[Congressional Record Volume 147, Number 8 (Tuesday, January 23, 2001)]
[Senate]
[Pages S446-S449]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  Mr. HOLLINGS. Mr. President, I am worried. I expressed this concern 
before the inauguration, and I hoped that cooler heads would prevail 
after the inauguration. Specifically, as I said at that time, surplus, 
surplus, everywhere a man cries surplus, and there is no surplus.
  Right to the point, I have been looking for a surplus since we had 
one in 1968 and 1969, almost 32 years ago. I worked with George Mahon, 
then chairman of the Appropriations Committee. We called over to the 
Capitol, and we asked Marvin Watson to check with President Johnson to 
see if we could cut another $5 billion from the budget. I think it was 
around December of 1968, and, at that particular time, there was no 
Budget Committee. The fiscal year used to run from July to the end of 
June the following year. We were given permission. We cut the budget. 
The entire budget amounted to some $178 billion. Now remember, that was 
guns and butter, the war in Vietnam, and domestic needs.
  Now, here we are, facing $362 billion just in interest costs--almost 
$1 billion a day. The government is spending more in interest costs 
than it spent for the entire budget in 1968 and 69--far more, more than 
double the amount, for nothing. Then I look at the record, and I follow 
it very closely because back in 1997, when we passed the so-called 
Balanced Budget Act, I was on the floor with my distinguished colleague 
from New Mexico, the chairman of the Budget Committee. I said if that 
Balanced Budget Act works, I will jump off the Capitol dome.
  Mr. President, around the fall of last year, I was looking up the 
price of a parachute because we were getting pretty close to a surplus. 
When President George Bush left town, the deficit was $403.6 billion. 
In other words, we were spending over $400 billion more than we were 
taking in. Of course, we have done that for 30 years. There has been no 
surplus in the entire 30-year-period since our last surplus. We ended 
fiscal year 2000 with a deficit of $23 billion. As of September 30th, 
the year 2000, almost 4 months ago, it was $23 billion.
  I carry around, in a similar fashion as my distinguished friend from 
West Virginia--he carries around the Constitution, and I carry around a 
little sheet, as much as I can keep it up to date, called ``The Public 
Debt To The Penny.''

  Mr. President, I ask unanimous consent to have this sheet printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      THE PUBLIC DEBT TO THE PENNY
------------------------------------------------------------------------
                                                         Amount
------------------------------------------------------------------------
Current: January 22, 2001.....................     $5,728,195,796,181.57
Current month:
  January 19, 2001............................      5,727,776,738,304.64
  January 18, 2001............................      5,725,695,166,475.90
  January 17, 2001............................      5,718,517,343,351.92
  January 16, 2001............................      5,711,790,291,567.40
  January 12, 2001............................      5,735,197,779,458.19
  January 11, 2001............................      5,734,110,648,665.41
  January 10, 2001............................      5,724,315,917,828.49
  January 9, 2001.............................      5,725,066,298,944.04
  January 8, 2001.............................      5,719,910,230,364.19
  January 5, 2001.............................      5,722,338,254,319.31
  January 4, 2001.............................      5,719,452,925,490.54
  January 3, 2001.............................      5,723,237,439,563.59
  January 2, 2001.............................      5,728,739,508,558.96
Prior months:
  December 29, 2000...........................      5,662,216,013,697.37
  November 30, 2000...........................      5,709,669,281,427.00
  October 31, 2000............................      5,657,327,531,667.14
Pror fiscal years:
  September 29, 2000..........................      5,674,178,209,886.86
  September 30, 1999..........................      5,656,270,901,615.43
  September 30, 1998..........................      5,526,193,008,897.62
  September 30, 1997..........................      5,413,146,011,397.34
  September 30, 1996..........................      5,224,810,939,135.73
  September 29, 1995..........................      4,973,982,900,709.39
  September 30, 1994..........................      4,692,749,910,013.32
  September 30, 1993..........................      4,411,488,883,139.38
  September 30, 1992..........................      4,064,620,655,521.66
  September 30, 1991..........................      3,665,303,351,697.03
  September 28, 1990..........................      3,233,313,451,777.25
  September 29, 1989..........................      2,857,430,960,187.32
  September 30, 1988..........................      2,602,337,712,041.16
  September 30, 1987..........................      2,350,276,890,953.00
------------------------------------------------------------------------
Source: Bureau of the Public Debt.

