Phil Gramm

Mr. GRAMM

Mr. GRAMM. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. GRAMM

Mr. GRAMM. Let me, Mr. President, talk about the budget negotiations. I am concerned that if we let this budget impasse go past the first of the year, that the financial markets in America are going to begin to react to the fact that no deficit reduction has occurred. I want to remind my colleagues that the election which occurred in 1994 is one of the clearest examples that I have ever seen of how elections can have tremendous economic consequences. If I were still serving in my role as a professor of economics at Texas A&M instead of serving in the role, as I often feel, of trying to teach economics here in Washington, DC--students at Texas A&M were a little more attentive-- I would use the plotting of interest rates in America as a perfect example of how elections have profound economic consequences, because I know that the people who have looked at the data are as astounded as I am at the results we would see. Interest rates were rising steadily until the day of the 1994 elections. When we had the most decisive election since 1934, interest rates suddenly started to decline. They have declined ever since, and as a result, the average annual mortgage payment on a 30-year mortgage in America has been reduced by about $1,200. That is a dramatic change. Now, it seems to me that the logic of this change is based on the rational expectation that the 1994 election, which brought a Republican majority in both Houses of Congress, was going to produce a dramatic change in the spending patterns of our Government. As we all know, Republicans had promised in the election that they would institute such a change, that we would balance the budget, that we would let working people keep more of what they earn, and that we would make some very modest changes to try to promote economic growth. Now we are on the verge of going into the new year without any of those changes having occurred. We have passed a budget, but the President is going to veto it. That means we have to start the whole process over. I simply want to raise a warning and a red flag that if we do not stand our ground on the 15th of December, if we simply give President Clinton another credit card without forcing him to sit down with us--the way families sit down at their kitchen table with a pencil and piece of paper and write out a budget that everybody agrees they are going to stick with--if we simply give President Clinton another credit card 10 days before Christmas and do not exact for that, some change that begins to implement a balanced budget, I am concerned that after the first of the year the markets that had changed their investment patterns on the belief that we would see a dramatic change in the fiscal policy of the country are no doubt going to reevaluate their position and interest rates are going to start going up. I believe that if we do not do something about this deficit before the first of the year, then we risk a rise in interest rates. I know it is very tempting to say, 10 days before Christmas, we do not want a confrontation with the President. It is also fair to say that, 10 days before Christmas, the President does not want a confrontation with us either. I do not think this is the time to fold up our tent and go home. I [[Page S 18051]] think this is the time to stand our ground, demand that the President sign on to a budget in order to get this new credit card, and I am committed to the principle that we do just that. I think we have written a budget which fulfills what we promised we would do; I intend to stand with that budget. My proposal, which I have made on several occasions in the past is this: we have set out what we can spend over the next 7 years and still balance the Federal budget; we should ask President Clinton to sit down with us and to try to reach agreement as to how that money is spent. I do not believe we ought to go back and rewrite our budget and let the President spend tens of billions of dollars we do not have on programs that we cannot afford. I think the best Christmas present we could give America is a balanced budget. Maybe my perspective is different because I am spending more time outside Washington than many of our colleagues, and I am in a mode where you tend to listen a little more intently than you might otherwise. I believe that the American people are not so concerned about the Government being disrupted as they are about the fact that a baby born in 1995, if the current trend in spending continues, is going to pay $187,000 in taxes, just to pay his or her share of the interest on the public debt. This is not just economic suicide, it is immoral, and I think we need to do something about it. I submit, that if we cannot do it now, how are we going to do it next year when we have to turn right around and write another budget? I simply raise these alarms because I believe we need to stand firm on our commitments to the American people. After all, we did not say we were going to balance the budget only if it was easy. We did not say we were going to balance the budget only if Bill Clinton went along. We said we were going to balance the Federal budget. So I think the time has come--in fact, in my opinion, it is long past--to say to the President, if you do not sign on to a budget, then we are not going to give you another credit card. It seems to me, the last time we went through this exercise the President got the credit card and we got this vague language about how he was going to support balancing the budget in 7 years under all these circumstances and all these conditions. The President was doing a lot of nodding and winking and good gestures during the negotiations, but once he got the credit card he said we have either agreed on everything or we have agreed on nothing, and since we have not agreed on everything, we have, therefore, agreed on nothing. I think we need to stop debating statements of policy. I think if we are going to give Bill Clinton another credit card, we need to have written into law limits on how much he can spend. Finally, we need to require that, in return for getting another credit card, the President join us in a budget which meets the spending levels we set out in the original seven year balanced budget resolution. I see we have another colleague who is here to speak. So, to accommodate him, I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I see that we have no other colleagues on the floor ready to speak on this subject, so I would like to speak both about Bosnia and about the budget negotiations that are going on here in the Capitol. I would like to talk about both because I think they are very important. Mr. President, I am opposed to sending American troops to Bosnia. I have not reached this conclusion quickly; I listened to President Bush and the Bush administration debate this issue at some length and followed that debate pretty closely. They reached the conclusion that sending ground troops to Bosnia was a mistake. My consistent position during that debate was that I also opposed sending ground troops to Bosnia. I have now had 3 years, counting the Presidential campaign in 1992, to listen to President Clinton try to make the case that we should send American ground troops into Bosnia. I am perfectly aware--and I say it with no criticism intended--that the President is a very effective salesman. I have concluded that his failure to convince me, and his failure to convince the country, on