[Congressional Record Volume 148, Number 7 (Tuesday, February 5, 2002)]
[Senate]
[Page S312]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                               THE BUDGET

  Mr. REID. Mr. President, I think it is important to note, with the 
President having submitted to us his budget, that we have had a $5 
trillion surplus disappear in the last 8 months.
  Earlier this month, the Congressional Budget Office confirmed that 
since passage of the tax cut in May, the surplus projected for the 
period of 2002 to 2011 declined by $4 trillion. The President's new 
tax-and-spend proposals would consume another $1.3 trillion or more 
over this period.
  I acknowledge that some of this is as a result of the war being 
conducted, but that is just some of it. As all political scientists and 
economists have reported in the last few months, the majority of the 
problem is other economic problems that have developed since this 
administration took office. It is clear that the Republican fiscal 
management forces a $1.5 trillion raid of the Social Security trust 
funds. There is also a raid on the Medicare trust funds of some $300 
billion.
  So I think we must acknowledge we have some serious problems that are 
going to have to be talked about in the next month or so as we get 
ready to do a budget for this Congress.
  We have what should be called deceptive bookkeeping. We have broken 
the bipartisan commitment to save Social Security trust fund surpluses. 
The administration has submitted to us an unbalanced budget. Clearly it 
is unbalanced. And they have used the Social Security surpluses to mask 
the unprecedented fiscal reversal seen in the last 8 months and to pay 
for exploding tax cuts that primarily benefit a wealthy few while 
jeopardizing retirement security for all Americans.
  In addition to this deceptive accounting practice, the 
administration's budget breaks with a decade-long tradition by only 
providing details for the next 5 years, even as the administration 
offers new tax-and-spend proposals with enormous costs that are not 
felt until later years. The reason they are not doing the 10-year 
forecast is that the deficits explode in those outyears. This gimmick 
hides the full budgetary impact and irresponsibility of the 
administration's fiscal proposals.

  The budget also resorts to other--for lack of a better description--
gimmicks. Examples include unrealistic restraints on future nondefense 
discretionary spending, unspecified future Medicare cuts, and proposing 
budget cuts that have been repeatedly rejected.
  Mr. President, I reserve the remainder of the majority's time.
  The ACTING PRESIDENT pro tempore. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I would like to make some comments in 
relation to the remarks the Senator from Nevada just made--not in 
disagreement with anything he said, but to supplement them and to put 
them in proper perspective.
  In regard to tax cuts and the war on terrorism and their impact on 
the deficit, even after the tax cuts of last year, we are still going 
to have a level of taxation that is as high as we had in World War II. 
The war on terrorism is taking our resources because, obviously, we 
have to put every resource we can into winning the war or it might not 
be won. And we are still going to have a level of taxation that was 
similar to the times of other wars. The benchmark we use is World War 
II, when taxes were at about 20.6 percent of gross national product.
  I ought to correct myself. At the end of 10 years, we would probably 
still have taxes a bit less than they were in World War II. But right 
now, they are at that level, even considering the tax cuts we passed.
  The war on terrorism has been one of the reasons we are in deficit. 
Also, the tax cuts are a reason there will be deficits. There are 
deficits because of the recession we are in right now, most of which 
was caused by the war acts of September 11, but also remember that the 
downturn in the economy, as far as manufacturing is concerned, started 
19 months ago, in March of the last year of President Clinton's 
administration. Also remember that 50 percent of the loss of the Nasdaq 
took place in the last year of the Clinton administration. As far as 
the economy is concerned, the downturn started before President Bush 
ever took office, before we ever knew that the dastardly acts which 
occurred on September 11 would ever happen to us.
  I want to comment on a fact that is true, that this does affect 
Social Security. In a unified budget, Social Security is considered 
part of the deficit or part of the surplus, but it is wrong to refer to 
a situation for Social Security different now than a year ago when we 
anticipated a $5.8 trillion surplus.
  This is a historical fact about Social Security that has never 
changed since 1936: Whether we have a unified budget, which we have had 
since 1967 when President Johnson instituted it, or whether we have 
separate pots of money--some for Social Security, some for Medicare, 
some for disability, some for highways, some for airports--our 
different trust funds, the way Social Security has been accounted for 
has not changed since 1936. It is this simple: Since 1936, the Social 
Security payroll money has been paid into a trust fund. That trust fund 
has had some sort of a surplus since 1936 except for the years 1982 and 
1983. My colleagues will remember, at that particular time when we did 
not have a surplus, we borrowed money from Medicare to keep Social 
Security checks going until we bailed it out.
  Since 1936, Social Security moneys have always been handled the same 
way. They have been put in the Social Security trust fund and the 
surplus has been invested in non-marketable Government securities. That 
has not changed since 1936, whether we have had unified accounting or 
whatever the situation has been.
  I yield the floor.
  Mr. THOMAS. Mr. President, has the time for morning business expired?
  The ACTING PRESIDENT pro tempore. Under morning business, the time 
for the minority has expired.
  Mr. THOMAS. I thank the Chair.
  Mrs. HUTCHISON. Mr. President, is it in order now to talk about Judge 
Phil Martinez?

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