[Congressional Record Volume 146, Number 7 (Wednesday, February 2, 2000)]
[Senate]
[Pages S288-S292]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. VOINOVICH (for himself and Mr. Gramm):
  S.J. Res. 38. A joint resolution to provide for a Balanced Budget 
Constitutional Amendment that prohibits the use of Social Security 
surpluses to achieve compliance; to the Committee on the Judiciary.


                balanced budget constitutional amendment

  Mr. VOINOVICH. Mr. President, the Congressional Budget Office, CBO, 
released figures last week showing that the United States is on track 
to achieve a $23 billion on-budget surplus this fiscal year. If CBO's 
figures hold up, then the United States will have achieved a true, on-
budget surplus for the first time in 40 years.
  In addition, the United States could enjoy an on-budget surplus 
ranging somewhere between $11 billion and $69 billion in fiscal year 
2001, depending on which set of figures you use.
  But what I find truly amazing is what CBO reports could occur over 
the next 10 years. Under the most realistic assumptions about 
discretionary spending, CBO estimates we could achieve an on-budget 
surplus of nearly $900 billion.
  As good as this sounds, we must remember not to get ahead of the 
game. Just because we could obtain an on-budget surplus, does not mean 
we have obtained an on-budget surplus.
  Whatever on-budget surplus we actually achieve this year--and the 
years that follow--is predicated on the ability of Congress and the 
President to resist the urge to spend it. Unfortunately, with an amount 
of unobligated money that large, there will be calls from all segments 
of society and Government to increase funding for this program, or 
create that program, or institute massive tax cuts.
  That is why the very first priority for this year must be to oppose 
the temptation to squander this year's surplus on a pork-laden 
supplemental appropriations bill. I implore my colleagues to maintain 
the necessary discipline that will let these surpluses grow.
  Even though I am cautiously optimistic about the on-budget surpluses 
projected for this year and the next, I still do not believe we should 
treat CBO's projections as the gospel truth as we plan 10 years, or 
even 5 years, down the road.
  That is because, as most any economist will tell you, the only thing 
certain about projections is their uncertainty.
  In testimony before the House Banking Committee last year, Federal 
Reserve Chairman Alan Greenspan said:

       . . . it's very difficult to project with any degree of 
     conviction when you get out beyond 12, 18 months.

  In addition, he stated:

       Projecting five or ten years out is a very precarious 
     activity, as I think we have demonstrated time and time 
     again.

  Last July, CBO Director Dan Crippen said, in testimony before the 
Senate Budget Committee that ``10-year budget projections are highly 
uncertain'' and that ``economic forecasting is an art that no one has 
truly mastered.'' And that is from the Director of CBO--the man in 
charge of making Congress' surplus projections.
  More alarming, as we all know, these surplus projections don't 
reflect the ticking time bomb of Social Security and Medicare costs 
that will explode when the baby boomers begin to retire--something that 
Congress and the President must address now.
  More importantly as we bask in the euphoria of these projected 
surpluses, we must not forget the sobering fact that we still have a 
$5.7 trillion national debt--a national debt that costs us more than 
$224 billion a year to service. That is more than $600 million a day in 
interest costs alone.
  Out of every Federal dollar spent, 13 cents goes to pay the interest 
on the national debt.
  In comparison: 16 cents goes for national defense, 18 cents goes for 
nondefense discretionary spending, and 53 cents goes for entitlement 
spending.
  Here is the chart. I think most people are not familiar with it. This 
shows where the Federal dollar goes: net interest, 13 percent; national 
defense, 16 percent; nondefense discretionary spending, 18 percent; and 
53 percent for mandatory spending.
  Think about it. We spend more on interest each year than we spend on 
Medicare. It is easy to understand our difficulty in reforming Medicare 
or providing a prescription drug benefit or funding countless other 
beneficial programs when the money we could use to pay for such 
programs or activities is being spent on interest.
  That is why I believe every fiscal decision we make from here on must 
be measured against the backdrop of how it will decrease our $5.7 
trillion national debt.
  In fact, in testimony before the Senate Budget Committee last week, 
CBO Director Crippen stated:

       Most economists agree that saving the surpluses, paying 
     down the debt held by the public, is probably the best thing 
     that we can do relative to the economy.

  On the very same day, Federal Reserve Chairman Greenspan said,

       My first priority would be to allow as much of the surplus 
     to flow through into a reduction in debt to the public. From 
     an economic point of view, that would be, by far, the best 
     means of employing it.

