[Congressional Record (Bound Edition), Volume 146 (2000), Part 7]
[Senate]
[Pages 9470-9475]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     THE FUTURE OF SOCIAL SECURITY

  Mr. GRAMS. Mr. President, I want to take time today to again talk 
about what I think is one of the most important issues facing Americans 
this year, and probably in the next few years; that is, what is the 
future of Social Security? How are we going to make sure we have a safe 
and sound retirement system not only for those on retirement today and 
those about to retire, but also for our children and our grandchildren?
  I have held around the State of Minnesota more than 50 townhall 
meetings trying to outline the problems facing Social Security today, 
and a plan I have introduced called the Personal Security and Wealth in 
Retirement Act, which would move from a pay-as-you-go system to a 
fully-funded, market-based personal retirement accounts.
  When you look back at the last 65 years of Social Security, it has 
basically done the job we have asked it to do; that is, to provide 
retirement benefits for millions of Americans. But if you look ahead to 
the next 30 years, the system has problems. It is facing some real 
problems. It is being strained to the limit. In fact, there will not be 
enough dollars collected in the system to pay the benefits the 
Government has promised. If the Congress does nothing, Social Security 
benefits will have to be reduced as much as one-third or more over the 
next 25 years.
  The biggest risk to Social Security is to do nothing. And there are 
those who are willing to stick their heads in the sand maybe to get by 
another election and to ignore the problems facing Social Security.
  Let me go through some of these things very quickly.
  When Franklin Delano Roosevelt introduced Social Security in 1935, he 
had concerns that it would only be run by the Government. He wanted 
part of it to be private accounts. In fact, there was many Americans 
who were allowed to stay outside of Social Security. In fact, there 
have been a number of state and local governments over the years--as 
late as 1981--that saw this loophole, opted out of Social Security, and 
created their own personal retirement accounts. None of them, by the 
way, has failed; all have been successful. By that I mean they are 
paying better benefits to their retirees than Social Security is paying 
to our retirees today.
  President Roosevelt also said that there should be a three-legged 
stool for Americans' retirement: personal savings, pension, and Social 
Security. Social Security is just one of the legs. It was never meant 
to be the sole source of retirement benefits. But for millions of 
Americans today--when they are paying an average tax bill of nearly 40 
percent of their wages in taxes, then they try to raise their family; 
buy food, clothing, shelter; put a little money away for vacations, and 
for education for their kids, et cetera--they do not have money left to 
save for their retirement. If you work for an employer that doesn't 
have a pension or 401(k), your only source of retirement is Social 
Security. Clearly, Social Security has stretched to its limit.
  Right now, 78 million baby boomers are ready to hit the system by the 
year 2008. The majority of Americans--nearly 90 percent--retire at the 
age of 62, not at 65. We are going to see baby boomers bumping into the 
system beginning as early as 2008. Social Security spending will exceed 
tax revenues by 2015.
  We hear about all of these surpluses in Social Security and the trust 
fund.
  But the truth is there is nothing in the trust fund but IOUs. Senator 
Fritz Hollings of South Carolina says there is no trust, and there are 
no funds in the Social Security trust funds. He is right.
  By 2015 there will be no more surpluses. In other words, if we are 
collecting $100 today and only spending $90, the other $10 is put into 
this trust fund. Of course, the Government borrows the surplus and 
spends it. By the year 2015, we will be bringing in $90 and paying out 
$100 or more. Where do we get the extra money? We are going to have to 
get it from the taxpayers. By 2015, taxes are going to have to be 
raised to cash in these IOUs in order to pay the benefits at that time.
  You hear a lot of Senators and others saying the system is solvent 
until 2037. That is only if we can raise taxes on workers to pay those 
benefits. That is the only way it can remain solvent. Congress is going 
to have to take action. The Social Security trust fund is going to be 
broke in 2037 unless we have the dollars to cash in those IOUs. The 
reason is our pay-as-you-go retirement system cannot meet the challenge 
of the demographic change.
