[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[Senate]
[Pages 7133-7149]
[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. The clerk will report the pending business.
  The legislative assistant read as follows:

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

  The Senate resumed consideration of the bill.
  Pending:

       Lott (for Abraham) amendment No. 254, to preserve and 
     protect the surpluses of the Social Security trust funds by 
     reaffirming the exclusion of receipts and disbursements from 
     the budget, by setting a limit on the debt held by the 
     public, and by amending the Congressional Budget Act of 1974 
     to provide a process to reduce the limit on the debt held by 
     the public.
       Abraham amendment No. 255 (to amendment No. 254), in the 
     nature of a substitute.

  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, I was about to ask what business we were 
on, and the Chair has answered the question.
  What I will do now is talk for a few minutes about the reasoning 
behind the amendment I brought on behalf of myself and Senators 
Domenici, Ashcroft, Lott, Nickles and several others, the so-called 
Social Security lockbox.
  First, I think it is important for our constituents to understand 
exactly what process happens now and what has been happening to their 
Social Security payroll taxes.
  If you are a working American, Social Security payroll taxes are 
taken out of your paycheck. Most Americans rue that little FICA box, as 
they know it means a reduction in the amount of take-home pay they 
have. The money that falls under the Social Security component of the 
FICA tax goes into the Social Security trust fund. From there it is 
used to pay Social Security benefits to retirees.
  Right now, however, the Social Security trust fund is taking in more 
money in taxes than it is paying out in benefits. We are doing that 
because in 1982 and 1983, as a result of the Bipartisan Commission's 
recommendations, we came up with an increase in the payroll taxes, the 
goal of which was to begin to build a surplus that could be used to 
meet the retirement demands, in terms of the system, of baby boomers.
  As a result, over the next 10 years, starting this year, Social 
Security will build up a surplus of $1.8 trillion. That means 1.8 
trillion more payroll tax dollars are going to go into the Social 
Security trust fund than will be needed to meet the retirement benefit 
paychecks that will be paid during that timeframe.
  As I think most Americans know, and it seems at least virtually every 
senior or person nearing senior citizen age in my State that I meet 
with knows, Social Security surpluses have, in recent years, been used 
to mask the size of the Federal deficit and basically to finance other 
Government spending--everything from foreign aid to funding for the 
bureaucracy in the Internal Revenue Service.
  Now, however, Mr. President, as a result of the hard work this 
Congress and previous Congresses have done in the last several years, 
we are on the verge of balancing the budget without using the Social 
Security surplus. In fact, over the next 10 years, the Federal 
Government will accumulate a total budget surplus of $2.7 trillion--
$1.8 trillion, as I mentioned, in the Social Security trust fund and 
$900 billion in non-Social Security surpluses.
  The question, then, is what should we do with the Social Security 
surpluses that we are contemplating generating over the next 10 years? 
Should we continue spending those surpluses on other Government 
programs, on new spending programs, or on increases in existing 
programs? Or should we save those dollars for Social Security? 
Remember, that was the intent of developing the surplus, to set aside 
additional surplus Social Security dollars for the day when Social 
Security income is no longer meeting its outflow in terms of paychecks.
  Well, those of us bringing this amendment today say, very simply, 
let's save it all. We want to save every penny of every dollar to fix 
the Social Security program, to modernize the program, so that it is 
ready to meet the demands of the 21st century. If we don't pass a 
Social Security modernization plan, then it is our belief that that 
money should be used to reduce the public debt and not used for new 
spending programs, for tax cuts, or for anything else.
  That is the purpose of the legislation we are offering in the form of 
this amendment--to set up, in effect, a safe-deposit box into which we 
would put Social Security surpluses to guarantee that they are used 
solely to modernize Social Security or to pay down the debt.
  Mr. President, this protection is needed. It is needed because, 
without it, the Social Security surplus will be spent. President 
Clinton said in a press statement of November 15, 1995, that he wanted 
``to assure the American people that the Social Security trust fund 
will not be used for any purpose other than to pay benefits to 
recipients.''
  ``Under current law,'' he went on to say, ``the Secretary of the 
Treasury is not authorized to use the fund for any purpose other than 
to pay benefits to recipients. There will be no exceptions under my 
watch. None. Not ever.''
  That is pretty unequivocal language: The Social Security trust fund 
will not be used for any purpose other than to pay benefits to 
recipients. Unfortunately, in 1998, as you will recall, the President 
threatened to shut down the Government if we didn't appropriate $21 
billion in new Federal spending, to

[[Page 7134]]

be funded, in effect, from the Social Security surplus. And now the 
Congressional Budget Office reports and has estimated that the 
President's latest budget, the one he submitted in February, spends 
$158 billion of the Social Security surplus--20 percent of the surplus 
that will be generated over the next 5 years on non-Social Security 
programs.
  If we have learned anything else over the last several years, we 
should have learned beyond a shadow of a doubt that money left in 
Washington will be spent in Washington. That includes money in the 
Social Security trust fund.
  I have singled out the President in my comments here because of this 
year's budget submission, as well as last year's spending bills; but it 
is not one side of the aisle alone that has a tendency to spend 
dollars. We have all voted for spending bills here that have taken the 
Social Security trust fund money and spent it elsewhere. In my 
judgment, the failure of the current budget process to provide 
safeguards against such spending demands that we put in place the kind 
of safe-deposit lockbox we are discussing here today in order to make 
sure that in the future the Social Security surplus dollars are 
protected, because unless we protect that surplus, in my judgment, it 
will be spent and we will not have adequate money to make sure that 
Social Security is not only available to today's seniors but tomorrow's 
seniors as well.
  The purpose of our Social Security lockbox is to make Social Security 
funds unavailable to those who want to spend them. First, it reaffirms 
that Social Security is off budget. Second, it establishes a 60-vote 
Senate point of order against any resolution or legislation that spends 
the Social Security surplus. Third, it establishes in law a declining 
limit on the amount of debt to be held by the public, which keeps 
Social Security moneys from being spent on Washington programs.
  In other words, Mr. President, initially on an annual basis, and then 
on a biannual basis, this legislation would mandate that the publicly 
held debt be decreased by the amount of money in the Social Security 
trust fund surplus until such time as we pass Social Security 
modernization legislation that would use those surpluses. In other 
words, if Congress does not pass a Social Security modernization plan, 
we will reduce the public debt, and the total amount over that 10-year 
period would be over $1.2 trillion--well over $1 trillion that would 
otherwise have been simply spent would, under this proposal, be used to 
pay down our debt. That, in turn, would lower interest rates, 
strengthen our economy, and strengthen the Social Security system 
accordingly. By strengthening our economy, this debt reduction will 
directly impact, in my judgment, not only economic growth but the 
strength of Social Security.
  Mr. President, in light of the time, I want to turn at this point to 
some of the comments that have been made on the Senate floor with 
regard to this amendment. Perhaps the most serious we have heard are 
serious charges that this amendment would prevent the Federal 
Government from meeting its obligation to pay Social Security benefits 
themselves. This is premised on a letter that was sent by Secretary of 
the Treasury Rubin some time ago--before this legislation was even 
drafted, I might add--criticizing the as-yet-to-be-drafted legislation 
on a number of counts. Some have referred to the letter from Secretary 
Rubin in expressing his concern about a bill not yet introduced.
  I urge my colleagues who have raised these concerns to please read 
the text of the amendment before us today. Let me point out in this 
regard that no fewer than three provisions in this amendment guarantee 
that there will be absolutely no disruption of any kind in the payment 
of Social Security benefits. We attempted--even though we had not yet 
drafted the legislation--in drafting the initial bill itself, which is 
offered in this amendment, to make sure that the concerns raised by the 
Secretary of the Treasury were, in fact, addressed. First, we included 
a recession trigger, which would suspend these public debt limits in 
times of recession and reinstate them only after we had recovered from 
a recession at a newly adjusted public debt level. Second, we included 
a provision seeing to it that no short-term task management problems 
would endanger Social Security payments. We have done that very 
specifically. Finally, we provided for a 7-month delay in implementing 
the lower debt limit figures--a delay that would make sure that when 
the publicly held debt limit was reduced, that event would occur at a 
time when the Treasury was at its maximum annual cash flow position, so 
that any type of management of money challenges the Secretary of the 
Treasury might have that might precipitate a short-term cash flow 
problem would not be encountered.
  In our judgment, this will provide the Secretary with a buffer that 
will be more than adequate, in terms of cash flow, to meet all Social 
Security obligations. In addition, the amendment contains a legal 
declaration that Social Security benefit payments required by law have 
priority claim on the U.S. Treasury. Such provision should not be 
necessary because in the highly unlikely and, indeed, unprecedented 
case of a default, I would be shocked to find that Secretary Rubin, or 
any of his successors, would give greater priority to spending dollars 
on foreign aid, corporate welfare, or the IRS bureaucracy than paying 
benefits to seniors. Nonetheless, to ensure that does not happen, we 
have included in this amendment a guarantee that, in the highly 
unlikely event of a default, Social Security benefits will be paid 
first.
  Finally, I must add one other guarantee of Social Security payments. 
I must mention one, and that is the Members of Congress themselves. I 
cannot conceive, and I am sure the Presiding Officer cannot conceive, 
that there is any Member of this body who would not vote to suspend 
these debt limits immediately if there was any risk of failing to meet 
our Social Security obligations. That would not happen. I don't think 
there is a Member in the House or the Senate who would vote to make 
sure those payments were met, and that is what we have--a point of 
order that can be overturned by a 60-vote Senate vote on the 
legislation.
  Social Security benefits are not endangered by this amendment. They 
are, in fact, made much safer by its provisions for saving Social 
Security, as well as the clear priority the amendment gives to all 
Social Security payments.
  The bottom line, Mr. President, is that we believe this amendment 
would make Social Security safer, and that is why 99 Senators recently 
voted for a sense-of-the-Senate resolution declaring that every nickel 
of the Social Security surplus should be saved in this way to fix 
Social Security, or to reduce the public debt.
  I urge those same 99 Senators to vote for cloture so that we can have 
an up-or-down vote on this amendment.
  I also say this. I know there are other Members who have other ways 
in mind as to how, perhaps, to address the challenge of protecting the 
Social Security surplus. In fact, I suspect the Senator from South 
Carolina, who spoke about this yesterday, will perhaps offer an 
amendment that he offered in committee. That is fine. I think we should 
offer different proposals. Let's vote them up or down. Let's not 
prevent votes from taking place. I would like a vote on this amendment, 
and I would certainly be happy to have a vote on amendments offered 
from other Members on either side of the aisle. But let's move the 
process forward.
  I think most people would like to see us addressing this issue head 
on and not deferring it and not refusing to take votes on it. I think 
what we should do is try to offer those various approaches and have the 
chance to have them debated in the context of the bill on the floor, 
and then vote on the amendment we are proposing, and on others as well, 
and we will see where the Senate judgment ultimately lies.
  In any event, Mr. President, I appreciate the opportunity to speak 
here today, and that I will now replace the Presiding Officer. I notice 
that the time for that, too, has arrived.

