[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[Senate]
[Pages 6858-6871]
[From the U.S. Government Publishing Office, www.gpo.gov]




  GUIDANCE FOR THE DESIGNATION OF EMERGENCIES AS A PART OF THE BUDGET 
                                PROCESS

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
proceed to the consideration of S. 557, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 557) to provide guidance for the designation of 
     emergencies as part of the budget process.


[[Page 6859]]


  The Senate proceeded to consider the bill.
  The PRESIDING OFFICER. The majority leader.


                           Amendment No. 254

  Mr. LOTT. Mr. President, on behalf of Senator Abraham, Senator 
Domenici, and others, I send an amendment to the pending budget bill to 
the desk and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Mississippi [Mr. Lott], for Mr. Abraham, 
     for himself, and Mr. Domenici, proposes an amendment numbered 
     254.

  Mr. LOTT. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. LOTT. I believe Senator Abraham is ready now.
  The PRESIDING OFFICER. The Senator from Michigan.


                 Amendment No. 255 To Amendment No. 254

  Mr. ABRAHAM. Mr. President, I send a second-degree amendment to the 
pending amendment to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Michigan [Mr. Abraham], for himself, Mr. 
     Domenici, Mr. Ashcroft, Mr. Lott, Mr. Nickles, Mr. McCain, 
     Mr. Frist, Mr. Crapo, Ms. Collins and Mr. Grams, proposes an 
     amendment numbered 255 to amendment No. 254.

  Mr. ABRAHAM. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. LOTT. Mr. President, I believe Senator Lautenberg or perhaps 
other Senators will be here momentarily and will wish to comment on 
this subject--perhaps even the Senator from South Carolina. I know 
Senator Abraham is prepared to begin the discussion.
  For years we have talked about how we can set aside Social Security 
to come up with a process so Social Security cannot be used to make the 
deficit look better or be spent for other programs or, for that matter, 
for tax cuts. A lot of thought has been given to this. Efforts have 
been made by Senators on both sides of the aisle. I think what we have 
this time is real. It will keep this money from being spent, without a 
supermajority vote in the Senate, for other than defense. It is a clear 
step in the right direction.
  We need to be able to say to the American people that not one cent of 
Social Security is going to be able to be spent on anything but Social 
Security. This lockbox will make it a lot more difficult, although 
under emergency circumstances obviously that could still be pierced. 
The key, though, is to lock this money up, make sure it is not 
frittered away, and then see if we can come up with genuine long-term 
Social Security reform so this money can be used for that. If it is 
not, it will still be used, available to reduce the debt, and, over a 
period of years, that itself will be a significant benefit to the 
country, to the economy, to our seniors, and to the Social Security 
program.
  So I commend Senator Abraham for his persistence on this issue, and I 
think the best thing for us to do at this point is to get into a 
discussion about what we are trying to do here and see if we can get 
this process through. This is a change in the law; this is not just a 
budget process change. This is something the Senate would have to act 
on, the House would have to act on, and we would have to send it to the 
President.
  So I think it is time, and appropriate, now, that we have this 
discussion about the future of Social Security.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, I thank the majority leader for giving us 
an opportunity to begin this debate. I realize we have a number of 
Members on various sides of this issue with different ideas. I think if 
we have a discussion here, perhaps we can identify some of the concerns 
and address them. I hope we can because I think this is a topic that 
needs to have our full attention.
  Let me begin by saying I have just submitted an amendment here on 
behalf of myself as well as Senators Domenici, Ashcroft, Lott, Nickles, 
McCain, Frist, Crapo, Collins, and Grams. The amendment is the Social 
Security Preservation and Debt Reduction Act. It implements a sense-of-
the-Senate resolution which we approved as part of the budget 
resolution just before our Easter recess.
  As you know, that sense-of-the-Senate resolution passed this Chamber 
on March 24 by a vote of 99 to zero. It said simply that we ought to 
truly protect Social Security by seeing to it that moneys in the Social 
Security trust fund are only used to fix Social Security or to pay down 
the public debt, and for no other purpose.
  We all agree that saving Social Security is our No. 1 priority in 
this Congress. That has been a discussion that virtually every Member 
at one time or another has been part of. The President, in both his 
1998 and his 1999 State of the Union Addresses, said we should save 
every penny of the Social Security surplus. In this year's Address, he 
said we should use it to reduce the Federal debt so as to ensure it 
will not be squandered on other spending programs.
  I agree with that. So do my cosponsors. Therefore, it is our hope, 
through this amendment we are offering today, to put into effect that 
which so many people, including the President, have sought to 
accomplish. If enacted into law, this amendment would save every penny 
of the Social Security surplus either to fix Social Security or to 
reduce the public debt.
  Using hundreds of billions of dollars from the Social Security trust 
fund for new spending will not save Social Security. Indeed, the 
Congressional Budget Office now estimates that the President's own 
budget, the one he submitted to us in February, spends $158 billion of 
the Social Security surplus, 20 percent of the surplus that will be 
generated over the next 5 years. Fortunately, as you know, the Senate 
charted a different course. Through our sense-of-the-Senate resolution, 
99 Senators stated our intention to lock up the Social Security trust 
fund to protect those dollars from being spent on other Government 
programs.
  Let me recount what this resolution, which we passed as part of the 
budget, provided.
  First, it provided we would place Social Security truly and fully off 
budget.
  Second, we pledged to create a subcategory of the current gross 
Federal debt limit; namely, debt held by the public.
  Third, we pledged to mandate the reduction of that publicly held debt 
level by an amount equal to the Social Security trust fund surplus.
  In addition, the limits could be adjusted one time to accommodate 
substantive Social Security reform. In other words, unless we were 
using the Social Security trust fund surplus to fix Social Security, 
reform to modernize the Social Security system, then it would be used 
to reduce the current levels of Publicly held debt.
  The amendment I am offering would implement those pledges. So let me 
briefly run down its provisions.
  The Social Security Surplus Preservation and Debt Reduction Act 
reaffirms that Social Security is off budget. That means its assets 
should not be counted for purposes of the budget submitted by the 
President or the Congressional Budget Resolution. The legislation 
establishes a simple majority point of order against any budget that 
does not count Social Security moneys. This amendment also codifies the 
budget resolution language to establish a 60-vote Senate point of order 
against any budget resolution, budget amendment, or budget conference 
report that runs a deficit unless that deficit results solely from 
Social Security reform legislation.
  Of critical importance is the amendment's provision establishing in 
law a

[[Page 6860]]

declining limit on the amount of debt that could be held by the public. 
This limit would be reduced in the year 2000, in the year 2001, and at 
2-year intervals thereafter through the year 2009, by an amount equal 
to the entire Social Security trust fund surplus for each corresponding 
time period. The amount would be measured as CBO's current annual 
projections of the Social Security surplus for these same years.
  The 60-vote point of order would lie against any resolution or bill 
that would exceed the publicly held debt limits. In other words, we 
could not expand the publicly held debt unless we had 60 Members of 
this Chamber who would make such a decision.
  However, these limits would be automatically adjusted for the cost of 
Social Security reform, as I have mentioned, and/or for any changes in 
the actual or projected Social Security trust fund surpluses.
  Clearly, we are trying to read out the long period of time through 
this legislation, a 10-year period. So if, as we move through that 
period, the size of the Social Security trust fund surplus were to be 
readjusted or projected differently, then the legislation we are 
offering right now would provide the mechanism for making adjustments 
in that reduction of the publicly held debt accordingly.
  A number of additional provisions would protect Social Security 
recipients from unforeseen events. First, specific language in the 
amendment states that the Secretary of the Treasury shall give priority 
to the payment of Social Security benefits required to be paid by law. 
This amendment guarantees that Social Security benefits will have the 
highest priority on all Federal moneys. We institute a concrete 
guarantee to seniors, and to those who one day will be seniors, that 
their benefits are truly backed up by the full faith and credit of the 
Government of the United States.
  In addition, Mr. President, this amendment includes a provision that 
would set aside the public debt reductions in the case of recession. 
Whenever the Commerce Department reports two consecutive quarters of 
less than 1 percent growth, the limits would be set aside until there 
is one full quarter of more than 1 percent real growth. Once 
reestablished, the limit would restart 6 months later at the level of 
public debt held at the time of the recession's ending and then step 
back down at the rate projected by the newly determined Social Security 
surpluses.
  Finally, this amendment includes an exception for emergencies such as 
the current crisis in Kosovo.
  On March 17 of this year, Treasury Secretary Rubin sent a letter 
expressing several concerns about this approach. First, let me say that 
I was somewhat disappointed when he did so and surprised that he would 
raise the concerns about a bill that had not yet been written, let 
alone introduced. I appreciate the way Washington public policy debates 
work, Mr. President, and I understand the Secretary of the Treasury 
wanted to, at a very early stage, express concerns. What we have tried 
to do is respond to those concerns in such a fashion, I hope, that the 
way we have crafted the amendment will satisfy some of the issues 
raised in his correspondence. Let me talk about a few of those 
considerations at this time.
  First, Secretary Rubin in his letter commented that fiscal restraint 
is best exercised through the tools of the budget process; debt limits 
should not be used as an additional means of imposing restraint. But 
the last 2 years have clearly shown that current budget rules are 
inadequate to curb Washington's spending habits.
  Last year, the President threatened to shut down the Government 
unless we spent $21 billion of the Social Security surplus through 
various so-called ``emergency'' spending declarations. There was a lot 
of debate as to whether or not some of those provisions truly were 
appropriately described as emergencies. This year, as I noted, the 
President proposed spending $158 billion of the Social Security surplus 
on new spending programs over the next 5 years.
  The budget rules, therefore, I do not believe are protecting the 
Social Security surplus, and it is not just the President who has 
proposed ideas and ways by which these Social Security surplus dollars 
can be spent. Members of Congress, on both sides of the aisle, have a 
lot of spending ideas, as we have heard.
  In my judgment, the current budget rules do not protect these Social 
Security surplus dollars adequately. They are not designed for that 
purpose. Therefore, in my judgment, only by locking away the Social 
Security surplus and guaranteeing that the spenders cannot get ahold of 
it will we be able to protect those surplus dollars.
  The fact of the matter is, if there is money available, people will 
find a way to spend it under the current rules. I think that is very 
simple and clear, and I think we should take additional steps to 
address it. I do not think we can count, as the Secretary has 
indicated, on the existing rules to suffice.
  Next, Secretary Rubin has raised the specter of default saying:

       Even the appearance of a risk that the United States of 
     America might not meet its obligations because of the absence 
     of necessary debt authority would impose significant 
     additional costs on American taxpayers.