  Mr. HOLLINGS. Mr. President, everyone in this land and those out in 
China and anywhere else can look up the public debt to the penny on the 
Internet.
  Yes, if the deficit or debt went up some $23 billion in fiscal year 
2000, and they are claiming a surplus, let's see where it was cut in 
the last 3\1/2\ months. I look and, instead, to my dismay but not to my 
surprise, the debt ended up at some $5.674 trillion in the last fiscal 
year. I look today, and, as of 1/22/2001, the public debt was $5.728 
trillion. So you can subtract these two figures, and you can see that 
the debt has gone up some $54 billion.
  While we are heading toward enlarging deficits and debts, everywhere 
man cries ``Surplus!''--even those with the best of credibility. I 
worked with the distinguished Senator from Texas, Mr. Gramm, on Gramm-
Rudman-Hollings. Incidentally, if you want to have political anonymity, 
cosponsor a bill with my distinguished friend from Texas. They've 
called it Gramm-Rudman from then on--which suits me.
  Today, I picked up the morning paper. And right down on page A2, it 
says, ``right now our surplus has never been greater.'' He thinks the 
surplus has never been greater, yet we still have rising debt.
  Instead, I wish everybody would turn to the ``Tax-Cut Mania'' article 
on page A17 of today's Washington Post.
  I ask unanimous consent this article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                             Tax-Cut Mania

                          (By Steven Rattner)

       With the economy visibly weakening, the preelection debate 
     over the Bush tax cut has nearly turned into a post-election 
     stampede. But even if the economy tips modestly into 
     recession, that still shouldn't panic us into full-sized tax 
     cuts.
       Haven't we learned anything about economic policy in the 
     past eight years? Nothing has contributed more to our current

[[Page S447]]

