Robert Bennett

Mr. BENNETT

Mr. BENNETT. Mr. President, today I am introducing a bill which would direct the U.S. Forest Service, in consultation with the Department of the Interior, to study the Great Western Trail to determine if it should be included in the National Scenic Trails System. The Great Western Trail takes in some of the greatest outdoor and natural opportunities the West has to offer. The trail will be a continuous, multiple-use route that reaches from Mexico to Canada. It encompasses a series of existing trails, mostly on public lands, running through a corridor which extends through five States. The trail itself extends from the panhandle of Idaho to the southern tip of Arizona. Along the 2,400 mile length of the trail are numerous recreational opportunities for all interests, from cross-country skiers to backpackers, hikers, and off-road enthusiasts. The trail passes through areas rich in western heritage as well as some of the most spectacular scenery in the world. Prior to designating the Great Western Trail as part of the National Trails System, a study must be conducted to determine its feasibility. This bill take the first step by instructing the Secretary of Agriculture, in consultation with the Secretary of Interior, to conduct a study of the current land ownership and use along the designated trail route. The study would include cost estimates of any necessary land acquisition as well as reporting on the appropriateness of including motorized activity along the trail route. Since the proposed trail route follows roads and trails already in existence, very little right-of-way acquisition would be required and minimal construction would be necessary. This study will play an important role by determining land and resource capability, public safety needs, and the administrative requirements necessary to designate the trail as part of the National Trails System. It is also important to note that the trail takes advantage of and will rely heavily upon volunteer construction, maintenance, and management of the trail system. Communities throughout the West will benefit tremendously from the Great Western Trail. The recreational opportunities and rural economic development that travel and tourism will bring to the region will not only provide an economic boost to the local economies, but will help those who travel the Great Western Trail to gain a greater appreciation for our Nation's heritage. The Great Western Trail will provide a positive experience for those who use it. It will become a significant and vital addition to America's system of national trails.

Mr. BENNETT

Mr. BENNETT. Mr. President, I pay tribute today to an extraordinary woman. She was not famous. She was not wealthy. She was not formally educated. She won none of the coveted awards or accolades that we usually associate with achievement. And yet, by anyone's measure, she was a rare and successful individual. She looked at life, both the good and the bad, and chose to shape her existence around the possible. She married and raised children in relative poverty, but taught her family what the wealth of love and hope means. She educated herself in life's classroom, constantly reading and absorbing. She reached out to those in need and gave kindness where none was expected. Four of her nine children met early and untimely deaths. Still she looked forward. She expanded not only her mind but her many talents. She overcame challenges and embraced life's opportunities as they came, no matter what her age. She was a woman of devout faith. Small in stature, she was large of heart and warm in spirit. Her home was a haven for friends and family. Earlier this month, at the age of 89--and independent till her very last day--she completed her mortality. She is survived by 5 children, 39 grandchildren, 92 great-grandchildren, and 3 great, great- grandchildren. Her name was Helen Kamm Hatch. And she was the mother of my friend and fellow colleague from Utah, Senator Orrin G. Hatch. I am proud to be able to honor her memory. She will be sorely missed.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise to introduce legislation which will amend the Colorado River Basin Salinity Control Act and authorize additional measures to carry out the salinity program. During the last session of Congress, this noncontroversial bill passed the Senate Energy Committee; closing days of the session. I am hopeful we will be able to move this bill early in this session of Congress. The Colorado River Basin Salinity Control Program has been authorized by Congress and implemented by Federal and State entities for the last 20 years. There is now a need to update and revise the authorizations provided for in the Colorado River Basin Salinity Control Act so that the Bureau of Reclamation [Reclamation] can move ahead in a more responsive and cost-effective way with the portion of the program which Reclamation is responsible for administering. The following statement provides general background as to the purposes and legislative history of the Salinity Control Act and the identified reforms necessary to the act. Background In the 1960's and early 1970's, rising salinity levels in the Lower Colorado River caused great concern because of damages inflicted by salt dissolved in the water. This damage was occurring in the United States and Mexico. In 1972, with the passage of the Clean Water Act, it was apparent that water quality standards needed to be adopted in the United States, and a plan of implementation to meet those water quality standards needed to be identified. The U.S. Environmental Protection Agency [EPA] published water quality standards for the Colorado River. The United States modified the treaty with Mexico to add to the United States commitments a water quality parameter. The Colorado River Basin States were involved in many of the discussions with respect to both the Mexico commitment and the water quality standards. Through the formation of a Colorado River Basin Salinity Control Forum, the States became collectively and formally involved in discussions with Federal representatives concerning the quality of the Colorado River. At the urging and with the cooperation of the basin States and the State Department in 1974, the Colorado River Basin Salinity Control Act was enacted by Congress. That authority became formally known as Public Law 93-320 (88 Stat. 266), the Colorado River Basin Salinity Control Act. That act consisted of two titles. Title I addressed the United States commitment to Mexico, and title II addressed the authorization for programs above Imperial Dam to help control the water quality in the river for the benefit of users in the United States. The amendments now being proposed in this legislation are exclusively related to title II authorizations. Title I has not been amended since the original enactment in 1974. Title II has received minor modifications as authorities were given to Reclamation to consider salinity control implementation strategies in some additional areas of the Colorado River Basin. More importantly, title II was amended in 1984 by Public Law 98-569 (98 Stat. 2933). The 1984 amendments provided for a formally constituted U.S. Department of Agriculture [USDA] program within the Salinity Control Act. The amendments gave additional responsibilities to the U.S. Bureau of Land Management [BLM] to seek cost-effective salinity control strategies. The amendments further described the basin States' cost-sharing responsibilities with respect to the USDA program, and further increased the cost-sharing requirements of the basin States with respect to newly authorized and implemented Reclamation programs. Needed Reforms The Colorado River Basin Salinity Control Forum [Forum] has perceived for some period of time the need for amendments to the authorization relating to Reclamation's program. It has been felt by the States that the program has, at times, been encumbered by formalities imposed by Reclamation and the authorizing legislation which related to procedures Reclamation used in implementing major water development projects in decades past. It is felt that authorization which would allow Reclamation to avoid some of these encumbrances and move more expediently and cost effectively to the best salinity control opportunities would ensure compliance with the water quality standards of the Colorado River, and this compliance could be accomplished at less cost. There is a need to allow Reclamation to consider salinity control strategy implementation in three geographic areas where planning documents have been prepared and cost-effective salinity control strategies have been identified. In the past, for Reclamation to implement salinity strategies in new areas, formal approval by Congress has been required. It is viewed that this is encumbering. Further, it is felt that Reclamation needs flexibility so that it might move to opportunities with the private sector to cost-share, offer grants, and/or allow the private sector, rather than the Federal Government to contract for the expenditure of appropriated funds. In this manner the limited dollars would not be partially lost through expenses which have been directly identified with the use of Federal procurement procedures. Last, Reclamation was authorized a ceiling expenditure in 1974 by Congress. After two decades, the funds expended are approaching the authorized ceiling. It is believed that it would be more appropriate for a $75 million authorization provision to be placed on the program. This will allow the salinity program to move forward for approximately 3 to 5 years at proposed spending levels. The Salinity Forum believes that legislative reform for the Reclamation program would be tailored after authorities given to the USDA by the Congress in 1984. The inspector general for the Department of the Interior released findings in 1993. Those findings are incorporated in a document entitled, ``Audit Report, Implementation of the Colorado River Basin Salinity Control Program, Bureau of Reclamation'', March 1993. The above legislation proposals are in keeping with the recommendations of the inspector general. Last year, Reclamation sent out a broad-based mailing to affected parties and interest groups asking for recommendations concerning the need for potential future efforts by Reclamation with respect to salinity control. Further, Reclamation asked for input as to how the program might possibly be reformulated. The responses received by Reclamation are in keeping with this legislation, and it is my understanding that the Bureau of Reclamation is expected to support this legislation again this year. To that end, I appreciate the excellent working relationship that has existed between my office, the Commissioner's Office of the Bureau of Reclamation, and the Colorado River Basin Salinity Control Forum. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BENNETT

