Kent Conrad

Mr. CONRAD

Mr. CONRAD. Medicaid, health care trust funds, Federal payments to railroad retirement accounts. The President of the United States would be able to veto every one of these programs, every agriculture program, including rural electric and telephone loans, conservation, temporary emergency food assistance programs, Federal crop insurance corporation, all payments to veterans. Would not all these be included?

Mr. CONRAD. Would not included in these categories be such things as guaranteed student loans, higher education facilities loans?

Mr. CONRAD. Will the Senator yield for a question?

Mr. CONRAD. Well, I am interested in that response because I really question whether it is right. I have here the Senate committee report on last year's VA/HUD appropriations bill. Included in this bill was budget authority and outlays for veterans' pensions and compensation. This indicates that the Senate bill contains $17.6 billion for veterans' compensation and pensions. This is mandatory spending which nonetheless gets included in the VA/HUD spending totals every year. My specific question would be, would the spending authority for veterans' pensions and compensation be enrolled separately and subject to Presidential veto under the Dole substitute separate enrollment bill?

Mr. CONRAD. The answer to that is no?

Mr. CONRAD. Well, the thrust of my questions goes to the issue of whether or not, with the Dole substitute, the President would be able to veto any existing entitlement spending.

Mr. CONRAD. Mr. President, I would ask the Senator from Indiana if he could answer some questions that I have.

Mr. CONRAD. Mr. President, I ask the Senator from Nebraska to yield me 5 minutes.

Mr. CONRAD. I have run out of time. I have other questions I would like to pursue. But I just say to my colleague and friend, I think we have a real legal problem with the definitions.

Mr. CONRAD. So then that suggests to me they would be available for Presidential veto under the terms of the Dole amendment.

Mr. CONRAD. Well, I have great reservations about that answer. I would ask the Senator from Indiana, are appropriated entitlements included in the definition of ``item'' under the terms of the Dole substitute?

Mr. CONRAD. Well, that sounds to me like a contradictory answer. How could it be that the funds could be spent if the President can veto the item?

Mr. CONRAD. I would then ask the Senator from Indiana, is the Senator from Indiana asserting that only the increase in appropriated entitlements would be subject to Presidential veto?

Mr. CONRAD. I ask the Senator from Nebraska if I might have 2 additional minutes.

Mr. CONRAD. There was in last year's agriculture appropriations bill $29 billion provided for the Food Stamp Program, an entitlement program, but it was an appropriated entitlement. President veto it?

Mr. CONRAD. Well, let me go further if I can. For example, then, in last year's agriculture appropriations bill there was $29 billion provided for the Food Stamp Program. Would this amount be enrolled separately and could the President veto it?

Mr. CONRAD. So the answer as I hear it is that, even though these appropriated entitlement accounts are in appropriations bills, specifically included in appropriations, all existing entitlement spending would not be subject to Presidential veto?

Mr. CONRAD. Well, the difficulty I have with that answer is, I say to my colleague, these are appropriated entitlements. These are entitlements that are in appropriations bills, and the Dole substitute provides for the separate enrollment of all appropriated measures, does it not?

Mr. CONRAD

Mr. CONRAD. I thank the Chair and I thank my colleague from Arizona as well for this time. I appreciate his giving me this time this morning.

Mr. CONRAD. Mr. President, I just wanted to say in response to the Senator from Illinois, I believe Krauthammer is partially right. Debt is a significant threat to Social Security. But there is a second threat. The second threat is raiding the trust funds to cover operating expenses. Just as a financial principle, I do not think we want to put in the Constitution that taking trust fund money to pay for operating expenses is the right way to go. I agree completely with the Senator from Illinois on the debt being a significant threat to Social Security as it is to the economic future of our country. That is the underlying problem that fundamentally we must address and I think we have an obligation, especially when we talk about the Constitution of the United States, to do it in an honest way.

Mr. CONRAD. Mr. President, I just ask for 30 seconds to make an observation?

