Russell Feingold

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President, just to conclude, this is really a very mild thing to ask. I am just asking that this process be a little bit honest and that we not mention in the committee report that will be used to interpret the constitutional amendment one program. There are many quasi-public agencies. This notion that the TVA is a self- supporting program is just an argument--debatable. It is nothing better than that. The CBO says it is not. We are going to accept here as a part of the constitutional process we are engaged in this absurd notion that simply because an argument is made by the supporters of the program, it is not going to be on the table? I cannot accept that. I suggest again, if we are going to go forward with this constitutional pork, it will become the symbol of the lack of seriousness of the balanced budget amendment, the ultimate proof that, when given an opportunity, special interests will be protected even with a balanced budget amendment, the principle being enshrined in the United States Constitution. I implore my colleague, take a minute or two to strike this language. It has no other consequence. I implore you to get this out of there so the process of balancing the budget can be an honest one, when we finally get to it. Mr. President, I yield the remainder of my time.

Mr. FEINGOLD. I yield myself sufficient time. Let us take a look at the language. It is true, as the Senator from Illinois says, ``Among the Federal programs that would not be covered by Senate Joint Resolution 1 is the electric power program of the Tennessee Valley Authority.'' But that is all that is mentioned. It is a real valuable thing for a program to be the only program out of the entire U.S. budget that gets exempted specifically. In other words, all the others will have to argue somehow that they are within that language. Maybe they will have to go to court, if they are allowed to go to court. We are not even sure about that. One program gets named, one program is on this pedestal and even though the Senator from Illinois, Mr. President, intends that others be mentioned, they ought to be mentioned. If we have to do that, let us have the committee issue a new report and list all the programs that are exempt. I am sure it would be as comfortable to the people who support those programs as this language is comforting to those who support the TVA. This is about the sweetest deal you can get, a constitutional exemption for your program while everyone else has to get into the field and has to fight each other for scarce Federal dollars. Mr. President, I cannot accept this argument of the Senator from Illinois. If it was intended the other programs be mentioned, they should have been mentioned. Only one is mentioned, and that program should not get that kind of special treatment. I yield the floor and reserve my time. have to the distinguished member of the Judiciary Committee, Senator Heflin, from Alabama.

Mr. FEINGOLD. There is only one entity that we are aware of that has been specifically named. If there are others that should be named, I think that should be the subject of similar amendments. And I am very glad to see the senior Senator from California asked that question because she knows very well how hard she fought to try to get an exemption for a program that really probably does deserve the exemption, and that is the contract with the American people in the form of Social Security. But that is not the one that got protected. Mr. President, this suggestion that this is a delay tactic is very troubling to me. I think it is not fair. In fact, I find it astonishing that the Senator from the very State that gets protected by this thing more than any other State, Tennessee, stands up and says this is a delay tactic. I am just calling it what it is. It is a great deal for Tennessee. I would love to be able to exempt all the programs in Wisconsin up front in the committee language and then pass a balanced budget amendment. I would get a lot of pats on the back back home for that one. But I did not do it. I would not try to do it because I know very well that is a denial of the very meaning of the balanced budget amendment. All the folks on the other side talked about the glidepath, about the right to know; we cannot make those decisions now. If we lay out what is going to be cut and is not cut, what happens is that the process falls apart. I suggest this committee language, if it is not struck, is the beginning of the end of any serious attempt to balance the budget because there would be a tremendous outcry across the country that this and only this program is important enough to be protected and that every other program did not count. So, Mr. President, I think this is a very, very clear amendment that should not even be controversial. That language should not be in the report. We all know it. And I would certainly hope TVA has to fight the same battle that everybody else does as the coming months go on. I yield the floor and reserve the remainder of my time.

Mr. FEINGOLD. I yield to the Senator from California for a question.

Mr. FEINGOLD. I yield myself such time as I need. Mr. President, I am kind of amazed at the comments of the Senator from Tennessee. He is suggesting that this amendment is an attempt to derail the balanced budget amendment. But I think everyone should know that I could be here delaying debate--I have the floor. I could be reading the entire history of the TVA to the Senate, if that is what I wanted to do--just open it up and read and read. That is permitted under the rules as we know. That is not what I did. I entered into a very brief time agreement, 20 minutes for my side. It is because I am not, Mr. President, trying to hold up the balanced budget amendment. In fact, this will take 2 seconds. All we have to do is vote in a few minutes to strike this ridiculous language from the committee report that tries to protect one program out of all the programs in the Federal budget. So I want everyone to know who is listening, it is completely false that this is an attempt to delay the balanced budget amendment. It is just 20 minutes, 20 minutes to say why should one program of all the programs in the United States in our budget get special treatment and all the rest, including Social Security, which the Senator from California worked so hard on--

