Bob Graham

Mr. GRAHAM

Mr. GRAHAM. Mr. President, in this article, this statement appeared: The amendment would also require a three-fifths majority in each Chamber to raise the ceiling on the amount of debt the Government can incur. It goes on to state: If annual deficits get out of hand and push the overall national debt to the legal ceiling, it would take a three- fifths supermajority to raise the limit to allow additional borrowing. That is clearly untrue. The constitutional amendment in the clearest words--and it is ironic that the text of the amendment was printed inside the article that I have just read--states that ``the limit on the debt of the United States held by the public''--held by the public--``shall not be increased without a three-fifths vote.'' By the year 2018, only approximately half of the total national debt will be held by the public. The rest of the national debt will be held primarily by Social Security and other Federal trust funds which are not subject to the limitation of this constitutional amendment. In a response to the President on Saturday, one of our colleagues made this statement. Americans know this measure would require Washington to start living within its means and balancing its budget like families and most State governments must do. That's why about 80 percent of Americans support it. If 80 percent of Americans believe that this would require Washington to start living within its means and operating like a typical American household, they are supporting this amendment for the wrong reasons and they are about to be severely disappointed. Finally, on one of the Sunday talk shows, one of our colleagues, in discussing the amendment, challenged a statement that this amendment would require 60 votes to raise taxes, correctly challenged that statement by saying: No, you don't need 60 votes under this amendment to increase revenues. You need 60 votes to increase the debt ceiling. That is not what the amendment provides. You do not need 60 votes to increase the debt ceiling. You need 60 votes to increase the amount of debt held by the public, which will be by the year 2018 only about half of our national debt. All the other debt that the Government borrows is outside of the three-fifths requirement. And it is that other availability of borrowing that is going to drive our national debt to almost $8 trillion by the year 2018. I have one other item from the weekend news that I want to discuss in a moment where I think there has been a misstatement. So these are some of the realities of the amendment that we are about to pass. It is an amendment which does not live up to its rhetoric. What is going to be the principal consequence of this gap between reality and rhetoric? The principal consequence of this deficiency in reality as opposed to the rhetoric with which the amendment is being sold is going to be aimed, targeted, focused on our Social Security system and primarily on those Social Security beneficiaries born after the year 1954. If you were born after the year 1954--and I see some people in this Chamber who I think meet that standard--listen: Social Security is going to be used to mask the extent of the real deficits of the United States. Let me just give you a few figures at 5-year intervals. In 1980, the reported national debt--this is reported on integrated, budgeted, total revenues versus total receipts including Social Security--the deficit was reported at $73.8 billion in 1980. When you look at the Social Security trust fund in 1980, the Social Security trust fund was running in a deficit. It had a deficit of $1.1 billion. So the real deficit of the general operations of Government was $72.7 billion; that is, the reported deficit minus the degree to which it incorporated the necessity to finance the deficit of Social Security. By 1985, the reported deficit had jumped to $212.3 billion. And by 1985, as a result of the changes made in Social Security in 1983 when Social Security was converted from a pay-as-you-go system to a surplus system--one that had this print line of developing large surpluses in order to be prepared to meet the needs of that population largely born after World War II and particularly after 1954--we had a surplus of $9.4 billion. So the real deficit in the general accounts of the Federal Government, that is everything other than Social Security, was $221.7 billion. That is 1985. In 1990, the reported deficit, $221.4 billion. The real deficit, after you eliminate the mask of Social Security surplus, was $279.6 billion. In 1995, reported deficit, $176 billion. It would appear that we had made significant progress in controlling the deficit. But because there has been a significant increase in Social Security surpluses, the real deficit was $245 billion, or not so much progress. By the year 2000, according to the Congressional Budget Office's latest report, dated January 1995, the reported deficit will be $284 billion. The Social Security surplus will equal $96 billion. So the real deficit, the deficit in all of our ongoing governmental accounts, will be $380 billion--$380 billion. That is just a foretaste of what it will be like 5 years later when, according to the Congressional Budget Office, we have a reported deficit of $421 billion and a Social Security surplus of $137 billion for a real deficit of $558 billion. That is what we are experiencing in terms of the direction of the budget. That brings me to my fourth and final weekend news communique. A leading Washington Post columnist wrote in an article entitled ``Fool's Amendment,'' that the redink hemorrhage this constitutional amendment is supposed to stop is not a chronic condition, it is actually a phenomena of the 1980's which has washed over into the 1990's, but it is a dubious proposition to rewrite the permanent charter of Government to correct for the follies of one decade. was not just a decade-long aberration, that we did not just lose our way for one 10-year period. In fact, we seem to have lost this fundamental character of America of generational responsibility. We are masking the extent to which we are lost by these increasing Social Security surpluses. We are lost with no indication that we are about to find a compass. Why is Social Security in the target of this issue? It is because that any future attempts to reform Social Security--and clearly Social Security cries out for some reform--are going to be stymied by the fact that those very reforms will be seen as, and in fact will be, means to further mask the deficit. Those reforms will not be used for the principal purpose of assisting Social Security to be a