[Congressional Record (Bound Edition), Volume 145 (1999), Part 15]
[Senate]
[Pages 21627-21629]
[From the U.S. Government Publishing Office, www.gpo.gov]



                    THE TRUTH ABOUT BUDGET SURPLUSES

  Mr. VOINOVICH. Mr. President, now that the tax cut bill will 
assuredly be vetoed, it is time to turn our attention to passing a 
budget that will respond to the needs of our citizens, keep our 
spending under control, maintain the integrity of the Social Security 
trust funds, and not increase our terrible national debt.
  When I was back in Ohio during the August break, almost everybody I 
talked to said they were glad that I opposed the tax cut that was based 
on the 10-year rosy projections, which I referred to as a mirage. Every 
expert in America said that to base tax cuts or new spending on such 
projections was fiscally irresponsible.
  The people who I spoke with told me that if it was not a mirage, then 
Congress should use the money to pay down the $5.6 trillion national 
debt and get out of dealing with the problems of Social Security and 
Medicare.
  They also said if we got to a point down the road where we got real 
money for a tax cut, we should do it when the economy needs stimulation 
and not right now.
  Quite a few of these same Ohioans said to me: For goodness sakes, 
Congress should not sit down with President Clinton and negotiate a tax 
reduction for spending increases--just pass an honest budget.
  As my colleagues know, the President has hinted that he may be 
willing to strike a deal for small tax cuts in exchange for a few 
spending increases. That would be an absolute disaster for our 
country's financial health, and I am pleased the majority leader has 
firmly rejected this approach.
  I have no doubt that the President will promise future tax cuts while 
insisting on immediate spending. The problem will be, I fear, that the 
tax cuts will never materialize, and the spending will fund programs 
that will become entrenched. And what's worse, he will use the so-
called surplus to pay for this new spending.
  Let's get back to basics: There is no surplus. I have said it before 
and I will say it again: The only surplus we have is made up of Social 
Security funds.
  Let me just say right here that I really wish the President, the 
Congress, and the media would start giving an accurate portrayal of the 
surplus and call it what it is--either the ``Social Security'' surplus 
or the ``on-budget'' surplus. And right now, the only surplus we have 
is a Social Security surplus.
  I want to show a chart I have used in other speeches on the floor. It 
basically shows that even in 1999, when we are talking about a surplus, 
we are actually running a budget deficit of some $4 billion. The first 
time we are going to have the real on-budget surplus in approximately 
30 years is next year, as projected by CBO. We have not yet 
accumulated, this year, all of the tax revenues necessary to meet and 
exceed our spending in fiscal year 1999.
  The only way we can claim a budget surplus today is by taking the 
surplus that is accumulating in the Social Security trust fund and 
using it to mask the deficit, just as has been done in previous years. 
The $14 billion projected ``on-budget" surplus for next year--which 
would be the first on-budget surplus, as I said, in over 30 years--is 
by no means secure.
  In fact, CBO Director Dan Crippen has already warned us that if we 
stay on the current path with the appropriations bills, we could turn 
the $14 billion projected ``on-budget'' surplus into an $11 billion 
deficit. And by doing so, we would be breaking our word with the 
American people to never again raid the Social Security trust funds. 
That would be outrageous given all the promises we have made to them 
and given all the debate I have heard on the

[[Page 21628]]