  In 1940, there were about 100 working for every retiree. Today, there 
are a little over 2.5. By the year 2025, there will be fewer than 2. In 
1940, with 100 people working, you only had to pay $10 a month to pay 
for a $1,000 benefit. Today, it is over $400. And we are going to ask 
our grandchildren to pay $500 or more in order to meet this obligation 
of retirement benefits.
  If you look over the next 75 years, it is going down like a rock. 
There is $21.6 trillion in unfunded liabilities. In other words, the 
benefits the Government has promised to pay--$21.6 trillion--are short 
of revenues we need to pay those benefits.
  How are we going to make them up? There are a couple of choices. We 
can raise taxes and tinker a little bit with the system. But you cannot 
tinker with $21.6 trillion deficit. They can cut benefits by a third of 
what retirees can expect to get. Or they can raise the retirement age. 
But that will not be enough to make up the $21.6 trillion in deficits 
over the next 75 years if we don't do make hard choice to save the 
system.
  My plan, the Personal Security and Wealth in Retirement Act, has a 
transitional cost as well. But it is the cost

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we have to pay anyway. It would cost about $13 trillion for us to make 
the transition to go from the Social Security system we know today to 
total personal retirement accounts. In other words, we are moving to a 
system where you have control over your retirement--not Washington--you 
decide when to retire, how much you want save and where you want to 
invest and how you want to control over your account.
  In reality, we have signed our name to a long-term contract that says 
we are going to guarantee retirement benefits for Americans forever. 
There is a cost because we have dug ourselves into a hole. Somehow we 
have to dig ourselves out. There is no free lunch. People around here 
can ignore it, but there is no free lunch. We are going to have to find 
a way to finance ourselves to reach our goals to have a safe, solid, 
and solvent Social Security system. The biggest risk is doing nothing 
at all.
  Social Security has a total unfunded liability of $21 trillion-plus. 
The trust fund has nothing but IOUs. Vice President Gore said let's pay 
down the debt and let's put the interest we save into the trust fund. 
But all he is talking about is adding more IOUs, not building assets in 
the Social Security trust funds. Instead, today, we have over $800 
billion of IOUs, but in 15 years, he wants to have $3.5 trillion worth 
of IOUs--no real assets, but IOUs.
  Again, the only way you can get those IOUs cashed in is to go to the 
taxpayers and get more taxes from them.
  To keep paying Social Security benefits, we are going to probably 
have to look at least at doubling the FICA tax--the withholding tax--
within the near future; not 15.3 percent. By the year of 2025 or 2030, 
we could see our payroll tax rates increase to 25 percent to 30 percent 
of wages--nearly doubling the FICA tax in order to maintain the current 
benefits we promised.
  I ask many of our senior citizens at our town meetings to raise their 
hands if they think they have good retirement benefits from Social 
Security. If you talk about a $700 check a month, or a $680 check a 
month, or $1,100 a month, this is not good retirement. This is not the 
retirement I want. I don't think this is the retirement we want to 
leave to our children. But in order to maintain even that system, we 
are going to impose taxes on the next generation. If you have 25 
percent in FICA taxes, then you add on the average Federal Government 
tax of 28 percent or 53 percent, and then add in Minnesota sales tax of 
8.5 percent, you are at 62 percent. Then add in sales taxes, property 
and excise taxes--I mean every tax you can think of--our kids are going 
to be paying taxes that approach 70 percent of their income. Mr. 
President, is this the kind of future we want to leave our kids because 
we stick our head in the sand and do not want to face our problems?
  Why is Social Security a bad investment today? If a taxpayer retired 
in 1960, they probably got back all the money they paid in in 18 
months. It was a tremendous return for the early retirees. Today, an 
average person retiring will get less than 2 percent return on his or 
her money paid into the system. Our minority population is actually 
getting a negative rate of return today. They are in fact subsidizing 
the rest of us. The markets have paid back nearly 11 percent, but when 
we filter out inflation, it is better than a 7 percent annual return in 
the market.