Mr. FEINGOLD. I yield myself such time as is necessary. Mr. President, I definitely believe the TVA should be given the fair consideration, indeed, that all programs should be given when it comes time to balance the budget. I am willing to look at the arguments as to what aspects of TVA should be continued and what aspects should not-- all the arguments. But it is a little difficult for me to hear Senators from that area of the country get up and talk about how wonderful TVA has been to that part of the country. I recognize the Depression, New Deal, and the history of TVA. I have similar feelings with regard to aspects of our dairy programs and those programs that have helped keep our dairy farmers going all these years. But I have not sought through the committee report or any other mechanism to write a special protection for the dairy program or even some of the other programs that affect our State, such as the Farm Credit Administration, another quasi-public agency that does not rely on taxpayer dollars directly. We do not have an exemption for that. If there is to be any meaning to the notion that everything has to be on the table and that this is not the time to make the preliminary decisions, it must mean that the TVA cannot be exempt while all these other worthy programs that mean so much to people around the country are not exempt. All this is--let me be clear, this is not an attack on the TVA--this is just saying there should not be any language in a committee report that is going to be used by the courts and everyone else in the future to interpret the balanced budget amendment that exempts one program. That is all. It is a very simple proposition. I am sure much later we will get to the merits of the TVA. So I would suggest this is a very mild suggestion that we not mess around with the future of the balanced budget issue by writing in exemptions in a committee report that relate directly to the constitutional provision. I yield the floor and reserve the remainder of my time. Mr. THOMPSON addressed the Chair.

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

Mr. FEINGOLD. Mr. President, the purpose of this motion is pretty straightforward. The Judiciary Committee report accompanying Senate Joint Resolution 1 has the most extraordinary passage which flatly says that the Electric Power Program of the Tennessee Valley Authority is not--repeating this now--is not covered by the balanced budget amendment, on the grounds Program. Not another single agency in our Government is singled out in the committee report in this manner. Only the Tennessee Valley Authority is exempted. That is right. Not Social Security, that is not exempted. But the Tennessee Valley Authority is exempted. Mr. President, we have heard of appropriations pork. Now I think we have a new creature--constitutional pork. We are making constitutional history here, and at the same time we are creating a far more sophisticated pork than we have ever had in this institution. We are putting it right into the Constitution. Not only, then, Mr. President, are the advocates of the balanced budget amendment saying they will not lay out a plan and say what they are going to cut, they are doing it better. They are actually protecting one particular program over all the other programs by writing in committee report language. It is an incredible provision for a committee report. To put it another way, Mr. President, this is an attempt to put the equivalent of an earmark into a Constitution for a program that is of a concern to particular Members of Congress. Do not let anyone be kidded. The U.S. Supreme Court has to interpret the language of the Constitution. They will be looking at that committee report to get a sense of what was intended. They will see that the most important program apparently in all of our Government, of everything that this Government has ever done or ever will do is one program: The Tennessee Valley Authority. The only one the Judiciary Committee thought should be treated in a special way. Let me raise just two reasons why I think this language is totally inappropriate. First, the proponents of this language argue that the TVA's Electric Power Program should not be covered by the balanced budget amendment because the financing of that program has been the sole responsibility of its own electric ratepayers, not the U.S. Treasury and the Nation's taxpayers, since 1959. Now, Mr. President, that is an argument but it is certainly a debatable one. The Congressional Budget Office in its annual report on options on reducing the deficit, has this to say about the TVA Electric Power Program. It says: Because many TVA stewardship activities are necessary to maintain its power system, their cost would more appropriately be borne by the users of the power. Direct cost to the Federal Government could be reduced by about $70 million annually if TVA were to increase power rates or fees to cover costs of all stewardship. Mr. President, CBO thus says that the Federal taxpayers are, in fact, subsidizing the electric power user. It is not just being paid for by the folks in that area of the country. So, Mr. President, that is not a dispute we need to settle here or now. That is what the advocates will say every time, ``We do not have to decide this now.'' But the point is that the backers of this language have attempted to tilt the argument on their side by placing this language in the committee report that will be used to interpret the meaning of this amendment to the U.S. Constitution. So what proposition does this stand for? Apparently, so all agencies are not equal under the balanced budget amendment. Some--in fact, one-- just one program gets special treatment. We will take a look at some of the other quasi-public agencies that could make a pretty good claim as the same status as the TVA. Looking at the U.S. Postal Service--and here is a routine letter I received from the Postal Service in December 1994--that depends exclusively on postage and fees rather than taxpayers' revenue for operations, and has done this since 1982. Each class of mail by law must cover its cost and we must break even over time. So the argument, Mr. President, that the Postal Service should receive special status under the balanced budget amendment would seem to be very much the same as the argument used to exempt the TVA. Why was the Postal Service not mentioned in the committee report as being exempted from the balanced budget amendment? Now, if you do not like the Post Office, and a lot of people do not, there are a number of other Federal programs that are operated entirely on revenues produced by users. For example, the Department of Agriculture's Marketing Service provides grading services on a user-fee basis for meat, poultry, eggs, dairy products, fruits, vegetables, cotton, and tobacco. Should these activities be exempted from any impact of the balanced budget amendment since they are entirely funded by the users and not the Federal taxpayers? Let us try the Farm Credit Administration. This is an independent agency in the executive branch of the U.S. Government which is responsible for the regulation of the examination of banks and associations and related entities that collectively comprise our farm credit system. The expenses of the Farm Credit Administration are paid through assessments against institutions under its jurisdiction. So, again, here is another one--not the TVA--but another program that operates at no direct cost to the taxpayer. So I ask again, is the Farm Credit Administration exempt like TVA from the impacts of the balanced budget amendment? If so, why was it not also cited in the constitutional history reported out of the Judiciary Committee's report in the same manner? What about the Federal Deposit Insurance Corporation, another quasi- Government corporation established in 1933? FDIC does not operate on funds appropriated by Congress but on assessments on deposits held by insured banks and from interest on the required investment of its surplus funds in Government securities. Is FDIC covered or not, and if not, why was it not cited by the Judiciary Committee? I will tell you why, Mr. President. The answer is clear. The Tennessee Valley Authority was singled out in the committee report because those concerned about its future do not want any budget cuts imposed upon this entity. It is not surprising in light of this whole balanced budget amendment, nobody wants to get cut. Guess what? The folks who support the TVA are fearful of the Federal budget knife hitting one of the programs they support in part, I suspect, because there have actually been a number of bills introduced in Government to cut off the subsidies to the TVA. I introduced on the first day of this Congress S. 43 which would terminate several current TVA programs and provide for a report on what remaining functions should be separated from the Federal Government. My Republican colleague from Wisconsin, Representative Scott Klug, has proposed legislation along similar lines in the other body. TVA supporters know that TVA is on the short list of most deficit reduction advocates, and that is why they want to provide it with special protection that no other program of any kind in the Federal Government is getting. Mr. President, it is not just the CBO that cited TVA programs as needing reform. Citizens Against Government Waste include TVA in their prime cuts list for 1994. Reducing funding for TVA was also part of the Kerrey-Brown deficit reduction package, which I cosponsored. The deficit reduction package of a group of Senators led by Senator John Kerry, which I also cosponsored, included it, and also the so-called famous Penny-Kasich plan also listed the TVA. There is no reason why we should allow this program to gain special protection as a result of the language that was put in the committee report. In fact, Mr. President, I am afraid that this attempt in the committee report begins to make this whole balanced budget process look a little bit like a $3 bill. My motion will not disturb the balanced budget amendment in any way. It simply says that the committee report language that singled this agency out for special protection is null and void and cannot be used for legislative history purposes when we finally get around to achieving a balanced budget. So to conclude, it is a simple proposition. We just need to ask the committee to come up with an additional report to change this. Otherwise, we will have enshrined a new tradition, something that no Democrat or Republican has ever achieved before, we have created constitutional pork. exempt one program while all the others have to be on the chopping table for potential cuts. I reserve the remainder of my time.

