[Congressional Record Volume 144, Number 2 (Wednesday, January 28, 1998)]
[Senate]
[Pages S109-S111]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE FISCAL CONDITION OF OUR COUNTRY

  Mr. CONRAD. Madam President, last night we heard the President's 
State of the Union Address. It was an important review of where the 
country stands. I want a chance to discuss today what I think are some 
of the most important points that were made last night, the most 
important points with respect to the fiscal condition of our country.
  I came here to the U.S. Senate 12 years ago. The thing that compelled 
me to run was the fact that fiscal conditions in the country were a 
disaster. I was convinced that unless steps were taken to get us back 
on a sound fiscal track, the future economic security of our country 
was threatened, which would have an adverse effect on the people that I 
represent in the State of North Dakota. We are very much affected by 
the national economy.

  But I was also concerned about where we were headed in terms of a 
national legacy. What were we going to leave to our children? Remember 
those times when we were running massive deficits? It looked like there 
was no end to red ink. So I came here with a commitment to get our 
fiscal house in order. I wanted not only to balance the budget, as it 
is called in Washington, but I also wanted to see us stop the practice 
of looting the Social Security trust funds in order to make the deficit 
appear smaller than it really was.
  So last night was a very special night for me. I was able to hear a 
President say he was going to submit a balanced budget for the first 
time in 30 years. I was also able to hear a President say that he was 
going to go further than that and he was going to move to stop the 
practice of raiding and looting Social Security trust fund surpluses.
  Madam President, I think that is critically important to the Nation's 
future. I want to describe what has happened, what is happening and why 
it matters to people.
  I brought this chart along to show precisely what has happened and 
what the differences are between the budget we talk about here in 
Washington and what I think any fair commentary would be on the budget. 
If we go back to 1992, the blue line shows what is termed the unified 
budget. What has happened to the so-called unified budget? That 
includes all of the resources of the Federal Government, all the 
revenues and all the expenditures. Of course, that means it also 
includes the Social Security surpluses.
  The red line shows the budget of the United States if you exclude the 
Social Security surpluses. What these lines show is that in 1992 we had 
a unified budget deficit of $290 billion--$290 billion. And the 
projections were that the

