[Congressional Record (Bound Edition), Volume 148 (2002), Part 11]
[Senate]
[Pages 14412-14414]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        THE STATE OF THE ECONOMY

  Mr. DOMENICI. The Republican leader has designated the Senator from 
New Mexico to control the time. I yield myself 10 minutes.
  Mr. President, fellow Senators, a week ago the Federal Reserve 
Chairman, Alan Greenspan, testified before the Senate Banking 
Committee. It is important to take note of what he said at that hearing 
and where he thinks our economy is headed. Despite the obvious bear 
market which prevailed until yesterday, when we had a rather 
significant bull market for the day, our economy's fundamentals are 
strong.
  Despite this bear market, our economy is not headed for another 
recession in the near future. Productivity growth is rapid. Inflation 
is low. Mortgage rates are also low, as everyone knows. That has kept 
the housing market very strong.
  Families have been taking advantage of these low-income rates by 
buying homes at a record pace and refinancing old ones, thus yielding 
either lower payments or cash at hand which they are using to acquire 
what they believe they need.
  Notice that those who claimed that the tax cut would lead to higher 
interest rates have been very quiet of late, at least on that point. 
The Federal Reserve sees the economy as growing at about a 3-percent 
rate in the second half of this year and even faster next year. The 
unemployment rate will probably end the year at about 5.9 percent. That 
is about right where it is now.
  Next year, the jobless rate could drop to about 5.4 percent. This 
does not mean the outlook lacks uncertainty. The recent weakness in the 
stock market is important. The American people are worried, concerned. 
Lower equity prices create a negative wealth effect that will be a drag 
on consumer spending, as I have just indicated. Lower stock prices also 
make it tougher for businesses to acquire the capital they need to 
invest. Slow business investment continues to be our economy's weakest 
point. And, of course, we still face the risk of further terrorist 
attacks or other conflicts that could disrupt the energy market.
  Chairman Greenspan also observed:

       To a degree, the return to budget deficits has been the 
     result of temporary factors, especially the falloff of 
     revenue, of tax take, and the increase in outlays associated 
     with the economic downturn.

  But the chairman also observed that unfortunately, despite these 
temporary factors impacting the deficit, he also saw signs that the 
underlying disciplinary mechanisms that form the framework for Federal 
budgets over the last 15 years have eroded.
  I would say one of the most obvious ``disciplinary mechanisms,'' to 
borrow his words, is the adoption of a congressional budget. I have 
spoken in the past here on the floor about the failure to adopt a 
budget resolution this year. Clearly, this is the one thing we can do 
in the Congress to send a message to the American public and to the 
markets that we understand the importance of having a budget in these 
difficult economic times. So far we have failed as elected officials to 
do the most essential of our responsibilities--adopt a budget.
  Clearly, the other side of the aisle, the Democrats and their 
leadership, bear that responsibility, the responsibility to have 
continued on with the budget process and to have produced a budget 
resolution. We know that even on this most serious of debates, with 
reference to prescription drugs for our seniors, the absence of a 
budget resolution has found its way here to the floor.
  Because there is not a budget resolution that impacts for the 
remainder of this year, we then look to the previous year for the 
impacts, plus or minus impacts, on adopting a prescription drug bill. 
Lo and behold, we find the previous year's budget, the budget that this 
Senator, as chairman, helped put together, is now impacting and will 
through the remainder of this fiscal year be impacting on what we can 
do in Medicare. Clearly, it is saying we can only spend $300 billion 
over the next decade. That was the judgment of the Senate when it last 
voted in a budget resolution.
  Things have not gotten better but perhaps have gotten somewhat worse 
during that intervening year. We are here on the floor discussing a 
Medicare bill that is much larger than what we talked about the year 
previous when we had a rather positive economy, not one that was in the 
red but one that was in the black.
  Now the question is, What shall we do for the remainder of this year, 
up until October 1, when all the appropriations bills are subject to 
adoption in both Houses, to go to conference, come back, and then go to 
the President--when all the other measures on which we have been going 
slow, or are in conference, have to come up? Are we going to have no 
budget resolution nor budget statement impacts on any of those 
activities, the sum total of which are the budget, and determine, 
starting October 1, what we shall do?
  It makes it difficult. Even the distinguished chairman of the 
Appropriations Committee, the President pro tempore, responding to a 
question about how not having a budget would affect the ability to work 
on appropriations bills, said--and I quote from The Hill magazine:

       It makes it difficult because we don't have the 
     disciplinary mechanisms at our fingertips that would 
     otherwise be the case if we had a budget.

