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[Congressional Record Volume 141, Number 83 (Thursday, May 18, 1995)]
[Senate]
[Pages S6850-S6852]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                               THE BUDGET

  Mr. REID. Mr. President, the issue before this body that will begin 
in approximately half an hour is not whether the Republicans are for a 
balanced budget or the Democrats are for a balanced budget. The 
question is how should we arrive at that balanced budget? All of us 
want to pass a resolution getting our financial house in order. The 
issue is one of priority. How are we going to resolve difficult issues 
before the American people in an effort to arrive at this balanced 
budget?
  We have heard a great deal of talk these past few months about the 
need for deficit reduction. Many on the other side of the aisle have 
talked about a balanced budget, and rightfully so. I say to my friends 
on the other side of the aisle, and I say to the American public, where 
were those same people in the fall of 1993 when the Democrats alone 
without a single Republican vote in the House or the Senate passed the 
largest deficit reduction package in the history of this country? Where 
were they? There was not a single Republican vote for the largest 
deficit reduction package in the history of this country. I say that 
would have been the time to start the debate regarding a balanced 
budget.
  Mr. President, the deficit reduction package that was passed in 1993 
is projected today by the CBO to reduce the deficit by $600 billion. 
The deficit will be exactly $16 billion less over 5 years because of 
the deficit reduction plan that was passed in 1993. Because of the 
Democrat plan, the 1994 deficit as a percentage of gross domestic 
product is projected to be the lowest among the G-7 countries. This 
year we are going to again have a declining deficit. For the first time 
in 50 years we will have had 3 years in a row where we have had 
declining deficits. Of course, it should be declining more, but the 
first time in 50 years. That says a lot.
  Because of the deficit plan, the unemployment rate is at 5.8 percent, 
down from 7 percent in 1992. We have had the lowest unemployment and 
the lowest inflation combined in the last 2 years than it has been in 
the last 50 years. There are now about 1.5 million fewer people 
unemployed than at the start of this administration, a 15-percent drop.
  So I think it is important to talk about some of the good things that 
are happening in our economy. Because of that deficit reduction plan, 
over 6.3 million new jobs have been created. Keep in mind these are not 
Government jobs because we reduced the Federal work force by hundreds 
of thousands of people. We have the lowest Federal employment since the 
Kennedy administration, right now; not in the future but right now. 
Significantly, the jobs that have been created as a result of the 
deficit reduction are in the high-wage industries. For example, 
managerial, professional jobs make up 58 percent of the new jobs 
created since 1994. These jobs are good jobs.
  What about taxes? According to CBO the deficit reduction package 
resulted in 98-plus percent approaching 99 percent of Americans paying 
the same or less taxes as a result of that deficit reduction plan. CPI 
inflation over the past 2 years averaged just 2.8 percent. That is the 
lowest of any administration since President Kennedy was President.
  The existing home sales for 1994 total almost 4 million. This is the 
largest total since 1978 and the second-largest total ever.
  Since our deficit reduction plan was passed, consumer confidence is 
up by almost 80 percent. Business investment, investment in producers 
of durable equipment, which is shown to be closely associated with 
productivity, again has soared to a 18.6 annual growth rate since 1992. 
This is a postwar high.
  Mr. President, let us not talk about the doom and gloom. Let us take 
a little bit of time to enjoy the goodness that is in the economy. 
Since passage of that deficit reduction plan the World Economic Forum 
has declared that the United States has the world's most competitive 
economy. Some may say, ``So what?'' Well, this is the first time in 9 
years that we have been selected for that honor.
  Again, I repeat, let us look at what is good. Why do we have to dwell 
on the doom and gloom? The economy is vibrant. It is strong.
  There may be someone in this 100-Member body that would argue against 
a balanced budget. I do not know who it would be. But there could be 
someone. I say that we should have a balanced budget. And we are going 
to have that. A debate ensued here a while [[Page S6851]] back where 
some suggested that the only way we can have a balanced budget is we 
amend the Constitution. It does not appear that is the case.