  Mr. President, we should keep in mind that we currently have a debt 
ceiling of $5.95 trillion. We live within a debt ceiling. We are not 
talking about creating something out of whole cloth here, a limit on 
the amount of indebtedness the American Government can assume. That is 
the law, and the Treasury cannot issue more debt than that.
  Further, current gross Federal debt is about $5.48 trillion. It is 
not at the moment projected to rise significantly over the next 10 
years. There is no specter of failure to meet our obligations here.
  I will note, however, that the CBO estimated that the President's 
proposals in his budget would raise gross Federal debt to almost $8.4 
trillion, almost $3.5 trillion over the current debt limit, exceeding 
the current debt limit by nearly 40 percent. Therefore, using the 
Secretary's logic, the President's budget will place us in immediate 
jeopardy of default because it will exceed the debt limits that we 
already have in place.
  Our proposal, on the other hand, simply creates a sublimit of our 
current debt limit, one for debt held by the public. It does nothing to 
limit our ability to meet our obligations.
  Nonetheless, we have tried to take Secretary Rubin's concerns 
seriously. What we have done to try to address those concerns--and I 
will elaborate on this a little bit further at a later point in these 
remarks--we have delayed the implementation of each year's new debt 
limit by 7 months to ensure that they become effective when the 
Treasury is most flush with cash. This will establish a buffer that is 
more than sufficient, in our judgment, to cover Treasury's short-term 
cash management needs, even during seasons of the year when cash 
deficits have historically appeared.
  Third, Secretary Rubin has expressed concern that the publicly held 
debt limits ``could easily be inadequate for the Government to meet its 
obligations at a given point during the year. If the Treasury could not 
borrow or raise, it is possible that it could simply stop honoring any 
payment.'' And he even went on to say Social Security payments.
  What he means by that, and it is related to the earlier point that I 
just addressed, is the fact that the revenue stream to the Government 
does not always coincide with the outflow of money during particular 
points in the year. That is why, as I have mentioned, we have altered 
our original proposal to move the date at which these publicly held 
debt ceiling changes would occur to a point--May 1--at which time, 
based on the past 10 years, the Government has been most flush, has had 
the largest inflow of money--obviously, it corresponds to some extent 
to tax payment day and other factors--for the exact purpose of making 
sure the changes would occur at a point when the Treasury would have 
the most cash on hand and the greatest flexibility with respect to any 
obligations, it would seem to me.

[[Page 6861]]

  In addition, we have placed into this amendment a legal declaration 
that Social Security payments required by law have priority claims on 
the U.S. Treasury. In other words, we try to do two things here that I 
think address all of the concerns raised by Secretary Rubin.
  First, we have changed the effective date as to when the debt limits 
would be changed to meet the maximum point of revenue stream to the 
Government, thus giving him and his successors total flexibility with 
respect to meeting obligations, and the guaranteed Social Security 
benefit checks will be paid by ensuring in the language of the 
amendment that they would receive top priority of expenditures.
  In addition, we have responded to the Secretary's concern about 
short-term cash management swings, as I say, with a 7-month delay of 
implementation of the debt limits.
  We are open to other ideas, but we are trying to be responsive to 
those concerns that have been raised. That is our hope here, to try to 
address anything that might serve as an impediment to anyone concerning 
the support of this vitally needed legislation.
  In addition, Secretary Rubin has worried that the proposed debt 
limits could run the risk of worsening an economic downturn. We take 
that to mean concerns that if a recession were occurring, we would be 
in a difficult position to adequately address it. Once again, we have 
taken into account those concerns, and we have placed in our amendment 
language, as I mentioned earlier, that would suspend the debt limits 
during times of recession and reinstate them only after we have 
recovered from such recession at the newly adjusted publicly held debt 
levels.
  Finally, the Secretary expressed concern that the lockbox does not 
allow for emergencies. Let me first observe that this administration's 
use of the term ``emergency'' has been somewhat variable, and it would 
certainly be the view of this Senator, and I know others, that it has 
been used to characterize a number of expenditures that are hard 
pressed to be included under that definition, at least as I see it. We 
spent $21 billion of the Social Security surplus on an emergency 
package at the end of the last Congress that certainly had provisions 
which did not, in my judgment, meet the normal definition of that term.
  However, considering that we now have a 60-vote point of order 
against any nondefense emergency spending provisions as part of the 
budget resolution that we passed, we have placed in this amendment 
language to automatically adjust upwards the publicly held debt limits 
for any emergency spending provisions. Thus, we once again address the 
concern that was raised.
  Mr. President, I believe this meets, therefore, every one of the 
serious concerns expressed by the Treasury Secretary, while at the same 
time still meeting the central goal of protecting and preserving the 
Social Security trust fund surpluses. It successfully addresses the No. 
1 issue of this Congress: Saving and strengthening Social Security.
  While it may not constitute the long-term reform proposals that I 
know will be further debated as the Congress moves ahead, it protects 
the surpluses of the trust fund so they can be employed to make sure 
that we modernize the Social Security system in a way that not only 
guarantees today's beneficiaries are able to receive what they are 
entitled to, but also the future beneficiaries will as well. We owe it 
to those who have reached retirement age, as well as those who will one 
day join them, to do this.
  As recent events have shown, the only way to do that is to take 
Social Security finally and fully off budget, because so long as Social 
Security trust fund surpluses can be accessed by spending priorities, 
they will be spent. In my judgment, it is that simple. It is simply too 
easy to point to good ideas and good programs and arguments of things 
that can be done with large amounts of the American people's money, too 
easy to see the benefits of Federal spending without looking at the 
cost to our financial stability and to those who depend on a sound 
Social Security system.
  In my opinion, we must, in order to meet our obligations to the 
American people, see to it that every penny of the Social Security 
trust fund surplus is preserved for Social Security. And the only way 
to do that is to lock up those funds by using them to pay down the 
public debt. I think it is the right thing to do.
  President Clinton himself has endorsed the idea at the root of this 
amendment. This Chamber recently voted unanimously for a resolution 
calling for legislation of this sort. So I hope we can get together, as 
colleagues, to take what would be the final step--this amendment--to 
place Social Security surpluses above the risks that they will be 
squandered and secure them for generations to come.
  Mr. President, I am pleased, on behalf of a variety of colleagues, to 
offer this amendment. We look forward to the discussion. I hope that it 
can encompass not just a discussion of this proposal as offered, but if 
Members have ideas with respect to the lockbox, I hope they will share 
them with us, because I think protecting the Social Security surplus 
dollars is something that we have an obligation to achieve in this 
Congress.
  Mr. President, I yield the floor.
  Mr. LAUTENBERG. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. ASHCROFT. 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. ASHCROFT. Mr. President, I am honored to cosponsor the Abraham-
Domenici Social Security surplus preservation amendment. This amendment 
will protect Social Security for millions of Americans who now receive 
its benefits and who now pay taxes hoping that they someday, too, will 
receive Social Security.
  I believe protecting Social Security is the highest priority we could 
have in the Congress. Protecting Social Security means we must make 
sure the current surpluses that will be needed to pay benefits later 
are not used to pay for new budget deficits in the rest of government. 
That is what this bill does. It is why I am for it, and it is why I 
urge swift passage of this legislation.
  The legislation we are debating today logically follows and, in fact 
implements, previous policy decisions that have been made by this 
Congress. Let's review a sense-of-the-Senate resolution that the Senate 
passed by an overwhelming 99-to-0 vote just 2 weeks ago. That 
resolution made these points:
  No. 1, Congress and the President should balance the budget excluding 
surpluses generated by the Social Security trust funds.
  No. 2, reducing the Federal debt held by the public is a top national 
priority.
  No. 3, the surpluses now held in the Social Security trust fund will 
reduce the debt held by the public by $1.7 trillion.
  The nonpartisan Congressional Budget Office estimates that President 
Clinton's budget would spend $158 billion of Social Security surpluses 
on new spending programs over the next 5 years. That is the nonpartisan 
Congressional Budget Office. It simply says that the President's plan 
for spending is to use the Social Security surplus to go out and spend 
$158 billion which would not otherwise be spent over the next 5 years.
  Social Security surpluses should be used for retirement security, for 
payment of current benefits, or to reduce the debt, and should not be 
used for other purposes.
  These mandates should be implemented in two ways:
  First, by providing for a Senate supermajority point of order against 
any bill or resolution that would use Social Security surpluses on 
anything other than the payment of Social Security benefits.
  Second, by establishing a supermajority point of order in the Senate 
against raising the limits established on the level of debt held by the 
public. This resolution passed the Senate 99 to nothing. It passed 
unanimously. Not

[[Page 6862]]

