[Congressional Record Volume 146, Number 93 (Tuesday, July 18, 2000)]
[Senate]
[Pages S7112-S7119]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
[[Page S7112]]
FEDERAL SURPLUS
Mr. DURBIN. The United States has changed a lot in the last 7\1/2\
years. Mr. President, 7\1/2\ years ago we were deep into deficits. We
were spending more each year than we collected in taxes. We were
running up the largest national debt in the history of the United
States. We have $6 trillion in debt to show for that experience.
Many people have lost faith in the ability of this institution to
correct this problem and to respond to what was truly a national
crisis. In fact, some went so far as to suggest we should amend the
Constitution of the United States to pass what was known as the
balanced budget amendment.
On the floor today with me is Senator Robert Byrd of West Virginia,
acknowledged to be probably the most gifted Senator when it comes to
the rules of this body and knowledge of the Constitution. He fought a
battle, sometimes lonely but ultimately successful, in stopping Members
from amending the Constitution and giving power to the Federal courts
to tell the Congress to stop spending. Some in this body thought that
was the only way we could stop the red ink cascading over the Treasury
in Washington, DC. Senator Byrd prevailed. The amendment was defeated.
Amazingly, we stand today in this Senate, in this Capitol, in
Washington, DC, with a complete change of events. We are no longer
talking about the yearly deficits. We are talking about the yearly
surpluses, the fact that the economy is so strong, so many people are
working, so many people are earning a good income, businesses are
successful, people are building homes, America is on the move. For 7\1/
2\ years or more now, we have seen that prosperity not only lift the
boats of the American people but also bring a new opportunity in
Congress. For the first time in many years, we can honestly sit back
and discuss and debate what to do with the surplus in the Treasury.
I think many Democrats share the feeling that we should be
conservative in our approach with this surplus. I am not sure what
tomorrow, next year, 3 years, or 5 years down the line will bring. I
think the decisions we should make as to this surplus should be
thoughtful. First and foremost, let's retire our national debt, the $6
trillion debt. We collect $1 billion a day in taxes from Americans,
businesses, families, and individuals to pay interest on our old
national debt. It is as if to say to our children, we are going to
leave you the mortgage on the home we enjoyed our entire lives.
I agree with President Clinton and most Democrats; our first priority
should be reduce the publicly held national debt to zero. We can do it.
We can do it in a short period of time. It will call for some
discipline and some honest dialog with the American people. We can take
the money from our surplus, pay down the debt in Social Security, pay
down the debt in Medicare, strengthen those two very important
programs, and bring down our national debt. That is our policy on the
Democratic side of the aisle. That, we think, should be the first step
that we make, the most important, the most conservative, the most
disciplined.
The Republican side sees things quite differently. They believe if we
are going to have a surplus, the first and most important thing we
should do with that surplus is to give tax cuts. There isn't a
politician alive who wouldn't like to address a crowd in his hometown
and announce a tax cut. There is just no more popular set of words we
can use in this business than: I'm going to cut your taxes. Is it the
right thing to do? Is it the responsible thing to do?
Equally important, if we are to give tax cuts, who should be the
beneficiaries? If we are going to have a surplus for the first time
virtually in modern memory, what are we going to do with that surplus?
Who will benefit from that surplus?
Over the last week and a half, we have heard the Republican answer to
those questions. They have suggested if we have a surplus in America,
if times are good and we can help somebody in America, the very first
people in line for help should be the wealthiest in America. Now, is
that the conclusion most American families would reach? I don't think
so.
If you take a look at the proposal of the Republicans to eliminate
the estate tax, and the bill that just passed to eliminate the so-
called marriage penalty, you can see who the winners are. This chart I
am presenting shows the Republican tax plan, their spending of our
surplus. Almost half of our surplus is going to benefit the wealthiest
people in America. The biggest winners? Mr. President, 43 percent of
the total tax cut proposed by the Republicans goes to people making
over $319,000 a year. They get 43 percent of the tax breaks. It means
for them, on average, an annual tax cut of $23,000. That is almost
$2,000 a month.
The Republicans believe in good times, after we have been through all
this pain, and we now have a surplus, the first group who deserves a
break, the first group to deserve a benefit is the wealthiest people in
America, those making over $319,000 a year.
What about those on the other end? What about the people who get up
and go to work every single day and may make a minimum wage or a little
better than that? How will they fare under the Republican proposal? How
were they considered when the Republicans sat down and said where our
priorities will be, here are the people we will help. The lowest 20
percent of wage earners in America, those making less than $13,600 a
year, get less than 1 percent of the Republican tax cut. It is worth
$24 a year to them, $2 a month. The Republicans didn't forget them,
they will send them $2 a month. For the wealthiest, it is almost $2,000
a month.
The next group, those making up to $24,400, see about $82 a year from
the Republican tax cuts. That comes to $7 a month. Think about that for
a second. If we are going to help the people in America who need help
the most, shouldn't we be rewarding hard-working families who get up
and go to work every single day, play by the rules, try to buy a home,
try to build a community, try to provide for their children and their
future or should we take this surplus and give it, first, to those who
are making over $300,000 a year?
Some people say that being in Congress is about a question of being
``in touch'' or ``out of touch.'' The Republican tax plan is in touch
with the wealthiest people. It is out of touch with regular families.
The Democratic side believes after bringing down the national debt,
we should target tax cuts to help these working families who have been
virtually ignored by the Republicans in their tax benefits.
On the floor of the Senate, we offered an amendment to say every
family in America, every single family, can deduct every year $12,000
in college education expenses. I have seen a lot of families with new
babies. Everybody is happy to see the child arrive. After a few
minutes, people turn and say: What a cute little boy. How in the world
are we ever going to pay for his college in 18 years? People know that
cost is going up. The average family knows how tough it is to pay it.
We say on this side, you deserve a helping hand to help your son or
daughter be the absolute best they can be. We offered an amendment.
Instead of the Republican plan for the wealthiest, we said let the
people of America deduct $12,000 a year in college education expenses
from their taxes. It is a deduction which would mean, for some
families, as much as $3,000, and a helping hand to pay for tuition.
Rejected, rejected on the floor of the Senate last week. They don't
want that kind of tax cut. They want the kind of tax cut that gives
$23,000 a year to the wealthiest people in America but would not give
to average families, worried about their kids going to good schools and
having a bright future, a helping hand.
