[Congressional Record Volume 146, Number 100 (Thursday, July 27, 2000)]
[Senate]
[Pages S7816-S7819]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     NOW IS NOT THE TIME TO RE-ENGAGE WITH THE INDONESIAN MILITARY

  Mr. WELLSTONE. Mr. President, colleagues, I rise today to draw 
attention to a recent decision by the Administration to reinitiate 
military ties with the government of Indonesia. Despite congressional 
concerns, the U.S. navy, marines, and coast guard last week began a 10-
day joint military exercise known as CARAT, Cooperation Afloat 
Readiness and Training, with their Indonesian military counterparts. 
Although the Administration sees this mission as a routine good-will 
mission, it is in fact the first time U.S. and Indonesian armed forces 
have worked together since the United States cut military ties with 
Indonesia last year. Colleagues, in case you don't recall, we cut those 
military ties after East Timor was devastated by Indonesian troops. We 
cut those ties because Indonesian soldiers are reported to have been 
active participants in a coordinated, massive campaign of murder, rape, 
and forced displacement in East Timor.
  The administration's decision to go forth with a CARAT exercise again 
this summer is simply indefensible. Given the human rights violations 
committed by the Indonesian military in East Timor and the lack of 
accountability for them, and the Indonesian military's continued ties 
to militias in West Timor, one must ask not only the question why we 
are so eager to re-engage with this military at all, but why we feel 
compelled to do so now. Now is not the time to conduct joint exercises 
with the Indonesian military; now is the time to demand its 
accountability. To do otherwise is to tacitly condone its conduct.
  Conditions continue to deteriorate in East Timorese refugee camps in 
West Timor and throughout the Indonesian archipelago. Up to 125,000 
East Timorese still languish in militia-controlled refugee camps in 
West Timor almost one year after the people of East Timor voted 
overwhelmingly for independence from Indonesia. Many of the refugees 
wish to return home but are afraid to do so. Today refugee camps remain 
highly militarized, with East Timorese members of the Indonesian 
military living among civilian refugees. And despite promises by the 
Indonesian government to disarm and disband militias, there are 
credible reports of Indonesian military support for militia groups. 
These same militias have easy access to modern weapons. Earlier this 
month the U.N. High Commissioner on Refugees had to suspend refugee 
registration indefinitely due to violent militia assaults on its staff, 
volunteers and refugees, and though UNHCR has continued its work in 
other areas, UNHCR and other aid workers continue work under extremely 
dangerous conditions.
  There has also been an upsurge in militia border incursions into East 
Timor with attacks on U.N. Peacekeepers and civilians. I regret to say 
that earlier this week a peacekeeper from New Zealand was shot and 
killed. Militia leaders, the Indonesian military, and the West Timorese 
press continue to sponsor a mass disinformation campaign alleging 
horrific conditions in East Timor and abuse by international forces. 
Further, Indonesia has yet to arrest a single militia leader or member 
of its military accused of human rights violations in East Timor. 
Instead of reinitiating joint military exercises and allowing the sale 
of certain

[[Page S7817]]

spare military parts, the Administration should increase its pressure 
on the government of Indonesia to fulfill past promises to disarm and 
disband militias in West Timor, and insure today that the Indonesian 
military is not linked to such militias. Militia leaders must be 
removed from refugee camps and those accused of human rights violations 
must be held accountable. Furthermore, Indonesia must make real its 
pledge to provide international and local relief workers safe and full 
access to all refugees.

