Congressional Record, Volume 145 Issue 54 (Tuesday, April 20, 1999)

[Congressional Record Volume 145, Number 54 (Tuesday, April 20, 1999)]
[Senate]
[Pages S3896-S3909]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

GUIDANCE FOR THE DESIGNATION OF EMERGENCIES AS A PART OF THE BUDGET
PROCESS

The PRESIDING OFFICER. Under the previous order, the Senate will now
proceed to the consideration of S. 557, which the clerk will report.
The assistant legislative clerk read as follows:

A bill (S. 557) to provide guidance for the designation of
emergencies as part of the budget process.

The Senate proceeded to consider the bill.
The PRESIDING OFFICER. The majority leader.

Amendment No. 254

Mr. LOTT. Mr. President, on behalf of Senator Abraham, Senator
Domenici, and others, I send an amendment to the pending budget bill to
the desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.

[[Page S3897]]

The assistant legislative clerk read as follows:

The Senator from Mississippi [Mr. Lott], for Mr. Abraham,
for himself, and Mr. Domenici, proposes an amendment numbered
254.

Mr. LOTT. Mr. President, I ask unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is printed in today's Record under
``Amendments Submitted.'')
Mr. LOTT. I believe Senator Abraham is ready now.
The PRESIDING OFFICER. The Senator from Michigan.

Amendment No. 255 To Amendment No. 254

Mr. ABRAHAM. Mr. President, I send a second-degree amendment to the
pending amendment to the desk.
The PRESIDING OFFICER. The clerk will report the amendment.
The assistant legislative clerk read as follows:

The Senator from Michigan [Mr. Abraham], for himself, Mr.
Domenici, Mr. Ashcroft, Mr. Lott, Mr. Nickles, Mr. McCain,
Mr. Frist, Mr. Crapo, Ms. Collins and Mr. Grams, proposes an
amendment numbered 255 to amendment No. 254.

Mr. ABRAHAM. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is printed in today's Record under
``Amendments Submitted.'')
Mr. LOTT. Mr. President, I believe Senator Lautenberg or perhaps
other Senators will be here momentarily and will wish to comment on
this subject--perhaps even the Senator from South Carolina. I know
Senator Abraham is prepared to begin the discussion.
For years we have talked about how we can set aside Social Security
to come up with a process so Social Security cannot be used to make the
deficit look better or be spent for other programs or, for that matter,
for tax cuts. A lot of thought has been given to this. Efforts have
been made by Senators on both sides of the aisle. I think what we have
this time is real. It will keep this money from being spent, without a
supermajority vote in the Senate, for other than defense. It is a clear
step in the right direction.
We need to be able to say to the American people that not one cent of
Social Security is going to be able to be spent on anything but Social
Security. This lockbox will make it a lot more difficult, although
under emergency circumstances obviously that could still be pierced.
The key, though, is to lock this money up, make sure it is not
frittered away, and then see if we can come up with genuine long-term
Social Security reform so this money can be used for that. If it is
not, it will still be used, available to reduce the debt, and, over a
period of years, that itself will be a significant benefit to the
country, to the economy, to our seniors, and to the Social Security
program.
So I commend Senator Abraham for his persistence on this issue, and I
think the best thing for us to do at this point is to get into a
discussion about what we are trying to do here and see if we can get
this process through. This is a change in the law; this is not just a
budget process change. This is something the Senate would have to act
on, the House would have to act on, and we would have to send it to the
President.
So I think it is time, and appropriate, now, that we have this
discussion about the future of Social Security.
I yield the floor.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. ABRAHAM. Mr. President, I thank the majority leader for giving us
an opportunity to begin this debate. I realize we have a number of
Members on various sides of this issue with different ideas. I think if
we have a discussion here, perhaps we can identify some of the concerns
and address them. I hope we can because I think this is a topic that
needs to have our full attention.
Let me begin by saying I have just submitted an amendment here on
behalf of myself as well as Senators Domenici, Ashcroft, Lott, Nickles,
McCain, Frist, Crapo, Collins, and Grams. The amendment is the Social
Security Preservation and Debt Reduction Act. It implements a sense-of-
the-Senate resolution which we approved as part of the budget
resolution just before our Easter recess.
As you know, that sense-of-the-Senate resolution passed this Chamber
on March 24 by a vote of 99 to zero. It said simply that we ought to
truly protect Social Security by seeing to it that moneys in the Social
Security trust fund are only used to fix Social Security or to pay down
the public debt, and for no other purpose.
We all agree that saving Social Security is our No. 1 priority in
this Congress. That has been a discussion that virtually every Member
at one time or another has been part of. The President, in both his
1998 and his 1999 State of the Union Addresses, said we should save
every penny of the Social Security surplus. In this year's Address, he
said we should use it to reduce the Federal debt so as to ensure it
will not be squandered on other spending programs.
I agree with that. So do my cosponsors. Therefore, it is our hope,
through this amendment we are offering today, to put into effect that
which so many people, including the President, have sought to
accomplish. If enacted into law, this amendment would save every penny
of the Social Security surplus either to fix Social Security or to
reduce the public debt.
Using hundreds of billions of dollars from the Social Security trust
fund for new spending will not save Social Security. Indeed, the
Congressional Budget Office now estimates that the President's own
budget, the one he submitted to us in February, spends $158 billion of
the Social Security surplus, 20 percent of the surplus that will be
generated over the next 5 years. Fortunately, as you know, the Senate
charted a different course. Through our sense-of-the-Senate resolution,
99 Senators stated our intention to lock up the Social Security trust
fund to protect those dollars from being spent on other Government
programs.
Let me recount what this resolution, which we passed as part of the
budget, provided.
First, it provided we would place Social Security truly and fully off
budget.
Second, we pledged to create a subcategory of the current gross
Federal debt limit; namely, debt held by the public.
Third, we pledged to mandate the reduction of that publicly held debt
level by an amount equal to the Social Security trust fund surplus.
In addition, the limits could be adjusted one time to accommodate
substantive Social Security reform. In other words, unless we were
using the Social Security trust fund surplus to fix Social Security,
reform to modernize the Social Security system, then it would be used
to reduce the current levels of Publicly held debt.

The amendment I am offering would implement those pledges. So let me
briefly run down its provisions.
The Social Security Surplus Preservation and Debt Reduction Act
reaffirms that Social Security is off budget. That means its assets
should not be counted for purposes of the budget submitted by the
President or the Congressional Budget Resolution. The legislation
establishes a simple majority point of order against any budget that
does not count Social Security moneys. This amendment also codifies the
budget resolution language to establish a 60-vote Senate point of order
against any budget resolution, budget amendment, or budget conference
report that runs a deficit unless that deficit results solely from
Social Security reform legislation.
Of critical importance is the amendment's provision establishing in
law a declining limit on the amount of debt that could be held by the
public. This limit would be reduced in the year 2000, in the year 2001,
and at 2-year intervals thereafter through the year 2009, by an amount
equal to the entire Social Security trust fund surplus for each
corresponding time period. The amount would be measured as CBO's
current annual projections of the Social Security surplus for these
same years.
The 60-vote point of order would lie against any resolution or bill
that would exceed the publicly held debt limits. In other words, we
could not expand the publicly held debt unless we had 60 Members of
this Chamber who would make such a decision.

[[Page S3898]]

However, these limits would be automatically adjusted for the cost of
Social Security reform, as I have mentioned, and/or for any changes in
the actual or projected Social Security trust fund surpluses.
Clearly, we are trying to read out the long period of time through
this legislation, a 10-year period. So if, as we move through that
period, the size of the Social Security trust fund surplus were to be
readjusted or projected differently, then the legislation we are
offering right now would provide the mechanism for making adjustments
in that reduction of the publicly held debt accordingly.
A number of additional provisions would protect Social Security
recipients from unforeseen events. First, specific language in the
amendment states that the Secretary of the Treasury shall give priority
to the payment of Social Security benefits required to be paid by law.
This amendment guarantees that Social Security benefits will have the
highest priority on all Federal moneys. We institute a concrete
guarantee to seniors, and to those who one day will be seniors, that
their benefits are truly backed up by the full faith and credit of the
Government of the United States.
In addition, Mr. President, this amendment includes a provision that
would set aside the public debt reductions in the case of recession.
Whenever the Commerce Department reports two consecutive quarters of
less than 1 percent growth, the limits would be set aside until there
is one full quarter of more than 1 percent real growth. Once
reestablished, the limit would restart 6 months later at the level of
public debt held at the time of the recession's ending and then step
back down at the rate projected by the newly determined Social
Security surpluses.

Finally, this amendment includes an exception for emergencies such as
the current crisis in Kosovo.
On March 17 of this year, Treasury Secretary Rubin sent a letter
expressing several concerns about this approach. First, let me say that
I was somewhat disappointed when he did so and surprised that he would
raise the concerns about a bill that had not yet been written, let
alone introduced. I appreciate the way Washington public policy debates
work, Mr. President, and I understand the Secretary of the Treasury
wanted to, at a very early stage, express concerns. What we have tried
to do is respond to those concerns in such a fashion, I hope, that the
way we have crafted the amendment will satisfy some of the issues
raised in his correspondence. Let me talk about a few of those
considerations at this time.
First, Secretary Rubin in his letter commented that fiscal restraint
is best exercised through the tools of the budget process; debt limits
should not be used as an additional means of imposing restraint. But
the last 2 years have clearly shown that current budget rules are
inadequate to curb Washington's spending habits.
Last year, the President threatened to shut down the Government
unless we spent $21 billion of the Social Security surplus through
various so-called ``emergency'' spending declarations. There was a lot
of debate as to whether or not some of those provisions truly were
appropriately described as emergencies. This year, as I noted, the
President proposed spending $158 billion of the Social Security surplus
on new spending programs over the next 5 years.
The budget rules, therefore, I do not believe are protecting the
Social Security surplus, and it is not just the President who has
proposed ideas and ways by which these Social Security surplus dollars
can be spent. Members of Congress, on both sides of the aisle, have a
lot of spending ideas, as we have heard.
In my judgment, the current budget rules do not protect these Social
Security surplus dollars adequately. They are not designed for that
purpose. Therefore, in my judgment, only by locking away the Social
Security surplus and guaranteeing that the spenders cannot get ahold of
it will we be able to protect those surplus dollars.
The fact of the matter is, if there is money available, people will
find a way to spend it under the current rules. I think that is very
simple and clear, and I think we should take additional steps to
address it. I do not think we can count, as the Secretary has
indicated, on the existing rules to suffice.
Next, Secretary Rubin has raised the specter of default saying:

Even the appearance of a risk that the United States of
America might not meet its obligations because of the absence
of necessary debt authority would impose significant
additional costs on American taxpayers.