  What would any person rather have? If an investment counselor said: I 
can up a plan, but it will not pay very good, less than 2 percent, so 
anyone 50 or younger, by the time they retire, it will be a negative; 
or we can put taxpayers in a new plan paying 7, 8, 11, 12 percent, what 
will you do? There will not be many at the desk signing up for a plan 
paying zero or giving a negative return on the money.
  Mr. President, there is no Social Security account with your name on 
it. A lot of people don't realize that. After a lifetime of working, 
taxpayers think there is an account in Washington that has their name 
on it. There is not. You don't have one dollar set aside for your 
retirement today. The only thing you can hope, in our pay-as-you-go 
system, is that when you retire there are people working so we can 
deduct money from their check to pay your benefit. It is a pay-as-you-
go system. The money we bring in the first of June will be paid out in 
benefits by the end of June. It is a pay-as-you-go system, with no 
accumulation of wealth, no real assets, no compounding of interest.
  By the way, we talk about these IOUs in the trust fund that will make 
the system solvent. In the President's own budget, he included this 
paragraph: These balances are available to finance future benefit 
payments and other trust fund expenditures.
  The IOUs are there to pay for the funds or payments to other 
expenditures, ``but only in a bookkeeping sense.''
  In other words, they are not real. Members on the floor will say: We 
have the IOUs. That is great, ``but only in a bookkeeping sense.'' 
There is nothing there.
  You can place a million-dollar IOU in your checking account and see 
how many checks your banker allows to be written against the IOU. None, 
until you put money in the account.
  ``They are claims on the Treasury, that, when redeemed, will have to 
be financed by raising taxes, borrowing from the public, or reducing 
benefits or other expenditures.''
  Do we want to reduce Social Security benefits or cut education, 
transportation, or health care? If we don't make some hard choices now 
we will be faced with tougher decisions later.
  We have these IOUs because the government spent all the surplus in 
the Social Security Trust Funds. The first step to save Social Security 
is to stop the government spending Americans' retirement dollars for 
nothing but their retirement, to keep the dollars outside the hands of 
the big spenders in Washington and to make sure we set aside the 
surplus funds today. We have not done it in the past. It needs to be 
done. I have introduced a second lockbox that says if our estimates are 
wrong--best faith estimates on what we spend and what we bring in--if 
we are honest and do not want to spend a dime of Social Security, if 
the estimates are wrong and we overspend, we need to go back and lower 
everybody's budget across the board. Perhaps take a .003-percent 
reduction so we don't have to go into the trust fund, and we will not 
spend a dime of Social Security.
  Mr. President, I have six principles for saving Social Security. I 
began working on this 7 years ago. I introduced this plan 3 years ago. 
I said then it would be a major issue in this Presidential debate. It 
is. I am glad governor George W. Bush has announced his plan to allow 
at least some privatization for improving and saving the system. And 
Vice President Al Gore has made a statement--he doesn't want to do 
anything. He wants status quo, he wants to tinker with the system. That 
means, again, raise your taxes even more.
  We need to make sure we protect current and future beneficiaries. 
Anyone on Social Security, about to retire, or who wants to stay with 
it, should be able to so do. It is your option; we will guarantee those 
benefits. Don't be concerned about it. We will hear scare tactics that 
somehow this plan is not going to work, we are only going to rob the 
elderly, and we will not have a safe Social Security. That is hogwash. 
We will always guarantee those benefits.
  Allow freedom of choice. If you want to have a personal retirement 
account, you should have that option as well. The Government should not 
stand in your way and say, no, we are going to keep you locked up in a 
system that will pay you little or nothing on your return.
  Preserve the safety net. Again, I have heard the scare tactics that 
there are no safety nets in the PRAs. That is a lie. Under our plan we 
have the same safety nets as Social Security. We have survivors 
benefits, disability benefits, built into the program. It is the same 
thing, but our plan pays dividends and higher returns than Social 
Security. The bottom line is we have the same safety nets.