     prosperity than having gotten our fiscal house in order.
       Bringing down the deficit allowed the Federal Reserve to 
     lower interest rates, and lower interest rates played a key 
     role in creating the greatest investment boom in history. 
     Even after adjusting for inflation, investment has risen from 
     $630 billion in 1992 to nearly $1.5 trillion last year, and 
     that investment has, in turn, been a critical part of the 
     productivity surge associated with the New Economy (which 
     remains very much with us, recession or no recession).
       Meanwhile, consumers have stopped saving. Without those 
     savings available as investment capital for business, the 
     size of the federal deficit or surplus becomes even more 
     important. Whatever the federal government doesn't borrow to 
     finance deficits (or produces as surplus) becomes available 
     for business investment.
       Tax cuts also bring international repercussions. The lack 
     of savings has contributed meaningfully to our massively 
     negative current account position as we ingest foreign 
     capital to finance the investment boom. A tax cut compounds 
     this problem.
       While we've made progress with the federal budget, voting a 
     sizable tax cut today would mean committing to spend money we 
     may not have, a significant step backward in the march toward 
     fiscal order. In truth, we're only just balancing the budget. 
     Don't forget that the current year's projected surplus of 
     $256 billion consists mostly of surpluses in the Social 
     Security and Medicare trust funds, surpluses that both 
     presidential candidates agreed should go into a lockbox.
       And even the $71 billion of true surplus must be viewed in 
     the proper framework: the understandable desire of the Bush 
     administration to propose new spending initiatives for 
     education, defense and other pressing needs, the propensity 
     of Congress to spend on its own agenda (and pork), the 
     eventual adverse impact of slower growth on tax revenues, and 
     the fact that even with the lockbox we haven't truly saved 
     Social Security and Medicare, which will both still run out 
     of money sometime before mid-century.
       Kept within our means, tax cuts are an important part of 
     holding the size of government to sensible proportions and of 
     redressing inequities, such as the marriage penalty. To 
     paraphrase President Bush's original justification for the 
     tax cut: Genuine surpluses should be returned to the people. 
     So, less tax relief now but perhaps more later as significant 
     surpluses begin to kick in.
       In the meantime, we need to develop a plan that we can 
     afford and also one less oriented toward helping the wealthy 
     through rate cuts and an end to the estate tax, probably the 
     most progressive tax in our system.
       But what about the ``recession''? At least until there's 
     evidence of a truly dramatic slowdown, leave that to the 
     Federal Reserve, which has already signaled that still lower 
     rates may be forthcoming. Interest rate cuts can be the 
     quickest and most effective form of fax reduction, 
     particularly when much of the ailment is weak capital 
     markets. Indeed, the Fed's half-point reduction three weeks 
     ago has already succeeded in stabilizing nervous financial 
     markets.
       Apart from a more quiescent Nasdaq, important indicators 
     such as the interest rate difference between corporate and 
     government borrowings have begun to turn down--a positive 
     signal--after relentlessly rising through the fall. Some, 
     particularly in the Bush camp, have chosen to read the Fed's 
     dramatic action on Jan. 3 as another vote for a quick and 
     large tax cut. Just the opposite. If the Fed is prepared to 
     move quickly and aggressively to combat slowdown, that's all 
     the more reason why we shouldn't abandon our fiscal 
     discipline.
       Under more extreme circumstances, a tax cut to fight 
     recession can make economic sense, but the slowdown we're 
     experiencing is hardly of Great Depression scale. Even Morgan 
     Stanley Dean Witter, whose early January recession call set 
     off a particularly loud alarm bell, projects the mildest of 
     recessions, and positive economic growth for this year as a 
     whole. The recession may be over while Congress is still 
     chewing over the tax cut.
       Part of today's tax-cut mania is politics--a new 
     administration eager to paint its economic inheritance in 
     negative terms and to justify an ill-advised campaign 
     platform--and part is the fact that after a decade of 
     unbroken prosperity, we've become too easily traumatized by 
     the occasional bump in the economic road. In fact, recessions 
     are not only inevitable but necessary to cleanse the economy 
     of imbalances that have built up.
       That's particularly true with today's stresses, 
     particularly in the financial markets. We've seen this movie 
     before. In late stages of an economic expansion, lenders 
     relax their guard and investors fall in love with all manner 
     of the next new thing. Before we wheel out too much anti-
     recession artillery, bear in mind that no tax cut can help 
     the fact that at 5000, the Nasdaq was wildly overvalued and 
     that we have many companies--not just dot-coms but companies 
     in telecom and other sectors--with truly bad business plans 
     that need to be allowed to disappear quietly into the night.
       Nor can a tax cut help the fact that one cause of this 
     slowdown and cleansing is a reversal of the ``wealth 
     effect,'' the propensity of consumers to spend and business 
     to invest when markets are robust. An injection of reality 
     into irrational and unrequited optimism about corporate 
     profits brought down the stock market; what should we do--
     pump the Nasdaq back up to 5000?
       When the Clinton administration arrived in 1993, it too 
     proposed a short-term stimulus package. Happily for the 
     economy, cooler heads prevailed. The stimulus was abandoned, 
     deficit reduction was passed, and we've had the longest 
     economic boom in American history. Sounds like a pretty good 
     plan.

  Mr. HOLLINGS. I'd like you to read Steven Rattner, and if you read 
the Financial Times, the article by John Plender--I ask unanimous 
consent that his article, ``A Sharp Adjustment'' be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                           A Sharp Adjustment

                           (By John Plender)