[[Page 7135]]


  Mr. HOLLINGS. Mr. President, will the distinguished Senator yield for 
a question?
  Mr. ABRAHAM. I will yield for one. I have to relieve the Presiding 
Officer.
  Mr. HOLLINGS. He doesn't mind. He loves it.
  I just heard coming on the floor the expression that ``every nickel'' 
is expended for Social Security. Is that correct, under this amendment?
  Mr. ABRAHAM. Our proposal, as the Senator knows, is to make sure that 
every Social Security surplus dollar is either spent in conjunction 
with legislation to modernize and guarantee the long-term solvency of 
Social Security, or used, as I said, to pay down the publicly held 
debt.
  Mr. HOLLINGS. That isn't what it says. ``Every nickel,'' the Senator 
said, could be used for Social Security. What I am trying to 
distinguish here, and asking the question, is the doubletalk, which 
obviously when you say ``every nickel'' used to reform or pay for 
Social Security or pay down the debt, now when you use moneys to pay 
down the debt, that is not for Social Security.
  Mr. ABRAHAM. As I think I laid out very clearly what the amendment 
does, I think the Senator from South Carolina would agree with me that 
when we take the Social Security surplus dollars and spend them on new 
spending programs or tax cuts or the expansion of existing programs--
that is what has been going on--I don't think that is what we want to 
see done with those dollars.
  Mr. HOLLINGS. Right.
  Mr. ABRAHAM. The issue is what do we do with them, if we don't spend 
them or use them for more spending programs?
  The legislation we are proposing says we either use those dollars to 
fix Social Security to deal with this long-term insolvency, or until we 
pass such legislation that we would use it to pay down the national 
debt.
  In my State, at least, I find an overwhelming number of people who 
feel that paying down the national debt is the one and only alternative 
for using these dollars. That makes sense to them because they know 
that will help us in the long term to address Social Security and 
solvency and a variety of other challenges that we face as a country.
  Mr. HOLLINGS. How do you pay down the debt with Social Security 
money, thereby causing a debt in Social Security? Social Security, I 
ask the distinguished Senator, is not responsible for the debt. In 
fact, Social Security is running a surplus, a surplus which was created 
intentionally to help fund the retirement of the Baby Boom generation.
  So let's both agree that Social Security hasn't caused the debt.
  Mr. ABRAHAM. That is right. I agree.
  Mr. HOLLINGS. When you use the expression ``to pay down the national 
debt,'' or the ``public debt,'' or whatever debt, it is debt caused by 
spending, or by tax cuts, or both. So you are not using every nickel 
for Social Security. On the contrary, what you are using is Social 
Security moneys to pay other debts for any and every purpose but Social 
Security.
  I don't understand the distinguished Senator coming along and 
supporting this. I don't want to see him get in trouble, because I am 
going to ask the majority leader to pull this amendment down. They 
don't want a vote on this. What he is saying is that he wants to save 
Social Security. I have the quotations in the file of everyone.
  Senator Domenici says ``every nickel'' to be spent on Social 
Security. Senator Gramm says ``every nickel'' to be spent on Social 
Security. I come in on the floor, and Senator Abraham says ``every 
nickel'' to be spent on Social Security. Then when you use the 
expression ``pay down the debt,'' which everybody wants, I agree with 
that. But when you use that expression and use that legislation, the 
amendment, to pay down the debt, in essence what you are saying is you 
are going to use Social Security, not for ``every nickel'' on Social 
Security, but for every nickel on any and everything other than Social 
Security.
  Mr. ABRAHAM. As the Senator from South Carolina knows, Mr. President, 
right now we are spending as much money as the current benefit system 
requires. We are fulfilling every single benefit which Social Security 
on an annual basis requires. The question is, If you have additional 
money, what do the American people want done with it? I think the 
American people do not want it spent for and don't want to see that 
additional surplus used for tax cuts. I think the American people are 
fed up with that.
  In my judgment, if the amendment were offered and passed, then that 
money will be spent, or it will be used in one of the fashions you have 
just described, the very way it has been used since 1983.
  So the question is which option do we prefer? I would like to see the 
money used to modernize Social Security. I hope we can on a bipartisan 
basis come forward with a plan that, in fact, modernizes Social 
Security for the 21st century. Until we do that, of the three choices 
left to us, it seems to me that at least the constituents in my State 
want to make sure that money doesn't get spent. I don't want to see it 
used for tax cuts. We want to see it used either to fix Social 
Security, or to bring down the national debt, because by bringing down 
the national debt we will, in effect, strengthen our position as we 
attempt to solve Social Security in the long term.
  Mr. HOLLINGS. I will get into the point about the national debt. I 
wish, as the Senator just outlined, ``pay down the national debt''--the 
truth of the matter is paying down the public debt has caused the 
national debt to continue to rise. We are not paying down the national 
debt.
  I wish Mr. Greenspan and Chairman Domenici, and all the rest who are 
talking about paying down the debt, would say, just as the Senator from 
Michigan has said, pay down the national debt, but the assumption is 
you have money left over. The truth of the matter is having used Social 
Security over the last several years, since 1983, to pay down the 
public debt, we now owe. We don't have a surplus in Social Security. 
This year the Social Security surplus is estimated to be $127 billion, 
but by the end of the year we actually will owe $857 billion to Social 
Security. Why? Because we loot money from the trust fund and use it for 
other things.
  That is my problem. And it was intended for the surplus money to stay 
there and to earn under section 201, in regular Treasury bills, 
government securities. And this year, if left untouched, it would earn 
almost $50 billion in interest for the Social Security trust fund.
  Incidentally, I know the Senator is a good businessman. That is the 
policy for corporate America. We make it a felony to pay down the 
company debt with the pension fund. Here we are paying down the 
government debt, whether it is public or the national debt, we are 
paying down the debt with Social Security, or the pension money, where 
it is a felony in private practice. We think that is a wonderful 
policy.
  Mr. ABRAHAM. We are sort of moving a little beyond the question here, 
I say to the Senator, in that I have to relieve the Presiding Officer.
  Here is what I say to the Senator from South Carolina. We have a lot 
of ideas. Senator Hollings has offered in the committee his alternative 
as to how we should deploy these resources, these surplus dollars. 
Others have talked about an even bigger lockbox than the one we are 
proposing that might encompass other areas of Federal spending. That is 
fine. I am more than happy to debate each of these options. I would 
just like to see us vote on this option.
  I would like to see the Members of the Senate have a chance to vote 
yes or no on the question of whether or not we create as an option to 
using these dollars for spending or tax cuts the option that would have 
to be followed of using it to pay down the debt.
  In my judgment, Mr. President, that is an option that seniors, and 
people who will soon be seniors, would prefer to see these dollars used 
for as opposed to the way they have been spent in recent years.
  But if a majority of the Senate thinks that they prefer to see these 
dollars spent, whether on tax cuts or

[[Page 7136]]

new spending programs, they can vote on it. And they should have a 
chance to vote on it. In fact, tomorrow they will have their first 
chance to vote on it. I say let's give the various plans their day in 
court here and let's see if the majority of the Senate supports one 
over the others.
  Mr. President, I yield the floor to the Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, I appreciate the distinguished Senator 
from Michigan yielding and engaging in a colloquy with me.
  Moving right to the point, it is not a question of this particular 
approach or that particular approach. It is this particular amendment 
by the distinguished Senator from Michigan. I think it ought to be 
withdrawn.
  What has been prompting this maneuver? They have been planning to see 
how in the world they could kill the President's program in one 
instrument while ensuring a tax cut on the other hand. In order to do 
that, they brought out the budget resolution with all that language I 
pointed out earlier yesterday repealing the pay-go rule. After 
repealing that pay-go rule, they can come in later with tax cuts.
  Incidentally, the tax cut is going to be scheduled so that it brings 
in, over the first 5 years, only a tax cut of about $142 billion; but 
over the next 5 years, $736 billion. That is how they get by the pay-go 
rule with that language in the concurrent resolution.
  Reading from the handout from the distinguished majority leader, and 
the author, the distinguished Senator from Michigan, it ``uses Social 
Security surplus to reduce debt held by public.'' What they are saying 
is they are using Social Security money to pay a debt.
  Now, if it was to pay the debt owed Social Security, the $857 billion 
which we will owe at the end of this year. Why is that? Because we have 
been paying down the public debt with Social Security trust funds. That 
is exactly why there is a debt in Social Security. Under the policy set 
by this particular amendment, you say that is exactly what we love to 
do, we are going to use the Social Security surplus to reduce the debt 
held by the public.
  This activity is illegal, in the sense that section 13301 of the 
Budget Act says you cannot use the particular moneys of Social Security 
in the general budget. There should never be a budget reported using 
Social Security moneys by the Congress, by the President, or in the 
budget resolution. That law, the Budget Act of 1990, was signed by 
President Bush. I heard a Member mention 99 Senators; 98 Senators, 
bipartisan, voted for section 13301, but that has been violated ever 
since its enactment, and that is why the debt continues to grow.
  Now, I would shut up, sit down, and take my seat if this amendment 
said ``use Social Security surplus to pay down the Social Security 
debt,'' but you are going to use the Social Security surplus to pay 
down any and every debt but the debt in Social Security and in the same 
breath say we want to save Social Security and this is how--put it in a 
lockbox. You say we will put it in a lockbox, and every nickel will be 
used for Social Security, yet this amendment actually guarantees that 
every nickel of that surplus will be used for any and every thing but 
Social Security.
  I am sure the Senator from Michigan wants to look at that closely 
with the Senator from Mississippi, the majority leader, because I had 
this particular debate last year in the election. My poor Republican 
opponent came with the same kind of language, and we put him right. We 
have different organizations to save Social Security. Max Richmond and 
the rest came down and gave me an award. This is a fact.
  And we wonder why there is no confidence in the Congress and why our 
Republicans get in trouble on Social Security. They get in trouble on 
Social Security because they tried to take it away in 1986. That is 
when they lost the U.S. Senate. Then they fought me. I finally 
embarrassed them into voting in 1990 to save it. I thought they would 
obey their own law. They didn't.
  Now, in an effort to get on top of the Social Security, they put out 
the rhetoric that every nickel is going to be saved for Social 
Security. I can state in this submission exactly what was said. Senator 
Domenici, the chairman, when asked, ``Why is that the case?'' ``Because 
we say put 100 percent of the accumulated surplus that belongs in the 
trust fund in the trust fund.''
  That isn't what the amendment says. It doesn't say, ``keep it in the 
trust fund.'' It says, ``use the money to reduce the debt''--any and 
every debt.
  How is the debt caused? Kosovo spending. How is the debt caused? 
Military pay. How is the debt caused? Foreign aid. Any and every 
program.
  The distinguished Senator from Michigan said that the Commerce 
Department was running up a debt unnecessary to the Department--abolish 
the Department. We are going to use Social Security money to pay for 
the Commerce Department--the very Department that the distinguished 
Senator said we ought to abolish.
  Let me read further. Here is the chairman of the Budget Committee:

       In addition, for those who are wondering what we are doing 
     about Social Security and what the President does about it, 
     let me remind you, we do not spend one nickel of Social 
     Security, of their money, for any new program. When the 
     President of the United States spent $158 billion in the 
     first 5 years out of Social Security trust fund without any 
     apologies, just said spend it, we say ``Don't spend it, keep 
     it in the trust fund and put it in a statutorily created 
     lockbox that would be tied to debt so it never can be 
     spent.''

  Further down:

       You do not have to be worried whether that Social Security 
     trust fund is going to be used for tax cuts because we cannot 
     direct that any of that money be used for tax cuts. It can be 
     used for the debt caused by tax cuts.

  They are running around wanting to reduce the debt. How can you 
reduce the debt by giving an across-the-board tax cut? That reduces 
your revenues and causes the debt to increase.
  Senator Gramm says:

       What this budget does on Social Security is very, very 
     simple. It says every penny [not just every nickel; the 
     Senator from Texas is a real conservative] every penny that 
     we collect in Social Security taxes that we don't have to pay 
     Social Security benefits should be dedicated to Social 
     Security, not to any debt caused by other programs in the 
     government.
       We should not spend it on any other Government programs, 
     nor should we use it for tax cuts. Senator Domenici, in a 
     proposal that is enshrined in this budget that we will have 
     to vote on, sets up a lockbox. We will not be able to spend 
     one penny of the Social Security surplus. This is vitally 
     important because, as everybody in the Senate knows [I am 
     quoting Senator Gramm] and I wish every American knew, our 
     Government has been using every penny of money coming into 
     the Social Security trust fund for other programs. We 
     currently have IOUs for this money.

  Mr. President, $857 billion, those are the IOUs. So the Senator from 
Texas and I agree that we have been stealing it. And how do we steal 
it? We use it to pay down the public debt. How is the debt caused? By 
tax cuts.
  So, what goes around comes around. I know the distinguished Senator 
does not want to join in that because he wants to save every nickel, he 
says. I will get the Congressional Record tomorrow and I hope they do 
not change it. But the quotation is there: ``Every nickel to be spent 
for Social Security.'' That is what Senator Gramm, the chairman of the 
Budget Committee, Senator Domenici, and the majority leader said. If 
you really want to save Social Security rather than spend it, you are 
going to, by gosh, vote against cloture, continue this debate so people 
can come to their senses. I can tell you that right now, I do not mind 
voting against it. You can tell my opposition to it.
  I will ask the distinguished Senator from Idaho, what about Social 
Security? I am trying to get sense out of this language here. 
Fortunately, the 19-page amendment is reduced. As it is described in 
the handout by the distinguished majority leader, it ``uses the Social 
Security surplus to reduce the debt.''
  How do you use the Social Security moneys to reduce the debt and yet 
spend every nickel--or every penny, as Senator Gramm says--for Social 
Security? The debt is not caused by Social Security. The debt is caused 
by anything and everything but Social Security. So, once you use Social 
Security