Mr. BENNETT. Mr. President, I come to the floor to talk about another matter, but I must respond to my friend from Arkansas--and he is, indeed, my friend--and say to him that I would be happy to cosponsor with him a bill that will call for royalty on mining claims. However, we have one slight disagreement about the definition of royalty. My friend from Arkansas wants a royalty on gross revenues, where I am willing to give him a royalty on net revenues. I know the arguments about that and the answers about that. People say, ``Oh, the bookkeepers will juggle the books in such a way as to guarantee there are no net revenues; therefore, royalty on net will not produce anything of value.'' Royalty on gross, however, has the same impact as a decrease in price. Coming from the State of Utah, where we have had direct experience with what happens when there is a decrease in price in hardrock mining minerals, I know how devastating that can be to the economy. One of the largest employers in my State is Kennecott, with the largest open-pit copper mine in the world. When the price of copper fell below a certain level--and I will be happy to supply that for the Record later on if Senators are interested--Kennecott continued to produce even though they were producing at a loss. They did this because they wanted to maintain their position in the world and maintain their market share. After awhile, however, they could not continue to do that, and ultimately they shut down. The impact on the economy of the State of Utah, and particularly of the Salt Lake area, was devastating. Kennecott was employing about 5,000 people. Kennecott was buying equipment from suppliers all over the valley that were employing thousands more. Kennecott no longer paid any State income taxes. Certainly, they were not paying any Federal income taxes. And their employees who were out of work were not paying State or Federal income taxes, but many of them were drawing unemployment compensation. Kennecott was idle for several years until the price of copper went back up. And when the price of copper went back up, Kennecott said we are going to reopen the Kennecott mine. It was a great day for the State of Utah and for the city of Salt Lake when Kennecott reopened. They started rehiring again. They did not hire all 5,000 back; they had modern mining techniques, and they only hired 2,500. Even so, 2,500 good-paying jobs in Utah were most welcome. As long as the price of copper stays up, those jobs will be there and Kennecott will continue to supply that which we need in the economy there. A gross royalty, as I said, Mr. President, is exactly the same thing as a price cut. If you put a gross royalty of 6 percent on the price of copper, that is exactly the same thing as cutting the price of copper 6 percent. If you say, no, we will do a 3-percent royalty, that is exactly the same thing as cutting the price of copper 3 percent. Can the company afford to pay it? If the price of copper is sufficiently high on the world market, absolutely, no problem. But what happens if the price of copper starts to fall and that margin is the difference, that gross royalty is the difference between a price the company at? The end result you know, Mr. President; the company shuts down. So I am willing to endorse the idea of changing the 1872 mining law. I am willing to join with my friend from Arkansas in writing a change to that law and putting in a royalty for the Federal Government on these minerals. But I want it to be a net royalty rather than a gross royalty so that it does not produce the result of lowering the world price of the commodity for that particular producer. Let us take two mines, both of them mythical, but they will illustrate the point. In mine A, they are mining gold with a bulldozer. That is how we mine copper, by the way, at the Kennecott copper mine. We mine it with a bulldozer. It is an open pit copper mine, and they just bulldoze the material into the crushers and ultimately into the separators, and ultimately they get the copper. In mine B, they have to build shafts. They are mining with all kinds of challenges and difficulties finding the vein of gold. In mine A, the cost of mining the gold --again, picking a number out of the air, but these are theoretical mines--in mine A, the gold is selling for $380 an ounce. Their cost of producing it is about $100 an ounce. They have a gross margin of $280 an ounce on that gold. Mine B gold is selling for $380 an ounce. Their cost of producing it is $350 an ounce. They have a margin of $30. If you come along and put a gross royalty on gold, mine A is not going to pay any attention to that cost at all. Good Heavens, they are earning $230 an ounce. An extra $30 off of that, they are still going to earn $200 an ounce. No problem. They can pay the royalty, not be concerned about it, go on their way, produce gold. But in mine B, $30 an ounce gross royalty means they have to shut down. And when you go into a mining situation, you have to look at not only the price that is being earned on the world market, but you have to look at your cost of production. So if you had a net royalty, the kind that I am willing to support, you would say, in mine A, if the royalty, to pick a number to keep it easy for those of us who cannot calculate too fast, is 10 percent, mine A is going to pay you on that $230 gross margin $23 an ounce. Mine B is going to pay you $3 an ounce. But both mine A and mine B are going to be in business, and both of them are going to be hiring people, and both of them are going to be maintaining payrolls, and both of them are going to be generating income to the Federal Government. This brings me to the second point where I have a disagreement with my friend from Arkansas when he says these fabulous finds that he describes produce not one penny to the Federal taxpayer. That is simply not so. If the mine is as productive as the Senator indicates that it will be, it produces income taxes from the profits of the company that gets the gold. It produces income taxes from the employees who are working there. It produces income taxes from the profits of the suppliers who produce the machinery and the power, the utilities, the rest of the things that go into making the mine work, and it produces income taxes from the wages of the employees of the suppliers. Indeed, the Federal Government gets an enormous amount of money out of a profitable business operation like a profitable gold mine, a profitable copper mine, a profitable palladium mine, whatever it is. He wants to add to the amount of money the Federal Government is getting from that operation some more money in the form of a royalty. And as I say, I am willing to support that. The place where I part company with him is on whether the royalty should be on the gross or on the net. As I have said, if it is on the gross, it represents a unilateral price cut for American operators that foreign operators do not have to absorb. If it is on the net, it represents an additional income tax, if you will, but I am perfectly willing to grant that additional income tax on the grounds that the land they are using is Federal land and there perhaps should be that additional tax. As I talk to the miners in my State, they are willing to do that, too. There is no opposition now in the mining industry that I am aware of to a Federal royalty on Federal lands as long as it is a net royalty rather than a gross royalty. As I said, Mr. President, I had not intended to speak about that when I came to the floor, but I always enjoy my friend from Arkansas. It comes as no surprise to him to know that I have heard this speech before, so I have thought some of these things through from previous recitations, and I am sure we will have the debate again as the Congress goes on. I commend him for his diligence. I commend him for his determination to see this thing through, and I hope that in the course of things maybe we can come to an agreement and ultimately resolve this because I am not one who insists we cannot ever, ever change the 1872 mining act. I see the Senator is on his feet. Mr. President, I ask unanimous consent that he be allowed to comment without my losing my right to the floor.

Mr. BENNETT. I thank my friend. I remind him--remind is the wrong term--I tell him that I did stand on the floor and defend exactly the kind of businesses he just described during the debate last year over the President's economic package, and told stories similar to the one he has told, and demonstrated, I thought, how the devastation of the ``S'' corporation procedure that was contained in the President's plan would damage businesses like that. I did not prevail on that occasion but I assure my colleague those kinds of presentations in defense of those businesses have been made. I have great admiration for his son. I also happen to like his son's cookies, which the Senator is kind enough to share with me from time to time. They are, indeed, a good product. We can have this debate, and we will. My point is that there is more to this than simply the question of whether or not the taxpayers are being ripped off by giving away land. It is not that there are bars of gold sitting on the ground, waiting to be picked up and taken to Fort Knox and turned into cash. There are all kinds of processes that must be performed before the gold can be refined, before it can be sold. I say to the Senator, as he talks about the oil industry that faces exactly the same thing, I think his analogy is well taken. The oil industry faces the risk of exploration, the costs of refining, and all of the rest of that. We have in the State of Utah enough oil, according to the geologists, to dwarf and eclipse the oil in Saudi Arabia. We have trillions and trillions and trillions of barrels of oil in the State of Utah. Why, therefore, are we not producing oil? For the simple reason that in Utah the oil is trapped in what is called oil shale. It is not down beneath the sand, to be pumped out simply by, in the language of the oil industry, sticking a straw in and sipping it up. And the oil shale does not become commercially viable until the world price of oil goes somewhere in the neighborhood of $50 to $60 a barrel. If we were going to get $60 a barrel for oil, you would see Utah take over for Saudi Arabia, and Utah be the oil center of the universe. But the world price is not at $60 a barrel; the world price is nowhere near $60 a barrel. Let us say that the world price was close to making shale oil commercially viable but the 12.5-percent increase in the world price represented by the U.S. royalty was the knife edge between its being profitable and not profitable. If that were to be the case and we were facing a serious energy crisis, I would come to the floor and say let us repeal the 12.5-percent royalty. Let us go to a net royalty on oil companies. Indeed, I am willing to talk about that as a possibility here. You know the gold is there. Yes. When you buy the land, when you patent the land, you know the gold is there. The thing you do not know and cannot predict, cannot be sure of, is the world price of the gold. That is where you are taking a gamble. If the world price of the metal falls below a certain level, you have just lost your money, which is what happened, as I said, in the State of Utah where we lost 5,000 jobs, not because people did not know the copper was there. The copper was still there. The difference is that the world price fell, and when the world price fell below that level, we shut down and we lost all the jobs. And we lost all the employment. When the world price came back up, the jobs came back up. My concern is not to bail out the rich mining companies. My concern is to hang onto those jobs if I can and say let us put the royalties in such a fashion that we do not cut the price for U.S. producers by an amount that their foreign competitors do not have.