sound, reliable, retirement system for the indefinite future. They will be used as a means of generating additional surplus so we can have even more spending, even more tax cuts, even more borrowing. Third, the increased national debt will lead to increased national annual debt payments. Under this constitutional amendment, the amount of deficit that we will add from the year 2002 through the year 2018 will be between $120 billion and $140 billion. That is $120 billion to $140 billion that our children and grandchildren and their children and grandchildren are going to be asked to pay. There will be no net national savings increase as a result of this amendment between 1995 and the year 2018. Mr. President, we reformed the Social Security system in the early 1980's, in order to build a surplus to meet our future obligations. By statute, that fund can only be invested in a particular form of Treasury notes which, incidentally, are restrained so they are nontransferable. How are we going to pay for all those notes when this large wave of Americans, particularly those born after 1954, arrive and begin to ask for their benefits? The theory was that the rest of the national budget would be in balance during this period, and we would use the Social Security surpluses for real investments in America, in our economic growth, in making our country stronger so that it would be in a position after the year 2018 to meet this enormous indebtedness. In fact, we have not been doing that. We have been using the Social Security surplus to fund our annual deficits. This amendment will allow Members to continue to use our Social Security surplus to fund our annual deficits and add $12 trillion to that national debt. We are facing, Mr. President, a gigantic truck wreck beginning in about the year 2015. We are still operating in a surplus, but the rate of increase in that surplus is beginning to decline. I remember an old joke told about a trucker who was in a class, studying new techniques in driving trucks. The teacher used a method of instruction in which he would ask students different hypothetical questions to see how they would respond in emergency situations. One of the questions that was asked was, ``Joe, suppose you are riding on a mountainous road in northern New Mexico. You are 200 yards from the top of the hill, and you look up and there is another truck that has just crested the hill. You can tell it is out of control, and you can tell it is going over 100 miles an hour. What would you do?'' Joe said, ``I would turn to my relief driver, Ray, who is sleeping in back of me, and wake him up.'' The driver was shocked. ``You would do what? You would wake up your relief driver in that kind of an emergency situation?'' Joe said, ``I sure would, because Joe never has seen a truck wreck like the one we are about to have.'' Well, friends, we need to wake up America because we have not seen a truck wreck like the one we will have which will begin in about the year 2015, no longer having the enormous annual surpluses but reversing to the point where we will have deficits. And what type of deficits? The period of about the year 2020 or 2025--and it sounds like a long time from now; we hope we will be here to see it--about that time, we will be running deficits in the Social Security of in the range of $350 billion to $400 billion a year. We will be spending out that much more than we will be taking in. That is not an aberration. That is the way the system was designed in order to create a core of assets that will be able to meet this future demand. If you could analogize this to a household, the Jones household has earnings of $40,000. Unfortunately, the Joneses have not been very prudent and they have gotten into a pattern over the last 2 or 3 years of spending $50,000. So every year, their indebtedness goes up and they get a little more in the hole. Well, good news and bad news has just occurred for the Jones family. Their favorite uncle died, and the uncle left an inheritance, part of which goes to the Jones family. Now, this is a somewhat unusual inheritance. The Jones family is going to receive $15,000 a year for the next 10 years. They are very happy about that. But the uncle has imposed a requirement on them. He loves the Jones' two children. They are his favorite nephew and niece, and he wants to see that they go to college. So he is going to require as a condition of receiving this $15,000 over each of the next 10 years that the Jones family commit that they will send these two children to college. They estimate that it will cost $10,000 a year per child to send them to college. What do the Joneses do? Do they put the $15,000 aside in some trust fund to meet this obligation to send their children to school, as their beloved uncle wanted? No. They take the money and they start to spend it. They actually increase their annual spending from $50,000 up to $55,000, so now they are spending the $40,000 they make and the $15,000 they got from their favorite uncle, and they live very well for the next 10 years. At the end of the 10 years, the $15,000 no longer is there. They are back to $40,000, having gotten themselves into the lifestyle of a $55,000-a-year family, and they have this obligation to send their two children to college. It is not far off from what our family of America will face in about the year 2018. We will no longer have the Social Security surplus, but we will have to meet the retirement obligations that we have made to our older Americans. We are setting up another type of clash, and that will be a confrontation between classes of Americans. We are setting up a potential confrontation between those Americans who will be in the work force in the decade of the 2020's and those Americans who will be retired, because we will be asking those people in the work force to work harder. There will be fewer of them to support the large number of retirees. We will ask them to pay excessively higher taxes in order to meet those accumulated obligations. Further, there will not be the kinds of student financial aid that maybe the Jones family thought they would get for their two children because we cannot afford student financial aid anymore. There is going to be a generational clash in America. There could also be a clash between older Americans and better-off Americans. There is going to be a temptation to manipulate Social Security in order to make the surplus even greater so that some of those obligations in the Contract With America that have this $700 billion-plus price tag from now until the year 2005 can be met. This concerns me. So we are going to be fraying