We also considered a prescription drug benefit. I think everybody
knows what that is about. Your parent and your grandparents, on
Medicare, are struggling to pay for their prescription drugs. On the
Democratic side, we think there should be a program under Medicare to
make sure the elderly have a chance to fill those prescriptions, stay
healthy, stay strong, stay independent. We have been fighting for that.
We offered it as an alternative. Instead of giving money to the
wealthiest in this country, why don't you help those under Medicare,
give them a helping hand in paying for some of the drugs? Rejected. The
Republicans had a chance to vote for that tax benefit and rejected it
on the floor of the Senate.
[[Page S7113]]
Having been across the State of Illinois, with public hearings on
prescription drug benefits, the stories will break your heart. Men and
women coming to those hearings get their prescription from the doctor.
They go to the pharmacy, and before they ask them to fill it they ask
how much will it cost. If it is too much, they either don't fill it or
take half the prescription many times, depriving themselves of the
basics of life so they can have prescription drugs.
That was the choice: To give to people earning over $300,000 a year
in income a tax break of $23,000 or to give to seniors and the disabled
a chance to pay for the prescription drugs. These are the values we
tested on the floor of the Senate, and Republicans rejected the idea of
a prescription drug benefit proposed by the Democrats.
On child care, do you know a working family with small children?
Unless they have someone in the family they can count on, who doesn't
worry about safe, quality child care for the kids? I think about it as
a grandfather. I have a little 4-year-old grandson, and it finally
dawned on me when my daughter told me she was looking for day care,
somebody was going to have my little Alex for 8 hours a day. I said,
``Who are these people? I want to know who they are if they are going
to have my grandson.''
Every mother and father asks that same question, and they struggle to
come up with the money to pay for good child care to guard each day the
most precious thing in their lives, and Senator Dodd said, can't we
give a tax break to working families to help them pay for child care?
Wouldn't that be something good for America, so the kids are in good,
safe hands during the course of the day so working families have that
peace of mind? Rejected by the Republicans in the Senate. No, sir, we
are not going to give a child care tax break for working families. We
are going to give to the wealthiest in America $23,000 a year in tax
cuts.
When it comes to putting people in the front of the line for help
from this Government, the Republican leadership has said time and
again: We are not there helping working families pay for college
education. We are not there helping working families pay for child
care. We are not there for prescription drug benefits. We are there for
changes in the Tax Code that literally help the wealthiest people in
America.
Another challenge many of us face is the whole question of taking
care of aging parents. If you are a baby boomer, you probably know what
I am talking about. Your parents, now, who want to live as long as they
possibly can as independently as they can, basically come to you at
some point and say, ``We are going to need a hand.'' People make
sacrifices for their parents in those circumstances. We think the Tax
Code should recognize that, and reward that as well, and give to
families who are struggling to take care of their aging parents and
those with serious illness a helping hand. That is another idea for a
tax cut that helps real American families, another idea rejected by the
Republican leadership in the Senate. No, these people are not on their
radar screen. First and foremost, the tax break suggested by the
Republicans has to go to the very wealthiest among us.
So half the surplus we are now generating and hope to see in the next
10 or 20 years is not going to the working families of America. It is
going to those who already are well off, those who are doing well,
those who, frankly, don't need a helping hand.
Imagine, if you will, if you are making $300,000 a year, what an
extra $2,000 a month means to you. What are you going to do with it?
Surely you will find something to do with it. But could it possibly be
as valuable as providing what a family needs to help pay for a college
education expenses? Prescription drugs? Day care? Taking care of an
aging parent? That is the battle that is underway.
President Clinton said he is going to veto these bills, and he
should, because he was elected by people across America, 98 percent of
whom will see no benefit whatsoever from these bills. Let us at least
start listening to families across America when it comes to our tax
policy. Let us sit down and correct the inequities in the Tax Code. But
also let us decide who is most deserving of our tax assistance. I do
not believe it is people making over $300,000 a year. They are doing
quite fine by themselves. Let's be sensitive, though, to those families
struggling every day to realize the American dream and to have
opportunity.
When you take a look at this Nation we live in, it is the greatest on
Earth. God blessed each one of us who had a chance to call this home.
But we have an obligation to people who live in this country to make
sure they have a chance for opportunity, too. You heard the wonderful
story Senator Jack Reed of Rhode Island told about John O. Pastore, one
of the giants in the history of the Senate. A son of immigrants, he
rose to serve in this Chamber and be an ideal and to serve as a model
for so many people and so many generations.
There are many others like John Pastore out there who need their
chance to prove themselves in America. They are not worried about
estate taxes paid by fewer than 2 percent of the American people. They
are folks who are worried about making sure they have a safe, healthy
home, making sure they have health care, have college education
expenses taken care of. Those people have been forgotten in the debate
over the last 2 weeks. It is up to President Clinton to remind us of
our priorities. It is up to him to lead us, now, into meaningful tax
relief targeted to help families who really need it.
When it comes to prescription drug benefits, I do not think there is
a more important issue we can consider during the course of this
remaining congressional session. Prescription drug expenditures have
been growing at double-digit rates for almost every year since 1980,
and the drugs that seniors need the most have increased at four times
the rate of inflation. The average prescription drug cost for Medicare
beneficiaries will reach $1,100 per year this year.
The Republicans have proposed, in a manner to try to deal with this,
the suggestion that we should turn to the health insurance companies to
let them take care of prescription drugs. Pardon me, we have seen what
those same managed care companies and health insurance companies do to
families when the families really need help. They turn them down when
they need medical care. They let decisions be made by insurance clerks
rather than doctors. They force people to go to court to sue for basic
health care. That is the same group to whom Republicans would turn over
the prescription drug benefit. That will never work. It is best for us
to put together a plan that is guaranteed and universal and under
Medicare that we can count on.
It is also important we have the leverage and the power to make sure
we can negotiate for reasonable drug prices. It is just inconceivable
to me that some of the same drugs we approve in the United States, some
of which we spent taxpayers' dollars to research and develop, end up
being sold in Canada for a fraction of the cost. Americans are now
getting in buses and driving over the Canadian border to buy their
drugs, fill their prescriptions for prescription drugs made by American
drug companies at taxpayers' expense because they have to pay three and
four times as much in the United States as they would in Canada. That
is disgraceful. If this Congress does not address it with not only a
prescription drug benefit but also some effort to have reasonable
control of price increases, we are not listening to the people we were
sent here to represent.