Mr. BENNETT

Mr. BENNETT. Mr. President, I have enjoyed this exchange. While I have the floor, I would like to talk briefly about the issue that I came to the floor to talk about before I became fascinated with the arguments by my friend from Arkansas. Mr. President, I happen to be chairman of the Senate prayer breakfast group. In that role, I attended the National Prayer Breakfast addressed by President Clinton and the Reverend Andrew Young. While we were there, we had Scripture readings, one from the New Testament and one from the Old Testament. Ruth Bader Ginsburg from the Supreme Court read the Scripture from the Old Testament. And I would like to repeat that which she read here on the floor of the Senate today because it covers beautifully the issue I want to address briefly. It is from Deuteronomy, chapter 25, and starts with verse 13. Do not have two differing weights in your bag, one heavy, one light. Do not have two differing measures in your house, one large, one small. You must have accurate and honest weights and measures so that you may live long in the land the Lord, your God, is giving you. Honest weights and measures--do not have one large and one small. The newspapers this morning are full of the story of the relationship between the dollar and the yen or the dollar and the deutsche mark. We recognize that the dollar for us is the unit of account that we use to measure the value of our work, measure the value of our products, and measure the value of our lands. All of these things are measured by the number of dollars that they can bring. In Japan the measure is the yen. Now, says the Bible, do not have two measures in your bag, one big and one small, one heavy and one light. Do not switch the measures. Yet, when it comes to the unit of account between national economies, we seem to have gotten into the idea that we can switch the measures. We have gone through that with the Mexicans. When we debated NAFTA on this floor, the unit of account was 3.5 pesos equals $1. Oh, it varied a little. It was in a band between 3.1 and 3.5. But we adopted NAFTA. We supported NAFTA on the firm assumption that the relationship between the dollar and the peso would be as stable as the weights and measures described in the Bible, that there would not be a breaking of the trust between those two countries. Then, in December there was, as our friends to the South said, ``Well, we are no longer going to hold the rigidity of that weight and measure between those two currencies. We are going to say the dollar buys you 4.5 pesos. We are going to have a lighter weight in our bag than we had before.'' I have spoken about the peso. I have perhaps spent too much time in the Senate talking about the peso. I tried to get the administration to work toward trying to get the weights and measures back to where they were. The administration does not seem to be interested in that. I will continue to bring it up from time to time. But today, I want to talk about the dollar and the yen because that is on the front pages. Mexico for some reason seems to have disappeared from the front pages even though the economic disaster in Mexico probably has more impact on our country long term than the relationship between the dollar and the yen. We are being told in this morning's papers that the dollar is falling against the yen, that the problem is in the free flight of the dollar, that we must do something to defend the dollar. There is an explicit assumption in that statement that I would like to challenge. What if-- just think about it--what if the dollar is the stable measure and it is the yen that is fluctuating in the wrong direction? What if, as you reach into your bag, you pull out the weight that the Bible talks about and it is the dollar that you find there? How are we going to know, if we have two fluctuating against each other, which one is the stable one? Or maybe neither is the stable one? But the unspoken assumption in this morning's paper that the yen is stable and it is the dollar that is falling is the assumption I want to challenge. How can you challenge it? Well, there is a third unit of measure that I would like to introduce into the equation. That is the measure that has been used for a unit of account of value since biblical times and probably before. There were no dollars, there were no yens when Moses wrote what I have read in Deuteronomy. But there was a measure for money, and it was called gold. How is the dollar valued currently with respect to that ancient metal? We have been talking about it--the Senator from Arkansas and I-- in terms of mining. Let us talk about it in terms of money for just a minute. The dollar is currently somewhere in the neighborhood where $380 buys you an ounce of gold; a little below that right now, down in the $370's. But the dollar has been fairly stable for months, maybe even going back to a year, around the $380 to $385 mark. You look at it today. The dollar is still stable in that area with respect to gold. The yen, on the other hand, has been falling with respect to gold. The price of gold in yen is $320 to the ounce. When we add this third element to the equation, it begins to change our perception just a little. Maybe it is the dollar that is stable and the yen that is fluctuating improperly instead of the other way around as this morning's papers indicate. What would happen if Alan Greenspan, who follows these things more carefully perhaps than any of us, got on the telephone and called his office number in Japan and said, Why don't you start printing extra yen? Do you know what would happen if they started printing extra yen? The value of the yen with respect to gold would begin to change. Of course, if we stayed stable with the price of gold, the value of the yen with respect to dollars would begin to change. And you would see the dollar-yen relationship begin to come together around the common point. For the sake of illustrating the point, let us say it was at $380 an ounce of gold and the yen would come to the point where you could buy gold at $380 an ounce with yen as well. So the yen and the dollar relationship would be solidified around their common relationship to gold. I think a number of very interesting things would happen in the world if that were to happen. I leave you with when he testified before the Banking Committee. He said, ``If the United States were on a gold standard, the Mexican peso crisis would not have occurred,'' because, you see, what he is really saying is, if we pegged our unit of account to a weight and a measure that did not change, to a weight and a measure that did not have a light version and a small version, to use the language of the Bible, but had only one, our currency would be the strongest in the world and the other nations would peg their currency to our currency, instead of having a situation where both currencies are constantly moving and producing the kind of uncertainty that this morning's headlines give us. Mr. President, I have no legislation to offer on this. I expect I probably will have as the Congress unfolds. But I take the occasion of this morning's headlines to once again raise the issue. I raised it last year in the last Congress when Mr. Greenspan first suggested in his testimony before the Banking Committee that pegging the dollar to gold might be a good idea. I have been watching it closely ever since Mr. Greenspan said that. I have been trying to become a student of this issue ever since Mr. Greenspan said that. I have talked about it on the floor of the Senate ever since Mr. Greenspan said that. So far, nobody has noticed. Perhaps nobody will notice it today. I find it very interesting that in this morning's paper, everybody is interested in the relationship between the dollar and the yen and the dollar and the deutsche marks, just as they were all interested in the relationship between the dollar and the peso. Nobody is addressing the fundamental question raised in the scriptural reference that Ruth Bader Ginsburg gave us at the National Prayer Breakfast when she told us, as the Bible has told us, that we must have stability and honesty in our weights and measures. I can think of no place where it is more vital to have that stability and honesty than in the weight and measure that we use to measure value throughout the world, which is our currency. I thank the Chair and yield the floor. Mrs. BOXER addressed the Chair.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise to discuss a situation that has been before us in the Chamber previously. We were all caught with some surprise earlier this year when the Secretary of the Treasury and the Chairman of the Federal Reserve Board came before a group of Members of Congress, House and Senate combined, to tell us of the crisis in Mexico and to ask for our support for a proposal to extend $40 billion in loan guarantees to the Mexicans. My initial reaction to that proposal was one of support, as were the reactions of the leadership of both parties in both Houses. Mexico is enormously important to the United States, economically and culturally. In addition, if we want to become crass about it, there are some 750,000 American jobs that are in jeopardy if the Mexican economy should collapse. It made sense for the United States to do what it could to reach out to the Mexicans and try to support their economy, and I supported the administration's request. As we got into the details of the deal, however, it became clear to me, as it did to a number of other Members of Congress, that the $40 billion loan guarantee was not a good deal, and we advised the Treasury of that. We urged them to come up with some alternative proposals, and they did. To their credit, they listened to the Congress and they proposed the second deal which I stood on this floor and endorsed in principle. It involved $15 billion from the Exchange Stabilization Fund and $5 billion under control of the Federal Reserve for a total of $20 billion in American money and the rest from international sources. I praised that deal because it increased the participation to include other governments besides our own, and it injected the expertise of the Federal Reserve Board into this circumstance which was not directly the situation previously. I was forced to come to the floor to express some reservations in a later speech about how this deal was being put together. When it was finally announced and the specifics were signed in the White House, I was shocked, and quoted as being shocked in the national press, by the statement by the Mexican Minister of Finance, Mr. Ortiz, who said we will use this money to shore up our banks, to put more capital into the Mexican banks. That was not what I had understood the deal was going to be. I said I hope it works, but I still think the thing we should do is to get the Federal Reserve Board involved in extinguishing pesos. Well, Mr. President, Mexico is back in the headlines with the news of the arrest of President Salinas' brother, the accusation being that he profited improperly and enormously from the privatization program that went on under President Salinas, and then the occasion of his arrest on the accusation that he had a hand in the political assassinations that took place in Mexico that helped upset the stability of that nation. I had dinner just the other evening of this week with people who are doing business in Mexico who say that the economic conditions there are worse than they were in 1981. For those who may not remember the 1981 devaluation, the peso prior to that devaluation was trading at 3 to the dollar. By the time they finally eliminated that peso and replaced it with the new pesos, it was 3,000 to the dollar. And again I say, people doing business in Mexico now are saying it is worse than it was in 1981. The Mexican Government is still printing pesos as if they had not learned the lessons of 1981 and the lessons of the recent devaluation. I see no action on our part by the Federal Reserve Board to try to extinguish pesos. Perhaps that is logical. If the Mexicans are going to continue to print them, the Federal Reserve Board obviously should not be involved in trying to soak them up. More in sorrow than anger, I come to the floor now to say it is my opinion that this attempt, well meaning and one which I supported, to aid the Mexicans in their hour of great distress is failing. I stand ready, if the Treasury is interested, to make continued recommendations as to what might be done. But I hear these stories about the assassinations, the breakdown of Mexican political institutions, and the information that the central bank and the Mexican Government are continuing to print pesos, and I find myself distressed and discouraged at the prospect. It is not a pleasant one. If our neighbors immediately to the south go back into the abyss of the economic disasters that they went through in 1981, it is not just they who will suffer; we in this country will suffer, and I am filled, as I say, with distress and anguish that the American attempt to help them for whatever reason has failed. Mr. WARNER addressed the Chair.