Mr. President, we should keep in mind that we currently have a debt
ceiling of $5.95 trillion. We live within a debt ceiling. We are not
talking about creating something out of whole cloth here, a limit on
the amount of indebtedness the American Government can assume. That is
the law, and the Treasury cannot issue more debt than that.
Further, current gross Federal debt is about $5.48 trillion. It is
not at the moment projected to rise significantly over the next 10
years. There is no specter of failure to meet our obligations here.

I will note, however, that the CBO estimated that the President's
proposals in his budget would raise gross Federal debt to almost $8.4
trillion, almost $3.5 trillion over the current debt limit, exceeding
the current debt limit by nearly 40 percent. Therefore, using the
Secretary's logic, the President's budget will place us in immediate
jeopardy of default because it will exceed the debt limits that we
already have in place.
Our proposal, on the other hand, simply creates a sublimit of our
current debt limit, one for debt held by the public. It does nothing to
limit our ability to meet our obligations.
Nonetheless, we have tried to take Secretary Rubin's concerns
seriously. What we have done to try to address those concerns--and I
will elaborate on this a little bit further at a later point in these
remarks--we have delayed the implementation of each year's new debt
limit by 7 months to ensure that they become effective when the
Treasury is most flush with cash. This will establish a buffer that is
more than sufficient, in our judgment, to cover Treasury's short-term
cash management needs, even during seasons of the year when cash
deficits have historically appeared.
Third, Secretary Rubin has expressed concern that the publicly held
debt limits ``could easily be inadequate for the Government to meet its
obligations at a given point during the year. If the Treasury could not
borrow or raise, it is possible that it could simply stop honoring any
payment.'' And he even went on to say Social Security payments.
What he means by that, and it is related to the earlier point that I
just addressed, is the fact that the revenue stream to the Government
does not always coincide with the outflow of money during particular
points in the year. That is why, as I have mentioned, we have altered
our original proposal to move the date at which these publicly held
debt ceiling changes would occur to a point--May 1--at which time,
based on the past 10 years, the Government has been most flush, has had
the largest inflow of money--obviously, it corresponds to some extent
to tax payment day and other factors--for the exact purpose of making
sure the changes would occur at a point when the Treasury would have
the most cash on hand and the greatest flexibility with respect to any
obligations, it would seem to me.
In addition, we have placed into this amendment a legal declaration
that Social Security payments required by law have priority claims on
the U.S. Treasury. In other words, we try to do two things here that I
think address all of the concerns raised by Secretary Rubin.
First, we have changed the effective date as to when the debt limits
would be changed to meet the maximum point of revenue stream to the
Government, thus giving him and his successors total flexibility with
respect to meeting obligations, and the guaranteed Social Security
benefit checks will be paid by ensuring in the language of the
amendment that they would receive top priority of expenditures.
In addition, we have responded to the Secretary's concern about
short-term cash management swings, as I say, with a 7-month delay of
implementation of the debt limits.
We are open to other ideas, but we are trying to be responsive to
those

[[Page S3899]]

concerns that have been raised. That is our hope here, to try to
address anything that might serve as an impediment to anyone concerning
the support of this vitally needed legislation.

In addition, Secretary Rubin has worried that the proposed debt
limits could run the risk of worsening an economic downturn. We take
that to mean concerns that if a recession were occurring, we would be
in a difficult position to adequately address it. Once again, we have
taken into account those concerns, and we have placed in our amendment
language, as I mentioned earlier, that would suspend the debt limits
during times of recession and reinstate them only after we have
recovered from such recession at the newly adjusted publicly held debt
levels.
Finally, the Secretary expressed concern that the lockbox does not
allow for emergencies. Let me first observe that this administration's
use of the term ``emergency'' has been somewhat variable, and it would
certainly be the view of this Senator, and I know others, that it has
been used to characterize a number of expenditures that are hard
pressed to be included under that definition, at least as I see it. We
spent $21 billion of the Social Security surplus on an emergency
package at the end of the last Congress that certainly had provisions
which did not, in my judgment, meet the normal definition of that term.
However, considering that we now have a 60-vote point of order
against any nondefense emergency spending provisions as part of the
budget resolution that we passed, we have placed in this amendment
language to automatically adjust upwards the publicly held debt limits
for any emergency spending provisions. Thus, we once again address the
concern that was raised.
Mr. President, I believe this meets, therefore, every one of the
serious concerns expressed by the Treasury Secretary, while at the same
time still meeting the central goal of protecting and preserving the
Social Security trust fund surpluses. It successfully addresses the No.
1 issue of this Congress: Saving and strengthening Social Security.
While it may not constitute the long-term reform proposals that I
know will be further debated as the Congress moves ahead, it protects
the surpluses of the trust fund so they can be employed to make sure
that we modernize the Social Security system in a way that not only
guarantees today's beneficiaries are able to receive what they are
entitled to, but also the future beneficiaries will as well. We owe it
to those who have reached retirement age, as well as those who will one
day join them, to do this.
As recent events have shown, the only way to do that is to take
Social Security finally and fully off budget, because so long as Social
Security trust fund surpluses can be accessed by spending priorities,
they will be spent. In my judgment, it is that simple. It is simply too
easy to point to good ideas and good programs and arguments of things
that can be done with large amounts of the American people's money, too
easy to see the benefits of Federal spending without looking at the
cost to our financial stability and to those who depend on a sound
Social Security system.

In my opinion, we must, in order to meet our obligations to the
American people, see to it that every penny of the Social Security
trust fund surplus is preserved for Social Security. And the only way
to do that is to lock up those funds by using them to pay down the
public debt. I think it is the right thing to do.
President Clinton himself has endorsed the idea at the root of this
amendment. This Chamber recently voted unanimously for a resolution
calling for legislation of this sort. So I hope we can get together, as
colleagues, to take what would be the final step--this amendment--to
place Social Security surpluses above the risks that they will be
squandered and secure them for generations to come.
Mr. President, I am pleased, on behalf of a variety of colleagues, to
offer this amendment. We look forward to the discussion. I hope that it
can encompass not just a discussion of this proposal as offered, but if
Members have ideas with respect to the lockbox, I hope they will share
them with us, because I think protecting the Social Security surplus
dollars is something that we have an obligation to achieve in this
Congress.
Mr. President, I yield the floor.
Mr. LAUTENBERG. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative assistant proceeded to call the roll.
Mr. ASHCROFT. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ASHCROFT. Mr. President, I am honored to cosponsor the Abraham-
Domenici Social Security surplus preservation amendment. This amendment
will protect Social Security for millions of Americans who now receive
its benefits and who now pay taxes hoping that they someday, too, will
receive Social Security.
I believe protecting Social Security is the highest priority we could
have in the Congress. Protecting Social Security means we must make
sure the current surpluses that will be needed to pay benefits later
are not used to pay for new budget deficits in the rest of government.
That is what this bill does. It is why I am for it, and it is why I
urge swift passage of this legislation.
The legislation we are debating today logically follows and, in fact
implements, previous policy decisions that have been made by this
Congress. Let's review a sense-of-the-Senate resolution that the Senate
passed by an overwhelming 99-to-0 vote just 2 weeks ago. That
resolution made these points:
No. 1, Congress and the President should balance the budget excluding
surpluses generated by the Social Security trust funds.
No. 2, reducing the Federal debt held by the public is a top national
priority.
No. 3, the surpluses now held in the Social Security trust fund will
reduce the debt held by the public by $1.7 trillion.
The nonpartisan Congressional Budget Office estimates that President
Clinton's budget would spend $158 billion of Social Security surpluses
on new spending programs over the next 5 years. That is the nonpartisan
Congressional Budget Office. It simply says that the President's plan
for spending is to use the Social Security surplus to go out and spend
$158 billion which would not otherwise be spent over the next 5 years.
Social Security surpluses should be used for retirement security, for
payment of current benefits, or to reduce the debt, and should not be
used for other purposes.
These mandates should be implemented in two ways:
First, by providing for a Senate supermajority point of order against
any bill or resolution that would use Social Security surpluses on
anything other than the payment of Social Security benefits.
Second, by establishing a supermajority point of order in the Senate
against raising the limits established on the level of debt held by the
public. This resolution passed the Senate 99 to nothing. It passed
unanimously. Not only did it pass unanimously, there was no dissenting
debate.
The conference report on the budget resolution which we passed last
week took the first steps necessary to protect Social Security by
balancing the budget without using the Social Security surpluses, and
it established for the next 2 years a point of order against budget
resolutions that use Social Security surpluses to balance the budget.
Mr. President, I believe that is what we need to do. We need to
basically say that it is out of order to go back and take Social
Security surpluses to cover deficits in other parts of government.
The amendment we have before us implements the sense-of-the-Senate
resolution. It simply takes what we did 2 weeks ago and makes permanent
the Social Security protection measures that were included in the
conference report. Specifically, this amendment accomplishes the
following:
No. 1, this amendment creates a 60-vote point of order against future
budget resolutions that use Social Security surpluses to balance the
budget. This provision makes the temporary point of order included in
the conference report permanent, and it is made a part of the law, not
just part of the Senate and House rules on the budget. We simply would
be able to say that it is out

[[Page S3900]]

of order, it requires a supermajority setting aside or suspending the
rules in order to devote the Social Security surplus to covering
deficits in other parts of the operations of government.

