Robert Byrd

Mr. BYRD

Mr. BYRD. I thank the distinguished Senator. He served with me as we sought to have the President postpone the third year of that 3-year tax cut until such time as we could see what the impact of the 2 previous years' tax cuts was going to be on the budget and on the economy. I remember going down to the White House. I was the minority leader at that time. As I say, there in the Oval Office I said to the President: Mr. President, you are proposing a tax cut over 3 years--I believe it was 3 years-- 5 percent, then 10 percent, and then 10 percent? It may not be the exact sequence, but those are the correct numbers. Why not wait until we see what the results are and the impact is for the first 2 years? Why go ahead now and add a third year of tax cuts? Why do it now? Why not wait? President Reagan responded. After he responded, I said: Mr. President, that doesn't answer my question. So he turned to Mr. Regan, who was the Secretary of the Treasury, and asked Mr. Regan to explain to me why we had to have 3 consecutive years all at once. Mr. Regan sought to explain it. When he finished, I said: Well, Mr. Regan, you still haven't answered my question. President Reagan then turned to Mr. Meese and asked Mr. Meese to explain it. This was all down in the Oval Office. Mr. Meese explained it somewhat like this: Senator, in order to give to the business people of this country certainty that there will be 3 years of tax cuts and in these amounts, in order that they might plan ahead with certainty, we need to package the three tax cuts in one bill. That was a reasonable explanation. I didn't buy it. But there were some people who might buy it. And there was something to it. I came back to the Hill, and on the Senate floor I, with Mr. Sarbanes and others on this side--we were in the minority then as we are now-- offered an amendment to postpone that third year until after the first 2 years of tax cuts had been implemented. We lost, of course. As we see, the projections did not pan out. Lord Byron said, ``History, with all thy volumes vast, hath but one page.'' Well, the one page of history that we see today tells us very clearly that we cannot depend upon these projections. I know of no one who can better testify to this fact than the distinguished Senator from Maryland, Mr. Sarbanes. He has served on the Joint Economic Committee for several years. Regarding the administration's 3-year across-the-board tax cut, we tried. We lost. In order to help give President Reagan's economic program a chance, I voted for the final bill because my people in West Virginia who send me here said: Give him a chance. Give this new President a chance. ``Give him a chance.'' So I did, I gave him a chance. I voted for the Reagan tax cut. It was a mistake on my part. On October 1, 1981, I went out on the floor as minority leader to take a look forward to the new fiscal year. On that day I said: ``Today is the beginning of the new fiscal year. Yesterday, there was a kind of New Year's Eve celebration. The trouble with New Year's Eve celebrations, we all have to wake up the next day and face reality.'' I quoted Arthur Schlesinger who wrote: ``This supply side fantasy is voodoo economics. The witch doctors have had their day. Reality is awaiting.'' On that October day, I noted: ``. . . The administration's brave words and rosy predictions began to wilt.'' The reality was that deficits as far as the human eye could see were out there. Deficits peaked in fiscal year 1992 at $290 billion. Not until fiscal year 1998, 17 years after the 1981 Reagan tax cuts, were we able to achieve a budget surplus. Having passed the Reagan tax cuts in 1981, which in large part created these unprecedented triple-digit, billion-dollar deficits, the Congress had no choice but to pass, and Presidents Reagan, Bush, and Clinton signed, numerous bills to correct our mistake and increase taxes in hopes of stemming the unprecedented tide of red ink. The Budget anachronisms of those tax increase measures are painful to recall: TEFRA, DeFRA, OBRA of 1987, OBRA of 1990, OBRA of 1993, and so on. Despite all of these efforts to stem the red ink during the 12 years of Presidents Reagan and Bush, the national debt rose from $932 billion, the day Mr. Reagan took office on January 20, 1981, to $2.683 trillion the day Mr. Reagan left office; to $4.097 trillion the day President Bush left office on January 20, 1993. These protracted deficits also resulted in higher interest rates for you and for you and for you, the American taxpayer, to pay. This forced the average American to pay more for his mortgage, more for his car, more for his child's education because of our rush to enact a huge tax cut. Because of our rush to enact a huge tax cut, the benefits of which went mainly to the wealthiest taxpayer, many, many middle-class American taxpayers were left with shrinking paychecks and shriveled dreams. As a result of the tough votes we took on the deficit reduction bills of 1990, Senator Sarbanes, and 1993, do you remember 1990, when we went over to Andrews Air Force Base? And do you remember 1993 when we passed the bill for which no Republican in the House or in the Senate voted? We are now reducing the debt held by the public, but gross debt continues to grow to this day. Our current gross debt is $5.6 trillion. Here is the chart: $5.646 trillion. The chart will show that, if these $5 trillion were stacked in $1 bills, the national debt would reach into the stratosphere 382 miles. May I ask Senator Sarbanes if he remembers when Mr. Reagan first came into office, Mr. Reagan made a presentation to the American public on television, and in that presentation Mr. Reagan talked about the debt he had inherited. It was $932 billion at that time. Mr. Reagan very graphically presented it by saying: If this $932 billion were in $1 bills, that stack of $1 bills representing the national debt of $932 billion which I inherited would reach into the stratosphere 63 miles. When Mr. Reagan left office, that same stack of $1 bills would have reached into the stratosphere 182 miles, three times what it was when Mr. Reagan took office. Our current gross debt worldwide is $929 for every man, woman, and child. Get that: Our current gross debt comes to $929 for every man, woman, and child around the globe! That is not pocket change. It represents $20,062 per man, woman, and child in the United States. Some may argue that increased Federal spending is responsible for the deficit. That is not so, not totally so. Looking at the chart entitled ``Total Federal Spending Lowest Level Since 1966,'' I have heard my ranking member on the Budget Committee, Mr. Conrad, refer to this chart and to this total of Federal spending. He has said it is the lowest level since 1966. Federal spending this year is only 1.2 percent of GDP, the lowest since 1966, and almost 5 percentage points less than in 1982 during the Reagan administration, and 4 percentage points less than in 1992 during the Bush Administration. Once again, we face the fork in the road. We have faced it before. We took the wrong path. We voted for that tax cut. But this time, we have a signpost. It is easy to vote for a tax cut. I love to cast easy votes. The easiest vote I have ever cast in my 55 years in politics has been a vote to cut taxes. Oh how easy. It doesn't take much courage to do that.