Mr. CONRAD. Mr. President, on March 10, the columnist Charles Krauthammer had a column in the Washington Post entitled ``Social Security Trust Fund Whopper.'' The gist of his column, which really was an attack on Senator Dorgan and myself for our role in the balanced budget amendment debate, was to suggest that it does not really matter whether you take Social Security trust fund moneys or not. His argument was, in the first case, that Social Security is a pay- as-you-go system. Mr. President, Mr. Krauthammer is just flat wrong. Social Security is not a pay-as-you-go system. He must have missed completely the 1983 act, because in that legislation Social Security was taken off a pay- as-you-go system. It was taken off the pay-as-you-go system because there was a general recognition that we had the baby boomer generation coming along, and that if we stayed on pay-as-you-go--and for those who perhaps are not familiar with the language that we use around here with respect to pay-as-you-go, that simply means you raise the amount of money necessary in any one year to fund the benefits in any one year. In 1983, that was all changed. We took Social Security off pay-as- you-go. We did it for the purpose I earlier described, the purpose of getting ready for the baby boom generation, the time when the number of Social Security eligible people will double in this country. And so in 1983 we set a course of running surpluses in Social Security. The idea was to save that money in preparation for the time when the baby boom generation retires. And for that reason, in the most recent year, we have run a $69 billion surplus in Social Security. Obviously, if we were pay-as-you-go, there would be no surplus, but there is a surplus and there are continuing surpluses. If those funds are used to balance the operating budget of the Federal Government, then obviously they will not be available when it comes time to pay out benefits to those who have made payments on the promise that they would get benefits when they retire. Mr. President, the second major error in Mr. Krauthammer's column is he suggests it does not really matter from where you borrow. It makes a great deal of difference. It makes a difference because Social Security is financed by a dedicated tax, a tax that is levied on employers and employees in this country to fund Social Security. That is a regressive tax. It is a payroll tax. Mr. President, 73 percent of American taxpayers pay more in Social Security taxes than they pay in income taxes. It matters a good deal whether or not one takes those funds and uses them for other Government expenses rather than saving them for the purposes for which they were intended. The difference it makes, I think, can be most easily explained with a simple example, one perhaps closer to home to Mr. Krauthammer himself. Let us say he works for the Washington Post, gets paid by them, puts part of his money into a retirement account, and the Washington Post falls on hard times. It runs into a situation in which they are losing money. Instead of moving to honestly balance their budget, they go raid the trust funds, the retirement funds of their employees, including Mr. Krauthammer. As we say in our answer yesterday in the Washington Post to his column, then ``. . . even [Mr.] Krauthammer might understand the fallacy of looting trust funds to pay [the] operating expenses [of a company.]'' Because then he would be directly affected. Mr. President, I ask unanimous consent to have printed in the Record a column Senator Dorgan and I wrote in answer to Mr. Krauthammer, that appeared in the Washington Post of yesterday.

Mr. CONRAD. Mr. President, I thank the Senator from Arizona. I like that idea. In fact, I think we ought to have a debate about this all over the country. I think it would provide a real education to the American people as how the finances of Government actually work. I think if people understood that we were talking about putting into the Constitution of the United States a policy that would take retirement trust fund moneys and use them to balance the operating budget that they would say that is not a good principle, not a good policy to put in the Constitution. Senator Dorgan and I both come from financial backgrounds, as the Senator from Arizona knows. It is perhaps for that reason that we are most sensitive to this notion of using trust fund moneys for the operating expenses of the Government or the operating expenses of any institution. If we were in the private sector and anybody stood up and suggested, ``I have a plan to balance the budget of this company. I know we have been running deficits. The answer I have come up with is to take the retirement funds and throw them into the pot,'' that person would be on their way to a Federal facility and it would not be the Congress of the United States. They would be on their way to jail because that is fraud. I feel very strongly about this question. I think as the American people have a chance to learn more about this question they will conclude that is not the way we want to conduct our business. But that does not take away for one moment from the need to balance the budget. We have an urgent need to do it, whether or not we have a balanced budget amendment. Frankly, I think a balanced budget amendment would help if it was properly crafted. But if we do not have one we still have to get about the business of balancing this budget. I know that is something the Senator from Arizona believes. I recognize the Senator from Illinois, who is here, who is the moving sponsor of the balanced budget amendment. Nobody is more dedicated, more sincere, or more serious about addressing this problem because he recognizes, as I think the Senator from Arizona does, and as I do, that if we do not do it, if we do not balance the budget, we are going to be in deep trouble in the years ahead. We are heading for a circumstance, according to the Entitlements Commission, where in the year 2012, every nickel of Federal revenue goes for entitlements and the interest on the debt. Obviously we cannot do that. I yield.

Mr. CONRAD

Mr. CONRAD. I thank the Chair. I think there was actually 10 minutes provided for me under the order.

Mr. CONRAD

Mr. CONRAD. Mr. President, I say to the floor manager, I would like, if possible, 5 minutes at the end of the remarks of the distinguished Senator from South Carolina.