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deficits were just going to go up from there.
  That is where we were in 1992. The next year we passed an economic 
plan proposed by this President. And I might say all the votes were on 
this side of the aisle because none of our friends on the other side 
would vote for it. It was controversial. And it is controversial. Any 
time you really are going to take action and reduce the deficit, that 
means you are going to cut spending, and perhaps even raise taxes. That 
is what the 1993 plan did. It cut spending, and it raised taxes on the 
wealthiest 1.5 percent of the income-tax payers of the country.
  That plan has worked and worked remarkably well. You can see what has 
happened here to the unified deficit. It has gone down each and every 
year so that this year, fiscal 1998, the Congressional Budget Office is 
now projecting a budget deficit of only $5 billion. But let us remember 
that is the unified deficit.
  The President said for fiscal 1999 he is going to propose a balanced 
budget. That means all of the revenues of the Federal Government, when 
matched with all of the outlays of the Federal Government, are going to 
balance. That is dramatic progress. That is real progress. That is 
important.
  But we should never forget that that means we are still using Social 
Security trust fund surpluses. We ought to stop it. We ought to stop it 
because we have to get ready for the time the baby-boom generation 
starts to retire. It is coming sooner than any of us might think. In 
fact, I am one of the leading edge members of the baby-boom generation. 
I will be 50 years old in just a few short weeks. When I retire, along 
with millions of other baby boomers, that is going to put enormous 
pressure on the Federal budget.
  I call it a demographic time bomb. It is lurking just over the 
horizon. We have to get ready for that time. The way we get ready is to 
stop using the Social Security trust fund surpluses to fund the other 
aspects of Government.
  I said to my colleagues in the Budget Committee this morning, if any 
private company tried to do what we are doing, they would be in big 
trouble. Because if any private company took the retirement funds of 
its employees and threw those into the pot in order to balance its 
operating budget, they would be in violation of Federal law. They would 
be headed for a Federal institution, but it would not be the U.S. 
Congress. They would be headed for a Federal penitentiary because that 
is considered fraud.
  That is the reason we ought to stop it. It is wrong. But it is not 
just wrong in the sense of being illegal. It is also wrong in the sense 
of preparing the economic future for this country. If we do not take 
action now, we will face very draconian decisions as we get closer to 
the time when the baby boomers actually start to retire.
  So this blue line shows the so-called unified budget. It shows that 
we have made dramatic progress moving towards a so-called balanced 
budget. But it is not really balanced until or unless we also stop 
raiding the Social Security trust fund, until we stop looting the trust 
fund surpluses to pay for the other actions of governments. You can see 
that this year we will be using the difference between a $5 billion 
deficit and $106 billion. We will be using $101 billion of Social 
Security trust fund surpluses.
  Last night the President said, whoa, wait a minute.
  Let's not continue this practice. Let's not fool ourselves by saying 
we have surpluses when, in fact, we are taking trust fund money and 
using those moneys to make believe we have surpluses. So before anybody 
gets busy figuring out new spending or new tax cut schemes, let's make 
sure we have secured the future of Social Security. As the President 
said, save Social Security first. That should be the first order of 
business for this Congress and future Congresses to come.
  Now, one reason it is important to end this raid on Social Security 
is because that will better secure the economic future for our country. 
This progress that we have made, this dramatic progress on reducing the 
deficit, has led to remarkably good economic conditions. We have seen 
over these last 4 years real business fixed investment growing at 10 
percent a year, one of the strongest rates we have ever seen in our 
history. We have seen the unemployment rate in the United States 
reduced to the lowest level since 1973. We have the lowest rate of 
unemployment in 24 years.
  The good news doesn't stop there. If you look at the inflation rate, 
that is the best sustained performance since 1967, the lowest rate of 
inflation on a sustained basis in 30 years. These are truly remarkable 
economic numbers. In addition to that, we know over 14 million jobs 
have been created. This has been one of the most successful economic 
policies ever put in place, and it was done at a time when there was 
great controversy about it. That is clear if you go back to 1993 and 
read the debate. Folks on the other side of the aisle said if you pass 
that plan, you will increase the deficit. They said you will increase 
unemployment. They said you will increase inflation. They were wrong. 
They were wrong on every single point.
  They had an economic theory called trickle down economics. When we 
pursued that theory in the 1980s, the deficit and the debt exploded. In 
1993, we reversed course and said, no, we are going back to commonsense 
economics, which means you look at what you are spending and what your 
revenues are and you put them into balance. That is how you eliminate 
the deficit. You cut your spending, you increase your revenue, and you 
eliminate the deficit. In doing this you take pressure off of interest 
rates and relieve that debt burden on the economy and the economy will 
grow. And this economic course worked. It did precisely what we hoped 
it would do. In fact, the results have been even better than we 
anticipated. The deficit has come down dramatically. We have seen 
remarkably strong economic growth, the lowest inflation in 30 years, 
the lowest unemployment in 24 years, the biggest reduction in elderly 
poverty in our history. That is a record we can be proud of.
  Let me just say I heard the other night somebody on television saying 
it is not because of the fiscal policy that was passed in 1993, it is 
because of the monetary policy the Federal Reserve Board has been 
pursuing that we have had this economic success. Mr. Greenspan, the 
head of the Federal Reserve, doesn't even subscribe to that 
proposition. He has said that the 1993 economic plan has played a 
significant role in the good economic circumstances that we have seen 
since that time. He is exactly right. It is a combination of fiscal 
policy and monetary policy that has brought us to the strong economic 
position we are in today. The fiscal policy is controlled by the 
Congress and the White House. The fiscal policy that we put in place 
with the 1993 economic plan has worked and it has worked like a charm. 
In fact, it has permitted the Federal Reserve Board to follow the 
monetary policy they have pursued that has also helped create this very 
successful economic environment in which we are in.
  Madam President, I wanted this chance to review where we have been, 
where we are going, how we got here, and how we can continue to make 
progress that strengthens the economy of this country.
  In conclusion, I just want to say we have an unparalleled opportunity 
this year. We have a chance to build on the remarkable success that was 
started with the 1993 economic plan. We have a chance to take that, 
coupled with the bipartisan budget plan that was passed last year, and 
thankfully we now see we are 3 years ahead of schedule on that plan. We 
now can take the next step and stop the raiding and the looting of 
Social Security trust fund surpluses in a way that would strengthen 
this economy for decades to come. We shouldn't let this moment pass. We 
shouldn't allow ourselves to get caught up in new spending schemes or 
tax cut schemes that threaten and endanger this remarkable progress 
that we have made.
  I hope that my colleagues, as we go through the legislative agenda of 
this year, will pay special attention to doing all that we can to 
secure the economic future for our country. We have, really, very few 
responsibilities that are more important than laying the groundwork for 
the economic prosperity and opportunity of the people that we 
represent.
  I yield the floor and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.

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  The legislative clerk proceeded to call the roll.
  Mr. BROWNBACK. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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