Mr. FEINGOLD

Mr. FEINGOLD. Will the Senator yield for a further question?

Mr. FEINGOLD. I would ask the Senator's reaction to the statement of Solicitor General Freed with regard to this issue where he said that if Congress attempted to pass legislation pursuant to section 6 to eliminate Federal court jurisdiction of questions arising in the balanced budget constitutional amendment, that limitation itself might very well be unconstitutional. That is my point. You may want to pass legislation afterwards. You may hope that the court will accept it. But there is no certainty whatsoever that the court will not say, I am sorry. This is merely a statute. And my question is, how does the Senator react to the question?

Mr. FEINGOLD. Mr. President, I rise in strong support of the amendment offered by the distinguished Senator from Louisiana which would make it clear that the balanced budget amendment cannot be used to turn over to the judicial system the responsibilities of managing the fiscal obligations and priorities of the United States. The amendment of the Senator from Louisiana would make clear we do not intend that unelected judges would assume the power to set tax rates or impound Social Security checks of elderly citizens in order to comply with the constitutional mandate that is created through the balanced budget amendment. Mr. President, there is probably no more significant amendment that will be offered during this entire debate on the balanced budget amendment. It goes to the very heart and structure of our system of government which we established over two centuries ago. Unless the Johnston amendment is adopted, the constitutional amendment we are debating could be construed to authorize Federal and State courts to intervene into the most political decisions now made by elected officials, including decisions about levying taxes and spending the revenues raised on national priorities that are established through our democratic process. Instead, Mr. President, individuals appointed, not elected, to lifetime judicial seats could become intimately involved in these matters. The independent judiciary, of course, is as important to our system as any other element, one of the most important. We do intend that our judges be free from partisan pressures. We intend that they make decisions based upon the law, not upon opinion polls or election returns. That structure is also based on something else, Mr. President. It is based upon the assumption that those courts with unelected leadership will not be given the responsibility for actions which are intended and reserved for elected officials, those in the legislative and executive branches. If the balanced budget amendment is added to the Constitution without an amendment which clarifies and limits the potential role of the courts in establishing fiscal priorities for the Federal Government, we will have suddenly opened the door to one of the most radical restructurings of our system at any time in our history. I assume in the last Congress, Mr. President, concerns about this issue led which specifically restricted the role of the courts in enforcement of the balanced budget amendment to the issuance only of declaratory judgments. We do not have that here in this amendment now. We do not have that restriction. Indeed, some of the most stalwart proponents of the amendment have conceded that without clear limitations, either in the amendment itself or the implementing legislation, the judiciary could become intimately involved in actually directing compliance with the balanced budget amendment. Now, of course, the response to these concerns has uniformly been, ``Do not worry about the details; we will fix it later.'' That is what we are told about all of our amendments. Repeatedly it is asserted that this issue can be addressed simply by implementing legislation. Now, the Judiciary Committee report accompanying Senate Joint Resolution 1 suggests that the silence of the amendment on the issue of judicial review is somehow a good thing, a virtue, asserting that through this silence the authors have refused to establish a congressional sanction for the Federal courts to involve themselves in fundamental macroeconomic and budgetary questions while not undermining their equally fundamental obligation to say what the law is. The proponent goes on to say to the extent that we do have any judicial intrusion, it can be reigned in later on by having implementing legislation. Mr. President, that is the classic sidestepping of critical decisions that has engendered public disdain for this body and for elected officials in general. It is irresponsible and an abdication of our most awesome duties to have failed to address this issue in a forthright and honest manner. The role of the courts in enforcement of this amendment ought to be resolved now, not sometime later. This is when we send it out to the States, not later. Mr. President, this entire debate over the balanced budget amendment has become somewhat troubling. We seem to be rushing the proposal through to meet an arbitrary deadline that was originally set up as a campaigning proposition. There has been little serious debate over the words of the proposed constitutional amendment. We are constantly diverted from any real discussion of the problems that should be addressed before this language is placed in the Constitution to a generalized discussion of Federal deficits and their impact on the national economy. Mr. President, I suggest that for a moment we set aside these generalities and focus on the language of the balanced budget amendment that we are considering, and specifically the role of the courts. I strongly urge the supporters of the amendment to consider the Johnston amendment on the merits and not just vote it down again because of some prearranged agreement to defeat any and all amendments. That is not appropriate when we are talking about the most fundamental issue of the separation of powers that this country is founded upon. It is not appropriate, not in the U.S. Senate. This is a constitutional amendment we are debating and we may well be sending on to the States. We better take the time to ensure that we have not created unintended consequences by careless wording of the amendment. Mr. President, the ratification of the balanced budget amendment without the Johnston amendment will result in judicial involvement in its implementation. I think that is virtually without question. The Constitution of the United States has been amended only 27 times in over 2 centuries. Ten of those amendments comprise the Bill of Rights. Three others, the 13th, 14th, and 15th, arose out of the Civil War. Our Founding Fathers