       Bond markets have rallied since the Federal Reserve's 
     surprise interest rate cut. But there are plenty of other 
     directions a financial shock could come from * * *
       For several months, the tightness of credit in global 
     markets has suggested that the current economic cycle could 
     end in financial crisis. A financial stress index devised by 
     the Montreal-based Bank Credit Analyst Research Group--based 
     on factors such as the degree of leverage in financial 
     markets, bank share prices and the shape of yield curves--has 
     dropped into dangerous territory.
       Yet the Federal Reserve's half-point cut in interest rates 
     on January 3 has put a dramatically different complexion on 
     events. The question is whether this surprise move will take 
     the financial sting out of the slowdown in the US and the 
     world economy.
       Confidence has returned triumphantly to the US bond market. 
     In spite of warnings from rating agencies of a big rise in 
     defaults, junk bonds have been selling like hot cakes since 
     the start of the year. January has also seen an exceptionally 
     high volume of investment-grade bond issues.
       In Europe the successful sale last week of nearly 
     10bn ($9.5bn) of bonds by British 
     Telecommunications was reckoned by some analysts to be a 
     turning point for telecom debt. Credit conditions generally 
     have eased. And financial flashpoints in emerging market 
     economies such as Argentina and Turkey have been successfully 
     addressed by the International Monetary Fund. To those who 
     responded to the rate cut by asking ``what does Alan 
     Greenspan, the Fed chairman, know that we don't?'' the bond 
     markets are saying ``who cares?''.
       Yet it is possible, that the doubters were looking for the 
     wrong kind of financial crisis. The last economic cycle came 
     to an end with a banking debacle followed by recession. In 
     the U.S., Japan and much of Europe, commercial banks had 
     over-extended themselves in property. In the present cycle 
     bankerly exuberance threatened to unleash a downturn when the 
     over-borrowed Long-Term Capital Management hedge fund came 
     close to collapse in 1998.
       The Fed's efforts to head off a systemic disaster by 
     cutting interest rates had the effect of prolonging the 
     economic cycle. It also provided a friendly environment for a 
     high-technology bubble. The result is that the cycle is 
     ending untypically, although in a way that would have looked 
     familiar to a 19th-century businessman. Over-investment 
     prompted by an artificially low cost of capital, together 
     with increased global competition, have prevented businesses 
     from passing on rising labour and energy costs in higher 
     prices.
       There is thus a shock to the real economy that is reflected 
     in an autonomous slowdown and a profits squeeze instead of a 
     full-scale financial shock. The high-tech bubble was, after 
     all, substantially financed by equity, not debt. And in place 
     of the overheating in junk bonds that characterised the end 
     of the 1980s, we have seen manic investment in venture 
     capital.
       The banking system has a number of discrete problems--the 
     Californian energy crisis, bad debts in telecoms, financial 
     fragility in emerging market economies and the rest. So far 
     they remain non-contagious. But there must be a risk that the 
     cumulative impact could start to pose systemic problems.
       This, says a central banker, could be difficult to manage. 
     When a crisis has a single focus as with property or Latin 
     American debt, he points out, ``you can put someone in charge 
     of the hospital ship and then focus on strategy to get out of 
     the mess. If the problems are spread across the whole loan 
     portfolio, it's harder to do this.''
       U.S. commercial banks have greatly enlarged their capital 
     since the last seizure in 1990. So while asset quality has 
     deteriorated and charge-offs have risen Alan Greenspan felt 
     able to argue last month that the problems ``remain 
     historically modest relative to assets and capital''.
       Yet the economy does remain vulnerable to financial shocks, 
     of which the most worrying concerns the link between the 