Mr. BENNETT

Mr. BENNETT. Mr. President, I am impressed by the unanimity of this freshman class. I am reminded of one great truth around here, and that is that people who come to Washington and stay a long time sometimes-- and I underline sometimes because it is not universal. I see many Members on the floor for whom it is not true--some- times lose touch with the people back home. It is always the most dangerous political thing that can happen to a Member of the Senate, is to lose touch. My father got to the Senate because his predecessor became too important in Washington to pay attention to the people of Utah. My colleague, the senior Senator from Utah, became a Senator because the man he defeated got out of touch. He was just reelected for a fourth term, indicating that has not happened to him. But the 11 Members who have come here now, who are the most recent people to face the voters, come unanimously in favor of the balanced budget amendment. When I return home to Utah and conduct my efforts to stay in touch, I find, again, unanimously the voice of the people are demanding that we do this. So I rise to say I think the people in this body should listen to the people of the country who are telling us overwhelmingly this is what they want, and as their representatives here it is time for us to give them what they want.

Mr. BENNETT

Mr. BENNETT. Mr. President, I thank my colleagues for indulging me in this matter and I will attempt to be as brief as I can. Yesterday, at this time, the chairman of the Banking Committee, my friend, Al D'Amato from New York, took the floor and made a strong statement with respect to the peso situation in Mexico and the proposed solution to that situation from our Government. I wish to take the floor and respond and expand upon the statements made by my distinguished chairman. I agree basically with the position that he took. I do not share some of the outrage that he expressed with respect to the administration's action. I took the floor after the administration had announced their action and generally praised it because I do believe that if we had not taken some kind of action the Mexican economy in an atmosphere of panic would, indeed, have spun out of control and the Mexican Government would have been in default on their bonds within some 48 hours of the time the administration acted. However, I do not want to leave the impression that with my support of the administration's actions I support the notion that the Mexican Government acted wisely when they devalued the peso in the first place. And the outrage suggested by the chairman of the Banking Committee was appropriately placed when it goes to the question of those who planned this devaluation, those who approved of the devaluation, and those who took the position that the devaluation was inevitable and that it was proper. In the Wall Street Journal yesterday, Robert Bartley, the editor of the Journal, wrote a somewhat lengthy but in my view very perceptive summary of this situation called ``Mexico: Suffering the Conventional Wisdom.'' I ask unanimous consent that this article be printed in the Record at the conclusion of my remarks.

Mr. BENNETT. The reason I praised the administration action when it was announced was that unlike the original proposal, the administration action called for entry into the circumstance of the Federal Reserve Board. I have enormous respect for Alan Greenspan, the Chairman of the Federal Reserve Board, who has an understanding of the evils of devaluation that I think goes beyond that held by some policymakers at the International Monetary Fund and the World Bank. Devaluations are not inevitable. Devaluations are not good policy. Devaluations are usually an attempt on the part of one government to, in the phrase that's become known, beggar thy neighbor--punish another government on their borders, either physically or by trade. We went through the circumstance of passing NAFTA in this body and in the other body. I was a strong supporter of NAFTA for a variety of reasons that I will not review here. One of the fundamental pillars of NAFTA was that we would establish free trade between these nations, and the assumption was very specific that this free trade would continue on a dependable exchange rate between countries. For Mexico, once the free trade zone was established, to violate that assumption and say, ``Well, now we have free trade in our countries but we are going to try to make our goods more attractive in your country by devaluing the peso and thereby making our exports cheaper,'' was a violation of that agreement, certainly of its spirit if not its letter. The fact that the markets reacted so violently to the devaluation, catching the experts at the IMF by surprise with that violence, demonstrates the fact that moving away from the 3.5 relationship between the dollar and the peso was, indeed, a violation of the whole spirit of the NAFTA debate and represented a betrayal of those who had supported NAFTA. Conventional wisdom, as Mr. Bartley points out, says ``No, no, you can devaluate a little bit and everything will be fine.'' The reaction in this circumstance said you cannot devalue a little bit when the devaluation is a betrayal. You have destroyed the whole relationship that existed between the two countries. That, in my view, was what was wrong. Now, in the package put together by the administration, there is the opportunity for Alan Greenspan and his opposite number in Mexico, Miguel Mancera, to get together and say we will use these funds that are now available to us by virtue of the decision of the President of the United States, not to bail out investors in Mexico but to start to extinguish pesos. We can acquire pesos by virtue of the money that we have and then extinguish them--tear them up, if you will--and reverse the monetary policy that flooded the Mexican economy with too many pesos, which is what led to the devaluation in the first place. We can use this money, these two gentlemen can, because they have the expertise, they have the ability, and if the Treasury Department will back them, they will have the support they need to say we can use this money over time to reverse the betrayal of the devaluation. And if that is the approach, I am convinced we will see the Mexican crisis resolve itself happily. Unfortunately, if that is not the approach, if the money is used in the conventional wisdom fashion of trying to see to it that all of the investors in Mexico are made whole, then I think the dire predictions that we have heard on this floor will indeed come true. So, I salute the chairman of the Banking Committee. I am a member of that committee, and I look forward to the hearings that he has told us he will schedule. I think it is very appropriate for him to take on this watchdog role that he outlined for us in his floor statements yesterday. But I hope the administration will recognize that those of us who supported what they proposed are looking to them to try to move to undo that which triggered the crisis in the first place, which was the act of betrayal, the devaluation. It was not the trade deficit. This country had a trade deficit, the United States, until 1914. The part of the country from which I come, the West, was built by trade deficits. The railroad that linked the West to the East and created all of the economic opportunities that came in its wake was built with British money, not American. Trade deficits are normal and healthy in developing countries. No, and it can be solved by using the breathing time purchased for it by the administration to extinguish those pesos and move back to the time where two trading partners who have joined hands in good faith under the umbrella of NAFTA can once again say: We can trust each other. There will be no future betrayal. We will stand as we have stood in the past. It cannot be done overnight. But it can be done if it is announced as a goal, if it is announced as an open target, and the two central bankers, Mr. Greenspan and Mr. Mancera, then set about to find a program to have it come to pass in a legitimate, orderly and proper fashion. This is the way to get the Mexicans back on their feet and this is the way to protect the American taxpayer. I salute Chairman D'Amato in his vigilance to hold hearings to see to it that this is carried out in that fashion. I yield the floor. Exhibit 1 [From the Wall Street Journal, Feb. 8, 1991] Mexico: Suffering the Conventional Wisdom (By Robert L. Bartley) Confusion number one is that the best exchange rate is one that produces the ``right'' trade balance. With the collapse of the Marxism now behind us, this has become the most pernicious idea loose on the earth today.--``Dollar Turmoil,'' Review & Outlook, The Wall Street Journal, May 23, 1989.

Mr. BENNETT

Mr. BENNETT. Mr. President, I ask unanimous consent that I be allowed to proceed as if in morning business for no more than 10 minutes.