the issue of sending ground troops to Bosnia is not the result of his lack of ability as a salesman. I think it has resulted from the fact that this position cannot credibly be sold. I have always tried to use three tests in deciding whether to send Americans into combat or into harm's way. I have applied those tests in the past and I have applied them to sending ground troops to Bosnia: First, do we have a vital national interest? In the Persian Gulf, we had a military dictator who was working to build chemical and nuclear weapons, and who had invaded a neighboring country. His military aggression threatened two vital allies of the United States--Israel and Saudi Arabia. And so, clearly, in the Persian Gulf we had a vital national interest. I have been to the region that we are discussing today. I have talked to our military at some length. Like virtually every other person in the country who keeps up with what is happening in our country and around the world, I am aware of the terrible misery that has plagued all of what used to be Yugoslavia, and especially the misery in Bosnia. But I have concluded that we do not have a vital national interest in this region. The second question that I tried to ask is: Can our intervention be decisive in promoting our vital interests? It is one thing to have a vital national interest; it is another thing to be able to be decisive in promoting that interest. In the Persian Gulf war, we had the military capacity to promote our vital national interest. We also had a clearly defined objective: drive Saddam Hussein out of Kuwait. We were able to put together an alliance and a plan that was as detailed about how we were going to end the war and get out of the Middle East, as it was about how we were going to intervene. I concluded in the Persian Gulf that we did have the capacity through our intervention to promote our vital interests. Certainly history has proven that to have been the case. I do not believe, however, that we have this capacity in Bosnia. I am very concerned about putting young Americans into the line of fire as a buffer force between two warring factions which have broken every cease-fire and have violated almost every treaty over the past 500 years. Now we have proposals, both from the administration and from the leadership of the Senate, which say that we should not only serve as a buffer force between those warring factions, but remarkably, in my humble opin- ion, that at the same time we [[Page S 18050]] should be engaged in overtly arming and training one of the belligerents in this conflict. I have to say, Mr. President, I respectfully disagree with that policy. I supported lifting the arms embargo against Bosnia. I thought it might make sense under some circumstances for Americans to provide training--not in Bosnia--but maybe somewhere else. It might make sense to train some of their senior officials in the United States, which is the sort of thing we have done in the past. I believe there is a conflict between the role of arming the Bosnians and serving as a neutral buffer force. I think that many even in our own Senate, and certainly some in the administration, have not reconciled how we could serve those two functions at the same time. It is not possible to be a neutral buffer force and, at the same time, be involved in the training and arming one side. I know, from having discussed this with some of our colleagues, there is a belief that we, in essence, took sides when we bombed the Serbs. If that is so, then this should disqualify us from serving in this intervention/peacekeeping role. I think it was a different situation. The Serbs had been issued an order by the United Nations to stop the shelling and to withdraw their heavy weapons. They refused to do it. NATO was asked to be the military arm of the U.N. forces in that case, a terrible command structure--one I would never support under any circumstance in the future and have not supported in the past. The point is, in no way do I see how our intervention, in a period of time of roughly 1 year as set by the President, how this is going to change anything in Bosnia. There is no reason to believe that our intervention is going to be decisive. Finally, let me say that in representing a big State with many people serving in the military, it has been my responsibility, after both Somalia and the Persian Gulf, to console parents and spouses of young Texans who have given their lives in the service of our country. In talking to families, it has struck me that at least in my case there ought to be one more test. That test ought to be this: I have two college age sons; if one of my sons was in the 82d Airborne Division, would I be willing to send him into battle? It seems to me that if I cannot answer this question with a yes--no ifs ands or buts about it; and in the Persian Gulf I could answer it yes, no ifs ands or buts about it--if I cannot answer this question with a yes, then I cannot feel comfortable sending someone else's son or sending someone else's daughter. So I am opposed to sending American troops into Bosnia. I intend to vote against the President's resolution asking Congress to join him in endorsing this policy. I am concerned we are in the process of seeing a resolution put together that, quite frankly, is full of escape clauses and ejection seats so that politicians can be on both sides of the issue. I want a clear-cut vote where we can vote ``yes'' we support the President's policy to send troops to Bosnia; or ``no,'' we do not. I intend to see that we get such a clear-cut, up or down vote. I am working with roughly a dozen of our colleagues who want to have that vote. I think it is very important that we say where we stand. I know there will be those who will try to combine the issue of supporting the troops with supporting the President. Quite frankly, I do not buy into that logic and I do not think it serves our political system well to try to combine the two. There is not a Member of the Senate, nor has there ever been a Member, who would not support the troops. It is because I support the troops, because I am concerned about their well-being, that I am opposed to sending troops to Bosnia. I have no doubt that the Americans who serve in the Armed Forces of the United States will go where their Commander in Chief sends them. They will serve proudly. They will do their job well. That is not the issue here. Their performance is not in doubt; it is our performance that is in doubt. Their ability to do their job is not being questioned. It is our ability in the Senate to do our job that is being questioned. I think it is important that there be no ifs, ands or buts about it, that we ought to have a clear-cut vote as to who supports the President's policy in Bosnia, and who does not. I, for one, do not. Let me add one other thing. This whole issue has nothing to do with politics. It has nothing to do with Bill Clinton. It has nothing to do with our distinguished majority leader, Senator Dole, who supports the President on this issue. It has everything to do with my obligation to 18 million Texans who elected me. I was against sending troops into Bosnia when George Bush was President. I am against sending troops into Bosnia now that Bill Clinton is President, and I am going to be against sending troops into Bosnia when someone else occupies the White House. This is an issue that I think is vitally important and goes to the very heart of what the role of Congress is. I believe that here we should say ``no.''

