S7154 CONGRESSIONAL RECORD— SENATE May 23, 1995 

particular level so we can get a nice big 

check from Uncle Sam.’’

I have also found that in some cases, 

20, 30, maybe even 40 percent of the 

people living in a particular area could 

be eligible for this cash payment program. Then you start finding con artists who will sign people up who do not 

pay taxes and have not filed returns in 

the past. They will go on a recruiting 

trip and encourage people to have their 

income fall into this category, file an 

electronic return and maybe split it 

with them because they weren’t going 

to do a return in the first place. 

There has been a lot of fraud in this 

program. I am quoting these figures 

from a recent GAO report. The most recent study shows 42 percent of EITC recipients receive too large a credit, and 

32 percent were not able to show they 

were entitled to any credit—wow, 32 

percent, the study showed, were not entitled to any credit. And then in 1994, 

the IRS did a 2-week study on electronic returns and showed 29 percent 

received too much EITC and 13 percent——

Mr. BRADLEY. Will the Senator 

yield on that point? 

Mr. NICKLES. And 13 percent were 

judged to have intentional errors. That 

is a fraudulent program. 

I will tell my colleagues, Senator 

DOMENICI wants to save an hour of time 

so that we can consider more amendments. I do not blame him. He has a lot 

of amendments pending. 

I will tell my colleagues, I had hoped 

to offer a Sense-of-the-Senate amendment in the second-degree to tell the 

Finance Committee, ‘‘Reform this program and in the process we think you 

can save some money.’’

This happens to be a program that 

needs to have some waste, fraud, and 

abuse taken out of it. That was the essence of the Sense-of-the-Senate 

amendment I had intended to offer, 

saying to the Finance Committee, 

‘‘Preserve this program in a way that 

you eliminate the waste and the abuse 

and the fraud that we see now and as 

reported by the GAO.’’

That is what we should be doing. I 

think the Finance Committee can do 

it. GAO says one-third of this program 

is fraudulent. We did not even cut it 

that much. We maybe should have frozen the program until we eliminated 

the fraud. We did not do that. We allowed the program to grow. 

I urge my colleagues to vote against 

the amendment of the Senator from 

New Jersey. I will be happy to yield for 

a question. 

Mr. BRADLEY. The Senator said 

one-third fraudulent. Could the Senator justify that? Could he give us 

some documentation that says onethird fraud? 

Mr. NICKLES. Will the Senator hold 

a second? 

Mr. DOMENICI. Mr. President, could 

I make a request before he answers the 

question? How much time do we have 

remaining? 

The PRESIDING OFFICER. One 

minute fifty-two seconds. 

Mr. DOMENICI. Mr. President, I say 

to Senator EXON, I have discussed with 

Senator NICKLES, and the Senator from 

Nebraska has discussed with Senator 

BRADLEY an arrangement that we 

might make. I am shortly going to 

make a point of order, and I understand either Senator EXON or Senator 

BRADLEY will move to waive it. 

I ask unanimous consent that when I 

make the point of order and Senator 

EXON or Senator BRADLEY seeks to 

waive it, that the time be limited on 

the motion to waive to 10 minutes a 

side. 

The PRESIDING OFFICER. Is there 

objection? 

Mr. EXON. There is no objection on 

this side, and just so I understand what 

the Senator is suggesting, the Senator 

from New Mexico will move to waive, 

we will object to that and then we will 

limit debate to 10 minutes on this side 

and 10 minutes on that side on that 

motion to waive; is that correct? 

Mr. DOMENICI. The Senator from 

Nebraska or the Senator from New Jersey will be making the motion to 

waive. The Senator is correct. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. Mr. President, I 

yield back the remainder of our time, 

which is a minute and something. 

Pursuant to the pending amendment, 

the pending amendment is not germane 

to the provisions of the budget resolution. And pursuant to section 305(b)(2) 

of the Budget Act, I raise a point of 

order against the pending amendment. 

Mr. EXON. Mr. President, pursuant 

to section 904 of the Congressional 

Budget Act of 1974, I move to waive 

section 305 of that act for the purposes 

of the pending Bradley amendment. 

The PRESIDING OFFICER. Under 

the previous order, the debate is 20 

minutes evenly divided. 

Mr. DOMENICI. Mr. President, I ask 

unanimous consent that it be in order 

to ask for a rollcall vote on the motion 

to waive at this time. 

The PRESIDING OFFICER. The motion to waive is pending. 

Mr. DOMENICI. I ask for the yeas 

and nays. 

The PRESIDING OFFICER. Is there a 

sufficient second? 

There is a sufficient second. 

The yeas and nays were ordered. 

f 

UNANIMOUS-CONSENT AGREEMENT 

Mr. DOMENICI. I ask unanimous 

consent that the motion to waive with 

respect to the Bradley amendment be 

set aside after the debate and that the 

vote occur at a time to be determined 

by the two leaders, which is the way we 

have done the other ones. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. I will yield our 10 

minutes to Senator NICKLES. 

Mr. EXON. I yield the 10 minutes on 

our side to be controlled by the Senator from New Jersey. 

Mr. BRADLEY addressed the Chair. 

The PRESIDING OFFICER. The Senator from New Jersey. 

Mr. BRADLEY. The distinguished 

Senator from Oklahoma says this is 

not a tax cut that I am trying to save, 

but, instead, that this is a spending 

program. And he continually refers to 

AFDC. Then why are you telling the 

Finance Committee to raise an additional $20 billion? In effect, the budget 

resolution tells the Finance Committee 

to increase revenues by $20 billion—

that is what this does, by $20 billion. 

Now, the Senator thinks he will do it 

by increasing taxes on families with 

under $28,000 in income. The Finance 

Committee might choose to do something else. But make no mistake, this 

results in increased taxes. 

Mr. NICKLES. Will the Senator 

yield? 

Mr. BRADLEY. Certainly, on your 

time. 

Mr. NICKLES. I will be brief. I would 

like to point out to my colleague that 

I think he is totally incorrect. The revenue numbers in our budget are the 

CBO baseline revenues. We did not 

change revenues. We did not direct the 

Finance Committee to change revenues. They have to reduce outlays. We 

do not raise revenues, we reduce outlays. 

Mr. BRADLEY. The effect of this will 

be to increase either the offset for Social Security taxes or, for 48 percent of 

the people receiving the earned income 

tax credit, income tax increases. That 

increases net revenues. 

I yield 2 minutes to the distinguished 

Senator from Massachusetts. 

Mr. KENNEDY. Mr. President, I rise 

to strongly support the Bradley amendment. It is amazing to me that the 

Budget Committee could review the totality of tax expenditures, $480 billion, 

and yet has selected the one area that 

is for working people, working men and 

women. Who are the people that are 

going to benefit from the earned income tax credit? They are the construction workers, the secretaries, the 

janitors, the hard-working backbone of 

this country and its economy. They 

have been singled out. 

The Budget Committee could have 

said we are going to take care of the 

billionaires’ tax loophole, that benefits 

people who reject their citizenship in 

order to take their bounty and go to 

another country. But oh, no; they 

didn’t go after the billionaires. 

You do not get the earned income tax 

credit unless you work. We are trying 

to reward work and particularly, the 

work of men and women that have children. They are the group of Americans 

that are falling furthest behind over 

the period of the last 15 years. This is 

the one program that helps and assists 

them. 

I do not know what it is about the 

Budget Committee that wants to single 

out working men and women who are 

making less than $28,000 a year to raise 

their taxes. They are the ones who are 

going to be targeted by this budget resolution—having their sons and daughters that go to college paying more in 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7155 

terms of the guaranteed loan programs. 

They are the ones whose kids are not 

going to have the summer jobs. They 

are the ones who are going to find out 

that the support and assistance for 

school-aged children that go to the 

public schools have been cut, that they 

are not going to get the Government’s 

help. 

What in the world is it about the Republicans to want to put that kind of 

burden on the working families of this 

country? That is wrong. 

The Bradley amendment addresses 

that, and it deserves our support. The 

Budget Committee should have found, 

out of $480 billion, some other way to 

make up that difference without targeting the working families in this 

country. 

Mr. BRADLEY. Mr. President, how 

much time remains? 

The PRESIDING OFFICER. The Senator has 61⁄2 minutes remaining. 

Mr. BRADLEY. I yield 3 minutes to 

the distinguished Senator from Connecticut. 

Mr. LIEBERMAN. Mr. President, I 

rise in support of this amendment to 

restore a portion of the cuts to the 

earned income tax credit envisioned by 

this budget. 

This program is such a great example 

of the kinds of public policies we 

should be pursuing. We have spent 

countless hours in this Chamber trying 

to figure out ways to get people to 

work and get them off the welfare 

rolls. That debate is sure to continue. 

But in the meantime, our Tax Code always contains the incentive for the 

working poor in this country to keep 

on working. It helps these people stay 

above the poverty line and off the welfare rolls which is just where each and 

every one of us in this Chamber would 

like them to be. And as if all of that 

were not enough, in a time when Americans demand less Government, the 

EITC accomplishes all of this without a 

new Government agency, without an 

elaborate bureaucracy, without creating a new payroll for a new program. 

I have made it clear that I believe 

the Senator from New Mexico has engaged in a noble and honest effort in 

presenting the budget we have before 

us today. While I do not agree with all 

of the priorities represented by the 

budget before us, I very much appreciate the effort and admire the bottom 

line. Which is why I am so puzzled by 

the EITC cuts. In the quest for a leaner, more efficient Government, I believe that cutting the EITC is an odd 

choice. The budget before us proposes 

to reduce the EITC by $13 billion by the 

year 2000 and by an additional $2 billion by the year 2002. These rollbacks 

in the program will come from repealing the final phase of the 1993 expansion of the EITC and the repeal of the 

EITC for workers without children. 

In practical terms, this rollback of 

the EITC will mean an increased tax 

burden of $21 billion over the next 7 

years on more than 12 million American households. In my home State of 

Connecticut alone, this would mean an 

average tax increase of $1,408 over 7 

years on 67,660 working families. This 

increased tax burden on the very sector 

of the population that can least afford 

to sustain it, the working family, just 

does not make sense. It is a policy that 

takes us further from, not closer to, 

our goal of encouraging work and selfsufficiency. 

The EITC encourages people to work 

toward a higher standard of living. 

Specifically, it supplements the earnings of eligible lower- and moderate-income workers and families with a Federal income tax credit that increases 

their disposable income. Families move 

off welfare dependence to full-time 

work because EITC makes work pay. 

Thus, parents who work full time are 

not forced to raise children in poverty. 

And I know that one of the stated 

purposes of these cuts is to eliminate 

fraud in the EITC program. That is a 

noble goal but I am afraid, that like 

the news of Mark Twain’s death, fraud 

in this program may be greatly exaggerated. The President has proposed 

denying the EITC credit to illegal 

aliens and I am pleased that the proposal before us incorporates that idea. 

It also makes sense to require a Social 

Security number in order to qualify for 

the credit. The IRS is making a good 

faith effort to ensure that this credit is 

going to the people who need it the 

most. 

I also think it is wise to adopt the 

President’s proposal to deny the EITC 

to otherwise eligible tax filers with interest and dividend income exceeding 

$2,500. If your investments are generating that much income, it is hard to 

argue that you really need the EITC. 

For that reason, I am pleased that we 

moved forward with this proposal as a 

way to offset part of the cost of reinstating the self-employed health insurance deduction. 

Historically, the EITC has enjoyed 

bipartisan support. My colleagues on 

the other side of the aisle have had 

many positive things to say about the 

EITC. They have described the program 

as a key means of helping low-income 

workers with dependent children get 

off and stay off welfare and a great way 

to help low-income families with the 

cost of raising their children. It sends 

assistance to those in need; to those 

who work hard and yet struggle to 

make a living and provide for their 

children. 

Jack Kemp, George Bush, and Ronald 

Reagan have all been strong advocates 

of the EITC. President Reagan described the EITC as ‘‘The best anti-poverty, the best pro-family, the best job 

creation measure to come out of the 

Congress.’’

The Republicans other budget proposals regarding the EITC are identical 

to those in the President’s fiscal year 

1996 budget. They include a proposal to 

roll back the EITC by denying the 

credit to illegal aliens, and the denial 

of the EITC to otherwise eligible tax 

filers whose interest and dividend income exceeds $2,500. I strongly support 

these two proposals. 

First, I agree that with the President 

that compliance measures must be 

strengthened. A prerequisite to EITC 

eligibility should be the possession of a 

valid Social Security number. This 

would create a simple and efficient 

screening process which would allow 

the IRS to deny the credit in the absence of a valid Social Security number. 

The Republicans second proposal to 

deny the EITC to eligible tax filers is 

another Clinton administration proposal. I agree with the President’s position that taxpayers with $2,500 of taxable interest and dividends do not need 

the EITC. Indeed, this proposal has already been included in H.R. 831 to offset a portion of the cost of reinstating 

the income tax deduction for health insurance premiums paid by the self employed. 

In closing I’d like to take a few moments to stress the emphasis that the 

EITC places on work. The EITC is a 

work incentive and by law it is only 

available to working families. If you 

are not working, you are not eligible 

for the EITC. It is just that simple. Additionally, for those in the lowest income levels, the EITC increases with 

each dollar of earnings. Therefore, if an 

individual in the eligible income bracket works longer hours, he will receive a 

larger EITC. This is tax fairness. 

I urge my colleagues to vote against 

any rollbacks in the EITC by supporting this amendment. 

Mr. President, the debate on this 

amendment is about priorities since 

this amendment does not affect the 

bottom line of this budget resolution. 

The amendment leaves intact the substantial, I would say, historic, feat of 

balancing the budget by the year 2002. 

This amendment says we do not want 

the earned income tax credit funds cut. 

The reason is that this is a program 

that rewards work. It is a low-bureaucracy, low-overhead program. It has 

worked by rewarding work and it is a 

program that has traditionally enjoyed 

bipartisan support. The Democratic 

Leadership Council, which I am pleased 

to chair, has long supported this program as has former Presidents Reagan 

and Bush as well as Jack Kemp. 

The budget before us has an impact 

on the program. It would reduce tax relief for 12 million American families by 

$21 billion. In my home State of Connecticut, this would mean a reduction 

in tax relief over the next 7 years of 

$1,400 for more than 67,000 working 

families. As a matter of priority, I do 

not want the bulk of these reductions. 

Mr. President, the cost of this program has grown. But that is not because it is out of control. The cost of 

this program has grown because we in 

Congress have directed that it grow because we believe in this program. 

My friend from Oklahoma says that 

the EITC is costing more annually 

than the AFDC. I say that is good 

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S7156 CONGRESSIONAL RECORD— SENATE May 23, 1995 

news. That means we are finally spending more to reward work than to reward those who do not work. I hope the 

gap between these two programs continues to grow as time goes by. 

Mr. President, it is important to note 

here, finally, that the increase in the 

program in recent years is not by fraud 

and deviousness in the program, it is 

by congressional design and congressional intent. When the changes we 

made to the program in 1993 are fully 

phased in at the end of fiscal year 1996, 

this program, the EITC, will actually 

grow by a very modest rate of 4.5 percent a year. 

So as a matter of priority, as a matter of sustaining a bipartisan consensus on supporting those who are 

poor and work and need our help and 

encouragement so they not go onto 

welfare, I support this amendment. 

Finally, I would like to quote former 

President Reagan who described the 

EITC as ‘‘the best antipoverty, the best 

profamily, the best job creation measure to come out of the Congress.’’ That 

is absolutely right. That is why I support the amendment. 

I yield the floor. 

Mr. BRADLEY. How much time remains? 

The PRESIDING OFFICER. Three 

minutes remain. 

Mr. BRADLEY. I yield myself 2 minutes. 

Mr. President, the earned income 

credit is called the earned income credit for a very specific reason. You do not 

get it unless you earn money. You do 

not get it as a gift. You get it because 

you work. You get it because you work 

and have earned money. You do not 

earn much money, but you do earn 

some money. And you also frequently 

are eligible for various benefits. As you 

earn more money, you lose those benefits. As you earn more money, you pay 

more Social Security. 

What the earned income tax credit is 

supposed to do is to give that working 

family that earns money some break 

for the Social Security and other taxes 

they pay and for the benefits that they 

lose as they earn more money. It is a 

very simple concept in terms of the Social Security tax. It could have the 

same impact as a tax credit against Social Security. But we do not have a 

credit against Social Security taxes. 

The earned income credit is essentially 

giving people who pay significant Social Security taxes some of that back. 

So it is clearly a reduction of an overall Federal tax burden, both income 

tax and Social Security tax. While people who are at $16,000 or $17,000 a year 

do not pay in a lot of income tax, they 

pay in over $2,000 in Social Security 

taxes. With the earned-income tax 

credit, because they work, they get a 

break for those Social Security taxes. 

They get a refund from the Government so they pay less Social Security 

tax, in reality. 

Mr. NICKLES. Mr. President, I want 

to try and clarify some of the statements that have been made. 

In the first place, I will repeat what 

I told Senator BRADLEY. This budget 

resolution does not direct the Finance 

Committee not to raise taxes. We do 

not have a tax increase in this budget. 

I know many of my colleagues on the 

other side want to have a tax increase. 

We do not have a tax increase. This 

says reduce the outlays. 

My colleague from Connecticut said 

we are saving $21 billion. We reduced 

the rate of growth in this program. 

That is our direction or suggestion to 

the Finance Committee to reduce the 

growth by $21 billion over 7 years. If we 

froze the program, we would have $50 

billion in savings. 

Frankly, I think we probably should 

freeze it because it is so rampant with 

abuse. It is so fraudulent. There are so 

many people taking advantage of this 

program. The more people find out 

about it the more they like it, especially if they find out that their neighbor or somebody else is taking advantage of it, and received a nice cash 

lump sum of $2,000 or $3,000. 

Unfortunately, the amount of dollars 

are so significant more people will be 

filing fraudulent returns. That is what 

the IRS has told Congress. The IRS has 

made some interesting statements. 

They said 13 percent of returns they 

judge to have intentional errors. In 

other words, fraud. They said 29 percent, in a 1994 study, 29 percent received too much earned-income credit. 

Regarding illegal aliens, the IRS suspects that more than 160,000 receive 

earned-income credits in 1994. 

I am afraid we spent a lot of money 

for GAO to do some homework for Congress, and then we do not pay any attention to their work. Maybe we should 

not in some cases. In this case, they 

have clearly shown this is a fraudulent 

program that needs to be reformed. 

Some of our colleagues are saying, 

no, no, keep the status quo, keep going 

as usual. So what if 30-some percent 

have abused the program. So what if it 

went from a few billion dollars a year 

to a $30 billion program. Allow it to 

continue. 

Mr. President, I do not think we can 

afford to. We can achieve every bit of 

the savings, and allow the program to 

go by eliminating the fraud in this program. If we do not, we ought to be 

ashamed of ourselves. 

GAO says look at a wealth test. We 

enacted an EITC wealth test earlier 

this year, but its thresholds are too 

high. A person can have a lot of assets 

and receive a lot of income from those 

assets and they can still qualify for the 

earned-income credit. For hours of 

work, there is no minimum. People can 

work 100 hours and qualify for $3,000 

benefit in this program. People do not 

have to work 2,000 hours. The average 

recipient last year worked, I think, 

1,300 hours. Some people could work 100 

hours and still receive it. 

This program is set up for abuse. The 

GAO has done a pretty significant 

study. This is recent study, in March 

1995. I encourage my colleagues to look 

at it. It is available. We paid for it. We 

should look at that information. 

I know my colleagues on the other 

side supported this massive increase in 

1993, and they are very proud of it. 

They have gone back and quoted Ronald Reagan who stated it was a good 

thing. However, the total cost of this 

program in 1980 was $2 billion; in 1986 it 

was still $2 billion. 

This program did not grow very fast, 

initially. By 1988 it grew to $5.9 billion. 

Then its cost really exploded. I heard a 

couple of my colleagues say it is primarily for families, but in 1993 their 

tax bill opened the program up to people who do not have children. 

Originally, as conceived by Senator 

Russell Long and others, the EITC was 

for families. Senator Long has written 

an op-ed piece saying he supported the 

earned-income program, but he said 

Congress went too far in 1993 when they 

expanded this program to apply to people without children. Originally, people 

had to have one or two kids to qualify 

for the program. Now you do not. 

Again, we make a lot more people eligible and we increase the amount of 

money they are eligible for. 

In 1990, the maximum amount anybody could receive out of this program 

was $953. In 1995, the maximum that 

someone can receive with two kids is 

$3,110. In the year 2000, that maximum 

amount under current law will be 

$4,068. We have millions of people that 

are eligible. So we are saying, no, we 

do not think we can afford that. So we 

allow the maximum to increase every 

year but at much smaller levels. So we 

say by the year 2000 the maximum 

amount that someone could receive 

with two or more children would be 

$3,560, over $450 more than what they 

are receiving today, but not going all 

the way to $4,068. 

Granted, the EITC is not growing as 

fast under our proposal. It should not 

because the program is so rampant 

with fraud and abuse. It is growing too 

fast. We need to curtail it. We need to 

have some containment on entitlement 

programs or we will never, ever, get to 

a balanced budget. 

Then, Mr. President, I want to mention one other thing. That is the way 

our colleagues on the other side of the 

aisle want to pay for this. They will 

take it from the so-called reserve fund 

that we are setting aside, if we balance 

the budget, to give back to the American taxpayer. 

This is about the third or the fourth 

amendment, and I am sure we will receive more, where our colleagues on 

the other side of the aisle are saying 

how they want to spend the so-called 

economic dividend. They want to spend 

it before we get there. That is, in a 

nutshell, the reason why the Democrats have never had balanced budgets. 

They want to spend it before we get it. 

They want to spend more than we take 

in. They are more popular spending 

money than taking it away. 

When we call this program an earnedincome tax credit, it makes people 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7157 

think we are reducing taxes. We are 

not. This program is a negative income 

tax. We ought it call it what it is. It is 

a negative income tax. 

George McGovern campaigned on a 

negative income tax in 1972, and now 

we have it in law. Perhaps it has 

maybe a better title, but for 80 percent 

of the people, it is a lump sum negative 

income tax. It is a cash payment. It is 

a cash payment that is growing a lot 

faster than AFDC. 

We should be discussing this when we 

get into welfare reform. I am all for 

trying to create incentives to get people to work, but this is a lump sum 

payment that discourages work. There 

are a lot of people that might work 

just enough to maximize this payment, 

by either reporting income, or not reporting income. 

We had some people on this case that 

might report income they did not receive so they could get into this level, 

and others might not report income 

that they received, cash or otherwise, 

so they could stay at this level. 

I do not even want to get into the 

confusing stuff about the marginal tax 

rates this program creates, but we find 

people in the phase-out side of this program that will end up paying 80 percent or 90 percent of their additional, 

marginal income in taxes. Think about 

that. I do not want to get too confusing 

with facts, but they can have the highest marginal tax rate of anybody in 

America. And that is not fair, either. 

That is a real disincentive to earn 

more income. I do not think we should 

have that. 

The direction of the Finance Committee and the direction of this budget 

is to limit the growth of this program. 

It is growing too fast. It is out of control. 

GAO says—not just Don NICKLES and 

Bill ROTH who had a hearing on this in 

the Governmental Affairs Committee—

that the cost of this program is exploding. I compliment Senator ROTH for his 

efforts. We need to respond. The Finance Committee and Ways and Means 

Committee needs to respond. We need 

to get this program under control. 

The PRESIDING OFFICER. The Senator from Oklahoma has 1 minute remaining, and 1 minute is remaining on 

the other side. 

Mr. NICKLES. I reserve the balance 

of my time. 

Mr. KENNEDY. Mr. President, I yield 

myself the 1 remaining minute. 

Mr. President, let the Senate think 

about who we are talking about here. 

We are talking about Americans who 

are working. If they are making the 

minimum wage and if they are getting 

food stamps, and they are getting 

EITC, they are still below the poverty 

line. Still below the poverty line. 

Now, that is what the issue is. Four 

trillion dollars in tax benefits or tax 

expenditures over the length of this 

measure, $4 trillion, will be accumulated. But the only place that the Republicans could find a place to collect 

money was $20 billion from these working families. If they are working full 

time for minimum wage, are getting 

food stamps, getting the EITC, these 

people still do not have enough, to 

bring up a family. And still they are 

trying to take that benefit away. It is 

wrong. 

I hope the BRADLEY amendment will 

be successful. 

The PRESIDING OFFICER. The Senator’s time is expired. 

Mr. EXON. Mr. President, has all 

time expired? 

The PRESIDING OFFICER. The Senator from Oklahoma has 1 minute. 

Mr. EXON. If I understand it correctly, we have finished debate and 

under the previous agreement we will 

have the vote on this at some succeeding time, is that correct? 

The PRESIDING OFFICER. The Senator from Oklahoma has 1 remaining 

minute. 

Mr. EXON. I thought the Senator has 

yielded back. He has not yielded back? 

I am sorry. 

The PRESIDING OFFICER. The Senator from Oklahoma. 

Mr. NICKLES. Mr. President, I will 

be brief. We have one minute remaining and we will be voting at a time designated by the two leaders. 

It is vitally important we pass the 

budget. We have a chance for the first 

time in history to pass a budget that is 

going to call for a balanced budget. 

Many of us thought we should do that 

whether we passed a constitutional 

amendment to balance the budget or 

not. It is not possible to pass a balanced budget unless we curtail the 

growth of expensive programs. This 

program has been growing out of control. This program cost a few billion 

dollars a few years ago. It cost $25 billion this year. It will be costing $36 billion by the year 2002. We cannot continue that rate of growth. We have to 

slow it down. 

Under this proposal it continues to 

grow about $1 billion a year, not as 

rapidly as proposed under current law. 

We cannot sustain current law growth. 

We cannot sustain 55 percent growth 

per year, so this is an effort to curtail 

it. 

I urge my colleagues to vote against 

the amendment and I yield the floor. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. Mr. President, has all 

time has expired? 

The PRESIDING OFFICER. All time 

has expired on both sides. 

Mr. EXON. Mr. President, I am 

pleased to yield a maximum of 45 minutes to my great friend and colleague, 

the senior Senator from West Virginia, 

off the minority side’s time allotted. 

Mr. BYRD. Mr. President, I thank 

the distinguished Senator from Nebraska, the ranking manager of the 

bill. 

Mr. President, both Houses of Congress waited for weeks beyond the time 

when budget resolutions are normally 

brought before the House and Senate. 

In fact, as Senators are aware, section 

301(a) of the Congressional Budget Act 

requires that on or before April 15 of 

each year the Congress shall complete 

action on a concurrent resolution on 

the budget for the fiscal year beginning 

on October 1 of such year. Nevertheless, Congress has often missed this 

deadline, so the lateness of this particular budget resolution is not extraordinary. 

It is particularly understandable that 

this year’s budget resolution would be 

late, in light of the fact that it contains more deficit reduction than has 

ever been proposed in any budget resolution. I believe the figure is nearly $1 

trillion in deficit reduction that would 

purportedly be achieved over the next 7 

years if this budget resolution is 

agreed to, and if all of its reconciliation instructions were enacted into 

law. That is what the Congressional 

Budget Office’s current projections 

show. 

At the end of that 7 years, according 

to table 1 on page 6 of the Budget Committee’s report, under this budget resolution we will have achieved a budget 

surplus of $1.3 billion. Apparently that 

surplus occurs only under a unified 

budget. For those who are not intimately familiar with budget terminology, a unified budget is one that allows the use of trust fund surpluses to 

mask the true size of the deficit. 

For this particular budget resolution, 

the use of such trust fund surpluses, 

and particularly the Social Security 

surplus, is necessary to achieve the $1.3 

billion surplus in the year 2002. If one 

turns back one page in the Budget 

Committee’s report to page 5, one will 

find another table. This table, table 1, 

sets forth the projected deficits recommended by the Budget Committee 

through the year 2002 without using 

the trust fund surpluses. This table 

shows that even if we adopt this budget 

resolution lock, stock, and barrel, we 

will still have a deficit—according to 

the Budget Committee—of $113.5 billion 

in 2002. In other words, if we do not 

apply the Social Security trust fund 

surplus against the deficit, the budget 

will not balance in the year 2002 under 

this budget resolution. Instead, there 

will be a deficit of $113.5 billion. 

Having said that, I am quick to acknowledge the tremendously difficult 

work that has been done by the able 

chairman of the Budget Committee, 

Mr. DOMENICI. He has spent months on 

this budget resolution and, having 

worked closely with him on appropriation and budget matters for many 

years, I know that he is thoroughly familiar with virtually every item in this 

budget resolution. I would expect no 

less from this very able and distinguished Senator. It cannot have been 

easy to recommend the difficult 

choices that were necessary to achieve 

$1 trillion in deficit reduction without 

including any additional revenues and 

without cutting military spending. I 

would note, however, that the task 

would have been even more difficult 

had not the 1993 Reconciliation Act 

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S7158 CONGRESSIONAL RECORD— SENATE May 23, 1995 

been enacted. So let us not lose sight of 

that fact. That measure, at the time of 

its passage, was estimated to cut the 

deficit by $433 billion below the CBO 

baseline over 5 years. 

President Clinton deserves a great 

deal of credit for having proposed a 

major deficit reduction package shortly after he assumed office in 1993. Subsequently, Congress enacted the Omnibus Reconciliation Act of 1993, which 

resulted in reducing 5-year deficit projections by $433 billion. Not one Republican, not one in either House, voted 

for the package, but, as I said, the 

Budget Committee has benefited from 

that 1993 deficit reduction package. 

Without that package that we enacted 

in 1993, the committee would have had 

to come up with another $433 billion in 

deficit reduction in this resolution in 

order to reach their target in 2002. 

Mr. President, despite the rhetoric to 

the contrary—let me say this. I hope 

all Senators will hear it. Despite the 

rhetoric to the contrary, this is not the 

first budget resolution that has projected a balanced budget. I hear many 

Senators say, ‘‘For the first time we 

have a budget resolution here that 

projects a balanced budget.’’

That ain’t so. This is not the first 

budget resolution that has projected a 

balanced budget. In fact, it is not even 

the second, or third budget resolution 

that has done so. That this is so is supported by the Budget Committee’s report accompanying this year’s resolution. In Mr. EXON’s minority views, on 

page 314, the following statement is 

made: 

Contrary to Republican statements, this is 

not the first budget resolution to achieve 

balance. It is the fifth in line. The 1980, 1981, 

1982, and 1991 budget resolutions were in balance. In the 1991 budget, Democrats did not 

use the Social Security trust fund surplus to 

reach balance. This all goes to demonstrate 

that the universe covered by a budget resolution can change in the course of the years. 

That is the language, that is the 

committee report, and I quoted from 

Mr. EXON’s statement there. 

So, there have been four other occasions when budget resolutions have 

projected a balanced budget. We have 

done this before. This is not the first 

time. In fact, I recall that President 

Carter’s fiscal year 1981 budget contained a deficit of something like $15.9 

billion. We in the Senate found that to 

be intolerable, and as majority leader 

at that time, I convened a session at 

which the chairman and ranking members of the Budget, Appropriations, and 

other relevant committees sat down for 

several days including an entire weekend to come up with the necessary 

changes to balance President Carter’s 

1981 budget. We accomplished our purpose and the fiscal year 1981 budget resolution, therefore, showed a balanced 

budget. but, as with all other budget 

resolutions, including this one, as we 

shall see, changes in economic and 

technical forecasts caused the actual 

1981 budget to be out of balance. The 

latest such budget resolution prior to 

the pending one was that for fiscal year 

1991. Some Senators will recall that the 

1991 budget resolution was adopted subsequent to the 1990 Budget Summit. 

That Budget Summit was requested by 

President Bush in May of 1990. I participated in it, as did a number of other 

Senators, including Mr. DOLE, Mr. 

DOMENICI, and Mr. GRAMM, to name a 

few—Mr. HATFIELD and Mr. Bentsen, 

who was a Senator at that time. From 

the House side, the summit participants included Mr. GEPHARDT and Mr. 

GINGRICH, among a number of others. 

We spent literally weeks and weeks 

and weeks, and even months negotiating a bipartisan deficit reduction 

package which, it was agreed by all, 

should be no greater than $500 billion 

over five years. The fear was that anything over $500 billion would throw the 

economy into recession. We had the 

best Democratic and Republican brains 

in the Nation sitting around that summit table at Andrews Air Force Base. 

In addition to Members of Congress and 

their staffs, we had the benefit of the 

wisdom of Mr. Richard Darman, President Bush’s OMB Director; Mr. John 

Sununu, the President’s Chief of Staff; 

and even the Secretary of the Treasury, Mr. Nicholas Brady. Also present 

was the CBO Director, Dr. Robert 

Reischauer, and several of his key 

staff. I should mention that Leon Panetta was there. As anyone can see, we 

did not suffer from a lack of expertise 

at the 1990 bipartisan Budget Summit. 

Well, after all those months of intense 

negotiations, which often ran into the 

night and included Saturdays and Sundays, we finally reached an agreement. 

That agreement cut the projected 5- 

year deficits for fiscal years 1991–95 by 

$500 billion. When first presented to the 

House, in the form of a budget resolution, the summit agreement was voted 

down. After some modifications were 

made, however, a budget resolution 

was agreed to by the House on October 

8, 1990, and by the Senate the next day. 

I have here the fiscal year 1991 budget resolution conference report. It is 

numbered report 101–820, and was submitted by Mr. Panetta, who was the 

House Budget Committee chairman at 

the time. On page 2 of this 1991 budget 

resolution conference report, we see a 

heading entitled ‘‘Recommended Levels and Amounts.’’ Under that heading 

in section 3(a)(4), one will find the onbudget deficits for fiscal years 1991–94 

and an on-budget surplus for fiscal year 

1995. 

Specifically, the conference report 

itself reads as follows: 

SEC. 3. (a)(4)(A) The amounts of the deficits 

are as follows: Fiscal year 1991: 

$143,700,000,000. Fiscal year 1992: 

$100,900,000,000. Fiscal year 1993: 

$62,000,000,000. Fiscal year 1994: $14,700,000,000. 

(B) The amount of the surplus is as follows: 

Fiscal year 1995: $20,500,000,000. 

So there you have it. The budget resolution for fiscal year 1991, which incorporated the budget cuts agreed to at 

the 1990 Budget Summit, showed an onbudget surplus of $20.5 billion in the 

fifth year; namely, fiscal year 1995. 

That surplus was to be achieved under 

that budget resolution without using 

the Social Security surplus. In fact, if 

one turns to page 21 of the 1991 budget 

resolution conference report, there one 

will find a table which, among other 

things, shows that if the Social Security and other trust fund surpluses are 

used to reduce the deficits, then there 

were supposed to be surpluses, not deficits, for fiscal years 1993, 1994, and 1995. 

In fact, the surpluses were to be: for 

fiscal year 1993, $44.8 billion; for fiscal 

year 1994, $108.5 billion; and for fiscal 

year 1995, $156.2 billion. 

My purpose, Madam President, in 

raising these matters is to put to rest 

the misconception that somehow the 

Republican leadership in the Congress 

has come up with the first budget resolution ever that projects balance; and 

the further misconception that past 

Congresses failed to bite the bullet and 

make the tough choices to balance the 

budget. The fact is that we thought we 

had enacted the necessary spending restraints in 1990, on a bipartisan basis, 

to achieve a balanced budget by 1995. 

The experts told us we had done so. 

But, as is the case now, and, as I have 

said many times, there is no earthly 

way that any human being can accurately predict what the deficit will be 5 

years from now. 

We all know what happened to those 

1991 budget resolution projections. 

They went south. No sooner was the 

ink dry on the Summit Agreement, and 

its accompanying reconciliation act, 

than CBO changed its projections. 

I have here a CBO document entitled 

‘‘CBO Papers—The 1990 Agreement: An 

Interim Assessment’’ dated December 

1990. On page 8, this paper lays out 

major changes in the 1991–95 deficit calculations upon which the Congress and 

President Bush had just depended when 

they enacted the provisions of the 

Summit Agreement, which was supposed to achieve a budget surplus by 

fiscal year 1995. Here is what CBO had 

to say about their changed projections, 

only 1 month after enactment of the 

Summit Agreement: 

The October interim economic assumptions increase the projected deficit by $41 

billion in 1991 and by about $60 billion per 

year thereafter, compared with CBO’s summer baseline. The October forecast reflects 

significant signs of weakness that appeared 

in the economy after CBO completed its 

summer forecast in June. The Iraqi invasion 

of Kuwait in early August has caused a sharp 

increase in oil prices, which has boosted inflation. In addition, the revision of the national income and product accounts for the 

past three years suggests that the economy’s 

potential rate of growth is lower than previously thought. 

Taken together, these economic developments reduce projected revenues by about 

$30 billion per year. Higher inflation increases cost-of-living adjustments for Social 

Security and other benefit programs, as well 

as discretionary inflation adjustments for 

defense and non-defense appropriations. 

Higher unemployment raises spending for 

unemployment compensation and for income-assistance programs. Finally, lower 

revenues and higher spending increase federal borrowing requirements and debt service 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7159 

costs, by amounts growing from $2 billion in 

1991 to $17 billion in 1995. 

During the final months of fiscal year 1990, 

the Resolution Trust Corporation (RTC)—the 

agency charged with resolving insolvent savings and loan associations—spent $10 billion 

more than CBO projected in July. This surge 

in spending suggests that the RTC is resolving cases more quickly and needs more working capital than previously thought. As a result, CBO has increased its estimates of deposit insurance spending in 1991 and 1992. Together with the resulting increase in debt 

service costs, deposit insurance reestimates 

increase the projected deficit by $16 billion 

in 1991 and $42 billion in 1992, have little effect in 1993, and reduce the deficit somewhat 

thereafter. 

So, Madam President, it became obvious, rather quickly then, that budget 

balance would not be achieved without 

further major deficit reduction packages. President Bush chose not to undertake further budget summits, nor to 

propose further deficit reduction for 

fiscal years 1992 or 1993. 

It was left up to President Clinton to 

propose further deficit reduction. He 

rose to the challenge in his ‘‘Vision For 

America,’’ which was submitted to 

Congress on February 17, 1993. President Clinton laid out a blueprint for 

improving the lives of Americans and 

for reducing the Federal deficit, while 

at the same time, addressing the Nation’s investment deficit in both 

human and physical infrastructure. 

The 1993 Omnibus Reconciliation Act 

was subsequently enacted and resulted 

in $433 billion in deficit reduction—and 

it had to be done without a single Republican vote. 

That brings me to the pending budget 

resolution, which, as I stated at the beginning of my remarks, calls for some 

very difficult budget cuts which, according to OMB, will total $961 billion 

below a baseline which already assumes a non-defense discretionary 

freeze for the next 7 years. From this 

baseline, this budget resolution would 

cut: $256 billion from Medicare; $175 billion from Medicaid; $209 billion from 

other entitlements; $190 billion from 

nondefense discretionary spending (as 

measured from a 1995 freeze extended 

through 2002; defense is increased by 

$25 billion); and $155 billion from reduced debt service. 

For nondefense discretionary spending, this budget resolution would cut 

$190 billion below a 1995 freeze; the 

equivalent of a $300 billion cut below 

the levels in the President’s budget. By 

the year 2002, nondefense discretionary 

spending will be cut by nearly onethird, declining to 2.5 percent of the 

gross domestic product, and that would 

be a record low. 

For military spending, on the other 

hand, this budget resolution proposes 

no cuts to the President’s budget, as 

opposed to its proposed $300 billion in 

cuts below the President’s nondefense 

budgets, over the next 7 years. That is 

preposterous. If we accept this budget 

resolution, we will cut by one-third—

provided the instructions are carried 

through—we will cut by one-third that 

portion of the budget which funds education, the National Institutes of 

Health, environmental cleanup, health 

and safety programs to ensure the safety of food and water for our citizens, 

research and development, School-ToWork and other job training programs, 

NASA, aviation safety (including air 

traffic control), civilian and military 

retirement, agriculture, highway and 

bridge construction and maintenance, 

transit assistance, the Small Business 

Administration, the judiciary and the 

courts, nuclear waste cleanup, our national parks, law enforcement, and the 

operating costs of every department 

and agency of the Federal Government. 

These and all other nondefense programs—all other nonmilitary programs—will suffer devastating cuts 

over the next 7 years. 

But not the military; not the military. No cuts are proposed for the military over the next 7 years. 

Does anyone believe that the military budget cannot be cut? Does anyone believe that the military budget 

ought not be cut? Does anyone believe 

that there are not items in that military budget that can be cut, ought to 

be cut, and still maintain the kind of 

security for our country that we expect? 

Well, apparently some of our friends 

on the other side of the aisle do believe 

that. Not only that, this budget resolution will reestablish a wall so that 

military spending will have its own 

separate caps for the next 7 years. This 

will prohibit Congress from cutting 

military spending and using those cuts 

to ease the pain on nonmilitary spending. This means that we will limit our 

ability to set priorities by removing 

from the budget-cutting pot the entire 

military budget. It is off limits. 

Furthermore, this budget resolution 

will eliminate the hold-harmless provisions of the Budget Enforcement Act 

for discretionary spending. This means 

that discretionary caps will no longer 

be adjusted for economic and technical 

miscalculations which are beyond the 

control of Congress. 

I fought for that in connection with 

the 1990 summit and the budget resolution that flowed therefrom. I fought for 

that. I sat right down in my office and 

discussed that with Mr. Darman. I said, 

‘‘There’s no give on that. Nondefense 

discretionary has got to be held harmless.’’ And we were, and we have been 

held harmless since. But that is out 

now with this budget resolution. 

Finally, this budget resolution will 

create a new requirement that, in order 

to not be charged against discretionary 

spending, emergencies will have to 

achieve a 60-vote supermajority in the 

Senate. 

So if we have a disaster in Texas, get 

ready to produce 60 votes, or else it 

will be charged against discretionary 

spending. And where do we have the 

money? Discretionary spending is on 

the block. The ax is going to fall, as it 

has fallen time and time again in recent years. 

It is clear that nondefense discretionary spending will suffer the greatest harm of any area of the Federal 

budget under this budget resolution. 

And the American people will not have 

to wait for reconciliation to feel the effects of the nondefense, nonmilitary, 

discretionary cuts. Those cuts will be 

coming to the House and Senate floors 

very soon after the adoption of the 

budget resolution conference agreement. Each of the 11 nondefense discretionary appropriation bills will contain 

a large dose of reality as to what is 

being asked of the American people in 

the way of cutbacks in government 

services. And these cuts will keep coming each and every year for the next 7 

years. There will be no relief. If the 

caps are exceeded, then automatic 

cuts, or sequesters, will occur to bring 

nonmilitary spending back within each 

year’s cap on both budget authority 

and outlays. Rest assured, if this budget resolution is agreed to, and I have 

no doubts that it will be agreed to, 

these cuts will occur. We will no longer 

have to speculate about the pain that 

will occur. It will have arrived. 