[[Page 9472]]

  Make Americans better off, not worse off. Today, nearly 20 percent of 
Americans, when they retire, retire into poverty, because Social 
Security is all they have--or very little else--and it is not enough to 
keep them off the poverty. Our system says when you retire you will 
have a minimum of 150 percent of poverty. Right now, the poverty for 
single individuals is about $8,400 a year. Our plan says you have to 
have at least $12,800 a year to retire. We make sure you don't retire 
into poverty. The people most affected are elderly women and widows. 
The Social Security system today discriminates against women. Again, we 
will hear stories that PRAs discriminate against women. That is not 
true. The current system is the culprit. Changing the system will 
improve retirement for millions of Americans today, including our 
elderly ladies.
  Create a fully funded system. Make sure if you have an option for 
private retirement accounts, you can do that. Most importantly, no tax 
increases, no tinkering with the system.
  I introduced my plan, the Personal Security and Wealth in Retirement 
Act, in the last Congress and the 106th. I will keep introducing this 
plan until we do something on it.
  How does the plan work for retirement options? Workers may divert 10 
percent of their income into a personal retirement account to be 
managed by Government-approved but private investment companies, 
similar to 401(k)'s and IRAs and FDIC accounts. We make sure they are 
safe and sound.
  Somebody making $30,000 a year now pays $3,720 into Social Security. 
Our plan says $3,000 goes into a personal retirement account. At the 
end of the year, you don't just have a promise, you actually have a 
savings book that has $3,000 cash, plus interest. The other 2.4 
percent, $720, goes into the SSA, Social Security Administration, to 
help fund part of the financing plan for those who want to stay on 
Social Security, to guarantee their benefits.
  Right now in personal retirement accounts, someone earning $36,000 a 
year pays in the maximum to Social Security, and receives $1,280 a 
month as a maximum benefit. Take just 10 percent of that income, put it 
into an average market account, you will have a benefit of $6,514 a 
month. That is a big difference, five times better under the private 
retirement account than what Social Security would pay. In addition, 
the safety nets are there for survivor and disability benefits. Don't 
let anybody say that somehow this isn't as good or better.
  Looking at the returns, people are talking about maybe 2 percent of 
your Social Security. After 40 years at 2 percent, you will have 
$171,000 in the account, plus reduced benefits from Social Security. So 
at least with partial reform plan, a citizen is better off and would 
have a little bit of reduced benefit from Social Security but will have 
$171,000 in the bank. Under my plan, you would have $855,000 based on a 
$36,000 income; $855,000 would have been put away for your retirement.
  The family with median income of $58,000, putting away 2 percent has 
$278,000 in the bank, and a reduced Social Security benefit. Again, 
better than what we have now. But you could have $1.4 million in a 
savings account in your name, cash, estate money, if you could put 
aside 10 percent of your salary.
  It is being done across the country. I discussed people in Galvaston, 
TX, with private retirement accounts who got the OK from Social 
Security to have their own retirement accounts in 1981. Social Security 
death benefits? My dad died at 61, we got $253. That is what Social 
Security offers.
  Galveston County that has their own private retirement accounts, 
receive an average $75,000 death benefit.
  Disability benefits for Social Security is $1,280; and Galveston, TX, 
is $2,749.
  What about retirement benefits? Social Security, a maximum on this 
average income is $1,280; Galveston County, nearly $4,800.
  By the way, Galveston has a conservative retirement plan, they invest 
very conservatively and they still pay those much better returns.
  One lady, by the way, named Wendy Cohill, her husband died at 44 of a 
heart attack. She was 42. She received $126,000 in death benefits plus 
what was in the account plus the survivors benefit that she used to pay 
to finish a college education. She was able to care for her family in 
her own home. If she would have had Social Security, she would have 
been under the poverty level. She said: Thank God, some wise men 
privatized Social Security here. If I had regular Social Security, I 
would be broke.
  The city of San Diego also has PRAs, a government employee, 35 years 
old, contributes 6 percent into the PRAs. After 35 years, they would 
receive a $3,000-per-month retirement benefit.
  Under Social Security, he would receive only $1,077 a month in 
benefits.