  We are going to have a balanced budget by the year 2002. That is what 
was stated in the balanced budget amendment that was defeated here; we 
can do it without a balanced budget. The reason that some pushed for a 
balanced budget amendment to the Constitution is they wanted to use 
Social Security. It would have been a lot easier way to balance the 
budget had we used the huge surpluses that are going to be accumulated; 
as, for example, this year $80 billion, the year 2002, $111 billion. 
That would have been the easy way to balance the budget. But I and a 
number of others said, ``Why don't we do it the right way, the honest 
but hard way, and balance the budget without depleting the surplus in 
Social Security, so that by the year 2002, we would not only have had a 
balanced budget, but we would still have a strong, vibrant Social 
Security system?'' That is the important thing. I think that is what we 
are going to wind up doing here.
  The proposal that we have by the Budget Committee will certainly 
define the difference between the two parties. We need to talk about 
priorities.
  Very succinctly stated, is it right to decimate Medicare by cutting 
it by $256 billion, or is it more important to not give a tax cut as in 
the budget that we have in the Senate Budget Committee of $170 billion, 
almost $400 billion in the House proposal? Let us do away with those 
tax cuts and apply that money to Medicare, to education. And why do we 
have in the Senate version this enormous tax increase on wage-earning 
families?
  And I say to my friends in the Senate and those within the sound of 
my voice, $28,000 a year, why would we want to increase the taxes for 
people who are making about double minimum wage?
  In the 1993 reduction package, the reason we gave a tax break to 
people who are earning less than $28,000 a year was so that there would 
be an incentive to get off welfare and and go to work. And now we are 
being told that is the wrong way to go.
  If we want to reform welfare, the only way we can do it is through 
incentives to work. And what this thing we call the earned income tax 
credit does is reward work. That is what welfare reform is. That is why 
we have it.
  The priorities that we are talking about, Mr. President, are 
significant. We have, in the proposal we have gotten from the Senate 
Budget Committee, cut college Federal aid to students over 7 years by 
$30 billion. Half of all college students, Mr. President, receive some 
type of financial aid from the Federal Government; 75 percent of all 
student aid comes from the Federal Government.
  Let me say it again. Half of all college students receive financial 
aid; 75 percent of all student aid comes from the Federal Government.
  Mr. INHOFE. Will the Senator yield?
  Mr. REID. We are talking about $30 billion.
  I do not have time. I will be happy, when my time is up, to respond 
to questions from the Senator from Oklahoma.
  This would affect about 4 million students a year. It would reduce 
Pell grants, and Pell grants go to the most needy students, it would 
reduce Pell grants for individual students by 40 percent. That is 
wrong. We would cut back moneys for the Head Start Program, special 
education. That is not the right priority. The right priorities are to 
achieve a balanced budget but let us eliminate tax cuts. That is the 
first way to go. It makes it very simple. And I would be very 
interested in doing away with some of the tax loopholes that are still 
in the Federal Tax Code. We could freeze tax loopholes at their current 
levels and save $300 billion. If we want to be more specific and 
maintain some of those, which this Senator would be willing to do, we 
would maybe only save $250 billion. The point is simply that we would 
save lots of money by cutting tax loopholes. That is what we need to 
do.
  The Republican balanced budget plan is a plan that is harmful to 
people who want to work. We are talking about equal sacrifice. This is 
not equal sacrifice, as was said on National Public Radio yesterday by 
noted Republican commentator Kevin Phillips. He said that the 
Republican plan in effect damages and hurts the working people but 
rewards significantly the rich. There is no equal sacrifice. The rich 
would benefit from the plan while all the sacrifice would go to the 
working middle class.
  That is not the way we should go. I believe, Mr. President, that we 
must be careful that we do not ruin Medicare; that we not have tax cuts 
only for the most affluent of our society; that we have reasonable, 
noninjurious cuts in Medicare; that we make sure we do not damage the 
education phase of our system; and most of all that we do not hurt the 
working people of this country.