For the entitlement portion of the 

budget, this budget resolution also 

calls for tough medicine. As the debate 

has already brought out, cuts of $256 

billion for Medicare; $175 billion for 

Medicaid; and $209 billion from other 

entitlements will be very harsh upon 

those in our society who, in many 

cases, are the least able to afford to 

pay more for their benefits. The 

changes called for in the budget resolution for entitlements will be taken up 

later this year in a massive reconciliation bill. Only if enacted by Congress 

and signed into law by the President, 

will these entitlement cuts take place. 

So there will be another day to make 

that decision. 

Page 5 of the committee report, 

Madam President, contains this statement: 

The committee’s recommendations are 

real, enforceable, and achieve the fiscal policy goal of a comprehensive, unified balanced 

budget in 2002. 

I ask Senators where is the enforcement on entitlement spending in this 

resolution? Let me read again page 5 of 

the committee report. I quote: 

The committee’s recommendations are 

real, enforceable, and achieve the fiscal policy goal of a comprehensive, unified balanced 

budget in 2002. 

I ask the committee, where is the enforcement on entitlements? The committee report says these are enforceable. Where? Where is the enforcement 

on entitlement spending in this resolution? I have asked my staff to find 

that. My staff has searched in vain to 

find caps on entitlements and sequesters to enforce the caps. There are no 

such provisions. Despite the committee’s claim, there is no enforcement on 

entitlement spending for the next 7 

years. Yet, as any knowledgeable observer knows, entitlements are where 

the growth in Federal spending is occurring. The cuts in discretionary 

spending will occur—you can bet—they 

will occur because there are caps every 

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S7160 CONGRESSIONAL RECORD— SENATE May 23, 1995 

year and automatic, across-the-board 

cuts discretionary spending within 

those caps. 

Yes, they are enforceable, those cuts 

in nonmilitary discretionary spending. 

Cuts in nonmilitary discretionary 

spending will occur because there are 

caps every year and automatic, acrossthe-board cuts to keep the nonmilitary 

discretionary spending within those 

caps. Yet, for entitlements, this resolution contains no caps and no other enforcement mechanisms. 

Similarly, for revenues, there is 

nothing in this resolution to ensure 

that each year’s revenue projection 

will be achieved. What if we have a recession? What if we have a recession, as 

we probably will? How will the shortfall be accounted for? 

The only way in this resolution is by 

increasing the deficit. 

For entitlement spending and revenues, this budget resolution is no different—no different—from any of the 

other budget resolutions in the past. In 

fact, the proposed balanced budget 

amendment to the Constitution suffers 

from the same flaw. We pointed that 

out time and time again in the debate. 

That amendment suffered from that 

flaw. Human beings simply cannot accurately forecast budgets 7 years, or 5 

years or 4 years or 3 years or 2 years, 

or even 1 year in advance. This budget 

resolution is no different from the 

budget resolution for fiscal year 1991 

which, as I have already pointed out, 

was not worth the paper it was written 

on. When all is said and done, it was 

not worth the paper it was written on. 

It took CBO just 1 month—1 month—to 

change the revenues downward and the 

entitlements upward. The pending resolution will not improve the negative 

effects of those misestimates for revenues and entitlements at all. 

This brings me to a final area of the 

pending resolution, which is disturbing 

to me, perhaps as much as any of the 

other matters I have raised, if not 

more. That is the portion of this budget resolution which states that after 

enactment of reconciliation, the Congressional Budget Office will provide 

the Senate with a revised estimate of 

the deficit for the years 1996 through 

2005, and if there is any additional deficit reduction, the ‘‘surplus’’ can be 

used for a cut in revenues. The resolution would not allow the surplus to be 

explicitly used for additional deficit reduction or to lessen the impact of proposed Medicare or Medicaid cuts. 

CBO has already indicated that if the 

deficit is eliminated by the year 2002, 

there will be a ‘‘bonus surplus’’ gained 

from a reduction in interest rates and 

an improvement of one-tenth of a percentage point in the growth rate. The 

mark requires the fiscal dividend to be 

limited to the amount CBO certifies is 

the additional deficit reduction that 

results from the enactment of reconciliation legislation based upon the 

Republican mark. 

Madam President, first of all, I do 

not believe there will be any windfall if 

this budget resolution is agreed to and 

if its accompanying reconciliation 

measure is signed into law. This budget 

resolution assumes there will be no recessions over the next 7 years. Furthermore, any objective review of the past 

history of CBO’s 5-year deficit projections would lead one to find highly suspect the 7-year projections contained 

in the pending resolution. I do not believe the chances are any better than 1 

in 1,000 that, if we accept this budget 

resolution to carry out its entire contents without change, we will achieve a 

balanced budget in 2002. 

Regarding the tax cut provided in 

this resolution, I am frankly amazed. 

For all the talk—all the talk—about 

balancing the budget and all the 

mighty effort expended, we turn right 

around again in the same budget balancing document and spend $170 billion 

that we do not have and will, in all 

likelihood, never have on a tax cut. It 

is folly. Here we go again. Like the old 

song says: ‘‘Livin’ on money that we 

ain’t made yet.’’

‘‘Livin’ on money that we ain’t made 

yet.’’ That money is not going to be 

there when the day rolls around. 

In case I am wrong, I do not support 

the use of any resulting windfall for 

tax cuts. And I do not care who recommends the tax cuts. It can be President Clinton, if he wants to. I am not 

going down that road with him. I do 

not think he should have gone down 

that road. I do not think anybody 

ought to be recommending tax cuts at 

this time. I am not supporting Mr. 

Clinton and I am not supporting the 

Republicans on any tax cuts. 

If there are any windfalls, we should 

apply them toward the deficit rather 

than give them away in tax cuts. That 

is what we wanted to do. We want to 

balance the budget. It is the height of 

ridiculosity to propose tax cuts for the 

wealthy which total over $350 billion 

over the next 7 years, while at the 

same time we are devastating domestic 

discretionary programs that are investments in the Nation’s future and in the 

people’s future. 

I believe that the other side of the 

aisle would do well to tone down the 

partisan rhetoric and the blame game. 

Democrats did not put us in this downward spiral. We all had a hand in it. We 

had a Democratic House, but we had a 

Republican President and we had a Republican Senate. Democrats have done 

their best to lead the efforts to eliminate the Federal deficit in the past. We 

recognize it has to be done. We did not 

ignore the problem in the past. We did 

not ignore it in 1993, and we stand 

ready to do our part again to do what 

is necessary to achieve budget balance. 

But it is obvious that we cannot do this 

if all we are interested in is partisanship. Virtually every substantive 

amendment that was offered by Democrats in the Budget Committee markup 

was rejected on a party line vote. Here 

on the Senate floor, the same partisan 

approach has been used by the Republican majority. 

I, therefore, do not kid myself by 

holding out any hope that there will be 

any attention paid by the Republican 

side to the suggestions or proposals 

made by this side of the aisle. That is 

unfortunate. We are all here to do our 

solemn duty in, once again, making 

tough choices which affect the lives of 

virtually every American in order to 

balance the budget. None of us shy 

away from that duty. But, I submit 

that the Senate and the American people would be far better served if, at 

some point during this year’s budget 

and reconciliation battles, we put aside 

partisan and Presidential politics, and 

vote for the best possible legislation in 

all instances—no matter whose idea it 

may be. 

I close by congratulating again, Mr. 

DOMENICI, the chairman of the Budget 

Committee. He is an extremely capable 

and bright and dedicated Senator, and 

he has demonstrated a great deal of 

courage in bringing this resolution forward. 

But I like to look at history in a situation like this, just as in many other 

situations. I have related some recent 

history to show that budget resolutions 

have a way of being overly optimistic 

and that there are conditions that 

occur in the economy which, in the 

final analysis, result in changing the 

expected and hoped-for outcomes of the 

budget resolutions. 

I also compliment Senator EXON, who 

has done a fine job, a dedicated job on 

the Budget Committee. It is not easy. 

And all of the members on that committee are to be complimented. I am 

not on the committee, and I do not 

envy those who have worked so hard. 

They have spent hours and days and 

weeks, and they have done their best. I 

know they have done their best. 

I know the Senator from New Mexico 

has done his best. He believes in this 

product. But he has no control over the 

future. Nobody has any control over tomorrow. ‘‘Boast not thyself of tomorrow, for thou knowest not what a day 

may bring forth.’’ Recessions can 

occur, military conflicts may arise. 

There are things we cannot foresee. We 

cannot foresee what inflation will be, 

what the unemployment rate will be, 

what the gross domestic product will 

be, what interest rates will be. 

In closing, I compliment the managers and I hope that what I had to say 

today will be of some benefit and that 

it will at least cause us to look back 

over the road we have traveled in the 

past and possibly to temper what we 

may have to say with regard to the future’s optimist projections. 

Madam President, how much time do 

I have left? 

The PRESIDING OFFICER. The Senator has 2 minutes 10 seconds remaining. 

Mr. BYRD. I yield back my 2 minutes. 

Mr. DOMENICI. Madam President, I 

yield myself 1 minute off my side. Before he leaves the floor, I thank Senator BYRD very much for his remarks. 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7161 

I know we do not agree on the details, 

but I thank him very much for the way 

in which he described the Budget Committee, as hard-working people. It is 

very hard to get people together on 

such diverse issues. I compliment Senator EXON for his hard work. Again, I 

thank Senator BYRD for his remarks. 

There is no question that if we could 

predict with specificity exactly what 

will happen 3 years, 7 years, 20 years 

from now, we would be greater than 

the Roman Senate. But in any event, 

we cannot do that. I understand we are 

doing our very best. But I think the assumptions and expectations of this 

budget are realistically conservative in 

terms of economics and the like, even 

more so than the President’s budget, 

which did not do much to the deficit 

but had less conservative estimates in 

the next 4 years. I thank him for his remarks. 

I yield the floor. 

Mr. EXON. Madam President, let me 

take a moment and thank my friend 

and colleague, the chairman of the 

committee, Senator DOMENICI, with 

whom I have worked for a long, long 

time. I have saluted him during this 

debate before and I do so again now. 

I also want to take a moment to 

compliment my very dear friend, the 

senior Senator from West Virginia, for 

his outstandingly considerate and 

thoughtful remarks. I just hope that 

the Senate will be wise enough to recognize and realize that someone with 

the wisdom, dedication and the 

evenhandedness that has been part and 

parcel of Senator BYRD’s lengthy and 

very distinguished career would give us 

pause for consideration. I think sometimes we get carried away, and I can 

think back and make talks on several 

measures that have been introduced in 

the U.S. Senate to solve the deficit 

problem. I voted against most of them 

because I did not think they held 

water. 

I simply say that there are many 

concerns that we have on both sides of 

the aisle. Some of the sharp debate we 

have had on this measure is a very legitimate process of the consideration—

the debate and deliberations that the 

U.S. Senate has been known for a long 

time. 

As a personal aside, let me say that I 

have often said with my experience in 

politics, the great reward has been the 

people that I have met and have been 

associated with that would have never 

come my way had I not been chosen by 

the great people of the State of Nebraska to represent them as Governor 

and then as a U.S. Senator. One of the 

finest things that has happened to this 

Senator, with all of the outstanding 

people that I have met and been associated with and worked with, Senator 

BYRD has always been a pillar of what 

I think a U.S. Senator should be all 

about. And I think the remarks that he 

just gave demonstrate better than I 

could have said it how important he 

has been and remains as a Member of 

this body. I thank my friend from West 

Virginia. 

Mr. BYRD. Madam President, I 

thank both managers of the bill. 

Mr. DOMENICI. Senator GRAMM of 

Texas is going to offer an amendment. 

Technically, under the rules, I am supposed to manage the opposition. But I 

choose today to designate, if he will assume the responsibility, Senator EXON

as the manager in opposition to the Republican amendment. 

Mr. EXON. I appreciate those remarks by Senator DOMENICI. We are 

prepared to cooperate as he has outlined. If I understand it correctly, we 

are now moving back and forth, and we 

are now prepared to listen to the beginning of the debate on what I understand is called the Gramm amendment. 

We are prepared for that if the Chair is. 

The PRESIDING OFFICER. The 

Chair recognizes the senior Senator 

from Texas. 

AMENDMENT NO. 1123

(Purpose: Setting forth the congressional 

budget for the United States Government 

for the fiscal years 1996, 1997, 1998, 1999, 

2000, 2001, and 2002) 

Mr. GRAMM. Madam President, I 

send an amendment to the desk and 

ask for its immediate consideration. 

The PRESIDING OFFICER. The 

clerk will report. 

The assistant legislative clerk read 

as follows: 

The Senator from Texas [Mr. GRAMM], for 

himself, Mr. COATS, Mr. COVERDELL, Mr. 

CRAIG, Mr. FAIRCLOTH, Mr. GRAMS, Mr. 

HELMS, Mr. KEMPTHORNE, Mr. KYL, Mr. LOTT, 

Mr. MACK, Mr. MCCAIN and Mr. SMITH, proposes an amendment numbered 1123. 

Mr. GRAMM. Madam President, I ask 

unanimous consent that reading of the 

amendment be dispensed with. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

(The text of the amendment is printed in today’s RECORD under ‘‘Amendments Submitted.’’) 

Mr. GRAMM. Madam President, I ask 

unanimous consent further reading be 

dispensed with. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. GRAMM. Madam President, I 

have offered an amendment which will 

reduce government spending from the 

level recommended in the Senate budget, that will include the heart of the 

tax cuts contained in the Contract 

With America, and that will, for all 

practical purposes, bring the budget 

which is now under consideration in 

the Senate into line with the budget 

that has already been adopted in the 

House. 

In short, if the amendment that I 

have offered is adopted, we can virtually guarantee that the tax cuts 

which Republicans across the land 

committed to in the 1994 elections will 

become the law of the land. 

I would like to outline what this debate is about. I would like to talk 

about the amendment. I would like to 

outline what the amendment does, and 

then I would like to talk about the 

issue that we are going to decide when 

we cast a vote on this amendment. 

In September of last year on the 

north plaza of the Capitol Building, Republican candidates for the U.S. Senate, in fact, every Republican challenger in the country that was running 

in an open seat or against a Democratic incumbent except one who could 

not be there on that occasion, gathered 

to issue to America, a statement that 

we called ‘‘7 more in ’94.’’

I want to read the opening part of 

that statement, and then I want to 

refer to a couple of things in it. We 

said, ‘‘We pledge to the American people that if they empower us as a majority in the U.S. Senate on November 8, 

1994, we will dedicate ourselves to the 

adoption of these legislative priorities.’’ Among those priorities, we had 

a tax exemption for children, we had 

the reestablishment of individual retirement accounts for families, we had 

the reduction of the capital gains tax 

rate, and the indexing of capital gains, 

and we pledged to repeal the earnings 

test under Social Security. 

One week later, as everyone in America now knows, Republican candidates 

for the House of Representatives gathered on the west front of the Capitol 

and presented their Contract With 

America which outlined two goals as it 

related to the budget. 

One goal was to balance the Federal 

budget, a commitment we also had 

made 1 week earlier on the northern 

approach to the Capitol; and also they 

outlined a comprehensive program to 

cut taxes, to let families keep more of 

what they earn, to provide incentives 

for people to work and to save and to 

invest. 

That was in September 1994. We all 

know that the American people on November 8 changed American Government in the most sweeping congressional election since 1932. We won a 

majority in both Houses of Congress. 

The House of Representatives, good to 

its word, not only made promises in 

the campaign but they fulfilled each 

and every one of those promises. They 

adopted a budget last week that balanced the Federal budget over a 7-year 

period and that mandated tax cuts as 

they had outlined in the Contract With 

America. 

Now, that brings the Senate to this 

point in the debate. Where we are 

today is that we have a budget before 

the Senate that fulfills half the fiscal 

commitments we made that September 

day. We have before the Senate a budget that over a 7-year-period limits the 

growth of Government spending to 3.3 

percent a year, down from an average 

of about 5.5 percent a year growth over 

the previous 5 years, down from about 

7.5 percent growth in Government 

spending since 1950. 

As a result of constraining the 

growth in Government spending, the 

budget that is before the Senate is a 

budget that will achieve balance over a 

7-year-period. 

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S7162 CONGRESSIONAL RECORD— SENATE May 23, 1995 

I want to congratulate Senator 

DOMENICI. I want to congratulate my 

colleagues for having achieved half of 

the commitment that we made prior to 

the elections in 1994. 

My amendment today seeks to 

achieve the other half of those commitments. Now, what is the difference at 

this moment between the House budget 

and the Senate budget? Stated in its 

most simple terms, the budget that we 

are considering in the Senate spends 

$175 billion more on nondefense spending programs over the next 7 years 

than the budget which was adopted in 

the House. That is the first difference. 

Our budget spends a lot more money 

than the House budget spends, on nondefense expenditures. 

The second difference is that the 

budget in the Senate does not mandate 

a tax cut, whereas the budget in the 

House does. 

My amendment is a very simple 

amendment. What my amendment does 

is make two changes in spending. No. 1, 

it phases in the reductions in the 

growth of spending under Medicaid so 

that while Medicaid expenditures grow 

every year over the next 7 years, and 

while Medicaid grows faster than Government spending is growing, we slow 

down the rate of growth in Medicaid 

more quickly under the substitute 

which I have offered than under the 

budget that is currently pending before 

the Senate. 

Many people believe that those savings are not only achievable but desirable. 

The most significant change in 

spending that I have proposed in this 

amendment reduces nondefense discretionary spending below the level contained in the budget that is before the 

Senate, so that overall we are spending 

$142 billion less under my amendment 

than we are spending in the budget 

that is currently before the Senate. 

If we look at this chart, Mr. President, it shows basically what the 

amendment does to spending. The red 

line is a line that shows the growth of 

Government spending under the 

Domenici budget; that growth averages 

3.3 percent a year. 

What my amendment does, by reducing the growth of discretionary spending, and by phasing in savings in Medicaid more quickly, rather than growing at 3.3 percent a year, Government 

spending would grow at approximately 

3 percent a year. Government is still 

spending more each year than it spent 

the year before, but not spending as 

much as it would have spent had this 

amendment not been adopted. 

This amendment then provides for 

tax cuts for the American people. 

These tax cuts basically contain the 

following items: A $500 tax credit per 

child; cutting the capital gains tax rate 

by 50 percent and indexing it for inflation; estate tax relief for small business and small farms; faster depreciation through expensing for small business to encourage investment in small 

business in America; beginning the 

process of phasing out the so-called 

marriage penalty, this perverse provision in the Tax Code where if two people with incomes meet, fall in love, and 

decide to get married, they pay the 

Government as much as $4,500 a year—

for the right to be married—in additional taxes; this amendment reestablishes individual retirement accounts 

for all Americans; it allows spouses 

working in the home to have an individual retirement account on exactly 

the same basis as if they worked outside the home; it allows the deduction 

with a credit for expenses in adopting a 

child; it raises the threshold for the 

earnings test under Social Security so 

that if senior citizens need to work to 

supplement their income, if they have 

the ability to work, they can do it 

without losing Social Security in the 

process; and finally, if someone takes 

care of an elderly person in their home, 

they are allowed a credit for part of 

those expenses. 

This, in essence, is the tax cut that is 

contained in the House budget and is 

the heart of the Contract With America. 

Now, let me take on the issues that 

are going to be raised. There are going 

to be some people who will say, ‘‘Look, 

let us balance the budget before we 

talk about tax cuts.’’

That is very easy to respond to. We 

are both balancing the budget. The 

DOMENICI budget balances the budget, 

certifies the savings, locks them in 

with enforcement mechanisms, and so 

does the amendment I have offered. In 

terms of balancing the budget, both 

amendments will balance the Federal 

budget. 

What my amendment does is spend 

less money, and by reducing spending 

by $142 billion over the next 7 years, 

my amendment makes it possible for 

us to adopt as part of the reconciliation process a tax cut, fulfill the commitment we made in the campaign, and 

to do something more: To begin the 

process of not only balancing the budget but changing who is doing the spending in America. 

The debate here is really between 

those who say we want the Government 

to spend $142 billion more, in the Senate, than Government spends in the 

House budget, and those who support 

my amendment and say let us have the 

Federal Government spend $142 billion 

less so families can spend more of their 

own money on their own children, so 

that businesses can invest more of 

their own money in their own businesses. 

I know there are those who will say 

this is a debate about how much money 

we spend on children, this is a debate 

about how much money we spend on 

education, housing, and nutrition. But 

this is not a debate about how much 

money we spend on children. It is not a 

debate about how much money is spent 

on nutrition or housing or education. 

It is a debate about who is going to do 

the spending. 

In the budget that is before us, the 

Government is going to continue to do 

the spending. In the amendment that I 

have offered, the family will do the 

spending. I know Government and I 

know the family and I know the difference. I believe if the American family is allowed to have a $500 tax credit 

per child so parents can spend more of 

their own money on their own children, 

on their own future, that they will do 

a better job in spending that money 

than the Federal Government is doing. 

In the House they propose eliminating public funding for public television. In the House, they propose 

eliminating the Federal Department of 

Education. And they give part of that 

money back to parents, to let parents 

decide how it is spent. I believe that is 

a clear choice and I want to be absolutely certain that people know that 

we can make that choice in this 

amendment. If you want families to 

spend more of their own money rather 

than having the Government spend it, 

you want to be for this amendment. 

Second, this amendment cuts the 

capital gains tax rate, provides incentives for investment, and I know there 

will be those in this debate who will 

say this helps rich people. ‘‘If you cut 

the capital gains tax rate, rich people 

are going to exploit the situation because what they are going to do is mobilize their money; they are going to 

invest it; they will create jobs. But if 

they are successful, they will earn profits.’’

Welcome to America. That is how our 

system works. If we want people to create jobs there has to be an incentive to 

do it. I do not understand people who 

love jobs but hate the people who create them. I do not understand how we 

can expect people to make investments 

and take risks, and yet somehow resent 

allowing them to benefit when they are 

successful from the investments they 

make and the risks they take. 

As I listen to all this talk about rich 

people versus poor people, it has started me thinking about my own life’s experience. I have been blessed in having 

a lot of jobs in my life, especially when 

I was growing up. I worked as a peanut 

processor, I worked in a cabinet shop, I 

worked in a boat factory, in addition to 

all the jobs we all had working in a 

grocery store, throwing a newspaper. 

No poor person ever hired me in my 

life. Every job I ever got in my life, I 

got because somebody beat me to the 

bottom rung of the economic ladder, 

climbed up, saved his money, invested 

it wisely, and made it possible for 

someone like me to get my foot on the 

bottom rung of the economic ladder. 

What my amendment seeks to do, by 

cutting the capital gains tax rate and 

by providing incentives for people to 

work and to save and to invest, is to 

guarantee that tens of millions of additional young Americans will get an opportunity to put their foot on the bottom rung of the economic ladder and 

start climbing up themselves. By cutting discretionary spending we have 

the opportunity to cut programs where 

Government is subsidizing business 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7163 

and, instead, cut the capital gains tax 

rate and provide investment incentives 

so that investment decisions are not 

made by the Government but where investment decisions are made in the private sector of the economy. 

Some people are going to say, ‘‘Look, 

we ought to forget this $500 tax credit 

per child because it is not enough 

money to make any difference.’’ For a 

two-child family, this $500 tax credit is 

going to mean that family is going to 

get to keep $1,000 more every year of 

what they earn to invest in their own 

children. That may not be much money 

in Washington, DC, but in Texas, where 

I am from, the ability of a family to 

spend $1,000 more of its own money on 

its own children is real money. The 

fact that that is not real money in 

Washington, DC, tells you something 

about the problems that we have in 

Washington, DC. I think these are 

changes we need to make. 

So here is the choice we are about. 

The choice is this. The House of Representatives has controlled Government spending, and using the words we 

use in Washington, cut Government 

spending. Even though spending grows 

every year in their budget, it just does 

not grow as fast as it would have grown 

had they not changed policies. But in 

the House, they spent roughly $175 billion less on nondefense spending than 

the budget that we are now considering 

in the Senate. My amendment simply 

cuts spending by roughly that amount 

and gives that money back to parents 

to invest in their own children, cuts 

the capital gains tax rate, encourages 

savings and investment by changing 

the tax code so that rather than the 

Government spending this $175 billion, 

it can be spent in the private sector, 

where families and businesses are making the decisions instead of the Government. 

This is not a debate about balancing 

the budget. Both budgets balance the 

budget. This is not a debate about 

spending money on children or investing in businesses. Both budgets do 

that. But it is a debate about who is 

going to do the spending. Under my 

amendment, families will do more 

spending and the Government will do 

less spending. Under my amendment, 

Government will make fewer investment decisions and private business 

will make more investment decisions. 

Not only do I believe this is good policy, I think it is important for two reasons. One is economic and one is political. 

Economically, I think the economy is 

beginning to soften. Economically, I 

think we are beginning to feel, now, 

the impact of the tax increase that was 

adopted 2 years ago. 

I think the impact is being felt on 

the American economy, and I think we 

are beginning to see troublesome signs 

in the economy. I think it is very important, as part of this budget, because 

we want it to work and we want to balance the budget, that we as part of this 

budget provide incentives for private 

investment. As Government does less, 

it is important that we give parents 

the ability to do more by letting them 

keep more of their own money. It is 

important, as Government does less, 

that we provide incentives for business 

to do more in creating jobs and growth 

and opportunity. 

I think that is especially true given 

that we are going to reform the welfare 

system and we are going to ask millions of people to get out of the welfare 

wagon and help the rest of us pull. Cutting the capital gains tax rate, providing incentives for investment and 

growth I think is a vital part of this. 

Finally, we had an election. We all 

see the results of that election. We 

have a Republican majority. We have 

54 Republicans in the Senate. We have 

a Republican majority in the House for 

the first time in 40 years. We won that 

election based on commitments that 

we made to the American people, and 

in terms of the budget we committed 

to do two things. No. 1 to balance the 

Federal budget. That is a commitment 

on which we are clearly going to deliver. But we also committed to reduce 

spending further so that families can 

keep more of what they earn and so 

that businesses can make more investment decisions to create more jobs, 

more growth, more opportunity for our 

people. That is a commitment that we 

are not going to fulfill unless we adopt 

this amendment. 

Finally, before I yield the floor and 

allow the opposition to speak and begin 

to recognize our colleagues who are cosponsors to the amendment, let me say 

this. I know there are others who are 

talking about cutting a deal—compromising, coming up with a temporary 

tax cut. I think if we are going to 

change America, if we are going to 

change Government policy, we have to 

stop cutting deals in Washington, DC. 

We promised that we would do this in 

the election. As chairman of the Republican senatorial committee, I went 

all over the country and with Republican candidates everywhere committed to this program, and so did others of our colleagues on the Republican 

side of the aisle. 

Now we come down to the moment of 

truth. There are many who say, look, it 

was hard enough balancing the budget. 

This was excruciatingly painful. This 

was difficult. We do not want to go the 

final step to live up to what we committed in the election. 

I think that is a mistake. I think 

America will be richer and freer and 

happier if we do it. It is not only the 

right thing to do economically, it is 

the right thing to do because we committed to do it. 

I reserve the remainder of our time. 

Mr. FEINGOLD addressed the Chair. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. EXON addressed the Chair. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. Mr. President, we have 

spent a lot of time discussing the basic 

unfairness of the tax cut proposed by 

some Members on the other side of the 

aisle. The American people are wise to 

Republican tax shenanigans that benefit the wealthiest in this Nation. The 

amendment that has just been offered 

by the Senator from Texas embraces 

the unworkable and unrealistic tax cut 

described by Speaker GINGRICH as, 

‘‘The heart and soul, the crown jewel of 

the Contract With America.’’

It is a phony jewel at best and a very 

deceptive one, I hasten to suggest. The 

plain fact is that we cannot afford a 

tax cut, and there should not be one in 

this budget if we are going to balance 

the budget. Our primary goal, the goal 

that the American people overwhelmingly endorse, should be to reduce the 

deficit. A tax cut like the one in the 

House Contract With America would 

only add to the problem by forcing us 

to make even deeper and more painful 

spending cuts. 

Poll after poll has shown that voters 

want Congress to get the Nation’s fiscal house in order by balancing the 

budget, not by cutting taxes. 

Mr. President, we have just spent the 

majority of Friday and Monday talking 

about the draconian impact of the Republican budget cuts. Those cuts are in 

Medicare, and lower income beneficiaries are all going to suffer. We also 

talked about Medicare cuts and the 

cuts to education, the cuts to the EITC 

program, the cuts to veterans programs, and the cuts to agriculture. But 

no matter how the deficit is eliminated, the fact is that achieving balance is an extraordinarily difficult and 

painful task. It requires more than $1 

trillion in spending cuts—cuts that 

have a real impact on real people. Adding tax cuts to the mix would only ensure that the pain goes even deeper. 

And in this budget that translates to 

even harsher treatment for our seniors, 

our schools and education, our children, and the least well off in our society. 

There has also been a great deal of 

talk in this Chamber especially about 

the so-called economic bonus that will 

magically occur if this budget is enacted. According to CBO, it would be 

possible for a total of some $170 billion 

over the next 7 years and balloon to 

$356 billion over 10 years if those figures work out—if those figures work 

out. The bonus has become the financing source for the tax cuts being advocated by our friends on the other side 

of the aisle. If this bonus does occur—

and I think that point is very debatable—I submit there are many better 

purposes to which it could and should 

be put. In fact, the driving force behind 

the Democratic amendments center on 

this very issue. 

The question is very simple: Should 

any economic bonus be reserved for tax 

cuts for the best off in our society or 

should it be used to soften the blows of 

some of the extraordinarily harsh cuts 

that will be meted out under the plan? 

Our position is very simple: we cannot 

afford a tax cut. It makes the job of 

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S7164 CONGRESSIONAL RECORD— SENATE May 23, 1995 

balancing the budget just that much 

more difficult and disproportionately 

unfair. 

Furthermore, in the event that an 

economic bonus or surplus should accrue as a result of the painful choices 

that are being made, this bonus should 

be used to lessen the pain of those cuts 

rather than a tax cut and thus better 

assuring a realistic balanced budget by 

a day certain. 

That is where we stand, Mr. President, and that is where the American 

people stand, too. That is where realistic and reasonable people stand. I certainly strongly recommend that we 

disapprove the amendment offered by 

the Senator from Texas. 

Mr. FEINGOLD addressed the Chair. 

The PRESIDING OFFICER (Mr. 

SMITH). Who yields time? 

Mr. GRAMM. Mr. President, if we go 

back and forth——

The PRESIDING OFFICER. The Senator from Texas is recognized. 

Mr. GRAMM. Let me respond very 

briefly and then I would yield to Senator GRAMS. 

Mr. President, let me first say that 

the amendment I have offered cuts 

spending by another $142 billion to 

make it possible for us to let families 

keep more of what they earn and to 

provide incentives for businesses to invest their own money in their own future and generate jobs. 

I hear our colleagues on the Democratic side of the aisle talking about 

difficult choices. I am not aware that a 

single one of them plans to make a single difficult choice, and these are difficult choices being made by Republicans. Their proposal is that if we 

make the difficult choices so that we 

balance the budget, if any benefit 

should accrue from that we allow Government to spend the benefits. Our proposal is that if we make the tough 

choices and benefits accrue as a result 

of those tough choices in lower interest 

rates and higher growth because we 

have balanced the budget, because the 

Government is not borrowing half of 

all the money that is loaned in America, we give that money back to the 

people who earned the money to begin 

with, the people who do the work, pay 

the taxes, and pull the wagon. 

So I do not think the distinction between the two visions for the future 

that we are debating here could be any 

clearer. 

I do not think the American people 

believe that the tax cuts adopted in the 

House of Representatives are unreasonable or unworkable. I do not think the 

American people think that the idea of 

letting families spend more of their 

own money by having Government 

spend less of it is an unrealistic or unworkable idea. In fact, it has worked in 

reverse for 40 years. The average family in 1950, with two children, sent $1 

out of every $50 it earned to Washington. Today, it is sending $1 out of 

every $4. 

I am just proposing to take a very 

small step back in the right direction 

for a change. 

I yield 10 minutes to the distinguished Senator from Minnesota, Senator GRAMS. 

Mr. GRAMS. I thank the Senator 

very much. And I want to thank him 

very much for giving me the time on 

this amendment, and also give a lot of 

credit to the Senator from Texas for 

bringing this amendment to the floor. 

Mr. President, we have heard strong 

and passionate statements from my 

colleagues on the subject of the $500 

per-child tax credit and other tax reductions. 

But there is one thing we have not 

heard. 

We have not heard from the people 

themselves, those who would benefit 

most from tax relief, those who pay the 

bills—that is, the middle-class Americans who work every day—and a lot of 

nights and weekends, too—just trying 

to make a better life for themselves, 

their children, their families. 

And they do it at the same time they 

are paying more and more taxes to the 

Federal Government. 

Who is speaking up for them? Who is 

speaking up for the taxpayers? 

As their elected representatives, it is 

supposed to be us. But sometimes I am 

not so sure we are. 

November was only 6 months ago, but 

in a city where the headline-making 

political promises of yesterday too 

often end up lining the bottom of the 

bird cage, the message of November already seems to have been forgotten by 

many of us in the Senate. 

And so, if not us, who is speaking up 

for the taxpayers? 

Believe me, Mr. President, they may 

not be here to speak for themselves, 

but they have a voice in this debate, 

and they have a right to be heard 

today. 

Fortunately, the taxpayers in my 

State of Minnesota are prolific letterwriters. And, thanks to their letters, 

some of which I have brought with me 

to the floor, they will be heard today. 

And this is just a very small sample 

but a representation of what I have received in the mail. 

Listen carefully—their thoughtful 

words reflect a deep dissatisfaction 

with the status quo in Washington. 

Listen to Ralph Krasky of Minneapolis: 

We are just being killed in taxes. We both 

work and all we do is save for April 15. Let 

us keep what we make. After all, it is not 

the government’s money. It is our money. 

Or listen to Elaine Haataja, 53 years 

old and living in Menagha. 

She lost her husband to cancer a year 

ago: 

I am very angry at our Federal and State 

tax system. I had no choice but to go to work 

for $5 an hour to support myself and keep up 

the taxes and insurance on my house and 

car. 

‘‘I receive $700 a month from my husband’s 

pension, which isn’t enough a month to pay 

utilities and insurance plus the upkeep on 

the house and my old car. And now I have to 

pay $1,100 for Federal and State taxes. 

The frustration is real, Mr. President, in Minneapolis, in Menagha, and 

every town in between. People feel as if 

their own Government has let them 

down; that somehow Government has 

gotten off the right track. 

‘‘I urge you to continue to cut taxes 

and cut spending and cut the Federal 

bureaucracy,’’ writes Ralph Grant of 

Rockford, MN. 

‘‘There is more than enough waste 

and fraud and pork and duplication in 

the Federal budget to sustain a severe 

reduction without affecting any necessary and required services.’’

Minnetrista residents Kathy and 

Gary Hejna agree: 

We believe this country was built with 

hard work and sacrifice, not sympathy and 

handouts. 

We also believe that we can spend this 

money more effectively than the Government, who has only succeeded in creating a 

permanent, dependent welfare class with our 

money over the last 40 years. 

Any bill that takes money away from the 

Government and gives it to the families, the 

basic unit of society, can only benefit everyone in this country. 

With seven children, Kathy and Gary 

would receive a tax credit of $3,500 

every year under the Gramm amendment. 

Think what a difference an extra 

$3,500 could mean for a family. 

It could mean health insurance, a 

special education for a gifted child, or 

simple necessities like groceries and 

clothing. 

Think how the $500 per-child tax 

credit could strengthen the American 

family. 

Kathleen and William Bart of Roseville have given it a lot of thought. ‘‘A 

$500 Federal tax credit for each dependent is not a Federal hand-out,’’ they 

write, ‘‘but would allow parents to 

keep more of the money that they 

make and to use it to care for their 

own children. 

‘‘A $500 Federal tax credit for each 

dependent would unquestionably 

strengthen many families—especially 

middle-class and economically-disadvantaged families.’’

Lori Brandt, who lives in Plymouth, 

MN, has thought about it, too. ‘‘Families desperately need a break today,’’

she says, ‘‘and tax relief is long overdue.’’

From Duluth came this letter by Justin Black. ‘‘So many families starting 

out these days are as poor as dirt because they have to pay so much taxes 

when they haven’t had the time to 

barely start their lives. 

‘‘They need a break like this tax bill 

so they can afford to raise a healthy 

family. Remember: they’re the hope for 

the next generation and they need to 

have a strong family life to take over 

where the last generation left off.’’

‘‘My husband, Jay, is an executive 

with a small manufacturing business 

and I am a mother and homemaker, as 

well as teacher to our two small children,’’ says Patty Meacham of Audubon, MN, in her letter to my office. 

‘‘We are helping to support Jay’s 69- 

year-old-mother, because we don’t feel 

the government should be responsible 

for every person within our borders. 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7165 

‘‘Tax cuts would enable us to do 

much more Grandma, and perhaps she 

could get off the rolls of people accepting rent assistance. 

‘‘It is no source of pride for us that 

she has to go to a government agency 

for help, but how can we do what is 

right for her, when we are so greatly 

strapped by the tax burden placed upon 

us?’’

A young couple from Coon Rapids 

tried to but a new home to fulfill the 

American dream, only to learn after 

meeting with their realtor that they 

simply could not afford to do it on 

their own. 

‘‘I have finally reached the point of 

complete frustration and anger over 

the amount of taxes being deducted 

from my check each month,’’ said their 

letter. 

‘‘When we got home that evening my 

husband and I sat down with our checkbook and our bills and tried to determine what we were doing wrong. After 

taking everything into consideration 

we determined that we weren’t spending our money foolishly. 

‘‘The only real problem we found was 

when we looked at our paycheck stubs 

and actually realized how much of our 

income was going to pay for taxes. 

‘‘It saddens me to think of how hard 

my husband and I work and how much 

time we have to spend away from our 

daughter to be at work * * * and we 

still cannot ‘reach the American 

dream.’’’

The $500 per-child tax credit would 

help families like Natalie’s realize 

their dreams. And Minnesotans know it 

will help the economy, too. 

David Clark, a taxpayer from Eden 

Prairie writes: ‘‘Taxation is an awesome burden in the U.S. today, and it 

is sucking away resources from the 

economy that could be used to create 

jobs and opportunities for everyone, including the poor. 

‘‘I urge you to use the new Republican majority to enact the legislation 

needed to get the Government off our 

backs.’’

Walter Wilder, a doctor from Edina, 

writes: ‘‘Tax cuts will help to balance 

the budget by stimulating growth, 

bringing in more income, including 

from the high-income people.’’

And J. Randy Brown of Oakdale says: 

‘‘I agree with your position that tax 

cuts are also a necessary part of the 

overall budget solution. Reduced taxes 

will result in renewed growth, job-creating, and the result of that would be 

increased revenues.’’

Mr. President, if it were up to the 

American people, we would have tax relief, and the vote would not even be 

close. 

The House heard the people and 

passed its budget last week, with the 

$500 per-child tax credit as its centerpiece. 

But now it is our turn. The American 

people are not sure we are up to the 

task. And I am afraid they may be 

right. 

‘‘I just finished my ’94 taxes. What a 

disappointment,’’ writes Tim Hulst of 

New Hope. 

‘‘The government can’t seem to get 

enough of my money. Last year, I 

worked two jobs—seven days per 

week—and my wife worked full time to 

try and support ourselves and three 

children. 

‘‘After all we’ve paid in, we still owe 

$1,000 more. Please convince your fellow Senators how important it is to 

cut taxes. I wonder sometimes if the 

Republicans in the Senate really get 

it.’’

Dean Fairbrother of Minneapolis has 

the same concerns. ‘‘The status-quo, 

too-cautious approach exemplified by 

many of the senior members of the Republican Senate caucus is unacceptable. Keep pushing for family tax relief,’’ he urged. 

‘‘Ignore the tired lamentations coming from the Old Bulls. They are 

wrong—you, me, and the majority of 

Americans pleading for such relief are 

dead right.’’

The letter-writer who leveled the 

harshest criticism at this Chamber is 

Folkert Breitsma of Maple Grove, who 

writes: 

‘‘It is a disgrace to see billions of our 

money squandered by politicians who 

are out of touch with real life and have 

the audacity to say that the national 

government can be entrusted with the 

money—that they know what is good 

for us. 

‘‘I have watched the Senate stonewall most of the initiatives brought 

forth by the House. It is defended by 

the Senators as being ‘more deliberate’

and ‘take time to study the initiatives.’

‘‘However it is promoted, I see it as 

stonewalling by a group of people that 

do not have a clear vision of what they 

want to achieve and have the arrogance to claim they know what is best 

for the country.’’

Those are strong words—not my 

words, but words in which I find a good 

deal of truth. 

But there is hope, Mr. President—the 

hope offered by the $500 per-child tax 

credit we debate today. 

Mr. President, look what the $500 

per-child tax credit could do for the 

Minnesotans who wrote asking for our 

help: 

We would return $1.4 million to the 

people of Wadena County, home of 

Elaine Haataja; we would return $48.7 

million to the people of Ramsey County, home of the Bart Family; $3 million 

to Becker County, home of the 

Meacham Family; $20.8 million to 

Washington County, home of the 

Browns; and $101.5 million would be returned to Hennepin County, which the 

Brandts, the Breitsmas, the Kraskys, 

the Hulsts, and the Fairbrothers call 

home. 

By passing the $500 per-child tax 

credit, we would return $500 million to 

Minnesota families—$25 billion annually to families across America. 

We have heard what the people have 

to say. I think the question, again, is 

who is speaking up for the taxpayers? 

As I close, Mr. President, I want to 

remark that the senior Senator from 

Nebraska said a few moments ago the 

tax cut would more deeply increase the 

pain to balance the budget. The pain of 

the tax burden on this country’s families is growing more and more, and 

they are demanding and asking for tax 

relief. 

I strongly urge my colleagues to support and adopt the Gramm amendment. 

The PRESIDING OFFICER. The time 

of the Senator from Minnesota has expired. 

