[Congressional Record Volume 148, Number 103 (Thursday, July 25, 2002)]
[Senate]
[Pages S7324-S7326]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE STATE OF THE ECONOMY
Mr. DOMENICI. The Republican leader has designated the Senator from
New Mexico to control the time. I yield myself 10 minutes.
Mr. President, fellow Senators, a week ago the Federal Reserve
Chairman, Alan Greenspan, testified before the Senate Banking
Committee. It is important to take note of what he said at that hearing
and where he thinks our economy is headed. Despite the obvious bear
market which prevailed until yesterday, when we had a rather
significant bull market for the day, our economy's fundamentals are
strong.
Despite this bear market, our economy is not headed for another
recession in the near future. Productivity growth is rapid. Inflation
is low. Mortgage rates are also low, as everyone knows. That has kept
the housing market very strong.
Families have been taking advantage of these low-income rates by
buying homes at a record pace and refinancing old ones, thus yielding
either lower payments or cash at hand which they are using to acquire
what they believe they need.
Notice that those who claimed that the tax cut would lead to higher
interest rates have been very quiet of late, at least on that point.
The Federal Reserve sees the economy as growing at about a 3-percent
rate in the second half of this year and even faster next year. The
unemployment rate will probably end the year at about 5.9 percent. That
is about right where it is now.
Next year, the jobless rate could drop to about 5.4 percent. This
does not mean the outlook lacks uncertainty. The recent weakness in the
stock market is important. The American people are worried, concerned.
Lower equity prices create a negative wealth effect that will be a drag
on consumer spending, as I have just indicated. Lower stock prices also
make it tougher for businesses to acquire the capital they need to
invest. Slow business investment continues to be our economy's weakest
point. And, of course, we still face the risk of further terrorist
attacks or other conflicts that could disrupt the energy market.
Chairman Greenspan also observed:
To a degree, the return to budget deficits has been the
result of temporary factors, especially the falloff of
revenue, of tax take, and the increase in outlays associated
with the economic downturn.
But the chairman also observed that unfortunately, despite these
temporary factors impacting the deficit, he also saw signs that the
underlying disciplinary mechanisms that form the framework for Federal
budgets over the last 15 years have eroded.
I would say one of the most obvious ``disciplinary mechanisms,'' to
borrow his words, is the adoption of a congressional budget. I have
spoken in the past here on the floor about the failure to adopt a
budget resolution this year. Clearly, this is the one thing we can do
in the Congress to send a message to the American public and to the
markets that we understand the importance of having a budget in these
difficult economic times. So far we have failed as elected officials to
do the most essential of our responsibilities--adopt a budget.
Clearly, the other side of the aisle, the Democrats and their
leadership, bear that responsibility, the responsibility to have
continued on with the budget process and to have produced a budget
resolution. We know that even on this most serious of debates, with
reference to prescription drugs for our seniors, the absence of a
budget resolution has found its way here to the floor.
Because there is not a budget resolution that impacts for the
remainder of this year, we then look to the previous year for the
impacts, plus or minus impacts, on adopting a prescription drug bill.
Lo and behold, we find the previous year's budget, the budget that this
Senator, as chairman, helped put together, is now impacting and will
through the remainder of this fiscal year be impacting on what we can
do in Medicare. Clearly, it is saying we can only spend $300 billion
over the next decade. That was the judgment of the Senate when it last
voted in a budget resolution.
Things have not gotten better but perhaps have gotten somewhat worse
during that intervening year. We are here on the floor discussing a
Medicare bill that is much larger than what we talked about the year
previous when we had a rather positive economy, not one that was in the
red but one that was in the black.
Now the question is, What shall we do for the remainder of this year,
up until October 1, when all the appropriations bills are subject to
adoption in both Houses, to go to conference, come back, and then go to
the President--when all the other measures on which we have been going
slow, or are in conference, have to come up? Are we going to have no
budget resolution nor budget statement impacts on any of those
activities, the sum total of which are the budget, and determine,
starting October 1, what we shall do?
It makes it difficult. Even the distinguished chairman of the
Appropriations Committee, the President pro tempore, responding to a
question about how not having a budget would affect the ability to work
on appropriations bills, said--and I quote from The Hill magazine:
It makes it difficult because we don't have the
disciplinary mechanisms at our fingertips that would
otherwise be the case if we had a budget.
The Appropriations Committee, under his leadership and that of
Senator Stevens as ranking member, is fully aware their appropriations
bills, one by one, when added together are the sum total of the budget
for the year starting October 1. They have recommended on one of the
bills that there be a sense of the Senate that they will engage in
attempting, with the Senate, to bind themselves to the numbers in the
appropriations bills, saying we will be bound by those even though we
do not have a budget resolution that would normally give the numbers,
prescribe them to the committee.
I gather that means the Budget Committee chairman and ranking
member--with that language, that sense of the Senate, saying that we
will be bound by the sum total of the allocations to the
subcommittees--I gather they clearly are concerned that if we do not
have something, the bills eventually will be subject to whatever the
Senate would vote in and have no overlying power that says you can't go
over this or you suffer some kind of penalty.
Senator Byrd and Dr. Greenspan have spoken. I tried on two or three
occasions on the floor to remind us, as Senator Judd Gregg has, and
some
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Democrats have taken to the floor concerned about the fact that we
don't have any discipline. It makes it difficult because we don't have
the disciplinary mechanisms at our fingertips. That is what the
distinguished chairman of the Appropriations Committee said a few days
ago.
A couple of weeks ago, absent a real budget resolution, we came close
to adopting at least a poor version of a budget by trying to set
spending caps for the appropriations process, enforceable only here in
the Senate next year, and extending with Senate enforcement tools some
expiring Budget Enforcement Act provisions.
But let it be clear, this is not a budget resolution.