the basic social relationship between and among important groups of Americans. And we are doing all of this, Mr. President, unnecessarily. We do not have to do this in order to pass this constitutional amendment. We will pass a better, a stronger, a significantly more conservative amendment if we will but take a series of actions in the next few hours. It would be my hope that we would take as preferred action, No. 1, the passage of the amendment that the Senator from California, Senator Feinstein, has offered which takes Social Security out of the rest of the Federal budget. It would deal with the principal issues raised particularly in section 1 and in section 7 that I discussed earlier. If we fail to pass the Feinstein amendment, we ought to adopt the first of my two amendments which says: If we are going to have a three- fifths vote to raise the limit of debt held by the public, let us make it a three-fifths vote on all national debt. The Social Security funds should not be more exposed than the other sources Let us all play on a level playing field. Let us have a three-fifths vote for lifting our public debt limit. Let us do what the reporter in the Washington Post, and what two of our colleagues apparently think we are doing in this amendment, by requiring a three-fifths vote to raise the ceiling on borrowing. We are not doing that in this amendment. We should. Finally, and I particularly would like to direct this comment to the chairman of the Budget Committee who probably understands these issues as well as anybody in this Chamber. If we continue with the outline of fiscal policy found in this amendment, using the Social Security surpluses as an additional area of borrowing, with only a majority vote required, we will be masking the extent of our other spending or tax cuts. As a result, in 2018 we will carry an $8 trillion debt, about $3 trillion of which is held by the Social Security System. In 2019, we begin this dramatic drawdown of the Social Security fund. The surplus will drop from $3 trillion to zero by the year 2028. How are we going to fill this triangle on this chart? The triangle represents the national debt that we have accumulated by borrowing from Social Security, but which now we are going to have to start repaying to the beneficiary. How are we going to fill that void? Under the balanced budget amendment, a three-fifths vote would be required to borrow from the public. This amendment will worsen this gigantic truck crash by saying that over a 10-year period, we have to borrow $3 trillion additional from the public and do it, we must have a three-fifths vote. At an absolute minimum, I think at least we ought to adopt my second amendment. The second Graham amendment which says that, when the Social Security program moves into a deficit position, we should be able to refinance the program by a simple majority vote. If we were able to borrow from Social Security at a majority vote, why should we not be able to pay off the beneficiaries with a majority vote? In addition, I would like to comment on the issue of judicial review. As the advocates have stated on this issue, as well as others, how much judicial interference there would be in enforcing this amendment? All of these matters can be handled pursuant to the language in section 2 which states: The Congress shall enforce and implement this article by appropriate legislation which may rely on estimates of outlays and expenditures. I think that there is an obligation owed by us to the American people to tell them how we are going to do that. I believe that the outcome of the balance budget amendment has been misrepresented. We should outline the implementing legislation. I believe that the advocates of this legislation ought to present to us between now and approximately 23 hours from now that language. Certainly, the bill's advocates have drafted this language. The objectives and strengths of this legislation are being regularly commented upon. Making public that language might help to alleviate some of the concerns that myself and others have raised during this debate. I think we have a right to see what the implementing language will actually say so that we can assess whether we think it will protect the Social Security System, and other important areas that have been stated. Or finally, and this, again, goes to the chairman of the Budget Committee, if we pass this amendment without either the modifications that address the serious problems of integrating Social Security into the rest of the Federal budget, and without the ability to analyze the implementing legislation, then I think the Budget Committee needs to lead our colleagues by pledging that we are not going to succumb to the temptation to borrow an additional $2 trillion between the year 2002 and 2018. Instead, the Senate will produce a budget plan that, in fact, will get us in balance, without having to use the Social Security surplus. That we will, rather than adding to the national debt, be adding to the Nation's savings account. I think that a commitment by the leadership of the Senate and the Budget Committee that they would take that course of action would be of considerable relief to the American people, it would certainly be of considerable relief to this Senator. So, Mr. President, in closing, the American people are poised for a disappointment. It is not the first time. This Congress, over many years, has stated that its intention was to act with fiscal responsibility. You could list the amendments, bills, the proposals that have had that as their objective. In every one of those instances, the American people have been disappointed. They have felt that they have been misled. That has contributed to the fact that the public standing of this institution has reached almost historic lows. It is in our hands to do otherwise. It is in our hands to pass a balanced budget amendment which will live up to our rhetoric. It is in our hands to pass a balanced budget amendment which will provide a strong deterrent to further additions to the national debt. It is in our hands to pass a balanced budget amendment that will protect what has been one of the great social programs in this Nation's history, a program that has lifted the America's seniors out of poverty, given them a level of respect and dignity in their retirement years. We should protect the Social Security system, a system that now stands in the gun sight of this amendment. All of those things are within our power to do and to do beginning 23 hours and 5 minutes from now. The question is, will we? Thank you, Mr. President. Mr. DOMENICI addressed the Chair.

