Robert Bennett

Mr. BENNETT

Mr. BENNETT. Mr. President, I understand that under the previous order, we now stand in recess for lunch?

Mr. BENNETT. Mr. President, I understand the Senator from Nevada wishes to speak. I will not take a great deal of time. I do want to respond, however, while the walls are still ringing with the oratory of my friend from Maryland, to some of the particular points that he made. Then I will allow the Senator from Nevada to proceed. I come at this with some background because I have been the CEO of a company that has been involved in litigation, and I have members of my family who have been involved in this circumstance. I also am not a lawyer and have a little difficulty following the twists and turns of the lawyers talking about the intricacies of rule this or rule that. The overall point that I think has to be made here is simply this. There is no division between companies and investors. Investors own the company. That which damages the company, damages the owners of the company, who are the investors. So, when the Senator from Maryland talks about pitting investors against the company, he is talking about pitting people against themselves. He implies that this bill helps the company to the detriment of the investors. That, frankly, is impossible. If the company thrives, who gets the money? The investors, the stockholders. If the company survives a market problem and becomes stronger as a result, who benefits? The stockholder, the owner of the company. The two are not separate, in spite of the fact that we have had all of this rhetoric implying that they are. The most significant problem, from my perspective, with this whole issue has been the attempt to divide the two and imply that the company is doing something to damage the investor and doing it deliberately for the benefit of [[Page S 17943]] the company. It simply does not wash. It simply does not track. Where have these lawsuits come from? They have come from lawyers who have not sought to protect investors and not sought to help the company, but to enrich themselves. I will give you one example that demonstrates the power of this circumstance. Let us say we have a company with 100 shares. Let us keep it very simple. We have a company with 100 shares. We have an investor who owns 1 of those 100 shares. We have another investor who owns 99 of those shares. Keep it very, very simple. The lawyer would rush to court and file a class action suit on behalf of the shareholder who owns one share on the grounds that the company has been damaged. And when the shareholder who owns 99 shares shows up and says, ``I would like to have a say in how this suit is prosecuted because it is going to damage my 99 shares,'' under the present law we are told, no, the investor with the one share got to the court before you did and he controls the suit and therefore he can make all kinds of claims he wants to in favor of the shareholders. The shareholder who owns 99 percent of the stock says, ``Don't do me any favors. Don't stand there and file this suit; it is going to damage my interests and, frankly, damage the interests of the shareholder who has one share as well, proportionately.'' Ah, but it does not matter, because the shareholder who has one share as well has a side deal with the lawyer and he is a professional plaintiff and the lawyer will pay him for filing the suit so the lawyer will get the settlement. That is inevitably what happens. Finally, the company says, ``It is going to cost us $1 million to fight this case.'' ``OK,'' says the lawyer, ``you don't want to spend the $1 million? That is fine with me. Let us settle it out of court for $750,000.'' Management says, ``We are not in the business of fighting lawsuits; we are in the business of producing products. Faced with that kind of blackmail, we have to do the best thing--for whom? We have to do the best thing for our shareholders. It will damage our shareholders $1 million to go to court. We can save them $250,000 if we pay this guy his blackmail and send him on his way.'' So they pay the $750,000. The lawyer takes his contingency fee, pays off his professional plaintiff on the side deal, and walks away saying, ``I have protected shareholder rights,'' when what he has really done is looted the company. What this bill says, what this conference report says, is in a circumstance like that the shareholder with 99 of those 100 shares can go to court and say, ``I am in control of this suit, not the one who has one share, and I move to dismiss.'' And the issue is over. Who is damaged by this bill under that scenario? The lawyer. Not the shareholder, not the investors; they are benefited by this bill. One other point I will make and then we can hear from the Senator from Nevada. This bill says there will be a proportionate liability, saying if someone was involved in a loss that was 3 percent that someone's fault, that someone is only liable for 3 percent of the damages. Oh, that is terrible, we are told. What a chilling effect that will have. Why, accountants and lawyers supporting the company will be immediately up to their eyeballs in fraud because they know they are only liable for a proportionate amount. That makes for interesting rhetoric on the floor of the Senate. It has little or no relevance to the real world. Let me give an example out of my own experience. I was an investor in a company that was trying to develop a particular mining project in the Western States. Unfortunately for me and my fellow investors, we did not do very well. For a variety of reasons, a variety of problems, we ultimately had to close down the operation. In the process of doing that whole activity we engaged the services of a very fine lawyer in Los Angeles, one of the premier lawyers of Los Angeles. And he gave us sound legal advice. He helped us through. A disgruntled supplier working with us on that circumstance kept trying to find some way to drag the lawyer who was helping us into a management role. He kept pushing and probing. I could not understand why. What in the world did he want to get the lawyer involved in the management kinds of decisions of this company that did not go anywhere? Finally, the fellow leveled with me. He said, ``If we can get into that lawyer's errors and omissions policy and prove that somehow he was involved in a management decision we think was a mistake, his insurance company will pay us a big payoff just to keep it out of court.'' The lawyer we were dealing with was careful enough that did not happen. But that was the motivation. Not to try to solve the problem, but to tap into the deep pocket of the insurance company for errors and omissions insurance that this lawyer prudently carried for his firm. So they were looking for every possible technicality to get past the management of the firm--the firm, being bankrupt, had no money to offer--and into the errors and omissions policy and the insurance policy of the lawyer. As I say, fortunately he was not successful. But that kind of attitude is the kind of attitude that causes lawyers to say, ``I will not help you,'' which causes his accountant to say, ``I will not take your account, I will not give you the expert advice you will need because I will get caught up in this.'' And it is to protect who? It is the investors who need the services of that lawyer and who need the services of that accountant that this bill is written as it is. So, Mr. President, I intend to come back to this theme often as we go through this debate. Let us not lose sight of what it is we are trying to do here. We are trying to protect the investor, and the investor, by definition, is the person who owns the company. Anything that damages the company damages the investor. Anything that chills the company's access to sound legal advice and sound accounting counsel damages the investor. Anything that causes the company to pay blackmail, out-of- court settlements damages the company, which damages the investor. So let us understand through this whole debate what the conference report does, what the bill does, what the committee approach does is to protect the investor. As we listen to rhetoric, saying let us protect the investor and punish the company, let us always keep that basic principle in mind: The owner of the company is the investor. With that, Mr. President, I suggest the absence of a quorum.

