[Congressional Record (Bound Edition), Volume 148 (2002), Part 11]
[Senate]
[Pages 15666-15667]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         FISCAL RESPONSIBILITY

  Mr. FEINGOLD. Mr. President, I rise to help bring attention back to 
the issue of fiscal discipline and protecting Social Security and 
Medicare for the generation to come.
  All parents want the best for their children. Parents will scrimp and 
save so that they can take care of their kids, buy them new clothes, 
and help them go to school. We do it because we love our children, and 
because it's the right thing to do.
  On a societal level, we are doing exactly the opposite. Rather than 
saving for the future needs of the next generation, rather than paying 
down debt to prepare for their future needs, rather than investing in 
assets now so that we will be better able to provide for the next 
generation, the Government instead has decided to spend its resources 
and more on current consumption. And that's the wrong thing to do.
  When we can see our children's faces and hear their dreams, we try to 
do whatever we can for them. But when we act as a society, when we make 
government policy, we seem unable to control our appetites for current 
consumption, we seem unable to do anything for the millions of our 
children's generation. And that is simply, on a moral level, the wrong 
thing to do.
  For when we in this generation choose to spend on current consumption 
and to accumulate debt for our children's generation to pay, we do 
nothing less than rob our children of their own choices. We make our 
choices to spend on our wants, but we saddle them with debts that they 
must pay from their tax dollars and the sweat of their brow.
  On top of that, the demographic wave of the baby boom generation adds 
another burden on our children's generation. We know now--there is no 
doubt about it--that our generation will retire in large numbers 
beginning in the next decade. By the nature of older age, we know that 
our generation will require increased spending on income support and 
health in the decade to come and thereafter. And by the nature of the 
Social Security system, and by the nature of Medicare and Medicaid, we 
know that the Government will have greatly increased obligations to 
fund. Even if we as a society choose to provide the baby boom 
generation with exactly the same benefits that society provided our 
father's and mother's generation, even if we do not provide for 
Medicare coverage of prescription drugs--and I believe that we should 
provide those benefits--we as a society will need to devote greater 
resources to these important programs.
  We could at least in part prepare for those needs by paying down our 
Government debt now, so that the Government would have greater freedom 
to borrow in the decades to come. Some suggest that we could at least 
in part prepare for those needs by accumulating financial assets now, 
which the Government could sell in the future as an alternative to 
raising taxes in the future. These actions would be the functional 
equivalent of saving by the Government.
  In the last year and a half, we have done exactly the opposite. We 
have chosen to do the functional equivalent of binge consumption. The 
Government has gone on a spending spree.
  In February of last year, the Bush administration's Office of 
Management and Budget started with a baseline projection that the 
Government would run a surplus of $282 billion in this year, fiscal 
year 2002. Earlier this month, in contrast, the OMB projected that we 
will in reality run a deficit of $165 billion this year, a difference 
of $447 billion between their initial baseline projections and their 
latest predictions for one year alone. In less than a year and a half, 
the deficit picture for this year alone has clouded by nearly half a 
trillion dollars.
  The Bush administration's own numbers tell a similar story for the 
decade as a whole. Last February, the OMB projected baseline surpluses 
of $5.6 trillion for the 10 years to come. Looking at the data that the 
OMB provided the Budget Committees along with the OMB's Mid-Session 
Review of the

[[Page 15667]]

