[Congressional Record Volume 144, Number 3 (Thursday, January 29, 1998)]
[Senate]
[Pages S203-S204]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           DEFICIT REDUCTION

  Mr. GRASSLEY. Mr. President, I am a member of the Budget Committee, 
and under Senator Domenici's very good leadership, we are starting a 
new budget process as we do every year. Today he called a hearing of 
our committee to hear from Chairman Greenspan. Chairman Greenspan is a 
person who is very well respected, not only on both sides of the aisle 
by Members of the Congress, but also by the President. He was 
reappointed to the chairmanship of the Fed by this President. Further, 
he is very well respected by the people of this country and, most 
importantly, by people who, as investors in America, have to have 
confidence in the economy. I think that Chairman Greenspan exudes a 
great deal of confidence himself. He establishes in most everybody 
confidence in the economy because of his caution. Economic growth over 
the last several years has had a great deal to do with the steady hand 
of Chairman Greenspan.
  As we start a new budget season, it is very appropriate that Chairman 
Greenspan be invited by Chairman Domenici to come to appear before the 
Senate Budget Committee.
  We had a chance to listen to an outstanding presentation by Chairman 
Greenspan. It was relatively short, but throughout the sermon on the 
economy, Chairman Greenspan called for this Congress and this President 
to be very cautious, as we go into the budget process in this year, 
especially about spending, about taxes, and having too rosy a scenario 
about our economic future.
  He expressed a great deal of confidence that the future is very 
bright for our economy, but incumbent in what he said was a caution 
that, by unwise budget decisions, we have the capability of lousing up 
a rosy opportunity. He put a great deal of emphasis upon the good that 
comes from paying down on the national debt. He also expressed, in 
response to some questions, that next to paying down the debt a great 
deal of economic good can come from cutting marginal tax rates and 
cutting capital gains. None of these is

[[Page S204]]

an end unto themselves, but help to make sure that there is a positive 
attitude in this country for people who will invest to create jobs in 
America in order to keep this economic miracle going.
  I was very happy to hear the caution expressed by Chairman Greenspan, 
because I sense, as he senses--and obviously, I am back here for the 
first week since last fall's recess so I have not visited with a lot of 
my colleagues--that over the last 3 months the anticipated surplus is 
generating too much talk about renewed spending. The White House 
proposes about eight new spending programs that the President wants to 
create, adding up to about $63 billion--and those are not discretionary 
spending; for the most part those are entitlements. Some Members of 
Congress, want to spend more money, while other Members of Congress 
want to give tax cuts. I love to give tax cuts. I probably have voted 
for most every tax cut that has been suggested since I have been in the 
Senate--but I think that at this point both this Senator from Iowa and 
my colleagues and the President of the United States ought to follow 
the advice of Chairman Greenspan and exercise some caution about 
spending increases and tax cuts. As I said, it appears to me that a 
golden opportunity might be lost because we think this windfall is in 
our pockets already. It is like it is burning a hole in our pockets. We 
can hardly wait to spend it.
  I almost sense that Chairman Greenspan would like to express a couple 
words he cannot ever use again. I think he senses an irrational 
exuberance on the part of Congress and the President of the United 
States, just to fritter away a wonderful opportunity we have here to 
reestablish the confidence of the people in the economy and, 
particularly, in the fiscal policy of the Congress, which was adopted 
in a bipartisan way last year.
  So I would follow on with Chairman Greenspan and ask my colleagues to 
cool it, to make sure that we learn from history. During the last 
decade, the decade of the 1980's, we found it is very easy for 
conservatives to ask for more money to spend on defense and then, 
pretty soon, that opens up the door for other increased spending. Well, 
if we are going to spend more money on defense, liberals are going to 
get their hands in the cookie jar and say we have to have more money 
spent on domestic programs. Then there is always the other side of the 
aisle, people wanting tax cuts, and, as I said, I even like tax cuts. 
But pretty soon you are on an irresponsible approach that brings 
trillions and trillions of dollars of debt.