This provision is identical to legislation I introduced earlier this
year to protect Social Security. This amendment lowers the amount of
debt held by the public by amounts roughly equal to the Social Security
surpluses. So as you have a Social Security surplus, instead of
spending it on new government, you use it to lower the amount of debt
held against this country.
The effect of this provision is twofold: It helps ensure that the
Social Security trust funds are not used to pay for aggressive spending
programs or for tax cuts; and, secondly, it reduces overall Federal
debt. By reducing debt, this amendment will strengthen our economy,
strengthen Social Security, and our capacity to meet our obligations to
it in the future.
Reducing the public debt makes it easier for America to meet its
Social Security obligations in three ways. I think Speaker Hastert was
most eloquent about this. He said if you ever came into a surplus in
your own life--maybe a rich uncle died, left you $50, $60,000--and you
either could spend it on a bunch of new spending or pay down the
mortgage on your house, which would help you meet the challenges of the
future better? It is pretty clear, not going to Las Vegas and taking a
lot of vacations but paying down your debt, paying down your mortgage,
would be the best thing.
Over the long run, paying off the debt will lower interest payments,
which are now over $200 billion annually. They equal about 15 percent
of our budget now.
No. 2, they would ease the burden of the $3.8 trillion national debt,
which would free up more resources to help us meet Social Security
obligations in the future. Of course, No. 3, a debt-free America will
have a stronger, faster-growing economy and will be better equipped to
come up with the money to redeem the trust fund's IOUs when needed.
We cannot afford not to pay off the Federal debt. Federal debt incurs
very real costs in the form of interest payments and higher interest
rates. Under President Clinton's proposed budget, $158 billion from the
fiscal year 2000 to fiscal year 2004 budget would be diverted from debt
reduction and directed towards spending. According to the Senate Budget
Committee, that represents 21 percent of the Social Security surplus
over that period. In fiscal year 2000 itself, it represents $40
billion, or 30 percent of the surplus.
In contrast, our amendment would require us to reserve every penny,
all of the Social Security surplus, for debt reduction. Under this
plan, publicly held debt, which now stands at 44.3 percent of GDP,
would be reduced to 10.3 percent of GDP by the year 2009. That is a 70-
percent reduction over just 10 years.
Once this amendment is adopted, the President and Congress will no
longer raid Social Security surpluses to pay for non-Social Security
spending. This amendment would, therefore, protect Social Security at
the beginning and at the end of the budget process. At the front end,
Congress could no longer pass budgets that use Social Security
surpluses. At the back end, the ratcheting down of the debt ceiling
would ensure that Social Security surpluses go to debt reduction,
thereby helping to keep our financial house in order. A strong
financial house for the United States of America is fundamentally the
best guarantee we can ever have that Social Security will be a house of
integrity itself.
One of the most important lessons a parent teaches a child is to be
responsible, responsible for his or her conduct and responsible for his
or her money. America needs to be responsible with the people's money.
The debt reduction proposed by this amendment is among the greatest
gifts we can give to our children, and it is a great gift for our
seniors. Imagine what our children could do if we were able to provide
for them a next generation that is free, free to build their own dreams
instead of pay for our past.
In addition to protecting our children from debt, this amendment will
also protect the Social Security system from irresponsible government
spending.
I urge my colleagues to join me in support of this amendment, and I
thank the Chair for this time on the floor.
Mr. DOMENICI addressed the Chair.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I thank the Senators who have taken the
floor and spoken on behalf of this lockbox amendment.
I have worked for many years with a number of Senators, some of whom
are on the floor--some on the other side, like Senator Hollings--in an
effort to see what we could do to make it as difficult as humanly
possible to spend Social Security trust fund money for other kinds of
expenditures of the Federal Government, be it programs, or be it tax
cuts.
Frankly, I have heard it said on a number of occasions that the
things we tried to do heretofore were all process and didn't get the
job done. I don't want to take credit for doing something
extraordinary. But I will say this idea of tying the Social Security
trust fund to the debt held by the public over a 10-year period, and
limiting the amount of debt that can occur in each of those years for a
decade, which essentially is the current debt minus the amount of
Social Security trust fund subtracted each year from that debt--what is
left over, that residual is the debt held by the public. But I did, at
a committee hearing, for some reason come up with the idea that maybe
that is what we ought to do--tie it to a debt limit.
There will be plenty of people who will take the floor and say this
is too rigid, this is too tough, this puts too big a shackle around the
Government of the United States.
Let me tell you honestly. If you want to tell the seniors of America
we don't want to spend your Social Security money for programs, or tax
cuts, or anything other than when we need it for you, we will use it
for you, then you ought to really be serious about it. You ought to say
that is what we are trying to do.
Obviously this is the first time that the rhetoric and the
contentions by Senators from both sides of the aisle that we ought to
not spend Social Security money has been reduced to a statute that, if
it passes and is signed by the President, will govern for 10 years,
whether or not the United States can easily use trust fund money from
Social Security for other causes, other reasons, as just as they may
be. It will become very difficult when this legislation becomes law for
us to ever again in a wholesale, willy-nilly manner spend Social
Security trust fund money. In fact, every time you exceed that debt
limit, and even if you have 60 votes, you are going to have to tell the
American people we are exceeding it; we have 60 votes now. It is
something very important, and people are going to be able to look and
see. Was it something very, very important, or are we back to business
as usual?
That is the essence of this proposal.
When I was saying we talk a lot about it, let me say on the debate on
the budget resolution on the floor of this Senate--and the occupant of
the Chair helped, because he voted the right way, but on this vote it
was an easy vote because 99 Senators voted for it, as I recall. There
was a sense-of-the-Senate resolution, kind of the precursor to this
bill that was adopted by the Senate. It was an Abraham-Domenici and
others sense-of-the-Senate resolution.
It did the following things:
One, it reaffirmed the Omnibus Budget Reconciliation Act of 1990 that
Social Security trust funds are off budget.
Second, it provides a Senate point of order against any budget
resolution that violates that section of the Omnibus Budget
Reconciliation Act.

Third, it mandates that Social Security surpluses are used only for
Social Security, or reducing the public debt.
Fourth, it provides for a Senate supermajority vote on a point of
order against any measure that would use Social Security surpluses for
anything other than the payment of Social Security benefits, Social
Security reform, or the reduction of the debt held by the public.
Fifth, it ensures that all Social Security benefits are paid on time.
Last, it accommodates Social Security reform legislation. That was
passed 99-0.

[[Page S3901]]

Mr. President, what happened was we attempted in that sense-of-the-
Senate resolution to encapsulate what this legislation that is before
us today did. It said that it is the sense of the Senate that we should
adopt a bill that does all of these things. Now we have that bill
before us.
So those who would now want to either unduly delay this vote, or say
we should not do it, or vote against it, no, it is not so easy to
explain that they just less than 10 days ago voted--2 weeks ago and a
few days--voted 99-0 to adopt legislation just like this.
I understand that there can be a lot of explaining between the
language and the statute--the language in this lockbox legislation.
Right off, I want to mention one thing. There are a number of
Senators--I am hoping it is a minimum--within the next couple of days
who are going to cite the fact that our distinguished Secretary of the
Treasury, Mr. Rubin, said some legislation that he had seen that was
the Domenici legislation on the lockbox wouldn't work mechanically,
that part of the year you don't get in a real strong flow of income
tax, and later on you get in a big flow of income tax, and that maybe
you would not be able to control the expenditures and the need for cash
during those early days if in fact you had a very rigid year-long debt
limit.
We have done the best we can. We are open to suggestions to adjust to
that need for flexibility without altering the ultimate dollar number
that will be the debt held by the public.
Again, rather than use it to destroy this legislation, which it
should not do--I read the letter, and we can fix the concerns of the
Secretary--if that is all the concerns the administration has, if that
is all of them, we already fixed most of them right here. But if it is
not quite right, we welcome the legislative liaison from the Treasury
or the White House to come and tell Mr. Rubin to tell us how to fix it
better, just as long as it is understood that we don't want somebody
from the administration saying that what we are really telling you is
too tough, it is too rigid, it holds your feet to the fire too much, we
ought to have more flexibility in terms of why and for what purpose we
should use this Social Security surplus. If that is the reason the
legislation is bad, we want to suggest that we are at opposite ends of
the polls; for that is the reason we think it is good, because it is
very tough.
If you are going to throw away much of the Social Security funds in
the next decade instead of applying it to the debt of $1.8 trillion, it
is not going to be easy, which means that Government is going to be
pretty much tied to a reasonable budget that does not spend the Social
Security budget surplus over time over this decade.
For those who say, well, you know, there will be no money for this or
that or the other, maybe there won't, but maybe there will be because
we are not saying that surpluses that are not Social Security surpluses
are subject to any kind of restriction. They are subject to what
Congress wants to do and what a President recommends.
So if there are surpluses that do not belong to them--and there is a
very large chunk of surplus now that doesn't belong to Social
Security--we are not trying to limit that. We Republicans think most of
that should go back to the public in tax cuts, but that is a year-long
battle with the President and others. That is not Social Security
money.
Mr. President, that same sense-of-the-Senate language that I told you
about that was adopted in the budget resolution in its final form,
after it got 99 votes freestanding, it was adopted by a vote of 54-44
when the budget resolution was adopted.
When 99 people vote and tell the Senate what we should do, and then
we do it, it would seem to me that it ought to be a rather simple
proposition that we ought to do it, tell the public we meant what we
said, and get on with making sure we find other ways to take care of
our governmental needs, but not the Social Security trust fund for the
next decade.
Unless the Senate and the sense-of-the-Senate resolution was
meaningless, this statute should get rather broad-based support, it
seems to this Senator.
Let me speak from the standpoint of what could be better for America
than us doing this. I can think of hardly anything that could be better
for America, not just for the seniors, better for America. Mr.
President, $1.8 trillion during the next decade, and I truly believe
that if this statute is adopted it will be perilously close to $1.8
trillion, that will be cut from the national debt.

