[Congressional Record (Bound Edition), Volume 149 (2003), Part 1]
[Senate]
[Pages 389-391]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE ECONOMY

  Mr. HOLLINGS. Mr. President, I would like to get the attention of the 
distinguished majority leader. Pending that, what brings this Senator 
to the floor is the headlines of the morning paper: ``Deficit 
Predictions Soar with Bush Stimulus Plan.''
  The economists from Standard & Poor's is quoted as saying:

       I don't think it's a near-term concern.

  Then, of course, as the story follows on page 6, the headline is to 
the effect: ``Economic Plan Could Lead to a Record Deficit.''
  I wanted the distinguished majority leader to send a message to Karl 
Rove. I cannot get the Washington Post to listen. I have been in here 
regularly for a good 10 years saying we are running record deficits. 
Now they have the chief economists saying this could lead to a record 
deficit.
  Let the record show on September 30, last year, at the end of fiscal 
year 2002, the CBO figure was $428 billion, a record deficit. Let's not 
come here in January and start talking about making records when we 
already have made a record. Everybody look up on their Internet, 
www.publicdebt.treas.gov, and you will see the public debt to the penny 
is already up some $155 to $159 or $160 billion. So we are already, in 
this year, $30 billion to $40 billion in the red ahead of last year.
  Of course, with the so-called tax cut of revenues, the cut of 
revenues under the Bush plan, we are bound to have an over $500 billion 
deficit. That is why I wanted to get the distinguished majority 
leader's attention because history is repeating itself.
  I remember 10 years ago President Bush I, as a result of Desert 
Storm, the gulf war success, was at all-time popularity. Then they 
looked economically with these headlines to a record deficit, and they 
had a $402 to $403 billion deficit. And the Governor of Arkansas beat 
him. That is exactly where we are headed this morning.
  I don't know why it is that you cannot get the truth out of these 
figures. I know what the economists are thinking. You get the money in 
and spend it and hold what they call the on-budget deficit and off-
budget and unified and public debt and government debt. That is all 
tommyrot. There is not a Governor in America with deficits asking to 
cut the revenues. Ask Governor Bush in Texas if he would recommend this 
out of the Governor's office in Austin, they would have run him out of 
the State.
  Come to Washington and nobody listens. If he can carry a message, I 
think Karl Rove would listen because he is trying to reelect the 
President. ``Economic Plan Could Lead to Record Deficit,'' and he will 
be electing John Kerry. Maybe I can get their attention telling them 
that. Here it comes, 2 years ahead of time, the economic plan could 
lead to record deficit.
  It is almost like working in the CIA here. It is top secret when you 
talk the truth. I think the axiom of Mark Twain is correct. He said: 
The truth is such a precious thing it should be used very sparingly. Of 
course, that is the media with respect to the truth on the amount of 
money we take in, on the amount of money we spend.
  Let's go exactly back to 1992. At that particular time, Governor 
Clinton had just been nominated and invited Alan Greenspan, among 
others, down to Little Rock. Greenspan told the Presidential nominee: 
Look, you are coming up to Washington. You are not only going to have 
to cut spending, you are going to have to increase taxes. And Governor 
Clinton said: Are you serious? He said: That is exactly what the 
country needs. That is what you are going to do to get long-term 
investment. You are not going to get long-term investment with these 
deficits upon deficits, the debt going up, the interest costs going up, 
which I call interest taxes.
  When the President says he is cutting taxes, he is actually 
increasing taxes. They cannot be avoided. They have to be paid. 
Interest costs run at the rate of $1 billion a day. This morning at 8 
o'clock, the first thing the Government did is add another $1 billion 
and add it to the debt. The distinguished Presiding Officer will pick 
up my bill. Senator Thurmond and I have gotten by. We are home free 
economically. But the next generation coming along will have to pick up 
our bill.
  In any event, President Clinton came to town. We submitted the plan, 
and we cut billions of spending, we raised taxes, and for the next 
eight years had the best economy we have ever had. The Senator from 
Tennessee, the distinguished majority leader, if I could get his 
attention. I ask my distinguished friend from Tennessee, I know you 
will see Karl Rove, and I want him to see he is leading his 
distinguished President into the same trap that Bush and I got led 
into. When you see these stories, Senator, to the effect that the 
economic plan could lead to record deficits, and they are quoting the 
chief economists of Standard & Poors, that is exactly where we were in 
1992.
  President Bush I was the most popular President after that Desert 
Storm you could possibly find. And within a year's time, the economy 
was at a $400 billion deficit. The young Governor from Arkansas beat 
him, and this is what we have right now when you see the economic world 
saying there will not be any investment, when they are saying they will 
have record deficits.
  Mr. FRIST. Will the Senator yield for a question?
  Mr. HOLLINGS. I'd be delighted.
  Mr. FRIST. The issue of deficit is of concern to our entire body. But 
if you look back at history, what was the size of the economy in 1992?
  Mr. HOLLINGS. I don't go with percentages, I go with reality. The 
reality is that the interest costs continue to go up.
  Mr. FRIST. Is it not true, though, that even at the worst projected 
deficit in the very article that the Senator read for 2003, as a 
percentage of GDP, about $10.5 trillion, is less than it would be in 
1992?
  Mr. HOLLINGS. You like that, is that right?
  Mr. FRIST. If the Senator would yield for a question, the answer to 
his question is yes; I would like, as a percentage of GDP, the deficit 
to be as low as possible. That is correct.
  Mr. HOLLINGS. Well, if that is the way they want to run the 
Government, tell President Bush to go back down----
  Mr. FRIST. Will the Senator yield for one more question?
  Mr. HOLLINGS. I yield.
  Mr. FRIST. In 1992, we were at war. Had we just gone through a fall 
in the stock market? Had we just got through the corporate scandals? 
Had we just had a 9/11 incident at that time?
  Mr. HOLLINGS. You don't want to jump on Ken Lay this morning. As the 
new majority leader, heavens above, I thought we got past Ken Lay. Now 
you want to jump on the poor fellow. Come on. I don't know, I think 
they are a little addled over there.
  What happens is, if the distinguished majority leader can tell me of 
any Governor in America with deficits who is running around talking 
about the percentage of his GDP--they would run Governor Bush out of 
Austin, TX, if he came out with that nonsense. But he comes up here and 
gets credibility. They have a drive on for dividend tax cuts that could 
not possibly help anybody until, of course, the election year. That is 
a Karl Rove instrumentality and strategy if there ever was. We 
understand that. But then--Karl will understand this--you are not going 
to be running on the talk shows with the President of the United States 
talking about the percentage of the GDP. We have to pay the bills. And 
what happens is, after President Bush came to town, we did raise taxes 
on Social Security. We raised taxes on gasoline. We raised income 
taxes. We couldn't get--Mr. President, the Presiding Officer should 
understand--we couldn't get a single Republican vote. And Vice 
President Gore had to come in here and break the tie in this body.