Mr. GRAMM

Mr. GRAMM. Mr. President, whenever I can serve the good of the Senate by speaking on another subject so that the discussion can occur, I leap to the opportunity.

Mr. GRAMM. Yes. Privilege of the Floor

Mr. GRAMM. I do not know that I will go that long, but I will suggest the absence of a quorum when I finish.

Mr. GRAMM

Mr. GRAMM. Mr. President, as we all know--in fact, as the whole country knows--intensive negotiations on the budget are underway in this very building, and working Americans have a big stake in the outcome of those negotiations. While we do not know the final makeup of the compromise that would emerge from these negotiations, what I have heard is already alarming. I want to talk about the things that we are reading about in the paper, the apparent movement in the negotiations. I think it is important that if someone feels very strongly about a subject--and I feel very strongly about this subject--that we not surprise them by waiting until the last minute, when negotiations are finished and a final product has been produced, to suddenly spring it on people that are not going to support it. So what I would like to do this afternoon is to talk very briefly about the emerging budget deal and then talk about four simple principles that I intend to establish in terms of my own vote. Obviously, I speak only on behalf of myself but I believe that, based upon the 1994 elections, the vast majority of Americans agree with the principles I will outline today. In fact, I think there is no doubt about the fact that the vast majority of Americans agree with the principles that I will set forth, and which will guide my vote on any final budget agreement. I think the general parameters of a negotiation are pretty clear in terms of what we hear from the White House, from Mr. Panetta, and what we are beginning to hear from our own leadership. If you go back to the last continuing resolution, there was a little line in that resolution that, for the first time, opened the door to the possibility that we would change the parameters, the assumptions in our budget. Let me explain why that is so important. It sounds kind of trivial to many people, what we assume about the health of the economy, interest rates, unemployment rates, and the number of people who qualify for Government programs. But let me explain how important those assumptions are. If you take the assumptions that the independent and nonpartisan Congressional Budget Office has established, which guide our budget, and you compare them to the assumptions contained in President Clinton's budgets, his assumptions about lower unemployment, higher growth, lower interest rates, and less spending from existing programs ultimately allows him to spend $1 trillion more, over the next 10 years, than our budget allows us to spend. Now, I have one constituent who can comprehend what $1 billion is-- Ross Perot, but I do not have any constituents that I know of, who knows what $1 trillion is, so let me try to define it. The trillion dollars that President Clinton wants to spend over the next 10 years would be equivalent to giving him the ability to write $15,000 worth of checks on the checking account of every American family, over that 10- year period. That is how much $1 trillion is. I think it is clear that one path the negotiations could take, a path that I am very concerned about, would be to change our assumptions. This would be like a family assuming--when they sit down around the kitchen table at the end of the month, when they get out a pencil and a piece of paper and try to figure out how they are going to pay the rent or mortgage and how they are going to buy a new refrigerator before the old one goes, or how they are going to try to send the first child in the history of their family to college, when they are making tough, real-world decisions, when that we are not just making ends meet, but struggling for the American dream--assuming that there will be more money to spend than will actually be available. I want to be very sure, Mr. President, that we do not make, in writing our new budget, an assumption that would be equivalent to a family saying, well, ``What if we won the lottery?'' or, ``What if we got a big promotion next year?'' or, ``What if some distant relative we do not know left us some money?'' We know American families do not do budgets that way because they have to live with the consequences of these decisions. I am very concerned that we are on a path toward changing the underlying assumptions in the budget in such a way as to let President Clinton spend an additional $100 to $150 billion more each year over the next 7 years than we have set out in our budget. I am very concerned that, if we do this, we are giving up the first real opportunity we have had in 25 years to balance the Federal budget. I want to let my colleagues know--and I know every person is trying to come up with the best solution to the impasse we have--but I want my colleagues to know that under no circumstances am I going to support any budget that allows President Clinton to spend money we do not have on programs we cannot afford. If there was one promise that we made clear last year in the elections, it was that if the American people gave us a Republican majority in both Houses of Congress, we were going to balance the budget. I will have no part in backing away from that commitment. The first principle I want to set out is a very simple one: I will not support a budget that spends one dime more than the dollar figures we set out in our balanced budget. We have written a budget and it was consistent with putting the Federal deficit in balance over [[Page S 17733]] a 7-year period. Families and businesses have to do it every year. It is not cruel and unusual punishment to make the Government do it over a 7-year period. But we have written a budget that establishes the maximum amount we can spend each year for the next 7 years and still balance the budget. That amount, by the way, is $12 trillion. This is a 27-percent increase over what we spent in the last 7 years. It seems to me that this is enough, especially when you stop and think about the fact that last Sunday, Americans sat down with the Sunday newspaper and with their scissors and cut 120 million coupons out of their Sunday newspapers, and then carried those coupons to the grocery store and went to all the hassles to turn in the coupons as they were paying their grocery bill just to save a few nickels, dimes, and quarters. Have we lost our ability to be outraged about the fact that the Government does not make those sorts of decisions when we are now taking $1 out of every $4 earned by every family of four in America? In 1950 we were taking only $1 out of every $50. I think, if we back away from our commitment to balance the Federal budget, we are betraying everything we promised in 1994, and I refuse to be a part of that. The first principle is that I will not support a budget that spends one dime more than the dollar figures we set out in our budget. Especially since this is the maximum amount we can spend while still balancing the Federal budget. The second principle is that I am not going to vote for a budget which provides tax cuts that are smaller than the tax cuts set out in the Balanced Budget Act. I want to remind my colleagues that we are talking about letting working families keep an amount that equals roughly 2 percent of the total amount of Federal spending. We promised in the election a $500 tax credit per child. That means beginning in January every family in America with two children would get to keep $1,000 more of what they earn to invest in their own children, their own family, their own future. We have a fairly tight lid on it. The money is only going to working moderate, middle, and upper middle-income families. I know many of our Democratic colleagues are outraged that, if you do not pay taxes, you do not get a tax cut. I am not outraged about this. I think it is time to start operating Government in a way that tries to help those people who pull the wagon instead of solely being focused on the people who are riding in the wagon and, quite frankly, are being kept in the wagon by programs that deny them the ability to get out and become part of the American experience. So I am not going to negotiate away a very modest tax cut which we committed to, which we set out in terms of absolute dollars at $245 billion over a 7-year period, roughly 2 percent of the level of spending of the Government, 70 percent of which goes to families, that begins to allow people to save more of what they earn, to invest more in their own children, and that has some modest incentives for economic growth. Now, what is negotiable? First of all, I think we should be ready to sit down with the President anywhere, at any time, and under any circumstance, to negotiate how we spend the $12 trillion that is consistent with balancing the Federal budget. I think we ought to be totally willing to sit down with President Clinton and negotiate on each of those 7 years, how that $12 trillion is spent while still balancing the Federal budget. I want to draw a clear line of distinction between negotiating about how to spend the amount of money that is consistent with balancing the budget and negotiating about how we might change the budget itself to allow more spending that we can not afford and that clearly