  Now, finally, after last year, it looks as if we are on a path to 
getting to a balanced budget, to stopping the building of the legacy of 
debt that our generation has left to our kids and grandkids. So I think 
we have to just cool it. We do not yet have this money in our pocket. 
Let us at least wait until it is there, and that is not going to be 
during this budget season. We have a historic opportunity, a windfall 
opportunity to do good. I know we have a strong economy, and that is 
where most of the praise can go--for balancing the budget even before 
the year 2002 as we promised.
  Also, Congress has exercised some restraint, finally. I do not think 
the public realizes it, but we have. Three out of four people in this 
country do not believe we are going to have a balanced budget when we 
say we are going to have it. Three out of four people, even after a 
bipartisan effort to accomplish it, do not believe today it is going to 
happen. Even with all the talk about more money coming in than 
anticipated, even with the President saying we are going to balance it 
before we said we were, still three out of four people do not believe 
we are going to balance the budget. So we have an opportunity, if we 
are cautious, as Chairman Greenspan said, to reduce that cynicism, to 
reestablish confidence in the American people that maybe we have a 
sound fiscal policy here and that we will balance the budget.
  We still have those, however, who say we ought to spend it, including 
the President of the United States. There are people who say we ought 
to have tax cuts.
  Now, we have a rare opportunity which seldom comes to Congress. If we 
just do nothing, we can do a great deal of good. How often, if Congress 
just does nothing, can some good come from it? But it is this simple. 
If we stay with the spending caps that we adopted last year in a 
bipartisan compromise, if we can stay with those caps, we are going to 
balance the budget before the year 2002, and we are going to pay off on 
the national debt without taking any action, because the Secretary of 
the Treasury just rolls over less old debt from week to week because of 
a budget surplus. So you gradually pay down on the national debt just 
by Congress taking no action. A great deal of good comes from Congress 
just doing nothing.
  We would reduce the cynicism of three out of four people in this 
country as to whether or not we are really serious about balancing the 
budget. That reestablishes confidence in the economy. It is going to 
encourage people to invest, and with investment you create jobs. We are 
going to reduce the interest costs to the Federal Treasury. The biggest 
item in the Federal budget is now interest--not defense, not Social 
Security or Medicare--interest. We will reduce it.
  Most importantly, we are going to be able to restore the American 
dream of our children and grandchildren. Every generation has thought 
their kids would have it better than their generation, but today's 
generation does not believe that their children will have a better 
future and their grandchildren have yet a better future because of the 
legacy of debt our generation is leaving. We can restore the American 
dream to our children and grandchildren.

  We also have an opportunity to do something that I never thought I 
would be able to be a part of in my lifetime--helping pay off on the 
national debt, reducing the legacy of debt that we have left to our 
children and grandchildren. It seems to me, not only is that good 
economically, but if we have an opportunity to do that--we have been 
living high on the hog for the last 3 decades because of Government 
borrowing--we can pay down that legacy of debt and keep a moral 
obligation that we ought to have for our generation to live within its 
means.
  We can also do what the President suggested needs to be done. We 
could also strengthen the fiscal position of the Federal Government so 
when the IOUs come due on Social Security we will be in a strong 
position to pay those IOUs. So the President needs to exercise 
restraint. Three years ago in the State of the Union Message we heard 
that the era of big Government is over. But this year we heard that the 
era of saying the era of big Government is over, is over.
  We also have to have some restraints on these tax cuts. Not that 
taxes can't be cut in the future, but we ought to make sure what we 
have in surplus first. We need to do it right and we should not do it 
piecemeal, and we have a tendency to do it in a piecemeal fashion.
  But most important, if we just cool it, if we just keep the cork in 
the bottle, if we just do nothing, we will do a great deal of good, not 
only for today but for our children and grandchildren. That is why I 
say we should take the advice of Chairman Greenspan that he gave to the 
Senate Budget Committee today and just be very, very cautious.

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