Mr. BENNETT. Mr. President, I will allow my colleagues to proceed, but I did want to respond briefly to some of the comments made by the Senator from Nevada, having been on the floor through his entire statement. I think there are a few points we need to make and then I will sit down and let my colleague proceed. As I took notes from the comments of the Senator from Nevada, his first point listed how difficult it is to prove fraud. He gave us seven things he said are hard to prove. I agree with him completely. These are hard to prove. They are also very easy to allege and an alleging of these things is what leads to the settlements out of court that are the problem for many of the companies we are dealing with. Second, he quotes from the Wall Street Journal. He quotes from Crain's, saying fraud is soaring; the Wall Street Journal headline, ``The Bad Guys are Winning.'' My only comment is if indeed that is so, why are not the Bill Lerach's of this world going after those bad guys instead of conducting the kind of practice that we have seen described here on the floor in the previous debate? Third, he makes the point that the biggest number of suits are between companies, not class action suits on behalf of the individual investors. He says this bill does not address that. I agree with him, this bill does not address that. If he feels that is a problem that needs to be addressed, he can file a bill that addresses that. The fact this bill does not address that does not mean that the issues the bill does address are not meritorious and need not be addressed. Then he talks about the statute of limitation. There has been a lot of debate about that. I only make the point that this bill does not change the present level of the statute of limitation. We are not talking about putting a heavier statute of limitation burden [[Page S 17952]] than currently exists. We are talking about allowing the current law to continue. Fifth, he talks about the great loss to cities and pension funds that cannot be recovered if we cannot go after the aiders and the abettors. Earlier in his statement he said we are being given evidence by anecdote on the part of those of us in support of this bill, but he gives us no anecdote to show the great loss by cities and pension funds except the anecdote that we hear again and again--and he brought it up under these circumstances--of Charles Keating. Well, I take some time to make the record very clear on Charles Keating, because we hear that again and again as the anecdote of what we will lose if this bill is passed. I will make these points, Mr. President. Most of the losses from the savings and loan scandal did not result from securities fraud. They resulted from outright criminal activity and looting the assets of the companies. They do not fall under the purview of this bill at all. They are simply irrelevant to this discussion. Even those S&L losses that did result in part from securities fraud would have been recoverable under this bill. It does not in any way, ex post facto, go back and say, if this bill had been in law at the time, you could not have gotten this recovery, you could not have gotten this recovery. Why do I say that? Here are the reasons. Statements by Keating and his cohorts would have failed every one of the stringent preconditions in the conference report safe harbor provision for forward-looking statements. Every one of Keating's statements and his people's statements would have been actionable had this report been law. Second, the conference report would not have immunized the alleged aiders and abettors because the conference report authorizes the SEC to take enforcement action against aiders and abettors, and the Keating investors would have recovered fully even without those aiding and abetting claims. Third, the conference report would not have rendered Keating's actions time barred. It would have no impact on the statute of limitations in those areas because, as I say, it does not change current law, and all of the actions under Keating were brought within the applicable timeframe. Therefore, the Keating thing does not apply there as an anecdote. We must understand that Keating's fraud did not apply to forward- looking statements. They made flat statements of error about the past. They lied flat out about what had been done. This bill does not protect anybody who is going to lie flat out about the past. The conference report would not have empowered Keating's cohorts to control the litigation. Under this bill, they would be as liable as they were in previous law. It would not have delayed or imposed any obstacles to the actions that were taken. The conference report does not, as some claim, inflexibly require courts to stay discovery every time a motion to dismiss is filed. It would have had no effect if this bill had passed--it would have no effect on the damage awards. Joint and several liability would still have been available under the fact circumstance of Keating. I could go on and on. The point I want to make is very clear. It is a red herring in this debate to talk about Charles Keating and the S&L disaster because this legislation would have had no impact whatsoever on the Government's ability to proceed in criminal action or an individual investors' ability to proceed in class actions against Charles Keating. The comment was made that the safe harbor will now allow people to lie. No, it will not. If you make a false statement, the one referred to as an example by the Senator from Nevada, ``The stock is going to triple,'' this bill does not protect you because you cannot