[[Page 390]]

  So it happened at that time the other Senator from Texas, Senator 
Gramm of Texas, said: You folks raise taxes on Social Security, and 
they will be hunting you Democrats down in the street and shooting you 
like dogs. That is in the Congressional Record.
  Now that they have the White House, the House and the Senate, has any 
Republican asked that the increase in Social Security taxes be 
canceled? Oh, no. They are not interested in saving Social Security. 
They give you the words, but like John Mitchell says: Watch what we do, 
not what we say. They will say Social Security, but they will not come 
back and reduce the Social Security tax. They just couldn't think of it 
10 years ago, and they have not been able to think otherwise for the 
past 10 years.
  We had the best 8 years of economic expansion, investment, and 
everything else, with the raising of taxes during the 1990s. And we are 
back into the same situation where we have already got a record deficit 
as of the end of the last fiscal year. The fiscal year 2002 ended on 
September 30 of last year with a $428 billion deficit. We are running 
$159 billion in the red already this year. You are already at $587 
billion. That is approaching $600 billion in stimulus. That is 
stimulating the economy, money that you do not have, money that you 
have to go out and borrow--for which you are not going to pay back. We 
have had the most stimulative economic program that you could think of 
for 15 months, and it hasn't worked. The economy is worse.
  Why? On account of voodoo II. President Reagan started this nonsense 
of what you do is cut revenues, cut taxes, and therefore increase your 
revenues. We went from less than a $1 trillion debt before Reagan. We 
had 200 years of history, all the wars, and we had not reached $1 
trillion in debt. Then we started this charade, which is all for the 
campaign and not for the country, because everybody can get reelected 
on cutting taxes.
  President Reagan said: Cut the taxes, cut the revenues, and we will 
grow out of it. As a result, we had the economic downturn in 1987, and 
we have had the economic downturn in 2001 with the tax cuts.
  Vice President Bush under Reagan called it voodoo. Now, young 
President Bush is giving us voodoo II, and young President Bush 
recommends voodoo III.
  Record deficits? Let me describe it so you can add it up and then 
subtract it. If you take all the deficits from 1945 up until 1976, 30 
years, take the deficits of President Truman, President Eisenhower, 
President Kennedy, President Johnson, President Nixon, President Ford--
take 30 years of all the deficits, the deficits of World War II, the 
Korean war, the war in Vietnam--take all of those deficits, add them 
up, and you will come to $358 billion over the 30-year period. And in 1 
year we have got $428 billion under this administration, and they still 
play the game.
  The Washington Post will not print the truth. They absolutely refuse 
to do it. All the other papers and everything else--I have gotten a few 
articles from time to time, but very few--just scattered, little squibs 
or anything else of that kind. What you end up doing, you have already 
got a record deficit. You are going to have record interest costs. We 
are going to war and immediately the cost of fuel is going up, the 
interest costs are going up, and we, instead of paying $1 billion a 
day, $360 billion or $365 billion a year in interest costs, we are 
going over $400 billion a year in debt. That $400 billion is just 
absolute waste, for nothing. We have to spend it each year. We come in 
here, but we are playing the political game. That is why this Senator 
is on the floor. I have been in the game 50 years. I never thought the 
Government would be turned into a campaign office.
  No one is concerned around here about the needs of the country. It is 
the needs of the campaign and the media. Jefferson spoke it best when 
he said: As between a free government and a free press, give me the 
latter. He knew as long as the free press would tell the truth to the 
American people, the people, through their representatives, would 
reflect the needs of the country. But that is not what the media does. 
It is a spectator sport. It is who is running and who is not running, 
who is elected and who is not elected, who may be elected and not be 
elected. They are not paying attention to needs. They are just like 
pollsters--what the polls show. No, I don't have any cosponsors for 
VAT, a value-added tax. But we ought to institute this, before the war.