made it difficult to amend our great national charter, and rightly so. A constitution is designed to endure for the ages, not merely reflect the passing issues of the day. Once altered, it is very difficult to change. For example, the 18th amendment, Prohibition, was ratified in 1919. It was a mistake. It inserted government into the private lives of citizens. It was widely flaunted and bred disrespect for the law. It was not repealed until 1933 by the 21st amendment. It took 14 years to undo that error. An amendment to the Constitution is not like any ordinary legislative matter that we can change next year when we find out that it does not work exactly as intended. The Constitution is not something we can tinker with and adjust from one Congress to the next. If the 104th Congress is intent upon adding the balanced budget amendment to the Constitution of the United States, then we better do it right. We better take the time to ensure that we have not created unintended consequences by careless wording of the amendment. Let us not allow legitimate frustrations over the Federal deficit inadvertently lead to a radical restructuring of our entire system of governance. Mr. President, that ratification of the balanced budget amendment without the Johnston amendment will result in judicial involvement in its implementation is virtually without question. Legal scholars from left to right agree that the balanced budget constitutional amendment will force the courts into potentially endless litigation over its enforcement. Former Solicitor General and Federal Judge Robert Bork said, The result . . . would likely be hundreds, if not thousands, of lawsuits around the country, many of them on inconsistent theories and providing inconsistent results. Kathleen Sullivan, professor of law at Stanford University similarly observed, . . . enforcement of the Balanced Budget Amendment would inevitably wind up on the doorsteps of the state and federal courts, and ultimately at the Supreme Court. She further testified, . . . the possibilities for litigation over balanced budget compliance are staggering. Judges [might be asked] to enforce balanced budgets either by enjoining excess spending or by ordering tax increases, the latter possibility no mere phantom after recent decisions by the Supreme Court upholding . . . federal judicial power to require the levy of a tax. Yale University professor of law, Burke Marshall, had this to say: I have little doubt that the courts ultimately would, however reluctantly, exercise the power of judicial review over such questions as the meaning of the language [used in the Amendment]. Although some may hope that the dictates of the amendment would be self-enforcing and self-policing by the Congress, there is little basis for such speculation. There is a virtual endless list of situations where litigation is likely to result from efforts to interpret or enforce the amendment. Courts will be asked to interpret the language of the amendment, including such questions as what constitutes total outlays and total revenues. These terms are not self-evident and are not likely to be self-evident to future generations. Litigation will surely ensue to determine what activities are or are not covered by the amendment. Almost unbelievably, the Judiciary Committee report, for example, makes the remarkable observation that the electrical power program of one quasi-public entity, the Tennessee Valley Authority, would not be covered by the amendment since its operations are entirely the responsibility of the electric ratepayers. Not only is the naming of this one agency remarkable, it clearly opens the door to many other quasi-public entities seeking similar status. As the author of legislation introduced on January 4, S. 43, to terminate some of the public funding of TVA programs and develop privatization plans for this entity, because I wanted to identify and show where I would create the balanced budget. I am both intrigued and perplexed by the decision to specifically exempt the Tennessee Valley Authority as a part of this balanced budget amendment process that supposedly is neutral as to what would and would not be included. Courts will be asked to hear challenges to the executive branch efforts to carry out the constitutional mandates. For example, if outlays exceed revenues in any fiscal year, the President could argue on constitutional grounds that it is necessary to impound funds and take other actions unilaterally to meet the requirements of balanced budget amendment. As will seek judicial review. For example, during the 1970's there was substantial litigation over the Presidential assertion of impoundment authority. Roughly 80 cases were decided by the courts on impoundment questions, generally against the broad interpretation of such power advanced by the Nixon administration. Passage of the Impoundment Control Act of 1974 brought that litigation to rest. Yet, backed by a new constitutional balanced budget amendment, many believe that the President would have not only the authority to impound appropriated funds, but would have an obligation to do so under the constitutional mandate. Surely, individuals whose retirement checks are withheld or Federal employees whose salaries are reduced by executive fiat would very likely have standing to sue under this amendment. Louis Fisher of the Congressional Research Services noted in testimony to the Senate Appropriations Committee that the experience in the States indicates that courts could well be asked to monitor spending, taxing, and indebtedness actions. Mr. Fisher observed, ``If state actions are a guide, judges will not be shy about tackling budgetary and fiscal questions, no matter how complex.'' Former Solicitor General Charles Fried also testified before the Appropriations Committee that ``[t]he experience of state court adjudication under state constitutional provisions that require balanced budgets and impose debt limitations * * * shows that courts can get intimately involved in the budget process and that they almost certainly will.'' Cases will also arise when Members of Congress seek to challenge the actions of the executive branch. One of my former professors, Prof. Archibald Cox, observed, ``There is * * * substantial likelihood that the Federal courts will be drawn in by congressional suits.'' The Supreme Court has recently assumed that either House has standing to sue to enjoin action rendering its vote ineffectual, Burke versus Barnes (1987). Thus, if the President impounded funds appropriated by Congress on the grounds that anticipated revenues had fallen short of projections, either House might challenge such action and, again, as the