make a prediction about what is going to happen to the stock under current SEC regulations and not be called in violation of those regulations for that. What you can say is we believe we will be able to make the marketplace with our widget on such and such a date, and that we will have X numbers of copies of that widget. But why would any executive make that statement if he did not believe it were the case? Nothing could be more damaging to his company or his reputation or his credibility as an executive than for him to make that kind of statement, meeting in front of securities analysts at the time of an IPO. You want to be very careful to preserve your credibility with the investment community. No, this is not the problem, CEO's making statements to securities analysts. I will tell you what the problem is and why we need a safe harbor. Let us say, within your company you have two engineers who are examining your product. Engineer A says, ``I do not like the way this thing works. I would like to fine tune it.'' Engineer B says, ``I disagree with you. I think it works just fine and it is ready for market.'' Along comes one of these strike suits and the discovery starts and the lawyer gets ahold of engineer A's position and immediately he stands up and says, ``Mr. Chairman,'' speaking to the CEO of the company, ``you have within your files a document where one of your employees told you absolutely this product was defective.'' He is quoting engineer A. He conveniently does not quote engineer B, who disagrees with him. And, there you are, you have made a false statement. And, ``If you did not know the product was defective, you should have known the product was defective.'' That is the problem. That is the kind of thing that happens over and over again in these circumstances, and that is why people settle. We are not talking about CEO's standing up and predicting the stock will triple when we talk about a safe harbor. We are talking about safe harbor for people who make statements that they believe are true at the time and then will get trapped in this kind of activity that I have described later on. Finally, we come to the point where the Senator from Nevada says there is no need for this. There has been no explosion of these strike suits. This is not a phenomenon that has suddenly hit us. I close by quoting. He quotes from appropriate publications. I have a few that I would like to quote from. The first one, the Washington Post on the 18th of November, 1995. Referring, in an editorial, to this bill it says: The bill was a response to a genuine outrage. A small number of lawyers have developed a technique of pouncing on any company whose stock price suddenly drops sharply. They then comb through past statements by the company to find the conventional expressions of hope for the future--and sue on grounds that those statements have misled and defrauded investors. That's a highly strained definition of fraud, but the present state of law makes this kind of suit very dangerous to a company. Although these are nominally shareholders' suits, they generally are instigated and controlled entirely by the lawyers. The companies most vulnerable to this destructive tactic are a particularly valuable kind--small, recently established high-tech firms whose stock prices tend to be volatile. And then from the Economist magazine dated December 2, 1995, in another editorial, ``Suits or Straitjackets,'' the subhead says ``The American Congress wants to make it harder for some shareholders to sue companies for fraud. This would be a good thing.'' The editorial says the following: Class-action lawsuits, in which a bunch of investors join together to sue a firm whose shares have fallen sharply, are a growing problem for America's high-tech companies. More than 650 such suits have been filed in the past four years alone, including ones against each of the ten biggest firms in Silicon Valley. There is nothing wrong with investors using the courts to protect their rights. But a growing number of these suits are being brought by those who are victims not of corporate misinformation, but of their own (and their lawyers') greed. As a result, many managers now hesitate to offer investors any predictions at all, lest they end up in court. That is why Congress is about to pass a measure that would make frivolous securities lawsuits harder to bring. Among other things, the bill, which should clear both the House and Senate easily, does three things. First, it allows firms to issue forecasts to investors providing that they list all of the important factors--a change in interest rates, say, or a slump in the consumer-electronics industry--that could affect them. Second, a defendant's auditors and equity underwriters would no longer be liable for the full extent of shareholders' losses, but only for those that are caused by their own misbehavior. Third, the bill encourages judges to slap fines on lawyers who bring groundless suits. The final paragraph of the editorial summarizes it very well. It says: As a general rule, it is a good idea to allow shareholders to protect themselves. This would not change under the proposed legislation. And in exchange for reform, they would [[Page S 17953]] get more (and better) corporate information on which to base their investment decisions. Mr. Clinton faces a choice. Either he can veto the bill on the mistaken ground that he is protecting shareholders' rights, or he can sign it and help put more money in their pockets. Mr. President, I ask unanimous consent that the full text of both editorials be printed in the Record.