Mr. BYRD. Does he have great grandchildren?

Mr. BYRD. One day we will leave this Chamber for the last time. And, if I am able to do so, I will look in a mirror. I will say to myself: How did you serve? Did you think mostly of yourself? Did you think in terms of only your generation? Did you think in terms of your children's future? Did you think about your great grandchildren? What about that little great granddaughter? She is going to be in school one day. When I look into that mirror, what will I say as to my stewardship during these years when I have served the people in the Congress? If I haven't served well, I shall have cheated that great granddaughter. I shall have cheated my daughters and my grandchildren. I would say as I look in that mirror: When you get all you want in your struggle for pelf, And the world makes you King for a day, Then go to the mirror and look at yourself, And see what that guy has to say. For it isn't your Father, or Mother, or Wife, Who judgment upon you must pass. The fellow whose verdict counts most in your life Is the man staring back from the glass. He's the fellow to please, never mind all the rest, For he's with you clear down to the end, And you've passed your most dangerous, most difficult test If the man in the glass is your friend. You may be like Jack Horner and ``chisel'' a plum, And think you're a wonderful guy, But the man in the glass will just say you're a bum If you can't look him straight in the eye. You may fool the whole world down the pathway of years, And get pats on the back as you pass, But your final reward will be heartaches and tears, If you've cheated the man in the glass. If I have cheated the people who sent me here, if I have cheated my grandchildren, my children, your children, then I shall have cheated myself most of all. Senator Sarbanes and Senator Conrad, we will have to look in that glass one day. And right here coming up, this year is one of the tests as to how we are going to react to the challenge before us.

