[Congressional Record (Bound Edition), Volume 147 (2001), Part 12]
[Senate]
[Pages 16550-16552]
[From the U.S. Government Publishing Office, www.gpo.gov]



                  BUDGET SURPLUS NUMBERS ARE NOT GOOD

  Mr. VOINOVICH. Mr. President, while the Senate was in recess for the 
month of August, the Congressional Budget Office released its 
projections as to the size of the Nation's surplus. As we expected, the 
numbers were not good.
  For fiscal year 2001, the CBO indicates the Federal Government will 
not only not have an on-budget surplus for the first time since 1999 
but that Washington will actually dip into the Social Security surplus 
to the tune of $9 billion in order to cover spending.
  The Office of Management and Budget says we will have a $1 billion 
surplus, but, in my view, that is effectively no surplus. So our 
financial situation this year is basically somewhere between a 
negligible surplus at best and a $9 billion deficit.
  Some of my colleagues might look at the CBO midterm budget review and 
see the problem of on-budget deficits as a short-term phenomena since 
CBO projects a return to consistent on-budget surpluses after 2004.
  This belief is misplaced. I remind my colleagues that CBO's forecast 
is based on the dubious assumption that spending in the outyears will 
increase only at the rate of inflation, which is roughly 2\1/2\ 
percent. To say that level of spending is unrealistic is an 
understatement, and anyone in this Chamber who honestly thinks Congress 
can keep spending at the level of inflation just does not live in the 
real world.
  I remind my colleagues, around this time last year, Congress 
increased nondefense discretionary spending 14.3 percent and overall 
spending was increased by more than 8 percent over

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fiscal year 2000. Had we not spent money like drunken sailors in the 
fiscal year 2001 budget, even with the economic turndown and the needed 
tax cut for the American people, Congress would not have invaded the 
Social Security this year. The problem is we just spend too much money. 
If we had increased overall spending in fiscal year 2001 by only 6 
percent, we would have saved tens of billions of dollars and we would 
not be dipping into the Social Security surplus and we would not have a 
problem in the 2001 budget.
  The concern now is, what will happen in fiscal year 2002? As it is, 
we are on track to increase 2002 discretionary spending by at least 6 
percent over last year. The President originally talked about 4 
percent, and we came out of the Senate with roughly a 5-percent 
increase. Based on the current demand for money in Washington and based 
on our past performance, spending in fiscal year 2002 will likely grow 
faster than that anticipated by CBO. That means next year we will not 
have an on-budget surplus and we are going to spend Social Security 
surplus funds to cover the growth in spending. That is where we are.
  Alarm bells should be going off all over Capitol Hill because we are 
getting ready to do something Senators and Representatives from both 
parties have vowed not to do, and that is spend the Social Security 
surplus. I often say ``there is always some good that blows in an ill 
wind.'' In this case, the ``ill wind'' is Congress's potential use of 
the Social Security surplus. The ``good'' is the hope that it will 
force Congress to control spending, prioritize, and make hard choices--
what the Presiding Officer and I had to do when we were Governors of 
our respective States. We had to prioritize, we had to make those tough 
choices and live within a budget limit.
  We didn't do that in fiscal years 1999 and 2000 here in Washington. 
We had a combined on-budget surplus of $88 billion and Congress and the 
previous administration did not believe they had to make hard choices.
  Well, things are different today, and now we must make the hard 
choices. The first thing we have to do is avoid spending the Social 
Security surplus. The second thing we have to do is not increase taxes. 
According to a national poll released by CBS news just yesterday, more 
than 70 percent of Americans opposed using the Social Security surplus 
to fund general government spending; 66 percent of Americans oppose 
using the Social Security surplus even in the event of a recession. Our 
constituents are making it pretty clear where they stand. They stand 
against spending the Social Security surplus.
  Some of my colleagues and the media say we should spend the Social 
Security surplus to stimulate the economy. I say to that, ``hogwash,'' 
and so do the American people. For me, spending the Social Security 
surplus is black and white. It is simply wrong. The fact of the matter 
is there is a difference between income taxes and payroll taxes. Just 
ask the people who count, the hard-working men and women who pay those 
payroll taxes, if there is a difference. More people pay higher payroll 
taxes in this country today than they do income taxes. They expect that 
money will be used for their Social Security benefits and not for 
general government spending.