only did it pass unanimously, there was no dissenting debate.
  The conference report on the budget resolution which we passed last 
week took the first steps necessary to protect Social Security by 
balancing the budget without using the Social Security surpluses, and 
it established for the next 2 years a point of order against budget 
resolutions that use Social Security surpluses to balance the budget.
  Mr. President, I believe that is what we need to do. We need to 
basically say that it is out of order to go back and take Social 
Security surpluses to cover deficits in other parts of government.
  The amendment we have before us implements the sense-of-the-Senate 
resolution. It simply takes what we did 2 weeks ago and makes permanent 
the Social Security protection measures that were included in the 
conference report. Specifically, this amendment accomplishes the 
following:
  No. 1, this amendment creates a 60-vote point of order against future 
budget resolutions that use Social Security surpluses to balance the 
budget. This provision makes the temporary point of order included in 
the conference report permanent, and it is made a part of the law, not 
just part of the Senate and House rules on the budget. We simply would 
be able to say that it is out of order, it requires a supermajority 
setting aside or suspending the rules in order to devote the Social 
Security surplus to covering deficits in other parts of the operations 
of government.
  This provision is identical to legislation I introduced earlier this 
year to protect Social Security. This amendment lowers the amount of 
debt held by the public by amounts roughly equal to the Social Security 
surpluses. So as you have a Social Security surplus, instead of 
spending it on new government, you use it to lower the amount of debt 
held against this country.
  The effect of this provision is twofold: It helps ensure that the 
Social Security trust funds are not used to pay for aggressive spending 
programs or for tax cuts; and, secondly, it reduces overall Federal 
debt. By reducing debt, this amendment will strengthen our economy, 
strengthen Social Security, and our capacity to meet our obligations to 
it in the future.
  Reducing the public debt makes it easier for America to meet its 
Social Security obligations in three ways. I think Speaker Hastert was 
most eloquent about this. He said if you ever came into a surplus in 
your own life--maybe a rich uncle died, left you $50, $60,000--and you 
either could spend it on a bunch of new spending or pay down the 
mortgage on your house, which would help you meet the challenges of the 
future better? It is pretty clear, not going to Las Vegas and taking a 
lot of vacations but paying down your debt, paying down your mortgage, 
would be the best thing.
  Over the long run, paying off the debt will lower interest payments, 
which are now over $200 billion annually. They equal about 15 percent 
of our budget now.
  No. 2, they would ease the burden of the $3.8 trillion national debt, 
which would free up more resources to help us meet Social Security 
obligations in the future. Of course, No. 3, a debt-free America will 
have a stronger, faster-growing economy and will be better equipped to 
come up with the money to redeem the trust fund's IOUs when needed.
  We cannot afford not to pay off the Federal debt. Federal debt incurs 
very real costs in the form of interest payments and higher interest 
rates. Under President Clinton's proposed budget, $158 billion from the 
fiscal year 2000 to fiscal year 2004 budget would be diverted from debt 
reduction and directed towards spending. According to the Senate Budget 
Committee, that represents 21 percent of the Social Security surplus 
over that period. In fiscal year 2000 itself, it represents $40 
billion, or 30 percent of the surplus.
  In contrast, our amendment would require us to reserve every penny, 
all of the Social Security surplus, for debt reduction. Under this 
plan, publicly held debt, which now stands at 44.3 percent of GDP, 
would be reduced to 10.3 percent of GDP by the year 2009. That is a 70-
percent reduction over just 10 years.
  Once this amendment is adopted, the President and Congress will no 
longer raid Social Security surpluses to pay for non-Social Security 
spending. This amendment would, therefore, protect Social Security at 
the beginning and at the end of the budget process. At the front end, 
Congress could no longer pass budgets that use Social Security 
surpluses. At the back end, the ratcheting down of the debt ceiling 
would ensure that Social Security surpluses go to debt reduction, 
thereby helping to keep our financial house in order. A strong 
financial house for the United States of America is fundamentally the 
best guarantee we can ever have that Social Security will be a house of 
integrity itself.
  One of the most important lessons a parent teaches a child is to be 
responsible, responsible for his or her conduct and responsible for his 
or her money. America needs to be responsible with the people's money. 
The debt reduction proposed by this amendment is among the greatest 
gifts we can give to our children, and it is a great gift for our 
seniors. Imagine what our children could do if we were able to provide 
for them a next generation that is free, free to build their own dreams 
instead of pay for our past.
  In addition to protecting our children from debt, this amendment will 
also protect the Social Security system from irresponsible government 
spending.
  I urge my colleagues to join me in support of this amendment, and I 
thank the Chair for this time on the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I thank the Senators who have taken the 
floor and spoken on behalf of this lockbox amendment.
  I have worked for many years with a number of Senators, some of whom 
are on the floor--some on the other side, like Senator Hollings--in an 
effort to see what we could do to make it as difficult as humanly 
possible to spend Social Security trust fund money for other kinds of 
expenditures of the Federal Government, be it programs, or be it tax 
cuts.
  Frankly, I have heard it said on a number of occasions that the 
things we tried to do heretofore were all process and didn't get the 
job done. I don't want to take credit for doing something 
extraordinary. But I will say this idea of tying the Social Security 
trust fund to the debt held by the public over a 10-year period, and 
limiting the amount of debt that can occur in each of those years for a 
decade, which essentially is the current debt minus the amount of 
Social Security trust fund subtracted each year from that debt--what is 
left over, that residual is the debt held by the public. But I did, at 
a committee hearing, for some reason come up with the idea that maybe 
that is what we ought to do--tie it to a debt limit.
  There will be plenty of people who will take the floor and say this 
is too rigid, this is too tough, this puts too big a shackle around the 
Government of the United States.
  Let me tell you honestly. If you want to tell the seniors of America 
we don't want to spend your Social Security money for programs, or tax 
cuts, or anything other than when we need it for you, we will use it 
for you, then you ought to really be serious about it. You ought to say 
that is what we are trying to do.
  Obviously this is the first time that the rhetoric and the 
contentions by Senators from both sides of the aisle that we ought to 
not spend Social Security money has been reduced to a statute that, if 
it passes and is signed by the President, will govern for 10 years, 
whether or not the United States can easily use trust fund money from 
Social Security for other causes, other reasons, as just as they may 
be. It will become very difficult when this legislation becomes law for 
us to ever again in a wholesale, willy-nilly manner spend Social 
Security trust fund money. In fact, every time you exceed that debt 
limit, and even if you have 60

[[Page 6863]]

votes, you are going to have to tell the American people we are 
exceeding it; we have 60 votes now. It is something very important, and 
people are going to be able to look and see. Was it something very, 
very important, or are we back to business as usual?
  That is the essence of this proposal.
  When I was saying we talk a lot about it, let me say on the debate on 
the budget resolution on the floor of this Senate--and the occupant of 
the Chair helped, because he voted the right way, but on this vote it 
was an easy vote because 99 Senators voted for it, as I recall. There 
was a sense-of-the-Senate resolution, kind of the precursor to this 
bill that was adopted by the Senate. It was an Abraham-Domenici and 
others sense-of-the-Senate resolution.
  It did the following things:
  One, it reaffirmed the Omnibus Budget Reconciliation Act of 1990 that 
Social Security trust funds are off budget.
  Second, it provides a Senate point of order against any budget 
resolution that violates that section of the Omnibus Budget 
Reconciliation Act.
  Third, it mandates that Social Security surpluses are used only for 
Social Security, or reducing the public debt.
  Fourth, it provides for a Senate supermajority vote on a point of 
order against any measure that would use Social Security surpluses for 
anything other than the payment of Social Security benefits, Social 
Security reform, or the reduction of the debt held by the public.
  Fifth, it ensures that all Social Security benefits are paid on time.
  Last, it accommodates Social Security reform legislation. That was 
passed 99-0.
  Mr. President, what happened was we attempted in that sense-of-the-
Senate resolution to encapsulate what this legislation that is before 
us today did. It said that it is the sense of the Senate that we should 
adopt a bill that does all of these things. Now we have that bill 
before us.
  So those who would now want to either unduly delay this vote, or say 
we should not do it, or vote against it, no, it is not so easy to 
explain that they just less than 10 days ago voted--2 weeks ago and a 
few days--voted 99-0 to adopt legislation just like this.
  I understand that there can be a lot of explaining between the 
language and the statute--the language in this lockbox legislation.
  Right off, I want to mention one thing. There are a number of 
Senators--I am hoping it is a minimum--within the next couple of days 
who are going to cite the fact that our distinguished Secretary of the 
Treasury, Mr. Rubin, said some legislation that he had seen that was 
the Domenici legislation on the lockbox wouldn't work mechanically, 
that part of the year you don't get in a real strong flow of income 
tax, and later on you get in a big flow of income tax, and that maybe 
you would not be able to control the expenditures and the need for cash 
during those early days if in fact you had a very rigid year-long debt 
limit.
  We have done the best we can. We are open to suggestions to adjust to 
that need for flexibility without altering the ultimate dollar number 
that will be the debt held by the public.
  Again, rather than use it to destroy this legislation, which it 
should not do--I read the letter, and we can fix the concerns of the 
Secretary--if that is all the concerns the administration has, if that 
is all of them, we already fixed most of them right here. But if it is 
not quite right, we welcome the legislative liaison from the Treasury 
or the White House to come and tell Mr. Rubin to tell us how to fix it 
better, just as long as it is understood that we don't want somebody 
from the administration saying that what we are really telling you is 
too tough, it is too rigid, it holds your feet to the fire too much, we 
ought to have more flexibility in terms of why and for what purpose we 
should use this Social Security surplus. If that is the reason the 
legislation is bad, we want to suggest that we are at opposite ends of 
the polls; for that is the reason we think it is good, because it is 
very tough.
  If you are going to throw away much of the Social Security funds in 
the next decade instead of applying it to the debt of $1.8 trillion, it 
is not going to be easy, which means that Government is going to be 
pretty much tied to a reasonable budget that does not spend the Social 
Security budget surplus over time over this decade.
  For those who say, well, you know, there will be no money for this or 
that or the other, maybe there won't, but maybe there will be because 
we are not saying that surpluses that are not Social Security surpluses 
are subject to any kind of restriction. They are subject to what 
Congress wants to do and what a President recommends.
  So if there are surpluses that do not belong to them--and there is a 
very large chunk of surplus now that doesn't belong to Social 
Security--we are not trying to limit that. We Republicans think most of 
that should go back to the public in tax cuts, but that is a year-long 
battle with the President and others. That is not Social Security 
money.
  Mr. President, that same sense-of-the-Senate language that I told you 
about that was adopted in the budget resolution in its final form, 
after it got 99 votes freestanding, it was adopted by a vote of 54-44 
when the budget resolution was adopted.
  When 99 people vote and tell the Senate what we should do, and then 
we do it, it would seem to me that it ought to be a rather simple 
proposition that we ought to do it, tell the public we meant what we 
said, and get on with making sure we find other ways to take care of 
our governmental needs, but not the Social Security trust fund for the 
next decade.
  Unless the Senate and the sense-of-the-Senate resolution was 
meaningless, this statute should get rather broad-based support, it 
seems to this Senator.
  Let me speak from the standpoint of what could be better for America 
than us doing this. I can think of hardly anything that could be better 
for America, not just for the seniors, better for America. Mr. 
President, $1.8 trillion during the next decade, and I truly believe 
that if this statute is adopted it will be perilously close to $1.8 
trillion, that will be cut from the national debt.
  That is an incredible number. Senator Ashcroft just told us how big 
it is, in terms of percentage of our gross national product. But $1.8 
trillion of public debt during this decade will be wiped clean and 
there will be no public debt against that $1.8 trillion because the 
surplus of Social Security money will be there, only to be used for 
major reform for Social Security if, in fact, that occurs during this 
decade.
  Why is that good? If you asked almost every rational, reasonable, 
mainstream American economist from Alan Greenspan to that long list 
that said the President was doing good things in reducing the debt, you 
ask them if reducing the debt by $1.8 trillion is not a very positive 
thing for our economy and they will all say: The best thing to use 
surplus for is debt reduction. Because that means we borrow less. In a 
very interesting way it means we save more, because if you were to 
spend it, you would have to be borrowing to take its place. And if you 
do not borrow, you are saving. Since we individually save little, it is 
very good, starting into the new millennium and the first few years, 
that we have a low debt with low borrowing which may very well keep the 
American economy moving ahead, strong, powerful, with lower interest 
rates.
  What could be better for America? Nothing. What could be better for 
seniors? Nothing--other than a reformed Social Security program that 
was in existence for 75 years with no problems. And, frankly, an 
appropriate plan might use this surplus in transition for that and we 
might get that out of this also.
  Why else is it good for seniors? Did anybody hear the President go to 
the Rose Garden when he got a statement from the trustees of Social 
Security and Medicare the other day and announce to America that things 
were looking better for Medicare and Social Security? I believe there 
was an announcement that we added 8 years to the longevity of the trust 
fund for Medicare. And we did not do a thing.