Senate floor over Social Security lockbox legislation.
  Right now, our primary responsibility is to be as conscientious as 
possible and come up with the best budget plan for fiscal year 2000.
  We also need to resist the President's push to expand current 
programs and to create new entitlements. The President has consistently 
been bringing his case directly to the American people, proposing new 
spending programs wherever he goes.
  At the same time, he says he is for debt reduction and saving Social 
Security. That is plain hogwash. What most people don't know is the 
President's latest budget proposal would boost spending in 81 
Government programs, create budget deficits, and as a result, raid 
billions of dollars from the Social Security trust funds over the next 
10 years.
  This year, in accordance with the 1997 Balanced Budget Act, which 
Congress passed and President Clinton signed, we are supposed to spend 
$27 billion less than last year. In other words, when the budget 
agreement was put together by Congress, they anticipated we would spend 
$27 billion less this year than last year.
  Let's face the facts. The only way we are going to deal with the 
budget and handle all of these items that need to be addressed is one 
of four ways:
  One, we can tighten our belts by finding places to cut spending in 
current Federal programs and reallocate those resources; two, we can 
raise taxes in order to provide services --a course of action I don't 
favor; three, we can use whatever on-budget surplus we may have next 
year, although in all likelihood it has already been spoken for; four, 
we can use the Social Security surpluses by raiding the trust funds.
  Those are the alternatives. All in all, these are four difficult 
choices, but I think most Americans would agree that the most 
responsible choice is to cut unnecessary spending.
  For example, we could start by eliminating the Welfare-to-Work 
Program. This program, which was initiated by the President, has had a 
total of $3 billion appropriated to it over the last 2 years. However, 
in the same period, the States and territories that chose to 
participate--and not all of them did--have only spent $182 million of 
those funds. That's because the money comes with too many strings 
attached for States and because it is a complete duplication of the 
Temporary Assistance for Needy Families program, or, TANF.
  Last year when I was governor, Ohio and five other States didn't even 
apply for the money under Welfare-to-Work. In Ohio, we rejected $88 
million. I believed that Ohio and the Federal Government had made a 
deal; that we were going to take care of our responsibilities under the 
new welfare law with the money that Congress allocated to us in the 
welfare reform legislation.
  After Welfare-to-Work, we should take the time, do the hard work and 
make the tough choices by determining what other Federal programs and 
pork-barrel spending we can trim in order to find the money necessary 
to meet our Nation's priorities.
  We should be just as enthusiastic, in my opinion, in terms of 
reducing taxes as we are just as conscientious in terms of finding ways 
we can cut funding.
  Most importantly, we need to instill truth-in-budgeting. The last 
thing we want to do is ruin our credibility by being dishonest. We need 
to end all the accounting gimmicks, such as extending the calendar to 
13 months in order to accommodate excess spending, or ``forward 
funding'' certain programs to avoid having to pay for them this year. 
In fact, as I understand from Senator Domenici, Chairman of the Senate 
Budget Committee, the President has $19 billion in his budget that 
encompasses forward funding.
  We should let the American people know that we're doing such things. 
It's their money; they have a right to know. But, we should strive at 
all times not to use ``smoke and mirrors'' to make the debt look 
smaller or the budget appear balanced on paper when in reality, it is 
not. They are onto it.
  We shouldn't be ``mixing and matching'' to give us the numbers that 
will give us the best budget results. We need to agree on a set of 
numbers exclusively. If we're going to use CBO numbers, then we should 
consistently use CBO's numbers. Same thing with OMB. It is 
intellectually dishonest to constantly change numbers--picking and 
choosing as we go along.
  Well, we will use CBO's numbers and next we will use OMB's figures.
  When I was Governor of Ohio, the first thing we did was sit down with 
the legislature and we said let's agree on the numbers. We agreed on 
the numbers. That is what we dealt with.
  In addition, if we want to avoid dipping into Social Security, then 
we should be prepared to make the hard choices and not declare 
everything an emergency. As every Member of this body knows, ever since 
the statutory spending caps were first enacted in 1990 to rein in 
runaway discretionary spending, Congress has used the ``emergency'' 
loophole to get around them.
  Mr. President, we have to stop these gimmicks! It's game playing! 
It's smoke and mirrors! And our constituents know it and they want us 
to put an end to it.
  It's high time we start to give serious consideration to a two year 
budget cycle like many states have, including Ohio. It doesn't make 
sense that we go through this budget exercise each year; a process that 
just exhausts this body and prevents us from being able to work towards 
down-sizing government and lowering our expenses.
  If we had 2-year budgets, we could spend some time on the oversight 
that this body has a responsibility to be doing.
  Until then, if something is truly an emergency, then Congress should 
be more than willing to come up with the money to pay for it. Only in 
times of war or severe economic crisis should we even be talking about 
dipping into Social Security. As I have said before, Social Security is 
the Nation's pension fund, and no responsible citizen would tap into 
their retirement fund unless it was an absolute last resort--and they 
would certainly look to pay it back. Congress must act accordingly.
  Mr. President, all of us in Congress should take the equivalent of a 
blood oath that we are not going to touch Social Security. Period. It 
would be the most important thing we could possibly do to bring fiscal 
accountability to this country because we've been using the social 
security trust funds and public borrowing to fund tax reductions and 
spending for the last 30 years and in that same period of time, we've 
seen our national debt increase over 1,300 percent.
  Think of that--1,300 percent.
  We have to remember that there is no such thing as a free lunch, but 
there are such things as hard choices. That is what we should be 
about--making the hard choices.
  I know that first hand because as Governor, I have been there; I had 
to make the $750 million in spending cuts, but because of the fiscally 
responsible choices we made, we had the lowest growth in 30 years and 
had 17% fewer employees--excluding prison workers.
  In addition, we ultimately gave Ohio a general revenue rainy day fund 
of over $935 million--after it had been depleted to 14 cents.
  Think of that. It was at 14 cents--a Medicaid rainy day fund of $100 
million and real tax cuts. I am talking about real tax cuts for the 
last 3 years, including last year for all Ohioans who had an across-
the-board reduction in their State income tax of almost 10 percent.
  That is why I came to Washington--to try and bring fiscal 
responsibility to our nation and this Congress so that my children and 
my grandchildren as well as all children and grandchildren are not 
saddled with the cost of those things that my generation did not want 
to pay for, and guarantee our covenant to the American people in regard 
to Social Security and Medicare.
  I would like to remind my colleagues that with each passing day, 
we're paying $600 million in interest payments just to service the 
national debt--a national debt that is $5.6 trillion.
  Most Americans do not realize that 14 percent of their tax dollar 
goes to pay off the interest on the debt. Fifteen percent goes for 
national defense. Seventeen percent goes to non-defense