Senator from Louisiana so well points out, we have the strong likelihood of the courts being involved. Although the question of when individual Members of Congress might have standing to pursue such actions remains open, the standing of Congress itself to assert its prerogatives seems clearly established. Finally, there are strong arguments to be made that individual taxpayers could have standing to bring suit to challenge a failure to enforce the amendment. Harvard Law Prof. Archibald Cox observed in his testimony before the Appropriations Committee last year that if the Supreme Court's formulation of standing in Flast versus Cohen, the seminal taxpayer standing case, is taken at face value, a Federal taxpayer would surely have standing to challenge an expenditure under the proposed amendment upon the allegation that it had resulted or would result in a violation of the specific limitation imposed by section 1 of the amendment. Certainly, taxpayer suits in the State courts are well-known, and the amendment does not restrict litigation to the Federal court system. Absent a provision placing exclusive jurisdiction in the Federal court system, the issue of State court litigation remains a viable option. This nightmare of litigation will likely have three major results. First, it will insert judges into policymaking functions that are unprecedented, for which they have no experience or judicially manageable standards to guide their decisions. That courts would take on such tasks as levying taxes is not mere speculation; the 1990 decision of the Supreme Court in Missouri versus Jenkins, upholding a district court decision directing a local school district to levy a tax in order to support a target school required in a desegregation order makes it clear that this is a very real possibility. Second, it would entail a radical and fundamental transformation of roles assigned to the different branches of government in this country. As Nicholas Katzenbach testified, * * * to open up even the possibility that judges appointed for life might end up making the most fundamental of all political decision is not only an unprecedented shift of constitutional roles and responsibilities but one that should be totally unacceptable in a democratic society. Third, and equally important, this shift in power to the judiciary could do incalculable damage to the judiciary itself. As Federal courts take on the task of enjoining the expenditure of funds appropriated by Congress or requiring the levy of specific taxes, the backlash toward judicial fiats could be enormous. Ultimately, the very effectiveness of the courts in preserving constitutional rights and liberties of citizens could be undermined. The answer to these concerns which has been made by the opponents of this amendment has been singularly unsatisfactory. Repeatedly, we are told, ``we will deal with the problem in the implementing legislation.'' Well, Mr. President, the short answer is what if Congress fails to agree on implementing legislation? What if the President vetoes any implementing legislation passed by Congress and Congress lacks the two-thirds majority needed to override such a veto? Is there any serious doubt that the judicial branch has the ability to enforce a constitutional mandate even in the absence of implementing legislation? It is hornbook law that the Federal courts have the duty to enforce constitutional requirements. There is no implementing legislation for the first amendment, or the fourth amendment or the sixth amendment. The power of the courts to enforce the constitution arises from the constitution itself, as was held in Marbury versus Madison, very early in our country's history. As Assistant Attorney General and former Duke Law School Professor Walter Dellinger testified before the Senate Judiciary Committee last month, Section 6 of the Balanced Budget Amendment does give Congress affirmative authority to legislate implementing legislation. But unless that authority is deemed exclusive, it does not oust the courts of jurisdiction to act without any implementing legislation, just as the courts are able to act under section 1 of the 14th Amendment. Mr. President, before I conclude, let me address one last argument, the political question argument, advanced by proponents of the amendment who belive that judicial intervention into the budget process is not likely to follow ratification of the amendment. The proponents argue that the courts are likely to use the political question doctrine to duck deeper involvement into budgetary decision making. The constitutional scholars, pointed out before the committee that the questions which are likely to arise under the balanced budget amendment simply do not meet the criteria established under Baker versus Carr (1962), which lays out the political question doctrine. Moreover, recent cases have suggested a narrowing of the political question doctrine. In light of the legislative history of this amendment and the presumption by both proponents and opponents that the courts will have some powers to hear cases involving its implementation, there is little likelihood that the political question doctrine will shield the amendment from judicial review. Mr. President, in the Federalist No. 78, Alexander Hamilton warned that ``there is no liberty, if the power of judging be not separated from the legislative and executive powers.'' If the Johnston amendment is not adopted, we run the grave risk of creating precisely the kind of peril against which Hamilton warned: and the peril is allowing unelected judges to decide policy questions that have heretofore been dealt with by the legislative and executive branches of our Government. To embark in that direction is the height of foolishness. Those on the other side of this debate who call themselves conservatives ought to be among the first to cosponsor and applaud the amendment of the Senator from Louisiana. Why leave this important issue of whether unelected judges should have Why would the Senate abdicate its responsibility? I have authored a lot of amendments here, Mr. President. I may have more. I care about them all--middle-class tax cut, tax expenditures, issues having to do with how this amendment is set up. I would happily drop all those amendments if we could just solve this fundamental problem and if we could just resolve, through the Johnston amendment, the question of whether we are going to turn over this Government to the unelected judges or whether we are going to maintain our right and our responsibility to uphold the Constitution and deal with budgetary matters. Mr. President, there is no question, of any amendment, this is the one that should be adopted.