[[Page 7137]]

moneys to pay the debt--I will be glad if somebody will just explain 
that to me and I will be glad to stop. But I just do not understand how 
we save Social Security by spending its money on any and every other 
program--the debt of every other program but Social Security.
  Would the distinguished Senator want to respond?
  Mr. CRAIG addressed the Chair.
  The PRESIDING OFFICER (Mr. Abraham). The Senator from Idaho.
  Mr. CRAIG. Mr. President, I will certainly be happy to try to respond 
to the Senator. The Senator has been here a good deal longer than I, 
has spent a good deal more time on this issue than I, but he also 
understands the term ``the debt held by the public.'' Any time you 
decrease the debt held by the public, you increase the ability of 
Government to pay their obligations to Social Security. Because those 
obligations will not be ingrained in new spending--be it discretionary 
or entitlement spending--we set it aside and we do not obligate it 
except for, as you would have in this instance, a reduction of debt and 
a decline, therefore, of interest paid on debt.
  That specifically is what the language does. I think it is quite 
clear and it is quite obvious that we are not obligating Social 
Security trust funds anymore to entitlement spending or to 
discretionary spending. And, therefore, when the obligations of the 
trust fund come due, you have money available because you did not 
obligate it. Therefore, this Senator and I do not have to go to the 
public to raise taxes to pay for a system for which the public had 
already been taxed.
  I am not a budgeter, nor am I on the Finance Committee, but I have 
worked with the chairman of the Budget Committee in the crafting of the 
language. I find it quite clear, not very confusing at all.
  Mr. HOLLINGS. Does the distinguished Senator find that Social 
Security has caused the debt that we are talking about paying, whether 
it be public, private or otherwise?
  Mr. CRAIG. The Federal Government has borrowed money from the trust 
funds, as the Senator knows. That is the law that was created.
  Mr. HOLLINGS. But I am asking does it cause any debt? Did Social 
Security overspend?
  Mr. CRAIG. It creates an obligation to repay because it is taken out 
in the form of Treasury notes and interest paid, and certainly there is 
an obligation to pay back. Whether it is an obligation to pay back or a 
debt, then that is a game of semantics, but it is an obligation. If I 
had an obligation to pay, as the Government does, to the trust funds of 
Social Security, I would consider that a debt burden and something I 
would have to pay. And I am quite sure my accountant would want me to 
put that in the ``debt'' column of ``bills outstanding'' or ``money to 
be paid'' or ``owed to'' a particular payment scheme. I call that debt.
  Mr. HOLLINGS. That is because the Government has taken the money from 
Social Security?
  Mr. CRAIG. They have borrowed it by law, as was prescribed in 1935, 
from the trust funds. That is the only way the money can be held in the 
trust funds to generate interest on the account. That is correct.
  Mr. HOLLINGS. Held in the trust fund? Let's you and me stop there. 
Why not hold it in the trust funds? Why spend it?
  Mr. CRAIG. No, no. Because you would have to use it. If it sat idle, 
it would lose anywhere from 8 to 10 percent a year on interest it could 
be earning.
  Mr. HOLLINGS. It could be held in trust over in the Treasury. We have 
a measure to do that.
  Mr. CRAIG. And done what with it, invested in the stock market to 
gain money?
  Mr. HOLLINGS. No, invested under section 201. Under section 201 it 
must be invested.
  Mr. CRAIG. Loaned to the Government.
  Mr. HOLLINGS. Long-term securities. It takes securities but you can 
take that money and put it back into the trust funds so it can earn the 
interest.
  Mr. CRAIG. The Senator from South Carolina and I both know exactly 
what we are talking about. We are talking about the same thing. The law 
is very specific.
  Mr. HOLLINGS. Right.
  Mr. CRAIG. You don't loan it out to a bank. You don't play it in the 
stock market. You loan it back to the Government and the Government 
uses the money that they borrowed.
  Mr. HOLLINGS. That is where we differ. Why would they loan the money? 
Why not put it back in trust when we make that profit, the maximum 
amount allowable under law.
  Mr. CRAIG. If the Senator will yield just briefly, and I will let him 
have the floor for the remainder of his time, the Government is not 
going to pay interest on money they can do nothing with.
  Mr. HOLLINGS. We can buy those--you said the Government needs to do 
it?
  Mr. CRAIG. No, the law requires it.
  Mr. HOLLINGS. It is not a question of need, it is a question of law.
  Mr. CRAIG. The Government doesn't need to do it, the law requires it 
to do it. I did not write the law; it was written in 1935 before the 
Senator from South Carolina and I ever got here.
  Mr. HOLLINGS. That is what I want to say, exactly. And I think it is 
a very sound law and I am not trying to repeal it. I am trying to carry 
out its intent. That is, we reap those benefits like any other Treasury 
security. Mr. President, there is not any question we are in a dickens 
of a fix. The CBO predicts that at the end of 1999 we will owe Social 
Security $857 billion; in the year 2000, it will be $994 billion that 
will be owed to Social Security. I want you to get the feel and the 
picture of exactly what is coming. They are talking like this is the 
only way to do it.
  This is the only way to absolutely savage and destroy Social 
Security. They want to continue to do it formally with this particular 
amendment, because this amendment, by the year 2001, paying down the 
public debt with the Social Security surplus, we will owe Social 
Security $1.139 trillion. Extrapolating it on out, by the year 2007 we 
will owe Social Security, paying down the public debt, $2.205 trillion; 
and on the 10th year out, the year 2008, we will owe Social Security 
$2.417 trillion.
  There is where we are going to be faced, before we get to the point 
of the year 2012-2013, where they said the interest costs then are 
going to have to be consumed and not earned in order to make the 
payments. And by 2022, we will be totally out of money. By that time it 
will be about $4 to $5 trillion. But just in the short period, by 2008, 
they are talking about all of this going up and how we are paying down 
the public debt over the years, we are increasing the Social Security 
debt, all under the auspices and policy of saving Social Security. That 
is what this Senator is trying to ram home.
  This is not saving Social Security. This is spending Social Security, 
putting it in a deep hole, totally in the red, and there is nobody in 
his right mind going to come and start trying to raise taxes for $2.417 
trillion. That is the course we are on with this particular amendment. 
That is why the Senator from South Carolina is exercised.
  We have several problems. One, of course, is to save Social Security. 
The way they do it is to continue to pay down the public debt with this 
particular amendment. It uses the Social Security surplus to reduce the 
debt held by the public. That is exactly what we have been doing, and 
now we want to formalize it. In essence, in paragraph 1 of the 
amendment, they reaffirm section 13301 saying that you cannot do that, 
and then in a further paragraph on page 10, they say that is what we 
can do.
  I remember, Mr. President, when I was the Governor of South Carolina, 
we had a contest. We were cleaning up the insurance industry. We had 
the Capital Life Insurance Company. They were looking for a slogan. We 
came up with the winning slogan: ``Capital Life will surely pay if the 
small print on the back don't take it away.''
  That is exactly what we have in this amendment. They are trying to 
say,

[[Page 7138]]

``Oh, no, we're not changing the law at all. We have the very same 
thing. We are doing it exactly the way it has been done over the 
years.''
  This is a long amendment:

       This title may be cited as the ``Social Security Surplus 
     Preservation and Debt Reduction Act.''

  Then, it cites a finding. In the finding, Mr. President, right in the 
very beginning, page 3, section 1, it says:

       (1) Reaffirmation of Support.--Congress reaffirms its 
     support for the provisions of section 13301 of the Budget 
     Enforcement Act of 1990 that provides that receipts and 
     disbursements of the social security trust funds shall not be 
     counted for the purposes of the budget submitted by the 
     President, the congressional budget, or the Balanced Budget 
     and Emergency Deficit Control Act of 1985.

  That is to keep the money in Social Security.
  But if you turn to page 10, it has a very tricky clause in here. It 
is called ``calculation.'' They were calculating when they wrote this 
one:

       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 . . . and subtract that actual level.

  When you subtract that actual level, you pay down the public debt. 
That is where they satisfy we are going to use Social Security trust 
moneys to pay down or reduce the debt. Fine business. It is reducing 
the debt for any and every program in Government, whether it is 
entitlement, discretionary, defense spending, or whatever, for any and 
every debt caused by every and any program other--other--except for 
Social Security. That is what gets me.
  Then they say every nickel is going to be spent, every penny is going 
to be spent, lockbox, nobody can touch it, you can't get to this money 
for any tax cut or for any spending programs or anything else, but you 
can get it for the debt caused by tax cuts, for the debt caused by 
spending programs.
  That is exactly what this amendment does. I think it ought to be 
withdrawn, because Members should not want to be in a subterfuge 
situation of this kind trying to save Social Security and actually 
savaging the program.
  Mr. President, I got into this debate with the Office of Management 
and Budget when they used the word ``surplus.'' There is no surplus.
  We can see from another chart that as of the year 1998, the expected 
deficit, according to the Congressional Budget Office--and this is the 
most recent April 15 figure--is $109 billion. Then 1999, $105.2 
billion. They expect on the current policy--current policy is not $17 
billion to $18 billion for military pay; it is not $6 billion more for 
Kosovo; it is not the caps being busted; it is really, since we already 
spent $12 billion last year and already busted the caps in this year's 
budget, $21 billion.
  We are looking for $32 billion there. We ought to pocket right this 
minute over $50 billion. The task of the Congress to keep current 
policy to only get to a deficit--again, next year on the 2000 budget of 
$91.8 billion, Mr. President, we have to start cutting programs some 50 
billion bucks.
  That is not in the cards at all. My friends on the other side of the 
aisle who came and said, ``Look, what we want to do is get rid of the 
Department of Education,'' now say, ``What we want to do is increase 
spending for education,'' because education, we found out in the 
political polls, is a very important issue in the Governors' races.
  All over America, everybody is interested in education. So now we 
want to increase spending for education, and instead of abolishing the 
Department, they are looking at election 2000. So they say, ``What we 
are going to do is actually increase money.'' You can see at a glance 
that we are in trouble there.
  The deficit, under current policy, continues to go up, as you can 
well see by the gross Federal debt on page 38 of the most recent 
economic and budget outlook fiscal years of the Congressional Budget 
Office. They see that the debt continues to go up in the years 2000, 
2001, 2002, 2003, 2004, 2005. And then by the year 2006, the actual 
debt will start coming down. We will actually get in more money. We 
will spend less, for the first time, than what we take in.
  Right now, our dilemma is that just with current policy and not 
cutting $51 billion, we are going to have a $91 billion deficit. And if 
we do not cut some $50 billion from the spending programs to take care 
of the military, Kosovo, and the particular targets set, then we are 
going to be back to about $140 billion.
  We had a good record in 1993, and it was not Greenspan. I keep 
hearing how the people out there did it. No; we sweat blood and tears. 
We voted to increase taxes on Social Security. I hear about all the tax 
cuts. Where is the tax cut to reestablish the moneys back to Social 
Security? They have given that up. The Senator from Texas said they 
were going to hunt us down in the streets and shoot us like dogs with 
that thing. Senator Packwood stood on the floor and said he would give 
you his house if the program worked. Congressman Kasich, chairman of 
the Budget Committee on the other side, said he would change parties.
  The stock market has gone over 10,000. Still we have the lowest 
inflation, lowest unemployment rate, business confidence, what have 
you, and the program is still working. Greenspan has not had anything 
to do since 1993. He just sits there as a sage and talks about some 
kind of increased excitement or whatever else, however he phrases it. 
Actually, he just lets our particular program work, and we are proud of 
it. The deficit has been coming down each year.
  Now under this amendment, you can bet your boots that you are 
spending Social Security to pay down the public debt. While saying you 
are trying to save it, you actually are going to increase the debt.
  That is how the CBO figures show it. That is what has been done over 
the years. That is the current policy. And this particular amendment 
does not change it. It is just fancy language to come about and try to 
get credit for ``100 percent.'' The rhetoric is correct: ``100 percent, 
every penny, every nickel, lockbox, lockbox,'' everything else. But the 
actual instrument itself--``Watch what we do, not what we say,'' as the 
former Attorney General, Mr. Mitchell, said.
  So what we do have is fiscal cancer. I say that advisedly, Mr. 
President, because everybody in America should understand that this 
year we are going to waste $356 billion in interest costs on the 
national debt. That is money spent for nothing productive. And when you 
do that, you really are taxing the people.
  If you could start paying down that debt--not the public debt, 
because when you pay down the public debt it increases the Social 
Security debt. It is like two credit cards, of course, having a 
MasterCard and Visa card, and you want to pay down the MasterCard, the 
public debt, with your Visa card, the Social Security card. So as you 
pay down what they can see, and what the stock market loves--because 
they do not want the Government, with its sharp elbows, coming into the 
market running up interest rates, crowding out corporate capital, maybe 
causing inflation, and otherwise, slowing the economy, actually paying 
its bills.
  There is no free lunch. What happens is, your interest costs go up, 
up and away, as this particular chart shows.
  Back when we last balanced the budget, Mr. President, under President 
Lyndon Baines Johnson, the debt was less than $1 trillion. And the 
interest cost for 200 years of history and the cost of all the wars--
the Revolution, the Civil War, World War I, II, Korea, Vietnam--the 
interest cost of 200 years of history and all the wars, the interest 
cost was only $16 billion. And since that time, without the cost of a 
war, it has gone up to $356 billion--think of that--$340 billion more 
that we have taxed the American people that we have to spend.
  ``Government's too big,'' is the charge about tax cuts. ``The 
Government is way too big.'' What is too big is the waste that has been 
caused by this political rhetoric and litany going on about ``the 
Government's too big; therefore, we need a tax cut.''
  What we need is a tax increase. Can you imagine a Senator saying that 
on the floor? I am like the Senator from Michigan. I do not think too 
much spending cuts are going to occur to