Mr. BENNETT. Mr. President, I ask unanimous consent the unanimous- consent agreement be modified further, that Senator Hatch be recognized to speak following Senator Leahy when we come back after lunch, for 15 minutes.

Mr. BENNETT. Mr. President, I thank the Chair. I thank my colleagues. The distinguished Senator from Connecticut, one of the original cosponsors of this bill and one of leaders of this fight for more years than I have been in the Senate, is now on his feet, and I am delighted to yield to him such time as he may require.

Mr. BENNETT. I ask unanimous consent to include Senator Reid for 15 minutes following Senator Boxer.

Mr. BENNETT. I ask the Chair, how much time remains on each side?

Mr. BENNETT. I thank the Chair.

Mr. BENNETT. Mr. President, prior to that action, I ask unanimous consent that following Senator Hatch's presentation this afternoon, that the senior Senator from South Carolina, Senator Thurmond, be recognized for 15 minutes on a nongermane matter. This, I might note, is the senior Senator's 93d birthday, and he has asked for this time. I think anyone who lives to that age and retains the faculties that the senior Senator from South Carolina has ought to be given whatever it is he asks for on his birthday.

Mr. BENNETT

Mr. BENNETT. Under those circumstances, Mr. President, I would suggest the absence of a quorum, and ask unanimous consent that it be charged to the opponents--I withhold.

Mr. BENNETT. Mr. President, as I look at the time allocated under the unanimous-consent agreement, the Senator from Nevada [Mr. Bryan] has 10 minutes. If he wishes to take that 10 minutes now, that could get us at least that much farther down the road.