Mr. EXON addressed the Chair. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. Mr. President, what I am 

hearing in the Senate today is almost 

word for word what I heard in the early 

1980’s: Give the people a tax cut and do 

not worry about the deficit. We are for 

tax cuts, too, but only after we get our 

deficit under control. 

I yield 5 minutes to my colleague 

from Wisconsin. 

Mr. FEINGOLD. Mr. President, I certainly thank the Senator from Nebraska, and I want to say I admire how 

straightforward the Senator from 

Texas is with his amendment and his 

approach. He lays it right on the line. 

He believes we can afford at this point 

a $350 billion tax cut and still balance 

the budget. 

In fact, I appreciate the candor of the 

whole Republican contract in admitting that this really is the centerpiece, 

this is the crown jewel of the Republican contract, as stated by the Speaker and as stated by the Senator from 

Texas. 

I was amazed when they first came 

up with that formulation. Of all the 

different things you could pick from 

the Republican contract: regulatory reform, trying to get the Government off 

our back; line-item veto; the balanced 

budget amendment—for a moment I 

thought that was the crown jewel of 

the Republican contract—the issue of 

unfunded mandates we already dealt 

with; issues having to do with Congress, living by the rules that it creates for others. All of these things are 

apparently swept aside when it comes 

to the importance of delivering a tax 

cut at this time even though this country has reached a $5 trillion debt and a 

deficit that has only recently been 

brought down through the efforts of 

the Clinton administration. 

So I agree with the Senator from 

Texas. This is the key amendment on 

this whole issue. The Senator says that 

the tax cut is the heart of the Contract 

With America. Well, this is the test: Is 

your heart with the tax cuts or is your 

heart with deficit reduction? You cannot have it both ways, and this is the 

test and this is what the American people are looking for. 

What is very unfortunate is that the 

Senator from Texas fails to tell what 

this amendment really does. It takes 

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S7166 CONGRESSIONAL RECORD— SENATE May 23, 1995 

$170 billion that is already in the budget resolution, adds that much again, 

makes the cuts deeper for the various 

programs that are going to be cut, and 

you know what, Mr. President, it still 

does not balance the budget in the year 

2002, unless you take the money of Social Security. 

This is not a balanced budget in the 

first place, Mr. President, and this 

amendment will only make it worse. 

Do not let anyone on the Republican 

side kid you, this budget resolution 

does not balance the budget in the year 

2002, unless you take the money from 

Social Security. So this amendment 

cannot possibly solve that problem. 

The Senator from Texas talks about 

two visions. He sees this as all about 

whether we are going to return the 

money to the people. But that is not 

what the November 8 election was all 

about. I think both in 1992 and 1994, the 

American people spoke with a very 

clear voice. They did not call for tax 

cuts. They said get rid of the Federal 

deficit, get rid of the huge interest payments we have to pay on the debt, do 

not saddle our children and our grandchildren with this deficit. That was the 

message in 1992 and it was the message 

in 1994. It is not a partisan message. 

People are just saying, clean up the 

mess that was made in the 1980’s that 

the Senator from Nebraska just referred to. 

The amendment of the Senator from 

Texas would make the mess much 

worse. It would say that even though 

all these deep cuts are being made in so 

many important human programs, we 

still have $350 billion in spare change 

around for tax cuts. I do not think anyone out there really believes that. 

Let me agree with the Senator from 

Texas that this should not be about 

class warfare. I support neither the 

Senator’s proposal nor the proposal for 

a tax cut in the budget resolution, nor 

do I support the President’s proposal 

for a much tinier tax cut. I say we cannot do any of it, and there is a moderate bipartisan coalition in this body 

of Republicans and Democrats alike 

who say just get rid of all the tax cuts; 

whatever we have to reduce spending 

with, let us use that money to reduce 

the deficit. 

You know, Mr. President, my biggest 

concern is not this amendment. This 

amendment is going down to defeat, I 

am happy to say. The crown jewel of 

the Republican contract will be soundly defeated on the floor of this Senate 

in a very short while. The Speaker’s 

crown jewel will be gone. The $350 billion is not going to be voted by this 

body. We will defeat the crown jewel of 

the Republican contract. But I will 

say, Mr. President, that this is a stalking horse to make the $170 billion that 

is already in the budget resolution look 

moderate. We also cannot afford that, 

and we will have amendments later to 

deal with this. If I may have 1 additional minute? 

Mr. EXON. Thirty seconds. If I give 

you another minute, there will not be 

enough. Thirty seconds. 

Mr. FEINGOLD. I thank the ranking 

member very much. 

Mr. President, this amendment, more 

than anything else, offends the common sense of the American people—

they know better than we do—if we 

vote for this. It offends them because 

they know darn well you cannot balance the budget and spend $350 billion 

on tax cuts and tell them it is going to 

work. It does not work. It is phony and 

it should be defeated. 

I thank the Chair. 

Mr. GRAMM addressed the Chair. 

The PRESIDING OFFICER. The time 

of the Senator from Wisconsin has expired. The Senator from Texas. 

Mr. GRAMM. Mr. President, I know 

it breaks the hearts of our colleagues, 

but in this amendment, I am proposing 

cutting Government spending, their 

precious programs, so that families can 

spend their own money on their own 

children on their own future, and invest in their own businesses. If that 

violates common sense, I think it says 

there is a difference between common 

sense in Washington, DC, and on the 

floor of the U.S. Senate as compared to 

common sense around every kitchen 

table in the kitchen of every working 

family in America. 

I yield 8 minutes to the Senator from 

Indiana, Senator COATS. 

Mr. COATS. Mr. President, I thank 

my fellow Senator from Texas, Senator 

GRAMM, for yielding, and I rise today in 

very strong support of his amendment, 

which has the courage to confront an 

issue that I believe is essential to our 

future: The preservation of the American family. 

The amendment before us strengthens—not weakens—strengthens the 

budget resolution by recognizing that 

cutting budgets and cutting taxes are 

part of the same movement in America, a movement to limit our Government and empower our people. 

These twin goals, I contend, are not 

inconsistent. They are inseparable, and 

we can prove our commitment to both 

if we are willing to cut Federal spending just an additional three-tenths of 1 

percent. Let us understand that. These 

two goals are not incompatible if Members are willing to take three-tenths of 

1 percent more in Federal programs 

and apply it as a return to the American taxpayer. 

While I support the progrowth and 

savings provisions provided in this 

amendment, in the limited time I have, 

I would like to focus my remarks on 

the profamily elements of this amendment. 

Opponents have argued that the only 

way to help children is to maintain 

record high levels of Federal spending 

on every Government program. But 

there is a better way. What we are asking today is simply, who is better informed and who is more compassionate 

to make choices in the interest of our 

children, the Federal Government or 

America’s families? Can there be any 

serious debate on how that question is 

answered? 

The lessons that we have learned 

from decades of social spending are 

clear: Government programs have proven incapable of fighting social despair 

and disorder. But strong families can, 

and it is time to admit that when families fail, so does our society. It is also 

time to understand that when our families are involved and favored and supported, they construct a hopeful future 

for America. 

This Congress today is presented 

with a choice between the failed, discredited compassion of Government 

and the proven power of strong families 

to build hope in their children and 

order in our society. 

I believe, Mr. President, it is a transparent ploy to say this is simply a matter of rich versus poor. Rather, it is a 

matter of where resources and authority should rest: in Government or in 

our families and our communities? 

Much of the opposition to tax relief 

seems to be based on a myth, a myth 

that tax cuts somehow waste the Government’s money. 

The Government produces nothing. It 

has no resources of its own to spend. 

Tax cuts are not a waste of Government funds; they are simply a method 

to allow Americans to keep their own 

money. They are a method to build 

working independence as an alternative to Government paternalism 

which has proven so destructive, despite the honorable intentions of its 

proponents. 

It is tax cuts that are the best form 

of social investment, an investment in 

the ability of people to care for themselves. In 1993, the Bipartisan Commission on America’s Urban Families 

found that, ‘‘The trend of family fragmentation drives the Nation’s most 

pressing social problems—crime, educational failure, declining mental 

health, drug abuse, and poverty. These, 

in turn, further fragment families.’’

One of the key policy recommendations of the commission was to ‘‘increase the self-sufficiency and economic well-being of families by either 

significantly increasing the personal 

exemption or a child tax credit for all 

children through age 18.’’

Those were the conclusions of the Bipartisan Commission on American 

Urban Families, and I think we should 

listen to their words. The findings on 

the National Commission of Urban 

Families were remarkably similar to 

the findings advocated 3 years ago by 

the Democratic Progressive Policy Institute; in an impressive report entitled ‘‘Putting Children First,’’ a progressive family policy for the nineties, 

this group found, ‘‘There are some 

things that only families can do, and if 

families are placed under so much 

stress that they cannot raise children 

effectively, the rest of the society cannot make up the difference in later 

years.’’

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7167 

Mr. President, the time of political 

change is the time to reassess our national priorities. We need to redirect 

our focus and our funds to strengthen 

the family. While Government’s role in 

preserving the family is limited, it is 

not insignificant. Perhaps the single 

most important thing Government can 

accomplish for families is to lift the 

economic burdens that can cripple the 

family. 

Over the last 50 years, we have had a 

lousy track record in doing that. The 

personal exemption is now just 12 percent of income, where it used to be at 

42 percent in 1948 when it was first introduced. Since the end of World War 

II, it is families that have borne the 

burden of increased taxes. That burden 

increased more than 200 percent for 

families with two children. 

Their average after-tax income is 

below that, even of elderly households, 

single persons, and couples without 

children. In my home State of Indiana, 

the median family income for a family 

of four is $30,000 and, of that, nearly 

$11,000 is devoted to Federal, State, and 

local taxes. The average family in Indiana pays more in taxes than it does in 

housing, food, and clothing expenses 

combined. 

The Gramm amendment completes 

the budget resolution by addressing 

not only the Government’s budget deficit, but also the deficit and the resources of families to care for their 

own. It is a deficit created by increased 

taxation of the family through the erosion of the personal exemption. For too 

long we have ignored this growing burden and its growing social costs. 

Mr. President, the promise of tax relief for the American family is now before us to be fulfilled or to be ignored. 

At the end of this process, I want to 

vote on a budget that tackles both 

threats to the American family—the 

threat of the budget deficit and an 

ever-growing threat of a tax burden. I 

want to support a budget that contributes to a growing economy and builds 

new momentum for job creation. For 

too long we have dismissed the needs of 

families to answer the call of other interests. With this vote, that trend can 

end. 

I urge my colleagues to vote for passage of this critical amendment. Again, 

the fundamental choice before us is, do 

we want to leave more money in the 

hands of Federal bureaucrats to spend 

in their so-called wisdom on behalf of 

our families and the needs that are 

pressing on our society, or do we want 

to rest that decision with parents and 

with families? 

By cutting spending just an additional three-tenths of 1 percent, we can 

give that decision to families rather 

than rest it in the hands of Government bureaucrats. That is the decision 

before us. We can have both. It is a fundamental choice that we must make. I 

am pleased to join the Senator from 

Texas, and I am pleased that he offered 

this amendment because that presents 

us and grants us that choice. 

If I have any additional time, I know 

the Senator is pressed for time, I am 

happy to yield any additional time 

back. 

Mr. EXON. Mr. President, in view of 

the fact that we have more time left 

than that side, would the Senator from 

Texas object to two rather short statements in a row? 

Mr. GRAMM. I would not object. 

Mr. EXON. Then I would yield at this 

time 4 minutes to the Senator from 

Michigan, followed by 2 minutes by the 

Senator from Minnesota. 

The PRESIDING OFFICER. The Senator from Michigan is recognized. 

Mr. LEVIN. Mr. President, I thank 

the Chair and my friend from Nebraska. 

Tomorrow, or the next day, the Senate is likely to approve a budget which 

would be described as being balanced 

by the year 2002, although it will not 

be. It will not be balanced because it 

relies heavily on surpluses in the Social Security Trust Fund to achieve 

that so-called balance. 

But the proposed budget resolution 

before us is unbalanced in another important way. The budget blueprint represented here penalizes middle-income 

working families, reduces our investment in education, and penalizes our 

senior citizens, in order to provide a 

tax reduction which will benefit mainly the wealthiest of Americans. 

One of the most inequitable aspects 

of the budget before us is that it raises 

taxes on working families. The proposal to cut back the earned-income 

tax credit for working families—in 

other words, to raise taxes on working 

families who make less than $28,000 per 

year will, according to the Department 

of the Treasury, raise their taxes, and 

in the case of a single parent with two 

children, for instance, who makes 

$8,800 a year, raise his or her taxes by 

$354. That is a minimum-wage parent 

making $8,800. That is a tax increase of 

$354, according to the Department of 

the Treasury, and that is what is in the 

budget resolution before us. 

Now, Kevin Phillips, a conservative 

commentator, says this about the Republican budget proposal and this particular tax increase on people making 

$28,000 or less. He said, 

It is the senior citizens, the poor, students, 

and ordinary Americans who will see programs that they depend on gutted by this 

proposal, while the richest 1 or 2 percent, far 

from making sacrifices, actually get new 

benefits and tax reductions. 

President Reagan described the 

earned income tax credit, which is 

being cut back in the proposal before 

us, as ‘‘the best antipoverty, best profamily, best job creation measure to 

come out of the Congress.’’ That is 

what President Reagan told us about 

the earned income tax credit. That is 

what the proposal before us will cut 

back. That is the law which benefits 

families that earn under $28,000, and 

that is the proposal before us which 

will cut back that earned income tax 

credit so that families earning under 

$28,000 will pay more in taxes. 

Why are we doing this? Mainly to cut 

some taxes. And, according to the proposal of the Senator from Texas, most 

of the tax cut will go to the wealthiest 

of Americans. Over 50 percent of the 

benefits in the amendment of the Senator from Texas goes to Americans 

earning over $100,000. Now, what a contrast that is. 

In the budget proposal before us, if 

you earn less than $28,000, you are slated for a tax increase. If we adopt the 

Bradley amendment, we will cure that 

unfairness. But then comes along another amendment which compounds 

the unfairness, and that is the amendment of the Senator from Texas, which 

then says we ought to take that pot of 

money created by the cuts on seniors 

and on students and on working people 

and give those dollars mainly, over 50 

percent, to people earning over $100,000. 

Now, the contrast could not be sharper. It could not be clearer. The unfairness is clear. We can correct that unfairness in two ways, by adopting the 

Bradley amendment and defeating the 

Gramm amendment. 

Mr. President. I rise to oppose the 

Gramm amendment which would provide for a $345 billion tax cut over the 

next 7 years. 

This tax cut provides more than half 

of its benefits to people making more 

than $100,000 a year. It gives a $20,000 

tax break to those who make $350,000. 

On Wednesday or Thursday, the Senate will likely approve a budget which 

will be described as balanced in the 

year 2002 although it will not be. It relies heavily on surpluses in the Social 

Security trust funds to achieve balance. The proposed budget resolution 

before us is already unbalanced in another important way. The budget blue 

print represented here penalizes middle-income working families, reduces 

our investment in education, and penalizes our senior citizens, in order to 

provide for a tax reduction which will 

benefit mostly the wealthiest of Americans. 

The Gramm amendment would make 

the inequities of this budget worse and 

would remove from conference with the 

House the possibility that the unfairness might be somewhat reduced. One 

of the most inequitable aspects of the 

proposal before us is that to pay for 

these tax cuts for the most well-off 

Americans, it raises taxes on working 

families. The proposal to cut back the 

earned income tax credit for working 

families making less than $28,000 per 

year would, according to the Department of the Treasury, raise taxes by 

$354 on a single parent with two children making only $8,840 a year. That’s 

minimum wage. 

Yesterday, I quoted noted conservative commentator Kevin Phillips, as 

have a number of my colleagues this 

week, but his recent public remarks 

sum up the problems with the Republican budget proposal and this particular tax increase on people making 

$28,000 a year very well. He said: 

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S7168 CONGRESSIONAL RECORD— SENATE May 23, 1995 

If the budget deficit were really a national 

crisis instead of a pretext for fiscal favoritism and finagling, we’d be talking about 

shared sacrifice, with * * * the people who 

have the big money making the biggest sacrifice. Instead, it’s senior citizens, the poor, 

students, and ordinary Americans who’ll see 

programs they depend on gutted while * * * 

the richest 1- or 2-percent, far from making 

sacrifices, actually get new benefits and tax 

reductions. 

The earned income tax credit has a 

long history of bipartisan support. 

President Reagan called the EITC, 

‘‘The best anti-poverty, the best profamily, the best job creation measure 

to come out of the Congress.’’ The 

EITC has played an important role in 

providing incentives to keep people 

working who are struggling to get on 

the lowest rungs of America’s economic ladder and to stay off the welfare roles. 

And our Republican colleagues do 

not, look to the $21⁄2 trillion over the 

next 5 years in all tax expenditures. 

There is no effort in this budget to control the growth of corporate tax deductions, no effort to restrain the growing 

tax breaks for the largest and richest 

among us. In fact, the Gramm amendment would eliminate the corporate alternative minimum tax, a tax designed 

to assure that profitable companies 

have to pay some reasonable amount in 

Federal income taxes. This is a more 

than $25 billion tax reduction for such 

companies. 

Instead, the Republican budget aims 

a $21 billion tax increase at the working families with children. In Michigan, this means a $457 million tax hike 

over 7 years on nearly 316,000 hardworking taxpayers making less than 

$28,000 a year. Over the next 7 years, 

they’ll pay an average of nearly $1,500 

more. 

Mr. President, the budget before us 

has its priorities wrong. The Bradley 

amendment on which we will vote 

shortly is a step in the right direction. 

The Gramm amendment is just wrong. 

It would provide tax cuts for the 

wealthiest while leaving intact this tax 

increase on working families. It’s simply a question of fairness. 

I urge my colleagues to defeat the 

Gramm amendment and support the 

Bradley amendment. 

I thank the Chair. 

The PRESIDING OFFICER. Under 

the previous order, the Senator from 

Minnesota is recognized for 2 minutes. 

Mr. WELLSTONE. Mr. President, I 

would apologize as a teacher for not 

doing justice to the issues before the 

Senate. It is just impossible in 2 minutes. 

Let me start out by saying that there 

is an old Yiddish proverb that I think 

applies to this amendment on the floor. 

That Yiddish proverb says you cannot 

dance at two weddings at the same 

time. Quite frankly, this is a perfect 

example of that. 

On the one hand, we tell people we 

are serious about deficit reduction. On 

the other hand, we are talking about 

$300 or $350 billion of tax cuts going 

disproportionately to the wealthiest 

and highest-income citizens. 

Mr. President, I just have to say that 

that does not pass the test of intellectual rigor in the State of Minnesota. 

People want the Senate to get real 

with them. They want the Senate to be 

straightforward with them. They do 

not believe for a moment that we can 

have hundreds of billions of dollars of 

tax cuts while, at the same time, we 

are pretending to be serious about deficit reduction. 

Second of all, Mr. President, and it is 

very difficult to talk about what the 

statistics mean in personal terms, but 

honest to God, when we are talking 

about severe cuts in Medicare for elderly people, and Medicaid for elderly people, and nutrition programs for children, and support for students to be 

able to go on to higher education, a 

higher education that they can afford, 

and when we give away an investment 

in education and health care and jobs 

for people, and we want to do all of this 

deficit reduction on the backs of these 

citizens, middle-income citizens, families, working people, all on behalf of 

hundreds of billions of dollars of tax 

cuts for the wealthiest people in the 

United States of America, it not only 

does not meet the Minnesota standard 

of rigor, it does not meet the Minnesota standard of fairness. 

Mr. GRAMM. Mr. President, I yield 

the junior Senator from Arizona 6 minutes. 

Mr. KYL. I thank the Senator from 

Texas for yielding. Mr. President, I express my strong support for the Gramm 

amendment. 

This amendment is about keeping 

our promises to the American people to 

provide tax relief to the American families. We have heard a lot of criticism 

about this amendment. It provides a 

$500 per child tax credit for the American family. It provides for marriage 

penalty relief, spousal IRA, a new 

American dream savings account to 

allow people to buy a home, provides a 

credit to families caring for elderly 

family members. 

It keeps faith with our seniors. It 

does not take a nickel from Social Security. In fact, it raises the Social Security earnings limitation, something 

that the senior citizens from Arizona 

have been fighting for since I has been 

here. It enables seniors to be able to 

work without having a penalty. 

It provides estate and gift tax relief, 

provides incentive for the purchase of 

long-term care insurance, something 

all of our seniors are interested in. 

This amendment also provides incentives for businesses to grow and create 

new jobs. 

Capital gains tax reform—there is 

over $5 trillion in backed-up capital, in 

pent-up capital, in our society that 

could be freed with this kind of capital 

gains tax relief. That means jobs for 

Americans. 

This amendment provides for a home 

office deduction. For small business expensing. It repeals the corporate alternative minimum tax and provides for 

neutral cost recovery. Balancing the 

budget, Mr. President, is important, 

but balancing the budget is not the 

only goal. At best we will produce a 

Government that still taxes too much, 

spends too much, and regulates too 

much. 

With the Gramm amendment we are 

saying to the American people that we 

trust them to spend their own hardearned tax dollars more wisely than 

the bureaucrats in Washington. They 

know how to take care of their family 

and how to invest and create new jobs. 

While some here talk of ordinary 

Americans, we believe that Americans 

are extraordinary. Given the opportunity, they can improve their own 

lives and the lives of their families. 

They just need the resources to do so. 

Who cares, Mr. President, more about 

a child’s education than a parent? Give 

them the $500 child tax credit. Who 

spends the money more wisely and efficiently? The St. Mary’s Food Bank in 

Arizona or the Department of Agriculture, that administers nutrition 

programs? If I had $500 to contribute to 

an entity to provide for the poor, I am 

going to contribute it to a local charity sooner than to the U.S. Government. 

Who is a better job creator, the Federal Government or private business? 

The Gramm amendment means Congress has to prioritize the remaining 

spending, like American families have 

to do. By reducing taxes, it provides a 

chance to stimulate economic activity 

and produce more revenue for the 

Treasury. 

Mr. President, when a retailer has a 

sale on a Saturday, does he expect to 

receive less income as a result of that 

sale? No. By reducing the rates, he intends to bring more people in and more 

than make up by increased volume 

what he has lost in the price that he 

charges. 

The same thing occurs when we reduce taxes rates. We are not producing 

less revenue to the Treasury. We actually—and experience proves this—

produce more revenue to the Treasury 

by virtue of that reduction. 

Finally, Mr. President, I heard some 

conversation a while ago that basically 

suggests the liberals in this body believe that this amendment will make it 

more difficult to balance the budget 

and deliver. They oppose it. Here is my 

challenge to all of the liberals who 

have spoken here. Will they support 

the budget resolution without this tax 

increase in it? Do any of our liberal 

colleagues want to stand up and say 

yes, they will vote for this amendment, 

for the budget resolution before the 

Senate, so long as we do not have the 

tax increases in it? 

The answer, Mr. President, is no. And 

the reason they will not support the 

budget resolution even without the tax 

increases is because fundamentally 

they do not support a balanced budget. 

Mr. GRAMM. Tax cuts, not increases. 

Mr. KYL. Mr. President, I am sorry if 

I misspoke with regard to the tax cuts 

mmaher on MIKETEMP with SOCIAL SECURITY NUMBERS

May 23, 1995 CONGRESSIONAL RECORD— SENATE S7169 

being proposed by the Gramm amendment. 

The bottom line, the liberals who oppose the Gramm tax cuts do so because 

they like taxes, because they want the 

money to spend, not because they are 

going to support a budget resolution 

that does not have these tax cuts in it. 

If any of our liberal colleagues are 

willing to stand up and prove me wrong 

by saying no, they will vote for this 

budget resolution so long as it does not 

have the Gramm tax cuts in it, then I 

will eat these words and say, fine, I accept their vote. 

I suggest, Mr. President, that the 

talk about opposing this amendment, 

because they are interested in balancing the budget, is just so much talk 

because in the end they will vote 

against the budget resolution that balances the budget. They would rather 

have the tax money to spend. That is 

why they oppose the Gramm tax cuts. 

I hope that our colleagues will support the Gramm tax cuts. Mr. President, I believe if they do so they will be 

striking a blow for the American economy and for the American family. 

Mr. EXON. Mr. President, I yield 5 

minutes to the Senator from South 

Carolina. 

Mr. HOLLINGS. Mr. President, I 

thank the distinguished leader on our 

side. 

Mr. President, the amendment of the 

Senator from Texas is premised on the 

idea that both House and Senate budget resolutions balance the budget: Absolutely false. Let me refer specifically 

to the House budget, page 4: The deficit 

for the year 2002 is estimated at $120.7 

billion. They make no pretense, they 

print it in black and white. 

Moreover, if we look at the figures on 

page 4, lines 20 and 21, we will find that 

the debt increases from 2001 to 2002 by 

$192 billion; that is the real deficit 

under the House resolution. 

The real deficit under the Senate 

budget for the year 2002 is listed on 

page 7, line 21 as $113.5 billion. If we 

turn to page 9, we can see that the debt 

increases $177 billion—the real deficit. 

So the very notion that we have done 

a good job, that we have balanced the 

budget, or that we deserve a reward, is 

all based on a false premise. Mr. President, the biggest falsity, one perpetrated on both sides of the aisle, is 

the belief that we can balance the 

budget through spending cuts alone 

and without increasing revenues. 

I laid out the harsh budget realities 

in January of this year. I continue to 

report it, but in the limited time I 

have, I cannot go through the entire 

document. Thus, I would ask unanimous consent to have it printed in the 

RECORD. 

There being no objection, the material was ordered to be printed in the 

RECORD, as follows: 

HOLLINGS RELEASES REALITIES ON TRUTH IN

BUDGETING

Reality No. 1: $1.2 trillion in spending cuts 

is necessary. 

Reality No. 2: There aren’t enough savings 

in entitlements. Have welfare reform, but a 

jobs program will cost; savings are questionable. Health reform can and should save 

some, but slowing growth from 10 to 5 percent doesn’t offer enough savings. Social Security won’t be cut and will be off-budget 

again. 

Reality No. 3: We should hold the line on 

the budget on Defense; that would be no savings. 

Reality No. 4: Savings must come from 

freezes and cuts in domestic discretionary 

spending but that’s not enough to stop hemorrhaging interest costs. 

Reality No. 5: Taxes are necessary to stop 

hemorrhage in interest costs. 

1996 1997 1998 1999 2000 2001 2002 

Deficit CBO Jan. 1995 (using trust funds) ....................................................................................................................... 207 224 225 253 284 297 322 

Freeze discretionary outlays after 1998 ............................................................................................................................. 0 0 0 ¥19 ¥38 ¥58 ¥78 Spending cuts .................................................................................................................................................................... ¥37 ¥74 ¥111 ¥128 ¥146 ¥163 ¥180 Interest savings .................................................................................................................................................................. ¥1 ¥5 ¥11 ¥20 ¥32 ¥46 ¥64 

Total savings ($1.2 trillion) ...................................................................................................................................... ¥38 ¥79 ¥122 ¥167 ¥216 ¥267 ¥322 

Remaining deficit using trust funds ................................................................................................................................. 169 145 103 86 68 30 0 

Remaining deficit excluding trust funds ........................................................................................................................... 287 264 222 202 185 149 121 

5 percent VAT ..................................................................................................................................................................... 96 155 172 184 190 196 200 

Net deficit excluding trust funds ....................................................................................................................................... 187 97 27 (17 ) (54 ) (111 ) (159 ) 

Gross debt .......................................................................................................................................................................... 5,142 5,257 5,300 5,305 5,272 5,200 5,091 

Average interest rate on debt (percent) ............................................................................................................................ 7.0 7.1 6.9 6.8 6.7 6.7 6.7 

Interest cost on the debt ................................................................................................................................................... 367 370 368 368 366 360 354 

Note.—Figures are in billions. Figures don’t include the billions necessary for a middle-class tax cut. 

Here is a list of the kinds of nondefense discretionary spending cuts 

that would be necessary now as a first 

step to get $37 billion of savings and 

put the country on the road to a balanced budget: 

Nondefense discretionary spending cuts 1996 1997 

Cut space station ............................................................. 2 .1 2 .1 

Eliminate CDBG ................................................................ 2 .0 2 .0 

Eliminate low-income home energy assistance ............... 1 .4 1 .5 

Eliminate arts funding ..................................................... 1 .0 1 .0 

Eliminate funding for campus based aid ........................ 1 .4 1 .4 

Eliminate funding for impact aid .................................... 1 .0 1 .0 

Reduce law enforcement funding to control drugs ......... 1 .5 1 .8 

Eliminate Federal wastewater grants ............................... 0 .8 1 .6 

Eliminate SBA loans ......................................................... 0 .21 0 .282 

Reduce Federal aid for mass transit ............................... 0 .5 0 .1 

Eliminate EDA ................................................................... 0 .02 0 .1 

Reduce Federal rent subsidies ......................................... 0 .1 0 .2 

Reduce overhead for university research ......................... 0 .2 0 .3 

Repeal Davis-Bacon .......................................................... 0 .2 0 .5 

Reduce State Dept. funding and end misc. activities .... 0 .1 0 .2 

End P.L. 480 title I and III sales ..................................... 0 .4 0 .6 

Eliminate overseas broadcasting ..................................... 0 .458 0 .570 

Eliminate the Bureau of Mines ........................................ 0 .1 0 .2 

Eliminate expansion of rural housing assistance ............ 0 .1 0 .2 

Eliminate USTTA ................................................................ 0 .012 0 .16 

Eliminate ATP .................................................................... 0 .1 0 .2 

Eliminate airport grant in aids ........................................ 0 .3 1 .0 

Eliminate Federal highway demonstration projects ......... 0 .1 0 .3 

Eliminate Amtrak subsidies .............................................. 0 .4 0 .4 

Eliminate RDA loan guarantees ....................................... 0 .0 0 .1 

Eliminate Appalachian Regional Commission .................. 0 .0 0 .1 

Eliminate untargeted funds for math and science ......... 0 .1 0 .2 

Cut Federal salaries by 4 percent .................................... 4 .0 4 .0 

Charge Federal employees commercial rates for parking 0 .1 0 .1 

Reduce agricultural research extension activities ........... 0 .2 0 .2 

Cancel advanced solid rocket motor ................................ 0 .3 0 .4 

Eliminate legal services ................................................... 0 .4 0 .4 

Reduce Federal travel by 30 percent ............................... 0 .4 0 .4 

Reduce energy funding for Energy Technology Develop. .. 0 .2 0 .5 

Reduce Superfund cleanup costs ..................................... 0 .2 0 .4 

Nondefense discretionary spending cuts 1996 1997 

Reduce REA subsidies ...................................................... 0 .1 0 .1 

Eliminate postal subsidies for nonprofits ........................ 0 .1 0 .1 

Reduce NIH funding .......................................................... 0 .5 1 .1 

Eliminate Federal Crop Insurance Program ..................... 0 .3 0 .3 

Reduce Justice State-local assistance grants ................. 0 .1 0 .2 

Reduce export-import direct loans ................................... 0 .1 0 .2 

Eliminate library programs ............................................... 0 .1 0 .1 

Modify Service Contract Act ............................................. 0 .2 0 .2 

Eliminate HUD special purpose grants ............................ 0 .2 0 .3 

Reduce housing programs ................................................ 0 .4 1 .0 

Eliminate Community Investment Program ...................... 0 .1 0 .4 

Reduce Strategic Petroleum Program ............................... 0 .1 0 .1 

Eliminate Senior Community Service Program ................. 0 .1 0 .4 

Reduce USDA spending for export marketing .................. 0 .02 0 .02 

Reduce maternal and child health grants ....................... 0 .2 0 .4 

Close veterans hospitals .................................................. 0 .1 0 .2 

Reduce number of political employees ............................ 0 .1 0 .1 

Reduce management costs for VA health care ............... 0 .2 0 .4 

Reduce PMA subsidy ......................................................... 0 .0 1 .2 

Reduce below cost timber sales ...................................... 0 .0 0 .1 

Reduce the legislative branch 15 percent ....................... 0 .3 0 .3 

Eliminate Small Business Development Centers ............. 0 .056 0 .074 

Eliminate minority assistance score, small business 

interstate and other technical assistance programs, 

women’s business assistance, international trade assistance, empowerment zones ..................................... 0 .033 0 .046 

Eliminate new State Department construction projects .. 0 .010 0 .023 

Eliminate Int’l Boundaries and Water Commission ......... 0 .013 0 .02 Eliminate Asia Foundation ................................................ 0 .013 0 .015 

Eliminate International Fisheries Commission ................. 0 .015 0 .015 

Eliminate Arms Control Disarmament Agency ................. 0 .041 0 .054 

Eliminate NED ................................................................... 0 .014 0 .034 

Eliminate Fulbright and other international exchanges .. 0 .119 0 .207 

Eliminate North-South Center ........................................... 0 .002 0 .004 

Eliminate U.S. contribution to WHO, OAS, and other 

international organizations including the United Nations .............................................................................. 0 .873 0 .873 

Eliminate participation in U.N. peacekeeping .................. 0 .533 0 .533 

Eliminate Byrne grant ....................................................... 0 .112 0 .306 

Eliminate Community Policing Program ........................... 0 .286 0 .780 

Moratorium on new Federal prison construction .............. 0 .208 0 .140 

Reduce Coast Guard 10 percent ...................................... 0 .208 0 .260 

Eliminate Manufacturing Extension Program ................... 0 .03 0 .06 

Eliminate coastal zone management ............................... 0 .03 0 .06 

Eliminate national Marine sanctuaries ............................ 0 .007 0 .012 

Nondefense discretionary spending cuts 1996 1997 

Eliminate climate and global change research ............... 0 .047 0 .078 

Eliminate national sea grant ........................................... 0 .032 0 .054 

Eliminate State weather modification grant .................... 0 .002 0 .003 

Cut weather service operations 10 percent ..................... 0 .031 0 .051 

Eliminate regional climate centers .................................. 0 .002 0 .003 

Eliminate Minority Business Development Agency ........... 0 .022 0 .044 

Eliminate Public Telecommunications Facilities Program 

grant ............................................................................. 0 .003 0 .016 

Eliminate children’s educational television ..................... 0 .0 0 .002 

Eliminate national information infrastructure grant ....... 0 .001 0 .032 

Cut Pell grants 20 percent ............................................... 0 .250 1 .24 

Eliminate education research ........................................... 0 .042 0 .283 

Cut Head Start 50 percent ............................................... 0 .840 1 .8 

Eliminate meals and services for the elderly .................. 0 .335 0 .473 

Eliminate title II social service block grant ..................... 2 .7 2 .8 

Eliminate community services block grant ...................... 0 .317 0 .470 

Eliminate rehabilitation services ...................................... 1 .85 2 .30 

Eliminate vocational education ........................................ 0 .176 1 .2 

Reduce chapter 1 20 percent ........................................... 0 .173 1 .16 

Reduce special education 20 percent .............................. 0 .072 0 .480 

Eliminate bilingual education .......................................... 0 .029 0 .196 

Eliminate JTPA .................................................................. 0 .250 4 .5 

Eliminate child welfare services ...................................... 0 .240 0 .289 

Eliminate CDC Breast Cancer Program ............................ 0 .048 0 .089 

Eliminate CDC AIDS Control Program .............................. 0 .283 0 .525 

Eliminate Ryan White AIDS Program ................................ 0 .228 0 .468 

Eliminate maternal and child health ............................... 0 .246 0 .506 

Eliminate Family Planning Program ................................. 0 .069 0 .143 

Eliminate CDC Immunization Program ............................. 0 .168 0 .345 

Eliminate Tuberculosis Program ....................................... 0 .042 0 .087 

Eliminate agricultural research service ........................... 0 .546 0 .656 

Reduce WIC 50 percent .................................................... 1 .579 1 .735 

Eliminate TEFAP: 

Administrative .......................................................... 0 .024 0 .040 

Commodities ............................................................ 0 .025 0 .025 

Reduce cooperative State research service 20 percent ... 0 .044 0 .070 

Reduce animal plant health inspection service 10 percent ............................................................................... 0 .036 0 .044 

Reduce food safety inspection service 10 percent .......... 0 .047 0 .052 

Total ......................................................................... 36 .941 58 .402 

mmaher on MIKETEMP with SOCIAL SECURITY NUMBERS

S7170 CONGRESSIONAL RECORD— SENATE May 23, 1995 

Mr. HOLLINGS. Mr. President, government is big. But what is big is the 

interest costs on the national debt. 

I was here when we balanced the 

budget under President Lyndon Johnson. The gross interest cost at that 

time was $4 billion. 

Think of it, 36 Presidents, Republican 

and Democrats, all the wars from the 

Revolution, World War I, II, Korea, and 

a good part of Vietnam—the interest 

costs on the debt were only $4 billion. 

The interest costs on this year’s deficit 

and debt are estimated at $340 billion. 

The cost of Government as you and I 

know it, domestic discretionary, is $275 

billion. That is the courts, the Congress, the President, the departments, 

FBI, DEA and all other non-defense appropriated accounts. Thus, even if you 

eliminate all of those departments, you 

still have a deficit. 

What you are doing in the Gramm 

amendment is a charade, requiring people to pay higher interest costs and 

saying you are giving it to them in a 

tax cut. We are misleading the people 

on the idea that the work is done. 

I agree that the people are better 

able to spend their money than we are. 

But they expect us to come to Washington and to be honest about budget 

matters. It is time to get out of the 

wagon and help us pull—the trouble is 

that we here are in the wagon. It is the 

children who are doing the pulling. 

Mr. DOMENICI. Will the Senator 

yield? 

Mr. HOLLINGS. I will be delighted to 

yield, on your time. 

Mr. DOMENICI. I just want to make 

three unanimous-consent requests on 

my time. 

Mr. HOLLINGS. I am through with 

my time. But I would be delighted to 

get into a debate with my distinguished chairman. 

In closing, let me just reiterate that 

I really am tired of this fraud. The 

greatest fraud I know exacted on the 

American people is the idea we have 

choices. We are broke. And the single 

biggest government program that we 

have is the interest costs on the debt 

that we have to spend year after year. 

To honestly stop this hemorrhaging we 

have to freeze, we have to cut, we have 

to close loopholes and increase taxes. 

When we finally admit that, we will get 

on top of the problem. 

Mr. DOMENICI. Thank you, Senator. 

The PRESIDING OFFICER. The Senator from New Mexico. 

Mr. DOMENICI. Mr. President, I ask 

unanimous consent that Senator 

GRAMM be allocated 20 minutes on the 

Thurmond-McCain amendment, the upcoming amendment, to be subtracted 

from the Thurmond-McCain time on 

their amendment. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. Mr. President, this 

has been cleared by the Democratic 

leader and by Senator EXON. 

I ask unanimous consent that just 

prior to the final vote on the budget 

resolution there be 30 minutes for debate to be controlled by the Democratic leader, to be followed by 30 minutes for debate to be controlled by the 

Republican leader, or the manager, 

Senator DOMENICI, this in addition to 

the time allotted under the Budget 

Act. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. GRAMM addressed the Chair. 

The PRESIDING OFFICER. The Senator from Texas. 

Mr. GRAMM. Mr. President, I yield 2 

minutes to the senior Senator from Arizona. 

Mr. McCAIN. Mr. President, I rise in 

support of the Gramm amendment. I 

would direct my remarks to my colleagues on this side of the aisle rather 

than the other side of the aisle, because, in 1993, the Senator from South 

Carolina and the Senator from North 

Dakota and the Senator from Illinois 

and the majority of those on that side 

of the aisle who were in the majority 

at that time voted in favor of the largest tax increase in the history of this 

country. That was their decision. And, 

because they were in the majority at 

the time, that was the will of Congress. 

In 1994, however, the American people repudiated that massive tax increase. The American people said they 

want their taxes cut and they said they 

want to keep some of the money for 

themselves. 

If the Senator from South Carolina 

does not think a $500 per child tax exemption would be appreciated by average Americans in this country, he is 

free to have his own views. The fact is, 

the people in Arizona, the families in 

Arizona, would be more than pleased to 

have a $500 a child tax cut and would 

have money to spend on their own children rather than to send to Washington. 

What this amendment is all about is 

whether we are going to have the status quo where we have accepted the 

largest tax increase in the history of 

this country, enacted in 1993, or whether we are going to carry out the message of the American people who said 

we want less Government, we want less 

regulation, we want less taxes. 

I see the Gramm amendment, frankly, as a real stark choice and perhaps 

the most important vote we will take 

in this budget debate, because it will 

determine basically the future—not of 

the party on that side of the aisle, but 

of the party on this side of the aisle—

as to whether we intend to keep the 

commitment and promise we made to 

the people of this country. 

I reserve the remainder of my time. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. Mr. President, I yield 4 

minutes to the Senator from North Dakota. 

Mr. DORGAN. Mr. President, in the 

old western movies we used to see 

these folks traveling around selling 

these bottles of tonic they claimed 

would cure everything from the hiccups to the gout. Of course, the bottle 

of tonic did nothing of the sort. 

This proposal—to cut taxes—reminds 

me of that. It is really dealing with 

myths. Let me deal with a couple of 

facts. People say, ‘‘The budget is going 

to be balanced. Now let us talk about a 

tax cut.’’ In the budget resolution in 

this Chamber today on page 7—this is a 

reproduction of page 7—it says ‘‘Deficits.’’ In the year 2002 the deficit is 

$113.5 billion. Balanced? Where? 

I want one person today on the majority side to come to the floor and tell 

us what this says, on page 7. It says a 

$113 billion deficit after 7 years. 

Second, tax cut. Do not take it from 

me, take it from a Republican, Kevin 

Phillips, who says, 

Spending on government programs [speaking of this budget] from Medicare and education to home heating oil assistance, is to 

be reduced in ways that principally burden 

the poor and the middle class while simultaneously taxes are to be cut in ways that predominantly benefit the top 1 or 2 percent of 

Americans. 

Do not take it from me. Take it from 

a Republican who tells it like it is. 

Here is the paragraph of what he is 

talking about on the tax cuts. They 

call it middle-class tax cuts. Families 

under $30,000 a year get $120. Families 

over $200,000 a year are given $11,200 tax 

cut. That is a middle-class tax cut? Not 

where I come from. 

No, this budget is clear. With this 

amendment calling for tax cuts for the 

wealthy, this budget says to working 

families: We are going to make it harder for you to send your kids to college 

because we do not have enough money 

but we are going to give a big tax cuts 

to the wealthy. It says to the elderly 

and poor: We are going to make it 

harder for you to get health care because we cannot afford it but we are 

going to give a big tax cut to the 

wealthy. It says to 2,000 corporations 

that we will give a $2 million check to 

each one of them, because we are going 

to eliminate the alternative minimum 

tax. 