Mr. BENNETT

Mr. BENNETT. Mr. President, I have listened to my colleague from Nevada give his statement, and tell us again and again and powerfully of his commitments to protect the Social Security trust fund. As I have listened to him, I have come to the conclusion that there could be nothing more devastating to the stability and the future of the Social Security trust fund than the amendment offered by the Senator from Nevada. I will share that reasoning with you. I know that is not his intent. I know he is acting out of the purest of motives. But I must say as strongly as I can in response to what he has said that the route he is suggesting that we go in an effort to support the Social Security trust fund is indeed the most dangerous way we could possibly go, if we in fact want to preserve that trust fund. Before I give that detail, let me make this comment about the overall debate. I remember last Congress the then-majority leader, the Senator from Maine, Mr. Mitchell, made one of his typically well-reasoned and eloquent statements in defense of the purity of the Constitution. He reminded us all that we were taking an oath to uphold and defend the Constitution when we entered this body, and he said in a pleading voice: Do not do anything that would jeopardize the Constitution. You are writing into the Constitu- tion--I am paraphrasing rather than a direct quote--you are writing into the Constitution matters that should be left to policy, that should be left to legislation, and you are changing the nature of the Constitution, which is our basic law, by proposing this amendment. He pled with us not to do that, on the basis of sound constitutional theory. Frankly, Mr. President, I was somewhat moved by the majority leader in that case, and I found myself questioning whether or not we really did need to amend the Constitution to get this taken care of. I have talked about how I resolved those differences at another time on the floor, so I will not repeat them here. But I find it very interesting that when we had, as the principal reason why we should defeat this amendment last year, the plea to keep policy matters out of the Constitution, we now have before us, as the principal thing that we must do in order to make this amendment viable, an amendment that writes policy matters into the Constitution, that flies right in the face of the advice of the former Senator from Maine, Mr. Mitchell, when he was opposing this 2 years ago. We are going to write statutory language into the Constitution if we adopt the Reid amendment and it gets ratified by the States. I think that is foolish. I think that changes the nature of the Constitution tremendously and, as I say, I think it is tremendously dangerous to Social Security. Why? Well, I have before me the language of the Reid amendment, and let us read it. It is very simple, very straightforward. It says: The receipts and outlays of the Federal old age and survivors insurance trust fund and the Federal disabilities insurance trust fund used to provide old age survivors and disability benefits shall not be counted as receipts or outlays for the purpose of this article. My colleague, the senior Senator from Utah, has already talked about the inappropriateness of writing into the Constitution titles of existing legislation. Let us assume for just a moment, however, that that is an appropriate thing to do. I do not believe for a moment that it is, but let us assume that it is. Then we say, all right, ``the funds used to provide old age survivors and disabilities benefits shall not be counted for the purposes of this article.'' Mr. President, what is a survivor? The answer to that is very clear. A survivor is whatever Congress says it is. So if we want to, in the language of the senior Senator from Nevada, use the implementing language of statutes to change the system, Congress can change the definition of survivor and be within the Constitution and loot the trust funds. Suppose Congress says a survivor, for the purpose of this amendment, is anyone who is alive. You have survived and, by definition, therefore, we can give you any benefit we want out of this fund and we are not violating the Constitution, we are not violating the Reid amendment to the balanced budget amendment. Congress can define a survivor as anyone who is over 21. Congress can define as a survivor anyone who has a driver's license and who has lived for 6 months after having driven. Having driven with some teenagers, I can accept that definition. Maybe you are a survivor if you stay alive for 6 months after receiving your license. Disability benefits. Mr. President, what is a disability? The answer is very clear. A disability is whatever Congress decides a disability would be. So Congress could decide, as indeed some groups in our society already have, that to be a woman is a disability in our society. Therefore, the money that is in this fund which under the Constitution is to be used for disability benefits can be spent on behalf of women and not men. There are others who will then say, oh, no, it is not a disability to be a woman, it is a disability to be overweight. So we are going to use the money to take care of everybody who is fat. No, it is a disability if you are too short. It is a disability if you are too tall. We have the American With Disabilities Act that outlines a whole bunch of disabilities, none of which are currently covered under Social Security or the disability insurance trust fund. If you are in a wheelchair, we are going to use the funds out of this fund to take care of you. We are going to use these funds to buy you a wheelchair or build you a ramp in your house, or whatever it is Congress decides to do. Mr. President, obviously, the examples I am giving are outlandish; I realize that. I make the point to show that there is, in fact, no restriction whatsoever on future Congresses to make whatever outlandish definitions they may choose. The one we think we all know is old age. What is old age? Old age is whatever Congress says it is. Right now, Congress says old age is 65--unless you happen to be a Federal employee with a sufficient amount of service to your credit, and then you can retire at age 50. Suppose some future Congress says that old age, to keep it all straight, is 50. We can go into the Federal disability insurance trust fund and the old age and survivors insurance trust fund and we can take that money to do things for anybody who is 50. The Senator from Nevada has said implementing legislation will not do it, we can pass a bill to change it. Yes, we can pass a bill to change the definitions that are under this proposed amendment, and we can, if we want to, gut the Social Security trust fund any time we want to. To hold out to somebody the promise that passage of the Reid amendment will guarantee that Social Security will never change and will never be in jeopardy is to hold out a promise that is false. To hold out that idea, which is well-intentioned, Mr. President, frankly, is misleading. The Senator from Nevada tells us that this is narrowly drawn and says that it will preserve the Social Security trust fund because it is narrowly drawn. I have not gone to law school, so I suppose I cannot argue with him in legal terms. But I do understand the English language, and I do believe that which I have said demonstrates that it is not narrowly drawn; indeed to the contrary, it leaves the door wide open for future Congresses to do all of the things that the Senator from Nevada suggested that some future Congress might do. He said if we just leave it as it is, future Congresses could raid the fund. That is true. Future Congresses could also abolish it. That is true. Future Congresses could, under his amendment, say that there will be no taxes connected with and no outlays made from the Federal old age and survivors insurance trust fund and cut it off at that point and leave these lines a dead letter in the Constitution. Future Congresses could do all of these things. There is simply no assurance in the Reid amendment that future Congresses will behave as he believes they will. Now he has said to us--and I accept it in the spirit in which it is offered--that Security in the present circumstance are acting in good faith and have good motives. And I am grateful to him for his willingness to accept our good faith. I accept his good faith. But he raises the specter of future Congresses acting irresponsibly. And I suggest to you, Mr. President--indeed, I am convinced, Mr. President--that if future Congresses do decide to act irresponsibly, they can do so just as easily under his amendment as they can now. And, indeed, in the matters I have pointed out, they have a greater temptation to do so if the Reid amendment is adopted, because all they need to do, as I have said, is change the definition of a disability, change the definition of a survivor, change the definition of old age, and they have those funds then available to them to do with whatever they see fit. Mr. President, I would like to return to the basic issue that I raised in the beginning before I got that specific about the Reid amendment. I wanted to be specific about the Reid amendment because of the time and care with which he took to address his argument and I wanted to respond as quickly as I could. Let us go back to the comments that I recall being made by the then majority leader, George Mitchell, when he pleaded with us not to fool around with the Constitution on this matter, when he told us, in effect: We can do this by statute. If we had the political will, we could balance the budget without changing the Constitution. Why do we want to put a policy matter, a normal legislative issue, into constitutional language? Well, Mr. President, I have been troubled by that argument, as I have said. I was moved by Senator Mitchell and his comments in that regard. I have such tremendous regard and respect for the Constitution that I think it should be amended only rarely and only in extremis. I agree with the argument that we could do this without a constitutional amendment requiring it. Why am I, therefore, standing here as a convert to the balanced budget amendment and defending it? I have resolved this issue in my mind from this analogy. As you know, Mr. President, and as Members of this body probably get tired of hearing me say, I am a businessman and I come out of the business environment. That is where I get most of my analogies. When a business is established, the first thing that is required, at least under the laws of the States where I have established businesses, is the filing with the State authorities of the bylaws. The bylaws lay out in clear pattern the constitutional authority, if you will, of the business. It says what management can do and cannot do. It lays out the structure. Just as the Constitution of the United States says there will be two Houses of Congress and how many Members there will be in each House, two from each State for the Senate, by population for the House, and so on, the bylaws of the business say how many members there will be on the board of directors, what the power of the board of directors shall be, and so on and so forth. It is never contemplated in the bylaws that the organizers of the business will lay out a specific business plan. That is left up to management. The idea is always that annual projections will be made by management. Management will be held accountable. Management will have to file appropriate accounting reports. Management will have to file tax returns and do all of the other things. The bylaws of the business say how management is to operate, but never get into the specifics of the business plan. What we are talking about here is an amendment to the bylaws. And, once again, we find a disconnect, we find an interesting paradox. We are being told, on the one hand, we cannot adopt this particular bylaw--this particular amendment to the Constitution--unless it is accompanied by a detailed business plan, stretching out for 7 years, giving to the last dollar everything that will be done. If you were to say that to an organizer of business, ``We are going to require you, before you amend the bylaws of the corporation, to give us a 7-year business plan showing how you will operate under this new amendment,'' management would resign. It would say, ``Under no circumstances can we live with that kind of a requirement.'' Now, what is this bylaw saying? Is it indeed a policy statement that belongs in the area of management that should be kept out of the Constitution? We are hearing a lot of concern over the three-fifths requirement; over the requirement that Congress has to vote three-fifths if it is going to have a budget that is not in balance. And we are being told, indeed, I have been told in hearings before the Joint Economic Committee by Members who are opposed to this amendment, ``No business in the world would ever adopt anything like the balanced budget amendment. No business would ever put its management in that kind of a straitjacket where a minority could block the business