Mr. FEINGOLD. I thank the Senator from Minnesota. We will visit this subject again many times, both of us, and I know we will have support from others. But what it really comes down to, this is not an attempt to delay on the balanced budget amendment. What we are doing here is to try to point out there are certain special interests that are being protected by tax expenditures and that those tax expenditures should be on the table. And, in large part, this is true because these tax expenditures have been a big part of the reason why this mess was created in the first place; one of the big reasons we have this deficit. So why in the world should not that be on the table with all the other things? That is our message and that is why we would urge the adoption of this motion to refer. Mr. HATCH addressed the Chair.

Mr. FEINGOLD. Right.

Mr. FEINGOLD. Exactly. If I may respond to the Senator from Minnesota, let us just think about, if you happen to be a supporter of the balanced budget amendment, your goal out of all of this is, of course, is that the States would ratify the balanced budget amendment. What do the supporters of the balanced budget amendment think is going to happen back in our home States when the people that are concerned about these programs find out the following: when they find out that defense spending is going up; when they find out that we are going to give out a big tax break across the board to everybody in the country; when they find out we would not even talk about tax loopholes? It is not going to take too long before some of those State legislatures figure out, ``Wait a minute. What is this coming out of?'' It is coming out of the local programs and the tax dollars, the property taxes, of hard-working people of places like Minnesota and Wisconsin. So I would think you would be concerned that not laying it out for the American people and putting tax expenditures off the table--as this, in effect, does if we do not put it in the sense of the Senate--I would think you would be concerned and I think the Senator from Minnesota is right on target.

Mr. FEINGOLD. Yes.

Mr. FEINGOLD. That is exactly my concern. We are out here talking about the big picture, in terms of we have to balance the budget, we are talking about direct spending programs, but we have an obligation to talk about everything that is spent out here. I find in Wisconsin, and I am sure you do in Minnesota, that people do not know about some of these oil and gas deals. They do not know, necessarily, that foreign nationals get the special deals on tax breaks. We talk about it. We do a heck of a job in telling people about where this item of pork--you know, the Lawrence Welk issue, the steamboat issue--and we should, and we made some progress on this. But back home people are being prevented from finding out--because we will not talk about it--that there is worse stuff a lot of times stuck in the Ways and Means Committee and in the Finance Committee that never comes up to public scrutiny. That is why it is particularly unfair, when these other programs are threatened that really help people and they may have to take some cuts, that they are on the chopping block and the American people are not even told the truth. No one is telling the people about the tax loopholes; in effect, a conspiracy not to talk about it. I think that is a very serious injustice to the people that you have described.

Mr. FEINGOLD. Mr. President, I ask the Senator from Minnesota if he noticed in his State the same thing I have in my State in recent weeks: That there is a heightened level of anxiety around our States about what is going to happen when we balance this budget. I am hearing people who are concerned about the elderly nutrition program, people that are concerned about what is going to happen with the Corporation for Public Broadcasting. So far, there does not seem to be much talk about the so-called tax loopholes as a way to solve the problem. That is one of the reasons I want to bring this up. I am wondering whether the Senator is experiencing this sort of discrepancy between direct spending programs versus not talking about the tax loopholes.

Mr. FEINGOLD. I ask the Senator to yield for a question.