I do not understand those priorities. 

Those priorities make no sense at all. 

The first job in this Chamber is to balance the Federal budget. For those on 

the other side to stand up and say we 

do not care about balancing the budget, and then to offer an amendment 

that says, ‘‘By the way, the budget is 

not in balance now that we have 

brought to the floor, but we also want 

to give very big tax cuts to those who 

need them least in this country and 

take it out of the hides of other folks 

who want to send their kids to school 

or to get health care or to buy home 

heating fuel in the cold winter,’’ somehow I think those priorities do not sell 

very well back home, because the people see through them. 

This is a curious and tortured claim 

that is brought to the floor, that somehow if we do not support tax cuts for 

the rich we do not care about the Federal deficits. We are the ones who care 

about the Federal deficit. We want to 

balance this budget, but you do not 

balance the budget by trotting out 

mmaher on MIKETEMP with SOCIAL SECURITY NUMBERS

May 23, 1995 CONGRESSIONAL RECORD— SENATE S7171 

something that is popular, a big tax 

cut, call it a middle-class tax cut, and 

butter the bread of the wealthy in this 

country, and then tell other folks we 

are sorry, we cannot afford things that 

are essential for you. 

No, this does not fly. This does not 

make sense. I think the American people will see it for that. This is pure politics, pure politics. 

This budget resolution on the floor 

today does not balance the budget. It 

does not claim it does. On line 21 of 

page 7 it says the Federal deficit in the 

year 2002 is going to be $113 billion. 

Would that those who called themselves warriors in the past debate on 

the deficit not turn out to be wall flowers on this issue and better serve this 

country and their constituents by deciding if there is money to be achieved 

anywhere, any place, on revenue or the 

spending side, to use it to bring this 

down to zero and put this country back 

on track. Really balance the budget, 

really give us some truth in labeling. 

Yes, that would better serve this country’s interests. 

I know it may not be the most popular thing, but I happen to think it is 

the right thing. 

Mr. President, I yield the floor. 

Mr. GRAMM addressed the Chair. 

The PRESIDING OFFICER (Mr. 

GRAMS). The Senator from Texas. 

Mr. GRAMM. Mr. President, I have to 

give our dear colleagues on the left 

credit for one thing. They do not propose budgets. They do not vote for balanced budget amendments to the Constitution. They never propose cutting 

anything. But they can stand up in 

front of God and everybody else and 

say they are for balancing the budget. 

It is like Bill Clinton, who feels our 

pain and does not share with us that he 

causes it all the time. 

I believe that we have a clear and 

stark choice here. You can support or 

not support Senator DOMENICI’s budget, 

but he makes the hard choices to balance the budget over the next 7 years. 

What my amendment does is make 

more hard choices, cut spending more 

so that in addition to balancing the 

budget, we can let the working men 

and women of America keep more of 

what they earn. 

Mr. DORGAN. Mr. President, will the 

Senator yield for a question? 

Mr. GRAMM. I yield to the distinguished Senator from New Hampshire. 

Mr. DORGAN. I wonder if the Senator will yield for a question. 

Mr. GRAMM. I will not yield. 

The PRESIDING OFFICER. The Senator from New Hampshire. 

Mr. SMITH. I thank the Senator 

from Texas. 

Mr. President, in one of his debates, 

Ronald Reagan said ‘‘There you go 

again.’’ And here we go again. This is a 

historic debate in this Chamber. At no 

point in recent times have the differences between the two political parties been more evident than right now. 

On the Republican side, you have somebody offering tax cuts, spending cuts, 

slowing the rate of growth, balancing 

the budget, and on the other side it is 

business as usual: More spending, more 

taxes, no alternatives. 

I was in this Chamber for many hours 

during the debate on the balanced 

budget amendment, and I heard it over 

and over and over again, speaker after 

speaker after speaker: We do not need 

the amendment. All we have to do is do 

it. What is the Republican plan? How 

come you do not tell us how you are 

going to do it? 

Well, here we are. We are saying how 

to do it. We are saying balance the 

budget. You would not give us the 

amendment because you would not give 

us enough votes. We are now offering 

the amendment. We are offering the 

opportunity to balance the budget 

without the amendment. What are you 

doing? Talking and walking. That is 

what they are doing, talking and walking over there. 

The Gramm amendment adds one 

more important component to the underlying Domenici proposal that has 

been missing, and that is very simply 

this. Either you want to let working 

Americans keep more of what they 

earn or you do not. You want to cut 

taxes for families and businesses so 

they can have more money to invest on 

their kids or in their businesses or you 

do not. That is what the Gramm 

amendment is all about. And I wish to 

commend the Senator from Texas for 

having the courage to come up with 

this bold proposal because the Senator 

from Texas knows that this is the essence of the Republican contract, the 

Contract With America, that was made 

with the American people, that put the 

Republican Senators in the majority in 

this Senate and put the Republicans in 

the majority in the House of Representatives. Republicans ought to be 

on this floor unanimously supporting 

the Gramm amendment today because 

without that contract and without that 

promise to the American people, you 

would not be in the majority. So if you 

want to break that contract, then vote 

against the Gramm amendment. 

I am talking to my colleagues on this 

side of the aisle because I know where 

my colleagues are coming from on the 

other side of the aisle. This amendment, the Gramm amendment, allows 

for a 3-percent growth in the overall 

budget—not a cut. The Domenici plan 

is 3.3. So for 0.3 percent, Senator 

GRAMM is offering businesses and families more money to invest and to provide for growth. 

The Gramm amendment makes a 

statement. It says we need to enact incentives for Americans to save and invest, penalty free withdrawals for 

homes, for education, medical expenses, marriage penalty tax credit, 

cut the capital gains rate, and index it 

for inflation, and a $500 a child tax 

credit. 

This is the essence of the difference 

between the two parties, Mr. President, 

as I said. The tax cuts in the Gramm 

proposal are paid for with spending 

cuts. It does not undercut the Domenici proposal. It simply provides deeper 

cuts to provide the tax benefits to the 

American people. 

We have seen a lot of polls lately 

that suggest the American people really do not want tax cuts. They are asked 

whether we would rather have tax cuts 

or deficit reduction. Well, of course, 

people will say we would like to have 

both, and you can get both right here 

in this proposal. When it is offered either/or, they will say, fine, balance the 

budget. We do not need the tax cuts. 

We will sacrifice. Balance the budget. 

This is both. This is both. Ask the 

American people if they would support 

a budget that reaches balance and 

gives them a capital gains tax. Ask the 

American people if they would support 

a budget that reaches balance and allows penalty-free withdrawals for education or a downpayment on a loan. 

Ask the American people if they would 

support a budget that reaches balance 

and provides a $500 tax credit for each 

child. Ask them that and see what the 

answer is—not either/or, both. And 

that is what the Gramm amendment is 

all about. The choice is not between 

tax cuts and a balanced budget. The 

question is are you willing to cut 

spending enough to do both. 

And again, the word ‘‘cut’’ is used 

very loosely because we are asking our 

colleagues on the other side of the aisle 

and some of the colleagues on this side 

of the aisle to support a proposal that 

limits the growth of the U.S. Government over the next 7 years to 3 percent. That is what we are asking you to 

do. 

You were out in the Chamber time 

after time after time during that balanced budget amendment debate saying give us your plan; give us your 

plan; we do not need an amendment. 

All right, we did not get the amendment. Where is your plan? You defeated your President’s plan 99 to nothing joining with us on the Senate floor. 

I have not seen yours. I am hearing all 

this talk, but I do not see any plan. 

Frankly, I think the American people 

are sick of it. They were sick of it in 

the elections in 1994, and they are 

going to be even sicker of it after this 

debate. We have an opportunity here. 

History shows us that tax cuts create 

jobs. It is not the Government’s 

money. It is your money. You provide 

it to the Government. Give the Government less. Leave it in your pocket, and 

you will create jobs, and you will employ more people, and we will have 

more tax revenues, and we will balance 

the budget even more quickly. 

In closing, Mr. President, let me just 

say every Republican Senator and 

House Member, as I said, voted against 

that budget, the President’s budget. 

The tax cuts included in the Gramm 

package total $173 billion. We are getting $173 billion back out of the $250 

billion tax increase the President provided us last year. We do not even get 

as far at cutting taxes as Clinton went 

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S7172 CONGRESSIONAL RECORD— SENATE May 23, 1995 

in raising taxes. Now, that is not really 

too much to ask. 

So, Mr. President, let me conclude by 

complimenting Senator DOMENICI for 

his courageous decision to meet this 

head on, and again to compliment Senator GRAMM for adding what I believe 

is a stronger amendment to this package to balance the Federal budget and 

to cut taxes, to do what the American 

people asked us to do when they elected us into the majority in November. 

I yield back the remainder of any 

time I may have. 

Mr. EXON addressed the Chair. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. Mr. President, I thank 

him for his patience, and I am pleased 

to yield 4 minutes to my distinguished 

colleague, the senior Senator from Illinois. 

Mr. SIMON. Mr. President, I thank 

my colleague. 

I am pleased to stand up and say I 

think this is a bad amendment. Would 

I like a tax cut? Of course. We would 

all like a tax cut. 

I have three grandchildren. I face the 

choice of sacrificing a little bit or 

building a better future for my three 

grandchildren. That is the fundamental 

choice. I do not have a hard time making that choice, and I do not think the 

American people have a hard time 

making that choice. 

Let us move to a balanced budget. I 

commend PETE DOMENICI for moving 

toward a balanced budget. I do not happen to agree with the priorities, but he 

is moving in that direction. But the 

Gramm amendment would take, over a 

10-year period, $594 billion in tax cuts. 

Our history on these things, on legislative answers—and this is why we 

need the constitutional amendment—is 

they last for about 2 years, as our 

friend from Texas knows better than 

anyone else, and then they blow up in 

our face. 

The danger is the Domenici plan will 

last 2 years and then we will discard it 

because it becomes too politically potent and we will keep the tax cut. 

When the Senator from Arizona, Senator KYL, says you cut taxes and you 

get more revenue for the Federal Government, in 1981 we had both a Republican—the Ronald Reagan plan—and a 

Democratic plan to do precisely that. I 

voted against both the Republican plan 

and the Democratic plan. But I can remember Ronald Reagan saying, ‘‘If you 

pass this, by 1984 we are going to have 

a balanced budget in our country.’’ It 

did not make sense. This amendment 

does not make sense now. 

And to cut back from the Domenici 

numbers, $40 billion in Medicaid—who 

are Medicaid recipients? Half of them 

are poor children. Forty billion dollars 

we are going to get here. If anyone 

thinks that $40 billion is not a tax cut, 

talk to any hospital administrator. 

That means we are going to cut back 

on what hospitals get for Medicaid. 

And what will hospital administrators 

do? They will shift it to the non-Medicaid, non-Medicare payment to the insurance companies, and our insurance 

rates go up all over the country. 

If anyone thinks that is not a tax increase, they are just fooling themselves. 

Oh, this is great politics. And my 

friend from Texas is good at politics. I 

commend him for standing up frequently on the courageous side of 

things. But this one is wrong. He is 

wrong. It is not in the national interest 

and his amendment should be defeated. 

Ms. MOSELEY-BRAUN addressed the 

Chair. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. EXON. Mr. President, I yield 4 

minutes to the junior Senator from Illinois. 

The PRESIDING OFFICER. The Senator from Illinois. 

Ms. MOSELEY-BRAUN. Thank you 

very much. 

Mr. President, at the outset of my remarks, I would like to point out to the 

sponsor of this amendment that, without this broad-brushing, these issues 

that a number of us on—the Senator 

said ‘‘on the left’’—on this side of the 

aisle voted for and supported the balanced budget amendment. In fact, Senator SIMON, my senior Senator, who is 

leaving the floor now, was an original 

sponsor of the balanced budget amendment and continued to press for that 

matter over the years. And so, this is 

not a partisan issue. 

Mr. President, we ordinarily consider 

tax cuts when our economy needs economic stimulus, but economic growth 

is strong, so strong, in fact, that the 

Federal Reserve raised interest rates 

seven separate times to ensure that the 

economy would not overheat. And unemployment is low; our economy has 

created 6 million new jobs. Jump-starting the economy, therefore, is unnecessary at this time, and cannot be the 

motive for this amendment. 

What is behind this amendment—as 

the chart over there indicates—is the 

notion that the Federal Government is 

too big. Now, that is something of an 

arguable point. It is true, for example 

that national defense consumed $81 billion in fiscal 1970, and increased to over 

$281 billion by fiscal 1994. However, in 

1970, the $81 billion financed over 3 million soldiers, sailors, Air Force personnel, and marines, whereas the $281 

billion we spent last year financed 

Armed Forces only about half that 

amount. The large dollar increases, 

therefore, do not really represent 

growth at all. 

It is true, of course, that as a percentage of the economy, Government 

has grown. The Federal Government 

accounted for about 19.2 percent of the 

economy in 1959, and 22 percent last 

year. That is an increase of about 14 

percent over the past 35 years. Where 

did that money go. Well, most of it 

went to Medicare and Social Security. 

These two programs alone increased 

from 2 percent of the economy in 1959 

to over 7.2 percent in 1994—that is, they 

more than accounted for all of the 

growth in Government over the last 35 

years. Everything else—discretionary 

spending, cash, nutrition, and housing 

assistance for the poor, agriculture—

almost everything else went down. The 

only other Federal activities to increase in size as a percentage of the 

economy since 1959 are interest expense 

and Medicaid. 

What these numbers all mean is that, 

to the extent the Federal Government 

has grown over the past 35 years, it has 

grown because Social Security and 

Medicare have become mature programs over that period. If you ask 

Americans whether they would prefer a 

tax cut, or whether they would prefer 

to reduce their retirement or health 

care security, the answer is, I think 

quite obvious. 

Now, this amendment does not quite 

ask that question, but it does raise another one: would Americans rather 

have a tax cut, and sacrifice long-term 

medical care for the elderly, and medical care for the poor, and investment 

in our children’s education, or would 

they rather give up the tax cuts, balance the budget, but continue to make 

essential public investments in education, and in health. I think the answer to that question is equally obvious. While Americans would very much 

like to balance the budget, they want 

to do so in a way that preserves essential investments in our future. 

They know that the reason balancing 

the budget is so important is because 

we do not want to deprive future generations of their opportunity to live 

the American dream. And they know 

that trying to balance the budget in a 

way that reduces educational opportunity and cuts access to health care 

does not meet our obligation to our 

children—and their children. They 

know that simply is not fair. They 

know that it hurts both individuals and 

our country, because our future is diminished if every American does not 

have the opportunity to strive for the 

American dream. 

And it is not just individual Americans who know that America’s future 

depends on making the right choice. 

Financial markets know it also. If the 

Senate adopts this amendment and the 

tax cuts become law, we will have undermined our commitment to real deficit reduction, and we will have ignored 

our responsibility to the future of 

Americans and to America. The results 

of that will be continued declines in 

our national wealth, a renewed fall of 

the dollar, a widening of the gap between rich and poor, and diminished 

opportunities for many Americans and 

for our Nation as a whole. 

The simple truth is that we are all in 

this together—we are all Americans—

and the way we balance the budget 

should reflect that fact. A tax cut that 

is unneeded to stimulate our economy 

makes no sense. A tax cut that creates 

confusion in the minds of financial 

markets as to whether the United 

States is committed to deficit reduction makes no sense. And a tax cut 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7173 

that undermines the essential purpose 

of balancing the budget in the first 

place—protecting future opportunities 

for our children and our country—is 

not what Americans want and must be 

defeated. 

I would point out, my previous colleague made the point that fiscal year 

2002 still has a deficit here of $113 billion. It seems to me that a $113 billion 

deficit is like being just a little bit 

pregnant. I believe we should focus our 

attention on deficit reduction instead 

of irresponsible promises of a chicken 

in every pot to make political points. 

I urge my colleagues, therefore, to 

defeat this amendment. 

The PRESIDING OFFICER. The Senator’s time has expired. 

Who yields time? 

Mr. GRAMM. Mr. President, I yield 

10 minutes to the distinguished Senator from Mississippi. 

The PRESIDING OFFICER. The Senator from Mississippi is recognized for 

10 minutes. 

Mr. LOTT. Mr. President, I want to 

thank the distinguished Senator from 

Texas for yielding me this time. 

I rise in support of the Gramm 

amendment to the 1996 concurrent 

budget resolution. I have said on the 

floor of the Senate before that, along 

with balancing the budget, which is 

very important, we need to provide 

some tax relief for all Americans, especially families. 

Slowing the rate of growth in Federal 

spending is not just a political exercise 

or an accounting endeavor. The Federal Government is financed by the 

hard work of the people. If Government 

is to be made smaller and, thus, costs 

less, then Americans should be able to 

keep more of their hard-earned cash. 

As I listened to the debate here in 

the Senate, it seemed to me that there 

are Senators or a Senator that will 

speak for almost every group in the 

country, many times for good reasons: 

whether it is education or Medicare or 

the elderly or the defense program. But 

rarely do we have people that stand up 

here in the Senate and speak up for the 

working taxpaying Americans. 

Who among us is willing to do that? 

Senator GRAMM of Texas is willing to 

do that. 

It seems to me if we are going to control the rate of growth in the Federal 

Government spending by over $1 trillion over the next 7 years, should not 

the people that are paying the bills, 

carrying the load, doing the work, get 

just a little bit of the relief? 

And I want to ask my colleagues: 

What is it you object to in this list of 

tax cuts? I felt very strongly that we 

should have had these tax cuts in the 

body of this resolution. I am pleased 

that we have the dividend that is designated for tax cuts. But I really think 

we should make it clear that we want 

some of these changes. And what we 

are talking about is some tax cuts that 

will encourage growth. 

Whatever happened to the idea that 

one of best ways to reduce the deficit is 

to have growth in the economy? We 

have heard that for years. President 

Clinton has even talked about that. 

And the economists all indicate they 

are worried about savings. How about 

the idea of letting the people get a little consideration to encourage them to 

save more? 

So let us encourage investment and 

growth and savings. That is what these 

tax cuts do. 

And, also, how about a little more 

fairness in the Tax Code? There are so 

many problems with the Tax Code you 

cannot begin to enumerate them all. 

But when you start talking about 

things like allowing wives working in 

the home to be able to have an individual retirement account, who is 

against that? That is fundamental fairness. Everybody can have an individual 

retirement account at certain levels of 

income, but not the spouse working in 

the home. To me, correction of this is 

just basic fairness. 

How about the marriage penalty 

credit? For years, Congress has talked 

about how we need to get rid of this 

marriage penalty, and yet it just lives 

on. This tax cut would deal with that 

problem. 

What about the idea of our elderly? 

We have a lot of our elderly who would 

like to keep working. But now if they 

keep working, many times when they 

need it and when we need them, they 

get penalized. 

These tax cuts would include, among 

other good things, raising the Social 

Security earnings test threshold. We 

should do that. I would like to eliminate it, but this proposal would take 

the threshold up to $30,000. 

So you see, we are talking about 

some things that will help families and 

wives, married couples, small businesses and our elderly in a real way. 

We have a provision in here that 

would provide small businesses estate 

and gift tax relief. The people who own 

small businesses run the risk of losing 

everything they have or affecting what 

they do because of these tax penalties. 

And we should have the capital gains 

tax rate cut. When I go home and I ask 

the people of all backgrounds and economic stations in life, should we have a 

capital gains rate cut, ‘‘Absolutely,’’

they say, we should do that. It never 

ceases to amaze me that in Washington, DC, a capital gains tax rate cut 

is fought. But out where people are creating the jobs and when they want to 

be able to sell timber or timberland, 

they understand that a capital gains 

tax rate cut would help them and 

would help the economy and would create jobs. But not in Washington, no. 

What about the $500 tax credit per 

child? Why do we not want to let the 

families with children keep a little bit 

more of their own money, let them decide how they want to spend money for 

clothing and schools and food for their 

children? Oh, no, it is much better to 

have a program from Washington that 

does it for you or tells you how you 

must do it. This would allow the decisions to go back to the families with 

children. Let them decide how to spend 

their money. 

I want to point out that this is not 

an insignificant consideration either. 

It really would make a difference in 

the family income. I would like to have 

printed in the RECORD, Mr. President—

it may have already been done, but I 

want to make sure it is in here—an article in the Washington Post on May 16 

by James K. Glassman entitled ‘‘Yes, 

Cut Taxes.’’ I ask unanimous consent 

that that be printed in the RECORD. 

There being no objection, the article 

was ordered to be printed in the 

RECORD, as follows: 

YES, CUT TAXES

(By James K. Glassman) 

Critics of the Republican budget in the 

press, Congress and the White House may be 

drastically underestimating the power—both 

political and economic—of those tax cuts the 

House passed in April. I know I did. 

First, a little history. The Republicans 

won the November congressional elections, 

using a contract that pledged a balanced 

budget and a tax cut. 

President Clinton figured they couldn’t do 

it, so his strategy was to sit back and let 

them take the heat for overreaching. His 

February budget opted for the status quo, 

which means annual deficits of $200 billionplus forever. 

Now, the Republicans are offering their official budget plans, and—whaddaya know?—

they show they can indeed balance the budget by their target year, the palindromic 2002. 

And they can do it by increasing spending in 

each year by an average of $45 billion. 

But skeptics see two problems. The first is 

Medicare. Republicans want to increase 

spending on the program by about 6 percent 

annually instead of 10 percent. In Washington parlance, this is a ‘‘cut’’ of $280 billion, so it’s not expected to be easy to sell. 

The second problem is tax cuts. Sen. Pete 

Domenici (R-N.M.), who heads the Senate 

Budget Committee, said Sunday, ‘‘We don’t 

have a tax cut until we balance the budget.’’

But his House counterpart, Rep. John Kasich 

(R-Ohio), things, the country can have both 

at the same time. 

The trouble with tax cuts is that they’re 

hard to justify at the same time you’re ordering painful limits—and some outright reductions—in spending. Also, it’s likely that a 

total restructuring of the tax system (a flat 

tax or a national sales tax) will be a big issue 

in next year’s presidential election. So why 

piecemeal changes now? 

In the past, I made these same arguments 

in urging Congress to shelve the tax cuts. 

But that was before I did something that 

most journalists (and even politicians) still 

haven’t done: I took a close look at the tax 

bill. 

Now I’m changing my mind. The tax 

changes are a political plus—and likely an 

economic plus as well. Once Americans understand them (and few do now) they’re apt 

to become very, very enthusiastic. Reluctant 

politicians risk being trampled. 

The two main provisions of the tax bill, 

H.R. 1215, are these: 

(1) Nearly every family with children can 

reduce its final tax bill by $500 per kid. 

For example, the average household headed 

by a married couple has an income of about 

$50,000 a year. If that family has three children, its current federal income tax bill, according to a study by Price Waterhouse, is 

$4,643. 

But if H.R. 1215 becomes law, the family’s 

tax bill well be reduced by $1,500—to $3,143, a 

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S7174 CONGRESSIONAL RECORD— SENATE May 23, 1995 

cut of a whopping 32 percent. Such a family 

with two children would save 20 percent, 

with four children, 47 percent. 

These are huge cuts, perhaps unprecedented in U.S. fiscal history. Yet I doubt 

that most Americans know much about 

them. The press coverage of H.R. 1215 earlier 

this year was dominated by a specious controversy over whether tax relief benefited 

the wealthy. Of course, it does—but only if 

the rich are willing to invest their money, 

not spent it. Which brings us to the second 

element . . . 

(2) Taxes on capital gains will be cut dramatically. 

This is the part that’s meant to encourage 

investing, and it’s a fact that most investing 

is done by families with higher incomes. But 

the capital gains cuts in H.R. 1215 aren’t a 

replay of the Reagan tax cuts, which didn’t 

work as advertised. 

Those 1986 cuts lowered the tax rates on income (salaries, bonuses, interest on bonds) 

but actually raised the rates on capital gains 

(profits from the sales of assets like stocks 

and real estate). As a result, the changes encouraged consumption, but not investment. 

In fact, the paltry U.S. savings rate actually 

fell. 

The changes in the tax bill the House 

passed in April are directly targeted at investment—and they’re extremely powerful. 

The bill does two things: First, it reduces 

a family’s capital gains rate to one-half of 

its income-tax rate. So, if you’re in a 28 percent bracket (taxable income of $38,000 to 

$92,000 for a couple filing jointly), you’ll pay 

just 14 percent on your stock profits. 

Second, the bill indexes capital gains, 

which means that you only pay taxes on real 

profits, not on inflation. Indexing can 

produce huge tax savings—but only for longterm investors. And long-term investors are 

what the U.S. economy desperately needs; 

they provide the capital that creates good 

jobs. 

Consider a family with taxable income of 

$80,000 a year that buys 200 shares of WalMart at $25 a share, holds the stock for six 

years, then sells it for $50 a share—a profit of 

$5,000. 

Right now, taxes would be $1,400 (28 percent of $5,000). But under H.R. 1215, if inflation over those six years averaged about 3 

percent, the family would pay tax only on its 

‘‘real’’ (non-inflationary) gain—on $4,000 

rather than on $5,000. And the rate would be 

just 14 percent. So the tax bill would be $560 

instead of $1,400, a reduction of 60 percent. 

Would capital gains cuts of that magnitude 

entice Americans to save and invest rather 

than to consume? It’s a good bet. 

The tax changes in H.R. 1215 would mean 

that the Treasury would receive about $80 

billion less revenue in 2002 than it now expects. That’s a shortfall of about 4 percent 

that would have to be met with extra spending restraint. is the trade-off worth it? It’s 

more and more clear the answer is yes. 

Mr. LOTT. Mr. President, I quote 

from that article I think the most pertinent part: 

(1) Nearly every family with children can 

reduce its final tax bill by $500 per kid. 

For example, the average household headed 

by a married couple has an income of about 

$50,000 a year. 

Not rich folks; these are middle-income, working people. 

If that family has three children, its current Federal income tax bill, according to a 

study by Price Waterhouse, is $4,643. 

But if—

This amendment is added to the 

budget resolution—

The family’s tax bill will be reduced by 

$1,500—to $3,143, a cut of a whopping 32 percent. Such a family with two children would 

save 20 percent, with four children, 47 percent. 

This is a significant move to help 

families with children. 

So, Mr. President, when I look down 

the list of provisions in this tax cut, I 

ask—in fact, I challenge—Senators to 

come out here and tell me which one of 

these they are against. 

Are you against providing tax incentives for the purchase of long-term care 

insurance? How about a home office deduction for small business men and 

women, individual entrepreneurs that 

work out of their homes? Everybody 

else gets a deduction for office expenses but not if you work in your 

home. More and more Americans are 

doing that, are able to do that, or are 

going to have to do it in the future. 

So I think there are many good provisions in this legislation. I urge the 

Senate to support it. It does have the 

support of a number of groups that are 

interested in encouraging growth and 

savings in the business community. 

The Heritage Foundation indicated 

that 490,563 children in my State of 

Mississippi would be eligible for the per 

child credit that I spoke of a moment 

ago. That means almost $245.3 million 

of this hard-earned cash would be returned to the families in my State. 

In President Clinton’s home State of 

Arkansas, there are 458,547 children 

who would benefit from the per child 

tax credit. That is about $229 million 

more than Arkansas families will get 

back without this tax credit. 

So I think, Mr. President, we have an 

opportunity to really help the economy 

and to help the families in this country. We should add this amendment to 

the resolution. Then, when we go to 

conference, while there still would be 

some differences, we could work out 

those differences and have tax relief in 

this very important legislation. 

So I urge the support of the Gramm 

amendment. 

Mr. President, I yield the floor. 

The PRESIDING OFFICER. The Senator from Texas. 

Mr. GRAMM. Mr. President, I ask 

unanimous consent to print a series of 

letters in the RECORD in support of the 

amendment by the National Taxpayers 

Union, by Citizens for a Sound Economy, by the Christian Coalition, by 

Traditional Values Coalition, by the 

Family Research Council, by Concerned Women of America, by the Business and Industrial Council, and by the 

National Federation of Independent 

Business. 

There being no objection, the letters 

were ordered to be printed in the 

RECORD, as follows: 

NATIONAL TAXPAYERS UNION, 

Washington, DC, May 22, 1995. 

DEAR SENATOR: The 300,000-member National Taxpayers Union (NTU) strongly supports the FY 1996 Budget Resolution (S. Con. 

Res. 13) as reported by the Senate Budget 

Committee. A vote FOR the Committee’s 

Budget Resolution will be scored as one of 

the most heavily-weighted pro-taxpayer 

votes in our 1995 Rating of Congress. NTU opposes any attempts to increase the spending 

projected in the Budget Resolution. ‘‘No’’

votes on such amendments will likewise be 

included as pro-taxpayer votes in our Rating. 

We are pleased that for the first time in fifteen years the Senate Budget Committee has 

reported a Budget Resolution to balance the 

budget without raising taxes. While the 

Budget Committee has outlined significant 

spending cuts, the final proposals will be 

drafted by the authorizing and appropriations committees. The Committee has made 

suggestions that NTU has supported for 

many years, including the termination or 

privatization of many government programs. 

It also begins the long-overdue process of reforming Medicare, which is headed for bankruptcy in a few years. 

Unless current trends change soon, funding 

increases in major entitlement programs 

will slash the after-tax income of the average American worker by almost 60% over the 

next 45 years. After-tax income would plunge 

from $19,000 in 1995 to $7,821 in 2040. As bleak 

as this projection may seem, it is based on 

an optimistic assumption that pre-tax incomes will rise faster over the next 45 years 

than they have over the past 20. This spending growth is not sustainable, and if allowed 

to grow unchecked will permanently damage 

our children’s hope for a better future. 

In the world economy, the advent of the 

Information Revolution will give a huge advantage to efficient governments. Because 

computers allow most economic transactions 

to occur literally anywhere, competition between jurisdictions expands by the day. That 

necessitates a revolution in the way government is financed and a radical downsizing of 

its activities. The budget restraint in this 

resolution will force necessary reexamination and reform of many government programs. 

While we fully support the Budget Resolution, we are disappointed that it does not 

project passage of the important tax reduction proposals that the House passed last 

month. Therefore, we support an amendment 

by Senator Phil Gramm and others that 

would further restrain spending growth, accommodate most of the House-passed tax 

cuts, and still balance the budget by 2002. It 

is vitally important that Congress also reduce the tax burden on middle-class taxpayers and the present tax disincentives for 

savings, investment, and economic growth. 

The typical American taxpayer has to work 

until May 6 this year just to pay his federal, 

state, and local taxes. Overburdened taxpayers expect and deserve substantial relief 

from this crushing tax load. A vote for the 

Gramm amendment will be included as protaxpayer vote in our Rating. 

Through almost 200 years of American history, our leaders strove to follow Thomas 

Jefferson’s wise advice: ‘‘We shall consider 

ourselves unauthorized to saddle posterity 

with our debts, and morally bound to pay 

them ourselves.’’ Passage of the Budget Resolution is essential if Congress hopes to restore a fiscally sound future for the next 

generation. 

Sincerely, 

DAVID KEATING, 

Executive Vice President. 

CITIZENS FOR A

SOUND ECONOMY, 

Washington, DC, May 17, 1995. 

Hon. PHIL GRAMM, 

U.S. Senate, Washington, DC. 

DEAR SENATOR GRAMM: I am writing on behalf of the 250,000 members of Citizens for a 

Sound Economy (CSE) to register our support for your proposal to balance the budget 

by 2002 by cutting taxes and slowing federal 

spending growth. 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7175 

In order to encourage a growing economy 

that creates new, high-paying jobs and rising 

living standards for our children and grandchildren, we must bring federal spending 

under control. Your proposal does this by 

limiting federal spending increases to 3.3 

percent per year. Cutting taxes and capping 

the dollars available for the federal government to spend would mean more dollars for 

American families to spend. Letting Americans spend and invest their money as they 

like, instead of allowing the government to 

spend their money for them, is one of the 

best things Congress could do to strengthen 

our economy. 

Americans are faced with chronic federal 

budget deficits because of ever-increasing 

government spending. CSE strongly supports 

your plan because it would cut taxes and 

help bring federal spending under control, 

thereby resulting in the first balanced budget in a generation. 

Sincerely, 

PAUL BECKNER, 

President. 

CHRISTIAN COALITION, 

CAPITOL HILL OFFICE, 

Washington, DC, May 8, 1995. 

DEAR SENATOR: On behalf of the 1.5 million 

members and supporters of the Christian Coalition, I am writing to urge your support for 

Senator Phil Gramm’s proposed substitute 

amendment to the Concurrent Budget Resolution for FY ’96 when it comes to the floor 

next week. This amendment will provide for 

tax relief and growth incentives as promised 

in the Contract With America. 

The American family has repeatedly been 

promised tax relief, only to see those promises broken. That is why the recent passage 

by the House of Representatives of the family tax relief promised in the Contract With 

America was particularly gratifying. But the 

American people do not make differentiations between the House and the Senate—

they only know that Republicans campaigned on the Contract With America and 

that the 1994 elections were a mandate to the 

Republican party to pass the Contract. That 

is why we are writing today to urge the Senate to stick with the tax relief promised in 

the Contract With America. 

Although all Americans have been impacted by today’s high taxation level, families with children have particularly felt the 

impact due to the diminished value of the 

personal exemption. The personal exemption 

protected 68 percent of the average family of 

four’s earnings from taxation in 1948, but it 

has not kept up with inflation and higher income. If it had done so, it would today be between $7,000 and $8,000. The American family 

pays more in federal, state, and local taxes, 

than it does for food, clothing, and housing 

combined. 

It is important to remember that in asking 

for the $500 per child tax credit, families are 

not asking for a new subsidy, a new entitlement, or a new spending program from the 

government. They are asking to keep more 

of their own hard-earned income in order to 

raise their families. 

We urge the Senate to put families first 

and support the Gramm substitute amendment when it comes to the floor next week. 

This is the family dividend of budget reduction. Thank you for your attention to our 

concerns. 

Sincerely, 

RALPH E. REED, JR., 

Executive Director. 

TRADITIONAL VALUES COALITION, 

May 12, 1995. 

Hon. PHIL GRAMM, 

U.S. Senate, Washington, DC. 

DEAR SENATOR GRAMM. Next week the Senate will begin consideration of the budget 

resolution. On behalf of Traditional Values 

Coalition’s 31,000 member churches I am 

writing to urge you to support Senator Phil 

Gramm’s amendment. 

For too long special interests have had 

more clout and control over the budget process than working families. In addition, over 

the last few decades Washington has shown a 

lack of financial discipline, forcing working 

families to shoulder the burden of increased 

government spending and higher taxes. Traditional Values Coalition believes that it is 

now time for Congress to change its priorities and focus by providing tax relief to the 

parents of 52 million children. With the passage of the Contract with America, the 

Houses has acknowledged this injustice toward working families. I hope the Senate 

will as well. 

Senator Gramm’s amendment will restrain 

the growth in federal spending by $94 billion 

over five years and provide desperately needed tax relief for 29 million hardworking families. TVC believes cuts in wasteful government spending will pay for the family tax relief. These spending cuts should come from 

eliminating hundreds of programs ranging 

from the Uranium Enrichment program ($1.6 

billion) to the National Endowment for the 

Arts and Humanities ($1.4 billion) and by 

privatizing the Corporation for Public Broadcasting ($1 billion). 

In the 1950’s, the average American family 

paid 3% of their income in federal taxes. 

Today, the average family sends 25% of its 

income to Washington. It is outrageous that 

the average working family pays more to the 

tax man than it spends on shelter, food and 

clothing. 

Traditional Values Coalition believes that 

working families are better equipped to 

make decisions on how to spend their own 

money than bureaucrats in Washington. 

Working families are not asking for anything special or an entitlement. They are 

simply asking for the government to return 

what rightfully belongs to them—their hard 

earned money. 

Traditional Values Coalition considers 

Senator Gramm’s amendment pro-family 

and pro-growth. Last year Congress put 

spending first, this year put families first. 

Sincerely, 

REV. LOUIS P. SHELDON, 

Chairman. 

FAMILY RESEARCH COUNCIL, 

Washington, DC, May 10, 1995. 

DEAR SENATOR: I am writing to express my 

support for an amendment Senator Gramm 

plans to offer to the budget resolution when 

it reaches the Senate floor later this month. 

The amendment would significantly reduce 

the tax burden on America’s families by 

adopting a $500 per-child tax credit and a variety of other tax measures (including a deduction for adoption expenses, spousal IRA 

benefits, etc.) which are very much needed. 

The Gramm proposal allows the Senate to 

adopt the ‘‘crown jewel’’ of the House GOP’s 

Contract With America. It recognizes that 

the electoral revolution that occurred last 

November 8 was driven in no small part by a 

desire on the part of the American people to 

see the size of government reduced and the 

amount of disposal income available for 

their use increased. 

As you know, the 1986 White House Working Group on the Family that I chaired for 

President Reagan had as its central recommendation a dramatic increase in perchild tax benefits. The Senate has an historic opportunity to address this long overlooked area of tax law and to demonstrate to 

the American people that it is working to 

make the kinds of changes Americans voted 

for last November. 

While I recognize that some legislators 

perceive tax relief to be at odds with the important goal of deficit reduction, it is important to point that the Gramm proposal—like 

the House GOP Contract—provides both significant tax relief and significant deficit reduction. As such, it recognizes that these 

two important goals are not mutually exclusive. 

I urge you, therefore, to enthusiastically 

support Senator Gramm’s efforts. Please let 

me know if you would like additional information about this subject from me or any 

member of my staff. 

Sincerely, 

GARY L. BAUER, 

President. 

CONCERNED WOMEN

FOR AMERICA, 

Washington, DC, May 12, 1995. 

Hon. PHIL GRAMM, 

Russell Senate Office Building, Washington, 

DC. 

DEAR SENATOR GRAMM: Concerned Women 

for America is the nation’s largest pro-family women’s organization with over 600,000 

members. For many years CWA has worked 

on legislative efforts to allow American families to keep more of their hard-earned 

money. Thus, we have worked diligently in 

favor of the $500-per-child tax credit, homemaker IRA equity, and tax credits for adoption expenses. 

We are very disturbed by the increased tax 

burden on families which often compels both 

parents to enter the work force in order to 

make financial ends meet. In 1948 the median 

family of four paid only two percent to of its 

income to the federal government in taxes. 

However, in 1989 the same family paid nearly 

24 percent in federal taxes. Adding on state 

and local taxes, over one-third of that family’s income will be spent on taxes. 

Families in your state need you to stand 

firm on their behalf. The House GOP ‘‘Contract With America’’ was passed because the 

voters made their voices heard last November. Tax relief for families was a vital component that helped to spark that revolution. 

Now it is time for the Senate to do its part 

to fight for families. Otherwise, the Senate 

will shoulder the voters’ outrage and become 

the weak link in the fight for smaller government and less taxes. 

CWA cannot compromise on this principle. 

This issue is not about class warfare. It is arrogant and baseless to assert that government cannot afford to allow families to keep 

more of their own money. Families should 

not have to suffer for the appalling lack of 

discipline and will in Congress to cut federal 

spending! 

Please join Concerned Women for American in supporting the Gramm amendment to 

the Senate Budget. CWA members in your 

state, and all America’s families, will remember your vote. 

Sincerely, 

BEVERLY LAHAYE, 

President. 

UNITED STATES

BUSINESS AND INDUSTRIAL COUNCIL, 

Washington, DC, May 16, 1995. 

Hon. PHIL GRAMM, 

U.S. Senate, Washington, DC. 

DEAR SENATOR GRAMM: In recent testimony to the Congressional Joint Economic 

Committee, Milton Friedman has calculated 

the aggregate cost of direct and indirect government expenditures at a staggering 50 percent of national output. About half of the 

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S7176 CONGRESSIONAL RECORD— SENATE May 23, 1995 

U.S. Gross Domestic Product is taken in 

taxes by the government at the federal, 

state, and local levels, including the costs of 

complying with excessive government regulations. Moreover, the Institute for Policy 

Innovation states that 50 percent of the average family’s budget goes to pay taxes to all 

levels of government. Clearly, the federal 

government is far too big and is taking too 

much from our economy. The Congress needs 

to drastically cut spending and also cut 

taxes. 

USBIC strongly supports your proposed 

amendment to the Senate Budget Resolution 

which would cut spending further in order to 

achieve the crucially important tax cuts already passed by the House as part of the Contract with America. Your amendment would 

combine the savings from lowering non-defense discretionary spending ($117 billion 

over seven years) beyond the reductions already in the Senate Budget Committee Resolution, with Medicaid savings derived from 

accelerating the decrease in the rate of 

growth in Medicaid. In addition, your 

amendment would use the ‘‘dividend’’ projected by the Congressional Budget Office resulting from balancing the budget by 2002. 

All of these additional spending cuts and 

savings would be combined to pay for $173 

billion in tax reductions over five years. We 

are delighted that your amendment would 

preserve the following crucial tax cuts already in the Contract—capital gains tax reduction and indexing, small business estate 

and gift tax relief, small business expensing, 

and repeal of the corporate alternate minimum tax. USBIC believes that the capital 

gains tax cut alone, if scored dynamically 

rather than statically, will increase revenues 

by $150 billion over five years, thereby inand-of itself almost paying for all the other 

tax cuts yet a second time. 

We represent 1000 small and medium-sized, 

mostly family-owned businesses nationwide. 

As you know, such businesses employ half of 

our nation’s workforce and create two thirds 

of all new jobs. Such businesses are the bedrock of the nation’s economy, yet they are 

being severely squeezed by high taxes and excessive regulations. Your amendment preserving the vitally needed House tax cuts 

will strongly improve the nation’s economy 

by stimulating investment, growth, and new 

jobs. 

Sincerely, 

KEVIN L. KEARNS, 

President. 

NATIONAL FEDERATION OF

INDEPENDENT BUSINESS, 

Washington, DC, May 16, 1995. 

Hon. PHIL GRAMM, 

U.S. Senate, Washington, DC. 

DEAR SENATOR GRAMM: On behalf of the 

more than 600,000 members of the National 

Federation of Independent Business (NFIB), I 

am writing to support your amendment, the 

Contract with America Tax Fairness and 

Deficit Reduction Act, to the FY 1996 Budget 

Resolution. 

For the first time in decades, the Congress 

is debating a resolution that puts the federal 

budget on a permanent path to a balanced 

federal budget. Your amendment would 

make possible significant tax relief for 

American families and small businesses 

while balancing the budget by the year 2002. 