[[Page 7139]]

take care of this particular problem for the simple reason we had 8 
years of President Reagan cutting spending, we had 4 years of President 
Bush cutting spending, we have had now another 6 years of President 
Clinton cutting spending--that 1993 Act cut spending $250 billion, and 
in fact it was way more than what we thought.
  As we went into the different programs, we increased taxes $250 
billion, which really amounts to about $310 billion. And we taxed the 
upper brackets, we taxed Social Security, as I have just described, but 
we got the economy going, and we started bringing the deficits down; 
but the debt kept going up because we kept spending Social Security on 
the public debt.
  That is how the debt has continued to go up, up and away on the 
Social Security. And the national debt has gone up. And it is fiscal 
cancer. You cannot give a tax cut if you are not paying your bills. You 
do not want to cut your revenue. You do not want to increase spending. 
Everybody agrees with that.
  But one way to make sure your debt continues to increase, which means 
the waste of interest costs continues, is a tax cut. But that is 
political jargon. We had that debate last year. And the distinguished 
colleague that I had opposing me, he wanted to have a tax cut. I said, 
let's pay down the debt. And we had put in a plan--I think the 
distinguished Presiding Officer should remember this because it was 
bipartisan.
  We had a conscience back 10 years ago. In 1988, we met in the Budget 
Committee, and you could see this so-called supply side--I wish my 
friend, Jack Kemp, was here because we would have a good debate. I will 
not describe that bus wreck that Senator Dole would always talk about, 
the bus going over the side--a bunch of supply-siders. He said that was 
the good news. He said what was the bad news was one empty seat.
  We were just causing the debt to go up, up. By the way, that is in 
the Congressional Record. That is not off-color by the Senator from 
South Carolina. I will get it out of the Congressional Record and show 
it to you. That is one reason I think Senator Dole lost. Because he and 
I worked on cutting down the debt, cutting down the spending, and then 
he went for a 15-percent across-the-board tax cut knowing that it was 
not any way to pay the bills and cut down the debt.
  But in any event, we realized, Mr. President, that we had to do 
something. So in the Budget Committee, in 1988, I presented a value-
added tax, a value-added tax of 5 percent, each percent raising about 
$35 billion, for about $185 billion.
  The distinguished Senator on the floor just momentarily asked, What 
are you going to do with the money? I say, put it in trust to not be 
expended except on reducing the deficit and debt. ``Reducing the 
deficit and debt,'' that was the language.
  I had Senator Armstrong from Colorado. I had Senator Boschwitz from 
Minnesota. I had six other Democratic Senators. We had eight Senators 
vote for that, and I appeared before the Finance Committee, and they 
quietly told me--they said, If we could have a secret ballot, we would 
pass it in a minute because we have to start doing it. I even wrote my 
friend, President Bush, and told him I would be glad to head up the 
Budget Committee effort and everything like that if he was really doing 
it. He said now is not the time. I will show you the letter.
  But we have been trying our best. If we had a VAT here, a tax 
increase allocated to the deficit and the debt, it would not only start 
paying it down, it would immediately remove about a 15- to 17-percent 
disadvantage of producing in the United States of America.
  Now we have all of these different commissions on competitiveness and 
productivity. Every industrialized country has a value-added tax. 
Canada has one. Japan has one. In Europe the average is about 17 
percent. And what we did is we brought the expert, Van Canosom was his 
name, from Holland, who had worked on both the Canadian and the 
Japanese, as well as the United Kingdom VAT. And he helped in an 
appearance before the Finance Committee.
  What we pointed out, in addition to paying down the debt, if 
everybody really wants to pay down the debt, we could also reconcile 
what you saw in the morning paper--$310 billion this year in deficit in 
the balance of trade. It went on to say that the economic experts were 
worried because we were consuming more than we are producing.
  The policy is not to produce in the United States. We are not 
competing really with the Japanese, really with the Mexicans. We are 
competing with ourselves. If you have a manufacturing plant, and 30 
percent of your volume is your labor cost, you can save as much as 20 
percent of the volume by moving your manufacturing to a lower-wage, 
offshore country. So if you have $500 million in sales, you can move to 
that low-wage, offshore country your manufacturing--just keep your 
executive office and your sales force in the United States--and 
immediately, before taxes, you make $100 million; or you continue to 
work your own people and go broke, because your competition is moving 
like gangbusters just over and fast.
  The only industries--as a former Governor I was in that game of 
industry attraction-- we are getting in South Carolina and in the South 
are foreign manufacturers who are trying to get into the American 
market, the richest market in the world.
  That is what is really happening. We are not getting any expansions. 
On the contrary, the already instituted manufacturer is moving, like 
textiles, with NAFTA. We have lost 30,000 jobs since NAFTA in the 
little State of South Carolina. We have Ambassador Barshefsky. She is 
worrying about bananas. And then I hear about the WTO with China, the 
People's Republic of China. I notice my friend, Tom Friedman, wrote an 
article that we had everything to win and nothing to lose.
  He doesn't understand there is a nonmarket economy in the People's 
Republic of China. Whereas, yes, we can bring a steel dumping case in 
here and have legislation already passed overwhelmingly in the House of 
Representatives, now before the Senate. The bill is at the desk, and we 
are ready to pass it. We could do that on our own. Join the WTO and you 
are bogged down in bureaucracy. You won a little vote. Cuba will cancel 
you out in the WTO. But he doesn't see anything wrong.
  We are trying to maintain our economic strength. The security of the 
United States of America is like a three-legged stool. The one leg is 
your values as a nation. We dedicate ourselves, again, in Kosovo and 
Bosnia, Somalia, feed the hungry and everything. America is the envy of 
the world for its values, individual rights, equal rights, freedom of 
all mankind. The second leg is the military, unquestioned, the 
superpower. The third leg economically has been fractured over the last 
50 years intentionally. We did it with the Marshall Plan. We sent over 
the expertise. We sent over the best machinery, and we won. Capitalism 
has generally prevailed in Europe and in the Pacific rim over 
communism. So we are proud of that.
  But now, as we try to build back our economic strength, we are 
spending like gangbusters. Our job policy program in this country is to 
get rid of all the jobs, send them all overseas. We are talking about 
the rich getting richer on the stock market, but we are actually 
eliminating the middle class in this country.
  So, yes, if you want to pay down the debt, I will be glad to work 
with someone on the other side, because that is the only way to get any 
legislation passed. It has to be bipartisan. If I can find somebody on 
the other side who is willing to take the risk, we can debate it. It 
might not pass this year, but then we have next year and maybe we can 
pass it next year. But somehow, somewhere we have to start paying the 
bill and quit running up deficits, politically describing them as 
surpluses in order to reelect ourselves. That is the biggest phony 
activity that is going on, the worst political charade. And then we 
wonder why, for example, we don't have the public's confidence.
  Mr. President, I got with Ken Apfel out at the Social Security 
Administration, because I was encouraged at the beginning of the year. 
I heard the

[[Page 7140]]

President say he was going to save Social Security. And then, of 
course, he was only going to save 62 percent. He was going to spend 38 
percent. And to be candid with you, the 38 percent was what he had been 
spending all along. The 38 percent now amounts to the $50 billion that 
he was spending when he first took office in 1993. So he was getting 
the same amount of money. The Social Security moneys went up, up and 
away, as you well know.
  I heard my Republican friends say, in a 99-0 vote, that we were going 
to save Social Security, every nickel of it, the distinguished 
gentleman said.
  So I introduced S. 605 after the advice of the counsel of the Social 
Security Administration itself. I can read paragraph 5 to you:

       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 funds--

  The Senator asked me on the floor a little while ago what we are 
going to do with it. You are going to comply with the law--

       pursuant to section 201(d) of the Social Security Act that 
     are outstanding on the first day of the month.

  So, yes, complying with the act back in 1935 that we invest the 
moneys of Social Security in Treasury bills, Government securities and 
immediately at the first of each month put that money back in trust in 
Social Security thereby earning its interest, very easily done and 
absolutely required to the point that if it is not done, it constitutes 
a felony in corporate America.
  I guess the McLain family is going to write me and say, please, don't 
quote my situation anymore. There was one gentleman up there in 
Detroit, where the distinguished Presiding Officer is familiar with, 
became the head of the corporation and paid down the company debt with 
a pension fund and was sentenced to jail. Now, you could find that 
gentleman, where he is serving, and say, next time run for the Senate; 
instead of a jail term, you get the ``good government award.''
  We put in here, with all dignity, we are going to save Social 
Security. We are going to have every nickel, every penny spent on 
Social Security, not on anything else. Here it is. Here is the handout. 
Using Social Security to reduce the debt. And it is to reduce the debt 
for any and every other program that you can think of other than Social 
Security.
  Social Security hasn't caused the debt. There is a debt; it doesn't 
pay the Social Security debt of $857 billion. It just allows that to 
continue to increase the next year to 900 some. If I could get that 
chart, I would like for them to see that.
  It goes up, then, to 994, almost $1 trillion, and then at the end of 
the 5-year period you owe $1.6 trillion and at the end of the 10-year 
period, you owe some $2.400 trillion. That is paying down the public 
debt. That is what my colleagues do not want to vote for.
  Let's keep the conversation and let's keep the debate going so that 
they all understand. I do not mind voting to kill it, but being in the 
minority--and I happen to be a minority of a minority, and I know how 
minorities feel and have to act; they do the best they can. Some would 
say I am taking an inordinate amount of time. Well, I have been trying 
to get time on the budget, but every time they get the budget, they 
control the time. I was going to have 20 minutes when we passed the 
budget resolution. They got me down to 15 minutes. They got me down to 
10. Then when they said I could have 5 and got up to talk, they said, 
no, you only have 3. So how can you explain the facts of life?
  We do have fiscal cancer, and this amendment continues to spread the 
cancer. You pay down the debt with Social Security moneys so that not 
every penny goes to Social Security, not every nickel goes to Social 
Security, but every penny and every nickel goes to any and other 
programs that have caused debt.
  Now, that is running the debt up in Social Security, all trying to 
save Social Security, trying to pay a worthy cause, trying to pay down 
the debt, another particular worthy cause.
  Let me make a proposition to the distinguished Presiding Officer. I 
know he is conscientious about this particular initiative, so if you 
really want to pay down the debt, we can go in with a VAT. I know he is 
for tax cuts. Maybe we can put in a 5-percent value-added tax and cut 
the payroll tax.
  It is very, very interesting, because all of these tax cuts, we need. 
The Government is too big. The Government is too big, so let's cut our 
revenues, but do not cut the working man's payroll tax, the fellow who 
is keeping the country together by the sweat of his brow. No, take the 
super rich where they have $10,000 in the stock market and give them a 
capital gains tax cut. Take the other rich who have money so they can 
get a write-off to go to college. Take another group and say, what you 
need is not to inherit these millions so you can sail around and join 
all the country clubs and drink up all the liquor and just have a happy 
time; let's have a reduction in the estate tax, all of these things, 
never saying cut the payroll tax.
  What is causing the surplus? What is causing the surplus they never 
get to. They do not have a conscience. I know that the distinguished 
Presiding Officer has a conscience, and maybe he will join me. If we 
can, you have to give a little in order to get a little, I understand, 
in this political game.
  I am ready to put a value-added tax out right and allocate it in 
Treasury like we tried to do back in 1988, but I will try it again here 
in 1999. But in order to get some votes, since they are interested in 
giving tax relief, we can get an offset, a certain amount of the 
payroll tax, a 5-percent cut in the payroll tax, 5-percent value-added 
tax.
  Once we put that in, then we will really do away with consuming 
America; we will really start paying down the bills and you will 
increase the strength of the economy and you will, in essence, be 
giving a double tax cut to that poor fellow in the middle on the 
payroll tax. Those are the men and women who really need consideration.
  If we can do that and stop spreading this fiscal cancer, Mr. 
President, we can really get this country continuing to move into the 
next century. But what we are doing now, as we are looking at November 
2000--the election--and we have to cut the revenues to increase the 
debt, all the time talking about we want to pay it down, we want to 
spend Social Security in order to save Social Security, increasing its 
debt going into the red, and its instability, and otherwise in trade 
continue not enforcing our dumping laws, but rather going along with 
bananas and citrus--they think they have something.
  I don't know how many banana growers we have and how many citrus 
growers. I think the citrus comes in a big tanker down in Florida from 
Brazil. They send a big concentrate tanker in, and I would be willing 
to wager that the majority of citrus consumed in the United States is 
coming out of South America, or maybe Mexico. I remember Castro was 
sending his citrus to Mexico, and Mexico was sending its up here. So it 
was a foreign aid program for Castro and Cuba all the time with the so-
called embargo.
  What we need is to continue to have a dynamic manufacturing economic 
strength program where, like Henry Ford said, ``I want to pay my 
workers enough money so they can buy what they produce.'' That produced 
and developed the strength of democracy in America, the middle class. 
What we are doing with this gamesmanship is saying we are going to pay 
down debt while we increase the debt, and saying we are going to save 
Social Security while we savage it, and saying we are looking out for 
the economy, and the Government is too big, while increasing its size 
and spending for nothing, and increasing the waste, as we give these 
so-called tax cuts.
  Mr. President, we are on the wrong road. The state of the Union is 
not all that good. The country is in good shape, but the Government--if 
we had a board of directors or stockholders to vote on it, and they 
knew exactly what was going on with corporate USA, they would run us 
all off, because it is one