  There is currently considerable unrest throughout the Indonesian 
archipelago. Reports abound about the direct involvement of the 
Indonesian military in much of the violence. In the past nineteen 
months thousands of people in Maluku, also known as the Moluccan 
Islands, have been killed in fighting between Christians and Muslims. 
It is known that members of the Indonesian military supported and, in 
some cases, caused the violence. On July 18, Indonesia's Minister of 
Defense Juwono Sudarsono admitted that there were ``some or even many'' 
army members who have become a ``major cause of clashes'' in Ambon. 
Credible human rights organizations also report an escalation of 
violence in West Papua with the Indonesian military actively supporting 
East Timor-style militias there. Moreover, the Indonesian military has 
repeatedly broken a cease-fire in the province of Aceh.
  Conditions in Indonesia are deteriorating. On Sunday U.N. Secretary 
General Kofi Annan told Indonesia's President Wahid that U.N. 
peacekeepers may be needed for the archipelago but President Wahid said 
his government could end the conflict by itself. He did note, however, 
that Indonesia's overstretched military might need logistical aid from 
friendly countries such as the United States. I worry that the decision 
the Administration has made to re-initiate military ties with Indonesia 
is sending the wrong signal to President Wahid. It should be made very 
clear to President Wahid that the U.S. will not provide assistance to 
Indonesia to do what it did before in East Timor.
  Although I believe we should support Indonesia, we must recognize 
that the type of support we provide will directly influence the shape 
Indonesia takes in the future. The Administration has not only 
proceeded with the CARAT exercise despite congressional concerns but is 
moving ahead with ``Phase I'' of a three phase program of re-engagement 
with the Indonesian military. This could include the sale of certain 
spare military parts to Indonesia. Given the deteriorating conditions 
in Indonesia and the human rights record of Indonesian soldiers, do we 
really want to do this?
  I rise today to urge my colleagues to voice their opposition to the 
CARAT exercise and to oppose any proposal for strengthening military 
ties with Indonesia in the near future. Again, I would like to make 
very clear that I believe the U.S. should support Indonesia but we must 
recognize that the type of support we provide now will directly 
influence the shape Indonesia takes in the future. Resuming a military 
relationship now not only threatens any future reforms in Indonesia but 
jeopardizes efforts already made to subjugate the Indonesian military 
to civilian authority. U.S. policy towards Indonesia should support 
democratic reform and demand accountability for those responsible for 
alleged human rights violations in East Timor and elsewhere. I fail to 
see how the CARAT exercise or lifting the embargo on military sales to 
Indonesia does either.
  Mr. KERREY. Mr. President, I rise to talk about inter-generational 
issues related to Federal budget spending. We will never have a better 
time to consider such issues as inter-generational equity than now 
during a time of large projected surpluses. These large projected 
surpluses provide us with a great deal more flexibility in choosing 
among priorities and in determining our legacy to future generations.
  Until recently, we were not so lucky. For more than thirty years, the 
budget projection reports from the Congressional Budget Office and the 
Office of Management and Budget were a source of growing despair for 
the American people. As each year went by, CBO and OMB would present 
worse news: larger deficits, larger national debt levels, and larger 
net interest payments. As the government's appetite for debt expanded, 
fewer and fewer dollars were available for private investment.
  In the beginning, experts explained that deficits were a good thing 
because they stimulated economic growth and created jobs. Over time, 
however, the voices of experts opposed to large deficits grew louder; 
they argued that deficits caused inflation, increased the cost of 
private capital, mortgaged away our future--just at the time when we 
needed to be preparing for the retirement of the large Baby Boom 
generation. As the opinions of the experts shifted, so did public 
opinion.
  During the 1980s and 1990s, the federal deficit became public enemy 
number one. Great efforts were made to understand it, to propose 
solutions to reduce it, and to explain how much better life would be 
without it. During election season, the air-waves were filled with 
promises and plans to get rid of the deficit and pay off the national 
debt. Editorial page writers reached deep into their creative reservoir 
to coin new phrases and create new metaphors to describe the problem. 
Books were published. Nonprofit organizations were created. 
Constitutional amendments were called for. There was even a new 
political party created on account of the deficit.
  In the 1990s--and at great political risk--we finally started taking 
action to control the size of the deficits and the growth of the 
national debt. I am proud to have participated in and voted for three 
budget acts--in 1990, 1993, and 1997--which have radically altered the 
fiscal condition of the Federal government and the debate about how the 
public's hard-earned tax dollars should be spent.
  The enactment of these three budget acts--particularly the 1993 and 
1997 budget acts--coupled with impressive gains in private sector 
productivity and economic growth led to a remarkable reversal of our 
deficit and debt trends. Deficits started shrinking in 1994. We 
celebrated our first unified budget surplus of $70 billion in 1998. 
Over the next 10 years, if we maintain current spending and revenue 
policies, CBO projects an eye-popping unified budget surplus of $4.5 
trillion. I am proud that we are able to celebrate the fruits of our 
fiscal restraint because we had the sheer will and political courage to 
put ourselves on a spending diet.
  Today, however, I want to call your attention to what could be called 
the ``unintended consequences'' of our fiscal responsibility. Not only 
have we allowed total Federal spending to dip below 20% of GDP levels 
not seen since the mid-1970s), but we are also on course to let 
spending drop to 15.6% of GDP by 2010. We have not seen spending levels 
this low since the 1950s. At the same time as total spending is 
declining as a percentage of GDP, the make up of our Federal spending 
is continuing to shift insignificant ways. An increasingly larger 
proportion of our spending is used for mandatory spending programs 
compared to discretionary spending programs. These numbers have 
important implications for the measurement of inter-generational 
equity.