We can talk about estate taxes. We can talk about people making over
$300,000 a year. But we have lost touch with reality and we have lost
touch with America if we do not understand the cost of prescription
drugs is something that haunts literally millions of Americans every
single day. That is something we can and must do something about in the
immediate future.
We have to bring Medicare in line with reality. The reality is that
prescription drugs can keep you out of the hospital, keep you home and
healthy, keep you independent and strong. When Medicare was created,
there was no prescription drug benefit. Forty years ago, there were not
that many drugs around, for that matter. But the world has changed. You
would not buy a health insurance policy today that did not have some
prescription drug benefit in it. Today, the most vulnerable people in
America are seniors and
[[Page S7114]]
disabled under Medicare who virtually have no prescription drug
protection whatsoever.
We want to change that. We, on the Democratic side, believe if we do
nothing else this year, we should enact a prescription drug benefit. We
can then say to our parents and grandparents and the elderly we love in
this country: We have heard your message. Again, I say while we should
have been debating that, we were debating an estate tax change that
ends up giving almost $23,000 a year to some of the wealthiest people
in America.
Look at how this works out in terms of the different income groups
and how much they receive. As I mentioned, the lowest 20 percent of
wage earners in America, under the Republican plan, get $2 a month.
What can you buy with that nowadays? Maybe a coke at McDonald's, I
guess. Then up here at the highest level, those making over $300,000 a
year, $23,000 in breaks on the Republican tax plan. Again, the inequity
is so obvious--the fact that the people who are struggling the hardest,
working the hardest, doing the most to make America strong, are the
people who are being ignored by the Republican tax relief.
This is not the first time that has occurred. Take a look at some of
these charts involving Republican tax cuts from years gone by. You will
see every single time the Republicans have had a chance--in August of
1999; in May of 2000, the House minimum wage proposal; in March of
2000, and the Republican Congress estate tax repeal--at least 41
percent of all the tax benefits went to the very richest, the top 1
percent in America.
When it came to the minimum wage, the same thing was true. Think
about that minimum wage for a second. How long could you survive on
$5.15 an hour on a job? Well, 350,000 people in my home State of
Illinois got up this morning and went to work, and they are being paid
today $5.15 an hour. These are not lazy people. These are some of the
hardest working people in my State. These are people cleaning the
tables, making the beds, doing the laundry, doing the dry cleaning,
watching our children in day care, and these people are being paid
$5.15 an hour.
We have tried, with Senator Kennedy, for over 2 years to increase the
minimum wage in this country, and we have been told America just cannot
afford it. We cannot afford to give people who go to work every single
day a livable, decent wage of $6.15. That is hardly a great sum of
money, but at least it tries to keep up with the cost of living.
The same Congress and the same leadership that has rejected a 50-
cent-an-hour wage increase for some of the hardest working people in
America wants to turn around and give a tax break of $23,000 a year to
those making over $300,000.
Doesn't it strike you as odd that they are willing to give a tax
break to folks making over $300,000 a year, which is the equivalent of
more than twice the income of a person earning the minimum wage? Where
is the sensitivity to America? I can't understand how the Republicans
can feel the ``pain'' of the wealthy but can't feel the pain of those
who are working hard every single day to try to make a living and to
try to make America better.
Again and again, given the chance to come up with the Republican tax
cuts, we find that the richest in America are the ones who profit. We
just ended up passing the so-called marriage penalty tax cut and
exactly the same rules apply. Who are the people who will benefit from
this? Under the Republican plan, this so-called marriage penalty turns
out to be a marriage bonus.
The idea, of course, behind it is if two individuals are earning a
certain income and decide to get married and they combine their income
on a joint return, many times they find themselves moving up to a
higher income tax bracket. That is wrong. We should change it. The
Democrats support that change and that reform.
The Republicans say that is not enough. They say: For those who
happen to get married--and one is working and one isn't--we want to
lower the tax rate in their situation, even though there is no tax
penalty. You end up giving a break where, frankly, it is not needed. So
the tax break goes to whose who are not being penalized.
When you look at the ultimate benefit of it, you see, once again, the
top 20 percent of earners in America are the ones who benefit the most
from the Republican plan. And 25.7 percent of all the benefits under
this plan go to the richest 5 percent in the country, and 78 percent of
it goes to the richest 20 percent in the country.
Again and again, given a chance to help working families and young
married people who are struggling to get a start in life, the
Republicans have said, no. They say the first people to help are the
richest people in our society. That, to me, does not make sense.
What we have suggested, under the marriage penalty, is that we should
have a simple, straightforward plan. We should define the marriage
penalty as when a married couple pays more as a married couple than
they would as two singles. Very simple. We say let married couples
earning below $100,000 have a choice in filing. They can file as two
singles or as a couple. The proposal could not be more simple.
The Democratic alternative completely eliminates each and every one
of the 65 marriage penalties in the Tax Code for taxpayers making
$100,000 a year or less. It reduces the marriage penalty for taxpayers
making between $100,000 and $150,000. I think it is realistic,
generous, and makes a lot of sense. I supported that, but that is not
what passed the Senate a few minutes ago.
What passed is a benefit that will, frankly, go to the wealthiest
people in this country. Again and again, we forget those who are making
America great, working every single day. We forget those who need help
in paying college education expenses.
We forget those who, frankly, have to make a tough decision at some
point in the life of their son or daughter: Where are they going to go
to college? Every parent dreams of their son or daughter getting into
the very best school, and then they try to think of how they are going
to pay for it. Many times they can't; they are unable to pay for it.
They have to have that sad meeting in their household where they
discuss it and say: Maybe you will have to stay home for a year. Maybe
you will go to a school closer to home for a couple years, and then
maybe, just maybe, if we save enough, you will get your chance to
realize your dream and go to the very best school where you have been
accepted.
That is a sad situation for a lot of families, but it is a real
situation. We know what has happened to college education expenses.
Anybody you talk to can tell you that particularly private schools but
many public educational institutions have seen their costs increase
dramatically. Families struggle with paying for that.