Mr. BENNETT. Mr. President, I understand the opponents of the bill are gathering their forces, and as we are waiting for that to happen, rather than spend the time in a quorum call, I would simply make an observation that I have made previously in response to the Senator from California which is, first, that none of the losses that occurred as a result of the Keating S&L circumstance to which she referred so often would be affected by this legislation. All of the remedies that were available to those people in the Keating circumstance would still stay in the law. The newspaper editorials which she quoted that implied to the contrary are incorrect. This has nothing to do with the Keating S&L circumstance. The other point that I would make again is that when we are talking about protecting investors, we are talking about the owners of the company--that is what investors are--and anything that damages the company, or damages the investors. So it is unfair to try to pit companies against investors as has been implied in some of the articles which she quoted. I say to my friend from Nevada that I am prepared to yield at any point that an opponent to the bill might arrive.

Mr. BENNETT. Mr. President, I yield the Senator from North Carolina 1 minute.

Mr. BENNETT. I do not wish to interrupt the Senator from California. I do not have the list in front of me, so why does she not go ahead. Mr. President, I suggest the absence of a quorum.

Mr. BENNETT

Mr. BENNETT. Mr. President, I suggest that we grant the unanimous- consent request of the Senator from Illinois, during which time--not to be disrespectful to his announcement--we sort out the time on this side.

Mr. BENNETT

Mr. BENNETT. Mr. President, I ask unanimous consent that the Committee on Finance be permitted to meet Tuesday, December 5, 1995, beginning at 10 a.m. in room SD-215, to conduct a hearing on the Organization for Economic Cooperation and Development [OECD] Shipbuilding Subsidies Agreement.

Mr. BENNETT. Mr. President, I ask unanimous consent on behalf of the Governmental Affairs Committee to meet on Tuesday, December 5, at 9:30 a.m. for a hearing on S. 88, Local Empowerment and Flexibility Act of 1995.

Mr. BENNETT. Mr. President, I ask unanimous consent that the Subcommittee on the Administrative Oversight and the Courts of the Committee on the Judiciary, be authorized to meet during the session of the Senate on Tuesday, December 5, 1995, at 10 a.m., in the Senate Dirksen Building, room 226, to hold a hearing on S. 984, the Parental Rights and Responsibilities Act.

Mr. BENNETT

Mr. BENNETT. Mr. President, I am pleased to join my colleagues today in introducing this important legislation and I congratulate Chairman Murkowski for his tremendous leadership, as well as Congressman Jim Hansen, who has led the debate in the House of Representatives. While the issue of R.S. 2477 rights-of-way may not be of concern to many of our colleagues east of the Rocky Mountains, it is certainly an issue of importance to States in the West. The bill which we are introducing today will take great strides in putting an end to a controversy which has nearly paralyzed many rural counties in the State of Utah. As my colleagues have eloquently described the history of this issue, I will not go into great detail. However, I would like to make a few very important points. The R.S. 2477 statute is the authority under which many of the existing State and county highways in my State were constructed and operated. For example, in Garfield County, UT, portions of Highway 12, one of the most scenic and most heavily traveled routes in southern Utah, have no other written authorization besides the R.S. 2477 authorization. Another example is the Hole-in-the-Rock road, historically one of the most significant routes in Utah history. This legislation seeks to address the problems that developed by the failure of R.S. 2477 to define what a highway was. By modern definition, highways are generally considered to be paved two or four lane roads, suitable for all types of traffic. However, southern Utah is crisscrossed with literally thousands of improved and unimproved roads which, regardless of the condition of the roads, are the lifelines to many native American communities, rural communities, public recreation areas, mining, oil and gas, and grazing claims. Currently, the only way a State or county can confirm the legality of a right-of-way is to file a lawsuit in a Federal court. This has placed an onerous financial burden on county governments which sincerely want to resolve the issue. Indeed, many of the smaller counties in Utah cannot afford to file claims even though R.S. 2477 rights-of-way is critical to their current and future economic survival. Mr. President, Utah has asserted more claims for R.S. 2477 than any other State. Nearly 5,000 claims have been asserted at one time or another. You can imagine the tremendous financial burden that result both for the county and the Federal Government. This legislation preserves the important role of State law in determining what is and is not a valid right-of-way. R.S. 2477 was originally an offer made by Congress to State and local governments to create highways across the vast stretches of western desert and to help settle the West. The original act recognized State law and relied on State law to provide many of the details of its implementation. In years past, the Department of the Interior has generally acquiesced to State law. Since the passage of FLPMA, and even up until the recent administration took office, the Department of the Interior's policy has generally looked to State law to determine what constitutes a public highway. Mr. President, this is a good bill. It restores the role of the State in determining what is and is not a valid right-of-way. It forces both the claimant and the Federal Government to come to the table. It narrows the time frame in which claims might be filed to 5 years. It grants the Secretary 2 years to object in writing to the claim and to provide a factual and legal basis for each objection. The proposed regulations would put the burden of proof on the claimant. It places responsibility on the holders of the claims to define, file, and defend them in court. This legislation will prevent roads from deteriorating which have been locked up. Most important, the legislation will preserve the ability of citizens to access public lands and, in many cases, private lands to mine, hunt, fish, camp, hike, view wildlife, and enjoy our fabulous natural beauty. The bill is not without its critics. The administration has already claimed that the bill will make it too easy to file new claims, and too burdensome for the Government to reject ones that do not meet the statutory criteria. Mr. President, I believe that we can take steps that will permit us to work through a large portion of the outstanding claims and I intend to work closely with my colleagues to do [[Page S 17533]] so. I encourage my colleagues to support this legislation and I look forward to assisting the chairman in any way possible to move this bill quickly through the Senate.

