[Congressional Record Volume 144, Number 1 (Tuesday, January 27, 1998)]
[Senate]
[Pages S10-S12]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE BUDGET SURPLUS
Mr. GRAMS. Mr. President, as we reconvene today for the second
session of the 105th Congress, there is important work ahead of us. I
am certain my colleagues join me in acknowledging that regardless of
the headlines and the commotion that is going on outside this chamber,
the Senate cannot be distracted from its responsibility to carry out
the will of the people. America's families, its taxpayers, have great
expectations of us, and we must not let them down. So I look forward to
what we can accomplish together on their behalf.
I have to admit, though, that I have mixed feelings about the session
ahead of us. I think Will Rogers explained my predicament best when he
said, ``This country has come to feel the same when Congress is in
session as when the baby gets hold of a hammer.''
When the baby finds the hammer, somebody almost always gets hit over
the head. In 1998, the ``hammer'' is the much-anticipated budget
surplus, and I am afraid it may very well be the taxpayers who get
whacked by it.
Earlier this month, the Congressional Budget Office projected that
the federal deficit would decline sharply this year from its original
estimate of $125 billion to $5 billion. It also forecast a $14 billion
surplus in 2001 and a total of $665 billion in surpluses by the end of
the next decade.
Now, tax dollars are always considered ``free money'' by the big
spenders here in Washington, and the thought of all that new ``free
money'' is creating a feeding frenzy here on Capitol Hill. The rush to
spend is like something right off the Discovery Channel, like the free-
for-all that results when a pack of hungry predators gets hold of a
piece of raw meat. A ravenous creature in its own right, Washington
will attack a pile of tax dollars and spend, spend, spend until it is
all gone--until the bones have been stripped of every last morsel of
meat.
Mr. President, with all due respect to my colleagues in both
chambers, I am disgusted by this ``stampede to spend,'' and angry that
it is being championed on both sides of the political aisle. I am a
Republican, elected by the people of Minnesota to carry out my promise
to lower their taxes and rein in a federal government that has grown
out of control. Republicans gained control of Congress because we are
the champions of the taxpayers--the American people trusted us to carry
out our promise when we said, ``Elect a Republican majority and we will
help you build a better life for yourselves and families by curbing
Washington's impulse to spend your precious tax dollars.''
They certainly did not elect Republicans thinking we would build a
bigger, more expensive government the first chance we got.
Not only are we rushing to join the spending stampede, but we are
doing it before the budget is actually balanced, before a surplus
actually exists, before even a single surplus dollar makes its way into
the federal treasury.
If this is a race to prove who can be the most ``compassionate'' with
the taxpayers' dollars, it is a race nobody is going to win, and one
the taxpayers most certainly will lose. When is Washington going to
understand that you cannot buy compassion? And Washington cannot give
something to Americans, without taking more from Americans. I hear the
big spenders say that Americans are struggling so Washington needs to
do more. And ``more'' always means taking more from Americans so
Washington can control, shape, and direct our families and our lives.
Who is going to stand up in this chamber for the taxpayers if the
Republicans will not? If our party is abandoning our commitment to
fiscal responsibility--the commitment that built a congressional
majority--we are abandoning the taxpayers as well. And do not think the
taxpayers have not noticed. One of my constituents, Dale Rook of
Beardsley, Minnesota, summed up the feelings of many in a recent
letter: ``It appears that the Democrats are still in control of both
Houses of Congress,'' he wrote. ``Why? What has happened to the
Republican Party?'' he wrote. A lot of us are asking that very same
question.
Of course, the Republicans do not have a monopoly here when it comes
to spending. I am deeply troubled by what is happening on Capitol Hill
among both parties, and every taxpayer ought to be as well. And as a
Senator representing the nation's families--America's hard-working,
taxpaying families--I pledge that they will not be forgotten.
Let me speak specifically about the deficit and the anticipated
surplus. Both Congress and the President have rushed to claim the
credit for the decline in the federal deficit. Mr. President, I think
we should give credit where credit is due. In this case, the credit
really belongs to the robust American economy and the working Americans
who propel it. And Washington should not be allowed to take that away
from American families, workers, and business. Washington should not
gain more control of our spending.
The economy, not any government action, has produced this
unprecedented revenue windfall. These unexpected dollars have come
directly from working Americans--taxes paid by corporations,
individuals and investors. If the economy continues to generate 8
[[Page S11]]
percent revenue growth as in recent years, we could soon enjoy unified
budget surpluses.
However, Mr. President, we must remember this is a surplus only under
a unified budget. That means Social Security surpluses that the
government borrowed to pay its bills are also counted in the
projection. Payroll taxes from the current generation of workers
provides far more money than is needed to finance benefits for today's
retirees; the extra money is used for other government programs.