We came up with a suggestion on the floor of a tax deduction to help
families pay for college education expenses. Rejected by the Republican
majority, their belief was, if we are going to give tax relief, let's
give it to the folks who are making over $300,000 a year.
Prescription drugs, college education expenses, child care, helping
to pay for your aging parents, that is my top list when it comes to tax
relief in this country. But, sadly, with the Republican majority in
control of the Congress now, that will not be the list that is listened
to or followed when you talk about tax relief.
In just a few weeks, the major political parties will go through the
quadrennial exercise of heading off for their national conventions--the
Republicans to Philadelphia, the Democrats to Los Angeles. Of course,
there will be a lot of speeches. The networks have decided it is not
worth listening to, and they are going to tune us out most of the time.
But you will read about it and probably catch some items in the news.
You will hear a lot of claims being made.
You can count on the message coming out of Philadelphia--the
Republican Convention--where they will say: President Clinton had a
chance to cut your taxes, and he didn't do it. He vetoed the bills that
the Republicans passed in the Congress.
A lot of people back home might say: That is a shame because I need a
tax cut.
But for 98 percent of the American families listening to those shows,
guess what, you were not protected or improved in any way by those tax
cuts. They go to the top 2 percent of the American people. Those are
the ones, the biggest wage earners in America, who will benefit.
[[Page S7115]]
Of course, at the Democratic Convention, you will hear us talk about
issues that this Congress has refused to even consider--the
prescription drug benefit, an increase in the minimum wage, and gun
safety legislation. Think about that. Of course, if you turn on the
television in the morning or pick up a newspaper, you hear of another
incident of a child shooting up a school. And you think to yourself:
What is America coming to that this can happen, in what is supposed to
be one of the safest places in our country, that kids can take guns to
school?
We were paralyzed a year ago--a little over a year ago now--at the
tragedy at Columbine High School in Littleton, CO. To think that 12
kids could be killed, and so many others terrorized by those who would
come upon these weapons and take them to school and open fire.
Every mother and father, and every schoolteacher and administrator,
and many students across America said: What are we going to do to
protect ourselves? They turned to Congress because we are representing
these people and their families and said: Can you do something?
We came up with gun safety legislation. Let me tell you what it
proposed. It wouldn't end gun violence in America, but it was an effort
to try to keep guns out of the hands of criminals and children. We
said: If you are going to buy a gun from a gun dealer in America, we
are going to check on who you are. We want to know something about your
background. It is the Brady law. We stopped a half a million people
from buying guns who should not have bought them because they were too
young, they had a criminal history or a history of mental illness. That
law has worked.
But the same people could have turned around and gone to a gun show
at the local armory and bought the same guns without any background
check. Those are the guns that we are finding more and more popping up
in high schools and schools across America, guns purchased at gun
shows, by those who were ineligible or questionable. They turn around
and sell them. Kids get their hands on them. So we enacted legislation
that said: We will do a background check at gun shows, too, to try to
keep guns out of the hands of criminals and children and those who
would misuse them.
That bill passed. It was a tie vote, 49-49, when Vice President Gore
came and cast the tiebreaking vote. That was over a year ago. Nothing
has happened to that bill since. It went over to the House of
Representatives, and the gun lobby ripped it to shreds. They sent it to
a conference committee, where it has been sitting moribund for
literally a year, while gun violence continues in America and claims
the lives of 12 or 13 of our children every single day.
One of the other provisions in that bill came from Senator Kohl of
Wisconsin. He said: When you sell a handgun in America, it should have
a child safety device or a trigger lock on it so kids can't get their
hands on them and hurt themselves or their playmates or their
classmates. That was part of the bill that we passed out of here. That
was stopped by the gun lobby, as well.
When you think about it, many parents who decide not to have a
firearm in their homes because they have small children never know,
when their son or daughter goes to play next door, what the
circumstances might be--whether those same kids are going to be
vulnerable to some child finding a gun in a drawer or up on a shelf,
play with it, and kill their playmate. You read about it almost every
single day.
So this commonsense idea that we will have child safety devices or
trigger locks on handguns in America was in the bill we sent over to
the House. It was stopped cold--stopped dead in its tracks--by the gun
lobby. They said: We have just gone too far. It is just too radical a
suggestion that we would sell child safety devices with handguns.
The third provision was from the Senator from California, Mrs.
Feinstein, who said: It is against the law to manufacturer and sell
high-capacity ammo clips in the United States, but there is a loophole.
You can import them from overseas. And it is pretty simple to do.
She put into law the provision that you won't be able to buy high-
capacity ammo clips that hold up to 100 cartridges and bullets. You
have to ask yourself: What sportsman or hunter needs 100 cartridges or
bullets? I believe if you need a high-capacity ammo clip and a
semiassault weapon to go and shoot a deer, perhaps you ought to stick
to fishing.
In many instances in America, the people who are buying these high-
capacity ammo clips are turning around and using them for these gang
banger activities and drive-by shootings that you read about, sadly,
here in Washington, DC, and Chicago and cities across America.
That was the third provision in the gun safety bill. That was the
third provision that the National Rifle Association said was
unacceptable: We cannot restrict the right of American hunters and
sportsmen to have high-capacity ammo clips that hold over 100
cartridges.
To my way of thinking, common sense requires us to say to people who
want to exercise their right to legally and safely use a firearm that
they, too, have to face some restriction on their activity. Those who
have visited Washington, DC, as tourists may have gone through an
airport and through a metal detector. It is an inconvenience we accept
because we want to be safe when we get on that airplane. To ask that
those who own firearms face similar inconveniences is not unreasonable,
unless you happen to be the National Rifle Association. They think it
is unreasonable to impose any restrictions whatsoever.
As a result, sadly, every morning in America, when you pick up the
paper, you see instances where children are being killed, instances
where kids are taking guns to school, instances where with some
foresight and some political courage, this Congress might have been
able to do something. We have not.
This has been a do-nothing-for-the-people Congress, as Vice President
Gore has said. It has failed to take into consideration what the
average working family in this country expects of us, not only to
balance the books but to balance our priorities, to make sure the
people who prosper because of our judgments and our decisions and our
legislative leadership are the families across America.