  Lowering the debt sends a positive signal to Wall Street and to Main 
Street. It encourages more savings and investment which we really need 
in the country, and, in turn, it fuels productivity and continued 
economic growth. It also lowers interest rates, which in my view, is a 
``bird-in-the-hand'' cost reduction for most Americans, and better than 
the ``two-in-the-bush'' tax-reduction proposals floating around this 
Congress.
  Furthermore, devoting on-budget surpluses to debt reduction is the 
only way we can ensure that our Nation will not return to the days of 
deficit spending should the economy take a sharp turn for the worse or 
a national emergency arise.
  As Alan Greenspan recently testified:

       A substantial part of the surplus. . .should be allowed to 
     reduce the debt, because you can always increase debt later 
     if you wish to, but it's effectively putting away the surplus 
     for use at a later time if you so choose.

  Even as most economists agree that the best use of any surplus is to 
apply it against the debt, the bad news is, the President and some of 
my colleagues believe the best use of this possible surplus is to 
increase spending and provide tax expenditures.
  By merely proposing his plan, as he outlined at his State of the 
Union Address, the President has assured a path of confrontation both 
with this Congress and within this Congress.
  I believe that Congress and the President need to avoid such partisan 
politics and work together on reaching an agreement as to how best to 
utilize these surpluses.
  Further, I believe the best option available to us is to agree on a 
realistic

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adjustment to the 1997 budget caps, do the best we can to respond to 
the needs of the American people within that limit, and use the balance 
of the surplus to pay down the national debt.
  If we can't start paying down our national debt now, with the longest 
period of economic growth in the history of our Nation, with record low 
unemployment and low inflation, when will we ever be able to do it?
  We have a moral obligation to do it now.
  I am ashamed, and so should my colleagues be ashamed, that because of 
30 years of irresponsible fiscal policies our national debt has 
increased 1,300 percent. My granddaughters, Mary Faith and Veronica, 
and my 2-week-old grandson, John, have each inherited a debt of nearly 
$21,000 because Members of Congress and our Presidents weren't willing 
to pay for the things they wanted, or, in the alternative, do without 
those items they could not afford.
  I agree with General Accounting Office Comptroller General David 
Walker, who, in testimony before the House Ways and Means Committee 
said:

       This generation has a stewardship responsibility to future 
     generations to reduce the debt burden they inherit, to 
     provide a strong foundation for future economic growth, and 
     to ensure that future commitments are both adequate and 
     affordable. Prudence requires making the tough choices today 
     while the economy is healthy and the workforce is relatively 
     large--before we are hit by the baby boom's demographic tidal 
     wave.

  Fortunately, that message is starting to be heard. Last month, 
Speaker of the House, Dennis Hastert, announced his goal of eliminating 
all federal debt held by the public by 2015. Not soon enough, but 
Speaker Hastert gets it. And I hope my colleagues on both sides of the 
aisle join us in supporting debt reduction as our primary fiscal goal 
because it is in the best interest of this nation.
  In order to ensure fiscal discipline and prevent us from 
``backsliding'' into the fiscal mess we've been in for the past 30-plus 
years, I am introducing today a Balanced Budget Amendment to the 
Constitution, or what I like to refer to as the ``backbone budget 
amendment.''
  I believe it is the only guarantee that we will never return to the 
days of deficit spending and the accumulation of debt, and we should do 
it now. Now! The time is right, and those of my colleagues who have 
championed this in the past should seize upon this opportunity to join 
me in this effort, because, as they know, or should know, a Balanced 
Budget Amendment is the most effective method of keeping a handle on 
spending.
  My proposal is a departure from previous proposals by stipulating 
that Social Security surpluses be exempt from deficit calculations. 
That is, a true balanced budget must be achieved without using off-
budget Social Security surpluses to finance spending in other areas. A 
federal balanced budget constitutional amendment will help Congress and 
the President make the hard decisions because they will no longer be 
able to tap the Social Security surplus.
  It is a simple matter of fact that without constitutional and 
statutory balanced budget provisions at the state and local level, many 
of our state and local governments would be in the same degree of debt 
as the federal government.
  And let me just touch on my own personal experience, because I've had 
to deal with very real financial problems in my state. Without a 
charter provision and a constitutional requirement, it would have been 
virtually impossible for me to bring the City of Cleveland out of the 
default I inherited when I was Mayor, and to deal with Ohio's $1.5 
billion deficit when I was Governor.
  Think about it--if we had a Balanced Budget Constitutional Amendment, 
and if we were to have a President who didn't want to make tough budget 
choices on his or her own, the Balanced Budget Constitutional Amendment 
would give the President the backbone he or she needs to make those 
tough choices.
  And believe me, I've discovered after just 1 year in the Senate, this 
Congress needs the ``Backbone Budget Amendment'' to force us to make 
those tough choices. If we pass the amendment, I'm confident that 
three-fourths of our state legislatures would ratify it without 
question, because most of them are required by laws in their respective 
states to balance their budgets.
  And there is one other thing we need to do now, and that is enact 
Senator Domenici's biennial budget legislation.
  I am a co-sponsor of this legislation because I believe it is an 
important tool to help use federal funds more efficiently and 
strengthen Congress' proper oversight role.
  Right now, we spend far too much time debating the federal budget, 
particularly discretionary spending. Conversely, we don't devote nearly 
as much time as we should on oversight of the federal agencies because 
of the time and energy consumed by the budget resolution, budget 
reconciliation and the appropriations process.
  Indeed, when he introduced his legislation last year, Senator 
Domenici pointed out in his statement that in 1996, 73% of the votes 
taken in the Senate that year were related to the budget--often the 
same subject is voted upon 3 or 4 times a year.
  A biennial budget will help Congress and the Executive Branch avoid 
the annual, lengthy budget and appropriations process and allow us to 
increase our attention on the government oversight portion of our job.
  As Chairman of the Subcommittee on Oversight of Government Management 
and Restructuring, I have noted that GAO report after GAO report sits 
on the shelf and no one does anything about them because no one has the 
time to conduct the follow-up.
  And from career bureaucrats to Cabinet Secretaries, nearly everyone 
in the Executive branch knows that when they're asked to come up to the 
Hill for an oversight hearing, once it's over, it's over--rarely do 
they have to worry about any follow-up hearings because Congress just 
doesn't have the time.
  Unfortunately, that reality can create problems that impact public 
safety or national security.
  As a freshman Senator, I was shocked to learn when we had hearings 
this past year regarding Dr. Lee and the situation at the Los Alamos 
National Lab that for 20 years we've had a problem with security at the 
Department of Energy, and no one did anything about it. But GAO knew: 
they've released 31 major reports on nuclear-security problems at the 
Department since 1980. That's just incredible!
  We need the time for oversight, and the 2-year budget cycle will make 
that possible, just like it did when I was Governor of Ohio.
  There is an old saying, ``prepare for tomorrow, today.'' The 
President and Congress must make a real commitment to fiscal 
responsibility, and if we need an example, all we have to do is emulate 
what most American families do when they have extra money. They don't 
go out and start spending wildly. They look to pay off their debts--
their credit cards, their loans and their mortgages.
  With our booming economy and with inflation and unemployment at 
historically low levels, there exists the best opportunity in a 
generation to pay down the national debt, reform and preserve Social 
Security and Medicare and ensure that our Nation meets its 
constitutional obligations. Such a legacy of fiscal responsibility 
would be the best possible gift we could give to our children and 
grandchildren, and to our Nation.
  Mr. President, I ask unanimous consent to print a copy of my 
legislation in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                               S.J. Res.