would deny us the ability, for the first time in a quarter of a century, to balance the Federal budget. I also believe we should be willing to sit down and hear the President out as to what the makeup of the tax cut should be. I do not believe we should compromise further on the size of the tax cut. I offered the original amendment in the Senate which would have cut Government spending further than our budget in order to adopt the Contract With America tax cut as it was adopted in the House. That amendment was rejected. We have already compromised in coming down from the original Contract With America. As my dear friend, Dick Armey, said about compromising on the tax cut, he ``already gave at the Senate.'' and I agree with this sentiment. It is clear that there is a movement in the negotiations toward going back and assuming that things will be better in the future than we believed they would be 3 weeks ago, because in some sense many Members of Congress and the White House believe if they could just assume away part of the deficit problem, that they could jointly achieve their objectives, that we could claim we have balanced the budget, that the President could spend more money, and that perhaps happiness might be found on both ends of Pennsylvania Avenue. Mr. President, I am not going to support that effort. I think that would be a tragic mistake. How can we conclude that the economy is going to be brighter in the future, if at the same time we prevent economic growth by giving smaller tax cuts, by having the Government spend more money, and by having larger deficits? We would be assuming a rosy scenario and doing things that deny the ability of that scenario to ever come true. I am not going to support that effort. Let me set down this fourth principle. Any changes that we make in what are called economic assumptions or technical assumptions--what we think interest rates will be 6 years from now, how fast we think money is going to be spent out of a program--that every penny resulting from those changes and assumptions ought to go to deficit reduction. By applying it to deficit reduction we can guarantee that it will be there if, in fact, things do not turn out to be as rosy as we would like them to be. We would be doing what prudent families do. That is, budget on the assumption that you are not going to win the lottery, budget on the assumption that you are not going to get the big promotion. And if you do get the promotion, if Aunt Sally does give you money, then you are in a very sound position to decide what to do with it. I believe if we conclude, as we say in the language art that is contained in the continuing resolution, if the Congressional Budget Office, in consultation with the White House and outside groups, concludes that there may be a brighter future than we thought 3 weeks ago when we debated this issue, then every dollar of savings ought to go to balance the budget in this century. Only in Washington do we have a debate about whether to balance the budget in 7 years or 10 years or even whether to do it at all. I have never, ever, in any of the States that I have traveled in the last few years heard, nor, has anybody come up to me and said ``Senator Gramm, I think balancing the budget is a great idea. Why not do it later than you plan?'' I have never had anybody say that to me. But almost every day--and as many of my colleagues know, I am meeting a lot of people all over the country--almost every day somebody comes up and says, ``Why are you waiting 7 years? Why don't we do it sooner? Why don't we do it now?'' So, I think it is prudent policy that, if we conclude that the economy is going to have a brighter future--basically because we conclude it is going to have a brighter future based on wishful thinking--then let us apply every dollar of savings that comes from these assumptions to deficit reduction. And if, in fact, it the economy does turn out to have a brighter future, the maybe we will balance the budget within this century. But if it does not, if the original assumptions, the original conservative assumptions, were right, then we will balance the budget in 7 years as we promised. I hear, every day, our colleagues talking about expanding the ability of the President to spend. A member of the leadership recently, while on television, suggested that maybe we could bring the tax cut down from $240 to $195 billion. I disagree. I think this is the time to stand on principle. We had an election. We have a mandate. It is not as if the American people were deceived. They knew what we promised to do. We wrote a contract. I know [[Page S 17734]] many Members of the Senate say they did not sign the contract, but America signed the contract when they elected us and gave us a majority in both Houses of Congress. I think these four principles I have outlined embody a reasonable and a flexible approach to living up to what we promised we would do and yet being willing to work with the President in saying: These are our priorities as to how we spend the $12 trillion that can be spent over the next 7 years while still balancing the Federal budget. What are yours? Government must learn to live within the constraint that, quite frankly, families face every month when they sit down around the kitchen table and get out that pencil and piece of paper. Families do not have the luxury of saying, ``Let us assume that something great is going to happen, let us spend additional money.'' They have to negotiate how they are going to spend the income they have available. We should be willing to negotiate with President Clinton on that basis. We should hear the President out in terms of his priorities, but we have a priority that was given as a mandate by the voters in 1994. That mandate and that priority is balance the Federal budget under reasonable and realistic assumptions. Anybody can balance the budget if you let them make up the assumptions. Any family can live within its budget if they can make up their income. That is not the trick. The real challenge, however, that is faced every night by millions of families sitting around their kitchen tables--which, quite frankly, we do not face here in Washington, and have not faced for 25 years--is how do you do it based on the amount of money you are realistically going to be able to spend? Every day in America, families are making these tough decisions, and they are having to say no to the things they want. They are having to say no because we never say no. They are having to say no to their children because we will not say no to spending more and more money of their money. I think the time has come for us to say no. I want to say no so families and businesses can say yes again. I want less Government, and more freedom. I want less Government, stronger families, more opportunity, and more freedom. I think the way we get there is to stand up for some very simple principles. We are committed to balancing the budget under realistic assumptions. We have set out what we can spend and still achieve our objective. We will spend no more. We promised the working people of this country a very small, very modest, very targeted amount of tax relief. It in no way gets working Americans back to where they were 20 years ago, but it is a step in the right direction. It is something we promised and I am not going to back off from it. We can negotiate over how to spend the money, but not how much to spend. And, finally, if in fact we conclude that the assumptions of the budget should be updated, that we should assume a more optimistic future--and I think we can make one by balancing the budget--but if we makes these assumptions, then every penny of savings that comes from those new rosy assumptions should go to deficit reduction. None of it should be spent. These are the principles I intend to fight for. They are principles I think embody what I fought for in the 1994 election when we elected a Republican majority. They were embodied in the Contract With America. And I think, quite frankly, if we want people to believe politicians mean anything when they say it, then there is one way to achieve this and that is to actually do what you said you would do. I believe that if we stick to these principles we would finally be living up to the commitments that we made. I, for one, intend to do it. I wanted to go on record today as to what my position is, because I do not want anyone to feel that, while they were away negotiating with President Clinton, somehow it was not clear where I stood. And when this final deal is reached, I do not want anyone to be surprised, if it violates one of these very, simple and, I think, eminently reasonable, principles, if I do not vote for the deal--because I cannot vote for a budget that does not live up to the deal we made first with the American people in 1994. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I am concerned that we are in the process of jimmying the numbers so that President Clinton can spend tens of billions of dollars that we do not have on programs that we cannot afford. It appears that we are laying the predicate for assuming away the deficit problem. [[Page S 17490]] I intend to oppose any budget which increases total spending above the level we set out in our budget. Mr. CONRAD addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Madam President, I move to reconsider the vote by which the motion was agreed to.