  The Appropriations Committee, under his leadership and that of 
Senator Stevens as ranking member, is fully aware their appropriations 
bills, one by one, when added together are the sum total of the budget 
for the year starting October 1. They have recommended on one of the 
bills that there be a sense of the Senate that they will engage in 
attempting, with the Senate, to bind themselves to the numbers in the 
appropriations bills, saying we will be bound by those even though we 
do not have a budget resolution that would normally give the numbers, 
prescribe them to the committee.
  I gather that means the Budget Committee chairman and ranking 
member--with that language, that sense of the Senate, saying that we 
will be bound by the sum total of the allocations to the 
subcommittees--I gather they clearly are concerned that if we do not 
have something, the bills eventually will be subject to whatever the 
Senate would vote in and have no overlying power that says you can't go 
over this or you suffer some kind of penalty.
  Senator Byrd and Dr. Greenspan have spoken. I tried on two or three 
occasions on the floor to remind us, as Senator Judd Gregg has, and 
some Democrats have taken to the floor concerned about the fact that we 
don't

[[Page 14413]]

have any discipline. It makes it difficult because we don't have the 
disciplinary mechanisms at our fingertips. That is what the 
distinguished chairman of the Appropriations Committee said a few days 
ago.
  A couple of weeks ago, absent a real budget resolution, we came close 
to adopting at least a poor version of a budget by trying to set 
spending caps for the appropriations process, enforceable only here in 
the Senate next year, and extending with Senate enforcement tools some 
expiring Budget Enforcement Act provisions.
  But let it be clear, this is not a budget resolution.
  The PRESIDING OFFICER. The Senator has used 10 minutes.
  Mr. DOMENICI. I ask unanimous consent for 5 additional minutes.
  The PRESIDING OFFICER. Without objection, the Senator may continue.
  Mr. DOMENICI. Let it be clear this was not a Senate budget resolution 
on which we voted. It was an attempt to address just a small portion of 
the Federal spending that indeed will take place between now and the 
end of next year. Let it be clear that this is not a budget resolution 
because it only applied to appropriations, and budget resolutions go 
well beyond the appropriations bills which constitute about one-third 
of the spending of our Nation. Two-thirds are subject to other 
approaches to spending, mandatory approaches--they are automatic, like 
Social Security, like Medicare. And the sum total of all those--Federal 
pensions, military pensions and on and on--the sum total of all of 
those mandatory, obligatory ones is two-thirds of the spending. A real 
budget would address the other two-thirds, that which we call generally 
entitlement spending.
  I think we are now beginning to see firsthand what it means not to 
have a budget resolution as we are here on the floor debating adding 
new spending to one of the largest Federal entitlement programs, the 
Medicare Program. The process does matter. An updated budget resolution 
would have updated our spending estimates and we would now be debating 
these prescription drug amendments to the current Medicare Program in a 
more honest and transparent manner.
  I think it is important that we listen up and we pay attention. This 
is a very serious situation. If in fact spending were to get out of 
hand, we hear Alan Greenspan warning us that one of the most 
significant qualities, characteristics of this American economy--one of 
the most serious ones would be for those who understand budgets to 
conclude that the fiscal policy is out of hand, that we don't know 
where it is going, and we don't know how much we are going to spend. I 
don't think that is the case.
  But some who would look at what we have done and not done might 
conclude that we are not as committed as we were a couple of years ago 
when we had budgets, reserve funds, and all the kinds of things we have 
grown to use around here.
  It is obvious we just have projections and estimates of costs based 
on the Congressional Budget Office and their most current projections. 
But because we don't have a budget resolution that is based on current 
estimates, the procedural points of order that lie against all of these 
amendments result from the fact that last year's budget resolution is 
the only one we have, and it was estimated using an entirely different 
set of projections.
  What this says is we are using enforcement tools that were in last 
year's budget based upon where we are going to be with reference to 
expenditures, tax intake, and, thus, deficits, or being in the black 
and with a surplus.