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That the 
     following article is proposed as an amendment to the 
     Constitution, which shall be valid to all intents and 
     purposes as part of the Constitution when ratified by the 
     legislatures of three-fourths of the several States within 
     seven years after the date of its submission to the States 
     for ratification:

                              ``Article --

       ``Section 1. Total outlays for any fiscal year shall not 
     exceed total receipts for that fiscal year, unless three-
     fifths of the whole number of each House of Congress shall 
     provide by law for a specific excess of outlays over receipts 
     by a rollcall vote.
       ``Section 2. Total receipts shall include all receipts of 
     the United States Government except those derived from 
     borrowing. Total outlays shall include all outlays of the 
     United States Government except for those for repayment of 
     debt principal.
       ``Section 3. Any surplus of receipts (including 
     attributable interest) over outlays of the Federal Old-Age 
     and Survivors Insurance and

[[Page S292]]

     the Federal Disability Insurance Trust Funds shall not be 
     counted for purposes of this article. Any deficit of receipts 
     (including attributable interest) relative to outlays of the 
     Federal Old-Age and Survivors Insurance and the Federal 
     Disability Insurance Trust Funds shall be counted for 
     purposes of this article, and must be completely offset by a 
     surplus of all other receipts over all other outlays.
       ``Section 4. The limit on the debt of the United States 
     held by the public shall not be increased, unless three-
     fifths of the whole number of each House shall provide by law 
     for such an increase by a rollcall vote.
       ``Section 5. Prior to each fiscal year, the President shall 
     transmit to the Congress a proposed budget for the United 
     States Government for that fiscal year, in which total 
     outlays do not exceed total receipts.
       ``Section 6. No bill to increase revenue shall become law 
     unless approved by a majority of the whole number of each 
     House by a rollcall vote.
       ``Section 7. The Congress may waive the provisions of this 
     article for any fiscal year in which a declaration of war is 
     in effect. The provisions of this article may be waived for 
     any fiscal year in which the United States is engaged in 
     military conflict which causes an imminent and serious 
     military threat to national security and is so declared by a 
     joint resolution, adopted by a majority of the whole number 
     of each House, which becomes law.
       ``Section 8. The Congress shall enforce and implement this 
     article by appropriate legislation, which may rely on 
     estimates of outlays and receipts.
       ``Section 9. This article shall take effect beginning with 
     fiscal year 2002 or with the second fiscal year beginning 
     after its ratification, whichever is later.''.

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