[[Page 6864]]

We just continued to have a prospering American economy. So one can say 
seniors should want a prospering American economy more than anyone else 
in this society, because a prospering American economy, with high 
employment and low unemployment, is the best medicine for the Social 
Security trust fund and Medicare trust fund of anything, any set of 
activities we could do as American people, as business people, and as 
American taxpayers and workers, producing goods and services in this 
very vibrant and powerful economy.
  So, when you look at that, this may just be, in some people's minds, 
some small approach to making the case that we are trying to save 
Social Security trust fund money from being spent arbitrarily for 
things that are not Social Security. It is more than that. It is a 
combination of things that I just described, including the very 
positive result of greatly reducing the national debt while we wait to 
see what is needed for Social Security reform; a very, very positive 
piece of legislation.
  It is important to allow the Federal Government maximum flexibility 
in times of low growth or recession. The Federal budget is one of the 
most important economic policy tools we have. In fact, we have 
procedures in place which allow us to suspend our budgetary enforcement 
rules during such times.
  This legislation contains a low-growth, recession trigger as well. If 
the Department of Commerce reports two consecutive quarters of real 
economic growth of less than 1 percent, the limit of debt held by the 
public is suspended. The current law statutory debt limit would still 
be in place.
  The limit on debt held by the public is suspended until the Commerce 
Department issues a final GDP report indicating that the level of real 
GDP has risen back to its level prior to the low growth or recession 
period. The limit on debt held by the public is restored at its actual 
level (at the time the Commerce Department report is issued that de-
triggers the suspension.)
  The limit on debt held by the public then begins to decline at the 
same rate that it would have had the suspension not been triggered.
  Mr. President, the Act is effective for 10 years and then sunsets. 
This is the same time period covered by the recently adopted concurrent 
resolution on the budget for fiscal year 2000--H. Con. Res. 68. It is a 
period of time in which the Social Security trust fund balances are 
expected to grow by nearly $1.8 trillion. These balances would retire 
debt held by the public which would help prepare the country for the 
retirement of the baby boom generation early in the next century. It 
reaffirms off-budget treatment of the social security program.
  The act reaffirms current law that the receipts and disbursements of 
the Social Security trust funds shall not be counted for the purposes 
of the Federal budget submitted to Congress by the President or any 
congressional budget.
  The act creates a new Budget Act point of order against Congress 
adopting a budget that uses social security surpluses to achieve 
balance, and requires the President to submit a budget that does the 
same. It uses the Social Security surplus to reduce the debt held by 
the public. The act establishes a new enforceable limit on the amount 
of debt held by the public over the period from 2000 to 2010. These 
debt limits specified in the act are current estimates of the level of 
borrowing from the public over this period that result from the Social 
Security surplus only being used to retire debt. The surplus could not 
be used for non-Social Security spending or tax cuts. Legislation 
increasing these limits would require a super-majority vote in the 
Senate.
  The act establishes the first limit becomes effective as of May 1, 
2000, and effectively ratchets down this limit May 1 and periodically 
thereafter. The effective date accommodates Treasury Department's 
Federal cash management responsibilities. The newly established debt 
held by the public limits would not disrupt the cash management 
operations of the Bureau of the Public Debt nor would it jeopardize 
Social Security benefit payments.
  The limits follows:
  May 1, 2000 through April 30, 2001, $3.628 trillion;
  May 1, 2001 through April 30, 2002, $3.512 trillion;
  May 1, 2002 through April 30, 2004, $3.383 trillion;
  May 1, 2004 through April 30, 2006, $3.100 trillion;
  May 1, 2006 through April 30, 2008, $2.775 trillion; and
  May 1, 2008 through April 30, 2010, $2.404 trillion.
  There are adjustments to Limits for Social Security reform, 
recessions, emergencies and war. Social Security reform--the Act 
authorizes adjustments to the limits established for legislation 
enacted that reforms Social Security during this time period. If Social 
Security reform legislation is enacted, and if that legislation has the 
effect of changing the debt held by the public specified in this act, 
then the Secretary of the Treasury shall adjust the limits in this act 
to reflect those changes.
  Recessions--the provisions of this act are suspended during a period 
of low economic growth. Two consecutive quarters of less than 1 percent 
real economic growth would automatically make the debt limits in this 
act inoperative. After the recession has ended, the act would reinstate 
new debt limit levels adjusted for the impact of the recession.
  Emergencies--the act also provides for an automatic adjustment to the 
debt limit levels specified if, after the adoption of this act, the 
Congress enacts into law ``emergency'' spending defined under the 
Balanced Budget Act. If emergency spending uses a non-Social Security 
surplus, then no adjustment to the limits would be necessary. If, 
however, emergency spending requires the usage of Social Security 
surpluses, then the limits specified in the act would be adjusted for 
that amount.
  Declaration of war--the act would be suspended upon Congress enacting 
a declaration of war.
  I want to suggest there are those who wonder what we will do if we 
have a recession. I provided in this a triggering mechanism. If there 
is anybody who would like to improve upon it, I welcome it. But it says 
you have a recession if you have two consecutive quarters of 
significant downturn in the economy, in which event you may very well 
be dramatically impacting upon the tax take of the country. In that 
case you may, indeed, trigger a halt to the reduction, the constant 
reduction of the debt limit. And you may leave it in place until you 
get into a recovery mode and then set it back on its trendline toward 
total elimination of the $1.8 trillion.
  In addition, you will find some language in it regarding war, or 
regarding substantial moneys being needed for our military. Those may 
occur from time to time and we would not want people to say this is 
making it impossible to fund that, even though holding it is a good 
thing. It might be that you would want to use it for those kinds of 
things, and there is a provision permitting us to do that.
  When you add it all up, I think we have been considerate of the 
problems associated with trying to truly lock this money in and that we 
have a good bill. We hope we get some support from the Democratic side 
before we are finished, and we stand ready to debate it. I hope our 
leader stands ready to debate it as long as necessary for us to get an 
up-or-down vote and see just where we all stand so our people will 
understand our position when the legislation appears, rather than when 
we have a sense of the Senate that we ought to do this. Let's see what 
happens on the legislation.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, let me first respond to our 
distinguished budget chairman by reading a letter addressed to our 
distinguished minority leader by the Secretary of the Treasury, Robert 
Rubin. It is dated March 17, 1999.

       Dear Tom: Thank you for inquiring about the impact of the 
     new debt limits contained in the Social Security Surplus 
     Preservation Act. I appreciate the opportunity to respond to 
     your question. In brief, I am deeply concerned that these 
     limits could preclude the United States from meeting its 
     future financial obligations to repay maturing debt and

[[Page 6865]]

     to honor payments--including benefit payments--and could also 
     run the risk of worsening a future economic downturn.
       It has been this Administration's view that fiscal 
     restraint is best exercised through the tools of the budget 
     process. Existing enforcement tools such as the pay-go rules 
     and the discretionary spending limits in the Budget 
     Enforcement Act have been key elements in maintaining fiscal 
     discipline in the 1990's Debt limits should not be used as an 
     additional means of imposing restraint. Debt is incurred 
     solely to pay expenditures that have previously been 
     authorized by the Congress and for the investment of the 
     Federal trust funds. By the time the debt limit is reached, 
     the Government is obligated to make payments and must have 
     enough money to do so.
       If Treasury were prohibited from issuing any new debt to 
     honor the Government's obligations, there could be permanent 
     damage to our credit standing. The debt obligations of the 
     United States are recognized as having the least credit risk 
     of any investment in the world. That credit standing is a 
     precious asset of the American people. Even the appearance of 
     a risk that the United States of America might not meet its 
     obligations because of the absence of necessary debt 
     authority would be likely to impose significant additional 
     costs on American taxpayers. Yet, in November 1995, a debt 
     crisis was precipitated when Government borrowing reached the 
     debt limit and in January Moody's credit rating service 
     placed Treasury securities on review for possible downgrade.
       As you know, there is currently a statutory limit on the 
     amount of money that Treasury can borrow in total from both 
     the public and from Federal trust funds. The proposed 
     ``lockbox'' provision would add a new statutory limit on debt 
     to the public.
       The proposed new debt limit runs the risk of precipitating 
     additional debt crises in the future. Although the proposal 
     adjusts the debt ceiling for discrepancies between the actual 
     and projected Social Security surpluses, it does not make 
     similar corrections for unanticipated developments on the 
     non-Social Security side of the budget. While our forecasts 
     have been conservative, the current forecast of the non-
     Social Security budget could prove too optimistic because of 
     changes in the economy, demographics, or countless other 
     factors. This could cause the publicly held debt to exceed 
     the new debt limit.
       Furthermore, even if the debt limit appears sufficient 
     because if covers the annual debt level--measured from end-
     of-year to end-of-year--it could easily be inadequate for the 
     Government to meet its obligations at a given point during 
     the year. Under normal circumstances, every business day, 
     Treasury makes payments--including Social Security payments 
     on certain days. In any given week, Treasury receives 
     revenues, makes payments, and refinances maturing debt. 
     Weekly and monthly swings in cash flow can easily exceed on-
     hand cash balances. When this occurs, Treasury then borrows 
     from the public to meet its obligations. If the amount of 
     publicly held debt were to reach the level of the debt 
     limit--or if the debt limit were to decline to below the 
     level of publicly held debt--Treasury could be precluded from 
     borrowing additional amounts from the public. If Treasury 
     could not borrow to raise cash, it is possible that it could 
     simply have to stop honoring any payments--including Social 
     Security payments.
       In this case, Treasury could be prohibited from issuing any 
     new debt to redeem maturing debt. Every Thursday, 
     approximately $20-23 billion of weekly Treasury bills mature 
     and, every month, an additional $60-85 billion in debt 
     matures. These securities must either be paid off in cash or 
     refinanced by issuing new debt. Treasury could be put in the 
     position of having to default for the first time in our 
     nation's history.
       Congress could defuse the debt limit problems by 
     immediately voting to raise the debt ceiling. Under the 
     ``lockbox'' proposal, however, it would take sixty votes in 
     the Senate to do so. As past experience indicates, obtaining 
     a super-majority for this purpose is often time-consuming and 
     difficult. Moreover, this requirement would greatly enhance 
     the power of a determined minority to use the debt limit to 
     impose their views on unrelated issues.
       Finally, the proposed debt limits could run the risk of 
     worsening an economic downturn. If the economy were to slow 
     unexpectedly, the budget balance would worsen. Absent a 
     super-majority vote to raise the debt limit, Congress would 
     need to reduce other spending or raise taxes. Either cutting 
     spending or raising taxes in a slowing economy could 
     aggravate the economic slowdown and substantially raise the 
     risk of a significant recession. And even those measures 
     would not guarantee that the debt limit would be not be 
     exceeded. A deepening recession would add further to revenue 
     losses and increases in outlays. The tax increases and 
     spending cuts could turn out to be inadequate to satisfy all 
     existing payment obligations and keep the debt under the 
     limit, worsening a crisis.
       To summarize, these new debt limits could create 
     uncertainty about the Federal government's ability to honor 
     its future obligations and should not be used as a instrument 
     of fiscal policy. While we certainly share the goal of 
     preserving Social Security, this legislation does nothing to 
     extend the solvency of the Social Security trust funds, while 
     potentially threatening the ability to make Social Security 
     payments to millions of Americans. I will recommend that the 
     President veto the bill if it contains the debt limit 
     provisions. If you have any additional questions, please do 
     not hesitate to contact me.
           Sincerely,
                                                  Robert E. Rubin.

