[Congressional Record Volume 143, Number 92 (Thursday, June 26, 1997)]
[Senate]
[Pages S6476-S6477]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 BALANCED BUDGET ENFORCEMENT AMENDMENT

  Mr. FRIST. Mr. President, I rise to discuss an important balanced 
budget enforcement amendment that I will offer on behalf of myself, 
Senators Conrad, Abraham, and Sessions, tomorrow morning.
  This amendment evolves from a very simple principle, and that is, 
once we get a balanced budget, that it stays balanced well into the 
future.
  This amendment, based on existing enforcement mechanisms, has two key 
provisions:
  First, it establishes a 60-vote point of order in the Senate against 
any bill that provides or would cause a deficit in the year 2002 or in 
any year thereafter.
  Second, it requires that the President submit a balanced budget in 
the year 2002 and every year thereafter. To retain appropriate 
flexibility, this amendment suspends this point of order in times of 
war or in times of recession. This exact same exception is provided for 
in the existing enforcement mechanisms under the current law.
  This amendment is also--I should add, because I think this is 
important as we bring forth amendments tomorrow--consistent with the 
bipartisan budget agreement.
  The text of the bipartisan budget agreement specifically states that 
``agreed upon budget levels are shown on the tables included in this 
agreement.'' Under the long-range summary table in the agreement, the 
agreement shows a budget surplus of $1 billion in the year 2002 and $34 
billion in the year 2007. This means that we are projecting a balanced 
budget in 5 years and in 10 years. My amendment will strengthen our 
ability to abide by this agreement and keep spending under control in 
the future.
  In the bipartisan budget agreement, the Congress, the President, 
Republicans and Democrats, joined together to balance the budget in the 
year 2002. But I believe that everyone would agree that we don't just 
want to balance the budget in just that 1 year, 2002, but we want to 
maintain balance every year thereafter. That includes the years 2003, 
2005, 2010, 2020.
  We must keep focusing on our long-term budget picture for one very 
important reason: to prepare for the baby boomers' retirement which is 
just over a decade away. We know that the budget agreement does not go 
far enough in addressing this long-term challenge.
  In fairness, the authors of the agreement never claimed that it does. 
But as we approach this new demographic era that all of us know is 
sitting out there just about a decade away, we must be acutely aware of 
the situation. In fact, we know that right now, 200,000 Americans will 
turn 65 this year. But in 15 years, in 14 years, in fact, by the year 
2011, 1.5 million Americans will turn 65 just that year and that trend 
will continue over the next two decades.
  Simultaneously, as the elderly population is increasing, the number 
of younger workers who are working to support that elderly population 
is decreasing. In fact, today, there are 4.9 workers supporting every 
single retiree's benefits, that is today, that includes Social Security 
and Medicare. But in the year 2030, there will only be 2.8 workers 
supporting the benefits of a single retiree.
  This dramatic demographic shift will bring significant economic, 
political, social and cultural changes that will transform our society. 
If we continued on our current spending course, entitlements--that is 
our automatic spending programs--coupled with interest on the debt 
would consume all revenues in just 15 years, leaving not a single 
dollar left over for roads, for infrastructure, for medical science, 
for the national parks, for medical research and for defense of the 
country. I believe our balanced budget agreement will help ease this 
demographic pressure, but much more work lies ahead. We must begin 
sooner, rather than later, to deal with these problems fairly and 
effectively. This amendment addresses that problem.
  It will keep pressure on Congress and the President to confront these 
inevitable challenges, this inevitable demographic shift. To those not 
familiar with the Federal budget process, this amendment will create a 
procedural hurdle, called a point of order, to prevent the Senate from 
considering bills that will increase the deficit. If a Senator raises 
this point of order, it will take a three-fifths vote of the Senate, 
that is 60 votes, to waive the point of order and pass the legislation, 
rather than the normal 51-vote majority.
  After we have all worked so hard and so long to rein in spending, we 
should not allow the deficit to balloon out of control once again after 
that year, 2002. It is imperative that we preserve this achievement and 
restrict Congress' ability to overspend taxpayer dollars. We will offer 
this amendment tomorrow morning and, at that time, I will urge all of 
my colleagues to support this important amendment which addresses the 
inevitable demographic changes. I yield the floor.
  Mr. CONRAD. Mr. President, I am pleased to be a cosponsor of Senator 
Frist's budget process amendment.
  The Frist amendment seeks to establish a more stringent enforcement 
mechanism for the bipartisan budget agreement. I think it's important 
for Congress and the President to continue working after enactment of 
this year's two reconciliation bills to ensure that at least the 
unified budget is balanced in 2002 and years thereafter. The amendment 
would also require the President to submit budgets each year which do 
not cause a unified deficit in fiscal year 2002 or any year thereafter.
  Specifically, the Frist amendment would establish a 60-vote point of 
order against any resolution or bill--including the budget resolution--
that provides or would cause a deficit in fiscal year 2002 or any year 
thereafter. I think such a point of order will help Congress and the 
President remain vigilant about the deficit, particularly in years 
after 2002.
  Frankly, I would have supported much more ambitious deficit reduction 
efforts this year. I would like to see the federal budget moving 
towards true balance--that is without counting the Social Security 
surpluses. I believe that is the real way to balance the