  I know the Senator from California said on the floor recently that 
personal retirement accounts are too risky and we cannot damage the 
foundation of Social Security. But last year, and I want to read this, 
the Senator from California--this is Senator Barbara Boxer along with 
Senator Dianne Feinstein and Senator Ted Kennedy, sent a letter to the 
President saying:
  ``Millions of our constituents will receive higher retirement 
benefits''--They are talking about the city of San Diego--``higher 
benefits from their current public pensions than they would under 
Social Security.''
  In other words, they were telling the President to leave San Diego 
alone because the President's plan for saving Social Security included 
taking 1 percent, pooling the investments, but he also would take all 
these with private accounts off the table and put them all into Social 
Security. She did not like that. She says:

       Mr. President, millions of our constituents who will 
     receive higher retirement benefits from their current public 
     pensions than they would under Social Security, are appealing 
     to their elected Representatives in Washington and we 
     respectfully urge you to honor the original legislative 
     intent underpinning the Social Security system--

  That was to exclude these people from Social Security, exclude this 
provision from your reform and leave San Diego alone, they were saying.
  My question is, if the retirement accounts in San Diego are better 
than Social Security, why can't you and I enjoy a similar system? But 
if Social Security is better, as Senator Boxer, Senator Feinstein, and 
Senator Kennedy will support, then why don't they want the citizens who 
work for the city of San Diego to have that same benefit? A good 
question.
  I know I do not have much time left. Mr. President, how much time do 
I have remaining?
  The PRESIDING OFFICER. The time until the hour of 12 noon is under 
the control of the Senator from Wyoming. He yielded you the time you 
needed.
  Mr. GRAMS. I will go through this quickly. I know we have others 
wanting to speak.
  As I said, this is not an experiment. This is being done around the 
world. Eleven countries now have privatized their retirement; 30 others 
are considering it. We like to think we are in the forefront of this. 
But when it comes to retirement benefits, we are behind the curve.
  Chile, 18 years ago, privatized their system because their system was 
much like ours. Franklin Delano Roosevelt and the brains in Washington 
did not create Social Security. It was modeled and copied from 
something that Otto Von Bismark put out in 1880. We adopted it almost 
exactly. So did Chile and just about every other country around the 
world. Chile, had the same problems or worse than what we are facing 
today. It went to bankrupt. They had to privatize their plan.
  By the way, 95 percent of the Chilean workers have opted into the 
personal retirement accounts. Their return last year was 11.3 percent. 
Ours, again, were less than 2 percent.
  British workers have chosen to go into PRAs. They have what they call 
their second tier Social Security, where they can opt from the Social 
Security System, like we have, into personal retirement accounts. In 
Britain, so far two-thirds of all British workers have opted into 
personal retirement accounts. They have enjoyed, over the past 5 years, 
a better than 10 percent return on their money. By the way, the

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pool of retirement in their retirement accounts in Britain exceeds $1.4 
trillion. That is how much now they have put away in their accounts. 
That is more than the total GDP of Britain, and it is more than all 
other private investments in all the other European countries combined. 
So it shows you the power of private retirement accounts, and the 
accumulation of wealth.
  Many people say: I have worked for 30 years. I can't give up what I 
have paid into Social Security.
  We have a recognition bond. The Government knows exactly how much you 
have paid in. If you have paid in $20,000, if you paid in $40,000, if 
you paid in $90,000, we know. We would give you a recognition bond, 
plus interest upon retirement.
  Mr. President, we must take care of today's Social Security 
recipients. If an individual chooses to remain in the current system, 
we must guarantee their benefits. There is no increase in age of 
retirement, no cuts in benefits, no ifs, ands, or buts, and no raising 
of taxes.
  The plan preserves the safety net, as I said, for survivors benefits 
and disability benefits. Poverty, as I said, recognized that $8,240 a 
year--you have to have $12,400, so you would not retire into poverty, 
again, as nearly 20 percent of our Americans do. Funds that manage PRAs 
are required to buy the life and disability insurance to provide the 
safety nets I have talked about.