  t(Mr. DOMENICI assumed the Chair.)
  Mr. HOLLINGS. Mr. President, the interesting thing to this Senator, 
of course, is the date, March 17. Nothing has changed. We knew that the 
distinguished chairman of the Budget Committee and his colleagues would 
be conspiring, as they have delayed us this afternoon to get the exact 
right conspiracy. To do what? To eliminate President Clinton's budget, 
on the one hand, and to engage in a charade or fraud, on the other 
hand, to make the Members, and particularly the media that covers this 
thing, see the perception is the reality. They are still talking 
surplus, surplus, surplus, surplus when we pointed out time and time 
and time again there is no surplus. We are spending $100 billion more 
than we are taking in. But this is to get everybody to think there is 
some change.
  All you have to do is read the distinguished chairman's summary of 
the Social Security Surplus Preservation and Debt Reduction Act, 
summary of amendment, April 20, 1999. This is 1 month later. The 
distinguished Secretary of the Treasury foresaw this amendment. There 
is nothing complicated about it except its wording and rewording of the 
statutory provisions of 13301 and many, many other provisions, to 
mislead, as if it were really doing something.
  But, 2, ``Uses Social Security surplus to reduce the debt held by the 
public.''
  Mr. President, we have been doing that for years and years on end. 
That is what we call the unified--there it is--the unified deficit. 
That is when they use the Social Security surplus. We have this chart. 
We have been using this for years.
  As a former chairman of the Budget Committee--I speak advisedly, not 
politically--I have been trying my dead level best to do what the 
chairman in this amendment proposes to do, but it is the same act, the 
same scene, because in 1968 President Lyndon Baines Johnson brought 
about a merging of the Social Security trust fund with general funds of 
the U.S. Government so we could then talk about a unified deficit with 
trust funds. Therefore, you could get a surplus rather than a deficit.
  The truth of the matter is, the trust fund surplus from Social 
Security is $126 billion. You use Social Security trust funds and you 
continue to do so.
  They say pay down the public debt. Let me get into that paying down 
the public debt, like it is something other than the national debt. I 
am in my 33rd year, and the real problem is to really try to stop 
increasing the national debt and to pay down the national debt.
  When we say pay down the debt, do not give monkeyshines of paying 
down public debt, thereby increasing Social Security debt. The 
distinguished Senator from Missouri said just a minute ago, if you 
inherited money, rather than going off to Las Vegas you ought to pay 
off your home mortgage. This does not pay off the home mortgage. This 
does not pay down the national debt. It just levels off and obscures 
the true size of the national debt, whereby we are thinking we are 
reducing the public debt and we are paying our bills. Not at all.
  (Mr. SMITH of Oregon assumed the chair.)
  Let's assume, Mr. President, individually I had two credit cards, I 
had a MasterCard and I had a Visa card, and I got in a big bill from 
MasterCard, and I said, ``Well, I'll take care of that crowd. They've 
been bringing a lot of pressure on me, so I will just take the Visa 
card and pay off the MasterCard.'' I still owe that much more money. I 
have just transferred it from MasterCard to Visa. In this case, I am 
just transferring it from public debt to Social Security. I am using, 
borrowing, spending--ah, spending--the Social Security moneys to pay 
down the public debt.

[[Page 6866]]

  That is all this amendment says, and that is what we have been doing 
since 1968. But on this long sheet here of--how many pages are here? It 
is a 17-page amendment, with all these facts and figures. You can find 
the triggering mechanism on page 10, when they say, ``After the 
Secretary determines the actual level for the social security surplus 
for the current year, the Secretary shall take the estimated level of 
the social security surplus for that year specified in paragraph (1) 
and subtract that actual level.'' And when you subtract that level, you 
bring down the public debt. That is the triggering mechanism. The 
amendment has 17 pages, and you will find it on page 10. The debt goes 
up, up, and away.
  Mr. President, I had to go to the Congressional Budget Office and ask 
for the trust fund balances. As of February 1999--I have not gotten it 
for March yet. Let me give you the Congressional Budget Office figures 
here of what we owe Social Security. That is something you ought to 
remember, that there isn't any Social Security surplus. Yes, each 
fiscal year there has been for several years, because we really bring 
in more than what we have to pay out that particular year. But having 
spent it, having been paying down the public debt, we have been 
spending the Social Security money.
  So Social Security, as of 1998, $730 billion in the red; 1999, $857 
billion. These are CBO figures. These are shockers--shockers--to you, 
because I am reading out how we are increasing the debt, not paying it 
down.
  We are the board of directors of the Government. We are not stock 
analysts up on Wall Street hoping that the Government does not come in 
with its sharp elbows, borrowing to pay its bills, running up interest 
rates, perhaps causing inflation, crowding out corporate finance.
  So you will find that the financial community and the Greenspans--oh, 
they love this ``pay down the public debt.'' They are not elected to 
office. We are elected as the trustees of the fiscal condition of the 
U.S. Government.
  Here is the most important program we have domestically, the Social 
Security program. And in 1998, $730 billion in the red; in 1999, it is 
projected to be $857 billion; in 2000, $994 billion; in 2001, $1.139 
trillion; and in the year 2002, under current policy, paying down the 
public debt, $1.292 trillion; in 2003, $1.453 trillion; in 2004, $1.624 
trillion; in 2005, $1.808 trillion, in 2006, $2.001 trillion; in 2007, 
$2.205 trillion. And at the end of the 10-year period this particular 
amendment contemplates, in the year 2008, we will owe, paying down the 
public debt and increasing the Social Security debt, $2.417 trillion.
  Now, come on. When you need the money to make the payments, when you 
can't just depend on the interest cost in 2013, at the end of the year 
in 2012, you are going to have to start borrowing money. And in 2034 
you will be outright broke and you will owe nearly $4.5 trillion--
almost $5 trillion.
  Who would want to be Senators running for reelection? Who would want 
to get elected to that mess? All you can do is cut down all the 
programs and raise taxes, unless you can get away with this fraud that 
is going on.
  I use the word ``fraud'' advisedly. We learned, as freshmen in law 
school, that it had to be false, and it was intended to be false, and 
intended to deceive, that it was relied upon, it did cause damage, and 
the damage was the proximate cause. This particular amendment is 
knowingly with intent to deceive. It is a fraud. It does not change a 
thing.
  We have been paying down the public debt with Social Security money, 
and we are running up Social Security's debt, sticking it more and more 
and more in the red, all under, ``We're going to save Social Security 
100 percent. It is going to be spent on only Social Security''--
absolutely false. When you pay down the public debt, that debt could 
have been caused by defense, Kosovo, it could have been caused by food 
stamps, it could be caused by foreign aid or Lawrence Welk's home--I 
remember when we appropriated money for Lawrence's home--it could be 
anything.
  So when you are paying down the debt, as it says right here on the 
face of the handout by the distinguished chairman of the Budget 
Committee--and I read, again, ``uses the Social Security surplus to 
reduce the debt held by the public''--the debt held by the public is 
cumulative with every and any amount of different expenditures. So it 
has more to be spent on every and any thing but Social Security, all 
the time saying they are saving Social Security.
  Let me make absolutely clear about this fiscal condition that we are 
in, because we have a cancer; we have fiscal cancer.
  Mr. President, I have a good friend over on the House side, the 
chairman of the Transportation Committee, Mr. Shuster.  And he is 
finally going to spend some highway moneys on highways. Bless him. I am 
100 percent for him, because I have been in this game now ever since we 
started the budget process in 1973, 1974, with Senator Muskie. I have 
been the chairman of the committee.
  But here are the trust funds. The Secretary of Treasury refers to 
trust funds. Somebody will say, they are not trusts, but they are 
supposed to be. ``For the investment of Federal trust funds'' is the 
expression used by Secretary Rubin. I am using the same expression: 
``Trust fund looted to balance the budget.''
  In 1999, here is what we owe Social Security: $857 billion; Medicare, 
we got $129 billion for the HI portion of Medicare and 39 billion for 
the SMI portion; for military retirement, $141 billion; for civilian 
retirement, we owe $490 billion--that is civil service employees; they 
ought to know it; it is going up--unemployment compensation fund, $79 
billion; highway moneys, $25 billion; airport moneys, $11 billion; 
railroad retirement, $23 billion; and ``other,'' like the Federal 
Finance Bank, $57 billion. So we owe our trust funds $1.851 trillion.
  By this 5-year period, at the end of 2004, we will owe $2.954 
trillion under current policy, and the amendment of the Senator that 
has just been put in by the majority leader--I wasn't here when it was 
introduced, but I understood he was going to put it in or the chairman 
of the Budget Committee--the one under consideration, in 5 years, we 
will owe $3 trillion to all of the particular trust funds. And the 
distinguished Senator from Texas came down to the floor of the Senate, 
and this is a quote of what he said on April 15:

       I believe that this is an excellent budget. I think, 
     looking at the whole package, it is the finest budget 
     presented in America in the 20 years that I have served in 
     Congress.