[[Page S6477]]

budget. But I also must acknowledge that the President and the 
bipartisan congressional leadership did not seek to balance the budget 
without counting Social Security. The bipartisan budget agreement 
balances only the unified budget. I don't believe we've truly balanced 
the budget with enactment of this year's reconciliation bills. But 
perhaps at least we have taken a modest step in the right direction.
  One of the reasons I support the Frist amendment is that I am 
concerned about whether this bipartisan budget deal will accomplish its 
intended goal--balance of the unified deficit within five years. When I 
first became aware of the details of the 1997 budget agreement, I 
viewed it largely as a missed opportunity.
  In my view, the budget was not truly balanced. It only claimed 
balance by using Social Security trust fund surpluses. In fact, in the 
year 2002 the real deficit will probably still be over $100 billion.
  In addition, under this bipartisan budget deal the deficit is larger 
for the next three years than it is this year. This year's deficit is 
currently projected to be about $67 billion. The deficits for 1998-2000 
will range from $80 billion to $100 billion.
  Of most concern to me, budget negotiators failed to correct the 
upward bias that currently exists in the Consumer Price Index. There is 
overwhelming evidence that the Consumer Price Index, currently used to 
adjust tax brackets and various spending programs for inflation, 
overstates the actual change in the cost-of-living in the United 
States. The budget deal should have corrected this mistake which will 
add nearly $1 trillion to our national debt over the next 12 years.
  Some of the economic assumptions underlying the budget deal are 
highly suspect. CBO's last minute revenue adjustment of $45 billion per 
year may be credible for the years 1997 and 1998. Its credibility for 
the period 1999-2007 is unclear. In addition, the balanced budget 
fiscal dividend assumed in the budget agreement is based on the theory 
that lower interest rates will result from balancing the budget with a 
credible deficit reduction plan and path. The real debate with regard 
to the Federal Reserve's interest rate policy right now is whether the 
Fed will raise, not lower, interest rates in the next few months, 
particularly since this proposal contains dramatically less savings--
only $200 billion--than other proposals offered this year.
  Finally, I am concerned that enactment of the tax package before the 
Senate will blow the progress we have made on reducing the deficit. 
Over the longer term, I am concerned that since many of the tax cuts 
are back-end loaded, they will explode in the outyears. The individual 
alternative minimum tax relief provisions are a perfect example. These 
provisions don't take effect until 2001. The cost over 1998-2002 is 
$350 million. The cost over 10 years is $15 billion, a 4000-percent 
increase. By 2007, the AMT provisions will cost the Treasury $6 billion 
per year.
  Another example involves the Individual Retirement Account provisions 
in the Senate's tax bill. I know there is strong support for providing 
incentives for people to save. But the various IRA provisions in the 
Senate tax bill, particularly the new back loaded IRAs, have serious 
deficit implications. The IRA proposals lose about $9 billion over 1998 
to 2002. Over the second five years the revenue loss is $36 billion. 
These types of back-end loaded tax cuts may prevent our nation from 
achieving long-term fiscal balance.
  For all these reasons, I support careful monitoring of the federal 
budget deficit in 2002 and years thereafter. I believe a 60-vote point 
of order will force Congress and the President to immediately get back 
on track if our fiscal situation changes dramatically and the unified 
budget deficit begins to rise in 2002 and years thereafter.
  If we can at least maintain unified balance of the budget, then 
perhaps Congress and the President will have the courage to move toward 
truly balancing the budget. We can perhaps then achieve the kinds of 
structural changes in entitlements that will put our nation on a 
sustainable fiscal course over the long term, as we prepare our nation 
and our economy for the retirement of the baby boom generation around 
the year 2012.
  Mr. LEVIN addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Michigan.
  Mr. LEVIN. Mr. President, I thank the Chair and I thank my good 
friend from Rhode Island for his understanding at this late hour.

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