That is an incredible number. Senator Ashcroft just told us how big
it is, in terms of percentage of our gross national product. But $1.8
trillion of public debt during this decade will be wiped clean and
there will be no public debt against that $1.8 trillion because the
surplus of Social Security money will be there, only to be used for
major reform for Social Security if, in fact, that occurs during this
decade.
Why is that good? If you asked almost every rational, reasonable,
mainstream American economist from Alan Greenspan to that long list
that said the President was doing good things in reducing the debt, you
ask them if reducing the debt by $1.8 trillion is not a very positive
thing for our economy and they will all say: The best thing to use
surplus for is debt reduction. Because that means we borrow less. In a
very interesting way it means we save more, because if you were to
spend it, you would have to be borrowing to take its place. And if you
do not borrow, you are saving. Since we individually save little, it is
very good, starting into the new millennium and the first few years,
that we have a low debt with low borrowing which may very well keep the
American economy moving ahead, strong, powerful, with lower interest
rates.
What could be better for America? Nothing. What could be better for
seniors? Nothing--other than a reformed Social Security program that
was in existence for 75 years with no problems. And, frankly, an
appropriate plan might use this surplus in transition for that and we
might get that out of this also.
Why else is it good for seniors? Did anybody hear the President go to
the Rose Garden when he got a statement from the trustees of Social
Security and Medicare the other day and announce to America that things
were looking better for Medicare and Social Security? I believe there
was an announcement that we added 8 years to the longevity of the trust
fund for Medicare. And we did not do a thing. We just continued to have
a prospering American economy. So one can say seniors should want a
prospering American economy more than anyone else in this society,
because a prospering American economy, with high employment and low
unemployment, is the best medicine for the Social Security trust fund
and Medicare trust fund of anything, any set of activities we could do
as American people, as business people, and as American taxpayers and
workers, producing goods and services in this very vibrant and powerful
economy.
So, when you look at that, this may just be, in some people's minds,
some small approach to making the case that we are trying to save
Social Security trust fund money from being spent arbitrarily for
things that are not Social Security. It is more than that. It is a
combination of things that I just described, including the very
positive result of greatly reducing the national debt while we wait to
see what is needed for Social Security reform; a very, very positive
piece of legislation.
It is important to allow the Federal Government maximum flexibility
in times of low growth or recession. The Federal budget is one of the
most important economic policy tools we have. In fact, we have
procedures in place which allow us to suspend our budgetary enforcement
rules during such times.
This legislation contains a low-growth, recession trigger as well. If
the Department of Commerce reports two consecutive quarters of real
economic growth of less than 1 percent, the limit of debt held by the
public is suspended. The current law statutory debt limit would still
be in place.
The limit on debt held by the public is suspended until the Commerce
Department issues a final GDP report indicating that the level of real
GDP has risen back to its level prior to the low growth or recession
period. The limit on debt held by the public is restored at its actual
level (at the time the Commerce Department report is issued that de-
triggers the suspension.)

[[Page S3902]]

The limit on debt held by the public then begins to decline at the
same rate that it would have had the suspension not been triggered.
Mr. President, the Act is effective for 10 years and then sunsets.
This is the same time period covered by the recently adopted concurrent
resolution on the budget for fiscal year 2000--H. Con. Res. 68. It is a
period of time in which the Social Security trust fund balances are
expected to grow by nearly $1.8 trillion. These balances would retire
debt held by the public which would help prepare the country for the
retirement of the baby boom generation early in the next century. It
reaffirms off-budget treatment of the social security program.
The act reaffirms current law that the receipts and disbursements of
the Social Security trust funds shall not be counted for the purposes
of the Federal budget submitted to Congress by the President or any
congressional budget.
The act creates a new Budget Act point of order against Congress
adopting a budget that uses social security surpluses to achieve
balance, and requires the President to submit a budget that does the
same. It uses the Social Security surplus to reduce the debt held by
the public. The act establishes a new enforceable limit on the amount
of debt held by the public over the period from 2000 to 2010. These
debt limits specified in the act are current estimates of the level of
borrowing from the public over this period that result from the Social
Security surplus only being used to retire debt. The surplus could not
be used for non-Social Security spending or tax cuts. Legislation
increasing these limits would require a super-majority vote in the
Senate.
The act establishes the first limit becomes effective as of May 1,
2000, and effectively ratchets down this limit May 1 and periodically
thereafter. The effective date accommodates Treasury Department's
Federal cash management responsibilities. The newly established debt
held by the public limits would not disrupt the cash management
operations of the Bureau of the Public Debt nor would it jeopardize
Social Security benefit payments.
The limits follows:
May 1, 2000 through April 30, 2001, $3.628 trillion;
May 1, 2001 through April 30, 2002, $3.512 trillion;
May 1, 2002 through April 30, 2004, $3.383 trillion;
May 1, 2004 through April 30, 2006, $3.100 trillion;
May 1, 2006 through April 30, 2008, $2.775 trillion; and
May 1, 2008 through April 30, 2010, $2.404 trillion.
There are adjustments to Limits for Social Security reform,
recessions, emergencies and war. Social Security reform--the Act
authorizes adjustments to the limits established for legislation
enacted that reforms Social Security during this time period. If Social
Security reform legislation is enacted, and if that legislation has the
effect of changing the debt held by the public specified in this act,
then the Secretary of the Treasury shall adjust the limits in this act
to reflect those changes.
Recessions--the provisions of this act are suspended during a period
of low economic growth. Two consecutive quarters of less than 1 percent
real economic growth would automatically make the debt limits in this
act inoperative. After the recession has ended, the act would reinstate
new debt limit levels adjusted for the impact of the recession.
Emergencies--the act also provides for an automatic adjustment to the
debt limit levels specified if, after the adoption of this act, the
Congress enacts into law ``emergency'' spending defined under the
Balanced Budget Act. If emergency spending uses a non-Social Security
surplus, then no adjustment to the limits would be necessary. If,
however, emergency spending requires the usage of Social Security
surpluses, then the limits specified in the act would be adjusted for
that amount.
Declaration of war--the act would be suspended upon Congress enacting
a declaration of war.
I want to suggest there are those who wonder what we will do if we
have a recession. I provided in this a triggering mechanism. If there
is anybody who would like to improve upon it, I welcome it. But it says
you have a recession if you have two consecutive quarters of
significant downturn in the economy, in which event you may very well
be dramatically impacting upon the tax take of the country. In that
case you may, indeed, trigger a halt to the reduction, the constant
reduction of the debt limit. And you may leave it in place until you
get into a recovery mode and then set it back on its trendline toward
total elimination of the $1.8 trillion.
In addition, you will find some language in it regarding war, or
regarding substantial moneys being needed for our military. Those may
occur from time to time and we would not want people to say this is
making it impossible to fund that, even though holding it is a good
thing. It might be that you would want to use it for those kinds of
things, and there is a provision permitting us to do that.
When you add it all up, I think we have been considerate of the
problems associated with trying to truly lock this money in and that we
have a good bill. We hope we get some support from the Democratic side
before we are finished, and we stand ready to debate it. I hope our
leader stands ready to debate it as long as necessary for us to get an
up-or-down vote and see just where we all stand so our people will
understand our position when the legislation appears, rather than when
we have a sense of the Senate that we ought to do this. Let's see what
happens on the legislation.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. HOLLINGS. Mr. President, let me first respond to our
distinguished budget chairman by reading a letter addressed to our
distinguished minority leader by the Secretary of the Treasury, Robert
Rubin. It is dated March 17, 1999.

Dear Tom: Thank you for inquiring about the impact of the
new debt limits contained in the Social Security Surplus
Preservation Act. I appreciate the opportunity to respond to
your question. In brief, I am deeply concerned that these
limits could preclude the United States from meeting its
future financial obligations to repay maturing debt and to
honor payments--including benefit payments--and could also
run the risk of worsening a future economic downturn.
It has been this Administration's view that fiscal
restraint is best exercised through the tools of the budget
process. Existing enforcement tools such as the pay-go rules
and the discretionary spending limits in the Budget
Enforcement Act have been key elements in maintaining fiscal
discipline in the 1990's Debt limits should not be used as an
additional means of imposing restraint. Debt is incurred
solely to pay expenditures that have previously been
authorized by the Congress and for the investment of the
Federal trust funds. By the time the debt limit is reached,
the Government is obligated to make payments and must have
enough money to do so.
If Treasury were prohibited from issuing any new debt to
honor the Government's obligations, there could be permanent
damage to our credit standing. The debt obligations of the
United States are recognized as having the least credit risk
of any investment in the world. That credit standing is a
precious asset of the American people. Even the appearance of
a risk that the United States of America might not meet its
obligations because of the absence of necessary debt
authority would be likely to impose significant additional
costs on American taxpayers. Yet, in November 1995, a debt
crisis was precipitated when Government borrowing reached the
debt limit and in January Moody's credit rating service
placed Treasury securities on review for possible downgrade.
As you know, there is currently a statutory limit on the
amount of money that Treasury can borrow in total from both
the public and from Federal trust funds. The proposed
``lockbox'' provision would add a new statutory limit on debt
to the public.
The proposed new debt limit runs the risk of precipitating
additional debt crises in the future. Although the proposal
adjusts the debt ceiling for discrepancies between the actual
and projected Social Security surpluses, it does not make
similar corrections for unanticipated developments on the
non-Social Security side of the budget. While our
forecasts have been conservative, the current forecast of
the non-Social Security budget could prove too optimistic
because of changes in the economy, demographics, or
countless other factors. This could cause the publicly
held debt to exceed the new debt limit.
Furthermore, even if the debt limit appears sufficient
because if covers the annual debt level--measured from end-
of-year to end-of-year--it could easily be inadequate for the
Government to meet its obligations at a given point during
the year. Under normal circumstances, every business day,
Treasury makes payments--including Social Security payments
on certain days. In any given week, Treasury receives
revenues, makes payments, and refinances maturing