  For those who would come up short--and those would be very few--if 
you could not get $12,400 a year, we would come in and say we will fill 
your glass full so when you retire, you would retire with less than 
that. This is the only entitlement portion of our bill. Again, this is 
an important safety net of this system.
  Rules similar to those that apply to IRAs today would apply to PRAs. 
Also, a Federal personal retirement investment board would oversee it 
for safety and soundness to make sure your retirement funds are there, 
and are safe. Investment companies that manage PRAs would be required 
to have an insurance plan to pay at least a minimum of 2.5 percent. 
That would be a floor. Again, that is much better than Social Security, 
but at least it is a guarantee if something would go wrong you would at 
least have that as your investment.
  In addition, you decide when you want to retire. As I said, right now 
the Government controls your retirement. They tell you exactly how much 
they are going to take out of your check, they tell you exactly the day 
you can retire, and then they tell you what they are going to give you 
in benefits.
  In our plan, you have those controls. You make your retirement 
decisions. As soon as you can buy an annuity that will keep you 150 
percent over poverty, you have met your requirement. You are not going 
to be a ward of the state. You ensured your future. You can stop. You 
can do what you want. You can arrange regular withdrawals, for the 
amounts that are above that requirement. To buy this minimum benefit, 
you would need about $125,000 in your account. If you are an average 
worker with earnings of $30,000, you would have $855,000 in your 
account, so you can use that other $750,000 any way you want.
  If you have a family, you could have $1.4 million. What are you going 
to do with the other $1.2 million. You can do whatever you want with 
that money; that is yours. You decide how you withdraw it. If you want 
to go to Europe? Write a check. Buy a new car? You can do it. Give it 
to your kid. You can do it.
  In divorce cases, PRAs are treated as common property. Upon death, 
PRAs go to heirs without estate taxes; no capital gains, so that at 
least you have created an estate, and this $1.2 million or $700,000 or 
whatever you had in your account is your money.
  Going back to Social Security, when you die, you get a $253 death 
benefit. Under this, you get a death benefit in our plan, a minimum, 
plus you would get what is left in your estate, whatever it might be. 
You can pass it on to your heirs, your spouse, your kids, your church--
wealth that you cannot pass on today because the Government takes all 
those benefits.
  Again, the bottom line is, no new taxes for this system. We do have a 
responsibility to bail ourselves out, but we are not taxing the system. 
Retirement income is going to be there whether you stay with Social 
Security, or if you choose to build a personal retirement account. You 
can decide the options, you decide how you want to invest it, and you 
decide when you want to retire. Let's make sure we give you choices.
  Just in concluding, despite our colleagues, our Democratic colleagues 
bashing Governor Bush's reform plan, its popularity is increasing among 
workers.
  I heard one say: I don't come out here and bash it. I want to study 
everything and I want to look over all of these plans.
  He hasn't even seen the Governor's plan. He doesn't really know what 
Vice President Al Gore has got. But yet he favors Al Gore over Governor 
Bush.
  Recent polls show most Americans support the idea of personal 
retirement accounts. In fact, if you are under 40 years old, more young 
people believe in UFOs than that they are going to get Social Security; 
90-some percent of young people under 30 would opt into personal 
retirement accounts.
  I believe a national consensus can be reached on ways to save and 
strengthen Social Security. There will always be a retirement system in 
this country. What kind of system are we going to leave for our 
children and grandchildren? For many of us, if we are 50 years old, 55 
years old, or older, we might have been condemned to the current system 
without time left in our working lives to change or take the option in 
the personal retirement accounts. We can tell our children and 
grandchildren we want to leave a 70-percent tax system for them, we 
want to leave them a plan that might guarantee they will get less 
benefits, pay more into it, and will have to wait longer to retire, or 
we can leave them an option for them to invest in their own retirement 
and have personal retirement accounts.
  The numbers show Americans overwhelmingly say: I am smart enough to 
handle my future.