Mr. GRAHAM

Mr. GRAHAM. Yes.

Mr. GRAHAM. As I indicated, should the amendment by the Senator from California be adopted, I am prepared to withdraw my amendments, because they would have been solved in a larger and, I think, more effective manner. If the amendment by the Senator from California is not adopted, I think it becomes urgent that one, and preferably the first of the two amendments that I am offering, be adopted.

Mr. GRAHAM. But would the amendment of the Senator from California occur prior to this amendment?

Mr. GRAHAM. Reserving the right to object, and I will not do so, will the vote on the amendments occur after the vote on the amendment as offered by the Senator from California?

Mr. GRAHAM. Madam President, I thank my friend from Michigan for his comments. I would say, in all honesty, that the adoption of the amendment as offered by the Senator from Nevada and the Senator from California, of which I was proud to be a cosponsor, would actually be the superior way to deal with this issue because it would solve the problem of no longer requiring that Social Security be commingled with the rest of the Federal budget as well as effectively rendering denuding the potential danger contained in section 2. So let me just summarize the first amendment. It is a very simple amendment. It strikes the phrase ``debt held by the public,'' would require that the three-fifths vote be applied to all increases in debt from whatever source, would have as its objective to avoid the addition of $2 trillion of debt between the year 2002 and 2018 and almost an assured fiscal crisis thereafter, and substitute in lieu thereof a cap on Federal debt after the year 2002, a substitution of the Social Security trust fund surpluses for debt held by the public during the period from 2002 to 2018, and then a reversal of that as the Social Security system has to redeem the IOU's that it holds from the Treasury in order to be able to meet its obligations. That is amendment No. 1, which, in our sequencing, is Amendment No. 259. My amendment No. 2, unfortunately, is a much wordier amendment. Let me read that amendment. It would take the language of section 2 which says, ``The limit on the debt of the United States held by the public shall not be increased,'' and it inserts this phrase, ``except for increases in the limit on the debt of the United States held by the public to reflect net redemptions from the Federal Old Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund.'' In essence what we would be saying is that by a majority vote, not a three-fifths vote, the Federal Government would be able to borrow funds--and this would occur based on current projections after the year 2018--the Federal Government would be able to raise the limit of debt of the public by a majority rather than a three-fifths vote for the purpose of redeeming the IOU's the Social Security trust fund will have accumulated and substituting debt that would be held by the public. It will, in my opinion, be necessary in order to maintain this alternative as a means of financing the enormous transition that will occur in Social Security after the year 2018, without punishing spending cuts, tax increases, or some combination of those. Madam President, I hope that this body will not just take the position that no amendments are to be considered, that regardless of merit we will mindlessly mow down all proposed changes. I am a supporter of the balanced budget amendment. I have voted for the balanced budget amendment in the past. I hope to vote for the balanced budget amendment in 1995. I want to vote for a responsible balanced budget amendment. I do not want to leave to our children and grandchildren an enormous debt based on our failure to exercise the discipline which is the purpose of the balanced budget amendment. That is why I have been supporting it. I also do not want to leave to our children and grandchildren the train wreck which is going to occur if we have a provision that requires a three-fifths vote to raise money from the general public to substitute and be able be making from Social Security over the next 20-plus years. I believe this is a dramatically more conservative approach than the one that is contained in the balanced budget amendment as currently