[Congressional Record Volume 144, Number 6 (Wednesday, February 4, 1998)]
[Senate]
[Pages S393-S394]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLARD (for himself and Mr. Enzi):
  S. 1608. A bill to provide for budgetary reform by requiring the 
reduction of the deficit, a balanced Federal budget, and the repayment 
of the national debt; to the Committee on the Budget and the Committee 
on Governmental Affairs, jointly, pursuant to the order of August 4, 
1977, as modified by the order of April 11, 1986, with instructions 
that if one Committee reports, the other Committee have thirty days to 
report or be discharged.


                    THE AMERICAN DEBT REPAYMENT ACT

  Mr. ALLARD. Mr. President, I have, of course, from time to time 
addressed the Senate at this point in the day because I am introducing 
a piece of legislation called The American Debt Repayment Act.
  I think this is an important piece of legislation, and it certainly 
is very timely when we take into consideration that Congress now has 
the President's budget before us for consideration. Recently the 
President submitted to Congress what he claims to be a balanced budget 
for the fiscal year 1999. I would like to welcome him to the ball game 
of talking about a balanced budget.
  Since I was elected as a Member of Congress in 1990, I have fought to 
balance the budget using real numbers. In fact, I was a member of the 
House Budget Committee that passed the first balanced budget in over 25 
years only to see this detailed, responsible plan vetoed by the 
President.
  As happy as I am that the administration has come close to realizing 
what the Republican led Congress has known all along, that we can 
balance the budget while maintaining responsible spending habits, I am 
deeply concerned that all progress could be lost if we do not diffuse 
the ticking time bomb of the Federal debt. The Federal debt now stands 
at over $5.4 trillion. That is almost $20,000 for every man, woman and 
child in the United States. If we do not begin a procedure for paying 
down the debt and funding the Social Security trust fund, entitlement 
programs will consume the entire Federal budget by the time the baby 
boomers retire. This is of great concern to me, and we cannot be 
shortsighted in dealing with the future of our children and 
grandchildren.
  The news, however, is not all bad. As I said, the President has 
submitted a budget that balances on paper beginning with the fiscal 
year 1999. While the reality could be different, this is still 4 years 
ahead of the 2002 timetable that was laid out by previous Congresses. 
Balancing the budget is clearly not the end but, rather, is only the 
beginning. From the outset, many of us have realized that once the 
budget is balanced, the Federal Government has the responsibility to 
retire the Federal debt. Included in the balanced budget agreement of 
1997 was an amendment of mine, and it expressed the sense of the 
Congress that the President submit a plan to pay down the debt when he 
submitted his budget. He did not follow this congressional guideline 
and that is one of the reasons why I feel I must come to the floor 
today and introduce the American Debt Repayment Act with my good friend 
from Wyoming, Senator Enzi. It is clear that now is the time to begin 
that process and commit to retiring the Federal debt.
  Let's talk a little bit about what I call the debt tax. The debt tax 
is the amount of hard-earned tax dollars that Americans send to 
Washington to pay the interest on the debt. With the Federal budget in 
balance, we can begin to pay down the debt and decrease the annual 
gross interest payments of $355 billion. I repeat that, $355 billion is 
what we are paying in gross interest. This is $355 billion that could 
be spent on any number of programs, or more beneficially, in my view, 
tax relief for American families. In real terms, American families are 
paying an annual debt tax of about $5,300 to pay interest on the debt. 
As any consumer knows, the interest on unpaid debt compounds quickly, 
which is exactly what has been happening to our country. We need to 
relieve our citizens of this burdensome tax.
  Now, there are reports that we might actually realize a surplus 
before the fiscal year 1999. While I am not ready to take it to the 
bank yet, I believe that is exactly what we should do with any surplus, 
take it to the bank and retire the Federal debt. The Congressional 
Budget Office is predicting a $5 billion deficit for fiscal year 1998. 
That is down from a forecast of $120 billion at the beginning of the 
year. I believe that we can and should deliver a balanced budget to the 
American people beginning with this fiscal year.
  I am a realist and understand that we cannot retire the Federal debt 
immediately. What we can do is create a plan by which we pay down the 
debt over a set number of years. I have such a plan. My legislation, 
the American Debt Repayment Act, seeks to amortize and pay off the debt 
in the year 2028. That is as simple as it gets. My plan puts the 
Federal Government on a 30-year mortgage to pay its creditors and place 
our country on sound financial ground.