  Do you know what it does, Mr. President? It just breaks all the 
discipline, the little discipline that we do have that has been in the 
pay-go rules. So once we settle out, then any amendment that came in, 
you had to have an offset.
  Here is what they do in the conference report so that they can go 
ahead with tax cuts and anything else they want. Of course, the 
manifest intent is to do away with Social Security, privatize it. In 
order to privatize it under Milton Friedman's plan, you need what? You 
need these surpluses. You need the $1.8 or the $2 trillion or, if you 
do it in the year 2004, you will need $3 trillion. So you will need 
these surpluses.
  Here's how you get them. Section 202 of this budget--here is the 
conference report on the budget:

       Whenever the Committee on Ways and Means of the House or 
     the Committee on Finance of the Senate reports a bill or an 
     amendment thereto is offered or a conference report thereon 
     is submitted that enhances retirement security through 
     structural programmatic reform, the appropriate chairman of 
     the Committee on the Budget may, one, increase the 
     appropriate allocations and aggregates of new budget 
     authority and outlays for the amount of new budget authority 
     provided by such measure and outlays flowing therefrom for 
     that purpose. Two, in the Senate, adjust the levels used for 
     determining compliance with the pay-as-you-go requirements of 
     section 207. And, three, reduce the revenue aggregates by the 
     amount of the revenue loss resulting from that measure for 
     that purpose.

  There go your tax cuts.
  What does this mean? It means what the distinguished chairman of the 
Budget Committee says. Whenever the Committee on Ways and Means of the

[[Page 6867]]

House or the Committee on Finance reports a bill, an amendment thereto, 
the chairman can decide, the appropriate chairman of the Committee on 
the Budget, he can tell you what that means; it means what he says.
  I am speaking as seriously as I know how. I have never seen the 
extreme of the shenanigans and the maneuvers and the misleads and the 
fraud going on politically, all to get by the next election, 
specifically using Social Security trust funds.
  Let's go back, Mr. President, to the Greenspan Commission. The 
Greenspan Commission, in 1983, said we are going to institute this 
payroll tax; namely, the 6.2 percent, the payroll by the employer, and 
6.2 percent by the employee, for 12.4 percent. And we know that is a 
high payroll tax. But we are putting that in to take care of the baby 
boomers in the next generation. That is why it was put in that way.
  And to make sure that it was set aside, section 21, Mr. President, 
provided just exactly that. It provided that it be set aside and that--
if I can find that section, I will show it to you, section 21. It said 
remove Social Security from the unified budget. That has been the on-
budget, off-budget, unified and all that, un-unified, private debt, 
public debt, trust fund debt, everything else--it is just one account. 
But I will read section 21:

       A majority of the members of the National Commission 
     recommends that the operations of the OASI, DI, HI and SMI 
     Trust Funds should be removed from the unified budget.

  It took this Senator on the Budget Committee almost 7 years before I 
could finally get it reported out of the Budget Committee, that 
particular provision.
  I ask unanimous consent that section 21 of the Greenspan Commission 
report be printed in the Record.
  There being no objection, section 21 was ordered to be printed in the 
Record, as follows:


                 social security and the unified budget

       (21) A majority of the members of the National Commission 
     recommends that the operations of the OASI, DI, HI, and SMI 
     Trust Funds should be removed from the unified budget. Some 
     of those who do not support this recommendation believe that 
     the situation would be adequately handled if the operations 
     of the Social Security program were displayed within the 
     present unified Federal budget as a separate budget function, 
     apart from other income security programs.

  Mr. HOLLINGS. I thank the Chair.
  I think we have in here section 13301. I ask unanimous consent that 
we print in the Record at this point section 13301 of the Budget 
Enforcement Act.
  There being no objection, section 13301 was ordered to be printed in 
the Record, as follows:

     SEC. 13301. OFF-BUDGET STATUS OF OASDI TRUST FUNDS.

       (a) Exclusion of Social Security From all Budgets.--
     Notwithstanding any other provision of law, the receipts and 
     disbursements of the Federal Old-Age and Survivors Insurance 
     Trust Fund and the Federal Disability Insurance Trust Fund 
     shall not be counted as new budget authority, outlays, 
     receipts, or deficit or surplus for purposes of--
       (1) the budget of the United States Government as submitted 
     by the President,
       (2) the congressional budget, or
       (3) the Balanced Budget and Emergency Deficit Control Act 
     of 1985.
       (b) Exclusion of Social Security From Congressional 
     Budget.--Section 301(a) of the Congressional Budget Act of 
     1974 is amended by adding at the end the following: ``The 
     concurrent resolution shall not include the outlays and 
     revenue totals of the old age, survivors, and disability 
     insurance program established under title II of the Social 
     Security Act or the related provisions of the Internal 
     Revenue Code of 1986 in the surplus or deficit totals 
     required by this subsection or in any . . .''

  Mr. HOLLINGS. I thank the distinguished Chair. I will read 
``Exclusion'':

       Section 301(a) of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following: ``The concurrent 
     resolution shall not include the outlays and revenue totals 
     of the old age, survivors and, disability insurance program 
     established under title II of the Social Security Act or the 
     related provisions of the Internal Revenue Code.''

  And it goes on in paragraph (a) saying that the Social Security trust 
fund

     . . . shall not be counted as new budget authority, outlays, 
     receipts, or deficit or surplus for purposes of the budget 
     of--(1) the budget of the United States Government as 
     submitted by the President, (2) the congressional budget, or 
     (3) the Balanced Budget and Emergency Deficit Control Act.

  Now, true it is, the amendment reiterates that particular section. 
But that has been in the disabuse, the disavowal, the violation thereof 
ever since 1990, when President Bush signed it into law on November 5 
of that particular year. And this particular amendment continues to put 
it within the unified by paying it down.
  Now, that has been the big problem all along. And so at the beginning 
of the year, when I fortunately began to hear music to my ears that 
both the White House and congressional leaders on both sides were 
saying again and again that they were going to save Social Security, I 
got with my friend Ken Apfel, who used to work for the Budget Committee 
and is the Administrator of Social Security today, and, as a result, we 
introduced S. 605, a bill to solidify the off-budget status of the Old 
Age Survivors and Disability Insurance Program under title II of the 
Social Security Act and to protect program assets. Let me read section 
5:

       Notwithstanding any other provision of law throughout each 
     month that begins after October 1st, 1999, the Secretary of 
     the Treasury shall maintain in a secure repository or 
     repositories cash in a total amount equal to the total 
     redemption value of all obligations issued to the Federal old 
     age and survivors insurance trust fund and the Federal 
     disability insurance trust fund pursuant to section 201(d) of 
     the Social Security Act that are outstanding on the first day 
     of such month.

  Mr. President, that really puts it into a lockbox. It is in the 
Budget Committee. I have asked the chairman to let us bring it up. I 
would be delighted to have hearings on it. We would give anything to 
have a vote on it, but they have filled up the tree so I can't put it 
in as an amendment here. Maybe we can get it at the end of the so-
called cloture vote and put it in when we get an up-or-down vote on 
this.
  But section 201(d) requires the Social Security Administration to 
invest in Treasury bills, Government securities. Necessarily, they get 
the IOU and the Government gets the money. But if you immediately 
transfer an equal amount of money back to a trust fund in Treasury, as 
section 5 requires, then you have the lockbox where the money is only 
expended for Social Security purposes.
  Now, this has been drawn with the assistance of the Social Security 
Administration. And some of my colleagues, when I showed it to them, 
they said: Wait a minute, that's what you are going to do. What you are 
going to do with the money is, you do exactly with the money as you did 
between the years 1935 and 1968 before you started this monkeyshine of 
a unified budget, spending all of the Social Security trust funds. That 
is what happens. You keep it right over there and it gets the highest 
amount permissible by law under T bills today, which this year in 
interest will be $48 to $50 billion in interest that it earns.
  This money is supposed to be earning, on the one hand, and kept in 
trust, those earnings, and the total fund on the other hand. Instead, 
we are spending the interest and the fund itself. We are breaking 
Social Security, and coming out here baldfaced and saying we all want 
to save Social Security, and not one red cent is going to be spent on 
any other than Social Security. It is one grand fraud.
  Mr. President, let me just emphasis, since I have the page turned 
here on public debt and private debt, or gross Federal debt--I am 
referring to an analysis of the President's budgetary proposals for 
fiscal year 2000. I asked CBO, ``What do you really leave out when you 
call it this public debt? What part of the debt, the overall public and 
private, or trust fund debt, goes into the national debt?'' This is 
held by the public. I am referring to page 74, April 1999, the most 
recent report of the Congressional Budget Office: Debt held by the 
public is the amount of money that the Federal Government has borrowed 
by selling securities to finance all of the deficits less any surpluses 
accumulated over time. Under the CBO's apparent baseline forecast, debt 
held by the public is estimated to decline from $3.6 trillion in 1999 
to $1.2 trillion in 2009. Gross Federal debt consists of debt held by 
the public and debt issued to Government accounts.

[[Page 6868]]