Mr. BENNETT

Mr. BENNETT. Mr. President, I am pleased to join my colleagues today in introducing this important legislation and I congratulate Chairman Murkowski for his tremendous leadership, as well as Congressman Jim Hansen, who has led the debate in the House of Representatives. While the issue of R.S. 2477 rights-of-way may not be of concern to many of our colleagues east of the Rocky Mountains, it is certainly an issue of importance to States in the West. The bill which we are introducing today will take great strides in putting an end to a controversy which has nearly paralyzed many rural counties in the State of Utah. As my colleagues have eloquently described the history of this issue, I will not go into great detail. However, I would like to make a few very important points. The R.S. 2477 statute is the authority under which many of the existing State and county highways in my State were constructed and operated. For example, in Garfield County, UT, portions of Highway 12, one of the most scenic and most heavily traveled routes in southern Utah, have no other written authorization besides the R.S. 2477 authorization. Another example is the Hole-in-the-Rock road, historically one of the most significant routes in Utah history. This legislation seeks to address the problems that developed by the failure of R.S. 2477 to define what a highway was. By modern definition, highways are generally considered to be paved two or four lane roads, suitable for all types of traffic. However, southern Utah is crisscrossed with literally thousands of improved and unimproved roads which, regardless of the condition of the roads, are the lifelines to many native American communities, rural communities, public recreation areas, mining, oil and gas, and grazing claims. Currently, the only way a State or county can confirm the legality of a right-of-way is to file a lawsuit in a Federal court. This has placed an onerous financial burden on county governments which sincerely want to resolve the issue. Indeed, many of the smaller counties in Utah cannot afford to file claims even though R.S. 2477 rights-of-way is critical to their current and future economic survival. Mr. President, Utah has asserted more claims for R.S. 2477 than any other State. Nearly 5,000 claims have been asserted at one time or another. You can imagine the tremendous financial burden that result both for the county and the Federal Government. This legislation preserves the important role of State law in determining what is and is not a valid right-of-way. R.S. 2477 was originally an offer made by Congress to State and local governments to create highways across the vast stretches of western desert and to help settle the West. The original act recognized State law and relied on State law to provide many of the details of its implementation. In years past, the Department of the Interior has generally acquiesced to State law. Since the passage of FLPMA, and even up until the recent administration took office, the Department of the Interior's policy has generally looked to State law to determine what constitutes a public highway. Mr. President, this is a good bill. It restores the role of the State in determining what is and is not a valid right-of-way. It forces both the claimant and the Federal Government to come to the table. It narrows the time frame in which claims might be filed to 5 years. It grants the Secretary 2 years to object in writing to the claim and to provide a factual and legal basis for each objection. The proposed regulations would put the burden of proof on the claimant. It places responsibility on the holders of the claims to define, file, and defend them in court. This legislation will prevent roads from deteriorating which have been locked up. Most important, the legislation will preserve the ability of citizens to access public lands and, in many cases, private lands to mine, hunt, fish, camp, hike, view wildlife, and enjoy our fabulous natural beauty. The bill is not without its critics. The administration has already claimed that the bill will make it too easy to file new claims, and too burdensome for the Government to reject ones that do not meet the statutory criteria. Mr. President, I believe that we can take steps that will permit us to work through a large portion of the outstanding claims and I intend to work closely with my colleagues to do [[Page S 17533]] so. I encourage my colleagues to support this legislation and I look forward to assisting the chairman in any way possible to move this bill quickly through the Senate.