I think also of the uninsured in this country. To think that in this
time of prosperity in America, after the longest run of economic
progress in the history of the United States, at a time when we are
envisioning surpluses that have never been seen in our history, that we
still live in a country with 40 million people who are uninsured. I
offered an amendment to my friends in the Senate that said we ought to
give a tax credit to small businesses to help pay for health insurance
for their employees. These are the businesses that pay the highest
health insurance premiums to protect the family who owns the business
as well as their employees. These are the employees working for small
businesses who make the lowest incomes. Not surprisingly, they turn out
to be the largest source of uninsured people in this country, those
workers and their children.
What I propose, as part of our tax package on the Democratic side, is
to say to small businesses: We will give you a helping hand. We will
give you a tax credit so that you can offer health insurance to your
employees. It strikes me as one of the basics we should consider.
Just a few years ago, we initiated a nationwide plan to help the
States pay for covering the children of working parents with health
insurance. It is called the CHIP program. It is working well in my
State of Illinois and across the Nation. Congress is trying to plug the
holes of 40 million uninsured people in America.
We had a hearing the other day that would have broken many hearts.
The mothers and fathers of very disabled children came to tell us about
their plight. They depend on SSI, a program under Social Security and
Medicaid, to provide for kids who are profoundly retarded or disabled.
They find, sadly, they earn too much money. We heard from a woman who
talked about a situation where her State came to her and said: You can
no longer provide for your child with your income; you just don't have
enough money. We want you to turn your child over to be a ward of the
State.
Imagine, in America, in the country in which we live, parents who are
struggling to raise disabled children
[[Page S7116]]
are told that the only answer is to turn their child over to become
a ward of the State. That was what she faced. Her health insurance did
not cover her needs.
Then there was a sergeant in the Air Force who came to see us with
his lovely little 9-year-old daughter, Lauren, who has some serious
medical difficulties. This is a man who has given most of his adult
life to his country in the Air Force. He was recently given a promotion
to E-6, where he would make $200 more a month. With that $200 more a
month, he was disqualified from receiving Medicaid and SSI. He said it
would cost him over $500 a month to take care of his little daughter.
So as he gets a tiny increase in pay of $200 a month, he sees that $500
of medical bills fall on his shoulders.
These are people in America without health insurance. These are
people who I think about when I think about the surplus that we are
experiencing. What are we going to do with this to extend health
insurance coverage to more and more Americans so it is no longer a
question that parents ask their emancipated kids, as I have asked my
daughter, Jennifer: Do you have health insurance now? She is a student
who works from time to time, does her very best, but I worry about it
as a father. I shouldn't have to. No one should have to in this
country. Health insurance ought to be a given in America--not the
fanciest and most expensive policy but a basic policy.
Is Congress debating that? Is Congress even thinking about it? Is
Congress sensitive to it? No. We are debating tax breaks for people
making over $300,000 a year. That is our priority. The priority is not
the parents of the handicapped children, the children of America who
are uninsured, the 40 million uninsured Americans in general. That is
where we lost sight of the true reality of the challenges facing
American families.
The choices on the floor of the Senate are clear, and the choices for
the American people in the election will be clear in terms of the
values that should be represented when we decide who will benefit from
the surplus we have generated and the strong economy of the last 8
years.
I yield the floor.
The PRESIDING OFFICER. The Senator from Mississippi.
Mr. COCHRAN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. VOINOVICH. 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. VOINOVICH. Mr. President, in the year-and-a-half that I have been
in the Senate, I have taken several opportunities to come to the floor
to talk about the need to reduce our national debt.
Every chance I get, I remind my colleagues that we cannot let the
excitement of having a record-high surplus allow us to lose sight of
the fact that we must keep spending in check, and use our Social
Security surplus and on-budget surplus dollars to pay down our $5.7
trillion national debt.
I can't help but wonder why the media is quick to report that we have
such tremendous surpluses, but is virtually silent when it comes to
reporting that we have such a huge national debt.
I think the people need to know that we have a national debt that is
costing us $224 billion in interest payments a year, and that
translates into $600 million per day just to pay the interest. Out of
every federal dollar that is spent this year, 13 cents will go to pay
the interest on the national debt. In comparison, 16 cents will go for
national defense; 18 cents will go for non-defense discretionary
spending; and 53 cents will go for entitlement spending. Right now, we
spend more federal tax dollars on debt interest than we do on the
entire Medicare program.
This debt didn't accumulate overnight. In fact, it took decades of
misguided fiscal policies on the part of the Congress and the Executive
Branch to get this way. But, fortunately, we have an opportunity, with
our strong economy and low unemployment, to make some headway on paying
down our debt.
Nearly every family in America or every business owner in America,
when they come into some extra money, would use that surplus money to
pay off their loans, their credit cards, etc.--whatever debt they had
accumulated.
And that's precisely what the U.S. government should do.
I don't think our Nation is any different from our families. If we
have some extra money, we ought to get rid of the debt we are carrying
on our back.
As my colleagues know, because of the expanding economy, CBO's April
surplus estimates showed that we had attained a $26 billion on-budget
surplus in fiscal year 2000.
And I would like to remind my colleagues that $22 billion of that $26
billion surplus was from payroll tax overpayments to the Medicare Trust
Fund.
However, of that $26 billion surplus amount, the fiscal year 2001
budget resolution assumed we would spend $14 billion of it.
That left $12 billion, which I felt should be used for debt
reduction, and so I sought to find a legislative remedy to have those
funds allocated solely for the purpose of debt reduction.
On June 15th, by a vote of 95-3, the Senate passed an amendment to
the Transportation Appropriations bill that Senator Allard and I
sponsored, directing the remaining $12 billion on-budget surplus to be
used for debt reduction. It was a tremendous victory, but, recognizably
short-lived.
Over the last two months, Congress has spent $13.8 billion in an
``emergency'' supplemental appropriations package that was included as
part of the Military Construction Appropriations Conference Report, and
an additional $5.5 billion has been allocated for payments for another
``ag bailout'' bill with the passage of the Crop Insurance Reform
package.
Thus, nearly all but $4 billion of the $26 billion surplus has been
spent, including just about all of the $22 billion in overpayments to
the Medicare Trust Fund--money that we in Congress have been talking
about ``lock-boxing'' to prevent it from being spent in just such a
manner.