Mr. BYRD. Yes.

Mr. BYRD. Yes. I do. I do. And I was very much impressed by that. We were talking about 10 years. What was the testimony, just beyond the 10 years?

Mr. BYRD. Yes. Yes. I thank the distinguished ranking member of the Budget committee, on which Senator Sarbanes and I serve. Mr. President, once again we face the fork in the road. We have faced it before and we took the wrong path--but this time we have a signpost. The lesson of recent history is very clear, and we have only to review it to see which way to go. The choices are these: Do we rely on uncertain, 10-year budget forecasts to pass a colossal tax cut, or do we exercise a little caution in case the forecasts prove to be only a mirage, as they have so often proved to be before? If we pass such a tax cut and the surpluses do not materialize, what needs of our citizens may have to be left behind? Let's take Social Security. Currently, 44.8 million older Americans receive Social Security. That is projected to grow to 82.7 million in the year 2030 when the baby boom generation has retired. The ratio of workers to beneficiaries was 42 to 1 in 1945, at the end of World War II. Today, that ratio is 3.4 to 1, and it is projected to fall to 2.1 to 1 in the year 2040. The Social Security trust fund is projected to be exhausted in the year 2037. If we go along with the Bush administration's tax cut, what about our pledge to protect Social Security? Let's take Medicare--33.4 million Americans rely on Medicare for their health care costs. This is projected to grow to 77 million in 2030. The Medicare--hospital insurance--trust fund is projected to have benefits exceed receipts in 2015 and to run out of money in 2023. If we go along with the Bush administration's tax cuts, shall we just pretend that the Medicare problem will solve itself? How about prescription drugs? Since Medicare was created in 1965, the practice of medicine has changed dramatically. Prescription drugs allow patients to avoid more expensive and invasive procedures, such as surgery. Since 1990, national spending on prescription drugs has tripled. The current Medicare program does not provide a prescription drug benefit. How can we pay for a prescription drug benefit if we have emptied the kitty with tax cuts? Just go up to your local drugstore. Get yourself a comfortable place somewhere over in the corner if you can, and watch that line as it progresses along that counter. Listen to some of the people who come there. They get their drugs, and they pay $100, $150. I sometimes wonder, how can they do it? Drugs are so terribly expensive, and they are becoming more expensive. And yet these people rake and scrape and save to try to have a little money with which to buy drugs. We have heard many stories about how some of them have to make a choice between food on the table or drugs to keep down pain, and the problem is getting worse. We are at a crossroads. What are we going to do about it? Discretionary spending--let's talk about it for a moment. I am an appropriator. The population of this Nation grew by 33 million, or 13.2 percent, from 1990 to 2000, and according to the U.S. Census is expected to grow by another 8.9 percent by 2010. Congress should make sure that we allow for the future growth of our population. There are those who argue that discretionary spending is too high. Let me refer to this chart entitled ``Total Discretionary Outlays, Fiscal Years 1962 to 2000.'' The distinguished ranking member of our Budget Committee has referred to this subject matter as we have discussed the budget surplus from day to day. In fiscal year 2000, discretionary spending as a share of our economy was just 6.3 percent. There it is. This share of spending has been shrinking for decades and is less than half of the share in 1962. When I came to this Senate, I say to Senator Conrad--I came to this Senate 43 years ago--the line on the graph would have been up between 12.7 and 14 percent. That was for discretionary spending. I was on the Appropriations Committee. I went on it the first month I came here. What is it today? At that time, the estimates--the latest estimates that were available were 1962. I came here in 1959. But in that year, 68 percent of all Federal spending was discretionary. On the pie chart, one can see how much of that chart was for discretionary spending: $72 billion; 68 percent was for discretionary spending. That was the amount of money that went through the hands of the Appropriations Committee. Today, only 34 percent of the Federal budget is discretionary. Entitlement spending has grown. We heard a witness before the Budget Committee just the other day talk about entitlement spending. Let's look at this chart entitled ``Entitlement Spending as a Share of the Economy.'' We see that entitlement spending has