It returns hard-earned money to families and 

small businesses who know best how to 

spend it. 

NFIB members strongly support a balanced 

federal budget and believe their taxes should 

be reduced. High taxes consistently rank at 

the top of the list of concerns for small business owners in surveys conducted by the 

NFIB Education Foundation. 

Important tax relief for small business includes: small business and family farm estate tax relief, incentives for retirement savings, and capital gains tax reduction and indexing. Your plan includes all of these proposals and more. 

We applaud your efforts and look forward 

to working with you. 

Sincerely, 

JOHN J. MOTLEY III, 

Vice President, 

Federal Governmental Relations. 

Mr. EXON addressed the Chair. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. Mr. President, I yield 4 

minutes to the Senator from Connecticut. 

The PRESIDING OFFICER. The Senator from Connecticut is recognized for 

4 minutes. 

Mr. DODD. Mr. President, I thank my 

colleague from Nebraska. 

Let me just begin by stating something that may put me within the minority here. I am opposed to all tax 

cuts in this bill, not because I am opposed to tax cuts. I think they ought to 

all be postponed—that is my own 

view—whether they come from one 

source or another. If we are honestly 

dealing with deficit reduction, tax cuts 

ought not be on the table. 

But I do want to rise and express my 

opposition to the particular proposal 

being offered today because I think it 

is particularly egregious and creates 

serious problems for our country. 

My colleague from Texas, with whom 

I serve on the Banking Committee, has 

often and very colorfully talked about 

who is in the wagon and outside the 

wagon. I raise here a picture of the 

good old chuck wagon. I call it the Republican tax cut wagon. 

I am going to use the wagon metaphor to explain to people, if I can, what 

we are talking about with this proposal. The wagon metaphor is a potent 

one. 

If we apply it to the Contract With 

America’s tax cut, I think people will 

get a clear picture of what we are talking about. If you take off the wagon’s 

cover and show what is inside this taxcut wagon, you get a clear picture of 

what is occurring. 

More than 51 percent of those riding 

in this tax-cut wagon are the wealthiest 12 percent of our population in this 

country earning more than $100,000 a 

year. In fact, the richest 1 percent, the 

best off of the population, of those 

earning over $350,000 will reap, under 

this proposal, an average windfall of 

$20,000 in tax breaks. People earning 

over $200,000 will receive a tax break in 

excess of $11,000. Is it any wonder that 

a recent Wall Street Journal article described the House GOP tax-cut package, much of what we are voting on 

today, in these words, and I quote the 

Wall Street Journal: 

Don’t do anything yet, but start salivating. The tax bill passed Wednesday by the 

House of Representatives could turn out to 

be the biggest tax-saving bonanza in years 

for upper-income Americans. 

While the tax-cut package represents 

a bonanza to the very well off, families 

earning $20,000 to $30,000—this area 

down here, Mr. President—will have 

their tax cut by only $247 per year. 

Those earning $30,000 to $50,000 will get 

a tax cut of $569 a year. That is about 

$1.50 a day. 

Collectively, these families, shown in 

orange on the chart, represent 35 percent of all American families, but they 

will receive less than 15 percent of the 

benefits under this tax cut. 

The least affluent, 25 percent of 

American families, earning less than 

$20,000 a year, shown in red, Mr. President, this thin column here, will receive a tax cut of $20 to $90 a year. 

Now that we have a better understanding of who is riding in the wagon, 

let us take a look at who is truly pulling the weight. The contract’s tax cut 

package will cost $345 billion over 7 

years and $639 billion over 10 years. 

How is this going to be paid for? By 

some of the most draconian, in my 

view, cuts presented on the floor of this 

body. Medicare recipients who have a 

median income of $17,000 will pay an 

additional $3,200 in the next 7 years. 

I do not argue the fact that Medicare 

needs to be addressed, but we might be 

more creative in solving that problem 

than using those dollars to pay for a 

tax cut, as I pointed out earlier, that 

goes to upper-income people. After decades of hard work, the seniors face retirement years full of anxiety—all of us 

know it—and squeezed by medical bills. 

Medicare problems are a symptom of a 

larger problem. It did not create the 

problem. More than 12 million working 

families will have to pay higher taxes 

because of the Republican proposal to 

cut some $21 billion from the earned income tax credit, a program that President Ronald Reagan called ‘‘one of the 

best programs we can possibly have to 

offer to the working poor in this country.’’

In Connecticut, these cuts will increase taxes on 87,000 working families 

by an average of $1,400 over 7 years. 

College students, Mr. President, will 

see the cost of a diploma rise by anywhere from $2,000 to $5,000 as a result of 

cuts in the student loan interest subsidy and other programs. 

Mr. President, in my opinion, it is 

the height of hypocrisy to bemoan the 

fact that some Americans are riding in 

the wagon while others are pulling and 

then turn around and offer a massive 

tax cut and ask working families, students, and seniors to foot the bill for a 

tax break for the more affluent in our 

society. 

Mr. President, I just feel, here 

again—and I say this with all due respect to my colleagues that are proposing this—this is not a time for this 

kind of a tax cut here at all. We cannot 

afford it. Deficit reduction ought to be 

the name of the game. If we are going 

to have deficit reduction, if we are 

going to ask people to pay, then to 

offer 12 percent of the American population to become a beneficiary of 51 

percent of this break, it seems to me 

ill-advised and wrongheaded. 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7177 

My hope is that this amendment will 

be rejected and we will come together 

around a sound budget alternative. I 

thank my colleague from Nebraska. 

Mr. GRAMM addressed the Chair. 

The PRESIDING OFFICER. The Senator from Texas. 

Mr. GRAMM. Mr. President, I would 

like to say to my dear colleague from 

Connecticut that that is a fine looking 

wagon. 

Mr. DODD. Not if you look on the inside of it. 

Mr. GRAMM. It is beautiful both inside and out. 

I would like to make a couple of simple points. No. 1, our colleagues always 

get confused when we are talking about 

tax cuts. They are always thinking 

about welfare. So they cannot understand when we cut taxes that people 

who do not pay any taxes do not get a 

tax cut. Those people are already 

riding in the wagon. I did not see 40 

million people on welfare riding in that 

wagon. I did not see $350 billion taken 

away last year from working people to 

give to the people riding in the wagon. 

When our colleague says that someone with a certain income level only 

got a $120 tax reduction, since the credit is $1,000 for a two-child family, that 

means they were only paying $120 in 

taxes. Tax cuts are for people who are 

paying taxes. In terms of all this business about rich people, I go back to my 

point: How can we be a country that 

loves jobs and hates the people that 

create them? The only way rich people 

will benefit from the capital gains tax 

rate is to invest money and be successful. If they invest money and they are 

successful and they do create jobs and 

the Federal Government takes a substantial portion of what they earn, why 

should they not benefit? What is wrong 

with profits? Is America the only country in the world as we are going into 

the 21st century where capitalism is a 

dirty word? 

This is something I do not understand. This is a different perspective on 

America than I have ever seen. Again, 

I think it does clearly define the vision 

that I am talking about versus the old 

and tired vision which has dominated 

American Government for 40 years. It 

is almost as if it is better to have people in misery as long as we can rub 

everybody’s nose in it, rather than trying to create incentives for economic 

growth. Redistributing wealth does not 

solve poverty. Creating wealth does 

solve it, and that is what the debate is 

about. 

I reserve the remainder of my time. 

Mr. EXON. Mr. President, I yield 4 

minutes to my colleague from Arkansas. 

Mr. BUMPERS. Mr. President, I 

thank the distinguished floor manager. 

Let me say, first of all, capitalism is 

not a dirty word. Crazy budgeting is 

what is crazy. It is not dirty, but it is 

crazy. Everybody in this body is always 

saying, ‘‘This is what the people want. 

They want term limits, and they want 

a constitutional amendment to balance 

the budget.’’

Let me show you what 70 percent of 

the people in this country want. This 

chart shows a USA Today poll which 

asks, ‘‘Do you prefer deficit reduction 

or tax cuts?’’ Seventy percent say that 

if we are going to cut spending, we 

should apply it toward deficit reduction. That’s almost three times the 

number of people who prefer tax cuts. 

So what are we doing here? We are 

thwarting the obvious will of the people. The amendment of the Senator 

from Texas reminds me of turning a 

child loose in a candy store. I cannot 

think of anything in this amendment 

that I would not love to vote for, except the very regressive part of the tax 

which rewards the rich and takes from 

the poor. The Senator’s amendment 

has a new IRA, it has a deduction for 

caring for the elderly. It has all kinds 

of tax breaks that I would love to vote 

for. But Mr. President, we cannot afford this, and the people of this country do not believe it is possible to have 

these tax cuts and balance the budget, 

too. 

When I ride home on an airplane, I 

talk to the people around me, and they 

say, ‘‘Senator, the thing that troubles 

me about you Democrats is you engage 

in class warfare.’’ I hear that very 

often. I suppose Rush Limbaugh has 

talked about it, otherwise, so many 

people would not be talking about it. 

But who is really engaging in class 

warfare here? Look at what the amendment of the Senator from Texas does. 

It gives a whopping $124 a year to people who make zero to $30,000 a year. 

That is a pizza every third Friday 

night. And when you take away the 

earned income tax credit, they pay a 

lot more. They not only do not get the 

$124, they wind up losing a substantial 

amount every year. But what about 

people who make over $200,000 a year? 

What kind of tax cut would they get 

out of this amendment? They would 

get a cut of $11,266. Why, Robin Hood 

would be whirling in his grave—taking 

from the poor to give to the rich. 

They say, ‘‘You Democrats talk too 

much about class warfare.’’ If that is 

not class warfare, I do not know what 

is. 

Mr. President, the last time we had a 

balanced budget was when Lyndon 

Johnson dumped the Social Security 

trust fund into the budget. And since 

that time, we have had integrated 

budgets. Social Security has been 

counted. Otherwise, the deficit would 

have been much, much bigger. So what 

do we do under this budget? We are 

going to take $600 billion of Social Security funds over the next 7 years to 

pretend to the American people that 

we have achieved a balanced budget. 

And the Senator from Texas comes 

with an amendment that will only cost 

$350 billion—talk about deja vu. I heard 

all of this in 1981, $3.5 trillion ago, how 

we can cut taxes and balance the budget. 

Mr. President, I divinely hope our 

colleagues will not accept this amendment. I yield the floor. 

Mr. EXON. Mr. President, I have one 

or two speakers scheduled to come. I 

will make a few comments before recognizing those who indicated they 

would like to speak on this subject. 

Let me say that the debate has been 

very interesting and very challenging. 

I will simply say that I hope all Senators will realize and recognize that 

this is a very key amendment that we 

must defeat if we are going to truly 

balance the budget and not try to fool 

the American people. 

Time and time again, it has been said 

that we cannot have a tax cut and balance the budget, too. I reference once 

again the fact that I was hearing the 

same story on the floor of the Senate 

in the early 1980’s when a massive tax 

cut was proposed at the same time the 

President of the United States was 

going to balance the budget in 4 years. 

Now, I think the President of the 

United States at that time was just not 

well informed. I happen to think that 

the numbers simply will not add up. I 

think most realistic people will say, 

while it would be nice—this Senator 

and everyone on this side and certainly 

everyone on that side would like to 

have the opportunity to provide a tax 

cut—the overriding problem in America today is the deficit. 

Certainly, this Senator would be the 

first one to join the bandwagon for a 

tax cut that was targeted at middle-income America. Certainly, the $500 credit for school-age children would be one 

that I would be attracted to. 

I have to say, as a fiscal conservative, and I think no one can question 

that, as one who voted for the balanced 

budget amendment, the last big vote 

we had in the Senate with regard to 

who wants to get things done, I simply 

say that I believe the measure being offered by the Senator from Texas, which 

is an incorporation of Speaker Gingrich’s crown jewel of America, as far as 

the Contract With America is concerned, is simply unrealistic. I hope 

very much it will be defeated. 

Mr. DORGAN. Mr. President, I wonder if the Senator will yield to me for 

a question. 

Mr. EXON. I am happy to yield. 

Mr. DORGAN. Mr. President, I used 

this chart a while ago and the Senator 

from Texas did not yield for a question. 

This chart is page 7 of the budget resolution that is before the Senate. 

I ask the Senator from Nebraska if 

this is not accurate. I notice that the 

Senator from Texas says, ‘‘With this 

plan of ours, the budget is balanced. So 

now, we will go give tax cuts.’’ Of 

course, tax cuts for the wealthy but, 

nonetheless, tax cuts. 

Page 7 of the budget resolution says 

‘‘Deficits.’’ On line 21, the year 2002, a 

$113 billion deficit remaining in the 

year 2002. 

Is it not true that this budget resolution does not come to the floor saying 

we balanced the budget; it comes to the 

floor saying we have a $113 billion deficit in the year 2002? 

Mr. EXON. Mr. President, I answer 

my colleague from North Dakota by 

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S7178 CONGRESSIONAL RECORD— SENATE May 23, 1995 

saying he is absolutely correct. The 

figures that he cites are in the budget 

resolution. 

What I think the Senator from North 

Dakota fails to recognize is that the 

tooth fairy is going to take care of that 

deficit. With that explanation, I am 

sure that the Senator will be fully satisfied. 

I reserve the balance of my time. 

Mr. GRAMM. I guess one of the 

things that is always frustrating about 

political debate is that it is so seldom 

that we will really talk about the 

issues that are involved. So we have 

drifted far afield from those issues. 

I would like to go back and try to set 

them all in perspective. I am going to 

reserve my final moments to conclude 

the debate, and I will allow the Democrats to speak until their time has expired. 

First of all, this is not a debate about 

balancing the budget versus cutting 

taxes. I am not proposing to cut taxes, 

except to the degree that spending is 

being cut beyond the level contained in 

the budget resolution. 

I am proposing, if we look at this 

chart, very simply to do this: The red 

line here starts off with the Federal 

Government spending roughly $1.5 trillion this year. It shows how much the 

Government can spend over the next 7 

years and still balance the unified 

budget of the United States of America. 

What I am proposing is to cut spending below that level so that rather 

than the Federal Government investing 

in the education of our children, families can invest in the education of our 

children; only the families will know 

the names of the children they are investing in. Only the families will have 

a stake directly in those children. 

My proposal is to cut Government 

spending on things like Government 

subsidies to business, so we can cut the 

capital gains tax rate, so that we can 

provide incentives for investment decisions to be made by people who are 

going to benefit or lose in those investment decisions, so that the marketplace, based on competition and efficiency, can make investment decisions. 

With regard to the debate about the 

income level of the people paying the 

taxes, the point is if we give a $500 tax 

credit per child in America, if someone 

is not paying $500 worth of taxes, they 

do not get the tax credit. 

But then what we are trying to do is 

to deal with a problem that in 1950, the 

average family with two children was 

sending 1 out of every $50 it earned to 

Washington for the Congress to spend; 

today the average family in America 

with two children is sending $1 out of 

every $4 to Washington for the Congress to spend. I want to let families 

spend more of their own money on 

their own children for their own future. 

That is what this debate is about. 

If we ask people if they want to balance the budget or cut taxes, they say 

balance the budget. I agree. If we ask 

do I want my children to be healthy or 

do I want them to go to college, I want 

them to be healthy. When their health 

is secured, I then want them to go to 

college. I do not have only one objective for my children. 

We have set out a budget that balances the budget. What I am proposing 

to do is to cut Government spending 

further, eliminate the Federal Department of Education, reduce subsidies to 

business and cut taxes by that amount 

so that families can invest more of 

their own money rather than having 

Government spend their money for 

them, and cut the capital gains tax 

rate and let businesses invest their 

money as they see fit, rather than us 

subsidizing businesses to invest money 

where we would like it to be invested. 

That is what this debate is about. I 

reserve the balance of my time. 

Mr. EXON. Mr. President, I yield 6 

minutes to the Senator from New Jersey. 

The PRESIDING OFFICER. The Senator from New Jersey is recognized for 

6 minutes. 

Mr. LAUTENBERG. Mr. President, I 

thank my friend and colleague, the 

ranking member of the Budget Committee. 

I think we are getting down to where 

this debate is all going to be in the 

RECORD and the decisions will have 

been made. It focuses or centers around 

a couple of fairly narrow issues, as I 

see them. 

We can discuss forever whether there 

were tax cuts intended when the Budget Committee passed the resolution on 

the floor, or whether there were not; 

and at times, it was said in the slip of 

a tongue that, yes, they were for tax 

cuts; no, they were not for tax cuts because the Finance Committee was 

going to be making its decision. It was 

just going to be kind of set aside, $170 

billion set aside that would be there to 

provide savings, but everybody knew it 

was there, but for the wink of an eye 

was reserved for tax cuts. 

Today we have heard a debate about 

the real thing. We have come face to 

face, finally, with what the issue is. 

The issue, very simply, is whether or 

not we are going to deprive people of 

programs that are essential; that is, to 

take care of those seniors who are 

beneficiaries of Medicare, to make sure 

that Medicaid has the funding so that 

in places like Newark, NJ, and 

throughout this country, hospitals that 

derive 60 percent, 70 percent, 80 percent 

of their income from Medicaid because 

they serve a poverty-stricken population will not have to close. 

We want to do that, as I hear the argument today, so that we can take care 

of the tax cuts that benefit primarily 

those in the upper income levels. 

As a matter of fact, roughly, for 

every person earning $350,000 it is estimated by Treasury that there will be a 

$20,000 reduction in taxes. That is a 

pretty hefty present at the end of the 

year, $20,000, while they are asking senior citizens who, on average, 75 percent 

of them, make $25,000 a year or less, 

who are totally dependent on $25,000 a 

year or less for their income and, on 

top of that, are having to supplement 

their Medicare Program with about 20 

percent of their income, or roughly 

$5,000, for that group that is at the 

$25,000 level. It does not leave much for 

ordinary living. And heaven forbid that 

a nursing home long-term care program is involved. That is the end of it. 

But we want to do that so we can 

take care of the tax cut, a tax cut primarily for those who are at the top of 

the income ladder. 

The question resolves itself very 

much, whose side are you on? On this 

side of the aisle we are on the side of 

the working Americans, the people who 

are doing their darnedest to try to 

keep home and family together, to try 

to provide for the education of their 

children, to give them a hand up so 

when it is their turn to takeover family responsibilities and leadership in 

the country they are prepared to do it. 

An America falling behind competitively is not a sight that is pleasant to 

see. An America whose health, whose 

longevity is declining compared to 

other nations in the world is not a 

pleasant sight to see. An America who 

is 25th among nations in foreign aid 

—25th among the 25 most advanced nations in this world. They leave us behind. When there are not only important diplomatic objectives to be gained 

but important commercial objectives 

to be gained as well. 

We see what happens. We need border 

guards. We know the State of Texas 

likes to see more border guards to help 

curb illegal immigration. We need 

more FBI agents, as we have seen very 

recently. 

We have to change the way we deal 

with security issues. But, no, all of 

those things are put on hold so we can 

take care of a tax reduction for those 

who in many cases do not need it. 

Yes, when you get to the middle class 

Americans, when those who are in the 

level of income where they need all the 

help they can get, that is a worthwhile 

consideration. But for someone who is 

making $150,000 a year, $350,000 a year, 

or more? That is not necessary, in my 

view, when it comes to considering the 

price that is paid for it. 

The statement was made just a few 

minutes ago about whether we would 

like to see our children healthy or educated? I could not agree more with 

what the Senator from Texas said. I 

would like to see the kids healthy first. 

But I also want my kids to be secure. I 

want them to know in the next century 

that instability within our society was 

not created by the elimination of some 

programs to give people job training, a 

decent education, an opportunity for 

full participation in our society. Instead of pretending we are going to be 

able to shield off some of the problems 

that we have. 

The PRESIDING OFFICER (Mr. 

KYL). The 6 minutes of the Senator has 

expired. 

Mr. LAUTENBERG. I close with the 

question very simply put on this chart, 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7179 

and that is: Whose side are we on? We 

here are on the side of the average 

American and our friends on the other 

side of the aisle want to take care of 

those who have enough, who have 

enough power, to give them an extra 

edge they do not need. 

I yield the floor. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. EXON. Mr. President, what is the 

remaining time on each side? 

The PRESIDING OFFICER. The Senator from Nebraska has 2 minutes and 

22 seconds. The Senator from Texas, 4 

minutes. 

Mr. EXON. Is the Senator from Texas 

ready to yield back his time? 

Mr. GRAMM. No, I am going to be 

the final speaker. I intend to use my 

last 4 minutes. 

Mr. EXON. Mr. President, winding up 

the debate, I just want to reiterate, if 

I might, some very fundamental points 

that have been made over and over 

again. 

First, we have high hopes that this 

particular amendment that is universally opposed on this side of the aisle is 

also substantially opposed on that side 

of the aisle and, therefore, this might 

well be the first victory that we have 

had in the whole series of debates on 

the budget, inside the Budget Committee and on the floor of the Senate. 

I hope my optimism about this vote 

is not ill founded, because if the 

amendment offered by the Senator 

from Texas comes to pass and is agreed 

to by this body, I think it is going to 

cause such havoc that the conference 

with the House of Representatives 

would be essentially meaningless. If we 

pass this what I think is an ill-advised 

amendment, regardless of the fact that 

it passed in the House of Representatives, regardless of the fact that it is 

the so-called crown jewel of the Contract With America, regardless of the 

fact that I see no reasonable person 

could sit down and pencil out the figures and come up with any conclusion 

that we could possibly balance the 

budget by the year 2002 then if we proceed not to vote down the amendment 

offered by the Senator from Texas, the 

House and the Senate in conference 

would be placed in a position to where 

I think it would be nearly impossible 

to work out anything that would be 

halfway reasonable. 

I think under those circumstances it 

would be a foregone conclusion that 

whatever system eventually passes 

through the authorization and through 

the appropriations process would be vetoed by the President of the United 

States. 

This is the time for reason. This is 

the time for reality. Let us vote down 

the amendment offered by the Senator 

from Texas. 

The PRESIDING OFFICER. The Senator’s time has expired. 

The Senator from Texas. 

Mr. GRAMM. Mr. President, if this 

amendment is adopted, both the House 

and the Senate will have adopted the 

tax cut in the Contract With America. 

We will have cut the growth in spending sufficiently to balance the Federal 

budget and to let working men and 

women keep more of what they earn to 

invest in their future, to invest in their 

children, to invest in their businesses. 

If we reject this amendment we will 

have a budget in the Senate that 

spends $175 billion more on nondefense 

spending over the next 7 years than the 

House budget does, and by not reducing 

spending as much, we will not give a 

tax cut to working families, we will 

not cut the capital gains tax rate, we 

will not transfer spending authority 

back to parents. We will continue to 

take the position, as this budget does, 

that the Congress of the United States 

knows better how to spend $175 billion 

than parents would know how to spend 

it, if they got to keep it to invest in 

their own children; that we, by spending $175 billion more than the House in 

this budget, believe we can do more to 

help the economy through Government 

subsidies than the private sector can 

do by cutting the capital gains tax rate 

and by having real investment in the 

private sector of the economy. 

A new day is dawning in the House of 

Representatives. They did something 

virtually unheard of in the modern era 

of American politics. They set out in 

black and white what they would do if 

we gave them a majority in the House 

of Representatives, as we did in the 

Senate, and then they did it. What we 

are doing here is fulfilling only half of 

our contract. 

Now, I know from having talked to 

enough of my colleagues that the fix is 

in, that there is talk about coming up 

with a compromise. There is discussion 

of cutting a deal so that we can go on 

in the Senate spending substantially 

more than the House is spending and 

yet we are going to act as if we are giving a tax cut, possibly in some kind of 

temporary tax-cut proposal. 

I do not believe that is what Americans had in mind when for the first 

time in 40 years they gave us a majority in both Houses of Congress. 

I think they believe that we were 

going to change the way our Government does our business. This amendment gives us a very, very clear choice. 

If you support the Contract With 

America, if you want to control spending so we can balance the budget and 

so that we can let working men and 

women keep more of what they earn to 

invest in their own children, in their 

own businesses, in their own future, 

then vote for this amendment and 

guarantee that the Contract With 

America will be embodied in the final 

budget we adopt. 

But if you want the Senate to be able 

to spend $175 billion more than the 

House budget, if you think we can 

spend money better than the people 

who earn it, then you want to vote no. 

I think that coming back later with 

some temporary tax cut, with some 

cut-a-deal proposal, undermines what 

we committed to the American people 

we would do, and I am opposed to it. I 

support this amendment, and I urge my 

colleagues to vote for it. 

The PRESIDING OFFICER. The time 

of the Senator has expired. 

All time on this amendment has expired. 

Mr. DOMENICI addressed the Chair. 

The PRESIDING OFFICER. The Senator from New Mexico. 

Mr. DOMENICI. Mr. President, I understand under the sequencing that the 

next amendment is Senator Exon’s 

amendment, and I ask unanimous consent that time on the Exon amendment 

be limited to the following: 15 minutes 

under the control of Senator EXON, 5 

minutes under the control of Senator 

DOMENICI, and there be no second-degree amendments in order to the Exon 

amendment. 

The PRESIDING OFFICER. Is there 

objection? The Chair hears none, and it 

is so ordered. 

Mr. EXON addressed the Chair. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. At this time I would like 

to yield for purposes of a statement on 

the budget to the Senator from Montana for 10 minutes. And then we will 

proceed, if it is all right with the manager of the bill, with the Exon amendment. 

Mr. DOMENICI. I thank the Senator. 

Mr. President, let me just ask, if I 

could, we have made some commitments that after the Senator from Nebraska we have a defense amendment. 

Then after that the Senator has told us 

Senator FEINGOLD——The Senator has 

no plan beyond that? 

Mr. EXON. No plan. 

Mr. DOMENICI. We would like very 

much to try to reduce the time. We are 

going to have Senator THURMOND reduce the time to one-half hour and 

maybe we can start doing half hours or 

less regularly. But that will be the 

next one after this. 

I thank the Senator. 

Mr. EXON. Mr. President, with regard to the vote on the Gramm amendment, I ask unanimous consent that 

the vote in relation to the Gramm 

amendment occur in the stacked sequence at a time to be announced by 

the two leaders and that no second-degree amendment be in order thereto. 

The PRESIDING OFFICER. Is there 

objection? Without objection, it is so 

ordered. 

Mr. DOMENICI. I should have made 

that request. I failed to, and I thank 

the Senator for making it for me in my 

behalf. 

Mr. EXON. I yield 10 minutes to the 

Senator from Montana. 

The PRESIDING OFFICER. The Senator from Montana is recognized. 

Mr. BAUCUS. Mr. President, I rise to 

discuss the Budget Resolution. 

PROTECTING THE AMERICAN DREAM

The Budget Committee has given us 

a sound accountant’s budget. It calls 

for the downsizing or elimination of 

many programs that have outlived 

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S7180 CONGRESSIONAL RECORD— SENATE May 23, 1995 

their usefulness. It uses much more realistic assumptions than the House 

budget. 

It would put us on the path toward a 

balanced budget. That is a goal I 

strongly support. And I hope we will 

write it into the Constitution by passing the balanced budget amendment. 

But, as we work to live more within 

our means, it is more important than 

ever that we set the right priorities. 

A budget is, after all, more than 

numbers and programs. It is people. It 

is middle class Americans working 

harder than ever just to make ends 

meet. It is middle class parents who 

scrimp and save in order to realize the 

dream of sending their kids to college. 

It is our seniors—that generation of 

Americans who worked so hard to build 

our economy while, at the same time, 

winning World War II and the cold war. 

They have earned a right to live with 

the independence and dignity that 

Medicare and Social Security help provide. 

And it is our farmers—the families 

who have worked so hard and so successfully to feed America and the entire world. 

For me, the ultimate test of any 

budget is how it affects these ordinary 

middle class Americans. Are they being 

treated fairly? And, if they work hard 

and play by the rules, will they share 

in the American dream of building a 

better life for themselves and for their 

children? 

At the outset, let me provide one example where I firmly believe this budget sets the wrong priorities. It proposes 

to cut just over $10 billion from the 

farm program. This will make American agriculture less competitive in 

foreign markets and cause serious financial hardship for our farmers. 

At the same time, it recommends 

funding an even greater amount for the 

NASA space station—a scientific boondoggle that has a long history of cost 

overruns. It is time to get our priorities back down to Earth by eliminating the space station and restoring 

funding for the farm program. 

While I believe there is room to make 

such commonsense changes to this 

budget, it contains a more fundamental 

flaw. While the very wealthy get a free 

ride—and maybe a big tax break—

working families and the elderly are 

called upon to sacrifice. 

The commentator Kevin Phillips—a 

Republican—recently pointed this out. 

Here is what Mr. Phillips had to say 

about this budget process: 

[This] legislation . . . especially as put forward by the House of Representatives—has 

major overtones of special-interest favoritism and income redistribution. Spending 

on government programs—from Medicare to 

home-heating oil assistance—is to be reduced in ways that principally burden . . . 

the middle-class while, simultaneously, 

taxes are to be cut in ways that predominantly benefit the top one or two percent of 

Americans. . . . We should be talking about 

shared sacrifice. Instead, it’s senior citizens 

. . . and ordinary Americans who will see 

programs they depend on gutted while business, finance and the richest one or two percent—far from making sacrifices—actually 

get new benefits and tax reductions. 

Over the past 25 years, the rich in 

this country have gotten a lot richer. 

Back in 1969, the wealthiest 1 percent 

of Americans controlled about 20 percent of our national wealth. Yet today, 

this figure has skyrocketed to nearly 

40 percent. And that leaves a smaller 

piece of the pie—a smaller piece of the 

American dream—for the middle class. 

Wealth is no crime. We should encourage risk taking and investment by 

business. But it is time for the most 

wealthy Americans to get out of the 

wagon and help the rest of us—seniors, 

working families, farmers, and students—pull it across the line to a balanced budget. 

MONTANANS ARE ALREADY PULLING THE WAGON

And most Montanans are already 

doing all they can to pull this wagon. 

Montana is a great place to live. But 

it can be a tough place to make a living. The average Montana family 

works hard, but takes in less than 

$25,000 each year. 

That is not a lot of money to put food 

on the table, to pay the mortgage, to 

make the car payment, and to save for 

the kids’ education. 

And, with each passing year, things 

get even tougher. Prices rise; but 

wages stay flat. Last year, for instance, working Montanans just barely 

kept pace with inflation. And, if you 

lived in a fast-growing community 

with skyrocketing housing prices—

places like Missoula, Bozeman, Hamilton, or Kalispell—you almost certainly lost ground. 

It is every bit as difficult for most of 

our senior citizens. All too often, Montana seniors living on fixed incomes 

just cannot make it. When you go into 

a fast-food restaurant or convenience 

store in Montana, you are just about as 

likely to be waited on by a senior citizen as you are by a teenager. 

It is not that Montanans are afraid of 

hard work. In good times and bad, we 

have always done what it takes to 

make ends meet and build a better life 

for our children. 

But we cannot do that when the Government keeps reaching into our wallets and gives nothing back in return. 

And, when you get to the bottom line, 

that is what this budget means to most 

Montanans. It is a tax; a tax on our 

seniors; a tax on our property owners; 

a tax on our parents; a tax on our students; a tax on our consumers; and a 

tax on our working families: 

The cuts in Medicare are a back door 

tax on Montana seniors who will end 

up paying an additional $900 each year 

for health care. And, sadly, some seniors living on fixed incomes will be 

forced to rely on their children and 

grandchildren to make up the difference. 

The cuts in education are a back door 

tax on Montana students, parents and 

property owners. This budget would 

eliminate 33 percent of the Federal investment in educating our children. 

Consequently, States and local school 

districts are bound to face the prospect 

of raising local property taxes in order 

to make up the difference. 

Beyond this, the proposed increased 

costs for the student loan program 

amount to nothing more than an increased tax on our students and parents working to send their kids to college. For example, the costs of a $17,000 

undergraduate student loan are estimated to increase by almost $5,000 over 

the life of the loan. And it you are a 

teacher in a rural Montana school district making—let us say—just $17,000 a 

year, that translates into a large 

chunk of your monthly paycheck just 

to pay off your student loan. 

And, finally, this budget includes an 

expensive surprise for electric ratepayers in eastern and central Montana. 

The proposed sale of the Western Area 

Power Administration [WAPA] will increase their electric bills, probably by 

about a third. And, ironically, WAPA is 

not subsidized. It is a program that 

protects ratepayers while also making 

money for the Government. 

FORGET POLITICS: USE A LITTLE COMMON SENSE

Despite these flaws, I believe this 

budget could be salvaged. Many of the 

cuts it proposes make sense. All it 

would take is agreement—bipartisan 

agreement—to rethink our priorities 

and find a way to protect rural America and restore funding to education 

and Medicare. 

If we put partisanship aside, we could 

get the job done. All it would take is a 

little common sense. 

First, let us bring our priorities down 

to Earth. Let us kill the space station 

and protect the family farmer. The 

costs are about the same. But the benefits of providing a stable supply of food 

and fiber for America and the world are 

far greater. 

This budget also sets aside $170 billion to eventually provide tax relief—

most of it probably going to the very 

wealthy. It is just common sense that 

we should use these funds to protect 

Medicare and education. If we did that, 

this budget would be a good start; 

something I could work with. 

Unlike some in my political party, I 

do not believe we should spare just 

about every domestic program and 

take a meat ax to the defense budget. 

There must be real cuts in a broad 

range of Federal programs. 

Here are seven areas where we can 

make a good start: 

First on my list is foreign aid. I am 

sick and tired of seeing the United 

States pay more than its fair share to 

support wasteful organizations like the 

United Nations and the World Bank. It 

is high time we demand that other 

countries pay their fair share of the 

U.N. budget. Moreover, I was pleased to 

see that this budget calls for a significant cut in funding for the U.S. Agency 

for International Development. 

Second, I am tired of seeing the 

United States spend billions of dollars 

for the defense of countries like Korea 

and Japan. While those countries do all 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7181 

they can to keep our products out of 

their market. It is time that they 

share more in the burden of their own 

national defense. 

Third, I also agree with the Budget 

Committee’s call to abolish the Arms 

Control and Disarmament Agency. We 

do not need to spend an additional $60 

million on this agency when we already 

have the Defense, State, and Energy 

Departments to do the same thing. It is 

time to get rid of it. 

And the same is true of a boondoggle 

called TV Marti, a wasteful Federal 

program that attempts to broadcast 

sitcom reruns to Cuba. 

Fifth, I was encouraged to see that 

the Budget Committee recommends 

the abolition of the Department of 

Commerce. This bureaucratic behemoth—a mish-mash of agencies ranging from the National Institute of 

Standards and Technology to the National Marine Fisheries Service—has 

long lacked a clear mission. 

Let us move those Commerce programs that are worth saving—like the 

Economic Development Administration that just helped create over 700 

high-wage jobs in Butte—to other departments. And let us scrap the bureaucratic over head and the Commerce programs that have outlived 

their usefulness. 

Sixth, I also believe the Budget Committee missed another opportunity to 

clean house by abolishing a second 

Cabinet Department. There is no better 

example of a failed Great Society program than the Department of Housing 

and Urban Development. 

HUD’s history is one of scandal, 

waste, and failed housing projects; 

places where drug dealers and other 

criminals intimidate and prey upon 

women and children. I believe we can 

find ways, through block grants and 

tax incentives, to promote good, affordable housing without HUD’s expensive 

and too often failed bureaucracy. 

And seventh—last but certainly not 

least—welfare is another place we must 

make savings. I intend to work on the 

Finance Committee to bring the costs 

of this program down. And, just as importantly, we must restore the value of 

the American work ethic to our welfare 

program. I hope Democrats and Republican can work together to make this 

happen. 

CONCLUSION

In closing, we all need to make sacrifices. We need to bring the budget 

into balance and give our children 

some relief from debt. 

I go home just about every weekend. 

And I hear it time and time again, 

Montanans are willing to do their part 

to bring down the deficit. In order to 

get this done, they are willing to make 

great sacrifices. 

They ask only one thing in return: 

fairness. They want to know that no 

one region or class of people is getting 

a free ride; that we are all pulling the 

wagon together toward a balanced 

budget. 

I wish that were the case with this 

budget resolution. But it is not. We can 

do better. We can be fair. We can set 

the right priorities. And we owe the 

people we represent nothing less. 

The PRESIDING OFFICER. The time 

of the Senator has expired. 

Mr. BAUCUS. I thank the Chair and 

I thank the Senator from Nebraska. 

The PRESIDING OFFICER. Who 

yields time? 

AMENDMENT NO. 1124

(Purpose: To restore funding for seniors, education, agriculture, working families, veterans, and other Americans, using amounts 

set aside for a tax cut) 

Mr. EXON. Mr. President, I send an 

amendment to the desk on behalf of 

myself and Senators LAUTENBERG, HARKIN, KENNEDY, MURRAY, BREAUX, 

DASCHLE, and DODD, and ask for its immediate consideration. 

The PRESIDING OFFICER. Without 

objection, the Gramm amendment is 

temporarily set aside. 

The clerk will report the amendment. 

The legislative clerk read as follows: 

The Senator from Nebraska [Mr. EXON], 

for himself, Mr. LAUTENBERG, Mr. HARKIN, 

Mr. KENNEDY, Mrs. MURRAY, Mr. BREAUX, Mr. 

DASCHLE, and Mr. DODD, proposes an amendment numbered 1124. 

Mr. EXON. Mr. President, I ask unanimous consent that reading of the 

amendment be dispensed with. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

The amendment is as follows: 

On page 74, strike beginning with line 12 

through line 12 on page 77 and insert the following: ‘‘budget, the appropriate budgetary 

allocations, aggregates, and levels shall be 

revised to reflect—

‘‘(1) $100,000,000,000 in budget authority and 

outlays of the additional deficit reduction 

achieved as calculated under subsection (c) 

for legislation that reduces the adverse effects on medicare and medicaid of—

‘‘(A) increased premiums; 

‘‘(B) increased deductibles; 

‘‘(C) increased copayments; 

‘‘(D) limits on the freedom to select the 

doctor of one’s choice; 

‘‘(E) reduced quality of health care services caused by funding reductions for health 

care providers; 

‘‘(F) reduced or eliminated benefits caused 

by restrictions on eligibility or services; 

‘‘(G) closure of hospitals or nursing homes, 

or other harms to health care providers; or 

‘‘(H) other costs to beneficiaries; 

‘‘(2) $18,000,000,000 in budget authority and 

outlays of the additional deficit reduction 

achieved as calculated under subsection (c) 

for legislation that reduces the adverse effects on discretionary spending on education 

and $12,000,000,000 in budget authority and 

outlays for legislation that reduces the adverse efforts on direct spending for education; 

‘‘(3) $10,000,000,000 in budget authority and 

outlays of the additional deficit reduction 

achieved as calculated under subsection (c) 

for legislation that reduces the adverse effects on direct spending within the jurisdiction of the Committee on Agriculture; 

‘‘(4) $17,000,000,000 in budget authority and 

outlays of the additional deficit reduction 

achieved as calculated under subsection (c) 

for legislation that restores the full current 

law earned income tax credit under section 

32 of of the Internal Revenue Code of 1986; 

‘‘(5) $3,000,000,000 in budget authority and 

outlays of the additional deficit reduction 

achieved as calculated under subsection (c) 

for legislation that reduces the adverse effects on programs for veterans; and 

‘‘(6) $10,000,000,000 in budget authority and 

outlays of the additional deficit reduction 

achieved as calculated under subsection (c) 

which shall be subject to allocation by the 

Committee on the Budget, by majority vote. 

The amounts provided by paragraphs (1) 

through (6) shall be proportionally adjusted 

based on any increase or decrease in the projected allowance of $170,000,000,000. 

‘‘(b) REVISED ALLOCATIONS AND AGGREGATES.—Upon the reporting of legislation 

pursuant to subsection (a), and again upon 

the submission of a conference report on 

such legislation (if a conference report is 

submitted), the Chair of the Committee on 

the Budget of the Senate may submit to the 

Senate appropriately revised allocations 

under sections 302(a) and 602(a) of the Congressional Budget Act of 1974, discretionary 

spending limits under section 201(a) of this 

resolution, budgetary aggregates, and levels 

under this resolution, revised by an amount 

that does not exceed the additional deficit 

reduction specified under subsection (d). 

‘‘(c) CBO REVISED DEFICIT ESTIMATE.—

After the enactment of legislation that complies with the reconciliation directives of 

section 6, the Congressional Budget Office 

shall provide the Chairman of the Committee on the Budget of the Senate a revised 

estimate of the deficit for fiscal years 1996 

through 2005. 

‘‘(d) ADDITIONAL DEFICIT REDUCTION.—For 

purposes of this section, the term ‘‘additional deficit reduction’’ means the amount 

by which the total deficit levels assumed in 

this resolution for a fiscal year exceed the 

revised deficit estimate provided pursuant to 

subsection (c) for such fiscal year for fiscal 

years 1996 through 2005. 

‘‘(e) CBO CERTIFICATION AND CONTINGENCIES.—This section shall not apply unless—

‘‘(1) legislation has been enacted complying with the reconciliation directives of 

section 6; 

‘‘(2) the Director of the Congressional 

Budget Office has provided the estimate required by subsection (c); and 

‘‘(3) the revisions made pursuant to this 

subsection do not cause a budget deficit for 

fiscal year 2002, 2003, 2004, or 2005. 

‘‘SEC. 205. SCORING OF EMERGENCY LEGISLATION. 

‘‘Notwithstanding section 606(d)(2) of the 

Congressional Budget Act of 1974 and beginning with fiscal year 1996, the determinations under sections 302, 303, and 311 of such 

Act shall take into account any new budget 

authority, new entitlement authority, outlays, receipts, or deficit effects as a consequence of the provisions of section 

251(b)(2)(D) and 252(e) of the Balanced Budget 

and Emergency Deficit Control Act of 1985.’’. 

Mr. EXON. Mr. President, this 

amendment is very concise; it is very 

clear. We have cut down the time to 15 

minutes on our side and 5 minutes for 

the opposition. 

Essentially, this amendment would 

take $160 billion from the $170 billion 

reserved in the Republican budget for 

tax cuts for the rich and redistribute 

$100 million to Medicare and Medicaid; 

$30 billion to education; $17 billion to 

the earned income tax credit; $3 billion 

to Veterans Affairs; and $10 billion to 

agriculture. 

The largest part of this amendment 

has been offered in part or in total in 

previous amendments to alleviate the 

hit that we think is unfair on many of 

the programs as they were produced 

out of the Budget Committee. 