[[Page 7141]]

grand fraud, a fraud that is intent to deceive.
  I know the people backing this particular amendment know better. They 
understand that when they say they pay down the debt, it sounds pretty, 
but the truth of the matter is that they take Social Security, 
increasing its debt, taking its money to pay down the debt, but all the 
time increasing the national debt and increasing the interest costs and 
increasing the fiscal cancer.
  I yield the floor.
  Mr. LAUTENBERG. Mr. President, as we continue to debate the so-called 
Social Security lock box legislation, let me again emphasize that we 
Democrats strongly support the purported goal of protecting Social 
Security surpluses. But many of us also feel that this legislation 
would be a serious mistake, for three reasons.
  First, it does nothing to protect Medicare. Instead, it allows 
Congress to squander funds needed for Medicare on 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.
  Also, the amendment contains a loophole that would allow Social 
Security contributions to be diverted for purposes other than Social 
Security benefits, such as risky new privatization schemes or tax 
breaks.
  And, third, the amendment threatens a government default. This could 
undermine our nation's credit standing, increase interest costs, block 
benefit and other payments, and ultimately lead to a world-wide 
economic crisis.
  For all these reasons, as I explained in more depth yesterday, I 
believe the pending amendment is seriously flawed.
  Today I want to talk a little more about some of the practical 
problems involved with the amendment, and why the last minute changes 
proposed by its sponsors fail to adequately address these problems.
  Mr. President, the amendment before us would establish limits on 
public debt that were constructed based on the Congressional Budget 
Office's projections for the next ten years. Under the proposal, those 
limits would be locked into law, and could be changed only for a few 
very narrow reasons, such as wars or emergencies.
  But it's important for our colleagues to understand that CBO's 
projections are highly uncertain. And it doesn't make sense to create 
inflexible and legally-binding debt limits based on those projections.
  Consider what happened to CBO's budget estimates last year. On March 
6, CBO revised its earlier estimate and said that we would have a 
fiscal year 1998 surplus of $8 billion. That was March 6. Two months 
later, on May 6, that $8 billion estimate mushroomed to a new estimate 
of $43 to $63 billion.
  So, in just two months, CBO's surplus projection changed by up to $55 
billion. And, I would note, even the upper range of the May estimate 
turned out to be too low. The actual surplus was about $70 billion.
  Keep in mind that these projections were for a figure five to seven 
months in the future. Now we're being asked to rely on projections of 
up to ten years. And if we're wrong, what's the result? A government 
default and a world wide economic crisis.
  Mr. President, you don't have to be a critic of CBO to question the 
accuracy of their estimates. CBO itself devoted an entire chapter of 
its Economic and Budget Outlook to uncertainties in budget projections.
  CBO compared the actual surpluses for 1988 through 1998 with the 
first projection of the surplus it produced five years before the start 
of the fiscal year. Excluding the effects of legislation, the remaining 
errors averaged about 13 percent of actual outlays.
  According to CBO, a deviation of 13 percent of projected outlays in 
2004 would produce an increase or decrease in the surplus of about $250 
billion. In 2009, a 13 percent error would produce a swing of about 
$300 billion, In fact, since the errors made ten years in advance are 
probably larger than the errors in estimates made five years ahead--
which, again, is where the 13 percent figure came from--the deviation 
in 2009 is likely to produce an even larger swing.
  It is simply dangerous to establish a rigid 10-year plan based on 
such speculative projections. The whole approach is fundamentally 
flawed.
  Our Republican colleagues have added two provisions to their 
legislation that they argue would provide a sufficient cushion to 
prevent an unintended default. But these provisions won't solve the 
problem.
  The new proposal would delay the implementation of each year's new 
debt limit by seven months, to kick in on May 1 of each one- or two-
year period rather than on October 1. The sponsors argue that this 
would make the new limit effective at a time when the Treasury tends to 
be flush with cash. This, they say, would ensure that the new, lower 
limit would not immediately trigger a default.
  Unfortunately, this change is like plugging a small hole on the 
Titanic. And it won't prevent disaster.
  First, it can only work if the CBO projections on which the debt 
limits are based prove accurate. And, as I've already discussed, we 
know they won't be.
  But even if by some miracle the estimates are right, that still may 
not take care of the problem.
  Let's take, for example, a year in which there is a recession. Now, 
my friends on the other side of the aisle will point out that they have 
provided an exception for recessions. But that exception won't work 
very well.
  Mr. President, we're not very good at predicting recessions. And, 
typically, by the time we know we're in one, we've actually been in it 
for a while.
  The recession exception in the amendment only kicks in after we have 
two quarters of low economic growth. But a slowdown could easily begin 
in one quarter, but late enough to keep growth for that quarter above 
the threshold for the exception. We then might have two quarters of low 
growth followed a few weeks later by the release of the official data 
triggering the exception.
  By that time, we would be eight or nine months into a recession. We 
would have had months of lower tax revenues and higher outlays for 
unemployment compensation and other programs. And, together, those 
changes already could have pushed us over the new debt limit and into 
default.
  Mr. President, a recession exception does no good if it is declared a 
few months after we've gone into default. We cannot take default back 
and say an exception should have been in place.
  It already would have happened. And Americans would have to pay for 
it through higher interest rates on their mortgages, car loans, and 
credit cards. Businesses would have to pay for it through higher 
borrowing costs. And taxpayers would have to pay for it because 
investors will demand higher interest rates on Treasury bonds.
  This would be an economic disaster for our country. And it would 
create an international economic crisis of unknown dimensions.
  Mr. President, under the Republican lock box, I'm afraid the question 
is not ``will this happen?'' The question is ``when will it happen?''
  That more than anything is why this proposal is so irresponsible. 
It's why Secretary Rubin is recommending a veto. And it's why it's so 
important that senators be allowed to offer amendments to improve it.
  Mr. President, this proposal was finalized only yesterday afternoon. 
And when they presented it, the sponsors themselves expressed openness 
to further tinkering. Unfortunately, there will be no opportunity to 
make any improvements unless we reject cloture tomorrow.
  So I would urge all my colleagues to oppose cloture. This proposal is 
seriously flawed. If we're serious about protecting Social Security, 
let's take the time to do it right.
  Mr. CRAIG addressed the Chair.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator from Idaho 
is recognized.
  Mr. CRAIG. Mr. President, the debate today on the floor on S. 557 is 
not a fraud; it is a real shakeup with reality that a lot of our 
Senators and some Members of this Congress don't want to

[[Page 7142]]

face, because for years we have had the tremendous flexibility in this 
country of borrowing money from the Social Security trust fund and 
spending, and spending, and spending.
  I think the American public is suggesting to us that that time ought 
to come to an end. There is no question that, in 1994, it began to come 
to an end. Some Senators can't face the reality of the changes that 
occurred then. But the American economy did, and it responded robustly 
when Government curbed its appetite to progressively spend a greater 
amount of the gross domestic product of this country. And it is now 
with a balanced budget and a surplus, generated by Social Security 
payroll taxes, that we have an opportunity to turn to the American 
people and, for the first time in a long while, say to the American 
people that we can not only ensure your Social Security without a new 
tax increase, but we can modernize it for future generations so that it 
will be a reliable and an earning annuity of the kind that most people 
would like their retirement account to be.
  At the end of this fiscal year, the Social Security trust fund will 
hold an estimated $853 billion. This year alone, it is projected to run 
a $127 billion surplus. The Social Security trust fund's $853 billion 
balance equals roughly half of the total Federal budget for this year. 
It equals America's total income tax payment for this year. Every cent 
of every dollar that every American pays in income tax will just equal 
the Social Security trust fund balance. Yet, how much actual money has 
been set aside for Social Security's $853 billion balance? Not one 
cent. Not one cent.
  Why are we, then, arguing about the concept, if not the reality, of 
an idea that begins to set it aside? Now we are starting to split the 
hairs on how it is set aside. I don't think it is time for that 
anymore, because I believe the American people no longer trust us. You 
cannot argue Social Security from 1935 to today and say, ``Trust us,'' 
because the American people have said, ``You spent the money, you 
indebted the country.'' We are saying that time should stop.
  Of course, the White House is playing one of the most phenomenal 
double standards that I have ever seen a White House play, because, as 
we know, President Clinton proposes quite the opposite today from what 
he proposed a year ago. I have not seen the Senator from South 
Carolina, in any way, try to defend what his President is talking 
about--and I am glad he isn't--because what the President talked about 
is raiding Social Security this year, when last year he said that every 
penny of it ought not to be spent, except for Social Security.
  What we are suggesting to the President is that he honor his first 
commitment instead of his latter commitment. What was it called? Save 
Social Security first. This year, he wants to spend $158 billion of the 
surplus, and he just sent up a bill for $6 billion more. Perhaps the 
time has come when defending the definition of ``is'' really isn't 
worth defending because what was last year isn't this year.
  The American people are very wise to the man in the White House who 
says one thing one day and contradicts himself the next day with a 
straight face. President Clinton's proposal reminds me of St. 
Augustine's confession on having prayed for chastity-- ``but not just 
yet.''
  Over the last holiday, I traveled home to my State of Idaho. I spoke 
to hundreds of people across my State about Social Security. I called 
it ``seniors to seniors'' town meetings. I asked the high school 
teachers to send their seniors from high school, and I asked the AARP 
and the senior centers to ask if their seniors would attend. We had the 
charts and we had the graphs of Social Security, and where it is, and 
where it is from the 1983 act, and how it will be solvent to 2014 or 
2015, and then by 2034 it is in trouble. Everybody sat and listened and 
anticipated.
  Then we talked about the surplus and the opportunity to modernize, as 
a result of that, to transition ourselves generationally into the 21st 
century with the true annuity program that not in any way blights the 
American economy but probably creates the kind of energy and driving 
force it deserves. It was not where we just played the old pyramid, 
Bismarckian game of Social Security where you had 1 retiree versus 8 or 
10 at the base paying.
  The Senator from South Carolina is right when he talks about the 
working person today and that response, because in 2034--I think I 
might be around then--I am going to be a Social Security recipient. I 
am going to be getting more than $1,000 a month in Social Security. 
There are going to be two people out there working, each one of them 
paying $500 out of their hard-earned money so I can live well. That is 
a travesty.
  I have a feeling that my grandkids are going to turn and say, 
``Grandpa, we can't afford you anymore. You are a liability to us 
because we can't afford to put our kids in college because your Social 
Security is costing us too much.''
  So what does that have to do with the debate this evening? It has a 
great deal to do with this debate, because what we are talking about is 
a generational opportunity. I am not going to debate Reagan economics. 
That would be like debating FDR and blaming him for the big Government 
we have today, and forgetting Congresses from FDR to today that could 
have made those changes.
  We have changed a lot since Ronald Reagan and George Bush. My guess 
is, decades from now we will change a lot more from what the Senator 
from South Carolina or the Senator from Idaho will do or would be about 
to do. That is the way our Government should work. It is not stagnant. 
It is not static. It is dynamic, sometimes for positive and sometimes 
for negative.
  But today and tomorrow, a balanced budget and a true surplus on the 
operating accounts means we have a generational opportunity to make a 
change like none I have seen in the years I have had a chance to serve 
Idaho in the Congress.
  Idahoans find it hard to believe that the President and future 
Congresses can resist the temptation to raid future surpluses and spend 
them. Why should they trust us? That is what we have done in the past. 
Sure enough, we have a balanced budget, and now we are at war in 
Kosovo, and here comes a new bill for $6 billion. What are we going to 
do? My guess is we could tighten our belt just a little bit, guarantee 
the stability of Social Security and the integrity of the trust fund, 
and recognize the priority of war, as past Americans did, over certain 
kinds of domestic spending, and spend accordingly.
  That is going to be the test of this Congress in the coming days, and 
it is a legitimate test, it is a responsible test.
  So I thank Senator Abraham, Senator Domenici, Senator Ashcroft, and 
others who, like many Americans, said, you know, we have an 
opportunity, and let's build a lockbox safeguard to assure that we can 
make this generational shift to modernize Social Security for the 21st 
century, to guarantee it to those who are receiving today and those who 
will receive from this system in the near future, but possibly--just 
possibly--create an environment where we can make some changes for the 
future.
  I say it is nothing short of historical. I believe it to be true. For 
the first time since Social Security began over 60 years ago, we would 
set aside all its moneys for all its intended purposes. This would 
amount to about $1.8 trillion over the next 10 years.
  The Abraham-Domenici-Ashcroft proposal would require 60 votes for the 
Senate to dip into the Social Security surplus. And it would require 
the money be set aside by instituting and then lowering a limit on the 
public debt. It is a legislative money belt for Social Security. It is 
not a straitjacket for government. We recognize there are true 
emergencies. While as much as 29 days ago we would not have recognized 
ourselves in war, we now must recognize that we are at war. So we have 
shown the flexibility for that concern.
  It would allow an exemption for real Social Security reform. It would 
save not only Social Security money but Federal money too.