     stock market and the U.S. private sector's balance sheet. One 
     consequence of the Fed's interest rate cuts after the LTCM 
     crisis was that it gave the private sector an opportunity to 
     spend and accumulate more debt. Since the start of the bull 
     market, U.S. household debt has gone from less than 65 per 
     cent to more than 95 per cent of personal disposable income, 
     while the savings ratio has fallen to zero.
       When households are already so heavily indebted they may 
     respond less readily to the Fed's interest-rate invitation to 
     go on another spending binge. But the debt also needs

[[Page S448]]

     to be seen in the context of the overall household balance 
     sheet, in which the asset side carries an unprecedented 
     amount of stock market investments. About 45 per cent of the 
     population is reckoned to have exposure to equities either 
     directly or via defined contribution pension plans.
       Stock market capitalization has fallen from about 180 
     percent of gross domestic product at its peak last March to 
     164 percent last week. There has been no collapse in 
     residential property. But if that sounds reassuring, note 
     that the stock market's earlier peaks in August 1929 and 
     December 1972 were well below these levels, at 81 percent and 
     78 percent of GDP.
       The scope for an adverse valuation adjustment on the basis 
     of changing expectations is far from negligible. The Bank 
     Credit Analyst argues that the era of super-normal equity 
     returns is over. Between 1982 and 1999, it points out, the 
     Standard & Poor's 500 index generated average annual total 
     returns after inflation of 16 percent, or twice the average 
     during the previous half-century. The average returns in 
     future, it argues, are likely to be no more than 8 percent 
     before inflation.
       If that is right and if private individuals have yet to 
     downgrade their expectations fully, there would be room for a 
     very sharp balance sheet adjustment as disillusioned 
     households rebuilt their depleted savings by investing in 
     non-equity assets.
       Also relevant is the distribution of household debt. A 
     lesson of the late 1980s boom in the US and the UK was that 
     only a small proportion of the borrowing population has to be 
     in difficulty to put big downward pressure on asset prices 
     and create a bust.
       Nor would the impact of a stock market shock be restricted 
     to negative wealth effects, as people responded to falling 
     asset values by spending less. It could exacerbate problems 
     in banking.
       If overstretched telecoms operators find that sliding 
     equity and bond markets are no longer willing to offer them 
     fresh funds, the banks may be asked to increase their 
     exposure to their least creditworthy customers, causing a 
     decline in asset quality.
       And any weaknesses among the investment banks, which have 
     enormous leverage on and off the balance sheet, both through 
     borrowing and exposure to derivatives, would be ruthlessly 
     exposed.
       There are other possible shocks. In the bond market, 
     investors' perceptions may become more cautious, with fallout 
     for equities. The risk, says David Hale of Zurich Financial 
     Services, is that the new Bush administration may forge 
     consensus by embracing more of the Democrats' spending 
     proposals. If the economy is weak, he adds, Republicans will 
     feel even less inhibited as they worry about the mid-term 
     elections in 2002.
       The dollar is another source of vulnerability, given the 
     financing challenge of a current account deficit of 4 percent 
     of GDP. Weakness against the euro would be helpful in 
     rebalancing global economic growth. But a collapse would be 
     another matter given the inflationary consequences.
       Whether these vulnerabilities turn into shocks is 
     inherently unpredictable. But as Barton Biggs, Morgan Stanley 
     Dean Witter's investment guru, told Barron's magazine last 
     week, ``it still boggles my imagination that everybody thinks 
     we can come through the biggest bubble in the history of the 
     world and certainly the longest boom the US has ever had, and 
     get out of it with a very, very mild recession''.
       His is not the only imagination that remains boggled.

