[Congressional Record Volume 147, Number 136 (Thursday, October 11, 2001)]
[Senate]
[Pages S10546-S10547]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       ALTERED FISCAL PRIORITIES

  Mr. VOINOVICH. Mr. President, discussions of the budget that once 
dominated the news headlines have been eclipsed since the world was 
forever changed by the horrendous events of September 11, and no one 
knows more about those events than the Presiding Officer.
  Perhaps one of the most significant changes resulting from the 
terrorist attacks is how significantly our fiscal priorities have been 
altered. Almost instantly the debate shifted from how to protect the 
Social Security surplus to how we should spend it to pay for 
counterterrorism and homeland defense efforts and stimulate the 
economy.
  By necessity, this dramatic change in our fiscal situation calls for 
Congress to sort out our top priorities between those that existed 
before September 11 and which continue to demand our attention and our 
new priorities, defending our homeland, fighting terrorism, and 
boosting the economy. We will commit the resources that are needed to 
succeed in this challenge and we will obtain those resources in 
whatever way is necessary.
  Some of my colleagues will remember that prior to the events of 
September 11 I was working closely with the administration and several 
of my colleagues on a bill designed to protect the Social Security 
surplus, control spending, and ensure debt reduction. That legislation 
had two exceptions: recession and war. If it had been in place, both of 
these exceptions would apply.
  Having said that, I emphatically say to my colleagues that the need 
for fiscal discipline is greater now than ever before. It must not be a 
casualty of September 11. We still need to prioritize our spending and 
we still need to make hard choices. As I said, the events of September 
11 changed everything, and they have also changed our fiscal outlook 
for years to come.
  Over the past few fiscal years, sustained by peace, prosperity, and 
assuredness, our Nation has had record budget surpluses. Unfortunately, 
the existence of surpluses has had an undesirable effect. Congress has 
expanded the Government, created new programs, and dramatically 
increased spending in others. The speed at which the fiscal fortunes of 
the Federal Government have shifted is astounding. Almost 8 months ago, 
CBO projected we would run an on-budget surplus for fiscal year 2001 of 
$125 billion, as well as a $156 billion Social Security surplus--a 
total of $281 billion that was supposed to be used for debt reduction.
  However, on September 26, the CBO released its monthly budget review 
and revealed a much different story. According to the CBO, when all is 
said and done the total unified budget surplus in fiscal year 2001 will 
be $121 billion, a change of $160 billion from the January estimate. 
This means Congress used $40 billion of the Social Security surplus to 
fund the general Government activities.
  The news for fiscal year 2002 is equally sobering. Last week the 
Senate Budget Committee, working in a bipartisan manner, released new 
figures on the budget outlook for fiscal year 2002 through fiscal year 
2011. The committee predicts that we are on track to spend the entire 
Social Security surplus in the 2002 fiscal year, and most or part of 
the Social Security surplus in the following year.

[[Page S10547]]

  We see that on this chart. We show a $52 billion surplus, but the 
fact is, we are truly in deficit because we will be using $122 billion 
of Social Security in 2002, $125 billion in 2003, and so forth. So we 
are going to be using the Social Security surplus, according to this 
chart, all the way out to the year 2006.
  I remind my colleagues the projected $52 billion unified surplus is a 
gross exaggeration of the possible surplus this year because we have 
pledged we are going to use $60 to $75 billion to stimulate the 
economy, which means we are going to wipe out this $52 billion surplus 
in 2002. In fact, we are going to have to borrow the money from the 
public to pay for the things we want to do.

  I would like to remind my colleagues the bleak budget outlook I 
described goes way out into future years. The Senate Budget Committee 
projected we will spend significant portions of Social Security 
surpluses, as I mentioned, in 2003 to 2006.
  I further remind my colleagues that these figures on this chart, as 
bad as they are, do not tell the whole story. These we are showing are 
based on a cost-of-living increase in spending based on inflation. 
Remember Congress spent 14.5 percent more in fiscal 2001 on nondefense 
discretionary spending than they did in fiscal year 2000. We should 
have no illusions that Congress is going to spend at the rate of 
inflation. I don't know of any time that Congress has spent money at 
the rate of inflation. As to these numbers on this chart, you might as 
well forget them. They are gone because the projections are based on 
inflationary increases and we know that is not going to be the case.
  Our current crisis should not be used as an excuse to run up the tab 
for programs and projects not related to the war on terrorism or 
stimulating our economy. Now more than ever before we have to 
prioritize our funding and make tough choices. Do our spending choices 
put the safety of American lives at home and abroad front and center? 
Will they truly boost the economy? These are the questions that should 
be applied to every dollar Congress spends. Our current fiscal position 
does not allow for any unnecessary spending. Domestic needs must be 
reprioritized. Those of us who have been concerned about fiscal 
responsibility have to recommit ourselves to fiscal discipline. We have 
to make the tough choices to keep in check the urge to spend, keeping 
in mind we are spending the Nation's Social Security money with every 
additional dollar that goes out the door. Once it has gone out the 
door, we are then going to borrow that money from the public.
  I am concerned that some proposals being considered in this Senate 
are inappropriate, given the long-term budget pressures we face. You 
will be hearing from me and hopefully many others about some of those 
proposals. If the stimulus package we put in place results in chronic 
budget deficits, it is going to drive up interest rates. And make no 
mistake about it, the financial markets are closely watching what we 
do. If they see Congress taking actions that will steer the Federal 
Government towards persistent deficits, they will drive interest rates 
higher. Higher interest rates will have exactly the opposite effect on 
the economy from what we want. They would put a brake on the economy by 
raising consumers' interest payments and discouraging economic 
activity.
  Remember, low interest rates are important to the economy. In fact, 
Federal Reserve Chairman Alan Greenspan has been quite clear about this 
as he has highlighted this to many of us.
  I think this is very important. This is not merely an academic 
exercise. The recent rise in long-term interest rates is attributed to 
the deteriorating budget condition of the Federal Government in the 
past few weeks. As my colleagues know, Congress will consider a true 
stimulus package in the near future. Helping America's workers, all 
workers, should be and will be a part of that package and should be our 
No. 1 priority.
  The stimulus package can only be so big. So it is critical that we 
touch as many Americans as possible. All of them should participate in 
that economic stimulus package. That same message applies to the money 
we allocate to fight terrorism at home and abroad. We need to 
prioritize and we need to get the biggest bang for our buck, literally 
and figuratively.
  We in this body must never lose sight that the day of reckoning with 
the baby boomer retirement has not been put off by our current crisis. 
Like it or not, the baby boomers will begin to retire in about 10 
years, and if we fail to act, we will put an unacceptable burden on our 
children and grandchildren. We face an important challenge in preparing 
for that day. Our goal should be to fund our war on terrorism at home 
and abroad, respond to the needs of the victims of the terrorist attack 
in New York and here in Washington, get our economy going, and as soon 
as possible end deficit spending. We owe it to our children and 
grandchildren.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. HATCH. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LEAHY. 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. LEAHY. Mr. President, what is the parliamentary situation under 
the unanimous consent request?
  The PRESIDING OFFICER. There is nothing pending before the Senate.
  Mr. LEAHY. Mr. President, I yield to the Democratic leader.
  Mr. REID. Mr. President, I appreciate the Senator yielding.
  On behalf of Senator Daschle, I now ask that the Senate consider S. 
1510.

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