submitted. It is the difference between having a ceiling of $6 trillion of national debt to one that would have national debt rising to the level of almost $8 trillion. If you are a conservative, if you are concerned about the kind of America that we will leave to the next generation, if you have been appalled at what we have done in the last 15 years where the debt went from less than $1 trillion to now almost $5 trillion in a period of 15 years, you ought to be equally appalled by the prospect of a debt growing from $5 trillion to $8 trillion in the next 20-plus years. Madam President, we do not have to condemn ourselves to this future. We have an alternative. The alternative is either adopting the amendment offered by the Senator from Nevada and now reoffered by the Senator from California, or as a first fallback, adopting the amendment which I have offered that would require a three-fifths vote for any increase of the national debt, thus forcing a readjustment of Social Security debt, for public debt, in the next period and after the year 2018, allowing a readjustment to finance the Social Security obligation that we will have. If we do not do either of those, at least we ought to not require a three-fifths vote to fund this enormous debt that we are going to be encouraging by consolidated Federal budget using the mask of Social Security to balloon the national debt by an unnecessary $2 trillion, and then leave it to our grandchildren through taxation or spending cuts to finance this Social Security obligation. Madam President, I feel emotional about this in part because I am the father of four children who were born as baby boomers and will be in the first line of those affected by this amendment. I am the grandfather of four children, soon to be eight grandchildren as a result of births that are en route, and I do not want to have my children and my grandchildren turn to me 20 years from now and say ``Granddaddy, why did you do this to me when you did not have to do so?'' I believe we have the opportunity to pass a balanced budget amendment that will allow Members to say to our children and our grandchildren: We stopped this profligate Federal spending. We required Members to do as most other individuals, families, businesses, and governments in America have to do. That is, balance their books on a more or less yearly basis. And we did it in an intelligent way that did not require citizens to pay an enormous sacrifice in their generation because we were living off the mask of this Social Security surplus during the last years of our generation's life. That is what is at stake. As I say, Madam President, I know there is a tremendous momentum to say, ``Let's not accept any amendments. That is perfection. This is what we must adopt.'' I urge that over the next few days--and this will be voted on Tuesday afternoon--that there will be some serious consideration of the implications of this issue. I say to our Presiding Officer and to my colleagues that I am anxious to meet with any Member of this body, to meet with any group which is concerned about this issue, to discuss its implications, to try to collectively learn what it is we are doing and to determine what would be the most prompt path. These are an important 4 days that we have between now and Tuesday. I hope we use those days wisely. Thank you. Unanimous-Consent Agreement

Mr. GRAHAM. I received this document from the Congressional Leaders United for a Balanced Budget. I do not believe it indicates who the members are.

Mr. GRAHAM. If the substitute of the Senator from California is adopted and if, as I understand it, it is the essence of the Reid amendment, then I would suggest that my amendments could be withdrawn.

Mr. GRAHAM. That is right. And this could take place with a majority vote. This does not require a supermajority of the Congress in order to achieve this unexpected result.

Mr. GRAHAM. I do not have my calculator, but it would be significant.

Mr. GRAHAM. In the year 2002, which is the year that the constitutional amendment kicks in, Social Security will have a surplus of $1.04 trillion; we will say $1 trillion. During the next 16 years, it grows to $3.02 trillion, or roughly $2 trillion. So $2 trillion divided by 16.

Mr. GRAHAM. Yes.

Mr. GRAHAM. Yes.