With all this added spending, I would like to remind my colleagues
that we are significantly raising discretionary spending this year--a
habit Congress seems reluctant to break. For example, in fiscal year
1998, Congress spent $555 billion on discretionary spending. In fiscal
year 1999 we increased discretionary spending to $575 billion--a 4%
increase over that one year.
In fiscal year 2000, if you factor in the emergency supplemental
appropriations we approved two weeks ago, discretionary spending will
be $618 billion. Compared to last year's $575 billion, if my figures
are right, that is a 7.5% increase so far in discretionary spending.
How many people in this country can say that they received a 7.5% pay
increase from last year?
This is outrageous, and all the more reason we can't allow spending
to grow any further in FY 2000.
When given the opportunity to spend more or bring down our national
debt, Congress has to learn to make the tough choices--the fiscally
prudent choices.
Fortunately, we will have another opportunity to curb spending and
make a dent in our national debt.
Today, we have received the expected news from CBO that our fiscal
year 2000 on-budget surplus has grown to $84 billion--$60 billion more
than was projected in January.
With such a large amount of on-budget surplus dollars at stake, I
fear that, again, the temptation will be enormous to spend these
dollars--and with even greater zeal than before. We must ignore the
allure of spending these surpluses, and remember that the best thing we
could do with these funds is use them to pay down the debt.
For those of my colleagues who support tax cuts, I would like to
remind them that the only thing that we can do with these FY 2000
surplus funds this year is use them to increase spending or pay down
the national debt. That's it. They cannot be used for tax cuts because
the fiscal year is almost over.
I have recently read an excellent paper written by Peter B. Sperry,
who is the Grover M. Hermann Fellow in Federal Budgetary Affairs at the
Heritage Foundation, regarding our obligation to use our surplus
dollars to pay down our national debt.
[[Page S7117]]
I believe each of my colleagues should read this compelling article,
and I ask unanimous consent that a copy of the article be printed in
the Record following my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit I.)
Mr. VOINOVICH. Mr. President, I agree with the conclusion that Mr.
Sperry reaches in his paper, and that is, Congress needs to enact
legislation that will automatically take the $60 billion windfall we
just received for fiscal year 2000 and use it to pay down the debt.
The bill that Mr. Sperry says that Congress needs to pass is H.R.
4601, the Debt Reduction Reconciliation Act of 2000. Fortunately, on
June 20th, the House of Representatives passed H.R. 4601, by a vote of
419-5. An overwhelming majority--just think of it.
I have reviewed this bill, and I believe H.R. 4601 is our last hope
to pass meaningful debt-reduction legislation this year. That is why I
asked that this bill be held at the desk and put on the Senate's
calendar, instead of being sent to Committee. We must consider this
legislation now, and we need to let the American people know that
Congress is serious about reducing the national debt and not merely
paying lip-service towards that goal.
In particular, the bill establishes an off-budget account at the U.S.
Treasury that would be called the Public Debt Reduction Payment
Account. Any funds that are over the amount specified in CBO's January
surplus estimate of $24 billion would be transferred to the Account,
where they would be automatically used to reduce the debt. Thus, $60
billion in on-budget surplus funds for FY 2000 would be directed
towards debt reduction.
My fear is that before any of the extra FY 2000 funds actually go
towards debt reduction, Congress and the President--especially the
President--will say, ``well, we've got the money, let's spend it and
get out of town.'' But Mr. President, that's definitely not how it
should work.
We have a moral obligation to use this money to pay down the debt,
and I would like to read a quote from General Accounting Office (GAO)
Comptroller General David Walker that hits the nail right on the head
regarding that obligation. In testimony before the House Ways and Means
Committee last year, Mr. Walker 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.
To me, the most important thing that we can do on behalf of our
children and our grandchildren is to remove the yoke of this debt
burden from their backs. If we do so, it will strike a blow for their
future and for the future of our nation.
It is the responsibility of the House and the Senate to ``stop the
hemorrhaging of spending'' by agreeing to let the remaining on-budget
surplus for FY 2000 go towards paying down the national debt. H.R. 4601
will meet that challenge, and it is now up to the Senate to pass this
bill. Let's get it done, Mr. President, and let's get it done now.
I thank the Chair, and I yield the floor.
Exhibit I
[From The Heritage Foundation, June 13, 2000]
How To Protect the Surplus From Wasteful Spending
(By Peter B. Sperry)
Although most Americans assume that a federal budget
surplus in any year is automatically used to reduce the
national debt, or at least the debt held by the public, this
actually is not the case. The U.S. Department of the Treasury
must implement specific financial accounting procedures if it
is to use a cash surplus to pay down the debt held by the
public. If these procedures are not followed, or if they
proceed slowly, then the surplus revenue just builds up in
the Treasury's operating cash accounts.
This excess cash could be used in the future to further
reduce the debt, but only if it is protected from other uses
in the meantime. Until the excess cash is formally committed
to debt repayment, Congress could appropriate it for other
purposes. Consequently, the current surplus will not
automatically reduce the publicly held national debt of $3.54
trillion unless Congress acts now to make sure these funds
are automatically used for debt reduction and for no other
purpose.
There is a parallel to this in household finance. When a
family with a large mortgage, credit card debt, and several
student loans receives an unexpected financial windfall, it
usually deposits the funds in a checking account and takes a
little time to consider how best to allocate the revenue--
whether to refinance the mortgage, pay off credit cards, or
establish a rainy day fund. Meanwhile, the family's debt
remains, and will not be reduced until the family formally
transfers funds to one or more of its creditors. If the
family does not take some action in the interim to wall off
the cash, it often ends up frittering away the money on new
purchases, and the debt remains.
The federal government faces a similar situation. Surplus
revenues are accumulating in the Treasury Department's
operating cash accounts faster than the Bureau of the Public
Debt can efficiently dedicate them to reducing the public
debt. Consequently, surplus balances in these accounts have
reached historic levels, and they are likely to accumulate
even faster as the size of the surplus grows. Unless Congress
takes formal action to protect these funds, they are
available to be used or misused at anytime in the
appropriations process. Fortunately, the House soon will
consider a bill (H.R. 4601) that would protect the budget
surplus from being raided by appropriations until prudent
decisions can be made about its use.
