[Congressional Record Volume 143, Number 109 (Tuesday, July 29, 1997)]
[Senate]
[Page S8222]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    SMOKE AND MIRRORS OF THE BUDGET

  Mr. HOLLINGS. I wanted to comment with respect to the usual smoke and 
mirrors of this year's budget. I wish, of course, our distinguished 
chairman of the Appropriations Committee, the distinguished Senator 
from Alaska [Mr. Stevens], was still in the Chamber because he 
initiated the actual spectrum auctions discussion for the simple reason 
that we have pretty well drained the pot there.
  On our last auctions, billions were expected, but we only received 
millions. Some of those bidding have now been put into receivership and 
have not responded to their particular bid. So we know now that under 
this particular agreement, when it calls for some $26.3 billion to come 
from spectrum actions, we will be lucky to get half of that amount. 
There again is more smoke and another mirror.
  Specifically, they who designed it agreed that it was smoke and it 
was a mirror in that they then backed it up with the universal service 
fund provision. This, of course, is a private fund, gotten together by 
the particular entities in communications where they measure each month 
the amount of traffic that they have had and the amount necessary to go 
into the universal service fund. It is a private fund, and there is a 
question legally whether you can even account for it. I don't know how 
CBO would score it, but we know that the agreement between the 
President and the leadership last evening leaves this space blank. 
Because, whatever is needed and is not allowed by the Congressional 
Budget Office in its measurement with respect to spectrum auctions, 
they then put into that particular blank space, whether it is $3 
billion, $4 billion, $5 billion or otherwise.
  The entitlement cuts, of course, are back loaded with 75 percent of 
the entitlement cuts to occur the last 2 years. And, of course, the 
most smoke and the biggest mirror of all is using, if you please, 
pension funds to make the budget appear balanced. Actually, we spend 
the money out of the pension funds. We spend the money out of Social 
Security; we spend the money out of the military retirees' fund; we 
spend the money out of the civil service retirees' fund; we spend money 
out of the airport and airways trust fund; we spend money out of the 
highway trust fund, and allocate that in the accounting to what they 
call a unified budget to make it look or appear balanced.
  That is the most smoke, that is the biggest mirror, that is the 
biggest shibboleth that is accepted by the free press. I don't know 
whether those in journalism ever had an arithmetic course, but the 
question is whether are you spending more than you are getting in each 
year in Government. At the State level, we measured it more 
specifically. We had to not only to balance the budget but also have 
reserves before Moody's and Standard & Poor's and other groups would 
give us our AAA credit rating. We have that in my particular State, but 
no such approach is used here at the Federal level. They use, 
continually, the smoke, the mirrors, and the biggest one of all which 
is to include, by the year 2000, over $100 in trust fund surpluses to 
make the budget appear balanced.

  So I think this completes my comments on the reality of this 
particular budget agreement that is called balanced when the very 
authors themselves know there is no chance of it being balanced.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.

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