. 
He said:

       The way to get to smaller government is by spending less 
     money. In fact, federal

[[Page S5090]]

     spending will rise sharply in fiscal year 1998--that's the 
     year that starts on October 1, 1997, and the only budget year 
     that has any real significance.

  Why? Because ``all the other numbers for all the other years are 
sheer fantasy. As anyone who runs a business knows, the only figure you 
can possibly control is next year's spending.''

  Let me say when the budget deal was struck here in 1990 that raised 
taxes, part of the agreement was we will put a cap on future spending. 
We will not spend over this limit. In 1993, a new tax increase came 
into being, and along with that new tax increase came the removal of 
those old caps, and new caps on spending were put at a higher level. 
They said, all right, we will not spend over this level if you give us 
these tax increases now.
  Now, in 1997, for the 1998 budget year, the first thing that has to 
be done in this budget, we have to bust those spending caps again 
because this budget can't live within those promises, and it extends 
the level ever higher.
  What does that mean? Where does the revenue come from? It is taken 
from the taxpayers and the hard workers of this country. Budget 
proponents are claiming to balance the budget by immediately increasing 
the deficit by at least $23 billion, or an increase of 34 percent, and 
then finding the savings to eliminate the deficit in the preceding 
years for the following years.
  If this does not make sense to the American taxpayers, that is 
because it does not make sense at all. It is just another example of 
the budget tomfoolery that is going around in Washington. A budget plan 
must also be based on real numbers and not the inflated budget 
estimates that have been used in the past to justify more spending and 
higher taxes. Somehow the new revenues, the increased dollars that come 
to Washington, can never be put into the category of reducing the 
deficit or returning some of it in tax relief. It always goes on the 
other side of more spending.
  This budget agreement fails on that score as well as by continuing to 
use the inflated budget estimates of the past to mask the spending 
increases it contains. I cannot support a budget that uses such 
gimmicks simply to make the numbers add up on paper.
  There are two other weaknesses of the agreement I would like to point 
out. For quite some time we have been told repeatedly by the CBO that 
we needed at least $500 billion in spending cuts to achieve a balanced 
budget. It will take hard choices to accomplish that. However, the need 
to make some of the most difficult choices supposedly vanished recently 
when we were told that we can spend more while balancing the budget at 
the same time because somehow the CBO discovered $225 billion in extra 
money. This cannot be true. It contradicts the CBO's own recently 
completed study that examined the potential impact of a recession on 
budget projections and the goal of a balanced budget by the year 2002.
  In this study, the CBO examined two possible recessions, one possibly 
in 1998, another in the year 2000, and it concluded in both cases GDP 
would fall 3.7 percent below potential and would add about $100 billion 
to the deficit. That would make the goal of achieving a balanced budget 
in the year 2002 very difficult.
  Again, if the $225 billion in ``extra money'' is indeed real, it did 
not fall mysteriously from the sky. It is money that belongs first and 
foremost to the American taxpayers, and it should be put to proper use. 
The right way would be to return it to the taxpayers as tax relief and/
or designated for deficit reduction. The wrong way is to spend all 
that. Unfortunately, this budget resolution takes the wrong way.
  Now, there are some who said on the floor today only $30 billion of 
that $225 billion was spent. If that is true, where is the rest of it? 
Where did it go? If it is still there, let's put it to tax relief. But 
the secret is that it has been put into spending.
  I introduced an amendment earlier today that would have required that 
we use the $225 billion of the CBO revenue windfall as assumed under 
this budget for tax relief and deficit reduction, and to keep 
nondefense discretionary spending at the current freeze baseline level. 
My amendment called for giving back half of the $225 billion windfall 
to the taxpayers and then devoting the other half for deficit 
reduction. Again, the question is, where did that money go?
  Another element of my amendment called for keeping nondefense 
spending at a freeze baseline level. Now, baseline budgeting has been 
the subject of great debates, many debates, and I will not repeat the 
arguments today, but let me tell you briefly why this is so important. 
For years, Republicans criticized the use of inflated baseline 
budgeting because it did not reflect the actual spending levels in 
terms of an increase or a cut in a program's funding. By that, they 
always project next year's spending to already be higher so they set a 
new baseline. So if we were going to spend $100 this year, the new 
baseline next year would be $105, so that is what they work off. If we 
only spend $104, the claim would be we cut the budget by $1, when 
actually we spent $4 more.
  Now, there are claims in this budget that we will save $1 trillion in 
spending for the American taxpayer over the next 10 years. Now, that 
sounds great, doesn't it? If you go by the baseline budgeting, what 
they are really saying is, if we froze spending today, over the next 10 
years we would spend about $16.2 trillion, but under the baseline 
budgeting, we are going to only spend $19.2, but we could have spent 
$20 trillion, so we are saving you $1 trillion. We could have spent $20 
trillion, but by the baseline we will cut back.