[[Page 7143]]

  Setting aside Social Security surpluses also means retiring Federal 
debt. I don't care how the debt was generated. The public holds the 
debt in a general sense. It may have been generated by defense spending 
or social spending. Government borrowed the money and spent it. The 
debt is not categorical to each area of government. We all know that.
  So I think it reasonably unfair to debate it in that manner. That is 
why we focus on the debt as debt held by the public.
  According to the Congressional Budget Office, compared to spending 
that $1.8 trillion, as has been done until now, setting it aside would 
reduce Federal interest payments $468 billion over the next 10 years.
  Some Senators want to talk about a tax increase to fund the largess 
of Government. How about running the system right so we save that kind 
of obligation and outlay? $468 billion worth of savings in 10 years is 
pretty darned good. It can be done, and we should do it now with a 
balanced budget and a surplus.
  We save Social Security's $1.8 trillion surplus for its modernization 
of the system, and we save $468 billion in interest payments as a 
result.
  Guaranteeing Social Security and guaranteeing savings--who wants to 
be against that?
  Now there are going to be some who will find rather unique arguments 
to say we have to vote ``no'' against this. It is a political trap for 
the year 2000. How about a political reality for the 21st century? That 
is what this legislation is all about--guaranteeing Social Security and 
guaranteeing savings.
  Who wants to be against that? The same people who wanted to raid it 
for $158 billion this year. I would expect the American people do not 
find that too surprising.
  John Dillinger hated bank vaults. It made his job harder.
  Big spenders in Washington will hate this lockbox because it leaves 
their appetite for spending without food.
  In last year's State of the Union Address on the other side of this 
very Capitol, President Clinton said:

       I propose that we reserve 100 percent of the surplus--
     that's every penny of any surplus--until we have taken all 
     the necessary measures to strengthen the Social Security 
     system for the 21st century.

  What a difference a year makes, or a word, or the opportunity to 
focus the American public in a different direction. Now he proposes not 
to keep his promise. But, rather than admitting he opposes it because 
of his desire to keep his hand in the Social Security cookie jar, he 
uses the same old scare tactics to which he has always resorted when 
cornered.
  The administration has sent us a veto threat on the Social Security 
lockbox. That has been about the 40th or 50th veto threat we have had 
from this administration in a reasonably short period of time.
  It is also out of date--remarking on a proposal that is far different 
from what we debate here today, because that veto threat had the 
question of money management in it. And that was taken care of by the 
authors of this bill.
  Why did President Clinton claim to oppose the security lockbox?
  First, he claimed that it would hurt in times of recession.
  If we are in a recession, we can declare that to be an emergency and 
we all know that. However, the proposal before the Senate would not 
even apply in a time of recession. We have taken that safeguard.
  Second, President Clinton claims it would limit the Treasury's 
ability to manage the Government's normal cash flow. This, however, has 
been addressed in the legislation now before the Senate. In addition, 
limits already exist on Treasury's ability to borrow and have since 
1917. Listen to your Secretary of the Treasury, Mr. President. Does 
President Clinton want us to abandon the statutory debt limit that now 
exists? I presume, under his Treasury's twisted logic, that he would 
oppose the existing legal limits if it were now being offered for the 
first time.
  It is ironic that he uses his Treasury Secretary to make his 
opposition for him. This is the same Treasury Secretary that just 3 
years ago circumvented the existing statutory debt limit by raiding 
Social Security trust funds for billions of dollars. Let me repeat 
that: The President who appoints a Secretary of the Treasury and says 
leave every dime in the trust funds is the same President whose 
Secretary of the Treasury just 3 years ago moved the law around 
existing statutory debt limits by raiding Social Security trust funds 
for billions of dollars.
  They called that disinvestment. ``Scheme'' is a better word. I call 
their opposition now disingenuous, because if that was disinvestment, 
what they say today is truly disingenuous to what this Congress wants 
to do and what the American people have demanded and are now asking 
for.
  Other than these, President Clinton offers no reason with any 
justification to argue opposing the lockbox. He claims it will not help 
the Social Security trust fund, and others are now claiming that, too. 
Yet saving the surplus is what he proposed just a year ago. I guess now 
that we are proposing it, it is not a good idea; when he proposes it, 
it is a good idea.
  Does he claim that his spending of $158 billion of the Social 
Security trust fund over the next 5 years will help Social Security? 
President Clinton also claims, again, that his phony transfer scheme 
would help Social Security. I could go on in those details, but other 
Senators are waiting to speak on this issue.
  There ought to be no schemes or gimmicks this time. This is a very 
straightforward proposal. I guess it is honesty that frustrates the 
other side. It is clarity, it is easy to understand by the American 
people. The idea that you just cannot spend at will anymore, you have 
to balance your budget and you have to face the hard truth of spending, 
and maybe the honest truth that if you are going to spend more, you 
have to tax more. Then you give the Congress a choice: Should we cut 
spending to balance the budget, or should we shift our priorities in a 
time of war, while assuring to the American people that their pensions, 
their retirement, their security will remain stable and that the 
Congress will not raid it. That is what the issue is here.
  It is not a matter of quoting history anymore. It is a matter of 
looking into the future. It is a matter of taking the unique 
opportunities today that we have to move forward.
  In those town meetings that I held across Idaho less than 3 weeks 
ago, I think senior citizens left feeling that Social Security for 
themselves was intact; they also left recognizing that probably their 
grandchildren did not expect it to be there for them, that they would 
pay three or four times more money into it and get three or four times 
less out of it. I think it is time that we think about all generations 
of Americans, young and old alike.
  I voted for the 1983 Social Security Reform Act. I am proud that we 
built that strength and that stability into the system, but I am not at 
all proud of the way this Congress spent the reserves in those trust 
accounts and built the debt that it built. While there is a lot of 
fingerpointing as to how that debt got there, there is one easy way to 
solve it; that is, to vote no.
  Finally, we have a Congress that is willing to face up to it. Out of 
that Congress comes a balanced budget. Out of that balanced budget 
comes a surplus. Out of that surplus comes the unique opportunity to 
strengthen and modernize Social Security. We do that by assuring to the 
American people that we will no longer borrow it off into all branches 
of government, but that we will lock it up, we will pay down debt, we 
will increase the strength and the financial stability of our 
government and we will honor the trust funds' commitments to recipients 
of Social Security. That is what the debate is about today. That is 
what we have created with S. 557. No more, no less.
  We don't need to quote a lot of history. The American people know 
what we have done. Most importantly, they are extremely excited about 
what we are proposing to do. For the first time, there is a strength of 
honesty and stability to their government with balanced budgets and 
surpluses that they

[[Page 7144]]

have not seen for a long while. They are not fearful of debt anymore 
because debt begins to decline. More importantly, we begin to pay it 
down so that we have the strength to honor our commitments in the 
future.
  That is what S. 557 is all about. I am amazed it finds opposition. I 
think it ought to be bipartisan. It is, without question, the way to 
save Social Security: Honor its commitments and project its strength 
and its modernization into the 21st century.
  I yield the floor.
  Mr. VOINOVICH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. VOINOVICH. Mr. President, I am proud to be a cosponsor of the 
Lott-Domenici Social Security lockbox amendment. This is the first real 
step in the effort to save Social Security. I thank the Senator from 
New Mexico, Senator Domenici, and Senator Abraham for their hard work 
in drafting this legislation and ensuring it comes to this Senate 
floor.
  During my campaign last year for the Senate, I visited almost every 
region of the State of Ohio. During those visits, I asked the question 
of those in attendance, How many in this room pay a payroll tax? Every 
hand went up. Then I asked, How many of you expect to receive Social 
Security? Only those close to retirement raised their hands.
  It was perplexing to me because it verified something my son George 
said to me--George, the summa cum laude graduate, undergraduate law 
school, CFE of a corporation--``Dad, I'm not going to see a dime of 
Social Security.''
  What a terrible thing, in a country like ours, where about two-thirds 
of the people who pay more into the Social Security funds than they do 
in taxes don't believe when the time comes for them to retire there is 
going to be anything there for them. I said during those visits that I 
was going to do everything I could to put a firewall between the Social 
Security trust fund and the general fund of the United States of 
America.
  I think we all recognize that part of the problem that we have had in 
this country since the Vietnam war is that after that war we didn't 
have the money to pay for it, nor did we have the money to pay for the 
great society. So we took the trust funds and placed them into the 
general fund, using them to mask a deficit. In other words, we weren't 
willing to pay for those things that we were spending our money on.
  Today, we have a chance to pass some legislation which gives honor to 
the sacred trust between the Federal Government and every American. I 
believe we need to get away from treating the Social Security trust 
fund as a part of the budget and wall it off from any temptation to use 
it for tax cuts or for new spending. We have been playing games with 
Social Security for too long. It is time to stop.
  The Senator from Idaho in his remarks today mentioned the fact that 
the President will be sending up a request for some $6 billion to pay 
for the war in Kosovo. The American people should know that that money 
is going to come from Social Security.
  Because the Social Security surplus is all there is. That is the 
surplus that we have today. There is not any onbudget surplus. There 
will not be any onbudget surplus until the year 2001, if we are lucky.
  So it seems to me that one way we can guarantee to my son and to all 
those other people I visited during that campaign, and to the American 
people, that one way we can at least begin to guarantee there will be 
something there when they retire is to put that money away so it cannot 
be touched.
  I wish there was a way you could put it into Fort Knox, so it could 
not be touched. But the fact of the matter is, the way this Government 
works today is that money in the Social Security trust fund is used to 
buy Treasury bills that are then used to pay for a lot of things that 
we do not have money to pay for. The thing about this lockbox proposal 
is that it takes all the Social Security trust fund and uses it to pay 
down the public debt, which means instead of it being used for spending 
programs, at least we are going to get the benefit for a period of time 
of paying down that public debt.
  I think it is real important that we are candid with the American 
people and tell them this is not the end of the solution, we have to 
tackle reform of Social Security. But one step, one gigantic step is 
for the first time saying we are no longer going to use it to pay for 
spending programs.
  In all due respect to the President of the United States, when this 
debate started several months ago, he said: I want to protect Social 
Security and I am going to use 62 percent of the unified budget, as 
Senator Hollings just said here this afternoon, to protect Social 
Security. The fact of the matter is the only surplus we have is Social 
Security, so he is going to take 62 percent of the Social Security 
surplus to protect it and use the other 38 percent of it for spending 
programs or whatever. On my side of the aisle, they talked about using 
the 38 percent to reduce taxes. On the other side of the aisle, we are 
going to use it for a little tax reduction, we are going to use it for 
spending programs, protect this and protect that. But it was a fraud. 
The only surplus we have is Social Security.
  So I am really quite concerned that today we hear the President 
saying: I am going to veto this legislation. Either you are for taking 
the first step to protect Social Security or you are not. You also 
ought to be in favor of putting all of this in the lockbox because you 
know what it is going to do? It is going to force us, if we want to 
keep the budget agreement, or if we want to maintain the budget caps, 
to find some other money; either reprioritize the dollars that are 
being spent on other programs or perhaps raise the dollars, raise more 
money to pay for these programs on which people want to spend money.
  I repeat, all of this started back after the Vietnam war. We will 
have a big decision here one of these days to decide whether or not we 
are going to get involved in an all-out war with Serbia. That is going 
to cost a whole lot of money and the American people ought to know that 
one of the considerations is how are we going to pay for it? Are we 
going to pay for it with the Social Security surplus? Are we going to 
borrow the money? Think about it.
  I have a great deal of respect for Senator Hollings. I think he and I 
are the only ones who had amendments to use the onbudget surplus to 
reduce the debt. I concur in that. I think that is what we ought to do.
  I just had my second grandchild and my grandchildren's gift from the 
Federal Government was a bill for $187,000 to pay interest on a debt 
they had nothing to do with. I think it is horrible that this debt 
keeps going up. Senator Hollings is right; the debt is going to 
continue to go up.
  Mr. HOLLINGS. Will the distinguished Senator yield?
  Mr. VOINOVICH. Certainly.
  Mr. HOLLINGS. Mr. President, I congratulate the distinguished Senator 
from Ohio. He got a lot of heat. But what he was trying to do, like we 
both did as Governors, is just hold the line and make certain that we 
can save something. On the figures of the Congressional Budget Office, 
he said 2001, they said 2006, that there would be an actual surplus and 
we could then pay down the debt. So I voted for the Voinovich 
amendment, and the distinguished Senator helped me on our amendment. We 
got 24 and he got even more votes, if I remember.
  So I congratulate the Senator's sincerity in his endeavor. Let me ask 
the distinguished Senator the question, when he says the only surplus 
we have is that of Social Security, that is true, although we have some 
other surpluses in the military retirement, civil service retirement, 
and other matters here. But isn't it the fact that the only debt we 
have is other than Social Security? In other words, Social Security has 
not caused the Government debt, be it public debt, private debt, or any 
other kind of debt, because we have been paying off Social Security and 
enjoying the surplus each year since 1983. Is that not the case? I 
mean, when you say pay off the debt----
  Mr. VOINOVICH. If the Senator will yield?