[[Page S3903]]

debt. Weekly and monthly swings in cash flow can easily
exceed on-hand cash balances. When this occurs, Treasury then
borrows from the public to meet its obligations. If the
amount of publicly held debt were to reach the level of the
debt limit--or if the debt limit were to decline to below the
level of publicly held debt--Treasury could be precluded from
borrowing additional amounts from the public. If Treasury
could not borrow to raise cash, it is possible that it could
simply have to stop honoring any payments--including Social
Security payments.
In this case, Treasury could be prohibited from issuing any
new debt to redeem maturing debt. Every Thursday,
approximately $20-23 billion of weekly Treasury bills mature
and, every month, an additional $60-85 billion in debt
matures. These securities must either be paid off in cash or
refinanced by issuing new debt. Treasury could be put in the
position of having to default for the first time in our
nation's history.
Congress could defuse the debt limit problems by
immediately voting to raise the debt ceiling. Under the
``lockbox'' proposal, however, it would take sixty votes in
the Senate to do so. As past experience indicates, obtaining
a super-majority for this purpose is often time-consuming and
difficult. Moreover, this requirement would greatly enhance
the power of a determined minority to use the debt limit to
impose their views on unrelated issues.
Finally, the proposed debt limits could run the risk of
worsening an economic downturn. If the economy were to slow
unexpectedly, the budget balance would worsen. Absent a
super-majority vote to raise the debt limit, Congress would
need to reduce other spending or raise taxes. Either cutting
spending or raising taxes in a slowing economy could
aggravate the economic slowdown and substantially raise the
risk of a significant recession. And even those measures
would not guarantee that the debt limit would be not be
exceeded. A deepening recession would add further to revenue
losses and increases in outlays. The tax increases and
spending cuts could turn out to be inadequate to satisfy all
existing payment obligations and keep the debt under the
limit, worsening a crisis.
To summarize, these new debt limits could create
uncertainty about the Federal government's ability to honor
its future obligations and should not be used as a instrument
of fiscal policy. While we certainly share the goal of
preserving Social Security, this legislation does nothing to
extend the solvency of the Social Security trust funds, while
potentially threatening the ability to make Social Security
payments to millions of Americans. I will recommend that the
President veto the bill if it contains the debt limit
provisions. If you have any additional questions, please do
not hesitate to contact me.
Sincerely,
Robert E. Rubin.

t(Mr. DOMENICI assumed the Chair.)
Mr. HOLLINGS. Mr. President, the interesting thing to this Senator,
of course, is the date, March 17. Nothing has changed. We knew that the
distinguished chairman of the Budget Committee and his colleagues would
be conspiring, as they have delayed us this afternoon to get the exact
right conspiracy. To do what? To eliminate President Clinton's budget,
on the one hand, and to engage in a charade or fraud, on the other
hand, to make the Members, and particularly the media that covers this
thing, see the perception is the reality. They are still talking
surplus, surplus, surplus, surplus when we pointed out time and time
and time again there is no surplus. We are spending $100 billion more
than we are taking in. But this is to get everybody to think there is
some change.
All you have to do is read the distinguished chairman's summary of
the Social Security Surplus Preservation and Debt Reduction Act,
summary of amendment, April 20, 1999. This is 1 month later. The
distinguished Secretary of the Treasury foresaw this amendment. There
is nothing complicated about it except its wording and rewording of the
statutory provisions of 13301 and many, many other provisions, to
mislead, as if it were really doing something.
But, 2, ``Uses Social Security surplus to reduce the debt held by the
public.''
Mr. President, we have been doing that for years and years on end.
That is what we call the unified--there it is--the unified deficit.
That is when they use the Social Security surplus. We have this chart.
We have been using this for years.
As a former chairman of the Budget Committee--I speak advisedly, not
politically--I have been trying my dead level best to do what the
chairman in this amendment proposes to do, but it is the same act, the
same scene, because in 1968 President Lyndon Baines Johnson brought
about a merging of the Social Security trust fund with general funds of
the U.S. Government so we could then talk about a unified deficit with
trust funds. Therefore, you could get a surplus rather than a deficit.
The truth of the matter is, the trust fund surplus from Social
Security is $126 billion. You use Social Security trust funds and you
continue to do so.
They say pay down the public debt. Let me get into that paying down
the public debt, like it is something other than the national debt. I
am in my 33rd year, and the real problem is to really try to stop
increasing the national debt and to pay down the national debt.
When we say pay down the debt, do not give monkeyshines of paying
down public debt, thereby increasing Social Security debt. The
distinguished Senator from Missouri said just a minute ago, if you
inherited money, rather than going off to Las Vegas you ought to pay
off your home mortgage. This does not pay off the home mortgage. This
does not pay down the national debt. It just levels off and obscures
the true size of the national debt, whereby we are thinking we are
reducing the public debt and we are paying our bills. Not at all.
(Mr. SMITH of Oregon assumed the chair.)
Let's assume, Mr. President, individually I had two credit cards, I
had a MasterCard and I had a Visa card, and I got in a big bill from
MasterCard, and I said, ``Well, I'll take care of that crowd. They've
been bringing a lot of pressure on me, so I will just take the Visa
card and pay off the MasterCard.'' I still owe that much more money. I
have just transferred it from MasterCard to Visa. In this case, I am
just transferring it from public debt to Social Security. I am using,
borrowing, spending--ah, spending--the Social Security moneys to pay
down the public debt.
That is all this amendment says, and that is what we have been doing
since 1968. But on this long sheet here of--how many pages are here? It
is a 17-page amendment, with all these facts and figures. You can find
the triggering mechanism on page 10, when they say, ``After the
Secretary determines the actual level for the social security surplus
for the current year, the Secretary shall take the estimated level of
the social security surplus for that year specified in paragraph (1)
and subtract that actual level.'' And when you subtract that level, you
bring down the public debt. That is the triggering mechanism. The
amendment has 17 pages, and you will find it on page 10. The debt goes
up, up, and away.
Mr. President, I had to go to the Congressional Budget Office and ask
for the trust fund balances. As of February 1999--I have not gotten it
for March yet. Let me give you the Congressional Budget Office figures
here of what we owe Social Security. That is something you ought to
remember, that there isn't any Social Security surplus. Yes, each
fiscal year there has been for several years, because we really bring
in more than what we have to pay out that particular year. But having
spent it, having been paying down the public debt, we have been
spending the Social Security money.
So Social Security, as of 1998, $730 billion in the red; 1999, $857
billion. These are CBO figures. These are shockers--shockers--to you,
because I am reading out how we are increasing the debt, not paying it
down.
We are the board of directors of the Government. We are not stock
analysts up on Wall Street hoping that the Government does not come in
with its sharp elbows, borrowing to pay its bills, running up interest
rates, perhaps causing inflation, crowding out corporate finance.
So you will find that the financial community and the Greenspans--oh,
they love this ``pay down the public debt.'' They are not elected to
office. We are elected as the trustees of the fiscal condition of the
U.S. Government.
Here is the most important program we have domestically, the Social
Security program. And in 1998, $730 billion in the red; in 1999, it is
projected to be $857 billion; in 2000, $994 billion; in 2001, $1.139
trillion; and in the year 2002, under current policy, paying down the
public debt, $1.292 trillion; in 2003, $1.453 trillion; in 2004, $1.624
trillion; in 2005, $1.808 trillion, in 2006, $2.001 trillion; in 2007,
$2.205 trillion. And at the end of the 10-year period this particular
amendment contemplates, in the year 2008, we will owe, paying down

[[Page S3904]]

the public debt and increasing the Social Security debt, $2.417
trillion.
Now, come on. When you need the money to make the payments, when you
can't just depend on the interest cost in 2013, at the end of the year
in 2012, you are going to have to start borrowing money. And in 2034
you will be outright broke and you will owe nearly $4.5 trillion--
almost $5 trillion.

Who would want to be Senators running for reelection? Who would want
to get elected to that mess? All you can do is cut down all the
programs and raise taxes, unless you can get away with this fraud that
is going on.
I use the word ``fraud'' advisedly. We learned, as freshmen in law
school, that it had to be false, and it was intended to be false, and
intended to deceive, that it was relied upon, it did cause damage, and
the damage was the proximate cause. This particular amendment is
knowingly with intent to deceive. It is a fraud. It does not change a
thing.
We have been paying down the public debt with Social Security money,
and we are running up Social Security's debt, sticking it more and more
and more in the red, all under, ``We're going to save Social Security
100 percent. It is going to be spent on only Social Security''--
absolutely false. When you pay down the public debt, that debt could
have been caused by defense, Kosovo, it could have been caused by food
stamps, it could be caused by foreign aid or Lawrence Welk's home--I
remember when we appropriated money for Lawrence's home--it could be
anything.
So when you are paying down the debt, as it says right here on the
face of the handout by the distinguished chairman of the Budget
Committee--and I read, again, ``uses the Social Security surplus to
reduce the debt held by the public''--the debt held by the public is
cumulative with every and any amount of different expenditures. So it
has more to be spent on every and any thing but Social Security, all
the time saying they are saving Social Security.
Let me make absolutely clear about this fiscal condition that we are
in, because we have a cancer; we have fiscal cancer.
Mr. President, I have a good friend over on the House side, the
chairman of the Transportation Committee, Mr. Shuster. And he is
finally going to spend some highway moneys on highways. Bless him. I am
100 percent for him, because I have been in this game now ever since we
started the budget process in 1973, 1974, with Senator Muskie. I have
been the chairman of the committee.
But here are the trust funds. The Secretary of Treasury refers to
trust funds. Somebody will say, they are not trusts, but they are
supposed to be. ``For the investment of Federal trust funds'' is the
expression used by Secretary Rubin. I am using the same expression:
``Trust fund looted to balance the budget.''
In 1999, here is what we owe Social Security: $857 billion; Medicare,
we got $129 billion for the HI portion of Medicare and 39 billion for
the SMI portion; for military retirement, $141 billion; for civilian
retirement, we owe $490 billion--that is civil service employees; they
ought to know it; it is going up--unemployment compensation fund, $79
billion; highway moneys, $25 billion; airport moneys, $11 billion;
railroad retirement, $23 billion; and ``other,'' like the Federal
Finance Bank, $57 billion. So we owe our trust funds $1.851 trillion.
By this 5-year period, at the end of 2004, we will owe $2.954
trillion under current policy, and the amendment of the Senator that
has just been put in by the majority leader--I wasn't here when it was
introduced, but I understood he was going to put it in or the chairman
of the Budget Committee--the one under consideration, in 5 years, we
will owe $3 trillion to all of the particular trust funds. And the
distinguished Senator from Texas came down to the floor of the Senate,
and this is a quote of what he said on April 15:

I believe that this is an excellent budget. I think,
looking at the whole package, it is the finest budget
presented in America in the 20 years that I have served in
Congress.