[[Page 21629]]

discretionary spending. And 54 percent goes for entitlement spending.
  So how much is our interest payment in comparison to other federal 
spending? It is more than we spend on Medicare. It's five times more 
than the federal dollars we spend on education. And it's 15 times more 
than we spend on medical research at NIH.
  If we are fortunate enough that the projections of an on-budget 
surplus actually occurs--I would like to see that --the best possible 
course of action that we could take is to use those funds and pay down 
the debt. With debt reduction you get lower interest rates, a continued 
strong economy and lower government interest costs.
  Indeed, as Federal Reserve Chairman Greenspan testified before the 
House Ways and Means Committee ``(T)he advantages that I perceive that 
would accrue to this economy from a significant decline in the 
outstanding debt to the public and its virtuous cycle on the total 
budget process is a value which I think far exceeds anything else we 
could do with the money.''
  Mr. President, we must avoid using Social Security to meet our 
financial obligations. Instead, we should greet the millennium with a 
promise to our citizens that we will engage in truth-in-budgeting, not 
use gimmicks and re-order our spending to reflect our national 
priorities.
  Mr. President, I believe that a statement I made in my 1991 Inaugural 
Address as Governor of Ohio is relevant today:

       Gone are the days when public officials are measured by how 
     much they spend on a problem. The new realities dictate that 
     public officials are now judged on whether they can work 
     harder and smarter, and do more with less.

  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. Mr. President, I commend my good friend and colleague, 
Senator Voinovich from Ohio, who I think has brought to the attention 
of this body in a timely manner a very appropriate and important issue; 
that is, the realization that the President is going to reject any 
proposal for a tax cut--and bring to the attention of this body the 
realization that, indeed, that accumulated debt of $5.6 trillion, which 
the Senator from Ohio referred to, is costing us interest.
  As the Senator from Ohio is well aware, I was in the banking business 
for about 25 years. People do not recognize the carrying charge. I 
think the figure that was used was $600 million per day.
  Interest is like the old saying of having a horse that eats while you 
sleep. It is ongoing. It doesn't take Saturdays or Sundays off.
  If one considers the significance of, I think the figure was 14 cents 
out of every dollar going for interest, one can quickly comprehend what 
we could do if we were free of that heavy obligation.
  I commend the Senator for bringing this matter to the attention of 
this body and assure him of my eagerness to work with him to bring 
about and resolve in a responsible manner a program to address the 
accumulated debt.
  As he has pointed out, there is an awful lot of procedure around here 
relative to the bookkeeping method of the Federal Government, which few 
people understand.
  Nevertheless, there is a harsh reality that we have a hard debt of 
$5.6 billion. We have an opportunity now with the Social Security 
surplus to address that debt. I agree with the Senator and his efforts 
to try to bring a consensus on this issue. I commend him highly. Let me 
assure the Senator of my willingness to work in that regard.
  (The remarks of Mr. Murkowski pertaining to the introduction of S. 
1591 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')

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