WHY DEBT REDUCTION NEEDS A BOOST
Thanks to unexpected budget surpluses, the U.S. Department
of the Treasury issued less new debt than it redeemed each
year. It conducted several ``reverse'' auctions to buy back
old high-interest debt. And it successfully reduced the
amount of federal debt held by the public in less than three
years by $230 billion, from $3.77 trillion in October 1997 to
$3.54 trillion in April 2000. Chart 1 clearly shows that its
efforts have been successful and impressive.
Despite this effort, the Treasury still is awash in cash.
Examining the Treasury Department's monthly reports over this
same period (see Appendix) reveals that, after accounting for
normal seasonal fluctuations, the closing balances of its
operating cash accounts have grown dramatically and, more
important, the rate at which cash is accumulating in them has
accelerated. The linear trend line in Chart 2 shows both the
growth in the closing balances in the cash accounts and the
projected growth under current conditions. Essentially, if no
provisions are made to protect these balances, in August
2002--two months before the midterm elections--appropriators
would have access to almost $60 billion in non-obligated
cash.
Unfortunately, even this projection may be too
conservative. Examination of month-to-month changes in the
closing balances indicates that the rate of cash accumulation
has started to accelerate, which will cause the closing
balances to grow even faster. The trend line in Chart 3 shows
that the amount of positive monthly change in closing cash
balances has, after accounting for normal fluctuation,
increased since October 1997, and cash balances could start
to increase by an average of $20 billion per month within two
years.
The Treasury Department faces extraordinary cash management
challenges as it attempts to repay the debt held by the
public steadily and without destabilizing financial markets
that depend on federal debt instruments as a standard of
measurement. By protecting accumulated cash balances from
misuse, Congress could provide the Treasury Department with
the flexibility it needs to do its job more effectively.
treasury's limited debt management tools
The Treasury relies on three basic debt management tools to
reduce the debt held by the public in a controlled manner.
Issuing Less Debt. As old debt matures and is redeemed, the
Treasury Department issues a slightly smaller amount of new
debt in return, thereby reducing the total debt held by the
public. This is the federal government's most cost-effective
and preferred method of debt reduction. However, it is not a
simple process to determine how much new debt should be
issued. If the Treasury Department returns too much debt to
the financial market, it misses an opportunity to retire
additional debt. If it returns too little to the markets, the
cost of federal debt instruments will rise, driving down
their yields and disrupting many private-sector retirement
plans.
Reverse Auctions. The Treasury Department periodically
conducts reverse auctions in which it announces that it will
buy a predetermined amount of specific types of debt
instruments from whoever will sell them for the best price.
This method quickly reduces debt held by the public, but it
can be expensive. Investors holding a T-bill that will be
worth $1,000 in 20 years may be willing to sell it for $995
if they need the money now and believe that is the best price
they can get. However, if they know the Treasury Department
has made a commitment to buy a large number of T-bills in a
short period of time, investors may hold out for $997--a
premium of $2 million on every $1 billion of debt the
Treasury Department retires.
Purchasing Debt Instruments. The Treasury Department can
use private-sector brokers to purchase federal debt
instruments on the open market without having it revealed
that the client is the federal government.
[[Page S7118]]
This method is slow, but it allows the Treasury Department to
take advantage of unpredictable fluctuations in financial
markets to buy back federal debt instruments for the best
possible price. This method must be used carefully and
discreetly to aovid having investors, upon realizing that the
true buyer is the federal government, hold out for higher
prices.
WHY TIMING AND FLEXIBILITY ARE IMPORTANT
The Treasury Department needs time and flexibility to use
debt management tools effectively. It often will need to
allow large balances to accumulate in the operating cash
accounts while it waits for the opportunity to buy back
federal debt instruments at the best possible price. If these
balances are unprotected, they may prove irresistible
temptations for appropriators with special-interest
constituencies.
A prudent Secretary of the Treasury would not risk
disrupting financial markets by recklessly reducing the
amount of new debt issued each year, but might increase the
number and size of reverse auctions to ensure that surplus
revenues are used for debt reduction rather than remain
available to congressional appropriators. The taxpayers
would, at best, pay more than necessary to retire the federal
debt, and they might find that appropriators have spent the
surplus before it could be used to pay down debt.
MAKING DEBT REDUCTION AUTOMATIC
Fortunately, Congress has the opportunity to ensure that
the Treasury's large cash balances are not misused in the
appropriations process. The U.S. House of Representatives
will soon consider H.R. 4601, the debt Reduction
Reconciliation Act of 2000, recently approved by the House
Ways and Means Committee. This legislation, sponsored by
Representative Ernest Fletcher (R-KY), is designed to give
the Treasury Department the time and flexibility it needs to
use debt management tools most effectively. It would protect
the on-budget surplus revenues collected during the
remainder of fiscal year (FY) 2000 and appropriate them
for debt reduction by depositing them in a designated
``off budget'' Public Debt Reduction Account.
Although the surplus revenues could still cause an increase
in cash balances, the cash would be dedicated in the Debt
Reduction Account rather than in the Treasury Department's
operating cash account. Appropriators would be able to
reallocate these funds only by first rescinding the
appropriation for debt reduction in legislation that would
have to pass both houses of Congress and gain presidential
approval. Once surplus revenues are deposited in the Debt
Reduction Account, appropriators would have very limited
ability to increase spending without creating an on-budget
deficit, which many taxpayers would perceive as a raid on the
Social Security trust fund.
H.R. 4601 would effectively protect the surplus revenues
that are collected during the remainder of FY 2000; moreover,
it serves as model for how Congress should allocate
unexpected windfalls in the future. It does not preclude tax
reform because it is limited to the current fiscal year and
therefore affects only revenues that have already been
collected or that will be collected before any tax reform
legislation takes effect. Nevertheless, once the Debt
Reduction Account is established, Congress could continue to
appropriate funds to the account at any time. Consequently,
Congress would retain the option to reduce revenues through
tax reform and still have a mechanism to prevent unexpected
surplus revenues, once collected, from being used for any
purpose other than debt reduction.