  Mr. HOLLINGS. That is Tuesday, January 23--today. You will understand 
my grave misgivings about all of these tax cuts. Everybody loves a tax 
cut. But we have to act responsibly and look at whether or not, in 
essence, instead of cutting taxes, we are increasing taxes, namely, 
increasing interest costs on the national debt.
  One of my colleagues, in cosponsoring President Bush's tax cut 
package, said, ``You have to starve the beast.'' We heard about 
starving the beast from President Ronald Reagan. It was first Kemp-
Roth; and Senator Dole, then the head of our Finance Committee, had his 
comments about that. Better than all of them was former President Bush. 
He called it voodoo economics. President Reagan turned Kemp-Roth into 
Reaganomics, and we are supposed to starve the beast, to cut all the 
taxes.
  What did we do? We increased the biggest waste in the history of 
Government; namely, the interest cost that is gone, where it was at the 
time we balanced the budget at $16 billion, it has now increased to 
$362 billion--$362 billion for absolutely nothing, just for past 
profligacy, just for ``starving the beast.''
  Come on, there is no education in the second kick of a mule. Don't 
come around here saying, ``We are going to starve the beast and reduce 
the taxes of the people. You know those Washington folks, they are 
going to spend it. Get it out of the hands of the politicians.'' That 
is big political nonsense.
  You talk about campaign finance, the biggest campaign finance abuse 
is not soft money. Oh no, the biggest abuse is how the politicians--
namely we Senators and Congressmen--use the Federal budget to get 
ourselves reelected. If we can run around and give tax cuts, then, as 
President Reagan said, ``The government is not the solution to the 
problem, the government is the problem.
  We have had 20 years of that nonsense. We have to sober up, and we 
have to start paying our bills. I am going to be coming from time to 
time to explain that we do not have a surplus--I wish we did--and I am 
going to caution the Members that when they start giving tax cuts, they 
are only increasing the interest costs of the debt. We know President 
Bush is going to increase defense. He has already said we ought to have 
an increase in military pay. We gave a pay raise last year, but we are 
going to give another increase, he says.
  We know, according to Secretary Colin Powell, we are going to 
increase funding for the State Department.
  We know we are going to increase funding for the Department of 
Agriculture. If he doesn't increase agriculture funding, Bush will be 
the first President who has not.
  We know we are going to increase energy funding. Look at the 
situation out on the west coast.
  We know we are going to increase education funding. President Bush 
has a proposal in right now. If you are going to test everybody, you 
are going to have accountability. I hear it costs $10 just at the 
elementary level and $50 at the higher levels for testing. This is 
going to cost into the millions, perhaps billions.
  So everybody is talking about increasing spending or increasing the 
debt and cutting out the revenues, increasing the debt. Somewhere, 
somehow, somebody will stand in front of this stampede and talk sense 
to the American people. Hopefully, the message will come through.
  How is this even called a surplus with any face whatever? There is 
another little sheet that is put out that says, ``Who Holds The Public 
Debt?"
  I ask unanimous consent that it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                           WHO HOLDS THE PUBLIC DEBT?
----------------------------------------------------------------------------------------------------------------
                                         Held by the Government      Owed to the Public             Total
----------------------------------------------------------------------------------------------------------------
    January 22, 2001..................      2,360,076,279,493.13      3,368,119,516,688.44     5,728,195,796,181
Current month:
    January 19, 2001..................      2,357,882,242,116.78      3,369,894,496,187.86     5,727,776,738,304
    January 18, 2001..................      2,355,790,659,744.32      3,369,904,506,731.58     5,725,695,166,475
    January 17, 2001..................      2,353,911,893,744.32      3,364,605,449,607.60     5,718,517,343,351
    January 16, 2001..................      2,347,016,197,744.32      3,364,774,093,823.08     5,711,790,291,567
    January 12, 2001..................      2,345,618,832,394.32      3,389,578,947,063.87     5,735,197,779,458
    January 11, 2001..................      2,344,827,431,394.32      3,389,283,217,271.09     5,734,110,648,665
    January 10, 2001..................      2,339,375,524,394.32      3,384,940,393,434.17     5,724,315,917,828
    January 9, 2001...................      2,340,337,733,394.32      3,384,728,565,549.72     5,725,066,298,944
    January 8, 2001...................      2,335,546,095,679.32      3,384,364,134,684.87     5,719,910,230,364
    January 5, 2001...................      2,338,430,377,679.32      3,383,907,876,639.99     5,722,338,254,319
    January 4, 2001...................      2,335,477,560,394.32      3,383,975,365,096.22     5,719,452,925,490
    January 3, 2001...................      2,334,486,285,394.32      3,388,751,154,169.27     5,723,237,439,563
    January 2, 2001...................      2,339,900,249,630.66      3,388,839,258,928.30     5,728,739,508,558
Prior months:
    December 29, 2000.................      2,281,817,734,158.99      3,380,398,279,538.38     5,662,216,013,697
    November 30, 2000.................      2,292,297,737,420.18      3,417,401,544,006.82     5,709,699,281,427
    October 31, 2000..................      2,282,350,804,469.35      3,374,976,727,197.79     5,657,327,531,667
    September 29, 2000................      2,268,874,719,665.66      3,405,303,490,221.20     5,674,178,209,886
    September 30, 1999................      2,020,166,307,131.62      3,636,104,594,501.81     5,656,270,901,633