  As my colleagues know, there are only two things we should 
legitimately spend the Social Security surplus on: Social Security 
benefits or paying down the debt. It is that simple. If we are not 
spending it on Social Security, we have a moral responsibility to use 
it to pay down the national debt.
  One of the primary reasons I wanted to serve as a U.S. Senator was to 
have an opportunity to bring fiscal responsibility to our Nation and 
help eliminate the terrific debt we have accumulated. As my colleagues 
know, for years successive Congresses and Presidents have spent money 
on things that, while important, they were unwilling to pay for; or in 
the alternative, do without. In the process, Washington ran up a 
staggering debt and mortgaged this country's future, my children's 
future, and my grandchildren's future.
  We have been reaping all the benefits and putting the future of our 
children and grandchildren in jeopardy. In other words, ``we buy now, 
you pay later.''
  I cannot convey how wrong I think it is to saddle them with such an 
excessive financial burden, something this Congress should correct. 
Using the Social Security surplus to repay the publicly held national 
debt will make it easier for the Government to meet its obligation to 
pay Social Security benefits in the future. At this point, the vast 
majority of projected debt reductions--some 75 percent over the next 10 
years--will be out of that Social Security surplus.
  In testimony before the Senate Budget Committee last year, Dan 
Crippen, the CBO Director, stated ``most economists agree saving the 
surpluses and paying down the debt held by the public is probably the 
best thing we can do relative to the economy.''
  It was true then and it is true today. If the Government has little 
or no publicly held debt when the baby boomers begin to retire, it will 
be more manageable for the Government to borrow money, the money that 
it will need to meet its obligations if Congress has not reformed 
Social Security by that time.
  The baby boomers will retire. We will either take care of their 
situation by raising payroll taxes or raising income taxes or having to 
borrow the money. We ought to at least anticipate that.
  Everyone knows that the lockbox we are talking about is nothing more 
than a slew of IOUs that must be repaid when the baby boomers start to 
retire. As I mentioned, either higher payroll taxes or higher income 
taxes or borrowing the money, those bills will be paid, one way or 
another.
  Moreover, by reserving the Social Security surplus to help repay that 
$3.1 trillion publicly held debt, money currently invested in U.S. 
Treasury bonds will be released to be invested more productively in the 
private sector. More private investment means more capital formation 
and a more robust economy now and in the future, which is precisely 
what we need most to meet the demands of our retiring baby boomers. We 
have to have a growing economy. That is the most important thing we 
have.
  Reserving the Social Security surplus to reduce the publicly held 
debt has the effect of reducing interest rates by reducing the overall 
demand for savings. In short, reserving the Social Security surplus to 
lower the debt sends a positive signal to Wall Street and Main Street 
that encourages more investment, which in turn fuels productivity and 
economic growth. It also lessens our cost of servicing interest on the 
Federal debt.
  Currently, we pay 11 cents out of every dollar--I don't think a lot 
of people realize this--11 cents out of every dollar is used to pay the 
interest on our debt. Lower the debt and you lower the interest 
burdens, and that frees more money for other priorities.
  It was not until 1999 that we got to a point where the Social 
Security surplus was no longer used to offset spending--being used for 
debt reduction instead--and members of each party in both the Senate 
and House swore they would not go back to using the Social Security 
surplus for spending. In addition, many of us who supported the 
President's tax reduction package did so because the President promised 
he would limit spending and he would use all of the Social Security 
surplus to pay down debt.
  I refer to that as a three-legged stool: No. 1, it allows meaningful 
tax reductions; No. 2, it restrains the growth of spending; and No. 3, 
it reduces debt.
  That was the promise and I expect the President to keep his promise. 
I know many of us who supported the tax reduction will keep our promise 
to limit spending, and we are not going to spend the Social Security 
surplus.
  So far in the appropriations process we look like we are on track to 
maintain a semblance of fiscal discipline because we are basically 
sticking with the budget resolution. Those appearances are deceiving 
because we are holding off the toughest bills for last, instead of 
tackling them first. We all know the way things are going, we are 
likely to increase spending for defense and education far beyond the 
levels anticipated when the budget resolution

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was passed. Like my colleagues, I support a strong national defense and 
funding for true educational responsibilities. However, I think we must 
offset increases in these programs by making reductions in other areas, 
understanding the President is not going to get everything he wants and 
Members of this body are not going to get everything they want.
  Unfortunately, that is not what we are doing. I agree with President 
Bush that the responsible course of action for the Congress is to 
immediately move up the two biggest appropriations bills, Defense and 
Labor-HHS: Consider them first. We need to get everything on the table 
and reallocate resources in order to stay within the budget limits, 
just as I did when I was Mayor of Cleveland and Governor of the State 
of Ohio.
  If we were in this kind of situation in a county, or in a city or at 
the State level, we would get everything on the table, we would look at 
all the things that need to be done, and say we have to reallocate 
these resources. But not in the U.S. Senate. Not in the U.S. Congress. 
We do these appropriations bills, No. 1 with blinders on, No. 2 with 
blinders on, No. 3 with blinders on--we go all the way to the end and 
just keep ratcheting it up a little bit until we get to the biggest 
ones at the end, and then we say: Holy smoke, we don't have the money; 
and then Katie bar the door. That is what has happened in the last 2 
years I have been here.
  I urge the President and urge the Senate leadership, let's get real. 
Let's look at what we are doing and understand we cannot do everything 
for everyone, and try to figure out how we can live within the limits 
we have set. We can do that. I think it would be the finest thing we 
could do for this country. It hasn't been done around here--I don't 
remember if it has ever been done since I have been watching 
government, and I have been watching it as a mayor and as a Governor 
for 20 years. I would like to see that happen.
  The other thing I am going to try to do to guarantee we do not end up 
spending the Social Security surplus is offer two amendments in the 
near future, with colleagues from both sides of the aisle, that will 
force the Senate and House to make the necessary hard choices that will 
bring fiscal discipline to the Government and keep the Social Security 
surplus from being used.
  My first amendment I will introduce will address Congress's perpetual 
irresponsible spending and budget gimmicks, gimmicks that Congress used 
in 1999 to avoid the appearance of using Social Security. There are a 
lot of them out there. We have to make sure we are honest with the 
public about what we are doing and not try to pull the wool over their 
eyes.
  The second amendment I will be offering is an amendment to guarantee 
Social Security funds will not be spent and instead will be used to 
reduce debt. It is my hope, as we proceed through the appropriations 
process, these amendments will be given favorable consideration by my 
colleagues and not turned aside on a procedural vote. We ought to have 
an up-or-down vote on some of these issues that are really going to 
clarify the process and make what we do in the Senate more transparent. 
We owe the American people nothing less.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?
  The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent I be allowed to 
speak for up to 15 minutes in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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