Mr. GRAMM

Mr. GRAMM. Madam President, let me thank you for the recognition. I want to begin by congratulating our dear colleague, the senior Senator from New Hampshire. I want to thank him for his leadership on this issue. I first spoke on this issue when I came over to the floor of the Senate to speak on another issue. The distinguished Senator from New Hampshire was talking about partial-birth abortions. He was explaining how the process worked in its total gruesome details, and another Senator rose and talked about how offended that Senator was by the description that Senator Smith had given. I felt compelled at that point to make what I think is the relevant point. If we are offended by the description of this brutal, violent act that the Senator's bill seeks to stop in America, should we not also be offended that the act is occurring? If the description of the act is offensive to us, then the fact that it is happening to living babies should be doubly offensive to us. I think this is a very fundamental issue, Madam President. We have all heard the distinguished Senator from New Hampshire describe the partial-birth abortion, but it really comes down to this: This is a baby that is several inches away from the protection of the law. This is a baby that is in the process of being delivered. Only its head remains in the birth canal. It is several inches away from being protected by the law and by the Constitution as currently interpreted by the courts. And at this very moment, when the decision is life or death, this abortion process occurs which terminates the life of the child and crushes its skull. This is a process that I believe is offensive to any civilized society. So the issue we are debating here, it seems to me, can be reduced down to a very simple issue. This is an act that any civilized society should find offensive. Even those who support allowing this to occur are offended by its description. I believe America and the civilized world should be offended by the fact that it is occurring in our country. I think no civilized society can condone this action. I think it is very clear that if this bill is sent to the committee, it is going to be killed. We have an opportunity, since the House has acted by an overwhelming vote, to adopt this bill and to send it to the President. I want to urge my colleagues to vote against the effort to send this bill to a [[Page S 16789]] committee where we will not see it again, where we will not have the opportunity to vote on it again, and where the righteous indignation of a civilized people will be thwarted because we do not take action to stop what we know is wrong and unacceptable in a civilized society. I want to conclude, Madam President, by again congratulating Senator Smith. I think it took great political courage to raise this issue. I think it is always very difficult when you are talking about the kind of act that we are debating here today. It is offensive. It is hard to talk about. I do not feel comfortable talking about it. But most importantly, I do not feel comfortable about the fact that it is happening in the United States of America. That is the point. If it is hard for us to talk about in the environment of the greatest deliberative body in the history of the world, it seems to me that it ought to be hard for us to continue to condone. I do not condone it. I want it to stop. And that is why I am going to vote for the Smith bill. That is why I am going to vote against this motion to kill it. I believe this bill should be passed, and we, as a civilized nation, should say no to these partial-birth abortions. Thank you, Madam President.