Mr. FEINGOLD. Mr. President, my particular thanks to the senior Senator from Minnesota, who is doing a wonderful job of raising this issue of tax expenditures. I have enjoyed, both here in the U.S. Senate and especially back in the Wisconsin State Senate, just trying to point out when you spend money on a tax loophole and give people a special tax break, that is spending, too. It is taking the hard-earned tax dollar of the American people, putting it into a package and sending it out just to a few people. It is an awful lot like a spending program. Our point here today is that often it does not get treated that way. It gets treated like somehow it is just a tax break for everybody, which, of course, it is not. If we are going to solve the Federal deficit and really have a balanced budget amendment, the Senator from Minnesota and I are saying this obviously has to be on the table. This has to be considered, too. So I am very pleased to join with the Senator from Minnesota in offering this motion which is designed to put the Senate on record, insisting that when we get around to actually trying to balance the Federal budget we have to subject these tax expenditures--many of them inappropriate tax loopholes--to the same kind of scrutiny we will use to examine direct spending programs. I feel I need to respond to the comments of the Senator from Washington, who spoke earlier today. He suggested all the Senator from Minnesota and I were doing was proposing an amendment designed to inhibit the balanced budget amendment itself. That is just not the case. I think those watching, everybody involved in this, should know that is really an unfortunate argument since the mechanism we are using, a motion to refer, is the very same mechanism that the majority leader used to get himself on record on Social Security. It does not delay the process at all. It just is a statement about the fact that certain things ought to be considered when we balance the budget. It strikes me as a little bit unfair to attack the motives of those behind this amendment. There is no possibility that this will upend the balanced budget amendment. Whether it has the votes or not, even though I like this amendment a lot I do not think the Senator from Minnesota or I have any belief at all this will stop the balanced budget amendment. It is just another attempt to have some honesty and some candor with the American people about what is going on here. And, in particular, to identify where the money is, why we have such a huge Federal deficit. One of the big reasons is tax loopholes that have not been covered, that have not been fixed, and that cost us a fortune. Mr. President, no one should mistake the difficult job that lies ahead in seeking to achieve a balanced budget, with or without a constitutional amendment. The Congressional Budget Office has already told us, using current baselines, that between 1996 and 2002, Congress will have to enact some combination of spending cuts and revenue increases totaling more than $1 trillion to achieve a balanced budget. There is strong sentiment, which I share, that we need to cut Federal spending, and that much of the deficit reduction achieved over the next several years will be as a result of cut backs in direct spending programs. That will happen. I am very enthusiastic about being part of that process, as I have been for the last 2 years--identifying specific programs that do not make sense anymore and that can and should be eliminated. That is very important to this process. But I also believe it is vitally important that in looking for ways to reduce the Federal deficit and bring the Federal budget into balance that we subject tax expenditures to the same kind of scrutiny applied to direct spending programs. That sounds simple, but in the land of the lobbyist inside the beltway of D.C., it is not so simple. Tax expenditures, tax loopholes get treated very differently. They are special. They are off the table. They are protected. Tax expenditures generally refer to preferential Tax Code provisions which give special treatment to specific industries or provide tax subsidies to consumers of particular products. Last year, the General Accounting Office issued a report, ``Tax Policy: Tax Expenditures Deserve More Scrutiny,'' which focused upon the need to subject tax expenditures to the same type of scrutiny applied to direct spending programs. The GAO report noted that most tax expenditures are not subject to reauthorization or any type of systematic review. Once they are in, they are in. They have a life of their own. They have immortality, in effect, in a way that spending programs do not. Once enacted these provisions are enshrined in the Tax Code and they are very, very difficult to dislodge.GAO noted many were originally enacted to address economic conditions that at the time were important. But many of the economic conditions that these tax expenditures were meant to address just do not exist anymore. But they keep on going, like the Energizer tax expenditures--it does not matter. They can be completely irrelevant. Once they are in the Tax Code they are there and you are paying for it. We are all paying for these in higher taxes--or, at this point, in higher deficits and higher payment on interest to pay for those deficits. For example, the GAO found of the 124 tax expenditures identified by the Joint Tax Committee in 1993, about half were enacted before 1950 something that the Senator from Minnesota has pointed out very persuasively. A lot of these are real old. They were not just enacted in the last 2 or 3 years. For example some of the tax allowances available to specific industries to recover certain costs of acquiring mineral deposits were enacted during World War I. Without an expiration date there is just very little impetus and no real trigger to review whether these provisions still make sense. It reminds me a lot of some of the programs we have talked about and both parties seem willing to eliminate, such as the helium program. I have authored a bill to eliminate the old helium program that had to do with providing helium for blimps. It is an old program from the earlier part of the century. The President said we should get rid of it. Republicans in the other body say we should get rid of it. Those are held up to scrutiny, those are held up to ridicule sometimes, as the wool and mohair program, the Tea Testing Board, the search for extraterrestrial intelligence--these get held up in the light of the day. Everybody laughs at them. They are prime time because they are spending programs. But if it is the same kind of thing for special interests in the Tax Code nobody talks about them. It is a nice, quiet thing to sweep under the rug and make the American people pay a ton of money to keep these tax expenditures going. Let me give a couple of examples. Since 1943, the Tax Code has allowed U.S. civilian employees who work abroad certain special allowances for things like housing and education, travel, and special cost-of-living allowances. As a result, employees who receive a large part of their incomes through these allowances rather than through direct salaries receive preferential treatment--a better deal than the rest of the American people. I became aware of these