  Let me share some of the numbers. If we assume a 4.5 percent growth 
in revenues and similar growth in Federal spending, we could retire the 
Federal debt in the year 2028 by maintaining a balanced budget and by 
amortizing the debt payments just like you would pay a home mortgage. 
Just as important, this plan does not break our promise to the American 
people under the balanced budget agreement.
  By doing so we save over 3.7 trillion tax dollars in interest 
payments and free at least that much for tax relief or programs. In 
fact, if we stick to baseline outlays we will be able to provide over 
$370 billion in tax relief or program spending through the year 2007 
while sticking to the American Debt Repayment Act to pay off the debt.
  I would like to take an opportunity to refer to my chart that I have 
on the floor where I have placed for the Members to see an amortization 
schedule on how we are going to pay off this huge debt Americans are 
faced with today, which is about $5.5 trillion. If we start paying down 
on the debt in fiscal year 1999, we have a $11.6 billion payment that 
we start out with and each year we increase the amount we pay down on 
the debt by $11.6 billion. If we continue that plan, by the year 2028 
we have no debt. And what we have saved the American people over that 
same period of time, and I have it in red here, is $3.7 trillion. By 
paying down the debt, we have saved the American people in interest 
savings more than $3.7 trillion.
  By the year 2014 the savings in interest payments could be applied 
directly to the $11.6 billion to continue to pay down the debt. So this 
is a very realistic plan. It is a very simple plan. It is less than 1 
percent of our total budget that we have in the fiscal year, our total 
budget being somewhere around $1.7 trillion. It is a plan that I think 
the Senate should adopt. It is called the American Debt Repayment Act. 
My hope is that we can set an example for the country as well as the 
House and send over to the President a plan that will balance the 
budget by 2028.
  In the end, we will realize tremendous benefits from paying down the 
debt. It is well-known that the United States economy performs well 
when Government follows sound budgetary policies. I believe that 
enacting a plan to retire the debt can only foster economic growth and 
stability.
  Many of my colleagues have come to the floor to discuss reduction 
plans, and for the most part we all agree on the necessity to do so. 
But the problem

[[Page S394]]

with plans that call for one-half or one-third of any surplus to repay 
the debt is that any President or Congress can produce a budget without 
a dime of surplus even though revenues continue to increase.
  I believe that any money left over after $11.6 billion has been 
committed to the debt should go to tax cuts, and I will fight against 
tax cuts for any extra spending. As I indicated earlier under my plan 
we can pay down the debt and lessen the tax burden on the American 
family.
  Mr. President, the Federal Government has not reduced its debt burden 
since 1959. We did not have a deficit in 1969, but it has been way back 
to 1959 since there has been any effort to reduce the debt burden. We 
have a historic opportunity to begin the process of retiring the 
Federal debt. We must eliminate the debt tax by retiring the Federal 
debt and restoring financial security to the trust funds and the 
American people.
  The American Debt Repayment Act is the only real plan to retire the 
national debt. This plan puts forth real numbers with a set payment and 
a balanced budget requirement to retire the Federal debt. So long as 
the Federal Government carries a $5.4 trillion debt, we cannot tell our 
children and our grandchildren that we have provided for their future. 
By enacting my and Senator Enzi's plan, we can maintain responsible 
spending levels within the Federal Government while providing for 
future generations.
  Again, I thank my friend from Wyoming and look forward to the 
Senate's action on this plan.
  I yield the floor.
  Mr. ENZI addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I too rise as an original cosponsor to 
express my support for the American Debt Repayment Act and to 
congratulate Senator Allard for all of his work on this very important 
issue.
  While Congress was not in session, I traveled several thousand miles 
across Wyoming. At town meetings I constantly and consistently heard 
comments such as, ``What surplus? If there is any surplus, please pay 
down the debt. Don't squander any of it on new spending ideas.''
  If recent CBO estimates hold true, we have the lowest deficit in 
about 30 years. We did not get to that point by exercising fiscal 
restraint, however. We still spent too much--nearly $1.7 trillion every 
year. I voted against the spending portion of the Balanced Budget Act 
of 1997 because it seemed clear more could have been done to cut down 
the size and scope of the Federal Government and get our fiscal house 
in order faster. If not for the unexpected revenues that came as a 
result of 7 years of economic expansion, we would not even be close to 
eliminating the Federal deficit today.