  Now that we have constrained spending and eliminated our budget 
deficits, the budget debate has shifted to questions about how to spend 
the surplus: on debt reduction, on tax cuts, on new discretionary 
spending programs, on fixing Social Security, or on creating a new 
Medicare prescription drug benefit?
  I favor all of these things to varying degrees, as I suspect most of 
you do. The trick is to find the right balance among these initiatives. 
In finding the right balance, I believe one of the most important 
criterion in determining how to use these surpluses should be measuring 
inter-generational equity. Not only do we need to assess the amount of 
money we invest on our seniors versus our children, but we also need to 
assess the trends of mandatory versus discretionary spending.
  Let me start with my own assessment of Federal spending on children 
and seniors. Today, the Federal government spends substantially more on 
seniors over the age of 65 than it does on children under the age of 
18. For example, in 2000, the Federal government spent roughly $17,000 
per person on programs for the elderly, compared with only $2,500 per 
person on programs for children. This means that at the Federal level, 
we are spending seven times

[[Page S7818]]

as much as people over the age of 65 as on children under the age of 
18.
  Even when we consider that states are the primary funders of primary 
and secondary education, the combined level of State and Federal 
spending still shows a dramatic contrast in spending on the old versus 
the young. At the state and Federal level, we are still spending 2.5 
times the amount of money on people over the age of 65 as on children 
under the age of 18.
  Given these discomforting facts, it might seem logical that most of 
the current proposals for spending surplus dollars would be for 
investments in our children. Instead, this Congress has been proposing 
and voting to spend a major portion of the surpluses on the most 
politically organized voting bloc in the nation--those over the age of 
65.
  In the Senate alone, we have either acted on, or are expected to act 
on, the following proposals which directly benefit seniors only:
  Eliminating the Social Security earnings test for workers over the 
age of 65 (10-year price tag: $23 billion)
  Allowing military retirees to opt out of Medicare and into TriCare or 
FEHBP (10-year price tag: $90 billion)
  Creating a new universal Medicare prescription drug benefit for 
seniors (10-year price tag: $300 billion)
  Medicare provider ``give-backs'' package (10-year price tag: $40 
billion)
  Increasing the Federal income tax exemption provided to Social 
Security beneficiaries (10-year price tag: $125 billion)
  If Congress actually enacted all of these popular provisions into 
law, spending for seniors over the next 10 years would increase by $578 
billion--an amount equivalent to this year's entire discretionary 
spending budget.

  At the same time as we are proposing, voting in favor of, and 
enacting legislation to improve benefits and tax cuts for seniors, we 
will be lucky to get legislation passed that will spend only an 
additional $10 billion on children under the age of 18.
  Why? The answer is not simply because seniors are politically 
organized voters and children are not. We also have to look at how most 
programs for seniors are funded versus programs for children. As the 
members of the Senate are well aware, most programs for seniors are 
funded through mandatory/entitlement spending. Spending increases in 
these programs are not subject to the annual appropriations process and 
are protected by automatic cost-of-living-adjustments (COLA) each year.
  The spending programs that primarily benefit our children, on the 
other hand, are discretionary, which means they are subject to the 
annual appropriations process. There are no automatic spending 
increases when it comes to programs for our kids. Instead, most 
programs for kids are held victim to politics and spending caps.
  As a result, the proportion of Federal government spending on 
mandatory versus discretionary spending has undergone a dramatic shift. 
Back in 1965, the Federal government spent the equivalent of 6% of GDP 
on mandatory entitlement programs like Social Security and 12% of GDP 
on discretionary funding items like national defense, education, and 
public infrastructure. Put another way: 35 years ago, one-third of our 
budget funded entitlement programs and two-thirds of our budget funded 
discretionary spending programs.
  The situation has now reversed. Today, we spend about two-thirds of 
our budget on entitlement programs and net interest payments and only 
one-third of our budget on discretionary spending programs.
  I am particularly troubled by the decline in spending on 
discretionary spending initiatives. Although our tight discretionary 
spending budget caps were a useful tool in the past for eliminating 
deficits and lowering debt, they are not useful today in helping us 
assess the discretionary budget needs of the nation. Today, 
appropriated spending is contained through spending caps that are too 
tight for today's economic reality. We are left with a discretionary 
budget that bears little relationship to the needs of the nation and 
that leaves us little flexibility to solve some of the big problems 
that still need to be addressed: health care access for the uninsured, 
education, and research and development in the areas of science and 
technology.
  The downward pressure on discretionary spending will become worse 
during the retirement of the Baby Boom generation--when the needs of 
programs on the mandatory spending side will increase dramatically. The 
coming demographic shift towards more retirees and fewer workers is NOT 
a ``pig in a python'' problem as described by some commentators whose 
economics are usually better than their metaphors. The ratio of workers 
needed to support each beneficiary does not increase after the baby 
boomers have become eligible for benefits. It remains the same.
  In 10 years, the unprecedented demographic shift toward more retirees 
will begin. The number of seniors drawing on Medicare and Social 
Security will nearly double from 39 million to 77 million. The number 
of workers will grow only slightly from 137 to 145 million. Worse, if 
we continue to under-invest in the education and training of our youth, 
we will have no choice but to continue the terrible process of using H-
1B visas to solve the problem of a shortage of skilled labor.