Mr. GRAMM

Mr. GRAMM. Mr. President, let me first say I intend to speak for just a moment on the budget and on the President's veto threat. However, let me say about the pending amendment that the House of Representatives has taken a very clear position that maintains the position that Congress has historically taken--that is, there is a higher standard when you are spending the taxpayers' money. In spending the taxpayers' money, the House has taken the position that we should not be spending the taxpayers' money either in the United States or around the world to fund abortion on demand, and we should not be spending the taxpayers' money to subsidize forced abortions in China. I think we need to reject this amendment. I think we need to stay with the House position. I am confident that we will. Mr. President, our leader, Senator Dole, and the Speaker of the House, Congressman Gingrich, are both down at the White House today meeting with the President about the growing confrontation concerning our budget. I wanted to make some remarks about this confrontation because I think we are coming down to the moment of truth where each of us is going to have to decide what the 1994 elections were about, what we stand for, what we are willing to stand up and fight for, and what we are willing to compromise on. I want to make just a few observations this afternoon on those subjects. First of all, we have adopted in both the House and the Senate a budget that does what we promised to do in the election. It balances the budget over a 7-year period. It saves Medicare. It reforms welfare. It changes the relationship between the Government and the people. In a very modest way, it begins to let working families keep more of what they earn to invest in their own children, their own families, and their own futures. The President has said so many times that he is going to veto our budget bill, that I think people are beginning to believe him--not that repetition is always a guarantee. But I think we have to start thinking seriously about the possibility that the President might veto the budget bill that we have passed. I think it is important for individual Members of the Senate to start making it clear where they stand on this issue. That is what I want to do this afternoon. First of all, the President is asking us, by vetoing our budget, to continue to spend money we do not have on programs we cannot afford. The President has sent not one but two budgets to Congress, and both of those budgets would increase the public debt by over $1 trillion in 5 years. Neither of those budgets would ever come into balance at any finite time in the future. Both of those budgets would give us a deficit that greatly exceeds $200 billion in the year that our budget would be in balance. Now, the President says he is going to veto our budget to force us to spend more money. Let me make it clear that no matter what might be agreed to, I am not going to vote to bust the budget that we wrote here on the floor of the U.S. Senate. Under no circumstances am I going to vote to increase spending above the level we set out in our budget. The President has every right, if he wants to enter legitimately into the debate by submitting a real budget that is balanced over a 7-year period, to negotiate with us about spending priorities. It is obvious his priorities are different, but I think those differences are legitimate, and I think they ought to be debated. But, unless the President is going to submit a budget to us which tell us how he would balance the Federal budget, I am not willing to allow him to force us to back away from our budget. Our proposal to the President, as a precondition for our negotiation with him, ought to include the following items: No. 1. Tell us how you would balance the budget over a 7-year period, not by wishing the problem away, but in terms that we can all understand and in terms that the Congressional Budget Office, which is the accountant for this process as designated by the President, can certify will really achieve a balanced budget. From that point we can then begin to compare the two budgets. Second, it seems to me if the President is really committed to balancing the budget, he ought to endorse the balanced budget amendment to the Constitution, which has passed the House and which is only one vote short of the two-thirds vote needed to pass the Senate and send to the States. I want to call on the President, if he is serious about balancing the budget, to come out and endorse the balanced budget amendment to the Constitution, to help us get one additional Democrat to vote for it, and in the process allow us to send it to the States. I believe it is high time that we let working people keep more of what they earn. In 1950, the average family with two children sent $1 out of every $50 to Washington. Today, that family is [[Page S 16484]] sending $1 out of every $4 to Washington. I think our action of giving a $500 tax credit per child for every working family in America so they can spend their own money on their own children and on their own futures, is long overdue. There is no circumstance under which I am going to back away from our tax cut so that Bill Clinton can spend more money in Washington, DC. This is not a debate about how much money we spend on children, but it is certainly a debate about who is going to do the spending. President Clinton and the Democrats want the Government to do the spending. We want the family to do the spending. We know the Government. We know the family. And we know the difference. So, I think, to conclude and let the debate go back to the amendment before the Senate, for 40 years we have been running up bills in Washington, DC. For 40 years we have been borrowing more and more money. The President's argument to us is, ``We have run up these bills. Raise the debt ceiling and pay the bills.'' It reminds me of an argument that was made when I was a young Member of Congress, in my first year, the first debate I ever participated in. Then-majority leader of the House Jim Wright got up when we were getting ready to vote on the debt ceiling, and he said, ``It is as if your spouse has run up a big bill on the credit card and the bill collector is knocking at the door. You have to pay your bills.'' That is what the President is in essence saying to us. My response is, let us look at what American families do under these circumstances. They do pay their bills. But they do something we have not done in 40 years. They sit down around the kitchen table, they get out a pad and pencil, they write down how much money they earn, they start adding up their expenses, they put together a budget, they get out their credit cards, they get out the butcher knife, they cut up their credit cards, and they resolve that, while they are going to pay their bills today, they are not going to put themselves in a position where every year the bill collector is pounding on the door. I believe defaulting on the public debt would be irresponsible. I believe shutting the Government down to make a political point is unnecessary and unfair. But there is something worse than defaulting on the debt. There is something worse than shutting the Government down. And that is continuing a spending spree that will destroy the future of our children. That is worse than both shutting the Government down and defaulting on the debt. And I am not going to vote for a budget, and I am not going to vote for a compromise, that continues the spending spree in Washington, DC. The American people in 1994 gave us a Republican majority in both Houses of Congress with a clear mandate: Stop the taxing, stop the spending, and stop the regulating. I, for one, am not willing to cut a deal in Washington, DC, with President Clinton, to undercut an election that sought to fundamentally change the way Government is run in Washington, DC. So I think we ought to negotiate with the President. I think we ought to try to work with the President. But we ought to make it very clear to the President that we are not going to back away from our commitment to balance the budget. We are not going to spend money we do not have on programs we cannot afford. And there is no amount of threat and bluster that can be exercised by the President that is going to induce us to pull down our budget and continue the spending spree in Washington, DC. I yield the floor.