The PRESIDING OFFICER. The Senator has used 10 minutes.
Mr. DOMENICI. I ask unanimous consent for 5 additional minutes.
The PRESIDING OFFICER. Without objection, the Senator may continue.
Mr. DOMENICI. Let it be clear this was not a Senate budget resolution
on which we voted. It was an attempt to address just a small portion of
the Federal spending that indeed will take place between now and the
end of next year. Let it be clear that this is not a budget resolution
because it only applied to appropriations, and budget resolutions go
well beyond the appropriations bills which constitute about one-third
of the spending of our Nation. Two-thirds are subject to other
approaches to spending, mandatory approaches--they are automatic, like
Social Security, like Medicare. And the sum total of all those--Federal
pensions, military pensions and on and on--the sum total of all of
those mandatory, obligatory ones is two-thirds of the spending. A real
budget would address the other two-thirds, that which we call generally
entitlement spending.
I think we are now beginning to see firsthand what it means not to
have a budget resolution as we are here on the floor debating adding
new spending to one of the largest Federal entitlement programs, the
Medicare Program. The process does matter. An updated budget resolution
would have updated our spending estimates and we would now be debating
these prescription drug amendments to the current Medicare Program in a
more honest and transparent manner.
I think it is important that we listen up and we pay attention. This
is a very serious situation. If in fact spending were to get out of
hand, we hear Alan Greenspan warning us that one of the most
significant qualities, characteristics of this American economy--one of
the most serious ones would be for those who understand budgets to
conclude that the fiscal policy is out of hand, that we don't know
where it is going, and we don't know how much we are going to spend. I
don't think that is the case.
But some who would look at what we have done and not done might
conclude that we are not as committed as we were a couple of years ago
when we had budgets, reserve funds, and all the kinds of things we have
grown to use around here.
It is obvious we just have projections and estimates of costs based
on the Congressional Budget Office and their most current projections.
But because we don't have a budget resolution that is based on current
estimates, the procedural points of order that lie against all of these
amendments result from the fact that last year's budget resolution is
the only one we have, and it was estimated using an entirely different
set of projections.
What this says is we are using enforcement tools that were in last
year's budget based upon where we are going to be with reference to
expenditures, tax intake, and, thus, deficits, or being in the black
and with a surplus.
Regardless of whose amendment one supports, not having a current
budget resolution penalizes all proposals. This is not the way to
consider one of the most important and probably most expensive
legislative proposals to come before the Congress in years; that is,
prescription drug provisions that we are debating.
We therefore see the failure to adopt a budget resolution, we see it
impacting on the way the Senate can conduct business here on the floor.
We are tied up in trying to consider a prescription drug bill while
bypassing the Senate Finance Committee. If the majority leader chooses
to proceed without waiting for, or without expecting and relying upon a
bill that the Finance Committee and committee debate produces and sends
to the Senate, that is his prerogative.
I believe in these particular times, with all of the facts I have
just described, that it is not the best way to do it. But there are
even other reasons beyond budgetary that cry out for it not being the
best way to conduct business--be it an energy bill, which we did
directly on the floor and didn't have language from a committee as a
formal bill with the appropriate documents attendant thereto, to many
others that we are taking up out of the majority leader's office and
putting up here on the floor without the committee authentication which
comes from the committee debate, which is a very heralded and important
part of the Senate process.
Chairman Greenspan also spoke specifically about the other rules that
were incorporated into the Budget Act and, thus, are in the budget.
They came into being when our country had another bad time. We went out
and met at Andrews Air Force Base. We came back with a series of
proposals, one of which was called a pay-go, and spending caps. These
are devices that helped at least provide some tools for statutory and
congressional fiscal policy deliberations. These were enforced by
points of order. The point of order lied. These provisions were
operative--or any one of them. Then we were penalized and had to have
60 votes rather than 51.
That is wherein the drug bill lies in terms of the process. This is
something we can do.
I have introduced legislation to extend the budget enforcement
provisions, including the spending caps, establishing firewalls that go
between the nondefense and defense, pay-go rules impacting the
mandatory spending programs and tax revenues, limitations on the
advanced appropriations, and other provisions that I believe are the
minimum needed to maintain some semblance of statutory and
congressional budget authority.
Let it be clear that this legislation is not a budget resolution, it
is strictly enforcement provisions. But it is the heart and soul of
budget enforcement mechanisms that would be here if we were adopting a
budget under the existing budget law. It is essential that we do at
least this much, and we ought to give serious consideration to doing it
before this year ends.
I once again borrow the language of Dr. Greenspan when he calls all
these things disciplinary mechanisms. We need to reassert them--
something Chairman Greenspan and Chairman Byrd reminded us that we
need. This is important to the way we conduct business and the signal
it sends to the markets and the economy.
Also, my colleagues joined in other legislation that I hope we can
find some way to have adopted before the new fiscal year begins on
October 1. I have heretofore introduced a summary of this proposal.
After getting closer and talking to more people, I put some more flesh
on it. I don't want to formally introduce it, but I want to send
attendant to this speech, following it, a proposal that will be called
a bill. It indeed would be the proposal I have summarized that, as a
minimal, we would need. I hope Senators will pay attention to it.
Perhaps by the end of the day today we can find out whether there is
a genuine interest. If there is not, then obviously I believe I have
done my best to call attention to it and to provide how it might be
done. I submit that there is indeed a possibility that if this were to
pass and the Senate were to adopt it, and since it applies only to us--
the House offers it through its Rules Committee--if we were to adopt
it, I have every reason to believe it would have a positive impact on
those who are wondering what is our fiscal policy after this October
and into a year with new so-called disciplinary functions available.
I yield the floor.
I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mrs. CLINTON. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Ms. Stabenow). Without objection, it is so
ordered.
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