  The difference is, we are not saving $1 trillion in spending for the 
taxpayers. We are adding $3 trillion in new spending over the same 10 
years.
  It was Lee Iacocca who said if American businesses used baseline 
budgeting the way Congress does, ``They would throw us in jail.'' Many 
of us share Iacocca's views and believe inflated baseline budgeting is 
a fraud and it should be ended.
  During the past 2 years we have been telling the American people we 
would guarantee an honest accounting of our Federal budget by 
implementing zero-baseline budgeting. In other words, be honest. This 
is what we spend this year. This is what we propose to spend next year, 
not the baseline that we could have spent, but we are not going to 
spend quite that much, so we will save you money. That is like going to 
a sale and saying I am going to spend $100 to save $4.
  We adopted zero-baseline budgeting, and Congress has produced two 
balanced budgets by using the freeze baseline. But the fiscal year 1998 
budget resolution abandoned this policy that we had used over the last 
2 years of honest accounting by reverting to inflated baseline 
budgeting. In my view, this is a shift, again, in the wrong direction.
  Returning to the inflated baseline not only again breaks a promise to 
the American people but also ensures, ensures that big government will 
live on by allowing Washington to avoid the hard choices that it must 
make to eliminate wasteful programs and address our long-term fiscal 
imbalances. We could have met the problem head on this year. They were 
negotiating the budget and could have finally had to face those 
problems, but somehow, at the last minute, the White Knight, the CBO, 
with $225 billion in new projections, rode in for the rescue and 
Congress did not have to make any choices. They went ahead and spent 
all the money.
  Mr. President, my amendment, as you know, was defeated by the Senate 
this morning. But this issue is not one that is going to go away. We 
must be honest with the American people, and we must, again, use zero-
baseline budgeting as we promised, so we can rebuild the American 
people's confidence in the Government and make Congress accountable to 
the taxpayers.
  No. 3, meaningful broad-based tax relief for working families. I have 
been the Senate's leading advocate of what we call meaningful broad-
based tax relief for working families through an important measure such 
as the $500-per-child tax credit.
  Rhetorically, everyone from colleagues in Congress and the President 
has joined me in calling for such tax relief. Once again, a closer look 
at this budget agreement reveals that reality does not match the 
rhetoric.
  What does this Washington deal mean for the millions of families who 
would benefit from a broad-based tax cut? Proponents of the budget 
agreement argue that since $135 billion has been set aside on paper for 
tax relief, that it is good. I beg to differ, because,

[[Page S5091]]

as with all things in Washington, there is more, or, in this case, 
there is less than meets the eye.
  For example, when they say there is $135 billion available for tax 
relief, they are ignoring the fact that $50 billion of this pool will 
be raised through higher taxes, so, in other words, to give a tax break 
to some we will have to raise taxes on others. We are going to have to 
borrow from Peter to pay Paul. So that leaves us a net tax cut of $85 
billion and someone will have to pay for the $50 billion. You can bet 
that someone will not be Uncle Sam.
  Also consider the fact that $35 billion has already been promised 
away to the President for his narrowly targeted college education tax 
plan.
  Now, as the Senate author of the broad-based tax relief for working 
families represented by the $500-per-child tax credit, I am deeply 
troubled that this Washington budget agreement dedicates too much money 
for narrowly targeted tax relief at the expense of broad-based tax 
relief. The debate over targeted versus broad-based tax relief raises 
the single most important question for us today, and that is the 
question of who decides. Targeted tax relief says Washington will 
decide who is going to get a tax break, how they are going to get it, 
and what they have to do to get that tax break. If you, as a taxpayer, 
want to cut, you have to do what Washington tells you to do, whereas 
broad-based tax relief says taxpayers can decide. If you want to use 
your tax cut for higher education, go ahead, for housing, go ahead, for 
health care, go ahead, but tax relief should not be narrowly tailored 
to fit the priorities set by Washington or used as a tool for social 
engineering purposes.
  Tax relief should be as broad based as possible leaving the 
decisionmaking on how best to use that to the taxpayer themselves. 
Every household is different. Washington cannot decide.