Mr. GRAHAM. But we have another choice; that is, what I think we ought to be doing is we ought to be balancing our general revenue accounts and using the surplus of Social Security not to mask our spending but rather using the surplus of Social Security as a real surplus including a real surplus that will be buying down an amount of public debt so that when we get to the point where we have run through the happy days of big Social Security surplus and face the very tough days of having to pay off all of that surplus, we will not have added $12 trillion to the national debt. If you really want to have a conservative balanced budget amendment, it ought to be an amendment that says we will put a three-fifths requirement on the law to increase the borrowing from whatever source, Social Security, other Federal trust funds, or the general public. That is an amendment that would be truly conservative. That would be an amendment which our grandchildren and the Senator from Idaho would very much appreciate. That would be an amendment that would give them the greatest assurance that their Social Security benefits are going to be real when they reach the age of eligibility. All of what I have said relates to the first amendment that I have offered, which has the simple objective of striking the four words ``held by the public'' and requires the three-fifths vote to apply to all of Federal increases in the debt limit. If we do not adopt that amendment----

Mr. GRAHAM. So we are constitutionally requiring a consolidated Federal budget. That is a correct premise. I believe that is what section 7 says. Then with the structure of the Social Security system that we have, each year from now until 2019, we will have a balanced budget by having our regular accounts out of balance to the extent that we have a Social Security surplus; that is, if this amendment were to be operative in the year 2002 when we have a Social Security surplus of approximately $110 billion, every other account in the Federal Government can be out of balance by $110 billion and the surplus from Social Security will bring the total into balance.

Mr. GRAHAM. Section 1 as defined by section 7 will constitutionally require an integrated or a consolidated Federal budget; that is, all sources of income, all sources of expenditures will be amalgamated for purposes of determining whether we have a balanced budget or not.

Mr. GRAHAM. Here is the structure of the balanced budget amendment. Section 1 says that we will have an integrated Federal budget in which Social Security and all trust funds will be commingled with the rest of the Federal Government. That is the definition of income and expenditure as provided in section 7. Does the Senator agree with that?

Mr. GRAHAM. I beg to disagree.

Mr. GRAHAM. Yes. That corresponds to the debt ceiling argument which would allow borrowing under those circumstances. My second amendment is going to make it easier to do that. But if the theory of the three-fifths vote is that essentially that is a statement that we are making that it should not be done--that is what the language of the congressional leadership stated--then that is in fact adhered to. When we have this drawdown of the Social Security surplus, no additional borrowing from the general public is permitted because it is capped at this level by the three-fifths margin. When we reach that point, and try to finance a $3 trillion indebtedness in a 10-year period with reliance on taxation or spending cuts or some combination, the consequence is going to be this train wreck, a wreck in the scale of which we have never quite seen before.

Mr. GRAHAM. No. I am saying I think the amendment is intended to preclude the borrowing option because it says you would have to have-- --

Mr. GRAHAM. Yes, in order to replace the money that we had previously borrowed from the Social Security fund. What worries me is in the purpose of this amendment, by putting a cap on debt held by the public with a three-fifths vote, is to preclude that substitution. Then we are going to have a situation in which with no additional borrowing, combined with a drawdown of the Social Security surplus from almost $3 trillion to zero over a period of 10 years, the only way we can fill this gap is by taxation or dramatic spending cuts.

Mr. GRAHAM. Yes.

Mr. GRAHAM. I would like to review a little of the history of how we got to where we are and why I think that history makes this chart the likely consequence of adopting the amendment in its current form. The difference is that my amendment will call for a stabilization of total Federal debt because it will require a three-fifths vote to raise total debt, not just the debt held by the public. And it will, therefore, force public debt to be displaced by the growing amount of Social Security. When Social Security was adopted, it utilized a pay-as-you-go financing mechanism. We took in an amount of money each year sufficient to meet that year's obligation. We did not have a surplus. This was a nonissue. In the late 1970's people began to recognize that we had these terrific demographic shifts that were going to be occurring over the next 30, 40 years because of the dramatically different birth rates in different periods of American history. So one of the key changes made in the 1983 reforms was to go to a surplus structure for Social Security, thus producing this curve. There was an implicit assumption in this surplus Social Security and that was that we were going to be operating a balanced Federal budget for the rest of our expenditures. The way we would be securing this surplus money was we would be using it to reduce the amount of public indebtedness. This is the chart that the 1983 Social Security reform was predicated upon, a balance and a cap on the total national debt and a substitution of public debt for Social Security debt. Then, beginning in the year 2018, without having added any debt in this period, we would be in a position to go back to the public and say: OK, now we have all these IOU's that the Social Security Administration is holding. We need to cash them in order to get the revenue to pay off the Social Security obligations to folks like our friend, the Senator from Idaho. And, we will do so without putting any additional strain on the Federal Government because we will not be increasing the amount of debt service. We will just be shifting it from the Social Security fund to debt held by non-Social Security entities.

Mr. GRAHAM. My amendment calls for the Social Security surpluses to continue to be invested in the Federal Government.

Mr. GRAHAM. No, absolutely not.