  It is not the Volunteer Army going to war in Iraq, it is the United 
States of America, the country, going to war. That is why I put in the 
draft with Representative Charlie Rangel over on the House side. We 
need a sense of sacrifice and commitment and togetherness in this 
country. But all we have is partisan politics for the next campaign, 
and the media generates it. All the talk shows, ``Firing Line,'' 
``Crossfire,'' ``Talk Back''--whatever they call those particular 
programs--they all offset each other, and they are supposed to make 
news. You can't get this printed. You cannot get the truth of how much 
came in and how much went out in any fiscal year.
  The truth is, by section 21 of the Greenspan Commission report in 
1983, they said: Set aside a surplus in trust for the baby boomers in 
the next century. And we are now in the next century. There is no 
problem with Social Security if we adhere to it. It took me some 7 
years to get it done.
  George Herbert Walker Bush, on November 5, 1990, signed into law 
section 13301 of the Budget Act. It says: Thou shalt not spend Social 
Security on anything other than Social Security.
  Today we are spending Social Security trust funds on anything and 
everything but Social Security. That is what is happening. We would 
have $1.3 trillion banked up, ready to go. There would be no privatized 
Social Security and all the problems we are going to solve in Social 
Security. They solve the political problem here in this body. It is 
politics. They all voted for it. President Bush I signed it into law. 
But they don't adhere to it.
  So I have another little amendment. In addition to paying for the 
war, I have one where the Secretary of Treasury has to certify that, in 
order for the tax cut to take effect, the government does not spend 
Social Security. I want to see how they vote on that. Any and all tax 
cuts, whether they have capital gains, dividends, marriage penalty, 
income--whatever they want to think of--let them pass it, but let it 
not take effect unless they can certify that it does not cost Social 
Security. Let's see how they vote on that.
  (Mr. CHAFEE assumed the chair.)
  Mr. HOLLINGS. They cannot run around here--everyone, to a man, every 
Republican, every Democrat, says: I want to save Social Security. But 
then they come around and continually spend it, and the American people 
wonder why.
  So the truth is, the economic plan ``could lead'' to a record 
deficit?
  The economic plan has led to a record deficit. The distinguished 
Presiding Officer should have been here. Of course, he couldn't because 
his distinguished father had the seat. But it was back in the 1980s. I 
recommended a value-added tax at that time. We had a hearing. I will 
have to get the gentleman's name from Holland--Dr. Cnossen. He was the 
Dutch expert who had written the value-added tax for Japan and Canada 
and helped update it with the United Kingdom. He testified. We needed 
the money. As we were going out of the Finance Committee room, John 
Chafee turned to Lloyd Bentsen, the chairman. This was the Finance 
Committee. He said, Lloyd, if we had a secret ballot, we would pass 
that out unanimously. That was almost 15 years ago.
  We had been running those deficits until we got into the 1990s, and 
we increased the taxes. We increased taxes on income. We increased 
taxes on gasoline. We increased taxes on Social Security and all of 
that. We had over a $400 billion deficit in 1992 when President Bush 
One left office. We brought it down in the early part of President Bush 
Two. We got it into the black. But then we passed the tax cuts. Voodoo 
Two. President Bush One was Vice President. He called it voodoo. He was 
right.
  This idea of cutting revenues and increasing revenues at the same 
time is

[[Page 391]]

bologna. Everybody knows it. We know from hard experience. Under 
President Reagan, under President Bush Two now, the Voodoo Two. Now we 
have before us the economic plan Voodoo Three. When will we ever learn? 
That was when I came to town. That was the song they were singing 
during Vietnam. ``When will we ever learn?''
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BENNETT. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BENNETT. Mr. President, I ask unanimous consent that I be allowed 
to speak in morning business for up to half an hour.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BENNETT. Thank you, Mr. President. I appreciate your concern and 
your helpfulness.

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