  There are many in Washington who believe you are not smart enough; 
you may be smart enough to earn your money, but you are not smart 
enough to put it aside for your retirement and only Washington can step 
in and help you out. That's wrong. Our plan empower working Americans 
and offers better options and gives you control over your retirement.
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Chair recognizes the 
Senator from Texas.
  Mrs. HUTCHISON. Mr. President, is there any procedural motion I need 
to make to move forward?
  The PRESIDING OFFICER. The time is under the control of the Senator 
from Wyoming until the hour of 12 noon.
  Mrs. HUTCHISON. I thank the Chair.
  Mr. President, 56 years ago today, 176,000 allied soldiers landed on 
the beaches of Normandy in what was the largest invasion in history. 
The operation was officially known as Operation Overlord, but I have 
never heard anyone refer to it by that name. It is now known as D-Day.
  While there have been hundreds of other D-days in other historic 
locations such as Okinawa, Iwo Jima, and Inchon, the forces that landed 
on Normandy Beach 56 years ago today truly changed the course of 
history. When we hear the term ``D-Day,'' we reflect on that awful and 
incredible day on Normandy Beach with reverence for what was 
accomplished and for all that was lost, and with respect the people who 
were there--those who did not survive and those who did.
  Thousands of young Americans died that day establishing that small 
beachhead on the continent of Europe. Within a year, the Allied forces 
went on to crush the Nazi war regime and brought forth on the European 
Continent an unprecedented period of peace.
  Today, we look back on that time and we remember and respect what was 
done.

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  When the cold war ended, the Wall came down and the Warsaw Pact 
disbanded. The United States began to draw down forces from Europe for 
the first time since we had gone in on D-Day and established a 
presence, and set up the plan to help our vanquished enemy.
  Military strategists began to talk of new missions for NATO. They 
spoke of the need for NATO to go ``out of area or out of business,'' 
implying that unless NATO could find a new reason to exist after the 
end of the Cold War, there may be no reason for it to exist at all.
  That new mission began to come into focus in the Balkans five years 
ago when the United States committed peacekeeping forces to Bosnia to 
enforce the provisions of the Dayton Peace Accords.
  What was conceived by the administration as a one-year mission to 
accomplish specific military objectives is now in its fifth year--with 
greatly expanded civilian nation-building objectives and no end in 
sight to the deployment.
  Today we are on the eve of another anniversary in the search for new 
NATO missions. One year ago, on June 10, NATO halted the bombing in 
Serbia and Kosovo. As in Bosnia, we again have deployed thousands of 
American forces to yet another Balkan quagmire with unclear 
objectives--and there is no end in sight to the Kosovo mission, either. 
This time the ethnic groups we seek to reconcile have not tired of the 
killing, apparently, and it continues as our soldiers stand by helpless 
to deter murder.
  The General Accounting Office estimates that the cost of our Balkan 
peacekeeping missions in Bosnia and Kosovo now tops $23 billion. We 
have become mired in the problem, unable to stand back and assess where 
we are. Nor are we able to look at the situation and say we must have a 
strategy.
  We know what this has cost our country: For the past five years, 
recruiting and retention problems in the U.S. military services have 
been exacerbated by endless peacekeeping missions. Our armed services 
today are not up to their congressionally mandated troop strength; they 
are at least 6,000 short.
  As the world's only superpower, we have a responsibility to lead. 
America led when the parties first came together in Dayton, but the 
Dayton Peace Accords simply stopped the fighting. We did not create 
conditions that could actually solve the problem without the presence 
of thousands of outside forces. We ended the hostilities--and we should 
be respectful of that achievement--but we did not create effective 
economic and political structures.
  That must be our goal for a lasting peace. As one American military 
peacekeeper said to me on a recent visit, ``Everyone's job in Bosnia is 
to work on the problems we face, but no one seems to have the 
responsibility for actually solving those problems.''
  We need to search for ways to solve these problems. Today I am 
introducing legislation to authorize funds to reconvene the parties to 
the Dayton Peace Accords that ended the Bosnia conflict, those who were 
involved in the Rambouillet talks that failed to avert the conflict in 
Kosovo and other regional entities. We must review our progress to 
date. If we cannot do that, how can we call ourselves leaders?