plan.'' Well, I said in the Joint Economic Committee, and I repeat here, I think I know something about business, and I can identify plenty of businesses who do indeed put themselves into this kind of circumstance. Again, the analogy, Mr. President: Suppose you had a business and it adopted as one of its bylaws that the business could not go into long- term debt without the approval of 60 percent of the members of the board of directors. That would not be an unusual kind of circumstance. The shareholders would feel they would be more protected if the members of the board had to come up with not just a majority to put the corporation into debt but a supermajority to put the corporation into debt. That would be an appropriate bylaw. If it were adopted, eyebrows would not go up. Indeed, I have served in circumstances where the board of directors did not require a supermajority before going into an area of long-term debt, they required unanimity. That is unusual, but it exists. We are not asking for that here. We are simply saying the board of directors--in this case, the two Houses of Congress--must have a sufficient level of support to gain 60 percent of both Houses before that board of directors will allow the corporation to increase its long-term debt, a very reasonable requirement in a set of corporate bylaws. So, once again, the arguments come in and they do not connect with each other, the first one saying, ``You shouldn't be putting anything like this in the Constitution at all.'' ``Why?'' ``Because this is something that is taken care of through legislation.'' And then there is the other argument, saying, ``Oh, no; you should not adopt this amendment unless it has legislation in it.'' The two simply do not match. Then the statement, ``Oh, you cannot adopt this balanced budget amendment until you give us all of the details.'' And then, back on the first amendment, ``But the Constitution is not the place where you talk about details.'' What comes through to me, Mr. President, is that these arguments that are being raised against it have the flavor of an old story that I remember where two neighbors in a frontier circumstance were meeting. The first neighbor said to the second: ``I have some work to do around my place. I have dropped my ax on a rock and it cut a chip out of the blade of the ax and it is worthless to me. I would like to borrow your ax to help me break up some wood.'' The second neighbor thought for a minute and said, ``I am sorry, I can't loan you my ax. I need it to shave with.'' The first fellow went away. After he was gone, the wife of the second fellow said, ``What did you tell him that for? That is a silly excuse. You do not shave with your ax.'' And he said ``Well, I didn't want to loan it to him because I was afraid I wouldn't get it back. But I didn't want to offend him so I did the next best thing.'' I think many of the arguments that are being raised are, in fact, being raised because some of the people raising them really do not want to put the Government in a circumstance where it is forced to confront the reality of a balanced budget discipline. But rather than offend their voters by being upfront about it, they are looking around for excuses like, ``I'm going to use the ax to shave with.'' friend from Nevada. I think he genuinely and with good intentions supports this amendment and believes that it would, indeed, help save the Social Security system. I hope I have made it clear that it would not save the Social Security system from the things that he has suggested. Now, Mr. President, we will address the basic question of whether or not balancing the budget makes sense. There are those who say this is one of those mirages that is always in the future and no matter how far you move toward it, you never get to it. The balanced budget will always be in the future; we will never, ever, want to do it. I have spoken about this before, but I return to it because it is the fundamental question underlying this whole debate. As I have said, I am a reluctant convert to this debate. I am very reluctant to make changes in the Constitution. I look back on our history and say we have gone for over 200 years without a balanced budget amendment. We have done just fine. Why do we need it now? Further, I accept the idea that it does come close to introducing legislative and policy issues into the Constitution rather than dealing strictly with fundamental law. I hear all those arguments. I am sympathetic to many of them. I come to the conclusion that we must have a statement in our basic bylaws--in our case, in our Constitution--that says we will resist the historic destabilizing influence in all democracies. The Senator from Arizona [Mr. Kyl] quoted the historian who said that democracies ultimately disintegrate when the people discover that they can vote themselves largess. That is, when people discover that they can use their power in a democracy to use Government power to pay themselves more than is really there, they ultimately destroy their country. We are not at that point yet. But we are beginning to get so far down that road that I am getting nervous. We need a statement in the Constitution that says we will not do that. Thomas Jefferson was afraid of that. That is why he raised the balanced budget amendment as an idea back in the beginning. They shied away from it. As I say, we have gone for 200 years without needing it. But we are getting there and we are getting there more and more as we go down this slippery slope to entitlements. Mr. President, I suggest that we can have entitlements and we can have a balanced budget. The two can coexist. But it will take a redefinition of the word ``entitlement'' in order to get America there. Let me share this observation that comes out of my personal experience. I hesitate to raise it, lest some misunderstand its source, but I raise it nonetheless because commentators outside of Utah who have had no religious backing to their point of view have raised it. I think, therefore, it is appropriate. I want to talk briefly about the welfare program of the Church of Jesus Christ of Latter-day Saints, of which I am a member. We have an entitlement as members of the church under the welfare program. Any member of the church who falls in need is entitled to receive help from the church. As an official of the church, I have been involved in dispensing that help. I have seen how it works. I have given vouchers to members of my congregation who turned those vouchers into food and clothing. I have signed checks to members of my congregation who have turned those checks into rent payments or money for their children or other vital necessities in their lives. If anything should ever happen to me, I am entitled to go before my church leaders and say, ``I want some food. I want some clothing. I want some cash to take care of my shelter.'' I am entitled to that as a member of the church if I need it. That is the qualifying phrase to that--entitled. I am entitled to it if I need it. Where does the entitlement come from? The same place that the Senator from Nevada spoke of--the people who pay into Social Security. I am entitled to that from my church because I have gone down to the cannery on my own, without being paid for it. I have canned peaches. I have cut up pears. I have peeled tomatoes. Frankly, I did not do it very expertly, to be sure, but I have done it, and my family has done it. I have gone to the farm out here in Maryland and I have worked on the farm and I have shoveled hay and I have shoveled what was politely called ``used hay.'' I have participated in the programs, and that has created for me a sense that I am entitled. I would walk in and face my Mormon bishop without a moment's hesitation and say to him, this is what has happened to me. I am in need. I am entitled to help. And I would walk out with my head held high. If I received that help I would not consider it charity. I have paid into that. I have contributed to it. I am entitled to receive it. The difference between that attitude and what we have going on in the Government is this. What is happening to the entitlement programs in the Government is we are saying, ``You are entitled to it whether you need it or not.'' We are in the midst of a baseball strike. We see baseball players whose average salary is $1 million a year. One of those baseball players could receive disability insurance even if his contract continued to pay him $1 million a year, because under our program he is entitled to it. And because we provide it for him, we cannot provide it in the degree, perhaps, that we should to other people who need it far more. We have reached the point where we have said, ``You are going to be paid back out of your own funds in the name of entitlement programs, Government largess, if you just vote for us.'' This is the pattern that has been established years ago. No one Congress is solely responsible. No one Member of Congress is solely responsible. It has built up over the years. It has gone forward over the years. Eventually we get into a circumstance where people are saying, ``I want mine. I want it now.'' You look at them and say, ``Wait a minute, you do not need it. Why do we not save that for someone who does?'' And they say, ``I want it because I am entitled to it whether I need it or not.'' That, Mr. President, I think, is the key to getting the budget under control. Yes, we have to cut defense. Yes, we have to get rid of the waste, fraud, and abuse in the Government. Yes, we have to have leaner and tighter departments. Yes, we have to do a whole number of things to get the Government smaller. But if we learned nothing from the entitlement commission--and Senator Kerrey of Nebraska has courageously and honestly and forthrightly portrayed this in his statements that have been reported clearly in the press--we have learned that if we do not get the overall entitlement monster under control, we will succumb to the fate that was outlined for us by that historian. Democracy fails when people discover they can vote themselves largess, and when we get in that context and in that circumstance, we are going to be in trouble. How do we deal with it? As I say, I have come to the conclusion, after thinking it through, that the way we deal with it is to put into our basic bylaws--in our case, our Constitution--a statement that says we will not go down that road. I am not sure that if I were acting alone I would have drafted the balanced budget amendment as it is currently worded. The democratic process requires that we all get together and we get a consensus or we at least get a majority as to how it is done. I might argue with this phrase or that phrase, but I cannot, finally, argue with the notion that it does, indeed, belong in the Constitution. Indeed, I have come to the conviction that it belongs nowhere else, because if the Constitution is going to lay down the fundamental concepts of our country and what we believe, it is going to lay down our fundamental rights as individuals in this country and the fundamental structure of our Government in this context; it is flawed and diminished if it does not have in that list of fundamental structural patterns and fundamental rights a statement that says we will not allow the Government to spend ourselves into bankruptcy. I can think of nothing more fundamental. I can think, as I say, of no place more logical for that statement to be than in the Constitution. So, Mr. President, I have wandered from responding to the senior Senator overall statement of the underlying resolution that is before us and given you my reasons as to why I am in support of that. I conclude by returning to the issue that is directly before us and summarizing, once again, my conviction that adoption of the Reid amendment would create the temptation on the part of future Congresses to do the very thing that the senior Senator from Nevada is concerned about: That it would create the temptation for future Congresses to give us legislation that would raid the Social Security trust funds. He said our successors are not bound. Absolutely our successors are not bound. Our successors might easily decide to redefine what is a survivor, redefine what is a disability benefit, redefine what is old age in such ways as to use those trust funds for virtually any purposes. My colleague, the senior Senator from Utah, Senator Hatch, calls this a giant loophole. The senior Senator from Nevada refers to that as poppycock. I will let the two senior Senators argue that one back and forth on a semantic level, but I find myself persuaded that the language in the Reid amendment does, indeed, provide such wide latitude for future Congresses that I would come down in agreement with my senior colleague from Utah that it would, indeed, be a huge loophole through which future Congresses could drive gigantic appropriations if they were so inclined. So, Mr. President, I leave the issue with these observations and trust that they will have contributed something to this particular debate. I yield the floor. Mr. MOYNIHAN addressed the Chair.