Without borrowing from the Social Security trust funds, the real
federal deficit could be $116 billion, rather than a $14 billion
surplus in 2001. In fact, the total deficit will be nearly a trillion
in the next ten years. This means we will see deficits, not surpluses,
as far as the eye can see.
In any event, if the budget surpluses, indeed, occur, with or without
Social Security borrowing, the question of how to apply these surpluses
remains critical. In my view, the right way to use any potential budget
surplus is to return those funds to working Americans and their
children in the form of meaningful tax relief, national debt reduction,
and channeling them toward solutions to our long-term financial
imbalances, thus ensuring our economy continues to grow. Since the
unexpected revenue has come directly from working Americans, it is only
fair to return it to them. Despite the first, tentative steps we took
last year toward real tax reform for families, the tax burden on the
American people is still historically high. It is sound policy to use
part of the surpluses to lower the tax burden and allow families to
keep a little more of their hard-earned money.
Over the past 30 years, we have amassed a $5.5 trillion national debt
thanks to Washington's culture of spending. A newborn child today will
bear about $20,000 of that debt the moment he or she comes into the
world. Each year, we sink more $250 billion into the black hole of
interest payments, which could be better spent fighting crime,
maintaining roads and bridges, and equipping the military. It is sound
policy to use part of any surpluses to begin paying down the national
debt and reducing the financial burden on the next generations.
The budget surpluses also give us a great opportunity to address our
other long-term financial imbalances. Federal unfunded liabilities
could eventually top $14 trillion, bankrupting our government if no
real reform occurs. It is vitally important that we use the budget
surpluses to finance these reforms, not to try to buy popularity--
spending in the name of compassion and need, while putting our entire
futures at financial risk.
If we fail to fix these long-term fiscal time bombs, the federal
deficit could come back and haunt us in a catastrophic way, shattering
the health of our future economy and placing an unbearable burden on
our children and grandchildren. According to the CBO, the federal
deficit would increase to $11 trillion and the national debt would
balloon to $91 billion in 2035 without substantial entitlement reform.
Some of my colleagues have suggested that we put the surpluses into
the Social Security trust funds. I generally agree that we should build
real assets for the trust funds by returning borrowed Social Security
surplus into it. But our Social Security system is in serious financial
trouble--a fiscal disaster-in-the-making that is not sustainable in its
present form as the Senator from New Hampshire outlined a few minutes
ago. Simply funneling money back into a broken system will not help fix
the problem. It will not build the real assets of the funds for current
and future beneficiaries and it does not address the flaws of the
current pay-as-you-go finance mechanism. Without fundamental reform,
the system will consume all the surpluses and go broke. Using the
budget surpluses to build real assets by changing the system from pay-
go to pre-funded is the right way to go.
The wrong way is to spend all those dollars on new government
programs, which is exactly what President Clinton has proposed to do,
even before a surplus is realized. The President has recklessly planned
to expand Medicare, rather than reforming it to preserve it from soon
going broke. He is also seeking a $22 billion increase in child-care
expenditures and subsidies. This is after Washington increased child
care expenditures by 500% in the last two years, going from $4 billion
to $20 billion a year just one year ago. Although I think it is good to
bring tax credits back to the table, it is wrong for Washington to
control daycare for American families. The President also wants to
throw more money into federal education programs for local schools
without addressing the real problems of the system. And advocating
Washington take more control of education rather than State and local
governments and local school boards.
Despite the President's rhetoric that the era of big government is
over, President Clinton, with the help of congressional spenders, has
made it even bigger. Actual annual government spending has increased
from $1.3 trillion to $1.6 trillion since Mr. Clinton took the White
House, adding over $1.2 trillion to the national debt.
Even under the `97 budget agreement, spending will increase to nearly
$1.9 trillion in 2002, a growth of 18 percent over 1992 levels. Is
there any sign of leaner government anywhere? No. Like the overweight
diner who lunches on lettuce and peaches with the family then sneaks a
pint of ice cream once the kitchen lights have been turned off, the
enablers of big government profess their new-found fiscal restraint but
hungrily pounce on your tax dollars at the first opportunity.
We must never, never, never repeat the mistake we made in 1997. If
you will remember, as soon as the CBO discovered a $225 billion revenue
windfall that ``might'' be received by the federal government in the
next six years, Congress and the President spent all of it, to expand
existing programs and create new programs. Not a penny is left. Few
wasteful and unnecessary programs were eliminated. The savings we
achieved through welfare reform are almost completely wiped out.