  In recent days, I have seen a unique attitude transformation take 
place in this city. Even though a budget surplus, or even a zero 
deficit--only estimated, of course--has not occurred yet, the 
administration has not hesitated to offer over $100 billion worth of 
new and expanded programs that would easily create a larger deficit in 
its proposed balanced budget. There are even more tax proposals. It 
seems the eye for spending is still bigger than our taxpayers' wallets.
  Even though the economy is strong, I am surprised that so few are 
concerned about the debt we as a nation are in danger of passing on to 
our children and our grandchildren. It seems we are tied to the 
immediate gratification we receive from spending money, spending money 
that we do not even have. We do not see the danger that looms in the 
not too distant future if we do not stop spending on credit and with 
reckless abandon. That danger is a massive Federal debt and changing 
demographics that will place a tremendous amount of pressure and burden 
on young taxpayers who, if no changes are made to the entitlement 
programs, will see a bankrupt Social Security and Medicare system and a 
mountain of debt so high and an economy so weak there will be no hope 
of paying it off. Somehow we have convinced ourselves that we deserve 
these benefits. Meanwhile, we will will it to our children to figure 
out a way to pay for them.
  The interest, just the interest that we are now paying on the Federal 
debt has reached about 15 percent of the total budget outlays. That 
amounts to $250 billion that cannot be used for education or military 
readiness and our national defense or people. The only way we can cut 
down on the amount of interest paid is to pay down the Federal debt.
  We have a Federal debt of over $5.5 trillion. We must run budget 
surpluses not just for 1 or 2 years but for 30 or more years to pay off 
that debt. And the surpluses are not even projected to last that long. 
I believe the administration and Congress should heed the words of the 
Federal Reserve Board Chairman Alan Greenspan. He noted in his 
testimony to the Senate Budget Committee on Thursday, January 29, 1998, 
that we should be cautious in our spending because Federal revenues are 
not guaranteed and they may fall short of our expectations.
  He again advised that ``we should be aiming for budgetary surpluses 
and using the proceeds to retire outstanding Federal debt.'' That will 
keep the economy sound and protect Social Security.
  The American Debt Repayment Act follows the advice of Chairman 
Greenspan. It requires budgetary surpluses every year, with these 
surpluses going toward payment of the Federal debt. These payments 
would amortize the debt over the next 30 years, similar to house 
mortgage payments, only on a $5.5 trillion mansion. Anyone who 
purchases the house must pay the mortgage that accompanies it. Why 
should the Federal Government be exempt from a similar requirement? 
It's the ethical thing to do, and it just makes sound economic sense. 
Yes, we bought a house for us and our kids, and we will pass on the 
house and the debt. But let's be sure it's a responsible debt with the 
payments current.
  Now is the time to start making these mortgage payments and begin to 
chip away at that mountain of debt. It is irresponsible, reckless, and 
selfish to wait any longer. Any delay will jeopardize the national 
security and economic freedom of us, our Nation, and our children.
  Some may ask if we can afford to do this now. In response, I would 
borrow the words of former President Ronald Reagan:

       If not now, when? If not us, who?

  I yield the remainder of my time.
  Mr. ALLARD. I thank the Senator for his very fine statement and yield 
the remainder of my time. I thank the Senator from Vermont.
                                 ______