  Now, while all of us support the use of tax relief for higher 
education expenses, we must recognize that there are many other needs 
faced by working families every day that can be best met by a tax cut, 
and it should not be up to Washington to make those decisions. But that 
is what this budget agreement does by reserving $35 billion from the 
President's college tax deduction which benefits a few. This Washington 
deal takes away tax relief dollars from the child tax credit which 
benefits the many.
  Finally, there are many other claims to those dollars remaining in 
the tax relief pool, including a capital gains tax cut, estate tax 
relief, IRA's and a host of other tax proposals. But if you start out 
with $135, you take away $50 in tax increases, you have $85 net. From 
those $85 million, the President has targeted tax relief of $35 
billion, which leaves a pool of $50 billion.
  To go through some of this other child tax relief, if you are going 
to get the full-blown tax relief you have been promised, it would be 
$104 billion. If you are going to get tax gains, tax reduction, it 
would be $24 billion; estate tax, $18 billion; IRAs, about $11 billion. 
What we have is about $170 billion of tax cuts promised that somehow we 
are going to squeeze out of a box of $50 billion. So, in other words, 
somebody is going to get something, but it will be a shadow. While all 
these ideas have merit, the competition for this ever-shrinking pool 
means more bad news for those of us who care about getting tax relief.
  Again, we have promised working families a $500-per-child tax credit, 
but once you factor in all the tax hikes, special interest tax cuts, 
and deals that have been made a part of the budget agreement, it is 
easy to see that this $500-per-child tax credit could end up being 
nothing more than a token gesture, a promise of meaningful broad-based 
tax relief for working families without the dollars to back it up.
  In other words, working families will be squeezed out again, a broken 
promise, and that is something that I cannot support.
  Contrary to the claims of its proponents, this Washington budget deal 
is a retreat from the promises we made to the taxpayers for meaningful 
tax relief. As I have argued, the figures set-aside for tax relief are 
wholly inadequate to keep the promises we made to take from Washington 
and give back to the taxpayers--a fatal flaw in this budget agreement 
and another brush-off to the working families we are supposed to 
represent.
  In its analysis of the budget, the Heritage Foundation concluded that 
``a credible plan to balance the Federal budget must result in a 
smaller Government that costs less and leaves much more money in the 
pockets of working Americans. The current budget deal not only fails 
these important tests, but in many cases would implement policies that 
are worse than taking no action at all.''
  The medical profession is guided by the doctrine of ``First, do no 
harm.'' The American people should demand the same of their Government 
as it establishes the Nation's spending and tax priorities through the 
budget process. A budget that fails to meet even the most basic tests 
of honesty and common sense--and that may actually leave the Nation in 
a fiscal situation more perilous than the one we face today--is a 
budget the American taxpayers will not support. Congress and the 
President can, and must, do better.
  In closing, let me add a final thought about this so-called balanced 
budget resolution.
  As I stand here in this Chamber, on a day when I should be proudly 
telling the taxpayers of Minnesota that Congress has finally heard 
their pleas and produced an honest budget that reduces the size of 
government and offers meaningful tax relief, I am saddened and angry 
that I cannot.
  The budget resolution passed by the Senate today is not the budget I 
was elected to carry out. It is not the budget a great many of my 
colleagues were elected to carry out. It is a budget built of 
concession, not of compromise, of illusion, not of reality, of 
whispers, not of boldness. It is a budget built like a house of cards, 
without a foundation, and held together by nothing but wishes and 
assumptions. This may be a so-called agreement between the Republicans 
and Democrats in Washington, but it is not the budget agreement we 
promised the taxpayers. It is a budget Congress hopes America will 
like. As you see more of the details, it will be one they don't. For 
this reason, it is a budget I deeply regret I cannot in good conscience 
support.

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