Budget, the Center on Budget and Policy Priorities calculated that $3.9 
trillion of that 10-year surplus has evaporated, and that the 
Administration seeks an additional $1.3 trillion in tax cuts and 
spending increases over the same period. Thus, by the OMB's own 
numbers, in the past 17 months, we have dissipated nearly all of the 
surplus for the decade to come.
  Putting the receipts of the Social Security Trust Funds aside, last 
February, the OMB's baseline projections showed the Government running 
surpluses throughout the decade. This month, the OMB policy projections 
show the non-Social Security budget running deficits through 2012, and 
probably for decades thereafter.
  Thus, instead of reducing the Federal debt, we are adding to the debt 
that our children's generation must pay. Instead of saving for the 
future, we are consuming future resources for ourselves.
  The causes and solutions to these circumstances are simple to see, 
although clearly, amassing the political will to act on them is far 
less simple to do. Plainly, last year's tax cut was too large, and the 
Government is spending too much. To meet our obligations to our 
children's generation, we should address both failings.
  By the OMB's own numbers, fully 38 percent of the reduction in 
surplus over the coming decade results from last year's tax cut. Two-
fifths of our problem results from that tax cut.
  Now that the fiscal realities have come home to roost, we should 
reevaluate future tax cuts. This is not to say that we should require 
anyone to pay higher taxes than they do now. To contribute mightily to 
our fiscal responsibility, we do not need to raise people's taxes 
higher than they pay now. If we simply keep future, additional tax cuts 
that benefit the highest income brackets from taking place, we would go 
a long way toward balancing the budget.
  According to Citizens for Tax Justice, if we simply froze tax rates 
for the top 1 percent of the income scale, it would save almost half of 
the loss to the Treasury from the tax cut in future years, once the tax 
cut is fully phased in. Citizens for Tax Justice estimates that $477 
billion of last year's tax cut will go to the top 1 percent of the 
income scale. That's an average tax cut of $342,000 each for taxpayers 
in that category, over the decade to come. And while the well-off have 
received some of those tax cuts already, as have most taxpayers, fully 
80 percent of the tax cuts for the top 1 percent are scheduled to take 
effect in years after this year--most after 2005. There is still time 
to correct this unbalanced tax cut, without raising anyone's tax rates 
higher than today's.
  Additional discipline is needed not only on the tax side, but also on 
the spending side. According to OMB's new numbers, spending for this 
year, fiscal year 2002, is up 11 percent over last year's levels. And 
as we have not enacted caps for 2003, we are at great risk of 
continuing these unsustainably large increases in spending into the 
future.
  Some have pointed to the fight against terrorism as reason enough for 
such spending levels. But we cannot make the fight against terrorism 
bear the vast weight of the entire Government's spending.
  We should not exempt military spending from its due scrutiny, but I 
do not propose that we constrain military spending alone. We should 
constrain both military and domestic spending. We need to put some 
constraint on spending levels, or they will continue to add to the 
Federal debt.
  The Federal Government's budget is obese. We can exercise some 
willpower now and cut back our consumption, or the doctors will put us 
on a far stricter diet later. And surely the credit markets and the 
economy will be a rigorous doctor. We delude ourselves if we imagine 
that the need to cut back will not come.
  As my colleagues are aware, I have twice come to the floor this year 
to offer amendments to extend the spending caps in the budget law, on 
June 5 with Senator Gregg and on June 20 with Senator Conrad. Although 
neither effort obtained the necessary 60 votes, the Gregg-Feingold 
amendment received 49 votes, and the Feingold-Conrad amendment received 
59 votes. And between the two amendments, 91 Senators have voted for 
caps of one duration or another.
  To paraphrase George Bernard Shaw, we as a Senate have established 
that we are for caps. We are just haggling over the price.
  I assert to my colleagues that caps at any level are better than no 
caps at all. We must have some restraint, or the Government will grow 
beyond any limit.
  We need to strengthen our budget process, to get the Government out 
of the business of using Social Security surpluses to fund other 
Government spending.
  That is a goal with a long and bipartisan history. In his January 
1998 State of the Union address, President Clinton called on the 
Government to ``save Social Security first.''
  That is also what President George W. Bush said in a March 2001 radio 
address, that we need to, in his words, ``keep the promise of Social 
Security and keep the Government from raiding the Social Security 
surplus.''
  We should stop using Social Security surpluses to fund the rest of 
Government because it is the moral thing to do. For every dollar that 
we add to the Federal debt is another dollar that our children must pay 
back in higher taxes or fewer Government benefits.
  Our children's generation will not forgive us for our failure of 
fiscal responsibility. History will not forgive us, if we fail to act.
  The task before us is plain. We must restrain future tax cuts, and we 
must restrain future spending.
  The task before us is not too difficult for us to achieve. We saw in 
the 1990s that when the Government balanced its budget, invested in 
education, and regulated business sensibly, it combined to lower 
interest rates, bolster consumer and investor confidence, and help the 
economy grow. We can do that again.
  We are not the first generation who has been asked to live with 
sacrifice. And the sacrifices that are asked of us are by far not the 
hardest with which generations have lived.
  All parents want the best for their children. Let us act on behalf of 
our children not just as individuals, but as a generation, as well. Let 
us return to fiscal discipline. And let us restore to our children's 
generation the freedom to choose their own future.

                          ____________________