Do you know what it does, Mr. President? It just breaks all the
discipline, the little discipline that we do have that has been in the
pay-go rules. So once we settle out, then any amendment that came in,
you had to have an offset.
Here is what they do in the conference report so that they can go
ahead with tax cuts and anything else they want. Of course, the
manifest intent is to do away with Social Security, privatize it. In
order to privatize it under Milton Friedman's plan, you need what? You
need these surpluses. You need the $1.8 or the $2 trillion or, if you
do it in the year 2004, you will need $3 trillion. So you will need
these surpluses.
Here's how you get them. Section 202 of this budget--here is the
conference report on the budget:

Whenever the Committee on Ways and Means of the House or
the Committee on Finance of the Senate reports a bill or an
amendment thereto is offered or a conference report thereon
is submitted that enhances retirement security through
structural programmatic reform, the appropriate chairman of
the Committee on the Budget may, one, increase the
appropriate allocations and aggregates of new budget
authority and outlays for the amount of new budget authority
provided by such measure and outlays flowing therefrom for
that purpose. Two, in the Senate, adjust the levels used for
determining compliance with the pay-as-you-go requirements of
section 207. And, three, reduce the revenue aggregates by the
amount of the revenue loss resulting from that measure for
that purpose.

There go your tax cuts.
What does this mean? It means what the distinguished chairman of the
Budget Committee says. Whenever the Committee on Ways and Means of the
House or the Committee on Finance reports a bill, an amendment thereto,
the chairman can decide, the appropriate chairman of the Committee on
the Budget, he can tell you what that means; it means what he says.
I am speaking as seriously as I know how. I have never seen the
extreme of the shenanigans and the maneuvers and the misleads and the
fraud going on politically, all to get by the next election,
specifically using Social Security trust funds.
Let's go back, Mr. President, to the Greenspan Commission. The
Greenspan Commission, in 1983, said we are going to institute this
payroll tax; namely, the 6.2 percent, the payroll by the employer, and
6.2 percent by the employee, for 12.4 percent. And we know that is a
high payroll tax. But we are putting that in to take care of the baby
boomers in the next generation. That is why it was put in that way.
And to make sure that it was set aside, section 21, Mr. President,
provided just exactly that. It provided that it be set aside and that--
if I can find that section, I will show it to you, section 21. It said
remove Social Security from the unified budget. That has been the on-
budget, off-budget, unified and all that, un-unified, private debt,
public debt, trust fund debt, everything else--it is just one account.
But I will read section 21:

A majority of the members of the National Commission
recommends that the operations of the OASI, DI, HI and SMI
Trust Funds should be removed from the unified budget.

It took this Senator on the Budget Committee almost 7 years before I
could finally get it reported out of the Budget Committee, that
particular provision.
I ask unanimous consent that section 21 of the Greenspan Commission
report be printed in the Record.
There being no objection, section 21 was ordered to be printed in the
Record, as follows:

social security and the unified budget

(21) A majority of the members of the National Commission
recommends that the operations of the OASI, DI, HI, and SMI
Trust Funds should be removed from the unified budget. Some
of those who do not support this recommendation believe that
the situation would be adequately handled if the operations
of the Social Security program were displayed within the
present unified Federal budget as a separate budget function,
apart from other income security programs.

Mr. HOLLINGS. I thank the Chair.
I think we have in here section 13301. I ask unanimous consent that
we print in the Record at this point section 13301 of the Budget
Enforcement Act.
There being no objection, section 13301 was ordered to be printed in
the Record, as follows:

SEC. 13301. OFF-BUDGET STATUS OF OASDI TRUST FUNDS.

(a) Exclusion of Social Security From all Budgets.--
Notwithstanding any other provision of law, the receipts and
disbursements of the Federal Old-Age and Survivors Insurance
Trust Fund and the Federal Disability Insurance Trust Fund
shall not be counted as new budget authority, outlays,
receipts, or deficit or surplus for purposes of--

[[Page S3905]]

(1) the budget of the United States Government as submitted
by the President,
(2) the congressional budget, or
(3) the Balanced Budget and Emergency Deficit Control Act
of 1985.
(b) Exclusion of Social Security From Congressional
Budget.--Section 301(a) of the Congressional Budget Act of
1974 is amended by adding at the end the following: ``The
concurrent resolution shall not include the outlays and
revenue totals of the old age, survivors, and disability
insurance program established under title II of the Social
Security Act or the related provisions of the Internal
Revenue Code of 1986 in the surplus or deficit totals
required by this subsection or in any . . .''

Mr. HOLLINGS. I thank the distinguished Chair. I will read
``Exclusion'':

Section 301(a) of the Congressional Budget Act of 1974 is
amended by adding at the end the following: ``The concurrent
resolution shall not include the outlays and revenue totals
of the old age, survivors and, disability insurance program
established under title II of the Social Security Act or the
related provisions of the Internal Revenue Code.''

And it goes on in paragraph (a) saying that the Social Security trust
fund

. . . shall not be counted as new budget authority, outlays,
receipts, or deficit or surplus for purposes of the budget
of--(1) the budget of the United States Government as
submitted by the President, (2) the congressional budget, or
(3) the Balanced Budget and Emergency Deficit Control Act.

Now, true it is, the amendment reiterates that particular section.
But that has been in the disabuse, the disavowal, the violation thereof
ever since 1990, when President Bush signed it into law on November 5
of that particular year. And this particular amendment continues to put
it within the unified by paying it down.
Now, that has been the big problem all along. And so at the beginning
of the year, when I fortunately began to hear music to my ears that
both the White House and congressional leaders on both sides were
saying again and again that they were going to save Social Security, I
got with my friend Ken Apfel, who used to work for the Budget Committee
and is the Administrator of Social Security today, and, as a result, we
introduced S. 605, a bill to solidify the off-budget status of the Old
Age Survivors and Disability Insurance Program under title II of the
Social Security Act and to protect program assets. Let me read section
5:

Notwithstanding any other provision of law throughout each
month that begins after October 1st, 1999, the Secretary of
the Treasury shall maintain in a secure repository or
repositories cash in a total amount equal to the total
redemption value of all obligations issued to the Federal old
age and survivors insurance trust fund and the Federal
disability insurance trust fund pursuant to section 201(d) of
the Social Security Act that are outstanding on the first day
of such month.

Mr. President, that really puts it into a lockbox. It is in the
Budget Committee. I have asked the chairman to let us bring it up. I
would be delighted to have hearings on it. We would give anything to
have a vote on it, but they have filled up the tree so I can't put it
in as an amendment here. Maybe we can get it at the end of the so-
called cloture vote and put it in when we get an up-or-down vote on
this.
But section 201(d) requires the Social Security Administration to
invest in Treasury bills, Government securities. Necessarily, they get
the IOU and the Government gets the money. But if you immediately
transfer an equal amount of money back to a trust fund in Treasury, as
section 5 requires, then you have the lockbox where the money is only
expended for Social Security purposes.
Now, this has been drawn with the assistance of the Social Security
Administration. And some of my colleagues, when I showed it to them,
they said: Wait a minute, that's what you are going to do. What you are
going to do with the money is, you do exactly with the money as you did
between the years 1935 and 1968 before you started this monkeyshine of
a unified budget, spending all of the Social Security trust funds. That
is what happens. You keep it right over there and it gets the highest
amount permissible by law under T bills today, which this year in
interest will be $48 to $50 billion in interest that it earns.
This money is supposed to be earning, on the one hand, and kept in
trust, those earnings, and the total fund on the other hand. Instead,
we are spending the interest and the fund itself. We are breaking
Social Security, and coming out here baldfaced and saying we all want
to save Social Security, and not one red cent is going to be spent on
any other than Social Security. It is one grand fraud.
Mr. President, let me just emphasis, since I have the page turned
here on public debt and private debt, or gross Federal debt--I am
referring to an analysis of the President's budgetary proposals for
fiscal year 2000. I asked CBO, ``What do you really leave out when you
call it this public debt? What part of the debt, the overall public and
private, or trust fund debt, goes into the national debt?'' This is
held by the public. I am referring to page 74, April 1999, the most
recent report of the Congressional Budget Office: Debt held by the
public is the amount of money that the Federal Government has borrowed
by selling securities to finance all of the deficits less any surpluses
accumulated over time. Under the CBO's apparent baseline forecast, debt
held by the public is estimated to decline from $3.6 trillion in 1999
to $1.2 trillion in 2009. Gross Federal debt consists of debt held by
the public and debt issued to Government accounts.
Like you issue and you receive in Government accounts, most of the
latter type of debt is held by trust funds, the largest of which are
Social Security and Federal civilian employee retirement funds.
Because Treasury handles investment by trust funds and other
Government accounts, purchases and sales of such securities do not flow
through the credit markets. Therefore, interest on those securities is
considered to be an intragovernmental transfer.
That is what I call the monkeyshine when they take from one and give
it to the other. You only are talking about the one that you are
giving, and you are saying you are reducing the public debt, but you
are increasing Social Security debt and saying in the same breath you
are saving Social Security when you are looting it, when you are
savaging it. You are ruining it. There is no question that is what is
going on, and that is what this amendment calls for.
Back in 1983, if we had any idea that Social Security trust funds
were going to be spent for any other purpose, you would have never
passed that tax increase on Social Security, that payroll tax. You
would never have been able to get the votes.
We all talked and revered ourselves out here on the floor with the
flourishes of how we were saving Social Security, that we weren't going
to let it get in the red anymore, and how we are going to take care of
the baby boomers in the next generation, and that we are not going to
have it go bust. Instead, it is not the baby boomers that continue to
talk. It is the adults on the floor of the Congress totally in
violation of all Government policy. We are going to private
corporations. And in 1994 we passed the Pension Reform Act and said
there are too many of these takeovers. Well, these fast money artists
come in and pay down a good conservative-run company. They pay down the
company's debt with the pension fund, and then take all the money and
run. We said that is going to have to stop, and we are going make it a
felony if you do it.
So we passed the Pension Reform Act of 1994.
Colleagues have heard me tell the story of Denny McLain, because I
saw it in the New York Times whereby Mr. McLain, the all-time pitcher
for the Detroit Tigers, became the head of a corporation, paid off the
debt with the company pension fund, got fired, convicted of a felony,
and sentenced to 8 years. Mr. President, if you can find what cell poor
Denny is in, tell him next time run for the Senate. Instead of the jail
term, he would get the ``Good Government Award.''
We stand out here baldfaced and say how we are saving Social Security
when we are spending it on the debt. Don't get all caught up with
public debt like they want. That is what they want. They want us to
meet ourselves coming around the corner. By the year 2000, next year,
we will owe $2 trillion, and by the end of the 5-year budget period, we
will owe trust funds--the Government itself--$3 trillion.