grown from 5.7 percent of GDP, gross domestic product--the source is CBO--in 1966 to 10.5 percent today. So America continues to have real needs that are not being met in the areas of infrastructure, education, health care, national security, and the list goes on and on. For example, the number of vehicle miles traveled on our Nation's highways has grown--from 1983 to 1999--from 1.65 trillion miles per year to over 2.69 trillion miles per year. Of the road miles in rural America, 56.5 percent are in fair to poor condition, according to the Federal Highway Administration; 56.9 percent are in fair to poor condition. One does not have to go very far to see that. Just travel along the streets in this Capital city and see the potholes, and what is happening to traffic congestion. I came to this city 49 years ago. Conditions are even worse in urban America, where 64.6 percent of the road miles are considered to be in some state of disrepair. The situation is no better when we turn our attention to the Nation's highway bridges. According to the most recent data from the Federal Highway Administration, 28.8 percent of our Nation's bridges are either functionally obsolete--they can no longer handle the kind of traffic for which they were built--or they are structurally deficient. We all should remember the Silver Bridge disaster that took place a few days before Christmas at Point Pleasant, WV, a few years ago. That bridge collapsed, sending many people to their watery graves, on the Ohio River. Do we just cross our fingers and hope that these bridges do not collapse? The EPA has estimated $200 billion in unmet needs for sewer, wastewater, and safe drinking water systems construction and maintenance, just to maintain the current systems and to allow for necessary expansion. Clean and safe drinking water should be a basic right of every man, woman, and child in America. We simply must address these needs, and it will take dollars--billions of dollars--to do it. According to the Department of Housing and Urban Development, there are 5.4 million families, representing 12.3 million individuals, who are in need of affordable housing. Do we sacrifice these needs on the altar of tax-cut fever? We are all familiar with the myriad problems confronting our military forces today: Recruitment and retention problems, crushing deployment burdens, aging ships and tanks and aircraft, a scarcity of spare parts, a scarcity of ammunition--just read it in today's Washington Post, a scarcity of ammunition--substandard housing, outdated facilities. All of these factors affect readiness. Beyond the current budget, we are bracing for the likelihood of requests of major leaps in defense spending, perhaps as much as $50 billion a year just over the horizon. When we allocate the surplus, it would be totally irresponsible-- totally irresponsible--to fail to provide enough discretionary resources to allow us to invest in our future. Ask the mayors of the big cities throughout this country. Ask the mayors of the little cities, the towns throughout this country. Debt reduction--let's talk about it for a moment. Our debt held by the public peaked in fiscal year 1997 at $3.8 trillion. In recent years, we have paid about $200 billion per year in interest -- interest--on that debt. As we approach the retirement of the baby boom generation, we could do no greater favor for my granddaughter, for my great granddaughter, for your children, for all of our people, no greater favor than to eliminate that debt and to eliminate those interest payments. I know we have received testimony in the committee that we can only eliminate it to a certain point as of a year that is not too far away. By the end of fiscal year 2001, we expect to have reduced the publicly held debt to $600 billion from the level in fiscal year 1997. We should make sure that we can stay on that course. If we enact large tax cuts that siphon away--that suck away, that draw away--the on-budget surpluses, we could return to the days when we had to use the Social Security surplus to help finance Federal operations rather than using it for reducing debt. In July of 1999, when the Republican leaders were pushing large tax cuts, I suggested that Congress take five steps: One, watch our investments carefully and manage them prudently. Manage the economy and watch out for inflation. Two, pay our debt. Pay down the national debt. Three, cover the necessities. Do not shortchange our Nation's core programs, such as education, health care, and the like. Four, put aside what we need to put aside for a rainy day. Reserve the Social Security and Medicare surpluses exclusively for future costs of those programs. Five, take prosperity in measured doses. Ease up on taxes without pulling the rug out from under projected surpluses. Mr. President, our