[[Page 7145]]


  Mr. HOLLINGS. Yes.
  Mr. VOINOVICH. It is my understanding what we would do with this 
lockbox money is to use it to pay down the public debt, which would 
lower the interest costs to our Federal budget every year. But at the 
same time it would mean that money ultimately would have to be paid 
back to the Social Security trust fund.
  Mr. HOLLINGS. Right. But when you say ``pay it back,'' you will use 
Social Security moneys to pay down debt that is caused by any and every 
other Government program, be it entitlements or defense or foreign aid 
or Kosovo or military pay that we voted for--whatever it is--but it is 
not a debt that was caused by Social Security. Is that correct?
  Mr. VOINOVICH. If the Senator will yield, that is correct. But the 
alternative to that, from my perspective, is that the money, the Social 
Security money, would then be used for spending programs that could be 
used to pay for the war or to pay for education or pay for a lot of 
other things.
  Mr. HOLLINGS. And that is how you pay for it, by paying down their 
debt. You pay down the debt of the war, the debt of the spending 
program and everything else. That is what we have been doing. That is 
why on this chart, I showed it, under CBO we owe Social Security $857 
billion. The particular amendment that has been introduced and is now 
subject to a vote tomorrow does not pay down Social Security's debt. It 
pays down the public debt, which is any and every other debt than 
Social Security.
  Mr. VOINOVICH. I say to the Senator, in all due respect, that is a 
whole lot better than doing nothing at this time, when he knows and I 
know if it is there to be taken--let's just take what the President 
did. The President said, ``I want to protect Social Security,'' and 
said, ``but I want to use 38 percent of it for other spending 
programs.'' This would eliminate this money being used for those other 
spending programs. This would allow the money to be used to pay down 
the debt and give us a little time in the meantime to come up with a 
real reform of that Social Security program. We know that is something 
this Congress is going to have to do if we really want to guarantee to 
the next generation that there will be something there for them.
  Mr. HOLLINGS. I know the Senator was not here with Senator John 
Heinz, a Republican Senator from Philadelphia. He and I worked together 
back in 1990 and we held the floor for quite some time. We thought at 
that time--that is why I am questioning and speaking advisedly--we 
thought at that time we had a lockbox. We put in section 13301.
  Mr. President, I ask unanimous consent to have section 13301 printed 
in the Record.
  There being no objection, the material 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 other surplus or 
     deficit totals required by this title.''.

  Mr. HOLLINGS. That said, you could not use Social Security in a 
unified budget; namely, you could not use it for any spending programs, 
tax cuts, and everything else. But they ignored it, since it was only a 
budget law and we did not make it a criminal statute to lock up the 
Congress or lock up the President of the United States for doing it.
  It has been totally honored in the disobedience thereof. We have not 
done it. Now I work with the administrator of Social Security. I want 
to show this to the distinguished Senator. It is S. 605, and it puts 
the money over in Treasury. You said you wish we could put it in Fort 
Knox. I can change that if the distinguished Senator would cosponsor 
it. We will say put it in Fort Knox, not to be spent for any purpose 
other than Social Security. It can be done.
  The dilemma we are in is, section 201 of the original Social Security 
Act says to use those moneys to buy Treasury bills or Government 
securities. Don't leave the money, then, with the Government when you 
buy that security. Count that same amount of money to be transferred 
back into the Social Security trust fund. Thereby, you have the money 
and you have also earned the interest each month.
  That is the way to do it, under the counsel of the Social Security 
Administration. I have checked it with other lawyers because I had been 
frustrated. I thought we had a lockbox. Oh, boy, Senator Heinz and I 
talked about the lockbox back in 1990, and President George Bush, on 
November 5, signed it into law. That is the law today. That is 
reiterated in this amendment to S. 557, on page 3:

       Congress reaffirms its support of the provisions of section 
     13301.

  But then on page 10, they spend it. What do they spend it for? For 
debt. Who caused that debt? All other programs, all programs other than 
Social Security. Social Security does not cause public debt, it is 
caused by other programs. That is how they get around the nuance of 
spending it.
  What we have, I say to the Senator, is a lockbox that everybody has 
the key to except one group--the Social Security folks. When you pay 
down the public debt, you can spend it for everything because that is 
what causes the public debt. That is why I was a little taken aback--
you try to talk politely on the floor, and my distinguished friend from 
Idaho said he was really worried about the honesty of this thing. You 
don't want me to get up and holler about the dishonesty, because I know 
the intent of the distinguished Senator from Michigan who offered it is 
good. I would not accuse him of being dishonest. But it is inaccurate, 
I can tell you that. It is totally, totally inaccurate to say that you 
have a lockbox. It is misleading when you use the expression ``pay down 
the public debt.''
  Mr. VOINOVICH. If the Senator will yield, one of the things I have 
learned, and this is my 33rd year in the business, is that you crawl 
and you walk and you run. You tried with Senator Heinz to come up with 
something you thought was going to lock it up.
  Mr. HOLLINGS. Right.
  Mr. VOINOVICH. I have been working with Senator Domenici since the 
day I came here to figure out something, and it is not easy to put that 
lockbox in place. Based on all of the information that I have, the best 
thing that we could do at this stage of the game, if we really want to 
block it off, is this legislation. It may not be perfect, but the fact 
of the matter is that it is much better than the current situation 
which allows the Social Security surplus to be used for spending 
programs.
  Mr. HOLLINGS. In violation of section 13301.
  Mr. VOINOVICH. If the Senator will yield, you know and I know, we 
have had all that language in there, and they keep doing it. They have 
used that money to pay for new programs.
  Mr. HOLLINGS. You are right.
  Mr. VOINOVICH. They have used that money to provide for tax 
reductions. Can you imagine that, tax reductions?
  Mr. HOLLINGS. Exactly. I agree. You are exactly right on that score, 
and you and I have the same intent. But I am trying to explain the best 
I can. All you have to do is read the language.
  I ask unanimous consent, Mr. President, that a document titled ``The 
Social Security Surplus Preservation and Debt Reduction Act, Summary of 
Amendment,'' dated April 20, 1999, by

[[Page 7146]]

the majority staff be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

    The Social Security Surplus Preservation and Debt Reduction Act


                  summary of amendment, april 20, 1999

       The Act is effective for ten 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.
       1. Reaffirms Off-Budget Treatment of 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.
       2. 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 public 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 to become 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 follow:

     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
     May 1, 2008 through April 30, 2010--$2.404 trillion

       3. Adjustments to Limits for: Social Security Reform, 
     Recessions, Emergencies and War.--1. 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.
       2. 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.
       3. 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.
       4. Declaration of War. The Act would be suspended upon 
     Congress enacting a declaration of war.

              PROJECTIONS OF FEDERAL DEBT ASSUMING THAT ON-BUDGET SURPLUSES ARE REDUCED TO ZERO AFTER 2000 USING CBO'S MARCH 1999 BASELINE
                                                        [By fiscal years, in billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    1998      1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Debt Held by the Public at the       3,771     3,720     3,628     3,512     3,383     3,245     3,100     2,945     2,775     2,595     2,404     2,203
 Beginning of the Year..........
Changes:
    Surplus \1\.................       -69      -111      -133      -145      -153      -162      -171      -184      -193      -204      -212      -218
    Other.......................        18        19        16        16        16        16        15        14        13        12        11        11
                                 -----------------------------------------------------------------------------------------------------------------------
      Total.....................       -51       -92      -117      -129      -137      -145      -156      -169      -180      -191      -201      -206
Debt Held by the Public at the       3,720     3,628     3,512     3,383     3,245     3,100     2,945     2,775     2,595     2,404     2,203     1,997
 End of the Year................
Debt Held by Govt Accounts......     1,769     1,956     2,164     2,376     2,601     2,833     3,072     3,321     3,577     3,842     4,107     4,373
Gross Federal Debt..............     5,479     5,584     5,676     5,758     5,846     5,933     6,016     6,096     6,172     6,246     6,311     6,370
Debt Subject to Limit...........     5,439     5,545     5,838     5,721     5,809     5,897     5,981     6,062     6,139     6,214     6,279     6,339
 
                                                                 AS A PERCENTAGE OF GDP
 
Debt Held by the Public at the       44.3%     41.4%     38.6%     35.7%     32.8%     29.9%     27.2%     24.5%     21.9%     19.4%     17.0%     14.8%
 End of the Year................
MEMORANDUM
Baseline Total Surplus..........        69       111       133       156       212       213       239       263       309       338       358       383
On-Budget Deficit (-) or Surplus       -30       -16        -5        11        59        61        68        79       116       134       146       165
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Surpluses are shown here as negative because they decrease the debt.
 
NOTES.--Projections of debt assume that discretionary spending will equal the statutory caps on such spending through 2002 and will grow at the rate of
  inflation thereafter. Reduction of the on-budget surpluses is assumed to have no effect on trust fund holdings.
 
Source: Congressional Budget Office.

  Mr. HOLLINGS. The Senator has the floor. I apologize for 
interrupting. It says: ``Uses the Social Security Surplus to Reduce the 
Debt. . . .'' Then it goes on to say:

       The surplus could not be used for non-social Security 
     spending or tax cuts.

  But when you say pay down the debt, that is actually what you are 
doing, is using the money for non-Social Security spending or maybe a 
tax cut, but it is not Social Security spending.
  Mr. VOINOVICH. If the Senator will yield, the problem that we have is 
that currently under the law, my understanding is that you need to buy 
the special Social Security Treasury bills with this money, and when 
you do that, the Federal Government has those dollars. What they have 
been doing with those dollars is paying for programs that they would 
not be able to pay for if they had not been using those special bills.
  This legislation at least stops that from occurring.
  Mr. HOLLINGS. How?
  Mr. VOINOVICH. It is going to take the money, and instead of spending 
it, at least we are going to get the benefit of reducing the debt which 
brings down the interest rate. It is a worthy alternative to the 
current situation.
  Mr. HOLLINGS. We have about $3.6 billion in public debt and about 
$1.8 billion or $1.9 billion in Government debt. Yes, you reduce the 
public debt, but you increase the Social Security or Government debt. 
What happens is the overall debt continues to go up.
  It is like I explained a little bit earlier about having two credit 
cards. I have a Visa card and a MasterCard. I want to pay down the 
public debt with the MasterCard. I said what I will do is use my Visa. 
So I pay down the MasterCard with the Visa card, but my name is on the 
Visa card, and I owe just that same amount of money.
  You can see by paying down the public debt, that is the unified 
deficit using the trust funds. It has been going down, and even the 
regular debt has been going down until now. It is going to start back 
up. The overall debt has been increasing up, up and away. It was less 
than $1 trillion.
  This is the cancer you and I worry about, not just the Social 
Security recipient getting their money, but it was less than $1 
trillion when President Johnson balanced the budget, and the interest 
cost was only 16. Now it is $5.7 trillion and interest costs of almost 
$1 billion a day. That is all for nothing. That is almost $340 billion 
in increased spending each and every year for absolutely nothing. That 
is the biggest