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S7182 CONGRESSIONAL RECORD— SENATE May 23, 1995 

We have discussed at length the distribution of taxes contained in the 

House Republican passed tax bill. It 

provides a $20,000 tax cut for taxpayers 

earning over $350,000. Fully 51 percent 

of the Republican tax cuts go to Americans with incomes over $100,000. 

We have to get our priorities back on 

track and that is what my amendment 

does. 

Let me walk my colleagues through 

the reasons for the redistribution of 

the $170 billion contingent fund. 

First is Medicare and Medicaid. My 

amendment restores $100 billion of the 

overall cut in Medicare and Medicaid is 

intended to reduce the adverse effects 

of increased premiums, deductibles and 

co-payments on beneficiaries. 

Most, if not all, of these add-backs 

would affect part B of the program and 

would not—I repeat—would not worsen 

the solvency of the HI trust fund. 

My amendment states that any addbacks will be structured in such a way 

to ensure that the fund remains solvent for the same time period attained 

through cuts made in this year’s reconciliation bill. 

I am restoring these reductions in 

order to protect the 1 in 4 Medicare 

beneficiaries who rely on Social Security for their only source of income. 

Second is Medicaid. Two-thirds of all 

Medicaid dollars are spent on seniors 

and disabled people. This is the only 

program which pays for long-term care. 

Many middle-income people who develop disabling conditions—like Alzheimer’s or Parkinson’s—end up spending all of their incomes for care. They 

often have nowhere else to turn but 

Medicaid. 

Under the Republican budget, nearly 

1 million seniors and disabled people 

could lose their coverage. This amendment would add back funding to reduce 

the hit on that population. 

The funding in my amendment could 

also be used to reduce the cuts to children. 

Third, is education which would receive $30 billion through this amendment. Over 500,000 graduate and professional students currently receive subsidized loans. Nearly 50 percent of fulltime, full-year students rely on the 

subsidized loans to pay for their education. 

Eliminating the in-school interest 

subsidy means graduate and professional students could have their total 

debt increase by $3,000 to $6,600 depending on how long they are in school. The 

subsidy is critical for these students, 

most of whom are independent and 

going back to school to pursue higher 

learning that is critical to the future of 

our Nation. 

My amendment also helps restore 

some of the Republican budget cuts to 

the impact aid program. 

Impact aid is a critical program that 

provides funds to school districts that 

educate children of military personnel, 

children who live on Indian lands, and 

children who live in federally subsidized housing. 

For school districts with large areas 

of Federal property within their boundaries, raising sufficient revenue to provide for the education of these children 

is a daunting challenge. Federal land is 

exempt from local property taxes—the 

mainstay of local education finance—

causing a greater tax burden on the 

residents and owners of non-Federal 

land. 

In my own State of Nebraska, Bellevue School District relies upon impact 

aid funding for almost 25 percent of its 

annual operating budget. Cuts in impact aid would be devastating to the 

quality of education for children of 

military personnel in Bellevue. My 

amendment softens the blow. 

Fourth is the EITC which would receive $17 billion. The EITC helps keep 

working families off of welfare. It also 

assists middle-class families who have 

sudden losses of income. 

The Republican budget cut for the 

EITC is particularly cruel since real 

wage growth has been slow, and many 

people are having to take lower-wage 

jobs as a result of downsizing and restructuring. 

Fifth, is veterans. My amendment 

adds $3 billion back to veterans programs. 

This Republican budget is a sad tribute to America’s men and women who 

have worn their country’s uniform. 

Let us be clear, by funding the VA’s 

medical system at the 1995 level for the 

next 7 years, the Republicans are dramatically cutting access to health care 

services for veterans’ across the country. 

The Republican budget also increases 

veterans’ contributions for GI bill education benefits. It increases the co-payment for prescription drugs for higherincome vets. 

Finally is agriculture. Mandatory agriculture spending is already projected 

to decline by 17 percent over the budget resolution timeframe. The Republican budget would cut an additional 20 

percent from these programs primarily 

CCC commodity programs. 

This amendment would ensure that 

farm programs make a fair contribution to deficit reduction without devastating the entire farm economy and 

severely hampering the ability of the 

Agriculture Committee to draft a 

workable farm program and a workable 

farm bill in the future. 

Finally, it would reduce the reconciled cut to the committee by $10 

billion and thus lessen the overall projected cuts from farm commodity programs from $12 billion to $2 billion. 

Finally, I would note that if the CBO 

scores this surplus differently, the 

numbers provided would be adjusted 

accordingly. 

The amendment does not allocate $10 

billion of the projected $170 billion tax 

cut now in the Republican budget. 

I intend to leave that amount open to 

be used to restore cuts in other programs that may have been unfairly hit. 

Or, it could be used as a cushion to further reduce the deficit and help us 

reach a balanced budget. 

Mr. President, I reserve the remainder of my time. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. DOMENICI. Is the Senator finished with his time? 

Mr. EXON. No, I have time. 

The PRESIDING OFFICER. The Senator from Nebraska has 5-1⁄2 minutes 

remaining, and the Senator from New 

Mexico has 5 minutes. 

Mr. DOMENICI. Actually, I only 

want to use 2 minutes. If the Senator 

will let me do that in wrap-up, I will 

let him finish and I will use only 2 minutes. 

Mr. EXON. Mr. President, I believe 

the arguments can be made pro and con 

and have been made pro and con on 

this amendment. Very simply in the 

time remaining—I will consider yielding back after making these closing 

statements. 

Once again, we are not attempting to 

change the date that we would balance 

the budget as prescribed in the Republican budget, we are not adding to the 

deficit, we are not adding to the national debt. We have been staying, as 

we have through all of these amendments—all of these amendments—within the parameters laid down, the overall figures of the Budget Committee. 

What we are simply saying is that 

rather than provide a kitty, if you will, 

in the Senate budget, which is clearly 

earmarked for tax cuts and is so established by the chairman of the committee in this resolution, an earmark 

of $170 billion dollars which could 

come, according to CBO, if we balance 

the budget by the year 2002, to simply 

take a portion of that $170 billion and, 

instead of cutting taxes, cut the hit on 

these programs that I have outlined. 

This amendment merely alleviates the 

substantial and unfair cuts in each and 

every one of them. 

I reserve the remainder of my time 

and may be in a position to yield back 

after the Senator has made his statement. 

Mr. DOMENICI. Mr. President, how 

much time do I have? 

The PRESIDING OFFICER. The Senator from Mexico has 4-1⁄2 minutes. 

Mr. DOMENICI. Let me speak very 

briefly, after which when time has been 

used up on the amendment, Senators 

should know that I plan to raise a 

point of order. 

Mr. President, what we have now is, 

as I view this, we have the budget resolution produced by the gallant 12 budgeteers from the Republican side. We 

have a budget resolution that gets to 

balance. In that, we decide that many 

programs have to be reformed, 

changed, some eliminated, but we say 

we are going to stop spending in the 

red. We are not going to charge our 

children with our bills any longer. In 

2002, we stop that. 

Now it just so happens, Mr. President, I say to fellow Senators, that in 

2002, according to the Congressional 

Budget Office, according to their 

economists and other economists, that 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7183 

essentially when you put down a balanced budget and you make it enforceable and you pass a whole batch of laws 

that change current entitlements so 

less is spent and they certify that for 

you and say you have a balanced budget, there is a dividend—the dividend 

could be in the neighborhood of $170 

billion—an economic dividend for doing 

what is right. 

What is right? What is right is to get 

in balance by the year 2002. So by doing 

what is right, the Republicans on the 

Budget Committee, and Republicans 

and hopefully some Democrats, when 

they vote for this budget resolution, 

have earned something for the American people. What have they earned? 

They have earned reduced long-term 

interest rates for starters —very significant for homeowners, auto buyers, 

for everyone, including business people 

and mothers and fathers sitting around 

talking about student loans. If they are 

affluent enough to pay their own student loans, there is less interest on 

those loans. That is what we get from 

that side. 

Indeed, there is a bonus of $170 billion 

that is kind of a surplus sitting there. 

We are now in the black and we have 

this surplus. What the Republicans say 

at this point in time is that we should 

transfer that $170 billion from a reserve 

fund to the tax writing committee and 

say to them, give the American people 

a modest dividend by cutting some 

taxes. Now, not rich people, not $300,000 

earners. We have said in this budget 

resolution that it will go—90 percent—

to middle-income Americans. That is 

the Senate’s position if they adopt 

ours. 

Let me say that, in a nutshell, Senator EXON would then say instead of 

doing that with that $170 billion, let us 

spend it. So we have a balanced budget 

and my good friend from Nebraska 

says, now, spend $100 billion of it on 

Medicare, spend $30 billion on education, spend $10 billion on agriculture, 

spend it on et cetera, et cetera. We 

hardly get to balance and we hardly 

get the dividend for Americans that 

they are entitled to, because most of 

them say, ‘‘Give us a balanced budget.’’

They are entitled to a bonus when we 

do what they have been telling us to 

do. So we say leave it there for a possible tax cut for Americans. 

Senator EXON would say for all of 

these good things, let us spend it, and 

all of a sudden we start spending again 

after we got in balance, and we add $170 

billion in spending. 

The purposes are good. Senators pick 

some very, very interesting programs 

that Americans are interested in but 

everybody is worried about. He says, 

use the dividend for them. We have explained them in detail. We believe we 

are going to make the Medicare trust 

fund solvent. We believe education is 

not going to get harmed under our assumptions. We believe we have been 

fair to agriculture, and on down the 

line. 

So I do not believe we ought to adopt 

the amendment. It is out of order 

under the Budget Act. When my time 

comes, I will so move. 

The PRESIDING OFFICER. The time 

of the Senator has expired. 

Mr. EXON addressed the Chair. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. How much time do I have 

remaining? 

The PRESIDING OFFICER. The Senator has 31⁄2 minutes. 

Mr. EXON. I will be very brief. I simply want to say that I have listened 

once again to my good friend and colleague from the State of New Mexico, 

my chairman. We do not happen to 

agree on this matter, but we happen to 

agree on many, many things. Time and 

time again, I have heard that those of 

us who realize that these programs are 

taking a considerable hit are being accused of being spenders if we do not try 

to alleviate some of the unfairness that 

I see in the Republican budget. 

When this debate first started, I complimented my talented friend from New 

Mexico for the courageous job he has 

done. Time and time again, I have said 

that we in the amendments that we offered in the committee, and the amendments we have offered on the floor, 

have not done anything to reach the 

goal that the Senator from New Mexico 

is espousing. We are simply asking, do 

we honestly feel that we should make 

some changes in the approaches on certain programs? I do not believe it is 

fair to say, nor do I think the American people are particularly concerned 

because their main worry is balancing 

the budget and keeping it balanced and 

to quit borrowing more money, which 

is crippling America with the interest 

we are paying on that borrowing. Suffice to say that we really believe that 

we can work with the Republicans, 

with Senator DOMENICI, if they would 

just listen to some of our pleas. 

I really think that the people of 

America would be most satisfied if we 

realistically face the challenge that we 

have to balance the budget and reduce 

the deficit. That is primarily the only 

thing that most of them are looking 

for. With that, I yield the remainder of 

my time and urge support of the 

amendment. 

Mr. DOMENICI. Mr. President, I 

yield myself 30 seconds off the bill. 

The PRESIDING OFFICER. The Senator from New Mexico is recognized. 

Mr. DOMENICI. Mr. President, it 

would be interesting to search the 

souls and hearts and minds of those on 

that side of the aisle to see, if this 

amendment were adopted, if they 

would vote for this budget resolution. 

It is most interesting. Take the dividend created through all of this hard 

work, tell us now here is how we would 

like it spent, then prevail on that and 

watch the budget go down in flames, 

because clearly we would not get very 

much support from that side of the 

aisle. We might get Senator EXON, but 

I will not even ask him. 

Mr. EXON. If the Senator will yield—

The PRESIDING OFFICER. The Senator has yielded himself 30 seconds. 

Mr. EXON. Off of my time. The Senator has made an interesting proposition. I would say to him that with all 

of the reservations that I have, if he 

will accept this amendment, he will at 

least get one vote on this side and, I 

think, considerably more. That may be 

a partial answer to his question, and I 

am acting in very good faith. 

Mr. DOMENICI. I agree. We may get 

one. 

Mr. DASCHLE. Mr. President, the 

Exon-Daschle amendment would reorder and re-balance the spending priorities in this proposed budget. 

Specifically, the amendment would 

shift funding from a proposed tax cut 

for the wealthiest Americans to several 

key programs upon which our national 

interests depend. The Exon amendment 

would restore $100 billion to Medicare, 

$30 billion to education, $17 billion to 

the earned income tax credit, $3 billion 

to veterans’ programs, and $10 billion 

to agricultural programs. The amendment would also exclude the proposed 

sale of the country’s Power Marketing 

Administrations, including the Western Area Power Administration, from 

the budget. All of these are important 

priorities for our Nation and, especially, for rural America. 

This amendment, like the amendments we offered yesterday, are completely paid for. It does not add one 

penny to the deficit. 

Yesterday I spoke of the importance 

of the restoration of Medicare funding, 

and, earlier today, I referred to the importance of the earned income tax 

credit. So, today, I will focus on the 

other elements of this amendment. 

First, the amendment would restore 

$30 billion in education funds. The underlying budget resolution proposes to 

balance the budget at the expense of 

educating our youth. That is unacceptable. It is myopic, and it is a false 

economy. The next generation cannot 

afford to be shortchanged in this manner. Educational investments are one 

of the best investments this country 

can make, especially as our youth prepare for the 21st century. 

This amendment, which provides $30 

billion to restore funding for critical 

education programs, will help young 

Americans and their families by restoring funding in student loans and education programs. 

The $30 billion restores funding for 

the student loan in-school interest subsidy and other critical programs such 

as Title 1, Pell grants, Impact Aid, special education, and Safe and Drug-free 

Schools. 

Impact Aid is especially important to 

South Dakota. Last year the program 

received a $70 million reduction in fiscal year 1995 funding. Further reductions are intolerable. These funds—

which represent the money the Federal 

Government is obligated to pay to reimburse local school districts for Federal displacement of the local tax 

mmaher on MIKETEMP with SOCIAL SECURITY NUMBERS

S7184 CONGRESSIONAL RECORD— SENATE May 23, 1995 

base—are absolutely critical to over 50 

schools in my State, and hundreds of 

schools throughout the country, that 

depend on Impact Aid to meet our children’s basic educational needs. 

The Impact Aid program provides 

critical dollars to over 50 schools in 

South Dakota. These payments are not 

a Government subsidy. Quite simply, 

their purpose is to compensate school 

districts for the loss of taxable revenue 

from what once was local taxable land. 

The message in the continued trend of 

decreased funding is that Congress has 

decided we do not need to uphold our 

obligation to the school districts that 

rely so greatly on these funds. 

In the McLaughlin school district in 

South Dakota the Impact Aid funds 

represent approximately 37 percent of 

the school’s budget; in the Lake Andes 

school district, 20 to 25 percent of their 

budget comes from Impact Aid monies; 

30 percent of the Dupree school’s general fund revenue budget is generated 

by Impact Aid funds; in Smee, South 

Dakota, if Impact Aids funds continue 

to dwindle, they will be unable to operate; in Pollock, South Dakota, they 

would have to close their doors if this 

funding is eliminated. 

The list goes on and on, Mr. President. This means that teacher pay, 

books, facilities, desks, buses—everything it takes to run a school—is dependent on whether this Congress lives 

up to the commitment that was made 

to these schools when the lands in 

their districts were taken. 

I simply ask this question of my colleagues. Is it fair to eliminate a program that was designed to help alleviate a very clear Federal burden that 

was imposed on certain local communities and school districts because the 

Federal Government decided to acquire 

land in their particular district? The 

answer is no. This is a Federal responsibility, not a Federal subsidy. 

The Exon-Daschle amendment would 

also restore $3 billion in funding for 

veterans’ programs, including veterans’

health care. In light of the budget’s 

proposed Medicare cuts, the cuts in VA 

funding are especially egregious, for reduced Medicare funding will undoubtedly lead to increased pressure on, and 

a shift in costs to, the VA health care 

system. As my colleagues know, the 

VA health care system is an already 

overburdened and underfunded one, so I 

fail to understand how the majority 

justifies this proposal. 

The $3 billion in this amendment 

would ease some of that pressure and 

help us ensure that our fundamental 

commitment to the men and women 

who have served this Nation is fulfilled. To do otherwise sends exactly 

the wrong message to veterans and the 

men and women who currently serve in 

the Armed Forces. 

While Senator EXON and I will talk 

more about the budget resolution’s 

treatment of agriculture tomorrow, 

when we will offer an amendment to restore some of the agricultural funding 

cut in the Republican budget, I want to 

take a moment to speak on that issue 

today. This amendment would restore 

$10 billion of the agricultural funding 

cut in the budget proposal. 

The amendment directs the funding 

where it is most needed—to farmers 

who struggle each year to stay on the 

farm, to keep producing America’s food 

and fiber supply, and to families who 

strike a rough patch when there is job 

loss or other bad luck, people trying to 

put food on the table and keep their 

families together. 

The Republican budget, on the other 

hand, raids rural America to aid the 

comfortable. The Republican budget 

proposal would cut $45.9 billion out of 

the Agriculture Department over the 

next 7 years. That is likely to translate 

to around $12 billion in direct cuts to 

farm programs. It is a 20-percent cut in 

farm spending. It will contribute to the 

further deterioration of the economic 

and social fabric of rural America. No 

other sector of American life is being 

asked to absorb such a hit. We can not 

have a prosperous urban America 

riding on the back of an impoverished 

farm America. Yet that is what Republican budget cuts will provide. 

Farmers in South Dakota would see a 

devastating decline in their income of 

over $57 million. Other rural States 

will suffer similar pain. This budget is 

short-sighted for rural America and 

self-interested for the best-off. It is not 

a balanced, fair proposal. It is not a 

budget that sustains the American tradition of building a strong farm sector, 

a tradition that has enjoyed bipartisan 

support until this Republican majority. 

Finally, this amendment would prevent the budget resolution from counting the sale of the power marketing administrations and other assets toward 

deficit reduction. This would remove 

the incentive to sell the Power Marketing Administrations [PMAs] in 

order to balance the budget, and would 

help ensure that decision is made on 

the basis of what would be the best policy for the United States. Since the 

sale of PMA’s makes no economic 

sense, this amendment would substantially hinder their sale. 

I have been concerned because the 

Clinton administration has announced 

plans to sell three of the five PMA’s, 

including the Western Area Power Administration [WAPA], which markets 

power from the main stem dams on the 

Missouri River to South Dakota utilities and cooperatives. The administration has stated it intends to sell WAPA 

in 1998. 

Despite the fact that the administration stated in the budget that ‘‘the proposal will provide customer protection 

from significant rate increases,’’ I am 

deeply concerned that if this plan is approved by Congress and goes forward, 

then significant rate increases will be 

inevitable, affecting consumers and the 

overall economies of rural states such 

as South Dakota. 

The PMA’s are an example of a Government program that works well. 

South Dakota, the Western Area Power 

Administration, which markets power 

from the main stem dams along the 

Missouri River, has ensured a consistent and affordable supply of electricity. The program is being run on a 

sound financial basis, as it recovers all 

expenses relating to its annual operation and the initial construction expenses, with interest. By providing 

low-cost power, the PMA’s have substantially assisted in the economic development of many States. 

Any one-time savings from the sale 

of WAPA would be offset by long term 

revenue losses. The administration and 

the Republicans expect a one-time 

budget savings from the sale, that over 

the long-run, will not save the Federal 

Government any money at all. Since 

the operational and capital costs of the 

program are more than paid back currently, the sale simply allows the Federal Government to collect the debt 

faster. But since the debt is being paid 

back with interest now, there is no 

long-term financial benefit to the Government. Long-term revenue losses 

from the sale offset the near-term revenue gains. 

Some claim that the power marketing administrations can be sold 

without causing substantial rate increases. In reality, today’s rates are set 

at the lowest possible level, while still 

ensuring that the debt is paid off. If the 

power marketing administrations are 

sold, then it is likely that rates will increase substantially. Those who buy 

the PMA’s will attempt to maximize 

the return on their investment. And 

electric rates for existing Federal 

power customers will rise as a result. 

Some predict rate increases as much as 

300 percent for some communities. 

This sale will not only affect the 

economy of South Dakota or a few 

western States. Power marketing administrations sell power in 34 States 

across the country. I would ask all of 

my colleagues from these States to 

consider the impact of the sale of 

PMA’s before they cast their vote. 

In conclusion, Mr. President, we need 

to reduce the deficit. No one argues 

that point. This amendment restores 

essential funding—upholding our obligation to rural America, children, and 

the elderly—and is completely offset 

with the reserve fund set aside by the 

GOP to pay for tax breaks for the 

wealthy. Again, the amendment does 

not contribute one penny to the deficit. 

I urge the adoption of the amendment. 

Mr. DOMENICI. The pending amendment is not germane to the provisions 

of the budget resolution pursuant to 

section 305(b)(2) of the Budget Act. I 

raise a point of order against the pending amendment. 

Mr. EXON. Mr. President, pursuant 

to section 904 of the Congressional 

Budget Act of 1974, I move to waive 

section 305 of the act for the purpose of 

the pending Exon amendment. 

I ask for the yeas and nays. 

The PRESIDING OFFICER. Is there a 

sufficient second? 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7185 

There is a sufficient second. 

The yeas and nays were ordered. 

Mr. DOMENICI. I ask unanimous 

consent that this amendment also be 

stacked pursuant to the previous order, 

subject to leadership control on when 

we vote. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. EXON. Can I inquire of my friend 

at this time? 

Mr. DOMENICI. Yes. 

Mr. EXON. We have stacked a series 

of votes now. I do not believe we have 

indicated when we might start our voting so that everybody would be properly advised. Are we going to start voting in an hour, 2 hours, 3 hours? Could 

the Senator give us some information 

on that? 

Mr. DOMENICI. That is a very good 

question. I thank the Senator. We are, 

hopefully, going to get through with 

the Thurmond-McCain amendment, 

which is next, and then we will start 

voting about 4 p.m. That is the best I 

can give you at this point. 

Mr. EXON. I thank my friend from 

New Mexico. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. DOMENICI. I understand Senator 

THURMOND is next. I yield to him to 

offer his amendment. 

AMENDMENT NO. 1125

(Purpose: To restore adequate defense budget 

levels and to provide for offsetting reductions from nondefense discretionary spending and nondefense spending in the defense 

budget) 

Mr. THURMOND. Mr. President, I 

send an amendment to the desk and 

ask for its immediate consideration. 

The PRESIDING OFFICER. The 

clerk will report. 

The assistant legislative clerk read 

as follows: 

The Senator from South Carolina [Mr. 

THURMOND], for himself, Mr. MCCAIN, Mrs. 

HUTCHISON, Mr. WARNER, Mr. COATS, Mr. 

INHOFE, Mr. KEMPTHORNE, Mr. LOTT, Mr. 

SMITH, Mr. COHEN and Mr. SANTORUM, proposes an amendment numbered 1125. 

Mr. THURMOND. Mr. President, I 

ask unanimous consent that reading of 

the amendment be dispensed with. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

The amendment is as follows: 

On page 11, line 7, increase the amount by 

$9,600,000,000. 

On page 11, line 8, increase the amount by 

$4,000,000,000. 

On page 11, line 14, increase the amount by 

$15,900,000,000. 

On page 11, line 15, increase the amount by 

$8,300,000,000. 

On page 11, line 21, increase the amount by 

$17,700,000,000. 

On page 11, line 22, increase the amount by 

$10,800,000,000. 

On page 12, line 3, increase the amount by 

$15,100,000,000. 

On page 12, line 4, increase the amount by 

$11,700,000,000. 

On page 12, line 10, increase the amount by 

$11,300,000,000. 

On page 12, line 11, increase the amount by 

$11,500,000,000. 

On page 12, line 17, increase the amount by 

$11,400,000,000. 

On page 12, line 18, increase the amount by 

$11,600,000,000. 

On page 12, line 24, increase the amount by 

$11,300,000,000. 

On page 12, line 25, increase the amount by 

$10,000,000,000. 

On page 54, line 20, decrease the amount by 

$9,600,000,000. 

On page 54, line 21, decrease the amount by 

$4,000,000,000. 

On page 55, line 2, decrease the amount by 

$15,900,000,000. 

On page 55, line 3, decrease the amount by 

$8,300,000,000. 

On page 55, line 9, decrease the amount by 

$17,700,000,000. 

On page 55, line 10, decrease the amount by 

$10,800,000,000. 

On page 55, line 16, decrease the amount by 

$15,100,000,000. 

On page 55, line 17, decrease the amount by 

$11,700,000,000. 

On page 55, line 23, decrease the amount by 

$11,300,000,000. 

On page 55, line 24, decrease the amount by 

$11,500,000,000. 

On page 56, line 5, decrease the amount by 

$11,400,000,000. 

On page 56, line 6, decrease the amount by 

$11,600,000,000. 

On page 56, line 12, decrease the amount by 

$11,300,000,000. 

On page 56, line 13, decrease the amount by 

$10,000,000,000. 

On page 65, line 14, increase the amount by 

$9,600,000,000. 

On page 65, line 15, increase the amount by 

$4,000,000,000. 

On page 65, line 17, decrease the amount by 

$9,600,000,000. 

On page 65, line 18, decrease the amount by 

$4,000,000,000. 

On page 65, line 21, increase the amount by 

$15,900,000,000. 

On page 65, line 22, increase the amount by 

$8,300,000,000. 

On page 65, line 24, decrease the amount by 

$15,900,000,000. 

On page 65, line 25, decrease the amount by 

$8,300,000,000. 

On page 66, line 3, increase the amount by 

$17,700,000,000. 

On page 66, line 4, increase the amount by 

$10,800,000,000. 

On page 66, line 6, decrease the amount by 

$17,700,000,000. 

On page 66, line 7, decrease the amount by 

$10,800,000,000. 

On page 66, line 10, increase the amount by 

$15,100,000,000. 

On page 66, line 11, increase the amount by 

$11,700,000,000. 

On page 66, line 13, decrease the amount by 

$15,100,000,000. 

On page 66, line 14, decrease the amount by 

$11,700,000,000. 

On page 66, line 17, increase the amount by 

$11,300,000,000. 

On page 66, line 18, increase the amount by 

$11,500,000,000. 

On page 66, line 20, decrease the amount by 

$11,300,000,000. 

On page 66, line 21, decrease the amount by 

$11,500,000,000. 

On page 66, line 24, increase the amount by 

$11,400,000,000. 

On page 66, line 25, increase the amount by 

$11,600,000,000. 

On page 67, line , decrease the amount by 

$11,400,000,000. 

On page 67, line , decrease the amount by 

$11,600,000,000. 

On page 67, line 6, increase the amount by 

$11,300,000,000. 

On page 67, line 7, increase the amount by 

$10,000,000,000. 

On page 67, line 9, decrease the amount by 

$11,300,000,000. 

On page 67, line 10, decrease the amount by 

$10,600,000,000. 

On page 68, after line 12, add the following 

new paragraph: 

(3) It is the sense of the Senate that the 

Senate should waive all points of order that 

would preclude increasing non-defense spending in any one fiscal year by up to $2 billion 

and, at the same time, decreasing defense 

spending in any one fiscal year by up to $2 

billion, from the levels of discretionary 

spending in this section. It is further the 

sense of the Senate that defense spending 

may not be reduced by more than a total of 

$10 billion and non-defense spending may not 

be increased by more than a total of $10 billion over the seven years of the resolution, 

from the levels of discretionary spending in 

this section. 

Mr. THURMOND. Mr. President, I 

have been asked ‘‘What do Americans 

expect of their Armed Force?’’ I believe 

Americans expect a capable and ready 

force, ready to meet our Nation’s security needs, able to safeguard our national interest and maintain our position as a world leader. The budget resolution from the Senator from New Mexico was a good effort. It required many 

hard decisions. The problem remains 

that the planned defense budget, as offered in the budget resolution, does not 

meet the needs of our Armed Forces or 

give us the ability to meet our global 

commitments. 

We live in a dangerous world. It is 

our responsibility not to repeat history 

and drastically reduce defense. This 

path will leave our forces in a dangerously unprepared state, and we will 

pay the price in the future. The international environment requires the 

United States to maintain a strong defense to deter aggression and maintain 

our vital interests. The Armed Services 

Committee has already received indications that the Defense Department is 

planning further end strength reductions to pay for needed modernization. 

The Bottom-Up Review described a 

minimum force, said to be necessary to 

support our military strategy. This review was not based on strategy. Force 

structure levels were too low, and the 

required modernization was mortgaged. 

Over the last year, the Armed Services Committee has continued to hear 

testimony concerning present and future readiness problems. Lack of funds 

is placing combat readiness in danger. 

The ability of our commanders in the 

field to maintain their forces is being 

jeopardized by an underfunded program. GAO and other sources have estimated shortfalls in defense to range 

from $20 billion to $150 billion over the 

next 6 years. Defense spending has been 

reduced every year since 1985, and as a 

percentage of gross domestic product is 

at pre-World War II levels. Modernization and procurement accounts remain 

at 50-year lows as modernization 

projects are continually pushed farther 

into the future or canceled all together. This is a trend that cannot continue. The defense budget, in the budget resolution, simply does not provide 

the minimum resources necessary to 

sustain our force or meet the Department’s pressing needs. 

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S7186 CONGRESSIONAL RECORD— SENATE May 23, 1995 

At the same time, requirements for 

our service men and women have not 

decreased. Instead, contingency operations and other deployments have increased requirements for American 

forces, placing greater stress on our 

service members, family members, and 

their equipment. These deployments 

have a price and are taking a toll on 

our force readiness. We must support 

our forces and not cripple our Nation’s 

defense. 

Our responsibility is to ensure that 

the bill for these funding shortfalls is 

not paid for by the sacrifice of men and 

women in our Armed Forces. These 

young Americans have been asked to 

live without proper housing and barracks, to make do with constrained 

training, and do without new systems 

and technology, because we cannot afford it. Quality-of-life programs have 

been ignored to support increasing operating tempos. Benefits are continually under review for further reductions. We should expect increasing recruiting and retention problems, if we 

do not support these young Americans 

who are serving our Nation. 

I am strongly in favor of cutting Federal spending and reducing the deficit, 

but we must meet our national security needs. The first responsibility of 

government is to provide for its defense. This amendment reverses a dangerous trend and provides for that commitment. It does not increase the deficit in Senator DOMENICI’s budget resolution. The amendment improves the 

balance between current and future 

readiness. We provide for an adequate 

quality of life for service members and 

their families. We can take care of 

shortfalls in important new systems 

such as national and theater missile 

defense systems. We must not allow 

our Nation’s defense needs to be decided by purely fiscal considerations. If 

we do, then sooner than we may realize, a bill is going to come due. Hopefully, that bill will not be paid with the 

lives of our service men and women, 

and great harm to the Nation. 

Mr. President, how much time is remaining? 

The PRESIDING OFFICER. The Senator from South Carolina has consumed 5 of the 7 minutes. 

Mr. THURMOND. Mr. President, I reserve the remaining 2 minutes. 

I yield to the Senator from Arizona, 

Mr. MCCAIN. 

Mr. MCCAIN. I thank my distinguished leader and chairman of the 

Armed Services Committee, Senator 

THURMOND, and I also want to thank 

my colleague from Texas, Senator 

HUTCHISON, for their leadership, especially Senator THURMOND’s leadership, 

on this very important amendment. 

Mr. President, I am sorry we are 

short of time. This amendment deserves a great deal more consideration 

if Members believe, as I do, that the 

first priority of any government is to 

preserve the security of its citizens. 

Senator THURMOND has described the 

amendment. I would just like to remind my colleagues for 2 years, Republicans have charged that the administration has failed to maintain a defense 

adequate to confront the myriad challenges we face in this period of instability. Now it is our responsibility to 

correct that failing. 

I am disappointed that the budget 

resolution submitted to this body by 

Republicans is the Clinton numbers, 

the same numbers that we attacked so 

vociferously for 2 years. 

Mr. President, no decade in this century began more auspiciously than the 

1990’s. That gross impediment to 

human liberty, the Berlin Wall, was 

breached by the stronger forces of 

human yearning. The central security 

problem of our time, the possible clash 

of East and West on the plains of Germany, was resolved by the dissolution 

of the Warsaw Pact, the reunification 

of Germany, and the collapse of the Soviet Union. 

The euphoria that accompanied these 

events anticipated the imminent arrival of a new world order of independent democracies engaged only in 

peaceful commercial competition with 

one another. 

The resurrection of ancient conflicts 

and hideous barbarism in the Balkans; 

the reappearance of other incidents of 

irrational nationalism that had been 

sublimated by the cold war; the haunting familiarity of Zhirinovsky’s odious 

appeal to perverse patriotism; the accelerating proliferation of weapons of 

mass destruction; and the waging of 

over 50 conflicts around the world have 

dimmed our hopes for a more just and 

tranquil world, and reminded Members 

that we have interests and values that 

are still at risk in this promising but 

uncertain world. 

The world is still a very dangerous 

place. American vigilance and struggle 

are required now more than ever. There 

are numerous potential threats to our 

national security in the world today: 

In North Korea, one of the world’s remaining Communist dictatorships 

seeks to acquire nuclear weapons, and 

this administration has failed to exercise the decisive leadership necessary 

to halt, once and for all, the threat of 

nuclear warfare on the Korean Peninsula. 

In Asia, China has laid claim to the 

entire South China Sea and enhanced 

its claim with a massive buildup of its 

armed forces, including the acquisition 

of new submarines, marine forces, and 

aircraft carriers. 

In the Middle East, Iran poses a serious threat to the security of the region 

with their own efforts to acquire nuclear weapons, their longstanding support of terrorist movements, and their 

aggressive military buildup in the 

Straits of Hormuz. 

Iraq remains a potential trouble spot 

as Saddam Hussein maintains a stranglehold on political and economic 

power in that state. 

Russia’s involvement in its ‘‘near 

abroad,’’ the ongoing horrible conflict 

in Chechnya, and its advocacy of 

changes in stable arms control agreements causes serious concerns. 

Ethnic conflicts continue to rage 

from Sri Lanka to Rwanda. 

And in Bosnia, United States military personnel may soon be sent in 

harm’s way to assist in extracting 

international forces from the failed 

U.N. peacekeeping effort in that State. 

These and many other examples of 

instability in the world today make it 

imperative that we support an adequate national defense posture in this 

Nation. 

Mr. President, the defense budget has 

declined 35 percent in real terms between 1985 and 1994. President Clinton 

promised in his State of the Union Address in January of 1994, ‘‘* * * we 

must not cut defense further.’’ Yet, his 

fiscal year 1996 defense budget submission cuts defense for 4 more years, totaling another 10 percent decline by 

1999. 

Mr. President, what we are faced 

with is a Hobson’s choice. We are 

spending money to maintain a ready 

force. That money is well spent, and we 

still have the finest and highest quality men and women this Nation can recruit and maintain in our Armed 

Forces. However, in exchange for that, 

we are sacrificing totally, the modernization of our force. 

In 1985, we procured 325 tactical aircraft; in 1996, we will procure 289. In 

1985, we procured 80,000 missiles; in 1995 

we procured 3,000. In tanks, in 1985, we 

procured 2,680 tanks and other vehicles; 

in 1995, 34 tanks and vehicles. Ships, in 

1985, we procured 34; in 1996, we will 

procure 3. 

Mr. President, we cannot—we cannot—maintain the capability that won 

the Persian Gulf with the kind of lack 

of modernization that is part and parcel of this proposal. 

The PRESIDING OFFICER. The Senator from Arizona had 5 minutes, and 

has 4 minutes remaining. 

Mr. MCCAIN. Mr. President, I, not 

unlike other Members of this body, am 

a student of history. I am certainly a 

confirmed believer in the old adage 

that those who ignore the lessons of 

history are doomed to repeat them. 

In 1917 the United States of America 

was not prepared to go to war. In 1941, 

on December 7, America was not prepared to go to war. In June of 1950, 

when North Korea attacked across the 

38th parallel, the United States was 

not prepared to go to war. In the 1970’s, 

when we had a hollow Army, the 

United States was not prepared. 

We must understand that what we 

are doing here is mortgaging the blood 

and treasure of America by adopting a 

proposal which cannot meet our national security requirements and 

needs. It is an enormous responsibility 

of this body, to assume a responsibility 

in contravention to the knowledge, 

wisdom and advice of our military 

leaders and all objective observers, and 

that is that we cannot modernize our 

forces so victory, if conflict comes, can 

only be purchased through enormous 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7187 

expenditure of treasure, and far more 

important than that, American blood. 

Mr. President, I reserve the remainder of my time. I will use it at the end 

of the debate. 

The PRESIDING OFFICER. The Senator from New Mexico. 

Mr. DOMENICI. How much time does 

Senator THURMOND or MCCAIN have remaining? 

The PRESIDING OFFICER. The Senator has 27 minutes and 45 seconds remaining. 

Mr. DOMENICI. I am in control, 

technically, of the time in opposition. 

But, frankly, I want to give that opposition time to the distinguished Senator from Nebraska for his side. They 

are going to have the time in opposition, not the Senator from New Mexico. 

But I will reserve, now, before I give 

that over—I will keep 10 minutes for 

myself and Senator LOTT. He, I understand, will not be able to fit in, in the 

time allotted. I will arrange to give 

him that time, not in opposition but in 

favor. Is that correct? 

Mr. LOTT. That is correct. 

Mr. THURMOND. I yield 3 minutes to 

Senator WARNER. 

Mr. WARNER. Mr. President, over 

the past several days, I have listened 

closely to the debate over this budget 

resolution which, I believe, has the potential to set our Nation on the road to 

fiscal responsibility. I want to commend the Senator from New Mexico, 

Senator DOMENICI, for his courageous 

proposal which will balance the Federal budget by the year 2002. I support 

what he and the other Republicans on 

the Budget Committee intend to do 

with this budget resolution—eliminate 

the Federal deficit and relieve the 

enormous burden of debt that we are 

currently loading on the backs of our 

children and grandchildren. However, I 

take exception with the spending levels 

for defense included within the budget 

resolution before the Senate. 

Mr. President, I am concerned about 

the security of our Nation and the 

risks we face in a world that—despite 

the demise of the cold war—remains a 

very dangerous and unpredictable 

place. As we speak, our Armed Forces 

are preparing for the possibility of a 

mission to assist in the withdrawal of 

U.N. forces from the former Yugoslavia. Whether or not you believe that 

we should put U.S. forces at risk to 

carry out this mission, I am certain 

that every Senator in this Chamber 

would support funding to ensure that 

our forces are trained and equipped to 

facilitate the rapid accomplishment of 

this mission with minimal risk to the 

lives of U.S. military personnel. We 

learned in Operation Desert Storm that 

well-trained troops equipped with modern weapons and equipment suffer 

fewer casualities. 

Today we are facing a world proliferating with new threats based on centuries-old ethnic, racial and religious 

hatreds. 

The problem with preparing our 

forces to defend against threats in this 

new world of disorder is that we may 

not be able to anticipate where and 

whom we will have to fight. We will 

have to be prepared for the unexpected, 

for major regional crises that arise 

suddenly—in other words, for contingencies. The case in point is the gulf 

war. Prior to August 1990, no one ever 

expected we would end up in a major 

land war against Iraq. 

Fortunately, we had a superior military capability that was more than a 

match for Iraq. But, in the past, this 

has not always been the case. The outbreak of World Wars I and II and Korea 

found us woefully unprepared, and the 

result was many thousands of Americans lost in the opening days of those 

conflicts. Consequently, in an era of 

uncertainty, combined with multiple 

potential dangers, the No. 1 threat 

could be our own unpreparedness. 

Mr. President, the administration’s 

ways of dealing with these uncertainties was to conduct a Bottom-Up Review which resulted in a force structure that is supposed to be able to fight 

and win two nearly-simultaneous 

major regional contingencies. It is 

highly questionable, however, whether 

or not this planned force will be capable of meeting this requirement. There 

is also general agreement that the administration’s future years defense 

plan [FYDP] is inadequate. The General Accounting Office estimated that 

the FYDP may be underfunded by as 

much as $150 billion. 

The administration has made readiness a high priority at the expense of 

modernization of our military. They 

have kept personnel and readiness accounts funded at high levels, but because the overall budget is underfunded, modernization—the R&D and 

procurement accounts—have paid the 

bills. Procurement is at intolerably low 

levels. A Marine Corps general officer 

testifying at an Armed Services Committee hearing recently stated that the 

Marine Corps procurement budget was 

only about one-third of what it should 

be for the third straight year. ‘‘You 

can’t modernize on pocket change,’’ he 

told the committee. 

I should also point out that even with 

all of the administration’s emphasis on 

readiness, significant readiness problems have occurred within our military 

over the past year. 

Last September, three Army divisions reported readiness levels of C–3. 

Not since the days of the Carter administration, have that many divisions reported such poor readiness levels. 

Overall readiness for active Navy 

aviation squadrons declined from about 

75 percent in fiscal year 1990 to 61 percent last year. 

Funding shortfalls in the 2d Marine 

Air Wing’s flying hour program resulted in 11 of 30 squadrons reporting in 

the two lowest readiness categories (C–

3 or C–4) for the 4th quarter of fiscal 

year 1994. 

Admiral Boorda, the Chief of Naval 

Operations stated recently, ‘‘We have 

gone to the well and it is dry. We must 

fund training if we are to prevent a 

‘hollow force.’’’

Mr. President, I believe it is clear 

that our military services are underfunded in the administration’s proposed budget and future years defense 

plan. For the past 21⁄2 years, members 

of the Armed Services Committee have 

been expressing that view. Every Republican on the Armed Services Committee signed a letter to the chairman 

of the Budget Committee recommending that fiscal year 1996 funding 

for defense be frozen at last years level, 

adjusted for inflation. This would result in a $12.5 billion increase over the 

President’s request for fiscal year 1996. 

Unfortunately, the Budget Committee’s proposal accepts the administration’s recommended budgets now and 

in the outyears for defense. If we accept the administration’s budgets, then 

the responsibility for shortfalls in defense funding and the resulting deficiencies in our Armed Forces will lie 

with those of us in the Congress. 

Mr. President, in his State of the 

Union Address in 1994, the President 

implored the Congress not to cut defense further—that defense had been 

cut enough. Then, this year, in his 

budget request for fiscal year 1996, the 

President recommended $5.7 billion less 

than he recommended last year—in 

real terms, this is over $13 billion less 

than last year. Mr. President, that 

sounds like a cut to me. 