  Regardless of whose amendment one supports, not having a current 
budget resolution penalizes all proposals. This is not the way to 
consider one of the most important and probably most expensive 
legislative proposals to come before the Congress in years; that is, 
prescription drug provisions that we are debating.
  We therefore see the failure to adopt a budget resolution, we see it 
impacting on the way the Senate can conduct business here on the floor. 
We are tied up in trying to consider a prescription drug bill while 
bypassing the Senate Finance Committee. If the majority leader chooses 
to proceed without waiting for, or without expecting and relying upon a 
bill that the Finance Committee and committee debate produces and sends 
to the Senate, that is his prerogative.
  I believe in these particular times, with all of the facts I have 
just described, that it is not the best way to do it. But there are 
even other reasons beyond budgetary that cry out for it not being the 
best way to conduct business--be it an energy bill, which we did 
directly on the floor and didn't have language from a committee as a 
formal bill with the appropriate documents attendant thereto, to many 
others that we are taking up out of the majority leader's office and 
putting up here on the floor without the committee authentication which 
comes from the committee debate, which is a very heralded and important 
part of the Senate process.
  Chairman Greenspan also spoke specifically about the other rules that 
were incorporated into the Budget Act and, thus, are in the budget. 
They came into being when our country had another bad time. We went out 
and met at Andrews Air Force Base. We came back with a series of 
proposals, one of which was called a pay-go, and spending caps. These 
are devices that helped at least provide some tools for statutory and 
congressional fiscal policy deliberations. These were enforced by 
points of order. The point of order lied. These provisions were 
operative--or any one of them. Then we were penalized and had to have 
60 votes rather than 51.
  That is wherein the drug bill lies in terms of the process. This is 
something we can do.
  I have introduced legislation to extend the budget enforcement 
provisions, including the spending caps, establishing firewalls that go 
between the nondefense and defense, pay-go rules impacting the 
mandatory spending programs and tax revenues, limitations on the 
advanced appropriations, and other provisions that I believe are the 
minimum needed to maintain some semblance of statutory and 
congressional budget authority.
  Let it be clear that this legislation is not a budget resolution, it 
is strictly enforcement provisions. But it is the heart and soul of 
budget enforcement mechanisms that would be here if we were adopting a 
budget under the existing budget law. It is essential that we do at 
least this much, and we ought to give serious consideration to doing it 
before this year ends.
  I once again borrow the language of Dr. Greenspan when he calls all 
these things disciplinary mechanisms. We need to reassert them--
something Chairman Greenspan and Chairman Byrd reminded us that we 
need. This is important to the way we conduct business and the signal 
it sends to the markets and the economy.
  Also, my colleagues joined in other legislation that I hope we can 
find some way to have adopted before the new fiscal year begins on 
October 1. I have heretofore introduced a summary of this proposal. 
After getting closer and talking to more people, I put some more flesh 
on it. I don't want to formally introduce it, but I want to send 
attendant to this speech, following it, a proposal that will be called 
a bill. It indeed would be the proposal I have summarized that, as a 
minimal, we would need. I hope Senators will pay attention to it.
  Perhaps by the end of the day today we can find out whether there is 
a genuine interest. If there is not, then obviously I believe I have 
done my best to call attention to it and to provide how it might be 
done. I submit that there is indeed a possibility that if this were to 
pass and the Senate were to adopt it, and since it applies only to us--
the House offers it through its Rules Committee--if we were to adopt 
it, I have every reason to believe it would have a positive impact on 
those who are wondering what is our fiscal policy after this October 
and into a year with new so-called disciplinary functions available.
  I yield the floor.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.

[[Page 14414]]

  The legislative clerk proceeded to call the roll.
  Mrs. CLINTON. Madam President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Ms. Stabenow). Without objection, it is so 
ordered.

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