  One of the least understood concepts regarding Social Security and 
Medicare is that neither is a contributory system with dedicated 
accounts for each individual. Both are inter-generational contracts. 
The generations in the work force agree to be taxed on behalf of 
eligible beneficiaries in exchange for the understanding that they will 
receive the same benefit when eligible. Both programs are forms of 
social insurance--not welfare--but both are also transfer payment 
programs. We tax one group of people and transfer the money to another.
  The proportion of spending on seniors--and the proportion of 
mandatory spending--will most surely increase as the baby boomers 
become eligible for transfer payments. Unless we want to raise taxes 
substantially or accrue massive amounts of debt, much of the squeeze 
will be felt by our discretionary spending programs. The spiral of 
under-investment in our children and in the future work force will 
continue. Our government will become more and more like an ATM machine.
  What should we do about this situation?
  I recommend a two step approach. Step one is to honestly assess 
whether can ``cut our way out of this problem''. Do you think public 
opinion will permit future Congresses to vote for reduction in the 
growth of Medicare, Social Security, and the long-term care portion of 
Medicaid? At the moment my answer is a resounding ``no''. Indeed, as I 
said earlier, we can currently heading the opposite direction.
  Step number two is to consider whether it is time for us to rewrite 
the social contract. The central question is this: Do the economic and 
social changes that have occurred since 1965 justify a different kind 
of safety net? I believe they do. I believe we need to rewrite and 
modernize the contract between Americans and the Federal government in 
regards to retirement income and health care.
  We should transform the Social Security program so that annual 
contributions lead all American workers--regardless of income--to 
accumulate wealth by participating in the growth of the American 
economy. Whether the investments are made in low risk instruments such 
as government bonds or in higher risk stock funds, it is a mathematical 
certainty that fifty years from now a generation of American workers 
could be heading towards retirement with the security that comes with 
the ownership of wealth--if we rewrite the contract to allow them to do 
so.
  Not only should we reform Social Security to allow workers to 
personally invest a portion of their payroll taxes, but we should also 
make sure those account contributions are progressive so that low and 
moderate income workers can save even more for their retirements. At 
the same time, it is important to make the traditional Social Security 
benefit formula even more progressive so that protections against 
poverty are even stronger for our low income seniors. Finally, it is 
important to change the law so that we can keep the promise to all 270 
million current and future beneficiaries--and that will mean reforming 
the program to restore its solvency over the long-term.
  In addition to reforming Social Security, we should end the idea of 
being uninsured in this nation by rewriting

[[Page S7819]]

our Federal laws so that eligibility for health insurance occurs simply 
as a result of being a citizen or a legal resident. We should fold 
existing programs--Medicare, Medicaid, VA benefits, FEHBP, and the 
income tax deduction--into a single system. And we should subsidize the 
purchase of health insurance only for those who need assistance. 
Enacting a Federal law that guarantees health insurance does not mean 
we should have socialized medicine. Personally, I favor using the 
private markets as much as possible--although there will be situations 
in which only the government can provide health care efficiently.
  One final suggestion. With budget projections showing that total 
Federal spending will fall to 15.6% of GDP by 2010, I urge my colleague 
to consider setting a goal of putting aside a portion of the 
surpluses--perhaps an amount equivalent to one-half to one percent of 
GDP--for additional discretionary investments. Investments that will 
improve the lives of our children both in the near future and over the 
long term--investments in education, research and development, and 
science and technology.
  Mr. President, I yield the floor.

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