present conundrum regarding budget surpluses reminds me of that old Aesop's fable about the ant and the grasshopper. It seems, as Aesop told it, that a commonwealth of ants, busily employed in preserving their corn, was approached by a grasshopper which had chanced to outlive the summer. The grasshopper was ready to starve from the cold and hunger and begged the ants for a grain of the corn, much like the 10 virgins in the Scripture; 5 who were wise and who had oil in their lamps, and 5 who were foolish who had no oil in their lamps. In this case, one of the ant colony asked the grasshopper why he had not anticipated the winter and put aside food, as the ants had so wisely done. The grasshopper answered that he had so enjoyed the abundance of summer that he had never once thought of the possibility of winter. So we are going to have a big tax cut. Ah, we will enjoy that. How enjoyable. How sweet. How sweet it would be. If that be the case, the ant replied, then all I can say is, those who spend all day reveling in summer may have to starve in the winter. The moral is, of course, do not fail to provide for the future. So a prudent course would demand, Mr. President, that we anticipate a cold and chilly downturn in our economic fortunes and forecasts and put back something for the winter. After all, it is only a very few years after the 10-year budget window that even these rosy estimates return to deficits as we cope with the retirement of the baby boom generation. Given the pressing needs of our Nation in the coming decades and the uncertainty of the budget projections, I believe it is critical we establish a mechanism that would put a cautionary curve on tax cuts and new spending. In response to my question at a recent Senate Budget Committee hearing, Mr. Barry Anderson of the Congressional Budget Office responded that it would be prudent to establish such a mechanism. So I intend to work diligently with my colleagues on the committee to craft some way to put a cautionary brake on these huge, foolhardy tax cuts that are being proposed, until we can be more sure that the surpluses will materialize. In my heart of hearts, I would prefer that any tax cuts this year be limited to no more than half a trillion dollars. That is my own viewpoint: $500 billion. Americans believe in prudence. They would not blow the mortgage money at the race track. Neither should we. Massive tax cuts of the size that is being proposed, based merely on projections, merely on pieces of paper--here they are. These are the projections. These are the projected surpluses. There they are on paper. Can you spend it? What is it worth? It is money not even in our pockets yet. It borders on reckless disregard for the needs of our people and the promises we have made to them to proceed in this manner and spend it based on 10-year forecasts. Even worse, we risk a return to serious budget deficits. As Mr. Conrad has said so many times, let's not get back into the ditch which our children would have to address. So, as we approach this fork in the road, we owe it to our children and to our children's children to make the right choice. We should invest in our future. We should set aside funds for problems that we know are lurking just over the horizon. Let us not make a risky U-turn and return to the rocky road of deficits as far as the eye can see. Mr. President, we will hear this refrain, that: ``It's the people's money. Let's give it back. It's their money. It's their money.'' And it is. But it is also their debt. It is also their deficits. It is also their highway safety. It is also their water and sewage treatment needs. It is also their children's education. It is theirs. It is also their safety in the skies. It is all theirs. And we are the stewards. How do we best serve them?

Mr. BYRD. I will yield to Senator Sarbanes.

Mr. BYRD. I thank the distinguished Senator from Maryland.

Mr. BYRD. Yes.

Mr. BYRD. Right.

Mr. BYRD. Yes; here is the chart.

Mr. BYRD. Yes, that is just 5 years out.

Mr. BYRD. That is my reaction.

Mr. BYRD. Exactly.

Mr. BYRD. That is the point we should take home with us.

Mr. BYRD. I thank the distinguished Senator from Maryland, a very, very fine Senator, knowledgeable. He has had many years of experience. I thank him for his contribution today and for the articles which he has brought to our attention and which will be included in the Congressional Record as he has requested. I value my association with the Senator, and I thank him very much. I yield the floor.

Mr. BYRD. Yes. I yield.

Mr. BYRD. I thank my friend. Does the Senator from Maryland have grandchildren?

Mr. BYRD. Yes.

Mr. BYRD. They did.

Mr. BYRD. I yield.

Mr. BYRD. Precisely.

Mr. BYRD. Yes, indeed.

Robert Byrd

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