[[Page 7147]]

waste. When you say Government is big, that is the big part.
  Mr. VOINOVICH. We are spending $600 million a day on interest costs.
  Mr. HOLLINGS. Actually almost a billion a day. Interest costs are 
over $363.8 billion a year. So the debt is going up.
  That is a beautiful little description that Alan Greenspan and the 
rest give that when you pay down the public debt, the interest costs go 
down. That is not the fact at all. Interest costs continue to increase.
  The Senator from Ohio has been very indulgent. He has the floor, and 
I apologize. I think he and I have the same frustration and the same 
intent. I advisedly and very seriously and very sincerely say look at 
this particular entry on page 3. That is exactly what they do, they 
reaffirm the lockbox, but on page 10 they transfer the money back to 
the debt, and it is every and any debt but Social Security. It can be 
spent for any and every amount, and it runs up Social Security and that 
goes into the national debt and that goes into the interest costs and 
that continues to increase. That is what has happened.
  When I was Governor, we had an insurance scandal, and we began to 
clean up the industry. One of the companies reorganized and said, ``Now 
we need a new slogan.'' I said, ``Capital Life will surely pay if the 
small print on the back don't take it away.'' That is exactly what we 
have here in this amendment. You have it on page 3, the lockbox, and 
now on page 10, you take it away.
  Mr. VOINOVICH. The Senator yields back his time. Thank you.
  I have enjoyed the discussion we have had. Obviously, there is a 
difference of opinion between the Senator from South Carolina and the 
Senator from Ohio.
  Based on all of the research work that I have done, and the options 
that are available to us, to me this is the most practical way, Mr. 
President, to deal with the problem that we have had for too long in 
this country. I believe that with the passage of this lockbox 
legislation, we are going to go a long way in making sure that this 
money is not being used for spending programs that we are unwilling to 
pay for and have not been willing to pay for in the past. The real 
beginning of the deficits that we have had began when we merged the 
Social Security surplus in with the unified budget and started to spend 
it.
  In fact, in 1979 the national debt was something like $860 billion. 
Today it is $5.7 trillion. I believe that this is the first step that 
we need to take to restore trust in those people in this country who 
are worried about Social Security, understanding that it is not 
perfect--understanding that it is not perfect--and understanding that 
this Congress needs to come together, on a bipartisan basis, hopefully 
with the leadership of the President, and tackle the problems that we 
have with the Social Security system in terms of guaranteeing its 
viability for the future. And that is something that hopefully we will 
get to this year; and if not then, hopefully next year; and if we do 
not then, when we elect a new President.
  Mr. President, I yield the floor.
  Mr. HOLLINGS. Mr. President, I will yield the floor in just a few 
seconds here. The statement was made that it would not put Social 
Security in a straitjacket. But the amendment does.
  I have the letter here from the distinguished Secretary of the 
Treasury. In yesterday's debate, we introduced the letter, 
substantially the same, dated March 17.
  This is dated April 21. It explains the serious objections that the 
distinguished Secretary of the Treasury has to the particular 
amendment. I ask unanimous consent that the letter be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                   Department of the Treasury,

                                   Washington, DC, April 21, 1999.
     Hon. Thomas Daschle,
     Minority Leader, U.S. Senate,
     Washington, DC.
       Dear Tom: This letter transmit an analysis of the Social 
     Security Surplus Preservation and Debt Reduction Act, the 
     amendment offered by Chairman Domenici and Senators Abraham 
     and Ashcroft to S. 557, which is currently being debated on 
     the Senate floor. This Act would create new statutory limits 
     on debt held by the public in addition to the existing 
     ceiling on the total debt held by the public and the Federal 
     trust funds. Our analysis indicates that this provision could 
     preclude the United States from meeting its financial 
     obligations to repay maturing debt and to make benefit 
     payments--including Social Security checks--and could also 
     worsen a future economic downturn. Let me refer you to my 
     earlier letter as I will not repeat here all of the concerns 
     I have with this proposal. For all of the reasons I mention 
     there, I would recommend to the President that he veto this 
     Act if it were presented to him for his signature.
       It is still my view and the view of the Administration 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. By the time a debt 
     limit is reached the Government is already obligated to make 
     payments and must have enough money to meet its obligations. 
     These proposed new debt limits, despite the changes made, 
     could run the risk of precipitating a debt crisis in the 
     future.
       The proposal makes only limited exceptions for 
     unanticipated developments on the non-Social Security side of 
     the budget. However, the potential for forecast error is 
     great even for estimates made for one year in the future, let 
     alone for ten years. Projections of future budget surpluses 
     are made using hundreds of assumptions, any of which is 
     subject to error. Indeed, the Congressional Budget Office 
     (CBO) studied the errors in its own five-year estimates and 
     concluded that, based on their average deviation, the annual 
     surplus estimate for 2004 could vary by $250 billion. Much 
     smaller forecast errors could cause these new debt limits to 
     be reached.
       The amendment's shift of the effective date from October 1 
     to May 1 may provide some degree of cushion but it does not 
     eliminate the risk that the debt limit could be reached in 
     the normal course of business. It reduces the debt limit just 
     after the large revenue bulge in April. However, the size of 
     the cushion and the impact of the timing shift can be far 
     smaller than the deviations from surplus projections 
     described above.
       The amendment could run the risk of worsening an economic 
     downturn. The debt limit would be suspended following two 
     consecutive quarters of real GDP growth below one percent. 
     However, an economic slowdown of any duration that did not 
     result in real growth of less than one percent for two 
     consecutive quarters could increase spending and reduce 
     recipts--and both CBO and OMB estimates indicate that such a 
     moderate slowdown could require the borrowing of hundreds of 
     billions of dollars over a period of just a few years. 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. In addition, there would be 
     a lag of at least seven months from the onset of a recession 
     to the time that the statistics were available to demonstrate 
     two consecutive quarters of real growth of less than one 
     percent. During these seven or more months, as in the first 
     case, revenues would likely decline and outlays increase 
     necessitating that Congress either reduce other spending or 
     raise taxes. In both cases, the tax increases and spending 
     cuts could turn out to be inadequate to satisfy all existing 
     payment obligations and to keep the debt under the limit, and 
     the debt-limit crisis could worsen.
       In addition, the Act does not guarantee that Social 
     Security benefits will be paid as scheduled in the event that 
     the debt ceiling were reached. The Act requires the Treasury 
     Secretary to give priority to the payment of Social Security 
     benefits but, if the Treasury could no longer borrow any 
     money, there might not be enough cash to pay all Social 
     Security benefits due on a given day. We believe that all 
     obligations of the Federal government should be honored. We 
     do not believe that prioritizing payments by program is a 
     sound way to approach the government's affairs (e.g., giving 
     Social Security payments precedence over tax refunds or other 
     benefits, such as those for veterans). In addition, this Act 
     does not indicate how this complex prioritization process 
     should be implemented, no system currently exists to do so, 
     and any such system would be impractical.
       Clearly, there could be very serious risks to Social 
     Security and other benefits and to the credit worthiness of 
     the United States if this Act were enacted into law. To 
     ensure fiscal discipline, the Administration recommends 
     instead that the pay-go rules and the discretionary spending 
     caps in current law be extended beyond FY 2002. These tools 
     of fiscal disciline--which do not rely on debt limits--have 
     been highly effective since they were adopted in 1990 on a 
     bipartisan basis. I urge the Congress to consider these 
     provisions--rather than new debt ceilings--as the best choice 
     for maintaining our hard-won fiscal discipline.
           Sincerely,
                                                  Robert E. Rubin,
                                        Secretary of the Treasury.


[[Page 7148]]

  Mr. HOLLINGS. I ask unanimous consent to have printed in the Record 
also section 21 of the Greenspan Commission report, Mr. President.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                 Social Security and the United 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. The reason I do that is the distinguished Senator from 
Idaho said he was here and voted for the Greenspan Commission report. 
And the Greenspan Commission report said: Look, as sort of a lockbox, 
take the Social Security trust funds out of the unified budget.

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

  You see we contemplated back in 1983 the baby boomer problem. And it 
is now determined to be not a baby boomer problem, but an adult problem 
on the floor of the National Government right here in the Congress.
  I will ask consent also to have printed in the Record the surpluses 
so they will have the exact figure. But we have the surpluses go up 
each year. I ask unanimous consent to have printed in the Record the 
Social Security trust fund surpluses from the year 1999 through the 
year 2008, as computed by the Congressional Budget Office.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                             SOCIAL SECURITY TRUST FUND SURPLUS, CBO DECEMBER 1998 BASELINE
                                                        [By fiscal year, in billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        1999      2000      2001      2002      2003      2004      2005      2006      2007      2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trust fund surplus..................................       126       137       144       153       161       171       183       193       204       212
Interest received by fund...........................       -52       -58       -64       -71       -79       -87       -96      -105      -115      -126
                                                     ---------------------------------------------------------------------------------------------------
Non-interest surplus................................        74        80        80        82        83        84        88        88        88        86
Trust fund balance, end of fiscal year..............       857       994     1,139     1,291     1,453     1,624     1,807     2,000     2,204     2,416
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.

  Mr. HOLLINGS. Mr. President, in 1999 we have a $126 billion surplus; 
in 2000, a $137 billion surplus; and then out into the year 2009, a 
$217 billion surplus. We contemplated that at the time of the enactment 
of the Greenspan Commission and said we are going to build up, like a 
good, responsible insurance company, a reserve so that we could take 
care of demands of the baby boomers in the next generation.
  If we said, at that particular time, Mr. President, that the money is 
going do be spent for any and everything, as the Senator from Ohio and 
I have just been discussing, we would have never voted for the payroll 
tax. You could not have gotten a vote except to save Social Security at 
that particular time. And we contemplated a reserve fund. Instead, they 
got all of these super-duper plans to solve the baby boomer problem; 
when the truth of the matter is, the big thing to do--and it almost 
puts it back solvent--is quit looting the Social Security trust fund 
for debt caused by any and every other program but Social Security.
  And one final point: The lockbox, in other words, with this 
particular measure, gives everybody the key but Social Security. When 
you say, pay down the public debt, you are paying down the debt caused 
by any and every other program, whether it is entitlement, 
discretionary or defense. That is the debt. Because it is not Social 
Security's debt. I wish they would pay down the $857 billion they owe 
Social Security.
  But they said, pay down the public debt. That increases the Social 
Security debt. The debt increases, as shown for the next 5 years by the 
Congressional Budget Office. The debt increases, interest costs 
increase.
  We are getting by now, but if we go back to the regular order of 
business economically in this country, we are really going to be 
savaged. And when they say honesty, what really frustrates the people 
who oppose this amendment is the honesty of it--I don't want to say the 
dishonesty, but the incorrectness of it.
  This amendment ought to be withdrawn. It actually continues what we 
have been doing that got us into this particular fix in formalizing. 
And they know it is formalizing and dignifying the savaging of the 
Social Security trust fund.
  I thank the distinguished Senator from Wisconsin for his indulgence. 
I yield the floor.
  Mr. FEINGOLD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. FEINGOLD. Thank you, Mr. President. And let me especially thank 
the Senator from Ohio and the Senator from South Carolina for their 
courtesy in allowing me to speak at this time.
  I want to simply acknowledge that the Senator from South Carolina is, 
in my mind, the leader in the entire Congress on trying to make sure 
that we actually protect the Social Security trust fund and that it not 
be subject to the kind of raids it has been subjected to for the last 
30 years. I give him enormous credit for that. He has been my leader on 
this issue. I thank him for his continued advocacy in protecting the 
Social Security trust fund.
  Ms. SNOWE. Mr. President, tomorrow's vote on the Social Security 
lock-box legislation will be a defining moment for the Senate. Members 
will be making an unequivocal statement about how they feel about the 
Social Security program: Do we truly believe Social Security's monies 
should be protected and preserved from spending raids? Or are we 
willing to allow Social Security monies to be treated as a ``piggy 
bank'' that can be tapped and diverted to other federal programs?
  I think the answer to these questions should be obvious--and I 
believe the 99 Senators who voted on March 24 for an amendment calling 
for adoption of the lockbox provision during the consideration of the 
Senate's FY 2000 budget resolution have an obligation to uphold the 
commitment they made to protect Social Security's monies and vote for 
the lock-box proposal.
  Every Republican and every Democrat present voted for the substance 
of this proposal just a few short weeks ago and--accordingly--I hope 
they will vote to conclude debate tomorrow. The Administration's 
opposition to this legislation should come as no surprise, especially 
considering that President Clinton's FY 2000 budget proposal relied 
heavily on Social Security's surpluses to fund numerous other programs. 
Specifically, the President's budget would have raided $158 billion 
from the Social Security surplus over the coming five years to pay for 
other programs, while the Republican budget preserves every penny of 
the Social Security surplus.
  In light of the President's diversion of Social Security monies to 
other programs, the members of the Budget Committee--by a nearly 
unanimous vote of 21 to 1--voted for an amendment I offered during the 
markup that called on Congress to reject any budget that would spend 
any portion of Social Security surpluses for any program other than 
Social Security. Not coincidentally, when the President's budget was 
later brought to a vote in the Senate, it was resoundingly rejected by 
a vote of 97 to 2.
  The bottom line is that the time has come for Congress and the 
President to

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stop relying on Social Security's surpluses to fund other government 
programs. The Social Security lock-box legislation we are now 
considering provides a hard and fast means of protecting these monies, 
while providing needed ``safety valves'' for recessions, emergencies, 
declarations of war, or legislation that strengthens the Social 
Security program. Accordingly, I urge my colleagues to uphold their 
commitment to this proposal by voting to conclude debate and bring the 
Social Security lock-box proposal to a Senate vote.
  Thank you, Mr. President. I yield the floor.

                          ____________________