  Like you issue and you receive in Government accounts, most of the 
latter type of debt is held by trust funds, the largest of which are 
Social Security and Federal civilian employee retirement funds.
  Because Treasury handles investment by trust funds and other 
Government accounts, purchases and sales of such securities do not flow 
through the credit markets. Therefore, interest on those securities is 
considered to be an intragovernmental transfer.
  That is what I call the monkeyshine when they take from one and give 
it to the other. You only are talking about the one that you are 
giving, and you are saying you are reducing the public debt, but you 
are increasing Social Security debt and saying in the same breath you 
are saving Social Security when you are looting it, when you are 
savaging it. You are ruining it. There is no question that is what is 
going on, and that is what this amendment calls for.
  Back in 1983, if we had any idea that Social Security trust funds 
were going to be spent for any other purpose, you would have never 
passed that tax increase on Social Security, that payroll tax. You 
would never have been able to get the votes.
  We all talked and revered ourselves out here on the floor with the 
flourishes of how we were saving Social Security, that we weren't going 
to let it get in the red anymore, and how we are going to take care of 
the baby boomers in the next generation, and that we are not going to 
have it go bust. Instead, it is not the baby boomers that continue to 
talk. It is the adults on the floor of the Congress totally in 
violation of all Government policy. We are going to private 
corporations. And in 1994 we passed the Pension Reform Act and said 
there are too many of these takeovers. Well, these fast money artists 
come in and pay down a good conservative-run company. They pay down the 
company's debt with the pension fund, and then take all the money and 
run. We said that is going to have to stop, and we are going make it a 
felony if you do it.
  So we passed the Pension Reform Act of 1994.
  Colleagues have heard me tell the story of Denny McLain, because I 
saw it in the New York Times whereby Mr. McLain, the all-time pitcher 
for the Detroit Tigers, became the head of a corporation, paid off the 
debt with the company pension fund, got fired, convicted of a felony, 
and sentenced to 8 years. Mr. President, if you can find what cell poor 
Denny is in, tell him next time run for the Senate. Instead of the jail 
term, he would get the ``Good Government Award.''
  We stand out here baldfaced and say how we are saving Social Security 
when we are spending it on the debt. Don't get all caught up with 
public debt like they want. That is what they want. They want us to 
meet ourselves coming around the corner. By the year 2000, next year, 
we will owe $2 trillion, and by the end of the 5-year budget period, we 
will owe trust funds--the Government itself--$3 trillion.
  I can tell you. You couldn't do this in corporate America. We would 
be all fired as the directors.
  But that is what happens and what occurs then. Finally, the fiscal 
cancer grows in droves. What happens is then it is projected that this 
year there is $356.3 billion in interest costs.
  Let me just say a word about that. I see other colleagues here on the 
floor, who I would be glad to yield to.
  But I am trying to emphasize again and again that this amendment does 
nothing more than increase our fiscal cancer. It does not save Social 
Security. It puts Social Security deeper in the red. That is what 
happens here when you get the forced spending like taxes for interest 
costs on the national debt, which is part of the public debt, too, and 
the debt owed to the trust funds--what they might call if we were a 
private entity our ``private debt.'' But what happens is, as with 
Lyndon Johnson, President Johnson, back in 1968 when we last balanced 
the budget, when the Government last balanced the budget, in 1968-1969 
we ended up with a surplus. We didn't use Social Security moneys, 
incidentally. At that particular time, there were about 200 years of 
history, and the cost of all the wars from the Revolution on up to 
World War I, World War II, the cost of Vietnam, Korea, the debt was 
less than $1 trillion. And the interest cost was only $16 billion--one-
sixth--$16 billion. Here, without the cost of a war and the ensuing 
years, it has gone up to $1.2 trillion.
  So we have increased spending for nothing, absolutely nothing. This 
is what I call ``fiscal cancer.'' You put in a sales tax. You get a 
school. You put in a gas tax. You get a highway. You put in other 
taxes. You get general government. But you put in this interest tax, 
for this charade, fraud, maneuver, political maneuver, and the cancer 
continues to grow. As the amount shows here on its face, for the next 5 
years, the interest costs go up.
  Here we are forced to spend $340 billion more than what President 
Johnson spent when the budget was last balanced.
  Mr. President, just think of that $340 billion that I am going to 
spend this year, next year, next year. In fact, it is going up, up and 
away in interest costs. This is all under current policy, incidentally. 
And we have already destroyed current policy by passing an $18 billion 
military pay bill.
  We have now, and we are all going to vote for it, I think, $6 billion 
for Kosovo. We have already busted the caps $21 billion. That is not 
the case here. This is saying that you have not busted the caps, that 
you had no Kosovo, that you had not voted $18 billion for the military. 
But just think of that $340 billion more. I could give $80 billion to 
paying down Social Security or saving Social Security. I could give $80 
billion to pay down the public debt. I could give $80 billion for the 
Republican tax cut. I could give $80 billion for the Democratic 
spending programs, for Medicare and otherwise. That is only $320 
billion. I would still have $20 billion for a parade and a party. As I 
promised my distinguished chairman, I would jump off the Capitol dome 
if he balanced the budget by the year 2002. That was a couple of years 
ago--or 2001. I am still willing to reiterate that pledge.
  They are not balancing the budget. We are spending, as you can see, 
$105.2 billion more than we are taking in, according to CBO this year, 
and $91.8 billion more than we are taking in for the budget that we are 
working on for the year 2000. That is what I call fiscal cancer, and 
nobody wants to talk about it. They want to say: Oh, everything is 
coming up like roses. It is morning in America, whatever else, any kind 
of political jargon. But the reality is there. I have a record and I 
did not just come to this recently. I put in the sales tax, back in 
1949 and 1950 for public education in my own State. I got the first 
triple-A credit rating of a southern State.
  I have been chairman of this Budget Committee and I have been 
watching. I am trying to educate the media, that is the only saving 
grace I have, if they could finally come out like Barron's did and say 
there is no surplus. Everybody is talking about using the Social 
Security surplus. Mr. President, I do not think I can get this printed 
in the Record--but here the Concord Coalition has finally come around, 
and a few others have come around and said it--but Barron's, dated 
March 1: ``There is no budget surplus.''
  If we could talk sense to each other, we could figure out how to get 
out of this thing. I said let's do it the way the Social Security 
Administration said; let's save it, let's put it in a true lockbox, S. 
605. I thought when I passed 13301 that I had put it in a lockbox, on 
November 5, 1990. We said it never would be spent and be used to 
reflect the financial condition, but they violate it regularly.
  S. 605 now says that you have to keep the money there. That is how we 
did it for years on end. It was fiscally sound. That is what is 
required of other pension funds, that they maintain their fiscal 
soundness.
  With that in mind, I yield the floor.
  Several Senators addressed the Chair.
  Mr. LAUTENBERG addressed the Chair.

[[Page 6869]]

  The PRESIDING OFFICER (Mr. Brownback). The Senator from New Jersey.
  Mr. LAUTENBERG. Thank you, Mr. President, for recognizing me.
  Mr. President, I support the underlying bill to reform the rules 
governing emergency spending that has been reported out of the 
Committee on Governmental Affairs. Two amendments to that bill have now 
been offered, a first-degree amendment and a second-degree amendment, 
which blocks further amendments. The pending amendments are proposing 
to establish what is being called a Social Security lockbox.
  Unfortunately, this lockbox is not secure. And it actually could 
undermine Social Security.
  We Democrats have a far better alternative. Ours is a true lockbox. 
And it protects both Social Security and Medicare in a much more 
responsible way.
  Before I comment further on the lockbox proposals, I want to review 
the underlying bill before us, which would make significant 
improvements in the treatment of emergency spending.
  Emergency spending is not casual spending. It is so important that it 
is exempt from budget rules. And that is as it ought to be, because it 
involves responding to things like floods, earthquakes and volcanoes.
  We can all identify parts of the country--the floods in the Midwest, 
the volcano in the State of Washington, and the terrible earthquake 
damage in California. Those are emergencies. They are immediate threats 
to American public health and safety, and Congress often has to act 
promptly to avoid the loss of life and property.
  Unfortunately, the emergency exception has been abused. Last year, 
Congress stretched the rules past the breaking point in the omnibus 
appropriations bill, which included many items of questionable 
emergency designation, especially those for military spending. These 
were declared emergencies when, in fact, we were not looking at Kosovo 
and these items were not needed to respond to an imminent threat.
  Mr. President, Congress has been able to abuse the emergency 
designation in part because the rules have been totally open-ended.
  To address the problem, the Governmental Affairs bill proposes a new 
definition of ``emergencies'' and a point of order to help prevent 
conference committees from inserting unjustifiable new emergency 
spending. It is a good bill. And I commend Senator Thompson and Senator 
Lieberman for their leadership.
  Mr. President, while we were considering the budget resolution, the 
Senate approved an amendment offered by the distinguished Senator from 
Illinois, Senator Durbin, that was based on this legislation. Yet the 
conferees on the budget resolution ignored the Senate's position. 
Instead, the conferees constructed a 60-vote point of order that now 
applies to all emergency spending--but with a huge loophole. Military 
spending was completely exempted, whether it was for new weapons 
systems or whatever.
  Mr. President, Heaven knows that all of us want to support our 
military, and want to make sure that what we are doing in Kosovo is 
fully supported. I, for one, hope that we will do whatever we can to 
bring this wave of atrocities to a halt. So I am not complaining about 
military spending.
  But, Mr. President, I thought that what the conferees on the budget 
resolution did was wrong. It was an abuse of the conference process 
since neither Senate nor House had approved anything like this. They 
just came up with it on their own.
  I also thought it was bad policy.
  Mr. President, there is no reason to allow 41 Senators to overrule 59 
Senators who want to provide emergency spending for a flood, tornado, 
hurricane, or earthquake. And there is no reason to create a higher 
hurdle for a legitimate disaster than for a new weapons system.
  I am afraid, Mr. President, that a 60 vote point of order against 
emergency designations is itself subject to abuse. One can conceive of 
all kinds of mischief to punish a particular senator or state for 
political reasons. And we should not to allow that kind of abuse.
  Unfortunately, Mr. President, the amendment before us would leave 
this problematic approach from the budget resolution in place. Even 
worse, it would write it into law. I think that would be a serious 
mistake.
  Now, Mr. President, I want to turn to the proposal to establish what 
proponents call a lockbox.
  I strongly support the purported goal of this amendment; that is, to 
secure the future funding of Social Security. But I have three major 
problems with this proposal.
  First, it does nothing to protect Medicare. Instead, it allows 
Congress to divert funds needed for Medicare in order to provide tax 
breaks for the wealthy.
  Second, it threatens Social Security. Under the amendment, an 
unexpected economic downturn could block the issuance of Social 
Security checks. This would deal a serious blow to so many of our 
elderly who are dependent on Social Security.
  Also, the amendment contains a booby trap that would allow Social 
Security contributions to be invaded for purposes other than Social 
Security benefits, like a risky new privatization scheme.
  And third, the amendment could create a Government default --a U.S. 
Government default. It could undermine our Nation's credit standing, 
increase interest costs, and ultimately lead to a worldwide economic 
crisis.
  I want to explain each of these in turn. The Medicare trust fund is 
now expected to be bankrupt by 2015--only 16 years away. We ought to 
move quickly to reform and modernize the program. But it is also clear 
that we will need additional resources. That is why most Democrats 
believe it is critical to save some of the surplus for Medicare.
  Our Republican friends say they agree about the importance of saving 
some of the surplus for Social Security. But when it comes to saving 
for Medicare, they are not willing to reserve a single penny. Instead, 
they want to use funding that is needed for Medicare to provide any 
other things they favor, including tax breaks which are largely for the 
wealthy.
  We Democrats think that is a mistake. And that is why I have 
developed a lockbox that would reserve funding for Medicare as well as 
Social Security. And I hope to have an opportunity to offer that 
proposal with Senator Conrad of North Dakota.
  Beyond its failure, Mr. President, to protect Medicare, the second 
major problem with the pending amendment is that it fails to protect 
Social Security. Actually, in some ways it threatens Social Security 
benefits.
  First, it threatens to block the issuance of Social Security checks 
if the economy slows, or if the Congress fails to act responsibly. If 
the limit on public debt is exceeded, even by the smallest of margins, 
the Government could not issue more Social Security checks, and checks 
already issued could not be honored.
  The Republicans say they protected Social Security benefits by 
providing that such benefits would be given--and I quote-- 
``priority.'' But this language will be of no use if the debt limit has 
been exceeded.
  In that situation, no new checks could be issued. And that applies 
not only to Social Security checks, but unemployment compensation, 
Medicare payments and all other Government payments as well.
  The lockbox amendment also includes a huge loophole. I call it a mine 
field. And it could allow Social Security funds to be used for a wide 
variety of purposes, anything that Congress labels as Social Security 
reform.
  Mr. President, these are code words. They say we are going to lock 
the door, but we are going to leave it open just a crack or two--
something people wouldn't do in their safe deposit box, something they 
wouldn't do in their homes. We want to leave a couple of catch phrases 
in here like ``retirement security,'' like ``reform,'' and so that we 
do not really guarantee that Social Security surpluses are going to be 
reserved for Social Security beneficiaries.