special allowances when I was involved in trying to accomplish another cut last session which we did achieve, a substantial spending cut in direct spending in overseas broadcasts. We found out in the last Congress that to curb some of the excessive salaries and allowances paid to employees of Radio Free Europe and Radio Liberty, to the Board of International Broadcasting, would involve dealing with one of these tax expenditures. As the Senator from Minnesota has said, some of these exemptions may be justifiable. However, I do know they can be abused and manipulated to for all the other Federal agencies. For these folks there is a special deal. It gets no review. Another example, Citizens for Tax Justice noted in a recent report that interest income earned by foreign nationals on loans to American companies or the U.S. Government was exempted from the U.S. tax since 1984. In other words each of us pays taxes on our interest income but a foreign national does not pay any U.S. tax on that income, according to the Citizen's for Tax Justice. And this is again an unfair deal, in my view. When this exemption was passed a decade ago maybe there was some justification for it. But we ought to have some kind of review of this type of tax preference to see if it is still appropriate. Has it had some beneficial impact in terms of inducing foreign nationals to make loans to U.S. entities? Maybe so. Or is it just a windfall that is stuck in the Tax Code and that we cannot get rid of? We need to ask whether in today's international climate our foreign investment decisions are made more on projections regarding political and economic stability or on these kind of breaks. A third example, and the Senator from Minnesota alluded to this. Since 1916, the gas and oil industry has had special expensing rules for exploration and development costs. A compendium of background material on individual tax expenditure provisions that was compiled by the Senate Budget Committee last December described these provisions as having ``very little, if any, economic justification.'' This report goes on to say that many economists believe that these provisions are a ``costly and inefficient way to increase oil and gas output and enhance energy security.'' Again, Mr. President, we are not raising this example alone because we have reached a final conclusion as to the merits of this special tax preference that is provided to one industry; rather, a tax preference established in 1916 simply ought to be carefully reconsidered in 1995 and thereafter, and the burden, Mr. President, should be on the proponents of the special preference to justify it because, by having this special preference, we all have to pay more. If tax expenditures were subjected to reauthorization and sunset rules like direct spending programs, they might not fare as well as they do today. Mr. President, I see the Senator from Minnesota is interested in speaking again. Let me just add a few other quick comments. There are other cases. I just mentioned some larger items. Although the revenue loss to the Treasury over time is actually significant, it does not look like so much in any particular year. The Joint Tax Committee only lists preferential Tax Code provisions that have a projected total revenue loss of over $50 million or more in a 5-year period. So these are regarded as small tax court provisions and again, even though they amount to quite a bit over time, they escape scrutiny year after year in the budget process. In contrast, you can be sure, Mr. President, that a direct spending program that would cost $10 million per year for 5 years would certainly be subject to review by both an authorizing committee and the Appropriations Committee on a regular basis. But to try to put it simply, what the Senator from Minnesota and I are talking about is this: He said, if you have the political clout and the influence to stick a special tax exemption in the House Ways and Means Committee or in the Finance Committee in the Senate, you are all set. That thing is in there forever. It is protected. It is not talked about. It is not considered spending. It is not considered part of the deficit. It is not considered part of the debt. It is not considered part of the burden on our children and grandchildren. But it is money. It is real money. But if you are an older person who wants a meal at an elderly nutrition site, or a child who is in Head Start, or somebody who wants to see an Amtrak train in your State so people can get to work without polluting the environment, you are scrutinized. You have to defend and stand and undergo the tremendous pressure that this deficit has created, and, in part, that deficit is because of these tax loopholes. Mr. President, to conclude, there are a number of reasons why tax expenditures should be subjected to the same scrutiny as direct spending programs. First, it is an equity issue. When some taxpayers receive special preference, the burden shifts to those who do not have lobbyists to win special breaks to pick up the difference. Giving special tax breaks to some industry means other industries will have the higher tax rates to get the same revenue. It also means the taxpayers with similar income and expenses end up having to pay different rates of taxes depending on whether they engage in the tax subsidization activity. Many tax expenditures make sense, and they accomplish important policy goals. But it is important that all such expenditures receive regular review, and they ought to be measured against each other, perhaps a more important policy goal. So to conclude, Mr. President, the Senator from Washington says it is a confession of failure to attack the balanced budget amendment. This is a continued attempt to try to level with the American people just as the right-to-know amendment was. They talk about middle-class tax cuts. This is a huge pot of money that we need to balance the budget. It should be on the table. And the amendment of the Senator from Minnesota would put the Senate on record that we are not going to hold this immune while everyone else has to suffer. I thank the Chair.

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

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

Mr. FEINGOLD. It may be unconstitutional.

Mr. FEINGOLD. That is under the current Constitution; this is under a new Constitution, one with a balanced budget amendment in it. The courts do not currently have a balanced budget amendment to deal with. What I am suggesting is, if you have a balanced budget amendment, and later on you decide that you want to have a statute, it is not certain that the court would rule that that limitation----

Mr. FEINGOLD. I am suggesting it is possible that subsequently the U.S. Supreme Court could rule that the balanced budget amendment, that would derogate from the balanced budget amendment and take away the power of the people to have a balanced budget by taking away the right to enforce it. If you do not include in the constitutional amendment itself, if you do not specify in the Constitution that statutory provision cannot necessarily be interpreted by the U.S. Supreme Court to derogate to the balanced budget amendment. I am not convinced of that at all.

Mr. FEINGOLD. Is that the Senator's intent?