Mr. GRAMM

Mr. GRAMM. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. GRAMM. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent that the Senator have an additional 30 seconds.

Mr. GRAMM

Mr. GRAMM. Mr. President, what we have in the bill before us is a doublecross of the States. We reduced the rate of growth in Medicaid spending in agreement with the Governors by $187 billion. But the condition under which the Governors took the reduced rate of growth was that they were going to get to run the program. This is in Medicaid. So, in the Medicaid Program, we reduced the growth of spending in that program by $187 billion. The Governors agreed to it on the condition that they run the Medicaid Program. We now are trying to tell them how to run it. I do not doubt the Senator from West Virginia and the Senator from Rhode Island have very good intentions. But we should not be telling the States how to run this program.

Mr. GRAMM. Mr. President, what we have in this bill is an effort by Senators----

Mr. GRAMM. Mr. President, I do not withdraw the amendment and I am ready to speak on behalf of it.

Mr. GRAMM

Mr. GRAMM. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. GRAMM. I want to conclude the debate. Mr. President, we are reducing funding for the existing Medicaid Program by $187 billion. The Governors agreed to this reduction. But on one basic part of the agreement, they asked that if we were going to reduce funding that we let them run their program, which they are funding in conjunction with us. Now what is happening is the Senator from West Virginia and the Senator from Rhode Island are saying, OK, we are giving you less money, but we are going to tell you how you have to run this program. As for this talk of ``getting rid of Medicaid''--nobody is talking about getting rid of Medicaid. And ``mean spirited''--I flatly reject the notion that the Senator from West Virginia loves the children in Texas or Rhode Island more than the Governor of Texas and the Governor of Rhode Island loves the children in their own States. The tide of history is moving against the ``Washington knows best'' policies advanced by the Senator from West Virginia and the Senator from Rhode Island, and this provision may stick today, but its days are numbered. We have to stop telling the States how to run programs in their own jurisdiction, based on our own arrogance that only we know best and only we care.

Mr. GRAMM. Mr. President, the whole logic of block granting Medicaid so that States could run the Medicaid Program with less money than if we had kept it as an entitlement is a belief that States can run the program better. In fact, both Democratic and Republican Governors have come to the national capital and said to us: ``If you will let us run Medicaid, we will provide better health care and we will do it cheaper and we will share the savings with you.'' On a bipartisan basis, they have supported our efforts to block grant Medicaid to the States, the logic being that States are capable of making decisions about running Medicaid, the logic being that the Governor and the legislature of the various States love people who receive benefits from Medicaid in their State at least as much as we do. They know those people more intimately than we do, and, obviously, those people are capable of putting them out of office directly, whereas they may not be able to vote against a Senator from another State. In the markup in the Finance Committee before I became a member, an amendment was added that created a new entitlement. This is an entitlement imposed upon the States. The entitlement basically says that while we are giving States the ability to run Medicaid, that we are going to intervene at the Federal level and mandate that no matter how they structure their programs they have to provide three entitlements. Specifically they are told by us that there are three groups of people that they must cover. There are groups that we would not want to cover; there are groups that the States would cover. But every Governor I know is outraged about this provision that mandates a State-mandated program for pregnant women, for children under the age of 12, and for disabled individuals. The point is this: Not that anyone wants to deny service to pregnant women or children under 12 or disabled people, but who are we in Washington to decide how the States are going to run this program? Is it not the ultimate arrogance for Washington to believe that only we care about pregnant women, that only we care about children under 12, that only we care about the disabled, and if we let the uncaring Governors, if we let the uncaring legislators run their program in their State, they are not going to take care of their own people? I totally and absolutely reject this. This amendment flies in the face of everything we are trying to do in Medicare, everything that my party stands for, and I think this Big Brother Washington approach has to end. I do not believe we are going to strip this rotten amendment out of this bill, but I want to have a vote on it. The whole logic of the Medicaid reform is we are going to let the local leaders who know their people best and who care the most make the decisions. The idea that we are creating a new entitlement and we are imposing it on the States, and now in a new provision we are going to, in essence, let people go into Federal court and sue the States on these issues, I think that clearly is a retreat from what we promised the States when we gave them less money to let them run the program, and I reserve whatever seconds may remain on my time.