Mr. BENNETT

Mr. BENNETT. Mr. President, I have taken to writing out a simple equation for my colleagues on this side, and I would be delighted to have the Senator adopt this on the other side. I take a piece of paper and I write simply ``1 percent equals $48 billion.'' People say, ``What does that mean?'' I say, ``When you have a national debt of $4.8 trillion, 1 percent of $4.8 trillion is $48 billion. If we lower the cost of funding that $4.8 trillion debt by 1 percentage point in interest rates, we save $48 billion every year.'' The Senator has just told us, Mr. President, that the balanced budget amendment could lower the interest rates by anywhere from 2 to 4 percent. We are talking, if the Senator's information is correct, anywhere from $100 to $200 billion a year in savings on the interest rate alone. I think it should be stressed that the Senator has touched a point here that often gets overlooked. We talk about spending cuts, we talk about tax increases. Do you know how painful it will be in this body if we say we have to increase taxes $200 billion a year to balance the budget? Or that we have to cut spending $200 billion a year to balance the budget? If we can get somewhere between $100 to $200 billion a year in savings simply on the interest rate alone, we will have done more than a good day's work. I thank the Senator for raising that issue of the impact of interest rates on the Federal economy.

Mr. BENNETT. Will the Senator yield for a comment?

Mr. BENNETT

Mr. BENNETT. I thank the Chair. (The remarks of Mr. Bennett, Mr. Bumpers, and Mr. Johnston pertaining to the introduction of S. 309 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise today to offer a piece of legislation which will be known, I hope, when it becomes law as the National Park Service Concessions Policy Reform Act of 1995. This particular act is cosponsored by two of my friends on the Senate Energy and Natural Resources Committee, the former chairman of that committee, Chairman Bennett Johnston and Mr. Bumpers, Dale Bumpers, from Arkansas, who was the chairman of the subcommittee that handled this legislation in the previous Congress. Mr. Bumpers has been pursuing reform in the Park Service concession policy for, I think, his entire career in the Senate. I was delighted to join with him last year and bring about the passage of this bill in the committee and the Senate. It was reported out by the committee by a vote of 16 to 4, a majority of Republicans and a majority of Democrats both supporting it. And it was passed on this floor a year and a half ago by a vote of 90 to 9, demonstrating tremendous bipartisan support for this. Unfortunately, our friends in the House did not act with the same dispatch that we did and, as a consequence, it got hung up there, tragically, for enough months to mean that when the conference report cam before this body, it ultimately got caught in the trap of the yearend logjam, traffic jam and, as a result, the conference report was not adopted. So it is necessary for us to introduce it again this year. I think this year we will see it move rapidly through both the Senate and the House and become law. The bill that I am introducing is very similar to the one that passed this body 90 to 9 last year, and the arguments in favor of it are the same as they were on that occasion. Very specifically, Mr. President, our national parks, like everything else in life, are national parks is going up. As a consequence, the need for services is changing. If I can refer to a national park in my own home State--and we in Utah are proud of the fact that we have as many national parks as any other State in the Union, it is a particularly gorgeous place in Utah-- Zion National Park in the last 10 years has seen the number of visitors go from 1.4 million in 1983 to 2.9 million in 1993, doubling in a 10- year period. Obviously, in that kind of a circumstance, the sort of concession policy that you had 10 years ago needs to be examined in the light of this increase. There, of course, are other reasons why this needs to be examined. The Park Service is itself running out of money. It is one of the tragedies that we have the crown jewels of the National Park System being starved for resources just as more and more Americans want to take advantage of the beauty of these parks. As a consequence, one of the places people are looking for money is to the royalty payments to come from the concessionaires. Oh, say some, well, that means the Government is trying to beat up on the concessionaires, the Government is trying to punish the concessionaires for being successful. I do not think so. What we are trying to do in this legislation is open up the concessions for competitive bidding and let the marketplace determine what these concessions are worth. I come from the business community. I have listened to the concessionaires as fellow business people when they come and say to me, Senator, you can't change the rules. Well, the rules change all the time as markets change. I knew that when I was in business. I reminded them of that in their business circumstance. But the most important reason we need to change this is because we do need the power of competition to help set the rates. We do need the opportunity for new blood and new ideas to come in, even if the concessionaire does not change. I say to those who are saying, We're going to lose what we have now under the new policy you are proposing, Senator, we're going to lose the concession that we have, I say, No you are not. If, indeed, you are as capable as you say you are, and I believe you are, if you have the expertise of 10, 15, 20 years experience as you say you have, you will be able to compete. But the mere fact that you will be forced to compete with an outside bidder will, indeed, make you sharper even if you are, indeed, the ones who hang on to the concession as it currently exists. So, Mr. President, we are dealing with a piece of legislation here that really is relatively noncontroversial, given the vote that it had in the last Congress; something that I think is long overdue, given the changes that are occurring in the national parks; something that is sound financial policy, given the fact that the parks do not have the kind of money that I think they should have. It is good public policy. I was pleased to be associated with it in the previous Congress, and I am happy to have the opportunity to offer it again in this Congress. Mr. President, how much time do I have remaining?

Mr. BENNETT. Mr. President, now that the Senator from Arkansas has joined us in the Chamber, I do not intend to use the remainder of my time. I would like to comment now that he is here on his leadership on this issue. I came to the Senate knowing nothing about it. I sat in the committee listening to the hearings where the issue was outlined and decided that the Senator from Arkansas was correct, that something needed to be done. I conferred with my then ranking member on the committee, the Senator from Wyoming, Mr. Wallop, who suggested that with my business background it might be appropriate that I get involved in this. I must, for the accuracy of the Record, point out that Senator Wallop was not convinced and was one of the four in the committee and one of the nine in the Chamber who decided they could not support this particular approach. But I was very grateful to him for his overall support of my involvement and to the Senator from Arkansas for his leadership and tenacity on this issue. He was very instrumental in giving me the background and the education and the understanding of these issues. Had he not been willing to act as my tutor and mentor in this circumstance I undoubtedly would not have come to the point that I have here today. So as I yield back the remainder of my time and end my statement, I do so with a comment of gratitude to the senior Senator from Arkansas for his leadership and his tutelage on this issue. I also must add to that my gratitude to the senior Republicans on the energy committee who also helped me understand this issue and who supported this in committee: Senator Hatfield, Senator Domenici, Senator Nickles, and others who supported us in committee on the Republican side. As I said in my earlier comment, the bill was supported by a majority of both Republicans and Democrats, even though there were both Republicans and Democrats in committee who decided they could not support it. So, Mr. President, I am delighted to turn the floor over to the senior Senator from Arkansas [Mr. Bumpers] and thank him for his patience in helping this more junior Senator understand the nature of this issue and the importance of it. I am delighted to have him as an original cosponsor on this bill.