[[Page 6870]]

  We had a vote here, 98 to nothing. We said that all Social Security 
surpluses should be reserved for Social Security recipients. 98 to 
nothing. But it didn't take long for the conferees on the budget 
resolution--those from the majority party--we weren't included--to put 
that vote in the trash basket. They included vague language that would 
allow Social Security surpluses to be used for, and I quote, 
``retirement security.''
  Similarly, the language of this amendment includes an escape hatch 
that will allow Congress to divert Social Security surpluses for 
anything that Congress labels as Social Security reform.
  I heard the distinguished chairman of the Budget Committee say 
earlier today that much of our surpluses ought to be reserved to give 
tax cuts to the people. It is not a bad idea. We like tax cuts, 
targeted tax cuts. But the leading Republican tax proposal, S. 3, would 
give those in the top one percent, with average incomes of $800,000 a 
year, a $20,000 tax cut. Meanwhile, some poor guy who works for a 
living, and his wife, or maybe a single parent who is working out there 
and making $38,000 a year, is going to get 99 bucks. That is what the 
Republican leadership has proposed.
  So I would say to that $800,000 wage earner: Sorry, buddy, we are not 
going to give you the $20,000 that you could use to put a downpayment 
on a yacht or whatever else you want to do.
  My conscience doesn't bother me at all when I say that tax cuts ought 
to be reserved for people who need proper day care for their children 
or need to help an elderly parent who has special medical problems.
  Mr. President, when the Social Security trust fund goes bankrupt in 
2034, it will be able to pay only about 70 percent of the promised 
benefits. Diverting payroll taxes for other uses, as this amendment 
allows, could make matters much worse. The date of insolvency could be 
moved up and arrive earlier. And instead of being able to pay only 70 
percent of promised benefits, we would be able to pay even less.
  The issue here is not whether to establish private savings accounts, 
as many have suggested. President Clinton has recommended one form of 
such accounts, his USA accounts. Others have similar ideas.
  But when Social Security already is 30 percent short of being able to 
provide promised benefits to baby boomers, we can't afford to invade 
its funds for other uses. If we want to establish private accounts, we 
can use other funds. We shouldn't permit even deeper cuts in guaranteed 
benefits.
  It also is important to understand that this amendment would do 
nothing to extend the life of Social Security trust funds. That is not 
just my opinion, it is a fact.
  To back that up, I have a letter from Mr. Harry Ballantyne, chief 
actuary of the Social Security Administration. As Mr. Ballantyne 
writes, the adoption of this proposal would have no significant effect 
on the long-term solvency of the program--none.
  I ask unanimous consent that a copy of this letter from the chief 
actuary of the Social Security Administration be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                               Social Security Administration,

                                                   April 19, 1999.
     Hon. Frank R. Lautenberg,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lautenberg: This letter addresses the 
     potential long-range financial effects on the OASDI program 
     of ``locking away'' the annual increases in the Social 
     Security Trust Funds, as proposed by Republican leaders in 
     the Senate and the House on March 10, 1999. The proposal 
     would require that annual increases in the OASI and DI Trust 
     Funds would be used solely to purchase long-term special 
     issue U.S. government bonds. In addition, the proposal would 
     require that the revenue used for the purchase of these bonds 
     would in turn be used solely for the purpose of reducing 
     Federal debt held by the public. Of course, the net change in 
     the Federal debt held by the public in any year would also be 
     affected by the size of any on-budget deficit or surplus for 
     that year.
       The proposal would not have any significant effect on the 
     long-range solvency of the OASDI program under the 
     intermediate assumptions of the 1999 Trustees Report. Thus, 
     the estimated long-range actuarial deficit of 2.07 percent of 
     taxable payroll and the year of the combined trust funds' 
     exhaustion (2034) would not change. The first year in which 
     estimated outgo will exceed estimated tax income would not be 
     affected and would therefore remain at 2014.
       Any plan that reduces the amount of Federal debt held by 
     the public may make later redemption by the Trust Funds of 
     special issue U.S. government bonds easier.
           Sincerely,
                                              Harry C. Ballantyne,
                                                    Chief Actuary.

  Mr. LAUTENBERG. Mr. President, it is critical that Congress act 
promptly to extend the solvency of Social Security. President Clinton 
has presented two related proposals that would extend Social Security's 
life through 2059. Some of my colleagues don't like those proposals. 
That is fair. But if they do not like his ideas, they should propose 
some of their own. So far, they haven't done it. And no one should be 
fooled into believing that this lockbox proposal is an answer.
  Finally, the most serious problem with this proposal is that it 
threatens to lead to a Government default. In the short term, that 
could damage our Nation's credit standing and increase interest costs.
  Treasury Secretary Rubin has written an excellent letter that 
explains the severity of the risks posed by this proposal. I note that 
the distinguished Senator from South Carolina already talked about this 
and has asked that Rubin's letter be printed in the Record. It was 
accepted on a unanimous consent basis. No Senator should vote on the 
pending amendment until they have read this letter. And it is hard to 
see how anyone could endorse the amendment after reading that letter.
  Unfortunately, this amendment could very well lead to a serious debt 
crisis in the future. Proposed limits on publicly held debt would be 
exceeded if current projections of the non-Social Security budget 
proved too optimistic. And, even if Congress tried in good faith to 
comply with new public debt limits, those limits could be reached due 
to changes in the economy, demographic shifts, or a variety of other 
factors.
  Mr. President, the sponsors of the amendment say that they have 
included a provision to ensure that a recession would not trigger a 
default. However, that provision won't always work. The provision would 
only become effective after two quarters of low economic growth. We 
could be in a deep recession for nearly 7 months before the exemption 
kicks in. By then, it could be too late. We could already be in 
default.
  Mr. President, our Nation has never defaulted on a debt backed by the 
full faith and credit of the United States. But this amendment could 
trigger default based on factors completely beyond our control. That 
wouldn't just block Social Security and other checks; it could easily 
lead to a worldwide financial crisis. That could prove catastrophic.
  Mr. President, this is crazy. If suddenly the economy slows, revenues 
decline, or expenditures increase unexpectedly, for any reason, why 
should we risk the world's economy? It is like forcing the whole world 
to play a game of economic Russian roulette.
  I would note that the Republican chairman of the House Ways and Means 
Committee, Congressman Bill Archer, recognizes the folly of this 
approach and strongly opposes it. So this shouldn't be a partisan 
issue. He is not a Democrat. And I hope others on that side of the 
aisle will also join in opposition. There are other more responsible 
ways to enforce budget discipline. And that is what we Democrats are 
proposing.
  Senator Conrad and I have developed an alternative lockbox to protect 
surpluses for both Social Security and Medicare, and we hope to have an 
opportunity to present it to the Senate. Our proposal would reserve all 
Social Security surpluses for Social Security and a portion of other 
surpluses for Medicare. Our lockbox would be enforced first by 
requiring 60 votes to invade the lockbox. Then, if Congress raided 
projected surpluses, other programs would be cut across the board.

[[Page 6871]]

We think this makes more sense than the potential triggering of a 
default and a worldwide economic meltdown.
  So I will briefly review the main problems with the proposal in front 
of us.
  It does nothing to protect Medicare. It allows Congress to spend 
money needed for Medicare on tax breaks for the wealthy.
  Second, it threatens Social Security. It could block Social Security 
checks when the economy performs worse than expected. And it includes a 
trap door that allows Social Security taxes to be invaded for purposes 
other than Social Security benefits, like risky new privatization 
schemes.
  Finally, the amendment threatens a default on debt backed by the full 
faith and credit of our country. This could increase interest costs 
immediately, and ultimately lead to a worldwide economic catastrophe.
  For all of these reasons, Mr. President, I hope my colleagues will 
recognize the serious problems with this amendment, and that we will be 
given an opportunity to offer amendments to improve it.
  Unfortunately, right now, we Democrats--45 of us--are being prevented 
from offering amendments that we think are needed to protect Social 
Security and Medicare beneficiaries. We are prohibited by a trick 
called filling the amendment tree. This prevents us from offering 
amendments, under the Senate rules.
  Mr. President, I hope my colleagues will give us the opportunity to 
offer amendments. We need a lockbox for Social Security. But it should 
be a real lockbox, without an escape hatch. It should protect Medicare 
as well. And it should be designed in a way that doesn't pose a threat 
of a Government default and a worldwide economic crisis.
  Mr. President, I hope that we can come together on an understanding--
that the 98 Senators present last week voted on--that Social Security 
surpluses should be reserved exclusively--no ifs, ands, or buts--for 
Social Security beneficiaries. No loopholes. No escape hatches. No 
little crack in the door of the lockbox.
  I hope our colleagues will think seriously about this when they vote. 
And I want the American public to take note of what is going on here. 
They are the final arbiters of whether or not we are doing the right 
thing.
  Mr. President, I thank the Chair for his courtesy.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. ALLARD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             Cloture Motion

  Mr. ALLARD. Mr. President, I send a cloture motion to the desk to the 
pending lockbox amendment, No. 254.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The legislative clerk read as follows:


                             Cloture Motion

  We the undersigned Senators, in accordance with the provisions of 
Rule XXII of the Standing Rules of the Senate, do hereby move to bring 
to a close debate on the pending amendment No. 254 to Calendar No. 89, 
S. 557, a bill to provide guidance for the designation of emergencies 
as part of the budget process:
         Trent Lott, Pete V. Domenici, Ben Nighthorse Campbell, 
           Jeff Sessions, Kay Bailey Hutchison, Craig Thomas, 
           Slade Gorton, Chuck Hagel, Spencer Abraham, Thad 
           Cochran, Pat Roberts, Conrad Burns, Christopher S. 
           Bond, John Ashcroft, Jon Kyl, and Mike DeWine.

  Mr. ALLARD. Mr. President, on behalf of the majority leader, for the 
information of all Senators, this cloture vote will occur on Thursday. 
The majority leader will announce to the Members the time of the vote 
later today.


                            Call of the Roll

  Mr. ALLARD. Mr. President, I ask unanimous consent that the mandatory 
quorum under rule XXII be waived.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________