[[Page S449]]

 
    September 30, 1998................      1,792,328,536,734.09      3,733,864,472,163.53     5,526,193,008,897
    September 30, 1997................      1,623,478,464,547.74      3,789,667,546,849.60     5,413,146,011,397
----------------------------------------------------------------------------------------------------------------

  Mr. HOLLINGS. Mr. President, that sheet breaks down the deficit and 
debt as debt held by the Government and debt owed to the public. You 
can see the debt owed to the public has been reduced $37 billion. But 
then the debt held by the Government has gone up $91 billion. So what 
happens? Yes, we have now an increase in the debt of $54 billion.
  This accounting is like using your Visa card to pay off your 
MasterCard. You still owe the same amount of money under the Visa card; 
the debt is on the Visa rather than on the MasterCard. It is 
tomfoolery. It is outrageous nonsense. We only have one Government, and 
it is public. That is why they call it the public debt. So let's not 
get that ``owe the public.'' We are the custodians of the public. And 
we are spending Social Security, Medicare, Civil Service retirement, 
military retirement, unemployment compensation, all of these other 
funds, and saying we are balancing the budget.
  Now they are into a mumbo-jumbo, saving Social Security mode. All you 
have to do to save Social Security is not spend it. They continue to 
spend it.
  If you did not spend the Social Security moneys, you would have 
between $2.4 and $2.7 trillion in the next 10 years. How about putting 
$2.7 trillion back into the Social Security kitty rather than taking it 
out, whereby we owe $1.9 trillion to Social Security alone this minute.
  The same case applies with Medicare. We have been using those moneys. 
We talk and say we are not going to do it. In fact, we passed a law, 
section 13-301 of the Budget Act: Thou shalt not, you Congress, or you 
President--calculate Social Security moneys in your budget. But they 
do. They do. And they separate it out, and then they spend it later on. 
If they have a lockbox and somebody says they put in a bill on the 
lockbox--I am going to put in a true lockbox. Ken Apfel, the 
Administrator of Social Security, helped me draft it, whereby each 
month we remit the amount of T-bills we purchase or give to the public. 
So we will keep that in the fund and have a true lockbox and not a 
section 201 as the Social Security Act requires, just put it in 
Treasury bills.
  There it is. We have this sheet. That is the game being played. Yes, 
campaign finance, McCain-Feingold. I voted for that bill five times 
already; I will vote for it again. That bill deals with soft money. 
Aspects of this bill are constitutionally questionable, and I have, in 
the past, introduced a constitutional amendment that says the Congress 
is hereby allowed to regulate or control spending in Federal elections. 
My bill received a majority vote in the Senate but never did get the 67 
votes needed to send it to the States. They would ratify it in a snap. 
I can tell my colleagues that right now.
  We play games with the American public, and the people who keep us 
honest play the games along with us; namely, the free press of America. 
They are the only ones who can stop this game. I cannot do it. No one 
Senator or Congressman or group of them can do it. We have tried.
  I will put a budget freeze in the budget again this year: Just take 
this year's budget for next year. That is the kind of economic 
situation described by Rattner and Plender in their articles. We not 
only have a fiscal deficit, but we have a current account deficit in 
the balance of trade of some $366 billion.
  As those dollars continue to go overseas and decrease in value, we 
are going to have to raise interest rates in order to attract foreign 
investment. And if we raise that interest rate to get that foreign 
investment, we are going in the opposite direction of Chairman 
Greenspan's recommendations.
  Chairman Greenspan needs to come forth the day after tomorrow, as he 
is scheduled to testify before the Budget Committee, and say 
categorically--without being political about it--but say that what we 
did in 1993 needs to be done: Proceed very cautiously; do not rely on 
these ten-year projected surpluses.
  The ten-year budget projection has been the evil in trying to balance 
the budget. When we had just the Appropriations Committee and not the 
Budget Committee, we had a one year budget. Then we got three year 
budget projections. Then with Gramm-Rudman-Hollings, we got 5-year 
budget projections. Recently, we played the game of 10-year budget 
projections until President Clinton said we could do away with the 
public debt in twelve years. He neglected to say, however, that in 
those 12 years we could transfer the public debt all back into the 
Government account and still owe the same amount of money. In fact, we 
can do that tomorrow morning. Just put in a little bill and say that 
the public debt shall be paid, and we will transfer it all over to the 
Government debt and all go home and get reelected. That nonsense has to 
stop.
  If anybody can find a surplus in the Government account, namely, in 
the national debt owed by the United States of America, please tell me, 
and I will be glad to jump off that dome. But unless and until that 
happens, Mr. President, old Hollings is going to stand here and berate 
them and nag them and fuss at them.
  This whole charade is just totally irresponsible. Senator Thurmond 
and I are going to get on; we are not going to have to pay for this, 
but our children and grandchildren are going to have to pay for it. 
Some of these esteemed Senators who are voting so boldly and 
introducing bills to ``starve the beast'' are going to learn the hard 
way that they are going to be spending nothing but interest costs. They 
are really going to be increasing the worst kind of tax on the American 
people--interest costs for which they get absolutely nothing.
  We are spending that amount of money. When President Clinton gave his 
State of the Union Address last January, it was said by one 
distinguished Senator that that gentleman is costing us $1 billion a 
minute. President Clinton then talked for 90 minutes, an hour and a 
half. President Bush now wants to give a $90 billion-a-year tax cut. 
Those two equal $180 billion. If we really had been paying the bill and 
had a true surplus, we could give both President Bush and President 
Clinton their programs of either spending increases or tax cuts and 
still have $182 billion. The truth is, instead of spending $362 
billion, $1 billion a day, on carrying charges, we would have another 
$182 billion from the $180 billion with which we could easily increase 
research at the National Institutes of Health, pay for the military, 
State Department--all of these other budgets.
  We would be tickled to death to increase all of them. We are spending 
the money but not getting anything for it. Somewhere, sometime we all 
have to start talking out of the same book, and that is the book put 
out by the U.S. Treasury itself. Every day they put out the public debt 
to the penny. When we pay down the public debt, rather than increasing 
it by some $54 billion, then let's all get together and talk about tax 
cuts.
  I yield the floor and 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. THOMAS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Smith of Oregon). Without objection, it is 
so ordered.

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