Mr. BENNETT

Mr. BENNETT. Mr. President, we are in the midst of a debate on the balanced budget amendment. At some point in this debate, I will have a make but, taking advantage of what the sportscasters call a break in the action, I thought I would make a few observations now about this particular matter. I am a reluctant convert to the balanced budget amendment. As I have said from time to time around here, my educational background is as a political scientist. My whole career has been spent in business. But when I was in college, I studied the works of Jefferson, Madison, Hamilton, and Jay, and, yes, Karl Marx, Friedrich Hegel, and some of the other political philosophers. That has always been my avocation, even in the years that I was in business. I guess it was inevitable, given that particular bent on my part, that I would end up, when I could afford it, back in politics. From a pure political science point of view, I can make a brilliant case against the balanced budget amendment. I can give you all of the reasons why a balanced budget amendment is not sound politics. Unfortunately, the real world sometimes intrudes upon the world of the political scientist and causes us to do things that are perhaps not as philosophically pure as we might like. Let me give you an example. As I understand the Constitution and the theory and philosophy behind the Constitution, election of Senators by State legislatures is the ideal way this body should function. The Senate was created to represent States. What better way to make sure that the Senate represents States than to give the States full and complete control over the choice of their Senators. And the States did that in time-honored fashion through their own State legislatures. That is the political science pure way that the Senate should operate. There is one problem with it. In the practical world, State legislatures that were divided by party--that is one party controlling one House and the other the other--would go for an entire Congress without being able to elect a Senator. The Framers of the Constitution did not foresee the rise of the two- party system and there is nothing in the Constitution to accommodate it. There is nothing in the Constitution to deal with the challenges that come from it. Also, people who were unscrupulous, who just decided they wanted to become Senators, many times could buy an entire State legislature, a bargain, if you will. And the corruption that surrounded the election of some Senators in the days when State legislatures chose Senators became so rampant that finally we had to go to another solution to the choice of Senators, which, while not pure to the philosophical doctrine of the Constitution, made eminent good sense. And so we passed the 17th amendment that called for direct election of the Senators. I am not sure the caliber of the Senate got any better when we moved from the time when State legislatures chose Senators to the time when the voters did, but the various problems that I have described went away. And we have lived with the result of this very well since the time the 17th amendment was passed. I think there is a parallel argument here with the balanced budget. I can give you, as I said at the outset, all kinds of reasons why the balanced budget amendment is not a good constitutional doctrine; all kinds of reasons why the Founders were wise to leave it out of the Constitution. Unfortunately, we have practical pressures that have now overwhelmed us that say to us it is time for us to recognize that we need to adopt a balanced budget amendment. What are those practical pressures? If I can go back to my political science background, I share with you the one thing that philosophers say is wrong with democracy as a form of government. Simply put, it is this: Once the people discover that they can vote themselves largess, the democracy will become financially unstable and it will fall. That was an article of faith among political scientists for centuries. What is the oldest democracy in the history of humankind that has defied this principle? It is this one. We have lasted longer as a democracy than any other in the history of the planets. And what is threatening our financial survival? It is the discovery of the people that they can, through their elected representatives, vote themselves largess--that is, get the Government to give them back more money than they give it--that is threatening our survival. Now, we did not do that for over a century, maybe a century and a half, and then we began to discover that. And, having discovered that principle and gotten comfortable with it, we have started down the dangerous path that has historically undermined democratic governments all along. So, in recognition of the fact that we have finally discovered that ancient truth and are acting on it, I say the time has come for us to adopt a balanced budget amendment. I see the Senator from Arizona has arrived. As I say, I have a longer and more comprehensive statement on this issue that I will offer at some point. But I felt at this time that I should lay the groundwork with this little philosophical note before I get into the meat and potatoes of this real debate. I hope those who spend their time looking at history and philosophy will grant me a point or two on this one and recognize that I am addressing it in something other than the practical political hustings of the last campaign. With that, Mr. President, I yield the floor. Mr. KYL addressed the Chair.

Mr. BENNETT

Mr. BENNETT. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. BENNETT. Mr. President, today the President of the United States announced his intention to use his executive authority to intervene in the matters relating to the Mexican financial crisis. Like other Members of the Senate, I have followed this crisis with great interest over the last few weeks. As a member of the Banking Committee, I participated in this morning's hearings on this issue, which were interrupted by the announcement of the President's action. Perhaps because of my interest in economic matters and my background in business, I have paid close attention to this and found that it has managed to consume some of my time in areas that I might have preferred to spend talking about other things. But it has become a very important part of my life for the last few weeks, and I thought it appropriate that I make a comment at this time. Mr. President, I have likened the crisis in Mexico to an analogy that I hope will help people understand the position that I have taken. Suppose, Mr. President, that your neighbor suddenly came pounding on your door with the news that his house was on fire. You go out, look at his house and, sure enough, there are flames and smoke coming out of the attic. And your neighbor says, ``My house is on fire; the fire is in the attic; my children are down in the basement. If we do not get the fire put out, my children will die. You must help me. Lend me your garden hose.'' And you say to the neighbor, ``Well, there is no question that your house is on fire and you need help, but I do not think the garden hose will reach. I do not think it has enough water pressure to get up to the attic. I think there must be another solution.'' ``No, you do not understand,'' says the neighbor. ``There are combustible materials on the top floor. When the fire gets down through the attic, they will catch fire and my children will die. Let me give you more information.'' You say, ``I do not need any more information about the fire. The information I need has to do with the ability of the garden hose to reach the problem.'' That, in my view, has been part of the difficulty with the debate we have had around here about this issue. People keep coming to us and telling us ``the Mexican house is on fire.'' My response is that I know that, I accept that. I do not argue with you, A, that it is on fire and, B, we need to help. My concern is whether or not the proposed solutions will help. And if they will not, I urge us to look someplace else to try to find something that will. So it is in that spirit that I have been carrying on conversations with people from the Federal Reserve and the United States Treasury and met with officials from Mexico on several occasions to try to be sure that we are coming up with some kind of fire extinguisher that will do the job. The more I worked on this, the more concerned I became that maybe we would not be able to do that. Today, the President has taken that decision out of our hands--I think very wisely and competently. The President has recognized that further delay, which would be an automatic result of leaving the thing before the Congress, would result in serious and perhaps irreparable harm. The fire had now gotten down from the attic, if you will, into the top floor, and it was necessary for the President to act and act quickly. I had suggested to members of the administration that they start thinking of a solution that did not require congressional action. They were reluctant to do that for reasons that I can fully understand, saying a matter as serious as this is something that should be brought to the Congress, and we should have an opportunity to debate and examine it before it is put into play. But events overtook that process and the President used the authority that was available to him under the exchange stabilization fund to move ahead. As I say, I urged officials at the Treasury to look at this possibility as much as a week or 10 days ago. As I say, they were reluctant because of their desire for congressional approval. Now they are in a circumstance where, in effect, all Congress can do is disapprove after the fact. I hope we will not do that. I hope we will recognize that the President did about the only thing he could do under the circumstances. I hope the program that he has put in place will work; that we will indeed ``see our neighbor's fire extinguished,'' because this is a matter of great concern to all Americans, with the number of jobs that could be lost, the number of exports that could be affected. All of those statistics are on the public record. There are a number of things that I think the Mexicans need to do. We have talked about them on this floor from time to time. I believe that this deal, as put in place by the President, is a better deal for the American taxpayer than the one that was first proposed, for several reasons. The first deal called for $40 billion, all of it charged to the American taxpayer. This deal calls for, up front, $20 billion charged to the American taxpayer with the balance, another $27 billion, spread over a variety of agencies and countries. True, some of that which is spread over these other agencies might end up being American taxpayers' money, but at least, on the front end, the exposure to the American taxpayer is reduced. Second, this deal produces burdensharing; that is, other countries are now going to be involved, whereas before it was strictly an American deal. Now we have gotten the attention of the other ``householders'' in the neighborhood, if you will, and they are bringing their ``garden hoses'' to the fire along with ours. I think that is a good thing, and that was not present in the first proposal the President made. Third, this proposal involves the Federal Reserve System. The people at the Federal Reserve will be involved in enforcing the conditions that the Mexicans agree to. I think that is a good thing. It was not present in the previous deal. In the previous deal, any enforcement that took place would be under the direction of the Treasury and whatever allies they could gather from the IMF. I am not one who has a great deal of confidence in the ability of the IMF to solve this kind of a problem. I think it builds the confidence of the financial community to know that the people at the Federal Reserve System, whose principal activity in life is to defend the American economy and the American dollar, will be involved in overseeing the activities of the Mexicans. So inserting the Federal Reserve into the package improves the package for me considerably. For these reasons then, Mr. President, I offer my congratulations to the President, and to the two leaders, Senator Dole and Senator Daschle, for their willingness to give expressions of approval to the President for this action. He did not need those expressions of approval. Under the law, he could have proceeded without them. But it demonstrates the fact that the Congress is not unmindful of the ``fire next door,'' that the two leaders, in a bipartisan fashion, have stepped forward to indicate their approval. The same thing is true in the House. Speaker Gingrich and Leader Gephardt have both indicated their approval, as well. So now all we can do is watch and wait. We have no assurance that this package will solve the Mexican problem. But at least there is now someone on the ground with a ``fire hose'' that presumably will be able to put out the fire. It is a hose that is more suited to the task than the garden hose that was originally asked for, and I add my voice to those that are being raised, saying to the President: You have my best wishes that this will work, and I will do whatever I can to cooperate with you and the administration to see that it does work. Mr. President, I suggest the absence of a quorum.

Mr. BENNETT

Mr. BENNETT. Mr. President, I ask unanimous consent that I be allowed to proceed for up to 10 minutes as in morning business.

Mr. BENNETT. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. BENNETT

Mr. BENNETT. Mr. President, I yield 5 minutes to the Senator from Indiana.

Mr. BENNETT. Mr. President, how much time do I have remaining?

Mr. BENNETT. I yield 5 minutes to the Senator from Washington.