There are those who state that defense should pay its fair share. Mr. 

President, I maintain that defense has 

already paid more than its fair share—

that defense has already been cut too 

deeply. Fiscal year 1996 represents the 

11th consecutive year of declining defense budgets—the longest continuous 

decline in post WW II history. DOD 

spending as a share of the Federal 

budget has declined from 42 percent in 

1968 to 18 percent in 1994 and continues 

to decline. 

As I indicated earlier, Defense procurement spending has suffered greatly 

under the Clinton administration. During the hollow force days of the mid1970’s, procurement spending was only 

about $46.7 billion; in 1985, at the 

height of the Reagan buildup, procurement spending reached $120 billion; in 

1995, procurement spending is down to 

$39.4 billion—representing a 67-percent 

decrease from fiscal year 1985 and 16- 

percent less than the mid-1970’s low 

point. 

Mr. President, when we fail to modernize our forces with new weapons and 

equipment, we not only cause maintenance and operating costs to rise, but 

more importantly, we condemn our future soldiers, sailors, airmen, and marines to fight their battles with obsolete weapons and equipment. 

Mr. President, when I asked an old 

Marine sergeant, who was a combat 

veteran of several wars, why he was so 

sure there would be another war, he replied, ‘‘There always has been.’’ It is 

certain that our forces will be called 

upon again to go into battle. The time 

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S7188 CONGRESSIONAL RECORD— SENATE May 23, 1995 

may be sooner than we think. I hope 

the Congress will not put our servicemen and women at greater risk because 

we cannot find additional funds from a 

budget of almost $1.3 trillion. 

I support the Thurmond-McCain 

amendment and urge my colleagues to 

vote for it also. 

Mr. DOLE. Mr. President, I rise 

today in support of the Thurmond-Stevens-McCain amendment. I commend 

my colleagues for their efforts to ensure an adequate defense budget. Under 

this amendment, defense spending 

would be increased to meet the levels 

approved by the House last week. However, the measure is deficit neutral in 

each year of the resolution, and keeps 

us on path to achieve a balanced budget by the year 2002. 

We are committed to cutting Federal 

spending. But we must ensure that our 

military is prepared to meet future 

challenges. Over the past few years, the 

Clinton administration has sacrificed 

the readiness and modernization of our 

forces. However, around the world, potential enemies are increasing and 

modernizing their military capabilities. 

For the past 2 years, the administration has justified its reduction-in-force 

structure by promising to provide our 

troops with the most modern technology available. During last year’s 

hearings on the fiscal year 1995 budget, 

General Shalikashvili stated, and I 

quote: 

The structure is adequate only if we stick 

with two linchpins: We must improve our capabilities, and we must improve and maintain our readiness. 

Unfortunately, this has turned out to 

be empty rhetoric. Procurement spending and procurement rates are at their 

lowest levels in 45 years. Despite promises to enhance force capabilities, modernization has come to a virtual standstill. The result is that our Armed 

Forces are smaller, but not more capable. 

Where President Clinton has failed to 

recognize the long-term needs of the 

military, we in Congress must take the 

lead. Our defense budget must balance 

our need to maintain near-term readiness and our need to provide enhanced 

capabilities for the future. It must prepare us for tomorrow’s challenges. 

Failure to do so will jeopardize the security of this Nation. I urge my colleagues to support this amendment. 

Mr. COHEN. Mr. President, much of 

the debate over the defense budget in 

recent weeks and months has been 

based on misperceptions and halftruths. 

A good example can be found in one 

editorial entitled ‘‘Grasping the Obvious,’’ which lashed out at defense 

spending, claiming that President Clinton wanted to increase the defense 

budget and that: 

The Defense Department has somehow become untouchable, taking a place alongside 

Social Security and Medicare in the pantheon of sacrosanct Federal enterprises. 

The editorial went on to argue that 

defense budgets should be reduced just 

as much if not more than other areas 

of Federal spending, and that the Pentagon and the White House would have 

to realize that in a time of ‘‘diminishing military threats,’’ deep cuts 

would have to be made. 

The writer is not alone in failing to 

grasp the obvious. The post-cold-war 

period has seen a proliferation of efforts to cut American defense budgets 

dangerously deeply. These efforts have 

been accompanied by accusations that, 

in an era of budget balancing and deficit reduction, the military is not absorbing its fair share of cuts. 

Nothing could be further from the 

truth. 

Far from being placed on a pedestal, 

protected from America’s budget cutting zeal, defense spending has already 

been subjected to a frenzy of profound 

and often damaging reductions. The defense budget has been cut every year 

for the past decade, for an overall real 

decline of some 35 percent. In contrast, 

real spending on Medicare and Social 

Security over the same period has increased 63 and 23 percent, respectively. 

The portion of the defense budget 

used to buy weapons and other equipment has already suffered a reduction 

of more than two-thirds over the past 

decade: 

A decade ago we purchased 720 tanks 

a year. Today, we buy none. 

Annual purchases of ships and aircraft have declined 80 and 87 percent 

respectively. 

Dozens of major weapons programs 

and more than a hundred smaller ones 

have been terminated. 

As the nonpartisan Congressional 

Budget Office has put it, the Pentagon 

has entered a ‘‘procurement holiday.’’

For the past decade, it has been defense that has borne the blows of the 

budget cutting axe as domestic spending has steadily grown. 

The very real reductions in defense 

budgets over the past decade may not 

seem important from the vantage point 

of defense spending critics, but for 

those whose job it is to ensure military 

readiness and to guarantee American 

security, the cuts have already made 

their tasks difficult to the point of 

being almost impossible. The question 

for these professionals is whether minimum levels of reliability and readiness can be ensured, given current 

spending cuts. 

Earlier this year, Gen. Carl Mundy, 

Commandant of the Marine Corps, 

warned: 

We are stretched thin. Actual operational 

commitments over the past 3 years have actually grown steadily and have greatly exceeded those predicted by either the Marine 

Corps assessment or the Bottom-Up Review 

* * *. We have not to date received sufficient 

resources to fund * * * minimum essential 

requirements * * * to provide a reasonable 

assurance that we can meet our commitments with operationally ready and effective 

forces, not only today, but throughout the 

program years.* * * 

This assessment has been echoed by 

senior officers in all of the Nation’s 

armed services. It illustrates the wellfounded concerns of those who understand the importance of readiness and 

modernization in military planning, especially in today’s uncertain world. 

The past few years have shown that 

the end of the cold-war standoff with 

Soviet Russia has not simplified and 

brought harmony to the world, rather 

it has increased uncertainty and made 

the world more susceptible to a host of 

festering regional conflicts. Many of 

these conflicts have the potential for 

escalation, spillover, and major destabilization in areas critical to the security and interests of the United States 

and our closest allies. 

While the United States is not the 

world’s policeman, we are the only 

global power, and we have global interests that can be threatened by regional 

powers, great and small. Defending our 

interests requires us to station forces 

abroad and to be able to project power 

around the globe. 

A brief glance around the world 

shows the variety of dangers the 

United States must be prepared to 

meet: 

Russian troops are turning Chechnya 

into a wasteland and Russian neighbors 

into colonies, while Russian engineers 

prepare to build nuclear reactors in the 

terrorist theocracy of Iran and Russian 

officials threaten the independence of 

the Baltics; 

China also plans to sell Iran nuclear 

reactors and seems intent on becoming 

a regional hegemon, claiming sovereignty over the strategic South 

China Sea, extending its coastal defense perimeter 10-fold out to 2,000 

miles, and backing these claims up 

with military deployments; 

Iran is aggressively pursuing nuclear 

weapons while also deploying Russianbuilt submarines and Chinese- and 

North Korean-built missiles in order to 

gain control of the Persian Gulf and 

dominate its neighbors; 

North Korea has violated last October’s nuclear agreement and continues 

to mass troops and artillery on the 

DMZ, making an Asian nuclear arms 

race and another Korean war real possibilities. 

NATO is edging closer to intervening 

in Bosnia in order to rescue the U.N. 

troops deployed there, which would put 

some 25,000 United States troops in the 

midst of a seemingly intractable war. 

Those who view this as merely a list 

of hypothetical risks unlikely to require American military deployments 

would do well to recall that since the 

end of the cold war, U.S. Armed Forces 

have been sent into action repeatedly 

on some 21⁄2 dozen operations. 

While members of the Armed Services Committee are on record as favoring increases in the defense budget, 

this amendment would merely slow the 

decline in defense spending over the 

next 7 years. Even if this amendment is 

adopted, defense spending will continue 

to decline in real terms for another 7 

years, resulting in 17 straight years of 

cuts in the defense budget. 

Given the tremendous cuts imposed 

on the defense budget in recent years 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7189 

and the great uncertainty we face 

around the world, we cannot continue 

to gut America’s Armed Forces. The 

military is already strained by the unprecedented number of peacetime operations it is being ordered to undertake. 

Mr. President, listening to the leaders of our Armed Forces and looking 

around the world, we are compelled to 

conclude that putting the brakes on 

military spending cuts is not merely a 

wise position, it is a national security 

imperative. 

I urge my colleagues to support the 

Thurmond amendment. 

Mrs. MURRAY. Mr. President, I rise 

in strong opposition to the ThurmondMcCain amendment, which seeks to increase defense spending by $68 billion 

over the next 7 years, and pay for that 

increase by making further cuts in domestic programs. 

In this era of shared sacrifice where 

no one is spared the budget ax—not 

children, seniors, nor veterans—I fear 

that those who would now ask the Senate to increase the level of defense 

spending simply do not understand the 

true war this country is fighting. 

Mr. President, it is America’s families who are on the front lines today, 

fighting to find a safe place to live, a 

sound education for their children, affordable health care, and job security. 

It is the war against crime, poverty, 

ignorance, and AIDS that needs to be 

this country’s priorities as we approach the next century. 

During the cold war, Americans made 

sacrifices here at home so that our national resources could be used to defeat 

communism around the globe. The Berlin Wall fell in 1989, and with it, the 

Warsaw Pact. The Soviet Union officially dissolved in 1991. We fought the 

war, and we won. 

In the aftermath of the cold war, I 

believe American families deserve to 

live in a safer and more stable world. 

They deserve to know that more of 

their tax dollars are going to educate 

their children and police their streets. 

The Republican budget before us 

today, which outlines their spending 

priorities for the next 7 years, makes 

deep cuts in programs for children, the 

poor, veterans, and the elderly, while 

insulating defense spending from cuts. 

And now we are asked to support an 

amendment which would add $68 billion 

more in defense spending, and to pay 

for that increase, American families 

would have to accept yet deeper cuts in 

domestic programs. 

Even without this amendment, let us 

remember what the Republican budget 

is asking of American families. 

Teachers and students are asked to 

accept dramatic cuts in education 

spending, worker training programs, 

and student loan assistance. 

Preschoolers and their parents must 

accept a 30-percent cut in Head Start 

funding, which will deny as many as 

100,000 low-income children the benefit 

of a preschool education. 

Rural Americans will be asked to accept 20-percent cuts in mandatory agriculture spending. 

Children and the elderly will be 

asked to shoulder $400 billion in Medicare and Medicaid cuts. In America 

today, one in four children, and one in 

three infants, are covered by Medicaid. 

The earned income tax credit, a program to help keep working families off 

welfare, will be cut by 11 percent. 

Our Nation’s scientific community 

must accept $25 billion in cuts for basic 

research. 

The budget blueprint before us increases the veterans’ contribution for 

GI bill education benefits, and freezes 

funding for the VA’s medical system at 

the 1995 level for the next 7 years, cutting access to health care for veterans 

around the Nation. Under the Republican proposal, the VA will be forced to 

close the equivalent of 35 of its 170 hospitals and deny care to over 1 million 

of our Nation’s vets. 

And if we accept the amendment now 

pending before the Senate, American 

families would be asked to accept even 

deeper cuts in education funding, crime 

control, and other important domestic 

programs. 

Proponents of this amendment point 

to recent declines in defense spending 

with alarm. While spending for our 

military is down from the mid-1980’s 

level, we must keep this trend in perspective. The United States today has 

the largest military budget and the 

most powerful military force in the 

world. 

The combined military budgets of 

Russia, Iraq, China, North Korea, 

Libya, Iran, Syria, and Cuba total $95 

billion annually. That is one-third the 

level of U.S. defense spending. Each 

year, the United States spends more 

than the next nine of the world’s biggest military spenders combined. 

In fact, this country spends so much 

for defense, even the Pentagon can’t 

keep track of it all. According to the 

GAO and the Pentagon’s inspector general, as well as the Pentagon’s Controller John Hamre, billions of defense 

dollars are lost year after year due to 

poor recordkeeping and lax accounting 

practices at the Department of Defense. 

According to GAO, each year the pentagon pays private contractors up to 

$750 million it does not owe them—with 

businesses often paid twice for the 

work they have done. And at this 

point, according to the Pentagon, there 

is really no way to retrieve these lost 

funds, or to stop the massive overpayments. 

Billions of dollars simply lost in the 

system, Mr. President, in an era when 

we are saying no to university scientists looking for cures to devastating 

diseases. 

Billions of dollars lost in the system 

when we are saying no to preschoolers 

who need HeadStart programs. 

Billions of dollars lost in the system, 

when we are saying no to our Nation’s 

elderly, who thought they could rely 

on Medicare in their final years. 

Billions of lost dollars when we are 

saying no to basic scientific research, 

which has fueled our economy for decades. 

At the very least, Congress should 

hold defense spending to the President’s level until the Pentagon can fix 

their payment procedures and bring 

some accountability to the system. We 

owe that much to the Nation’s taxpayers. 

Our debate today is about deficit reduction—which requires hard choices. 

Under the Senate budget plan, the 

United States will continue to maintain the strongest military in the 

world. Today the military’s share of 

the gross domestic product is 4.6 percent, which is higher than the entire 

Federal domestic discretionary budget 

combined 3.7 percent. 

And in the current international climate, where the United States remains 

the only military superpower, we are 

also the dominant economic and political actor on the stage. In this role, we 

must increasingly emphasize nonmilitary solutions to global conflicts—

diplomatic negotiations, multilateral 

efforts, and regional responses. 

But most of all, in order to project 

strength abroad, we must gain strength 

here at home. Our national security, in 

my view, will not be strengthened by 

yet more guns and missiles. We need to 

restore global economic leadership. We 

must invest in our children and their 

future—in their education and their 

health. We must rebuild our cities and 

our infrastructure, and invest in technology and scientific research. 

We must ensure that the economy 

our children inherit in the next century is sound and growing. 

Mr. President, I will end with a quote 

from Dwight Eisenhower, who observed 

in 1953, 

Every gun that is fired, every warship 

launched, every rocket fired signifies, in the 

final sense, a theft from those who hunger 

and are not fed, those who are cold and are 

not clothed. The world in arms is not spending money alone. It is spending the sweat of 

its laborers, the genius of its scientists, the 

hopes of its children. 

General Eisenhower had it right. Mr. 

President, I urge my colleagues to defeat the Thurmond-McCain amendment. 

Mr. COATS. Mr. President, I am a 

supporter of this historic budget. But I 

want briefly to comment on the level 

of defense spending it recommends—a 

level I believe is clearly inadequate to 

retain our long-term readiness and the 

quality of life of our men and women in 

uniform. 

Balancing the books is one of the 

most important duties of Government. 

But it is not the first duty of Government. That duty is the defense of our 

country, this means more than defending our borders. It means shaping a security environment that will be favorable to America in the future. It means 

providing our troops with the training 

they need and the equipment they require. 

The Armed Services Committee has 

spent a good deal of time and effort 

this spring, through hearings and briefings, exploring the current and future 

needs of our military. 

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S7190 CONGRESSIONAL RECORD— SENATE May 23, 1995 

Although the cold war is over—we 

have found that the demands we place 

on our military have not diminished. If 

anything, they have expanded—into 

quick deployments, in high-risk situations, under tremendous danger and 

strain. For example: 

Our shrinking forces in Europe—from 

314,000 prior to the fall of the Berlin 

wall and now rapidly approaching 

100,000—have been deployed in more 

missions in the last 5 years than in the 

previous 45 years. 

The average soldier now spends approximately 138 days each year away 

from home on extended, short notice 

deployments. This must be combined 

with extensive training to maintain 

key skills. 

Our Navy surface ships, and the men 

and women who man them, are deploying and training at tempos that keep 

them away from home in excess of 130 

days per year, on average. 

The Marines currently have 24,000 

people deployed overseas carrying out 

911 fast reaction assignments. Just to 

give you some concept of the pace of 

change in the Marines, the total manning level for the Marines has been stabilized at 178,000. During the last 5 

years, the Marine Corps downsized 

24,000 personnel—the same figure which 

is currently deployed. 

The Air Force has gone from 18 active fighter wings to 13 wings resulting 

in a four-fold increase in deployment 

obligations over the last 7 years—while 

drawing down the overall end strength 

by one third. These commitments have 

required a quadrupling of the total 

number of people deployed over the 

last 5 years. 

My point is this: A serious gap is 

opening between the military mission 

we define and the level of funding we 

provide. Unfortunately, the budget resolution before us continues this dangerous trend, which may leave our 

forces without the tools, training or 

equipment to fulfill future tasks we 

will ask of them. 

The Gulf war is our benchmark of 

American military success. It is an effort we must be able to duplicate, well 

into the future. But even that war was 

conducted under the most favorable 

circumstances. 

We had 6 months to move equipment 

and troops into the region. It is very 

unlikely we will enjoy that sort of advantage in other situations. 

Our training and logistics were given 

extensive time to put into place. 

Our opponent had inferior technology, and no known weapons of mass 

destruction. 

All the surrounding countries in the 

region were friendly. 

The international community was 

solidly behind us. 

As we plan for the next war—a war 

we hope will never come—it would be 

foolish to base our strategy on advantages we enjoyed in the last one. And I 

am deeply concerned we have squandered some of the advantages we can 

control. 

If we attempted today to engage in a 

major regional conflict, I believe we 

have placed artificial handicaps on our 

ability to project American power. Future enemies have gained from the lessons learned by Iraq, and will not allow 

a protracted buildup to take place. We 

would not be able to conduct such a 

war because the shortfalls in air and 

sea lift capabilities would prevent it. 

The drawdown in personnel over the 

last 4 years is another critical element 

in this debate. The proposed budget 

levels will not allow us to adequately 

address these shortfalls. We need additional funding in defense to develop capable and modern equipment, and allow 

our men and women to do the job assigned to them. 

In addition, with this continued decline of our defense, we are sending the 

wrong message to the world, especially 

to our allies—a message of retreat and 

withdrawal. America has world-wide 

commitments and national interests 

which must be maintained. Our ability 

to back-up those obligations, with a 

strong and viable military, should be 

one of our highest priorities. 

If we build our economic security but 

cripple our military capability in the 

process, then we will have failed both 

our children and our Nation. Maintaining America’s national strength is our 

best assurance of peace—and that 

peace is worth the price. 

Mr. President. I support the Thurmond amendment. It is an effort to reverse a dangerous trend, and restore a 

national resource—the strength of our 

Nation. I urge the Senate adopt the 

amendment from the Senator from 

South Carolina. 

Mr. THURMOND. Mr. President, before the Senate votes on this amendment, I want to be sure that my colleagues on both sides of the aisles understand the importance of this vote. 

If the Senate elects not to support an 

increase in defense spending, then the 

responsibility for underfunding defense 

for the last 21⁄2 years will no longer rest 

with the administration. By accepting 

the Budget Committee recommendation to accept the administration’s 

proposed defense budgets we, the Members of the Senate, must bear full responsibility for decreasing readiness 

and the lack of modernization in our 

Armed Forces. 

The Armed Services Committee has 

received a large number of letters requesting assistance and support for 

items in the defense budget or funds to 

be added in the authorization process. I 

want to make it clear that it will be 

very difficult to include any new programs or proposals that add money to 

existing defense programs without the 

increase in funds this amendment provides. Furthermore, resources to provide additional equipment for the National Guard and Reserves will not be 

available. Programs within the budget 

that are already at jeopardy such as 

the third Seawolf submarine are at 

greater risk without the increase this 

amendment provides. 

Mr. President, this is not a threat 

but reality. I hope all my colleagues 

will consider this amendment carefully 

and vote to provide the funds needed 

for an adequate defense for our Nation. 

Mr. ABRAHAM. Mr. President, I rise 

in support of the Thurmond-McCain 

amendment to increase the level of defense spending to a reasonable level. 

Throughout my campaign, I promised 

the voters to oppose additional cuts in 

defense, and sufficiently fund important weapons systems modernization 

programs needed to ensure our forces’

technological supremacy. Although 

there may no longer be a monolithic 

threat to our existence, there are a 

myriad of threats and strategic interests which warrant a United States 

military force level capable of protecting them. 

In defining and protecting the U.S. 

strategic interests, the Clinton administration has been negligent. It has 

consistently failed to request the funds 

necessary to field, maintain and train 

the forces necessary to carry out its 

own National Security Strategy. Estimates of this budget shortfall range 

from almost $50 billion to over $480 billion during the next five years. In fact, 

the President’s budget will allow military spending to fall below the anemic 

levels provided to the hollow forces of 

the Carter administration. From 1985 

to the end of the Clinton administration’s budget in 2001, critical procurement modernization programs will fall 

over 57 percent, while research and development spending is cut by almost 40 

percent. 

Therefore I believe our military capability is seriously compromised. Senator MCCAIN’s February 1995 Report on 

Military Capabilities and Readiness 

stated that although smaller forces can 

still be militarily effective, they must 

also be ‘‘continually enhanced through 

modernization.’’ The former service 

Chiefs of Staff who conducted this 

study found military modernization at 

a standstill, while procurement and research and development budgets were 

insufficient to maintain our force’s 

technological superiority. 

Mr. President, in light of these conditions, I find it imperative to support 

the amendment proposed by Senator 

THURMOND. This amendment would increase defense spending by $67.9 billion 

over seven years and finance it by an 

equivalent reduction in non-defense 

discretionary spending. As I mentioned 

during the debate on the Gramm tax 

cut amendment, I agree that it is possible to reduce discretionary spending 

further than what is proposed in the 

budget resolution. However, I do not 

think it is prudent to do so on a proportionate across-the-board basis. In 

my judgement, additional program 

eliminations and consolidations in targeted areas of the budget is the proper 

course to follow. 

In closing, providing for the Nation’s 

defense is the Federal Government’s 

first and primary responsibility. To 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7191 

allow the President to deplete our military below that level necessary to protect our strategic interests is irresponsible and ill-advised. We must increase 

the funding to the National Defense account and we must do it now. 

The PRESIDING OFFICER (Mr. 

ABRAHAM). Who yields time? 

Mr. DOMENICI. Mr. President, I 

think the time is getting out of balance in terms of those in favor and 

those opposed. Do we have any people 

who might speak in opposition? 

Mr. EXON. We will have somebody in 

just a moment. 

There has been some misunderstanding on time. At the present time, 

will the Chair advise the Senate how 

much time is allocated and remaining 

to the proponents of the amendment, 

and what is the split on the time with 

regard to the other side? 

The PRESIDING OFFICER. The proponents have 25 minutes remaining. 

The opponents, the Senator from Nebraska, would have 50 minutes. 

Mr. EXON. Mr. President, I did not 

hear the time in answer to my question. 

The PRESIDING OFFICER. I am 

sorry. The proponents would have 25 

minutes remaining. Senator DOMENICI

would have 10 minutes. And you would 

have 50 minutes remaining. 

Mr. EXON. I thank the Chair. 

Mr. DOMENICI. Did Senator THURMOND want to yield some time or did he 

want to wait? 

Mr. THURMOND. I will wait and let 

them speak. 

Mr. DOMENICI. I think that would 

be fair. 

Mr. EXON. I inquire of the Senator 

from Iowa, [Mr. GRASSLEY], who asked 

for some time, is he prepared to offer 

his remarks at this time? 

Mr. GRASSLEY. Yes, I am. 

Mr. EXON. How much time does the 

Senator from Iowa wish? 

Mr. GRASSLEY. Could I have 5 minutes for the moment. I may want some 

time later on. 

Mr. EXON. I yield 5 minutes, and if 

the Senator needs more time I will be 

glad to yield it. 

The PRESIDING OFFICER. The Senator from Iowa. 

Mr. GRASSLEY. Mr. President, this 

is a battle that is mainly being fought 

on the Republican side. There are Republicans who are bent on pumping up 

the defense budget once again. There 

are a lot of Republicans on this side 

who are of the opinion that that should 

not be done. They may not speak as 

well about that issue, so I am going to 

do what I do quite often, oppose the efforts by my distinguished colleagues on 

the Republican side of the aisle, to 

make sure that we do not spend any 

more money on defense than what is in 

the very well-crafted compromise put 

together by the distinguished chairman 

of the Budget Committee, Senator 

DOMENICI. 

The proposal to pump up the defense 

numbers makes no sense at all. I think 

it defies all reason and all understanding. I am baffled by their proposal; more important, baffled by the 

number of $92 billion, higher than anything I had heard spoken of behind the 

scenes over the last month that might 

come up at this particular time. 

What they are doing is starting back 

on the slippery slope towards higher 

defense budgets that is a license for 

further waste and mismanagement. 

Not only that, but the world situation 

does not call for spending more money 

at this particular time. The Soviet 

threat is gone. The cold war is over. 

But the debate in Congress for spending more for defense is reminiscent of 

that era. 

There has been a dramatic decrease 

in the primary threat to our national 

security as we knew it. We have rewritten our national security goals, but the 

budget that my colleagues want the increase for is defined in those cold war 

terms. 

The defense budget is coming down, 

and it should be coming down. So why 

do they say that it needs to go up? Why 

and for what? There is no good reason. 

The bureaucrats at the Pentagon say 

that they need more money, and they 

say they need it right now. That is the 

reason. That happens to be the only 

reason. 

Once again I wish to remind my colleagues what happened on May 2, 1985. 

The Reagan administration was trying 

to continue the pumped up defense 

numbers that had been in existence for 

3 years at that particular time. They 

were trying to push defense spending 

from around $255 billion in fiscal year 

1985 to around $300 billion in fiscal year 

1986, and then to $400 billion, and then 

to $500 billion in the years beyond. 

Now, that was at the height of the 

cold war and the height of Soviet military power. The rise in the Soviet military power was the principal driver behind the plan to push the Pentagon 

budget to $500 billion by the year 1990. 

But on May 2, 1985, the Senate rejected 

this Reagan defense budget buildup 

even in the face of massive Soviet military power. 

This measure, the fiscal year 1986 

budget resolution, put a brake on that, 

effectively ending the planned growth 

of the Pentagon budget. If we rejected 

a defense budget buildup to those numbers in 1985 when we were confronted 

with a serious military threat, why 

would we now move to pump up the 

budget when that threat has literally 

evaporated? Why would we do that? 

As we learned back in the 1980’s, 

higher defense budgets only bring higher costs, more overhead, and more 

waste, as long as the Department of 

Defense management leadership remains AWOL. More money for defense 

when the threat to our national security has decreased dramatically cannot 

be justified. The numbers before us in 

this amendment then cannot be justified. 

May I have 2 more minutes? 

Mr. EXON. I yield 2 additional minutes. 

Mr. GRASSLEY. The international 

situation today as we know it points to 

decreasing threats and a call for defense numbers to stay flat. If we pump 

up the budget now, we will be buying 

weapons that we do not need, weapons 

like the Sea Wolf submarine, the F–22 

fighter, more B–2 bombers, Comanche 

helicopters, all designed to defeat a 

threat that no longer exists. The Sea 

Wolf, the F–22, the B–2 and the Comanche are all cold war relics. The cold war 

warriors are trying to buy cold war 

weapons on a post-cold war budget. 

That is the only reason we are having 

the debate on this amendment today. 

This kind of defense policy will give 

us another hollow force like we had in 

the 1970’s. We will end up with another 

hollow force because the cold war warriors have to rob the readiness accounts to pay for the cold war relics. 

They have to rob the readiness accounts because all the cold war weapons are underfunded. They are underfunded because this outrageous price 

tag cannot be justified in the absence 

of a Soviet military threat. 

I yield the floor. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. EXON addressed the Chair. 

The PRESIDING OFFICER. The Senator from Nebraska. 

Mr. EXON. I yield 12 minutes to the 

Senator from West Virginia. 

The PRESIDING OFFICER. The Senator from West Virginia is recognized. 

Mr. BYRD. Mr. President, I thank 

the distinguished Senator from Nebraska. I congratulate him on his excellent work on this measure. 

Mr. President, a number of recent 

newspaper articles, in the Washington 

Post and the Baltimore Sun, have reported on the extent of financial mismanagement in the Department of Defense. These reports indicate that this 

mismanagement has resulted in at 

least $28.8 billion lost in overpayments 

to defense contractors or simply unaccounted for over the past decade. Unbelievably, this amount is down from 

$48.7 billion in 1993. The current Department of Defense comptroller, Mr. 

John Hamre, has had the unenviable 

task of trying to sort out the extent of 

the problem and the multiple causes 

for it. He is to be commended for his 

diligence and honesty in dealing 

squarely with this issue, and he deserves our support as he attempts to 

correct the underlying morass of multiple and confusing payment and accounting systems that created the current crisis. But the fact is, the Department of Defense cannot adequately 

safeguard the roughly $260 billion that 

it is entrusted with each year. Yet the 

amendment before us would increase 

the money entrusted to the Department of Defense by $92 billion over 7 

years. This amendment would cut deeper into the shrinking accounts for energy, agriculture, education, and law 

enforcement programs—programs that 

directly benefit every American citizen—in order to pour more money into 

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S7192 CONGRESSIONAL RECORD— SENATE May 23, 1995 

a defense money bucket that has so 

many holes in it that it might better 

be described as a money sieve. 

According to the press reports, which 

also cite Department of Defense Inspector General and the General Accounting Office reports, basic accounting and record-keeping procedures, required of even the smallest private office, are not widely followed in the Department of Defense and the military 

services. Invoices and payment records 

are not reconciled, yearly tracking of 

funds spent on equipment or programs 

is not done, and program managers are 

authorized to write checks on the Department of Defense account without 

checking the balance in the central 

registry. And the Department of the 

Treasury covers the Department of Defense’s bad checks, so no one is ever 

held accountable for their profligate 

spending. Charles A. Bowsher, the 

Comptroller General of the United 

States for the General Accounting Office, has stated in written testimony 

before the Appropriations Subcommittee on Defense that ‘‘none of 

the military services or major DoD 

components have produced reliable financial statements since the passage of 

the CFO [Chief Financial Officers] Act 

of 1990.’’

According to the DoD Inspector General, $14.7 billion cannot be accounted 

for with invoices, so the Department of 

Defense cannot say that it is not buying unneeded or unnecessary items. 

Over $7 billion worth of goods and services were purchased by military offices 

in excess of the amounts authorized by 

Congress. Every year, the Department 

of Defense overpays defense contractors by $500–750 million. According to 

the General Accounting Office, while 

contractors generally notify the Department of Defense when they are 

overpaid, they may not return the payments unless instructed to do so. As of 

July 1994, a sample of large and small 

defense contractors were holding approximately $231.5 million in contract 

overpayments, including one that had 

been outstanding for about 7 years, 

costing the government about $5 million in interest. This is not a system 

that needs more money added to it. 

While many of these appalling examples of waste are due to the problems 

inherent in antiquated and confusing 

accounting systems, 19 different payroll systems, and over 200 different contracting systems, there are also troubling examples of potential fraud that 

are being investigated. One involves an 

investigation into whether Air Force 

officials used money from various 

weapons programs to construct a golf 

course. In today’s difficult fiscal environment, it is essential that every defense dollar goes toward maintaining 

the readiness of our fighting forces and 

is not diverted to golf courses or to 

purchasing items in excess of defense 

needs because we cannot keep track of 

our money. 

Secretary of Defense Perry and Mr. 

Hamre have made great progress in 

correcting this mess, which stretches 

back over decades but was exacerbated 

during the defense buildup in the 1980’s. 

The number of accounting programs 

are being reduced, the financial staff is 

being halved and consolidated from 300 

offices nationwide to 25, and a system 

is being implemented to check all payments against invoices. The number of 

different military and civilian pay systems have also been reduced. 

These are important steps, and they 

are necessary steps. In his written testimony before the Senate Appropriations Defense Subcommittee this 

morning, Mr. Hamre estimated that 

through the consolidation and standardization of its financial systems and 

operations, the Defense Finance and 

Accounting Service will achieve substantial savings in its own operating 

costs, on the order of $57 million in fiscal year 1997. I would hope that these 

savings would be put to use further upgrading and consolidating the Department of Defense accounting systems 

into a smoothly functioning system. 

Improvements in financial management at the Department of Defense 

should whittle down the current $28.8 

billion in so-called ‘‘problem disbursements.’’ These savings should fund increases in defense programs, not false 

savings brutally carved with a meat 

axe from already lean energy, agriculture, education, and law enforcement programs. 

Mr. President, I urge my colleagues 

to vote against this amendment, and I 

say that with all due respect to the cosponsors thereof. 

Mr. President, I ask unanimous consent that the articles to which I referred in my statement be printed in 

the RECORD. 

There being no objection, the material was ordered to be printed in the 

RECORD as follows: 

[From the Baltimore Sun, May 17, 1995] 

PENTAGON UNABLE TO ACCOUNT FOR $28.8 BILLION; ERROR-PRONE PAYMENT SYSTEM CITED

(By Gilbert A. Lewthwaite) 

WASHINGTON.—The Pentagon is facing an 

accounting gap, with discrepancies on its 

books totaling $28.8 billion, its top financial 

officer told Congress yesterday. 

The problem includes a $13 billion imbalance between checks the Pentagon has written over the past 10 years and the vouchers 

it can produce to account for those payments. The other $15 billion is from a variety 

of bookkeeping shortcomings. 

Pentagon comptroller John Hamre said $1 

billion worth of ‘‘problem’’ disbursements 

were being made monthly without being 

properly matched to invoices. 

‘‘We got into this sad state of affairs because we designed a system where you pay 

now and account later,’’ he told the Senate 

Armed Services subcommittee on readiness. 

‘‘It isn’t that we have wicked people trying 

to screw up, it’s that we have a system that’s 

so error-prone that good people working hard 

are going to make mistakes.’’

The Pentagon’s finances are in such bad 

shape that Sen. Carl Levin, a Michigan Democrat, said the Defense Department may 

need the sort of financial control board imposed on the District of Columbia. 

‘‘This is totally unacceptable. There is a 

lot of money here which is going through the 

sieve,’’ said Mr. Levin, adding that voters experienced ‘‘frustration, disappointment, indeed, anger’’ over reports of continuing Pentagon waste, fraud and abuse, particularly at 

a time when Congress was ordering major 

spending cuts in other programs. 

Mr. Hamre, in an effort to explain the accounting difficulties, said the Pentagon each 

month processes 2.5 million invoices, spends 

$9.2 billion and issues 10 million paychecks. 

‘‘So that’s 10 million times to get things 

screwed up,’’ he said. 

His own pay, he said, had been miscalculated six times in the 18 months he has spent 

in the department, adding: ‘‘And it’s really 

bad when you screw up your boss’ pay. And 

I’ve done that a couple of times.’’

Mr. Hamre’s boss, Defense Secretary William J. Perry, has made financial reform a 

priority in an effort to save money, which 

can be spent on improving the combat readiness of the armed forces. 

The Perry plan calls for reducing the 250 

accounting systems the Pentagon operates, 

halving of the financial staff of 46,000 to 

23,000 in five years, and consolidating 300 accounting offices nationwide into 25 financial 

centers. 

To phase out the practice of paying first 

and accounting for the payment later, beginning July 1 any Pentagon payment of more 

than $5 million will have to be checked 

against an invoice, said Mr. Hamre. After October 1, the new rule will apply to payments 

of more than $1 million. Eventually it will 

apply to all payments. 

The military pay systems for uniformed 

personnel has been reduced from 18 in 1991 to 

six today, and will be down to two in 1997. Civilian pay systems have been reduced from 18 

to 10. By 1998 there will be a single civilian 

pay system. 

Mr. Hamre said the Defense Department 

was also screening its retirement rolls after 

1,000 military pension recipients in the Philippines failed to turn up at the U.S. Embassy 

to confirm their status. They were then 

struck from the rolls. 

The Senate panel heard that in fiscal 1994 

the Pentagon was accountable for more than 

$1 trillion in assets, 3 million military and 

civilian personnel, and $272 billion in expenditures—approximately equivalent to 50 percent of the federal government’s discretionary spending. 

‘‘It’s big bucks,’’ said Sen. John Glenn, a 

leader in the decade-old campaign to reform 

the Defense Department’s accounting systems. ‘‘If any of the civilian agencies on the 

chopping block had [the Pentagon’s] record 

on financial management, they would probably be at the top of the hit list.’’

Charles A. Bowsher, U.S. comptroller general and the top federal financial watchdog, 

said the Perry blueprint for financial reform 

was ‘‘a good overall plan,’’ but he added that 

only ‘‘modest progress’’ had been made in 

implementing it. 

Asked about overpayments of an average 

$750 million yearly to defense contractors, 

Mr. Bowsher said that frequently it was the 

contractors themselves who revealed the 

overpayments to the Pentagon. 

An accounting firm, hired by the General 

Accounting Office to check on 5,000 defense 

contracts since 1990, found $285 million in 

overpayments. To date the Pentagon has demanded repayment of $133 million, but has 

actually collected only $85 million, a GAO 

official said. 

Mr. Bowsher also pointed to the ‘‘Byzantine’’ process of obtaining a military travel 

voucher, which involved 40 transactions costing the defense department 30 cents for every 

travel dollar. Administrative charges in the 

private sector were down to 1 cent for every 

dollar, he said. 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7193 

[From the Washington Post, May 14, 1995] 

BILLIONS GO ASTRAY, OFTEN WITHOUT A

TRACE

(By Dana Priest) 

Each year, the Defense Department inadvertently pays contractors hundreds of millions of dollars that it does not owe them, 

and much of the money is never returned. 

In addition, the department has spent $15 

billion it cannot account for over the past 

decade. 

And Pentagon purchasing agents appear to 

have overdrawn government checking accounts by at least $7 billion in payment for 

goods and services since the mid-1980s, with 

little or no accountability. 

Unlike the infamous $7,600 coffee pot and 

$600 toilet seat pricing scandals of years 

past, these problems, and many more, are 

the result of poor recordkeeping and lax accounting practices that for years have characterized the way the Defense Department 

keeps track of the money—$260 billion this 

year—that it receives from Congress. 

According to a series of investigations by 

the department’s inspector general and the 

General Accounting Office, and ongoing 

work by Pentagon Comptroller John J. 

Hamre, the Department’s systems of paying 

contractors and employees are so antiquated 

and error-prone that it sometimes is difficult 

to tell whether a payment has been made, 

whether it is correct, or even what it paid 

for. 

Just how much money does the poor accounting waste? 

Former deputy defense secretary and new 

CIA Director John M. Deutch wouldn’t hazard a guess. ‘‘Lots,’’ he scribbled recently on 

a reporter’s notebook in response to a question. 

For months after he took the job as chairman of the Joint Chiefs of Staff in late 1993, 

Gen. John Shalikashvili received paychecks 

for the wrong amount. In the last year and a 

half, Comptroller Hamre counted six problems with his own pay. 

A paper-based system in which items frequently are misplaced or lost and computers 

that often cannot talk to each other are part 

of the problem. But there are other major 

systemic weaknesses. A lack of basic accounting procedures—such as matching invoices and payment records, or keeping 

track of money spent on a given piece of 

equipment from one year to the next—has 

made it impossible to determine how billions 

of dollars have been spent by each of the 

service branches. 

In addition, Hamre explained, tracking the 

money has been nearly impossible because 

300 different program directors—the Air 

Force F–16 fighter program director, the 

commanding officer of an aircraft carrier, 

the head of a maintenance depot, for example—have had separate checkbooks, each one 

free to write checks without regard to the 

balance in the Pentagon’s central registry. 

The U.S. Treasury has always paid the 

bills, even when there was no money in a 

given project’s account, because it assumes 

any error was unintentional and someday 

would be corrected, said Pentagon officials 

and inspector general investigators. 

‘‘There’s this huge pot of money over there 

in the Treasury that you can keep drawing 

down,’’ said the Deputy Inspector General 

Derek J. Vander Schaaf. ‘‘As long as your 

[overall] checkbook’s good,’’ he said, meaning the Treasury, ‘‘nobody screams.’’

The problems were created over several 

decades and made worse during the 1980s 

Reagan administration defense buildup during the latter days of the Cold War, when 

there was little political will to scrutinize 

the record sums being spent. 

Today, however, even ardent defense 

hawks have become disturbed over the mismanaged flow of funds. Some Republicans 

who looked deeply into the matter are suggesting a freeze on military spending until 

the Pentagon’s corroded payment system 

can be permanently fixed. 

‘‘The defense budget is in financial chaos,’’

said Sen. Charles E. Grassley (R-Iowa), who 

is advocating a freeze. ‘‘The foundation of 

the defense budget is built on sand.’’

A Senate Armed Services subcommittee is 

scheduled to hold a hearing on the problems 

Tuesday. It will be chaired Sen. John Glenn 

(Ohio), a Democrat, who was authorized by 

Republicans to conduct it because of his 

long-standing interest in the subject. 

Among the problems detailed by the Defense Department, the Pentagon inspector 

general and the GAO: 

Of the 36 Pentagon departments audited by 

the inspector general (IG) in the last year, 28 

used ‘‘records in such terrible condition’’ as 

to make their annual financial statements—

an accounting of money collected and money 

spent—utterly worthless, said Vander 

Schaaf. 

Financial officials cannot account for $14.7 

billion in ‘‘unmatched disbursements,’’

checks written for equipment and services 

purchased by all military units within the 

last decade. This means that accountants 

know only that a certain amount of money 

was spent on the overall F–16 jet account, for 

example, but not how much was spent on F–

16 landing gear or pilot manuals because 

they cannot find a purchase order from the 

government to match the check. 

‘‘You don’t know what you’re really paying 

for,’’ Vander Schaaf said. 

The $14.7 billion represents ‘‘hard-core 

problems’’ where department accountants 

have tried but failed to find the records. ‘‘We 

could be paying for something we don’t need 

or want,’’ said Russell Rau, the IG’s director 

of financial management. 