I can tell you. You couldn't do this in corporate America. We would
be all fired as the directors.
But that is what happens and what occurs then. Finally, the fiscal
cancer

[[Page S3906]]

grows in droves. What happens is then it is projected that this year
there is $356.3 billion in interest costs.
Let me just say a word about that. I see other colleagues here on the
floor, who I would be glad to yield to.
But I am trying to emphasize again and again that this amendment does
nothing more than increase our fiscal cancer. It does not save Social
Security. It puts Social Security deeper in the red. That is what
happens here when you get the forced spending like taxes for interest
costs on the national debt, which is part of the public debt, too, and
the debt owed to the trust funds--what they might call if we were a
private entity our ``private debt.'' But what happens is, as with
Lyndon Johnson, President Johnson, back in 1968 when we last balanced
the budget, when the Government last balanced the budget, in 1968-1969
we ended up with a surplus. We didn't use Social Security moneys,
incidentally. At that particular time, there were about 200 years of
history, and the cost of all the wars from the Revolution on up to
World War I, World War II, the cost of Vietnam, Korea, the debt was
less than $1 trillion. And the interest cost was only $16 billion--one-
sixth--$16 billion. Here, without the cost of a war and the ensuing
years, it has gone up to $1.2 trillion.
So we have increased spending for nothing, absolutely nothing. This
is what I call ``fiscal cancer.'' You put in a sales tax. You get a
school. You put in a gas tax. You get a highway. You put in other
taxes. You get general government. But you put in this interest tax,
for this charade, fraud, maneuver, political maneuver, and the cancer
continues to grow. As the amount shows here on its face, for the next 5
years, the interest costs go up.
Here we are forced to spend $340 billion more than what President
Johnson spent when the budget was last balanced.
Mr. President, just think of that $340 billion that I am going to
spend this year, next year, next year. In fact, it is going up, up and
away in interest costs. This is all under current policy, incidentally.
And we have already destroyed current policy by passing an $18 billion
military pay bill.
We have now, and we are all going to vote for it, I think, $6 billion
for Kosovo. We have already busted the caps $21 billion. That is not
the case here. This is saying that you have not busted the caps, that
you had no Kosovo, that you had not voted $18 billion for the military.
But just think of that $340 billion more. I could give $80 billion to
paying down Social Security or saving Social Security. I could give $80
billion to pay down the public debt. I could give $80 billion for the
Republican tax cut. I could give $80 billion for the Democratic
spending programs, for Medicare and otherwise. That is only $320
billion. I would still have $20 billion for a parade and a party. As I
promised my distinguished chairman, I would jump off the Capitol dome
if he balanced the budget by the year 2002. That was a couple of years
ago--or 2001. I am still willing to reiterate that pledge.
They are not balancing the budget. We are spending, as you can see,
$105.2 billion more than we are taking in, according to CBO this year,
and $91.8 billion more than we are taking in for the budget that we are
working on for the year 2000. That is what I call fiscal cancer, and
nobody wants to talk about it. They want to say: Oh, everything is
coming up like roses. It is morning in America, whatever else, any kind
of political jargon. But the reality is there. I have a record and I
did not just come to this recently. I put in the sales tax, back in
1949 and 1950 for public education in my own State. I got the first
triple-A credit rating of a southern State.
I have been chairman of this Budget Committee and I have been
watching. I am trying to educate the media, that is the only saving
grace I have, if they could finally come out like Barron's did and say
there is no surplus. Everybody is talking about using the Social
Security surplus. Mr. President, I do not think I can get this printed
in the Record--but here the Concord Coalition has finally come around,
and a few others have come around and said it--but Barron's, dated
March 1: ``There is no budget surplus.''
If we could talk sense to each other, we could figure out how to get
out of this thing. I said let's do it the way the Social Security
Administration said; let's save it, let's put it in a true lockbox, S.
605. I thought when I passed 13301 that I had put it in a lockbox, on
November 5, 1990. We said it never would be spent and be used to
reflect the financial condition, but they violate it regularly.
S. 605 now says that you have to keep the money there. That is how we
did it for years on end. It was fiscally sound. That is what is
required of other pension funds, that they maintain their fiscal
soundness.
With that in mind, I yield the floor.
Several Senators addressed the Chair.
Mr. LAUTENBERG addressed the Chair.
The PRESIDING OFFICER (Mr. Brownback). The Senator from New Jersey.
Mr. LAUTENBERG. Thank you, Mr. President, for recognizing me.
Mr. President, I support the underlying bill to reform the rules
governing emergency spending that has been reported out of the
Committee on Governmental Affairs. Two amendments to that bill have now
been offered, a first-degree amendment and a second-degree amendment,
which blocks further amendments. The pending amendments are proposing
to establish what is being called a Social Security lockbox.
Unfortunately, this lockbox is not secure. And it actually could
undermine Social Security.
We Democrats have a far better alternative. Ours is a true lockbox.
And it protects both Social Security and Medicare in a much more
responsible way.
Before I comment further on the lockbox proposals, I want to review
the underlying bill before us, which would make significant
improvements in the treatment of emergency spending.
Emergency spending is not casual spending. It is so important that it
is exempt from budget rules. And that is as it ought to be, because it
involves responding to things like floods, earthquakes and volcanoes.
We can all identify parts of the country--the floods in the Midwest,
the volcano in the State of Washington, and the terrible earthquake
damage in California. Those are emergencies. They are immediate threats
to American public health and safety, and Congress often has to act
promptly to avoid the loss of life and property.
Unfortunately, the emergency exception has been abused. Last year,
Congress stretched the rules past the breaking point in the omnibus
appropriations bill, which included many items of questionable
emergency designation, especially those for military spending. These
were declared emergencies when, in fact, we were not looking at Kosovo
and these items were not needed to respond to an imminent threat.
Mr. President, Congress has been able to abuse the emergency
designation in part because the rules have been totally open-ended.
To address the problem, the Governmental Affairs bill proposes a new
definition of ``emergencies'' and a point of order to help prevent
conference committees from inserting unjustifiable new emergency
spending. It is a good bill. And I commend Senator Thompson and Senator
Lieberman for their leadership.
Mr. President, while we were considering the budget resolution, the
Senate approved an amendment offered by the distinguished Senator from
Illinois, Senator Durbin, that was based on this legislation. Yet the
conferees on the budget resolution ignored the Senate's position.
Instead, the conferees constructed a 60-vote point of order that now
applies to all emergency spending--but with a huge loophole. Military
spending was completely exempted, whether it was for new weapons
systems or whatever.
Mr. President, Heaven knows that all of us want to support our
military, and want to make sure that what we are doing in Kosovo is
fully supported. I, for one, hope that we will do whatever we can to
bring this wave of atrocities to a halt. So I am not complaining about
military spending.
But, Mr. President, I thought that what the conferees on the budget
resolution did was wrong. It was an abuse of the conference process
since neither Senate nor House had approved anything like this. They
just came up with it on their own.

[[Page S3907]]

I also thought it was bad policy.
Mr. President, there is no reason to allow 41 Senators to overrule 59
Senators who want to provide emergency spending for a flood, tornado,
hurricane, or earthquake. And there is no reason to create a higher
hurdle for a legitimate disaster than for a new weapons system.
I am afraid, Mr. President, that a 60 vote point of order against
emergency designations is itself subject to abuse. One can conceive of
all kinds of mischief to punish a particular senator or state for
political reasons. And we should not to allow that kind of abuse.
Unfortunately, Mr. President, the amendment before us would leave
this problematic approach from the budget resolution in place. Even
worse, it would write it into law. I think that would be a serious
mistake.
Now, Mr. President, I want to turn to the proposal to establish what
proponents call a lockbox.
I strongly support the purported goal of this amendment; that is, to
secure the future funding of Social Security. But I have three major
problems with this proposal.
First, it does nothing to protect Medicare. Instead, it allows
Congress to divert funds needed for Medicare in order to provide tax
breaks for the wealthy.
Second, it threatens Social Security. Under the amendment, an
unexpected economic downturn could block the issuance of Social
Security checks. This would deal a serious blow to so many of our
elderly who are dependent on Social Security.
Also, the amendment contains a booby trap that would allow Social
Security contributions to be invaded for purposes other than Social
Security benefits, like a risky new privatization scheme.
And third, the amendment could create a Government default --a U.S.
Government default. It could undermine our Nation's credit standing,
increase interest costs, and ultimately lead to a worldwide economic
crisis.
I want to explain each of these in turn. The Medicare trust fund is
now expected to be bankrupt by 2015--only 16 years away. We ought to
move quickly to reform and modernize the program. But it is also clear
that we will need additional resources. That is why most Democrats
believe it is critical to save some of the surplus for Medicare.
Our Republican friends say they agree about the importance of saving
some of the surplus for Social Security. But when it comes to saving
for Medicare, they are not willing to reserve a single penny. Instead,
they want to use funding that is needed for Medicare to provide any
other things they favor, including tax breaks which are largely for the
wealthy.
We Democrats think that is a mistake. And that is why I have
developed a lockbox that would reserve funding for Medicare as well as
Social Security. And I hope to have an opportunity to offer that
proposal with Senator Conrad of North Dakota.
Beyond its failure, Mr. President, to protect Medicare, the second
major problem with the pending amendment is that it fails to protect
Social Security. Actually, in some ways it threatens Social Security
benefits.
First, it threatens to block the issuance of Social Security checks
if the economy slows, or if the Congress fails to act responsibly. If
the limit on public debt is exceeded, even by the smallest of margins,
the Government could not issue more Social Security checks, and checks
already issued could not be honored.
The Republicans say they protected Social Security benefits by
providing that such benefits would be given--and I quote--
``priority.'' But this language will be of no use if the debt limit has
been exceeded.
In that situation, no new checks could be issued. And that applies
not only to Social Security checks, but unemployment compensation,
Medicare payments and all other Government payments as well.
The lockbox amendment also includes a huge loophole. I call it a mine
field. And it could allow Social Security funds to be used for a wide
variety of purposes, anything that Congress labels as Social Security
reform.
Mr. President, these are code words. They say we are going to lock
the door, but we are going to leave it open just a crack or two--
something people wouldn't do in their safe deposit box, something they
wouldn't do in their homes. We want to leave a couple of catch phrases
in here like ``retirement security,'' like ``reform,'' and so that we
do not really guarantee that Social Security surpluses are going to be
reserved for Social Security beneficiaries.
We had a vote here, 98 to nothing. We said that all Social Security
surpluses should be reserved for Social Security recipients. 98 to
nothing. But it didn't take long for the conferees on the budget
resolution--those from the majority party--we weren't included--to put
that vote in the trash basket. They included vague language that would
allow Social Security surpluses to be used for, and I quote,
``retirement security.''
Similarly, the language of this amendment includes an escape hatch
that will allow Congress to divert Social Security surpluses for
anything that Congress labels as Social Security reform.
I heard the distinguished chairman of the Budget Committee say
earlier today that much of our surpluses ought to be reserved to give
tax cuts to the people. It is not a bad idea. We like tax cuts,
targeted tax cuts. But the leading Republican tax proposal, S. 3, would
give those in the top one percent, with average incomes of $800,000 a
year, a $20,000 tax cut. Meanwhile, some poor guy who works for a
living, and his wife, or maybe a single parent who is working out there
and making $38,000 a year, is going to get 99 bucks. That is what the
Republican leadership has proposed.
So I would say to that $800,000 wage earner: Sorry, buddy, we are not
going to give you the $20,000 that you could use to put a downpayment
on a yacht or whatever else you want to do.
My conscience doesn't bother me at all when I say that tax cuts ought
to be reserved for people who need proper day care for their children
or need to help an elderly parent who has special medical problems.
Mr. President, when the Social Security trust fund goes bankrupt in
2034, it will be able to pay only about 70 percent of the promised
benefits. Diverting payroll taxes for other uses, as this amendment
allows, could make matters much worse. The date of insolvency could be
moved up and arrive earlier. And instead of being able to pay only 70
percent of promised benefits, we would be able to pay even less.
The issue here is not whether to establish private savings accounts,
as many have suggested. President Clinton has recommended one form of
such accounts, his USA accounts. Others have similar ideas.
But when Social Security already is 30 percent short of being able to
provide promised benefits to baby boomers, we can't afford to invade
its funds for other uses. If we want to establish private accounts, we
can use other funds. We shouldn't permit even deeper cuts in guaranteed
benefits.
It also is important to understand that this amendment would do
nothing to extend the life of Social Security trust funds. That is not
just my opinion, it is a fact.
To back that up, I have a letter from Mr. Harry Ballantyne, chief
actuary of the Social Security Administration. As Mr. Ballantyne
writes, the adoption of this proposal would have no significant effect
on the long-term solvency of the program--none.
I ask unanimous consent that a copy of this letter from the chief
actuary of the Social Security Administration be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

