[Congressional Record Volume 144, Number 8 (Monday, February 9, 1998)]
[Senate]
[Pages S524-S530]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        REDUCTION OF THE DEFICIT

  Mr. NICKLES. Mr. President, during the President's State of the Union 
speech, as well as in the submission of the budget, there have been a 
lot of accolades about a balanced budget. Many of us have worked for a 
long, long time to see a balanced budget. It has been kind of 
interesting, with different people taking credit for it. The President 
said he has done it since has been in office, that the deficit has come 
down every year. The Republicans have said after they took control in 
the '94 elections, that is when we really saw the deficits reduce.
  I would like to put some facts into the Record, dealing both with the 
President's budget and also the source of the decline of the deficit 
since January of 1995. In the budget deficit of 1995, submitted by 
President Clinton, in January of 1995, it showed that the deficit was 
estimated to be $176 billion in 1995; in 1996, it was supposed to be, 
or estimated to be $207 billion; in 1997, $224 billion; $222 billion in 
'98; $253 billion in '99; $284 billion in 2000; $297 billion in 2001; 
$322 billion in the year 2002. This is President Clinton's budget. That 
was what he submitted to Congress in January of 1995.
  Now, you had something happen in November of '94, which is that the 
Republicans were elected to take control of Congress. That was the 
change. This already takes into account the President's large tax 
increase of 1993. So that is already computed in here. In spite of his 
large tax increase, deficits continued to increase, from $176 billion 
in '95 to an estimated $322 billion in the year 2002.
  I make a point of that because I have heard several administrative 
officials testifying, ``Yes, we brought the deficit down and did it 
because of that historic tax increase of 1993.'' I just beg to differ. 
The facts were that the policies showed that the deficit was going to 
continue to climb significantly. What happened since 1995? That is what 
this chart will show. We have had some tax cuts. The tax cut that was 
passed--actually, there was one passed in '95, but the President vetoed 
it. So there is no change in '95 and '96, as far as the Tax Code. 
Congress did pass, and the President signed, a tax reduction effort 
last year. This chart will show the net effect of that. Frankly, it is 
not very large. In between the years 1997 and 2002, it is a net tax cut 
of $75 billion. So that didn't have a lot of difference on what 
happened in the economy.
  Spending cuts over that same period of time, between the year 1995 
and 2002, was $276 billion. So that didn't have a lot. The primary 
difference was re-estimates--re-estimates. I am using CBO data, 
Congressional Budget Office data. The difference of technical and 
economic assumptions is $1.567 trillion over those same years. And so, 
yes, the economy has done better, and the estimates were off. The 
growth rates have been higher, revenues have been higher. That is the 
principal source of deficit reduction. Again, I am not even trying to 
offer a lot of my own opinion. I am just trying to show that here is 
the deficit projection given by CBO in January of 1995. Here is the CBO 
deficit baseline in January of 1998, 3 years apart, but a total of a 
couple of trillion dollars difference in their net results.

  Now, Mr. President, I would like to talk about the President's budget 
that he submitted to Congress. He made the statement that he did not 
want one dime to be spent that would increase the national debt--not 
one dime. Under the President's proposal, he has $124 billion, actually 
$124.1 billion, between the year 1998 and the year 2003, that 5-year 
period of time, that would increase the debt by new spending. And $70.9 
billion of that is discretionary spending--including mandatory, a total 
of $124 billion of new spending, spending over and above what we have 
in present law, spending over and above what is now contemplated, 
spending over and above what was agreed upon last year.
  I might mention, as far as the discretionary spending, last year we 
entered into an agreement that said here is how much we are going to 
spend in discretionary spending every year. The President is violating 
that agreement by his submission of the budget.
  Now, the budget was balanced, but yet in the budget that we agreed 
upon last year, one of the reasons it is balanced is because basically 
we froze, or came close to freezing discretionary spending. He is 
calling for increases in discretionary spending above what was agreed 
upon last year. He calls for $124 billion in new spending. He also has 
tax cuts that really also would have an increasing impact on the 
deficit of $24.2 billion.
  If you add the two together, the President's proposal that he made in 
his budget and in the State of the Union, if you took the new spending 
and the tax cuts, which are really, in my opinion, using the Tax Code 
to spend money, it would have a negative impact on the deficit of 
$148.3 billion over this period of time.
  I am going to submit this for the record. It will show you exactly 
where it goes, the discretionary, mandatory--where in the mandatory 
spending, where in the tax cuts, the amount of those tax cuts the 
President has proposed. He has proposed this amount of new spending and 
tax cuts which have a negative impact on the deficit of $148 billion.
  In other words, if we do not do anything, the deficit picture will be 
$148 billion better than it would be if we enacted the President's 
spending and tax proposal.
  Now, to pay for it, he does provide for $115.8 billion of new taxes--
tobacco tax increases, other tax increases, and user fees. If you add 
all that together, it is $115.8 billion. He has proposed spending cuts 
in the mandatory items of $34 billion, and so that's how he is paying 
for his new spending and for his tax cuts.
  So I just make mention of that, Mr. President. The President's 
proposal violates the budget proposal because it increases 
discretionary spending more than we agreed upon last year, and that's 
where we are getting a lot of savings. Then he says basically what he 
wants to do is to spend $124 billion more over this period of time than 
what we agreed upon last year. He wants to give some tax cuts of $24 
billion, targeted social spending through the Tax Code, and some of 
that is for school construction, some of it is for child care tax 
credits, for environmental purposes, and so on. But anyway, he wants to 
use the Tax Code to spend money, and so he has $148 billion. What does 
he do? He says, well, let's increase taxes $115.8 billion and let's 
make some changes in some of the entitlement programs, spectrum fees 
and so on, and we will raise the money to do it. So he wants to spend 
and tax $150 billion more than we agreed to last year--$150 billion 
over 5 years. That is what it boils down to.
  In other words, you can do nothing and you will have basically the 
same

[[Page S525]]

deficit picture under the President's budget as if you adopted it. If 
you adopt the President's budget, you would spend a lot more and you 
would tax a lot more, period. If you just look at the figures, here is 
the budget level under existing law, or if we adopt the President's, we 
are going to spend about $148 billion, $150 billion more in 
discretionary and mandatory spending and we are going to tax that much.
  That is really what it boils down to. I hope we do not follow that. 
But I at least wanted to put that in the Record so my colleagues would 
have it.
  I ask unanimous consent that three charts I prepared using the 
President's budget and CBO be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

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[[Page S530]]

  Mr. NICKLES. Mr. President, I see my colleague from West Virginia. I 
am going to close the Senate unless he wishes to address the Senate. 
And he has declined, Mr. President.

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