H.R. 4601 would give the Treasury flexibility to use its
debt reduction tools in the most effective manner. Surplus
revenues deposited in the Debt Reduction Account would remain
available until expended, but only for debt reduction. The
department would be able to schedule reverse auctions at the
most advantageous times, make funds available to brokers
buying back debt on the open markets or decrease the size of
new debt issues--depending on which mechanism, or combination
of tools, proves most cost effective. There would no longer
be pressure to ``use it or lose it.''
how to improve h.r. 4601
Although H.R. 4601 demonstrates a real commitment of
members of the House to fiscal discipline, the legislation
could be improved. Congress should consider requiring the
Secretary of the Treasury also to deposit all revenue
received from the sale of Special Issue Treasury Bills
(which are sold only to the Social Security
Administration) in the Debt Reduction Account. This would
preclude the possibility of any future raids on the Social
Security trust fund.
Congress should also consider adding language to H.R. 4601
to automatically appropriate future real (rather than
projected) surplus revenues to the Debt Reduction Account.
This would allow Congress the flexibility to implement tax
reforms while also guaranteeing that surplus revenues, once
collected, could be used only for debt reduction.
conclusion
Many Americans assume that if surplus revenues are not used
for spending or tax cuts, they automatically reduce the
national debt. Indeed, this has become an unstated premise in
discussions of fiscal policy, whether in the press, academia,
or Congress. Unfortunately, the premise is incorrect.
To make the premise true, the Treasury Department should be
able to make specific provisions for retiring debt. If it is
not given the power and obligation to do so, the surplus
revenues accumulating in its operating cash accounts will be
subject to misuse by appropriations. Congress has an
opportunity and obligation to give the Treasury Department
the time and flexibility it needs to utilize its debt
management tools effectively when it considers H.R. 4601.
This bill offers an effective first step toward the goal of
making sure that budget surpluses do not disappear in new
spending programs.
what is the national debt?
The national debt consists of Treasury notes, T-bills, and
savings bonds that were sold to raise cash to pay the ongoing
operational expenses of the federal government. National debt
held by the public consists of debt instruments sold to
anyone other than a federal trust fund. Most federal debt
held by the public is owned by state and local governments,
pension plans, mutual funds, and individual retirement
portfolios.
Most investors consider federal debt instruments to be cash
equivalents that pay interest, and they are strongly
motivated to hold them until maturity--up to 30 years in the
case of T-bills. Many institutional investors, particularly
pension funds, are required to maintain a certain portion of
their portfolio in cash equivalents, and they depend on the
federal government to issue new debt when their old
investments mature and are redeemed. In additional, many
lenders, particularly mortgage companies, use the market
price of federal debt instruments as a measurement device to
determine appropriate rates of return on alternative
investments. These lenders rely on the federal government to
maintain enough federal debt in circulation to make this
measurement valid.
Appendix
U.S. TREASURY OPERATING CASH AND TOTAL PUBLIC DEBT: OCTOBER 1997-APRIL 2000
[In millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total borrowing Total borrowing
Treasury Treasury from the from the
operating cash: operating cash: Change public: opening public: closing Change
opening balance closing balance balance balance
--------------------------------------------------------------------------------------------------------------------------------------------------------
1997:
Oct........................................... $43,621 $20,261 -$23,360 $3,771,141 3,777,456 $6,315
Nov........................................... 20,261 19,778 -483 3,777,456 3,806,564 29,108
Dec........................................... 19,778 31,885 12,107 3,806,564 3,804,792 -1,772
1998:
Jan........................................... 31,885 40,307 8,422 3,804,792 3,779,985 -24,807
Feb........................................... 40,307 16,280 -24,027 3,779,985 3,810,549 30,564
Mar........................................... 16,280 27,632 11,352 3,810,549 3,830,686 20,137
Apr........................................... 27,632 88,030 60,398 3,830,686 3,770,099 -60,587
May........................................... 88,030 36,131 -51,899 3,770,099 3,761,503 -8,596
Jun........................................... 36,131 72,275 36,144 3,761,503 3,748,885 -12,618
Jul........................................... 72,275 36,065 -36,210 3,748,885 3,732,515 -16,370
Aug........................................... 36,065 36,427 362 3,732,515 3,766,504 33,989
Sep........................................... 36,427 37,878 1,451 3,766,504 3,720,092 -46,412
Oct........................................... 38,878 36,217 -2,661 3,720,092 3,735,422 15,330
Nov........................................... 36,217 15,882 -20,335 3,735,194 3,757,558 22,364
Dec........................................... 15,882 17,503 1,621 3,757,558 3,752,168 -5,390
1999:
Jan........................................... 17,503 57,070 39,567 3,752,168 3,720,919 -31,249
Feb........................................... 57,070 4,638 -52,432 3,720,919 3,722,607 1,688
Mar........................................... 4,638 21,626 16,988 3,722,611 3,759,624 37,013
Apr........................................... 21,626 58,138 36,512 3,759,624 3,674,416 -85,208
May........................................... 58,138 25,643 -32,495 3,674,416 3,673,865 -551
Jun........................................... 25,643 53,102 27,459 3,673,865 3,651,619 -22,246
Jul........................................... 53,102 39,549 -13,553 3,651,619 3,652,812 1,193
Aug........................................... 39,549 36,389 -3,160 3,652,812 3,679,282 26,470
Sep........................................... 36,389 56,458 20,069 3,681,008 3,633,290 -47,718
Oct........................................... 56,458 47,567 -8,891 3,632,958 3,638,712 5,754
[[Page S7119]]
Nov........................................... 47,567 6,079 -41,488 3,639,079 3,645,212 6,133
Dec........................................... 6,079 83,327 77,248 3,645,212 3,680,961 35,749
2000:
Jan........................................... 83,327 62,735 -20,592 3,680,961 3,596,976 -83,985
Feb........................................... 67,735 21,962 -40,773 3,596,570 3,613,701 17,131
Mar........................................... 21,962 44,770 22,808 3,613,701 3,653,447 39,746
Apr........................................... 44,770 92,557 47,787 3,653,447 3,540,781 -112,666
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: U.S. Department of the Treasury, Monthly Treasury Statements, at http://www.fms.treas.gov/mts/.
Mr. VOINOVICH. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. LOTT. Mr. President, I ask unanimous consent that the order for
the quorum call be dispensed with.
The PRESIDING OFFICER (Mr. Gorton). Without objection, it is so
ordered.
____________________