If the budget surpluses are not returned to the American people in
the form of debt reduction or tax relief, I am absolutely certain
Congress and President Clinton will spend them all for new and expanded
government programs. When it is paid for by the taxpayers, Washington
has never been able to resist raiding the freezer for that late-night
pint of ice cream.
Listen to what the people are saying. A Time/CNN poll conducted in
mid January reveals that most Americans--78 percent of them--believe
that spending the budget surplus to reduce the national debt should be
a top priority. Sixty-eight percent also favored using the surplus to
cut federal income taxes.
I`m hearing that same message in the calls, faxes, letters, and e-
mails I have received this month. Here are the words of Mark Keppel of
Minneapolis:
I want you to know how strongly your constituency feel that
you do not allow those feeding at the taxpayer trough to
waste this opportunity to reduce our huge current debt
burden.
These tax collections are over-collections of our money,
and we wish to either reduce our outstanding debt or have
this surplus returned to us, not reallocated to new, unfunded
projects. Can that be any clearer?
Brian Tice, a 27-year-old constituent of mine from Anoka, was equally
clear. ``If our country is bankrupted,'' he wrote, ``my lifetime of
savings and my retirement will go down with it. I encourage you to
stand firm against those . . . who will pressure you into spending the
surplus on social and special interest programs.''
After hundreds of billions of new spending and over a trillion in new
debts, President Clinton announced on January 5th that he will submit a
balanced budget to Congress for the 1999 fiscal year. I am encouraged
by his announcement. I welcome the President's intention to balance the
budget. But why wait another year?
The robust economy has offered us a historic opportunity to finally
put our fiscal house in order. We should, and can, balance the budget
this year by trimming just a few wasteful government-spending programs.
Compared to nearly $1.7 trillion in annual government spending, a $5
billion spending cut is peanuts. And if we can achieve it, it will
balance the federal budget for the first time since 1969, and think of
the positive impact it would have on our economy. That is why my
colleagues, Senators Brownback, Inhofe, Ashcroft, Allard, Hutchinson
and myself sent a letter to the congressional leadership
[[Page S12]]
early this month, urging Congress and the President to work together to
achieve a balanced budget this year, rather than the next year, by
rescinding $5 billion from the 1998 budget.
More importantly, the sooner we balance our budget the less pain we
will suffer in the future. As I said earlier, the long-term fiscal time
bombs we are facing require that we take action quickly. Escalating
Social Security and Medicare costs pose the primary threat to the
federal government's long-term solvency. We have only ten-year's time
to fix Social Security. If it is mishandled, millions of Americans
could suffer. Medicare is already in a horrific situation. It has
accumulated over a trillion-dollar deficit and will soon be broke.
Immediate action has to be taken to preserve and improve it.
There are trillions of other federal unfunded liabilities that we
cannot ignore. These include entitlement programs other than Social
Security and Medicare: federal civilian and military pensions, railroad
retirement benefits, federal insurance programs, bank deposit
insurance, private pension insurance, and a huge portfolio of
guaranteed loans, environmental cleanup, and deferred maintenance and
life-cycle costs for equipment and infrastructure--all of which have
some risk of going sour and costing the government substantial sums
down the road.
If we balance the budget this year, it will give us a little more
time and a little more flexibility to focus on and fix these long-term
financial liabilities.
Mr. President, I began this statement by quoting Will Rogers. As I
conclude, let me quote him once again:
There is not a man in the country that cannot make a living
for himself and family. But he cannot make a living for them
and his government, too, the way his government is living.
What the government has got to do is live as cheap as the
people.
Our immediate task should be to regain the confidence of the American
people by achieving a balanced budget and keeping it balanced by
shrinking the size of the government. That is, by asking government to
live as cheap as the people. By doing so, we will reduce interest
rates, increase national savings, create more jobs, provide more
meaningful tax cuts, and generate more revenues. More importantly, we
will shrink the financial burden for our children and grandchildren.
As the Senate meets today to open the second session of the 105th
Congress, I urge my colleagues to recall the promises they have made to
the American taxpayers. Embrace those promises, and put the needs and
desires of the people ahead of the impulse to leave a legacy of
compassion--a legacy that could bury the taxpayers if left unchecked.
Let us work with the President to achieve a balanced budget this year
and begin a new era of government accountability.
Thank you very much, Mr. President. I yield the floor.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. CAMPBELL. Mr. President, I ask unanimous consent to speak for 8
minutes as in morning business, to be followed immediately by my
colleague, Senator Allard, for 8 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from Colorado is recognized.
Mr. CAMPBELL. I thank the Chair.
(The remarks of Mr. Campbell and Mr. Allard pertaining to the
submission of S. Res. 166 and S. Res. 167 are located in today's Record
under ``Submission of Concurrent and Senate Resolutions.'')
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