[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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