  I would be happy to respond to a question of my friend from Oklahoma.
  Mr. INHOFE. I thank the distinguished Senator from Nevada and would 
like to ask this. One of the Senator's statements was that the defining 
difference, the budget that is adopted in the debate that will take 
place over the proposed budget that we have from the Republican side 
will be the defining difference between the two parties. And my 
question is, Is the Senator taking the budget, the President's budget 
as your budget and then the Domenici Republican budget as the other, as 
being the defining two budgets?
  Mr. REID. I say to my friend Oklahoma--and the Senator was not in the 
Chamber when I started my statement--I said, No. 1, where were the 
Republicans when we passed the 1993 deficit reduction plan, the largest 
deficit reduction in the history of the country? And I laid out in some 
detail what has happened since we reduced the deficit by $600 billion 
during this period of time.
  I will also say to my friend, during all the Reagan years and all the 
Bush years, we started out with a document from the President, a 
budget. But as my friend knows, having had experience in the House, as 
I have, the budget we get from the President is always changed. That is 
our function. I heard this statement numerous times when we were in the 
majority in the House and Senate, that Congress sets the spending. It 
is not the President. It is the Congress. During the years I have been 
here, every year President Reagan sent us a budget, President Bush sent 
us a budget, and President Clinton sent us a budget, we came up with 
our own working documents. I think that is what we should do this time. 
What the President sent us will not be what comes out of this Chamber.
  I think when it is all said and done, people on this side of the 
aisle will have the opportunity to vote to determine whether we should 
have tax increases for the poor, tax decreases for the wealthy, whether 
we should dramatically cut Medicare and education. We will have votes 
on that, to determine the differences between the two parties.
  Mr. INHOFE. Will the Senator yield further?
  Mr. REID. Of course.
  Mr. INHOFE. I agree with the Senator. I have read the Constitution 
and seen what our job is. And, of course, we had a Republican President 
with a Democrat Congress at the time the Senator is speaking of. Now it 
is just the reverse; we have a Democrat President and Republican 
Congress. Obviously, there will be a difference from the beginning 
budget. The observation that I would make and would like to ask the 
Senator about is when we talk about the cuts, talk about the deficits--
and the Senator was talking about the 1993 bill--in 1994, there was a 
tax increase that was recommended by the Democratic Party and by the 
President of the United States, Bill Clinton, that was characterized as 
the largest single tax increase in the history of public finance in 
America or anywhere in the world. I would like to ask the Senator two 
questions. He has been talking about the reduction that we are 
proposing in our bill in taxes, and I would suggest to the Senator that 
we are not proposing a reduction in taxes from the Senate even though I 
would personally like to have us do that. It is the House bill that is 
offering the reductions in their package.
  Mr. REID. I will be happy to respond.
  The PRESIDING OFFICER. The Chair will advise the Senator from Nevada 
that the time has expired.
  Mr. REID. I would ask that in morning business this colloquy between 
the [[Page S6852]] Senators from Oklahoma and Nevada be allowed to 
continue.
  Mr. INHOFE. Reserving the right to object, I would like to not have 
that extend beyond the next 2 minutes because I want the use the last 8 
minutes.
  Mr. REID. If I could have 1 minute to respond.
  Mr. INHOFE. No objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. I would say, first of all, that was wrongly characterized 
as the largest tax increase in history. And I would further state that 
the Senate budget we have received also has a tax cut. It is disguised. 
But what it does, any savings that come as a result of the balanced 
budget would be referred to the Finance Committee and the Finance 
Committee only use that money for tax decreases.
  So both the Senate version of the budget and the House version of the 
budget have tax cuts. The House was more apparent in theirs. They have 
about $385 billion in tax cuts. The Senate proposal is a little more 
camouflaged but there is still a call for $170 billion in tax cuts 
because that is all the Finance Committee could use the money for as 
savings.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SANTORUM. Mr. President, I would be happy to yield the time I 
have to the Senator from Oklahoma.

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