Mr. BENNETT

Mr. BENNETT. Mr. President, I listened to the debate here this morning with some interest. I do not have a prepared statement, but I have a few observations I want to make. First, with respect to this forecasting issue and what should be and should not be in it, I would like to point out one fact that many have ignored with respect to forecasting. This is not a forecast; this is a historical report. Martin Feldstein, writing in the Wall Street Journal, has pointed out the difference between the forecast made 2 years ago for the President's tax increase and the amount of tax actually received is this: The Federal Government has received one- third as much tax revenue as was forecast. Nobody is talking about that. They say the President raised the taxes because he had so much courage and that solved the deficit problem. In fact, the forecasters were off by two-thirds. We got one-third as much money as was forecast. Now we are being told, ``Yeah, the blue chip forecasters are now saying that we will get more money than CBO or OMB say we will get. So why don't we take that forecast?'' I will be happy to take that forecast, Mr. President. I will do it in a heartbeat on this condition--that we use the same blue chip forecasters to score the legislation that we pass. But we are stuck with the CBO whether we like it or not. The CBO scores the Senator from New Mexico on every budget action that he takes. Why do we have one set of numbers for our legislative action and then say we will have another set of numbers for the balanced budget circumstance? Let us put it out very clearly, Mr. President. If the CBO is wrong and too low, that means that the bill that we pass will bring us to a balanced budget faster than 7 years. That means if the CBO is wrong, we will make the terrible mistake of balancing the budget in 5. But, if the CBO is right and OMB is wrong and we pass the President's program, that means we will balance the budget never. I have learned since I have come to Washington the true definition of the phrase ``the outyears.'' I never knew what the outyears meant. In Washington, the outyears mean those years that are far out there. Well, in fact, in this debate, Mr. President, the outyears mean never. We have to recognize that if we are going to balance the budget, we have to start now and not depend on a rosy scenario for the outyears, no matter who makes it, whether it is CBO or OMB or the blue chip forecasters or whoever. If we wait for the outyears to make the decision, we will never ever get there. So we must take the first step. We must take it this year. And we must not flinch. One other thing, Mr. President. The President pounded the pulpit the other day and said some 16 times he believes in a balanced budget. Well, Mr. President, we are going to find out, because some of the political handlers at the White House did not bother to inform the President that the election is next year, not this year. And between now and then he is required by law to send us a budget. And we will see when he sends us his budget in 1997 just how serious he is. And we will see how effective it is because the budget he sent us in 1996----

Mr. BENNETT

Mr. BENNETT. Is it the Senator's memory that Senator Daschle endorsed the 7.1 percent of Senator Mitchell's proposal?

Mr. BENNETT. Is it the Senator's recollection that the majority of the Democratic Members of the Senate endorsed the 7.1 percent growth rate in Medicare?

Mr. BENNETT. Does the Senator not agree with the Senator from Utah in finding it interesting that since we proposed to allow Medicare to grow more rapidly than the President did, more rapidly than the bill endorsed by a majority of the Members of the Democratic Party in the Senate, that we are now being pilloried as those who would slash Medicare?

Mr. BENNETT. Perhaps we should choose the 7.1 percent level that they endorsed in the previous Congress when they controlled it and thereby slash Medicare a little more.