Social Security Administration,

April 19, 1999.
Hon. Frank R. Lautenberg,
U.S. Senate,
Washington, DC.
Dear Senator Lautenberg: This letter addresses the
potential long-range financial effects on the OASDI program
of ``locking away'' the annual increases in the Social
Security Trust Funds, as proposed by Republican leaders in
the Senate and the House on March 10, 1999. The proposal
would require that annual increases in the OASI and DI Trust
Funds would be used solely to purchase long-term special
issue U.S. government bonds. In addition, the proposal would
require that the revenue used for the purchase of these bonds
would in turn be used solely for the purpose of reducing
Federal debt held by the public. Of course, the net

[[Page S3908]]

change in the Federal debt held by the public in any year
would also be affected by the size of any on-budget deficit
or surplus for that year.
The proposal would not have any significant effect on the
long-range solvency of the OASDI program under the
intermediate assumptions of the 1999 Trustees Report. Thus,
the estimated long-range actuarial deficit of 2.07 percent of
taxable payroll and the year of the combined trust funds'
exhaustion (2034) would not change. The first year in which
estimated outgo will exceed estimated tax income would not be
affected and would therefore remain at 2014.
Any plan that reduces the amount of Federal debt held by
the public may make later redemption by the Trust Funds of
special issue U.S. government bonds easier.
Sincerely,
Harry C. Ballantyne,
Chief Actuary.

Mr. LAUTENBERG. Mr. President, it is critical that Congress act
promptly to extend the solvency of Social Security. President Clinton
has presented two related proposals that would extend Social Security's
life through 2059. Some of my colleagues don't like those proposals.
That is fair. But if they do not like his ideas, they should propose
some of their own. So far, they haven't done it. And no one should be
fooled into believing that this lockbox proposal is an answer.
Finally, the most serious problem with this proposal is that it
threatens to lead to a Government default. In the short term, that
could damage our Nation's credit standing and increase interest costs.
Treasury Secretary Rubin has written an excellent letter that
explains the severity of the risks posed by this proposal. I note that
the distinguished Senator from South Carolina already talked about this
and has asked that Rubin's letter be printed in the Record. It was
accepted on a unanimous consent basis. No Senator should vote on the
pending amendment until they have read this letter. And it is hard to
see how anyone could endorse the amendment after reading that letter.

Unfortunately, this amendment could very well lead to a serious debt
crisis in the future. Proposed limits on publicly held debt would be
exceeded if current projections of the non-Social Security budget
proved too optimistic. And, even if Congress tried in good faith to
comply with new public debt limits, those limits could be reached due
to changes in the economy, demographic shifts, or a variety of other
factors.
Mr. President, the sponsors of the amendment say that they have
included a provision to ensure that a recession would not trigger a
default. However, that provision won't always work. The provision would
only become effective after two quarters of low economic growth. We
could be in a deep recession for nearly 7 months before the exemption
kicks in. By then, it could be too late. We could already be in
default.
Mr. President, our Nation has never defaulted on a debt backed by the
full faith and credit of the United States. But this amendment could
trigger default based on factors completely beyond our control. That
wouldn't just block Social Security and other checks; it could easily
lead to a worldwide financial crisis. That could prove catastrophic.
Mr. President, this is crazy. If suddenly the economy slows, revenues
decline, or expenditures increase unexpectedly, for any reason, why
should we risk the world's economy? It is like forcing the whole world
to play a game of economic Russian roulette.
I would note that the Republican chairman of the House Ways and Means
Committee, Congressman Bill Archer, recognizes the folly of this
approach and strongly opposes it. So this shouldn't be a partisan
issue. He is not a Democrat. And I hope others on that side of the
aisle will also join in opposition. There are other more responsible
ways to enforce budget discipline. And that is what we Democrats are
proposing.
Senator Conrad and I have developed an alternative lockbox to protect
surpluses for both Social Security and Medicare, and we hope to have an
opportunity to present it to the Senate. Our proposal would reserve all
Social Security surpluses for Social Security and a portion of other
surpluses for Medicare. Our lockbox would be enforced first by
requiring 60 votes to invade the lockbox. Then, if Congress raided
projected surpluses, other programs would be cut across the board. We
think this makes more sense than the potential triggering of a default
and a worldwide economic meltdown.
So I will briefly review the main problems with the proposal in front
of us.
It does nothing to protect Medicare. It allows Congress to spend
money needed for Medicare on tax breaks for the wealthy.
Second, it threatens Social Security. It could block Social Security
checks when the economy performs worse than expected. And it includes a
trap door that allows Social Security taxes to be invaded for purposes
other than Social Security benefits, like risky new privatization
schemes.
Finally, the amendment threatens a default on debt backed by the full
faith and credit of our country. This could increase interest costs
immediately, and ultimately lead to a worldwide economic catastrophe.
For all of these reasons, Mr. President, I hope my colleagues will
recognize the serious problems with this amendment, and that we will be
given an opportunity to offer amendments to improve it.
Unfortunately, right now, we Democrats--45 of us--are being prevented
from offering amendments that we think are needed to protect Social
Security and Medicare beneficiaries. We are prohibited by a trick
called filling the amendment tree. This prevents us from offering
amendments, under the Senate rules.
Mr. President, I hope my colleagues will give us the opportunity to
offer amendments. We need a lockbox for Social Security. But it should
be a real lockbox, without an escape hatch. It should protect Medicare
as well. And it should be designed in a way that doesn't pose a threat
of a Government default and a worldwide economic crisis.
Mr. President, I hope that we can come together on an understanding--
that the 98 Senators present last week voted on--that Social Security
surpluses should be reserved exclusively--no ifs, ands, or buts--for
Social Security beneficiaries. No loopholes. No escape hatches. No
little crack in the door of the lockbox.
I hope our colleagues will think seriously about this when they vote.
And I want the American public to take note of what is going on here.
They are the final arbiters of whether or not we are doing the right
thing.
Mr. President, I thank the Chair for his courtesy.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative assistant proceeded to call the roll.
Mr. ALLARD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Cloture Motion

Mr. ALLARD. Mr. President, I send a cloture motion to the desk to the
pending lockbox amendment, No. 254.
The PRESIDING OFFICER. The cloture motion having been presented under
rule XXII, the Chair directs the clerk to read the motion.
The legislative clerk read as follows:

Cloture Motion

We the undersigned Senators, in accordance with the provisions of
Rule XXII of the Standing Rules of the Senate, do hereby move to bring
to a close debate on the pending amendment No. 254 to Calendar No. 89,
S. 557, a bill to provide guidance for the designation of emergencies
as part of the budget process:
Trent Lott, Pete V. Domenici, Ben Nighthorse Campbell,
Jeff Sessions, Kay Bailey Hutchison, Craig Thomas,
Slade Gorton, Chuck Hagel, Spencer Abraham, Thad
Cochran, Pat Roberts, Conrad Burns, Christopher S.
Bond, John Ashcroft, Jon Kyl, and Mike DeWine.

Mr. ALLARD. Mr. President, on behalf of the majority leader, for the
information of all Senators, this cloture vote will occur on Thursday.
The majority leader will announce to the Members the time of the vote
later today.

Call of the Roll

Mr. ALLARD. Mr. President, I ask unanimous consent that the mandatory
quorum under rule XXII be waived.
The PRESIDING OFFICER. Without objection, it is so ordered.

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