  We must look for a long-term settlement based on greater self-
determination for the governed and less by outside powers. That may 
involve tailoring current borders to fit the facts on the ground. It 
will create conditions of genuine stability, reconstruction and 
prosperity. It will allow us, in a responsible way, to set some 
timetables, some measurements for success, and, hopefully, to begin 
turning over these peacekeeping responsibilities to our European allies 
within a reasonable time frame.
  We must have self-determination that works. The current policy wagers 
America's reputation, prestige and will on a mirage of multicultural 
democracy in the Balkans. We are trying to create governments that 
ignore history, nationality and ethnicity. Elections have been held in 
which refugees were bused into disputed regions to vote for elected 
officials who cannot serve because they are unable to return to their 
prewar homes.
  American officers spend their days deciding which vehicles can travel 
down which roads, and escorting Serb families in hostile Albanian 
territory to the dentist and back or to the library and back.
  This effort is diverting the United States from its global 
responsibilities. We occupy a unique place in the world today, standing 
astride history's path as the most powerful nation that ever may have 
existed. Our supercharged economic engine certainly reflects the best 
that mankind has to offer. However, a superpower's core responsibility 
is not to right every wrong, but to preserve its strength for those 
challenges that only a superpower can address.
  The United States must know when to encourage capable allies and 
proxies to address contingencies that fall short of that standard. 
Instead, time and again, our military readiness to address potential 
threats--such as North Korea, mainland China, Iraq--has been diverted 
to contingency provisions on the periphery of our nation's security 
concerns.
  America's peacekeeping burden in the 1990s has resulted in two of our 
Army divisions reporting themselves unfit for combat.
  We can achieve more in the Balkans than a peace enforced at bayonet 
tip. We ought to tie our continued financial support to a comprehensive 
regional settlement, to substantial military withdrawal from the region 
and to a firm policy of encouraging the Europeans to do more--with our 
support, which will always be there.
  Any NATO member can patrol the Balkans, but only the United States 
can defend NATO. That is the role of a superpower, and that is the role 
of a strong and reliable ally.
  As we take up the armed services budget this week, I hope we can take 
on the role that is the responsibility of the Senate and try to put 
some long-term potential peace into play. I am not saying I know what 
the outcome of any kind of conference should be. But I do know it is 
our responsibility to call such a conference and begin to assess where 
we are; to look with vision to the future and set the standard that 
must be set for the lasting peace that we want and hope for and will 
work for and support in the Balkans.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Idaho.
  Mr. CRAIG. Mr. President, the unanimous consent agreement that we are 
operating under takes us through 12 noon, does it not?
  The PRESIDING OFFICER. It takes us through 12:30.
  Mr. CRAIG. Through 12:30?
  The PRESIDING OFFICER. There is a unanimous consent agreement that 
Senator Gregg be given the time from 12 to 12:15, and Senator Reid the 
time from 12:15 to 12:30.
  Mr. CRAIG. I yield the floor to my colleague, the chairman of the 
Armed Services Committee, Senator Warner, for a statement before I 
resume my time.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Virginia.
  Mr. WARNER. I thank my distinguished colleague.
  (The remarks of Mr. Warner and Mr. Craig pertaining to the 
introduction of S. 2669 are located in today's Record under 
``Statements on Introduced Bills and Joint Resolutions.'')
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. CRAIG. Mr. President, I ask unanimous consent that I be allowed 
to proceed for 15 minutes.
  Mr. GREGG. Reserving the right to object, what was the Senator's 
request?
  Mr. CRAIG. I asked to proceed for 15 minutes. I had yielded some time 
to the chairman of the Armed Services Committee.
  Mr. GREGG. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceed to call the roll.
  Mr. GREGG. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.

[[Page 9475]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. Mr. President, I thank the Senator from Idaho for his 
courtesy. I ask unanimous consent that he be allowed to proceed after I 
have completed my statement.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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