In the last eight years, various military offices appear to have ordered $7 billion worth 

of goods and services in excess of the amount 

Congress has given to them to spend. These 

‘‘negative unliquidated obligations’’ may indicate that a bill has been paid twice or mistakenly charged to the wrong account because bookkeepers at hundreds of maintenance depots, weapons program offices and 

military bases did not keep track of payments they made, said Vander Schaaf. 

Of the $7 billion ‘‘the government has no 

idea how much of this balance is still owed,’’

Rau said. 

Hamre has threatened to take part of the 

$7 billion out of the military services’ current operating budget if they cannot find 

documentation for the expenditures by June 

1. 

Every year the Defense Department pays 

private contractors at least $500 million it 

does not owe them, according to Vander 

Schaaf. The GAO believes the figure is closer 

to $750 million. 

The payment system is in such bad shape 

that the Pentagon relies on contractors to 

catch erroneously calculated checks and return them. Many of the overpayments are 

due to errors made on a paper-based system 

in which harried clerks are judged by how 

quickly they make payments. And because 

there is no adequate way to track the 

amount of periodic payments made on a contract, businesses often are paid twice for the 

work they have done. 

Defense Department finance officials believe they are recouping about 75 percent of 

the overpayments, although they admit they 

have no way of knowing exactly how much is 

being overpaid. 

Today, after an 18-month struggle by 

Hamre to turn the situation around, the department still has 10 payroll systems and 200 

different contracting systems. 

Hamre, who wins praise from Republicans 

and Democrats for his efforts, has undertaken a major consolidation of payroll and 

contracting offices. He has opened more than 

100 investigations into whether individual 

program managers or service agencies violated the law by using money appropriated 

for one program for something else or for 

paying contracts that exceeded their budget. 

He has frozen 23 major accounts and has 

stopped payment to 1,200 contractors whose 

records are particularly troublesome. In 

July, clerks will be prohibited from making 

payments over $5 million to any contractor 

‘‘unless a valid accounting record’’ of the 

contract can be found. By October, the 

amount drops to $1 million, which means it 

will affect thousands more contracts. 

According to Hamre and Rau, a number of 

cases are under investigation for possible 

violations of the Anti-Deficiency Act, the 

law that governs how congressionally appropriated money must be spent. Penalties 

range from disciplinary job action to criminal prosecution. Investigators are trying to 

determine: 

Why there is an unauthorized expenditure 

of around $1 billion on the Mark 50 torpedo, 

and the Standard and Phoenix missiles. 

Hamre and Rau suspect that Navy officials 

used money appropriated for other items or 

wrote checks on empty accounts to pay contracts from 1988 and 1992. 

Whether Air Force officials used money 

from various weapons programs to build a 

golf course at Wright-Patterson Air Force 

Base in Ohio beginning in 1987. 

What happened when some programs ran 

out of money. ‘‘There are some [cases] in the 

Air Force now that really stink,’’ Hamre 

said. When money for the Advanced Cruise 

Missile ran out, Air Force officials simply 

terminated the existing contract and rewrote another, more expensive one the following day, Pentagon investigators recently 

concluded. In order to pay for cost overruns 

associated with the new C–17 cargo plane, 

contract officials simply reclassified $101 

million in development costs as production 

costs. 

Hamre said the services allowed such 

money mingling to go on partly because of 

the complexity of the yearly congressional 

appropriations process. ‘‘People want to find 

an easier way to get the job done,’’ he said. 

‘‘They are trying to get some flexibility in a 

very cumbersome system.’’

But, he added, some services also have resisted correcting problems and punishing 

wrongdoers. ‘‘I’m very frustrated by it,’’ he 

said. ‘‘In the past, they just waited until people retired. It was the old boy network covering for people.’’

The Defense Department is unlike any government agency in scope and size. It sends 

out $35 million an hour in checks for military and civilian employees from its main financing office in Columbus, Ohio. And it 

buys everything from toothbrushes to nuclear submarines; about $380 billion flows 

within the various military purchasing bureaucracies and out to the private sector 

each year. 

It takes at least 100 paper transactions 

among dozens of organizations to buy a complex weapons system. Some supply contracts 

have 2,000 line items and, because of the congressional appropriations process, must be 

paid for by money from several different 

pots. 

Fixing the problems without throwing the 

entire system into chaos, Hamre said, ‘‘is 

like changing the tire on a car while you’re 

driving 60 miles per hour.’’

But some argue it has never been more important to make the fixes quickly. 

‘‘Here we are in a period of reduced spending, it’s critically important today that we 

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S7194 CONGRESSIONAL RECORD— SENATE May 23, 1995 

get a bigger bang for the buck,’’ said Sen. 

William V. Roth Jr. (R.-Del.), chairman of 

the Government Affairs Committee, where 

many of the current problems were first revealed. ‘‘We’ve got to put pressure on to expedite it. At best, it will take too long.’’

But in the world of Defense Department financing, time is not always a solution, as 

one small example illustrates. 

In 1991, because of a computer programming error, the department’s finance and accounting service centers erroneously paid 

thousands of Desert Storm reservists $80 million they were not owed. When officials realized the mistake, they began to send letters 

to service members to recoup the overpayments. Many veterans complained to Congress, which then prohibited the Pentagon 

from collecting any overpayment of less 

than $2,500 and made it give back money collected from people who received less than 

that amount. 

To comply, the Defense Finance and Accounting Service (DFAS) payment centers in 

Cleveland, Denver, Indianapolis and Kansas 

City created new computer programs to cancel the debts and issue refunds. But they did 

not adequately test the new programs, IG 

and GAO investigators found. 

As a result, the appropriate debts were not 

canceled, and improper amounts of refunds 

were issued, often to the wrong service member. The DFAS center in Denver, for example, canceled $295,000 that service members 

owned it for travel advances. In all, the 

botched effort to follow Congress’s direction 

cost taxpayers an additional $15 million, 

Pentagon officials said. 

‘‘It isn’t possible now’’ to recoup the 

money, Hamre said. ‘‘We can’t reconstruct 

the records. We admit were really, really 

bad. We don’t do it again.’’ The IG’s office 

has agreed that it would be too costly to reconstruct the records and recoup the loss. 

As he often does when he testifies about 

these matters on Capitol Hill, Hamre confessed to the Senate Armed Services Committee recently: ‘‘We’ve made a lot of 

progress. But we’ve got a long way to go.’’

Mr. BYRD. I yield back the remainder of my time. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. THURMOND. Mr. President, I 

yield Senator NUNN 5 minutes. 

Mr. NUNN. I thank my friend from 

South Carolina. 

Mr. President, I rise in support of the 

Thurmond-McCain amendment to increase the defense spending levels in 

this budget resolution. 

For over 2 years, I have been expressing my concern that projected defense 

budgets are not sufficient from four 

standpoints: First, to maintain the 

current readiness of our forces; second, 

to provide the standard of living that 

military personnel and their families 

expect and deserve; third, supporting 

the force structure necessary to carry 

out the full range of missions that we 

expect our military forces to be able to 

perform; and fourth, to provide for the 

modernization that is the key to the 

future capability of those forces. The 

modernization of our forces, which is 

essential to future readiness, is an area 

of increasing concern, Mr. President, 

and this is an area where we are most 

deficient today. 

The men and women in the military 

continue to perform superbly every 

time they are called on, and we are 

calling on them all the time. We owe it 

to them to give them the support they 

need to do their job. We also have to 

ensure that the men and women who 

will be called on 5, 10, or 20 years from 

now will have the same advantages visa-vis their opponents that our forces 

have today, including the technological superiority that played such a 

key role in Operation Desert Storm 

and plays such a key role everywhere 

our forces are deployed today. 

While I am encouraged by the funding for readiness, military pay raises, 

and quality of life initiatives Secretary 

Perry has recommended in the President’s budget, I think there are clearly 

insufficient funds going into modernizing the force. Modernization, for the 

most part, is delayed into the outyears 

under the current future years defense 

program. We all know how illusory 

these budget projections become 4 or 5 

years down the road. 

Under the current budget, 1996 and 

1997 will be the second and third 

straight years during which the Air 

Force will not purchase a single new 

fighter aircraft. The Air Force has no 

bomber program. Our leading standoff 

weapon program has been canceled, yet 

the budget, at this stage, contains no 

funds to replace that capability. The 

number of navy ships is not nearly 

enough to replace even a 300-ship Navy. 

and the Marine Corps is years away 

from having a replacement for its 

aging amphibious assault vehicles. It 

would not take long to list the Army’s 

modernization programs, but it would 

take a long time to list the deficiencies 

in that program. 

The fiscal squeeze on the defense 

budget is already intense. As we seek 

to balance the budget, and properly 

so—especially if we try to enact tax 

cuts, which I think are ill-advised, and 

which I hope this body will vote 

against this afternoon—if we do that, 

however, the pressure is going to get 

more and more intense on the defense 

budget. This gives me even less confidence in the outyear funding predictions that show funds for defense 

modernization increasing. 

In my view, we need to increase the 

defense topline now particularly in the 

outyears, to restore the balance to our 

defense program. We also need to reinstate the firewalls. 

And I congratulate the chairman of 

the committee and the members of the 

Budget Committee for doing this in the 

resolution. That is enormously important to protect any defense increases 

we are able to achieve and to provide 

some stability in the defense budget. 

Firewalls have not and will not mean 

that defense cannot be cut. What it 

does mean is that these cuts will not be 

shifted to other programs, and that 

means that if there are defense cuts 

and the firewalls are in, then the cuts 

will go to deficit reduction. I believe 

that is appropriate, and I think that is 

the way that defense is best protected. 

We have been reducing the defense 

budget for a long time. The current 

builddown started during President 

Reagan’s second term, even before the 

fall of the Berlin Wall, and continued, 

accelerated, throughout the Bush administration and the current administration. I believe the time has come to 

stabilize the defense budget as much as 

possible, since the defense budget has 

already made a greater contribution to 

deficit reduction than any other part of 

the budget; I might add, than all of the 

budget combined. 

In my judgment, the administration 

needs to restore some balance to the 

defense program but Congress’ recent 

action are a good news/bad news story. 

The good news is that the House 

budget resolution provided an increase 

for the defense budget. This amendment would do the same in the Senate 

budget resolution. And the Senate 

budget resolution, unlike the House 

version, contains firewalls. But there 

has been bad news for defense as well. 

THE SENATE RESOLUTION DOES NOT INCREASE

DEFENSE

First, although there have been a lot 

of statements that the President’s defense budget and Bottom-Up Review 

force structure are inadequate, this 

resolution as reported out by the Budget Committee contains no increase for 

defense above the levels proposed by 

the administration—in fact in the final 

2 years it is lower than the administration’s plan. 

And while the House version of this 

resolution does increase defense, the 

House voted earlier this year in their 

tax cut bill to pay for the tax cut 

largely by cutting discretionary spending, which includes defense, and the 

House did not include firewalls in either the tax cut bill which reduced the 

discretionary caps or in their budget 

resolution. So the House has put discretionary spending on the table to pay 

for cutting taxes, which certainly 

makes it more difficult to find the 

money to increase the defense budget. 

REQUIREMENT THAT DOD ABSORB THE COST OF

CONTINGENCIES

Second, despite the frequent complaints about the cost of contingency 

operations and their effect on readiness, the defense supplemental enacted 

earlier this year required the Department of Defense to absorb almost the 

entire cost of these contingency operations—the very practice that had been 

criticized in the past. In fact, the 

House leadership wrote to the President earlier this year stating their intention that as a matter of policy all 

future supplementals would have to be 

offset. 

This resolution would essentially 

adopt that same approach by requiring 

60 votes for any future emergency 

supplementals, instead of a majority 

vote as has been the case in the past. 

Of course this only applies to discretionary funding, since entitlement programs could continue to increase without even requiring votes, let alone 

supermajority votes. 

Mr. President, I have several concerns with the approach the Congress 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7195 

has taken on supplementals so far this 

year. The defense supplemental did not 

provide the net increase in defense 

spending for readiness that was requested by the Clinton Administration, 

despite the concerns many of my colleagues have expressed about readiness. 

The cost of these contingencies were 

made up almost entirely by cutting 

elsewhere in the defense budget, and 

those cuts came in modernization. 

So the scorecard so far in this new 

Congress is that the defense budget, as 

it now stands, counting the supplemental, is below what President Clinton had asked for. So to those in the 

Congress of the United States who are 

saying the Clinton defense budget is 

too low, and people on both side of the 

aisle are saying that, I say to them we 

are cutting below the President’s budget, not in this resolution, but in the 

overall supplemental and that approach. 

I am also troubled by the impact that 

a policy of making DOD absorb the full 

cost of these contingencies could have 

on the defense budget and on defense 

management. It largely defeats the 

purpose of having supplementals, and I 

can already predict some of the problems we are going to have with this 

policy. 

I am not sure we have really thought 

through the impact of what we may be 

doing to the military with this 100 percent offset approach. Earlier this year, 

Gen. Gordon Sullivan, the Chief of 

Staff of the Army, told the Armed 

Services Committee that if the Congress adopts a policy of forcing the 

military to completely offset the costs 

of any contingency operation: 

* * * it is just going to destroy our training programs, our quality of life programs, 

and it is going to be difficult to manage the 

readiness of the force * * *. It is going to 

come out of reducing real property maintenance. We may have to furlough civilians, 

terminate termporary employees, curtail 

supply requests, park vehicles, reduce environmental compliance. It is going to have a 

major impact. 

General Sullivan said that in the 

event the military is told to assist a 

large-scale evacuation of U.N. personnel from Croatia: 

I just have to stop training, and I will have 

to move money around from elsewhere to 

keep that operation going since obviously 

what you expect me to do is to fight and win 

you wars. So, I will have to get the money 

from people who are not doing that to support it. 

Now that may sound like an exaggeration to some, but if you understand the laws that govern the defense 

budget, you will see why General Sullivan’s comments are right on target. 

The cost of an operation, such as paying for the airlift to get there, the fuel, 

spare parts, and so on, must come out 

of the operating budget. The military 

does not have the authority to fund 

contingency costs by diverting funds 

from the procurement of weapons, or 

from research or military construction 

or military personnel accounts, even if 

they wanted to. 

And even within the operating budget, there are further constraints. A 

large portion of the operating account 

is civilian pay, so you cannot save 

money there without firing civilians. 

And you cannot cut really cut the 

money to operate the bases—you have 

to pay the light bill. So the areas General Sullivan is talking about—training, maintenance and repair of the 

buildings on our military bases—are 

the only areas where the military has 

the flexibility to change its plans halfway through the year. And in fact that 

is exactly what happened last year—

money had to be diverted from training. 

In addition to my concerns about the 

financial impact on the Defense Department if this bill is viewed as a 

precedent, I also share the concerns expressed by my friend Senator INOUYE

about the long-term policy implications of telling the military any future 

contingency they are involved in is 

going to come out of their budget dollar for dollar. This is going to have an 

impact on their ability and their willingness to respond to situations like 

Haiti or Cuba, or especially a much 

more expensive operation like peace 

enforcement in Bosnia, in the future. 

In effect, we could have our funding 

and budgeting procedures dictating our 

foreign policy and our decisions on the 

use of force. 

I hope we do not set in concrete a 

policy of making the Defense Department absorb the costs of contingency 

operations, because if we are telling 

the Department of Defense that any 

time there is an emergency that comes 

up and they come over and request supplemental funds that they are going to 

have to provide a 100-percent offset, 

then we are going to change the nature 

of the responsiveness of the Department of Defense itself to the missions 

that may, indeed, be crucial to our Nation’s security. 

If the Department of Defense is told 

that any unanticipated operation they 

undertake, either unilaterally or with 

NATO or the United Nations, is going 

to have to be completely offset within 

the defense budget, which means they 

are going to have to basically kill or 

substantially alter crucial defense programs in order to absorb those costs, 

then the result is going to be a very 

strong signal that the United States is 

not going to be as involved as we have 

been in world affairs, including commitments to our allies and commitments that we have voted for at the 

U.N. Security Council. 

MODERNIZATION FUNDS ARE THE FIRST TO BE

CUT

The future readiness and future capability of the Defense Department requires modernization and it requires 

research and development, and those 

are the programs that were cut to fund 

the defense supplemental earlier this 

year, and those are the programs that 

will continue to be hurt by this policy 

of requiring complete offsets for contingency operations. Five or ten years 

from now, people will have a very serious problem with readiness if we continue to declare there is no emergency 

even when our forces are responding to 

the unanticipated events that we all 

know will take place somewhere in the 

world from time to time. 

This is why I am supporting this 

amendment to increase the defense 

topline number. We have cut the defense budget so much already that 

there is very little flexibility left to 

deal with the unexpected, even though 

we all know that the Defense Department always has to be ready for the 

unexpected—we expect them to be 

ready for the unexpected. And I am 

very concerned that as we struggle to 

live within these drastically reduced 

budgets without further reducing our 

military capability, the Congress will, 

acting in good faith to preserve readiness, make cuts that will cause great 

harm over the long term. 

You need look no further than the 

supplemental enacted earlier this 

spring to see the warning signs. What 

was cut to offset the cost of contingency operations? Basic science and 

technology research. Dual-use technology programs that are designed to 

better integrate our defense and civilian technology bases in order to get 

the Defense Department better technology at lower cost. In other words, 

programs that will pay off in the long 

term but seem easy to cut in the short 

term. 

Another example is environmental 

cleanup at military installations, 

which was cut by $300 million in the 

supplemental. Is this program as important to our combat capability as 

funding training and modernization? Of 

course not. But the reason that environmental cleanup costs are so high 

now is that for years these problems 

were ignored. And if we push them 

under the rug again, we are only going 

to wind up with an even bigger bill 

down the road. 

CONCLUSION

In conclusion, Mr. President, so far 

we have seen a lot more talk than action about enhancing our national security and increasing the defense budget. Many of my colleagues share my 

concern that we have cut the defense 

budget too far, too fast and that we are 

mortgaging our future by sacrificing 

the capability of our forces 10 years 

down the road in order to fully fund 

current readiness. The ThurmondMcCain amendment represents real action to enhance our national defense 

while at the same time putting us on a 

path to a balanced budget, and I urge 

my colleagues to support it. 

I ask unanimous consent that a table 

showing real reductions in the defense 

budget be printed in the RECORD. 

There being no objection, the table 

was ordered to be printed in the 

RECORD, as follows: 

mmaher on MIKETEMP with SOCIAL SECURITY NUMBERS

S7196 CONGRESSIONAL RECORD— SENATE May 23, 1995 

FISCAL YEAR 1996 SENATE BUDGET RESOLUTION 

1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 

Nat Def BA (current dollars) .................................................................................................................. $143.9 $294.7 $303.3 $263.5 $257.7 $253.4 $259.6 $266.2 $276.0 $275.9 $275.9 

DOD fiscal year 1996 deflators 1 ............................................................................................................ 0.5383 0.7130 0.8378 0.9727 1.0000 1.0294 1.0595 1.0900 1.1195 1.1494 1.1801 

NAT Def BA Const (1996 dollars) ........................................................................................................... $267.2 $413.3 $362.0 $270.9 $257.7 $246.2 $245.0 $244.2 $246.5 $240.0 $233.8 

GDP (CBO estimates) .............................................................................................................................. $3,746 $4,207 $4,853 $7,036 $7,370 $7,747 $8,152 $8,572 $9,013 $9,843 $9,978 

Defense BA as percent of GDP ............................................................................................................... 3.8 7.0 6.2 3.7 3.5 3.3 3.2 3.1 3.1 2.8 2.8 

1CBO assumes higher inflation. 

Real Changes 

(In percent) 

1980–85 .......................................... 54.6 

1985–90 .......................................... ¥12.4 

1990–95 .......................................... ¥25.2 

1995–2000 ....................................... ¥9.0 

1980–1990 ....................................... 35.4 

1985–1995 ....................................... ¥34.5 

1990–2000 ....................................... ¥31.9 

1980–1995 ....................................... 1.4 

1985–2000 ....................................... ¥40.3 

1980–2000 ....................................... ¥7.7 

1980–2002 ....................................... ¥12.5 

1985–2002 ....................................... ¥43.4 

1990–2002 ....................................... ¥35.4 

1995–2002 ....................................... ¥13.7 

The PRESIDING OFFICER. The Senator’s time has expired. 

Mr. NUNN. Mr. President, I thank 

my colleague from South Carolina and 

my colleague from Arizona for sponsoring this amendment. I urge my colleagues to support the amendment. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. THURMOND. Mr. President, I 

yield 5 minutes to the distinguished 

Senator from New Hampshire. 

The PRESIDING OFFICER. The Senator from New Hampshire. 

Mr. SMITH. I thank the Senator 

from South Carolina, the chairman of 

the Armed Services Committee, for offering this amendment, along with 

Senator MCCAIN. 

I commend both of my colleagues for 

this amendment to restore much needed funds to our defense program and to 

do it without adding to the deficit but 

by setting priorities throughout the 

budget, including the defense budget. I 

might add that that also has priorities 

shuffled around in order to help with 

this amendment. 

I want to emphasize from the outset, 

again, it does not undermine the objective of a balanced budget by the year 

2002. This amendment will not change 

that objective in any way. We still get 

to a balanced budget by the year 2002. 

But what this amendment does do is 

to help stave off terrible shortfalls in 

military readiness training and modernization. We owe it to our troops in 

the field to have the training and modernization that they deserve if we are 

going to ask them to go into harm’s 

way. 

The defense reductions under President Clinton’s budget, frankly, are 

wreaking havoc on our military capability. Most of us in this Chamber 

know that, especially those of us who 

are on the Armed Services Committee 

who see it every day. 

I hope that my colleagues would listen carefully to those of us on the 

Armed Services Committee in both 

parties who have spoken so eloquently 

on this matter. This body simply cannot and must not legitimize a blueprint 

for disaster by approving these kinds of 

defense numbers. 

Mr. President, I am troubled that the 

Budget Committee has endorsed the 

Clinton defense numbers. These spending totals are simply inadequate to 

safeguard our national security. And 

they are already having a very serious 

effect on readiness. 

I am also troubled that the President 

has chosen to blame Congress for current deficiencies in military readiness. 

I would emphasize that this is the same 

administration that entered office and 

immediately cut defense by $178 billion, the same administration that has 

dramatically underfunded operations, 

maintenance, and readiness modernization and quality of life programs for 

our military families. 

This is the same administration that 

has turned our Armed Forces into a 911 

force all over the world on behalf of the 

United Nations, and yet we ask more 

and more and more and give them less 

and less and less. 

This is the same administration that 

committed our military forces to occupy Haiti without the consent of Congress, costing taxpayers hundreds of 

millions of dollars. 

This is the same administration that 

turned our naval base at Guantanamo 

into a refugee camp leaving the Defense Department stuck footing the bill 

to feed, clothe and bathe thousands of 

refugees indefinitely while subjected to 

the insults of many of them. 

This is the same administration that 

has pledged $4 billion in nuclear reactors for North Korea at the time we are 

spending tens of billions of dollars to 

defend against a North Korean military 

threat. 

I find these types of inconsistency 

preposterous. The truth is that the 

Clinton defense program is decimating 

our Armed Forces. Personnel tempo is 

going through the roof, our troops are 

being constantly deployed all over the 

world from Haiti to Somalia to Southwest Asia and back home, with little or 

no time to spend with their families, 

and they are out again going someplace 

else. 

I urge my colleagues to talk to them, 

talk to the military personnel, talk to 

their families and find out how tough 

this is. 

Depot maintenance backlogs are increasing; critical modernization programs are being terminated; morale is 

down; retention is down; 25 percent of 

our Army divisions were recently classified as unprepared to meet their mission requirements. 

Mr. President, if Senators support 

this blueprint, which is so devastating 

our military capabilities, then they 

ought to oppose the Thurmond-McCain 

amendment. It is as simple as that. If 

you do not want to give our Armed 

Forces what they deserve, then go 

ahead and oppose the amendment. But 

if you share the view of the majority of 

Americans that this President has gone 

too far with these military reductions 

and our international security is in 

jeopardy, you should support the Thurmond-McCain amendment. 

In conclusion, I want to emphasize 

this amendment does not add to the 

deficit, it will not undermine the balanced budget, and it will restore much 

needed funds back to our defense program to stave off an imminent disaster 

in military readiness. 

I yield back any time I may have. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. THURMOND. Does the opposition have any speakers, Mr. President? 

Mr. President, we will have to charge 

time over there. 

The PRESIDING OFFICER. Who 

yields time? 

Mr. THURMOND. Mr. President, I 

ask again, does the opposition have 

any speakers? 

Mr. EXON. Mr. President, I suggest 

the absence of a quorum and the time 

be equally charged. 

Mr. McCAIN. I object. 

The PRESIDING OFFICER. Objection is heard. 

Mr. THURMOND. Mr. President, I 

yield 5 minutes to Senator LOTT. 

Mr. DOMENICI. We have an additional 10 minutes we can yield, too. 

Why do I not yield 5 of the 10 I have to 

Senator LOTT. 

Mr. LOTT. Mr. President, if I could 

make a parliamentary inquiry, but not 

counted against my time, what is the 

status? Are we going to try to get some 

debate back and forth, or should I proceed at this point? 

Mr. DOMENICI. I do not see how we 

can make them do that if they do not—

the best we can do is put a quorum call 

in. When you put a quorum call in, 

under the statute, it is charged equally 

to both sides. 

The PRESIDING OFFICER. It is 

charged to the side who suggests it. 

Mr. DOMENICI. We have two alternatives. We can wait around and see if 

they suggest it or, if they do not, then 

we can just let the time run and it is 

equally charged. The Senator asked 

that it be equally charged under a UC? 

Mr. EXON. Yes. 

Mr. DOMENICI. Yes. What we are attempting to do is unsnarl a potential 

problem. If we can have a moment to 

talk we might be able to unsnarl it. 

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May 23, 1995 CONGRESSIONAL RECORD— SENATE S7197 

Mr. DOMENICI. Mr. President, I ask 

unanimous consent that we have 5 minutes charged to no one. 

Mr. EXON. There is a suspicion somebody is trying to fool somebody else. 

Mr. DOMENICI. Five minutes 

charged to neither side. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. Mr. President, I suggest the absence of a quorum and that 

the time be charged to neither side. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. The clerk 

will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. DOMENICI. 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. DOMENICI. Mr. President, we 

have to advise Senators that the time 

has come to start a vote shortly. So I 

ask unanimous consent that at 3:45 

p.m., the Senate proceed to vote on the 

stacked votes that had been postponed 

earlier today, in the following sequence: The Bradley motion to waive; 

on or in relation to the Roth amendment; on or in relation to the Gramm 

amendment; on or in relation to the 

EXON amendment. 

I further ask unanimous consent that 

the first vote in the voting sequence be 

20 minutes and that thereafter they be 

limited to 10 minutes each. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. Mr. President, I further ask unanimous consent that following the conclusion of the stacked 

votes, the Senate resume the pending 

amendment, which would be placed in 

status quo. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. I suggest the absence 

of a quorum until 3:45 p.m. 

The PRESIDING OFFICER. With the 

time to be equally divided? 

Mr. DOMENICI. That is fine. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. DOLE. Mr. President, I ask unanimous consent that the order for the 

quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

The PRESIDING OFFICER. The vote 

on the EXON motion to waive the Budget Act is in order. 

The yeas and nays have been ordered. 

The clerk will call the roll. 

The assistant legislative clerk called 

the roll. 

The yeas and nays resulted—yeas 47, 

nays 53, as follows: 

[Rollcall Vote No. 176 Leg.] 

YEAS—47 

Akaka 

Baucus 

Biden 

Bingaman 

Boxer 

Bradley 

Breaux 

Bryan 

Bumpers 

Byrd 

Conrad 

Daschle 

Dodd 

Dorgan 

Exon 

Feingold 

Feinstein 

Ford 

Glenn 

Graham 

Harkin 

Heflin 

Hollings 

Inouye 

Jeffords 

Johnston 

Kennedy 

Kerrey 

Kerry 

Kohl 

Lautenberg 

Leahy 

Levin 

Lieberman 

Mikulski 

Moseley-Braun 

Moynihan 

Murray 

Nunn 

Pell 

Pryor 

Reid 

Robb 

Rockefeller 

Sarbanes 

Simon 

Wellstone 

NAYS—53 

Abraham 

Ashcroft 

Bennett 

Bond 

Brown 

Burns 

Campbell 

Chafee 

Coats 

Cochran 

Cohen 

Coverdell 

Craig 

D’Amato 

DeWine 

Dole 

Domenici 

Faircloth 

Frist 

Gorton 

Gramm 

Grams 

Grassley 

Gregg 

Hatch 

Hatfield 

Helms 

Hutchison 

Inhofe 

Kassebaum 

Kempthorne 

Kyl 

Lott 

Lugar 

Mack 

McCain 

McConnell 

Murkowski 

Nickles 

Packwood 

Pressler 

Roth 

Santorum 

Shelby 

Simpson 

Smith 

Snowe 

Specter 

Stevens 

Thomas 

Thompson 

Thurmond 

Warner 

The PRESIDING OFFICER (Mr. GORTON). On this question, the yeas are 47, 

the nays are 53. Three-fifths of the Senators duly chosen and sworn not having 

voted in the affirmative, the motion is 

rejected. 

The point of order is sustained. 

The amendment falls. 

Mr. DOMENICI. Mr. President, I 

move to reconsider the vote. 

Mr. BRADLEY. I move to lay that 

motion on the table. 

The motion to lay on the table was 

agreed to. 

The PRESIDING OFFICER. The Senator from Iowa. 

PRIVILEGE OF THE CHAIR—SENATE CONCURRENT

RESOLUTION 13

Mr. HARKIN. Mr. President, I ask 

unanimous consent that Don Wiberg 

from the American Association for the 

Advancement of Science, a science fellow in my office, be granted the privilege of the floor for the duration of debate on this bill. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

VOTE ON AMENDMENT NO. 1121

The PRESIDING OFFICER. The 

question is on agreeing to the Roth 

amendment, No. 1121. The yeas and 

nays have been ordered. 

The clerk will call the roll. 

The legislative clerk called the roll. 

The PRESIDING OFFICER. Are there 

any Senators in the Chamber who desire to change their votes? 

The result was announced, yeas 50, 

nays 50, as follows: 

[Rollcall Vote No. 177 Leg.] 

YEAS—50 

Abraham 

Ashcroft 

Baucus 

Bennett 

Biden 

Bond 

Brown 

Campbell 

Chafee 

Coats 

Cochran 

Coverdell 

Craig 

D’Amato 

DeWine 

Dole 

Faircloth 

Feingold 

Frist 

Gramm 

Grams 

Grassley 

Gregg 

Hatch 

Helms 

Hutchison 

Inhofe 

Jeffords 

Kempthorne 

Kyl 

Lott 

Lugar 

Mack 

McCain 

McConnell 

Murkowski 

Nickles 

Packwood 

Pressler 

Roth 

Santorum 

Shelby 

Simpson 

Smith 

Snowe 

Specter 

Stevens 

Thomas 

Thompson 

Thurmond 

NAYS—50 

Akaka 

Bingaman 

Boxer 

Bradley 

Breaux 

Bryan 

Bumpers 

Burns 

Byrd 

Cohen 

Conrad 

Daschle 

Dodd 

Domenici 

Dorgan 

Exon 

Feinstein 

Ford 

Glenn 

Gorton 

Graham 

Harkin 

Hatfield 

Heflin 

Hollings 

Inouye 

Johnston 

Kassebaum 

Kennedy 

Kerrey 

Kerry 

Kohl 

Lautenberg 

Leahy 

Levin 

Lieberman 

Mikulski 

Moseley-Braun 

Moynihan 

Murray 

Nunn 

Pell 

Pryor 

Reid 

Robb 

Rockefeller 

Sarbanes 

Simon 

Warner 

Wellstone 

So, the amendment (No. 1121) was rejected. 

Mr. GLENN. Mr. President, I move to 

reconsider the vote. 

Mr. LEVIN. I move to lay that motion on the table. 

The motion to lay on the table was 

agreed to. 

VOTE ON AMENDMENT NO. 1123

The PRESIDING OFFICER. The 

question now occurs on agreeing to the 

Gramm amendment, No. 1123. 

Mr. GRAMM. Mr. President, I ask for 

the yeas and nays. 

The PRESIDING OFFICER. Is there a 

sufficient second? 

There is a sufficient second. 

The yeas and nays were ordered. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The assistant legislative clerk called 

the roll. 

The result was announced—yeas 31, 

nays 69, as follows: 

[Rollcall Vote No. 178 Leg.] 

YEAS—31 

Abraham 

Ashcroft 

Bennett 

Brown 

Campbell 

Coats 

Coverdell 

Craig 

Dole 

Faircloth 

Frist 

Gramm 

Grams 

Hatch 

Helms 

Hutchison 

Inhofe 

Kempthorne 

Kyl 

Lott 

Lugar 

Mack 

McCain 

McConnell 

Nickles 

Roth 

Santorum 

Shelby 

Smith 

Thompson 

Thurmond 

NAYS—69 

Akaka 

Baucus 

Biden 

Bingaman 

Bond 

Boxer 

Bradley 

Breaux 

Bryan 

Bumpers 

Burns 

Byrd 

Chafee 

Cochran 

Cohen 

Conrad 

D’Amato 

Daschle 

DeWine 

Dodd 

Domenici 

Dorgan 

Exon 

Feingold 

Feinstein 

Ford 

Glenn 

Gorton 

Graham 

Grassley 

Gregg 

Harkin 

Hatfield 

Heflin 

Hollings 

Inouye 

Jeffords 

Johnston 

Kassebaum 

Kennedy 

Kerrey 

Kerry 

Kohl 

Lautenberg 

Leahy 

Levin 

Lieberman 

Mikulski 

Moseley-Braun 

Moynihan 

Murkowski 

Murray 

Nunn 

Packwood 

Pell 

Pressler 

Pryor 

Reid 

Robb 

Rockefeller 

Sarbanes 

Simon 

Simpson 

Snowe 

Specter 

Stevens 

Thomas 

Warner 

Wellstone 

So the amendment (No. 1123) was rejected. 

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S7198 CONGRESSIONAL RECORD— SENATE May 23, 1995 

Mr. DOMENICI. Mr. President, I 

move to reconsider the vote by which 

the amendment was rejected. 

Mr. EXON. I move to lay that motion 

on the table. 

The motion to lay on the table was 

agreed to. 

Mr. DOMENICI addressed the Chair. 

The PRESIDING OFFICER. The Senator from New Mexico. 

UNANIMOUS-CONSENT AGREEMENTS

Mr. DOMENICI. Mr. President, I 

want to put several unanimous-consent 

requests which will finish out the day 

and set the amendments in order for 

today and early morning. 

I ask unanimous consent that all the 

time be yielded back on the Thurmond 

amendment and that the Senate proceed to a vote on that amendment 

without any intervening action or debate after the disposition of the Exon 

amendment. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. Mr. President, further, I ask unanimous consent that immediately following the disposition of 

the Thurmond amendment, Senator 

HARKIN be recognized to offer an 

amendment on which there be 15 minutes under the control of Senator HARKIN and 5 minutes under the control of 

Senator DOMENICI; that no amendments 

be in order to that amendment; and 

that following the conclusion of the 

time on that amendment, it be laid 

aside. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. Mr. President, I further ask unanimous consent that following the debate on the Harkin 

amendment, Senator FEINGOLD be recognized to offer an amendment on 

which there be 20 minutes under the 

control of Senator FEINGOLD, 20 minutes under Senator DOMENICI’s control, 

10 of which will belong to the Senator 

from Alaska, Senator MURKOWSKI; that 

no amendments be in order to the Feingold amendment; and that following 

the conclusion of time it be laid aside. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. Mr. President, I ask 

unanimous consent that the first vote 

on the Harkin amendment be limited 

to 20 minutes, followed by a 10-minute 

vote on the Feingold amendment, to 

occur Wednesday at a time to be determined by the two leaders. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOMENICI. Mr. President, I ask 

unanimous consent that following the 

conclusion of the debate on the Feingold amendment this evening, Senator 

SNOWE be recognized to offer an amendment. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. DOLE addressed the Chair. 

The PRESIDING OFFICER. The majority leader. 

Mr. DOLE. Mr. President, what is the 

pending business? 

The PRESIDING OFFICER. The motion to waive the Budget Act for the 

consideration of the amendment by the 

Senator from Nebraska [Mr. EXON]. 

Mr. DOLE. Following that, there will 

be a vote on the amendment by the 

Senator from South Carolina [Mr. 

THURMOND] and the Senator from Arizona [Mr. MCCAIN]? 

The PRESIDING OFFICER. The next 

vote would be a vote on the Thurmond 

amendment, debate on which is not yet 

concluded. 

Mr. DOLE. As I understand, time has 

been yielded back. 

The PRESIDING OFFICER. Time has 

been yielded back by consent. 

ORDER OF PROCEDURE

Mr. DOLE. Mr. President, I advise 

my colleagues, that will be the last 

vote today. We will continue to work 

on the measure until we are down to 4 

hours remaining, but there will be no 

more votes. 

Mr. HARKIN. Mr. President, is it 

still in order to reserve the right to object? We could not hear the unanimousconsent requests. 

Mr. DOMENICI. It says ‘‘on the 

amendment.’’ It means up or down. We 

had agreed to that and that was in the 

unanimous-consent request. 

VOTE ON MOTION TO WAIVE THE BUDGET ACT

FOR CONSIDERATION OF AMENDMENT NO. 1124

The PRESIDING OFFICER. The 

question occurs on agreeing to the motion to waive the Budget Act for the 

consideration of amendment No. 1124, 

offered by the Senator from Nebraska 

[Mr. EXON]. The yeas and nays have 

been ordered. The clerk will call the 

roll. 

The yeas and nays resulted—yeas 47, 

nays 53, as follows: 

[Rollcall Vote No. 179 Leg.] 

YEAS—47 

Akaka 

Baucus 

Biden 

Bingaman 

Boxer 

Bradley 

Breaux 

Bryan 

Bumpers 

Byrd 

Conrad 

Daschle 

Dodd 

Dorgan 

Exon 

Feingold 

Feinstein 

Ford 

Glenn 

Graham 

Harkin 

Heflin 

Hollings 

Inouye 

Jeffords 

Johnston 

Kennedy 

Kerrey 

Kerry 

Kohl 

Lautenberg 

Leahy 

Levin 

Lieberman 

Mikulski 

Moseley-Braun 

Moynihan 

Murray 

Nunn 

Pell 

Pryor 

Reid 

Robb 

Rockefeller 

Sarbanes 

Simon 

Wellstone 

NAYS—53 

Abraham 

Ashcroft 

Bennett 

Bond 

Brown 

Burns 

Campbell 

Chafee 

Coats 

Cochran 

Cohen 

Coverdell 

Craig 

D’Amato 

DeWine 

Dole 

Domenici 

Faircloth 

Frist 

Gorton 

Gramm 

Grams 

Grassley 

Gregg 

Hatch 

Hatfield 

Helms 

Hutchison 

Inhofe 

Kassebaum 

Kempthorne 

Kyl 

Lott 

Lugar 

Mack 

McCain 

McConnell 

Murkowski 

Nickles 

Packwood 

Pressler 

Roth 

Santorum 

Shelby 

Simpson 

Smith 

Snowe 

Specter 

Stevens 

Thomas 

Thompson 

Thurmond 

Warner 

The PRESIDING OFFICER. The 

point of order is sustained and the 

amendment falls because it is not germane to the underlying resolution. 

VOTE ON AMENDMENT NO. 1125

The PRESIDING OFFICER. The 

question is on agreeing to the Thurmond amendment, numbered 1125. 

Mr. THURMOND. Mr. President, I 

ask for the yeas and nays. 

The PRESIDING OFFICER. Is there a 

sufficient second? 

There is a sufficient second. 

The yeas and nays were ordered. 

The clerk will call the roll. 

The bill clerk called the roll. 

The PRESIDING OFFICER (Mr. 

BROWN). Are there any other Senators 

in the Chamber desiring to vote? 

The result was announced—yeas 40, 

nays 60, as follows: 

[Rollcall Vote No. 180 Leg.] 

YEAS—40 

Abraham 

Ashcroft 

Bennett 

Burns 

Campbell 

Chafee 

Coats 

Cochran 

Cohen 

Coverdell 

Craig 

Dole 

Faircloth 

Frist 

Gramm 

Grams 

Hatch 

Heflin 

Helms 

Hutchison 

Inhofe 

Kempthorne 

Kyl 

Lieberman 

Lott 

Mack 

McCain 

McConnell 

Murkowski 

Nickles 

Nunn 

Santorum 

Shelby 

Smith 

Snowe 

Stevens 

Thomas 

Thompson 

Thurmond 

Warner 

NAYS—60 

Akaka 

Baucus 

Biden 

Bingaman 

Bond 

Boxer 

Bradley 

Breaux 

Brown 

Bryan 

Bumpers 

Byrd 

Conrad 

D’Amato 

Daschle 

DeWine 

Dodd 

Domenici 

Dorgan 

Exon 

Feingold 

Feinstein 

Ford 

Glenn 

Gorton 

Graham 

Grassley 

Gregg 

Harkin 

Hatfield 

Hollings 

Inouye 

Jeffords 

Johnston 

Kassebaum 

Kennedy 

Kerrey 

Kerry 

Kohl 

Lautenberg 

Leahy 

Levin 

Lugar 

Mikulski 

Moseley-Braun 

Moynihan 

Murray 

Packwood 

Pell 

Pressler 

Pryor 

Reid 

Robb 

Rockefeller 

Roth 

Sarbanes 

Simon 

Simpson 

Specter 

Wellstone 

So the amendment (No. 1125) was rejected. 

The PRESIDING OFFICER. Under 

the previous order of the Senate, the 

Senator from Iowa is recognized to 

offer an amendment. The time is divided, according to that agreement, 15 

minutes for the Senator from Iowa and 

5 minutes for the Senator from New 

Mexico. 

f 

CHANGE OF VOTE 

Mr. MURKOWSKI. Mr. President, I 

wonder if the Senator from Iowa would 

yield for a unanimous-consent request 

in regard to a vote. 

Mr. HARKIN. Yes. 

The PRESIDING OFFICER. The Senator from Alaska is recognized. 

Mr. MURKOWSKI. I thank the Chair. 

Mr. President, on rollcall vote No. 

178, I am embarrassed to say that I 

voted yes. It was my intention to vote 

no. I have been a proponent of the position of no. Therefore, I would ask 

unanimous consent that I be permitted 

to change my vote. This will in no way 

change the outcome of the vote. 

mmaher on MIKETEMP with SOCIAL SECURITY NUMBERS