Mr. GRAMM

Mr. GRAMM. Mr. President, if you are looking at our budget which is now before the Senate, it addresses two basic facts that I believe alarm all working Americans. The first fact is that the average family in America with two little children, which in 1950 was sending $1 out of every $50 it earned to Washington, DC, is today sending $1 out of every $4 it earns to Washington, DC. And if over the next 20 year, we do not start a new spending program nor eliminate an existing one, to pay for the Government we have already committed to will mean that in 20 years the average working family in America with two children will be sending $1 out of every $3 they earn to Washington, DC. Bill Clinton looks at that trend and says, ``Great, let's accelerate.'' We look at it and say, ``It has to be stopped and it has to be reversed.'' And that is exactly what we do in our budget. The second figure is a very simple fact and it is an alarming fact. A baby born in America today, if the current trend of Government spending continues unabated, will pay $187,000 of taxes in their working lifetime just to pay interest on the public debt. That is not just economic suicide, that is immoral, and we are determined to stop it. Here is basically where we are. We have written a budget that over 7 years comes into balance. President Clinton has trumpeted the fact that the deficit today is down, but he does not show us that his own budget office shows that under his budget, and the Congressional Budget Office shows convincingly, that the deficit now skyrockets under the Clinton budget. He has sent us not one but two budgets, and under both of those budgets, the deficit explodes. We have proposed a budget that achieves balance in 7 years, and now the President is saying to us that unless we increase spending on programs that we do not need and we cannot afford that the President is going to veto our budget. Well, Mr. President, let me say as one Member of the Senate, there is no circumstance under which I am going to go back and rewrite our budget. There is no circumstance under which I am going to agree to increase spending, to continue the deficit spree that threatens the future of our country and that threatens the future of our children. We have proposed a budget that cuts taxes. It gives a $500 tax credit per child for every working family in America. What it means is that if we are successful next year, every working family in America that pays taxes that has two children will get to keep $1,000 more of what they earn to invest in their own children, to invest in their own family, to invest in their own future. Now Bill Clinton says the Government can spend the money better than that family can spend the money. We reject that. We think history proves that notion is wrong and we are confident that the people who do the work and pay the taxes and pull the wagon in America agree with us. Our $500 tax credit per child, our elimination of the marriage penalty will mean that the average working family in my State will get to keep $1,100 more of their hard-earned income to invest in their own future, to invest in their own children, and we want that to happen. We talk so much about balancing the budget, but it has been so long since we have done it that people forget what the benefits of a balanced budget are. First of all, since we are balancing the budget and cutting taxes, the first benefit for a working family with two children is they get to keep $1,000 more of what they earn. But a balanced Federal budget would mean on an average mortgage of the average working family, that their mortgage payments per year over the next 20 years would be $1,664 less per year. In buying a new car every 4 years and financing it, as most working Americans have to do, they would pay $180 less in interest costs for buying that car every year because we balanced the budget. Because we will have more growth when income is going into expanding the economy, that is $1,385 of income for every working family. You add it all up and the average family in America gains, I repeat, gains $4,229 a year directly from a balanced budget. It means over 1.75 million more jobs annually and reducing the national debt mortgage on our grandchildren by $66,000. This budget is a choice: Do you want more income, lower interest rates, higher growth, more jobs, less debt on your grandchildren and to keep more of what you earn? We say, ``Yes.'' The Democrats say, ``No, Government can do it better.'' Motion to Commit

Mr. GRAMM

Mr. GRAMM. Mr. President, the Arab-Israel peace process must be judged by one question, and one question only: Will Israel be stronger and more secure at the end of the process than it was at the beginning? To achieve that end, I support this legislation to move the U.S. Embassy to Jerusalem. Our Embassy should be located in Jerusalem. Jerusalem is Israel's chosen seat of government, where its Parliament, prime ministry, Supreme Court, and most government ministries are located. The United States has diplomatic relations with 184 countries, and in every country--except Israel--our embassy is located in the capital designated by the host nation. The Clinton administration argues that moving the Embassy will destroy the peace process. I believe that the peace process can continue only if Israelis believe that their nation's vital [[Page S 15476]] interests will not be compromised. Moving our Embassy to Jerusalem will strengthen that conviction, and it will be a clear demonstration of the fact that no wedge will be driven between Israel and the United States over the status of Jerusalem. This week, we will begin a celebration of Jerusalem and its 3,000 years of playing a critical, central role in world history. As we begin this celebration, I am pleased to support this bill in the conviction that moving the American Embassy would send an unmistakable signal that the unity of Jerusalem is irreversible, and it will remain, now and forever, the capital of Israel.

Mr. GRAMM

Mr. GRAMM. Mr. President, I rise in strong support of this legislation. Like many of our colleagues, I am profoundly disappointed that title III of this bill will be dropped today. I am disappointed that we could not get the 60 votes we need to break a filibuster by those who are not willing to tighten the noose tighter around Fidel Castro's neck. It would be one of the great tragedies of history if the tidal wave of freedom that has covered the planet in the last 5 years were allowed to subside before it drowned Fidel Castro. My basic objective here today, Mr. President, is to pass the Helms bill and go to conference, and then in conference bring back the title III provisions, the provisions which will deny Castro the ability to entice foreign private investment to prolong his life as dictator in Cuba which would prolong the misery of the Cuban people. I believe that the bill that is now before us is an improvement over our current situation. It does strengthen the embargo. It does set up a procedure whereby we make it more difficult for Castro's Cuba to get funding through the United Nations or the world financial organizations. The bill gives us the ability to link our aid to Russia's actions as they relate to Cuba, both in Russia's trade relationship and in their intelligence gathering. So I think the Helms bill, as it now is before the Senate, is an improvement on current law. What remains of that bill does not do the job the original bill did. We are all disappointed that we could not break the filibuster on that bill. Yet, I am supportive of the remaining Helms provisions. I want to see them adopted. I want to see us go to conference. I want to put title III back in the bill and bring it back to the Senate and fight for its passage. I think it would be a great tragedy for our country, it would be a great tragedy for everything we stand for in the world, it would be a great tragedy for the Cuban people, if we do not do everything in our power to get rid of Fidel Castro. The original Helms-Burton bill was an important step in the right direction. I am for that bill. I intend to continue to fight for it. I urge my colleagues to support this measure today so that we can go to conference and get back the original bill. I yield the floor. Mr. LIEBERMAN addressed the Chair.

Mr. GRAMM

Mr. GRAMM. It is our intention to move to table the amendment now.

Mr. GRAMM

Mr. GRAMM. Mr. President, do I have any remaining time?