Phil Gramm

Mr. GRAMM

Mr. GRAMM. I am so moved that I would like to just respond to that. First of all, if you are rich, if you own your own corporation, you are not too much affected by these changes. And let me explain why. In 1950, rich people paid a lot of taxes. Rich people pay a lot of taxes today. In 1950, poor people did not pay any taxes. Poor people do not pay any taxes today. What has happened since 1950 is that the tax burden on average working Americans has exploded to pay for all of this Government that our dear colleague from Minnesota sees as the salvation of the American people. We have spent more money on welfare since 1965 than we have spent in fighting all the wars the Nation has been involved in this century, and there are more poor people today than there were when we started this program. They are poorer today than they were when we started this program. They are more dependent today than they were when we started this program. The illegitimacy rate among the poor is three times what it was when we started this program. The crime rate has exploded. And by every index on the planet, they are worse off today than they were when we started the war on poverty. But are my colleagues dismayed? Are they the least bit unhappy? No. If we could just spend another trillion, if we could just let Government do more, everything would be wonderful. There is only one problem that our dear colleague has, and that is the American people do not believe it anymore. The American people have rejected that idea. In terms of health care, our colleague last year, along with our President, had an opportunity to convince the American people it just made great sense to tear down the greatest health care system the world had ever known to rebuild it in the image of the Post Office. And remarkably, for a while, it looked as if that was going to succeed. But finally, a few Members--and I am very proud to be able to say I was one of them--stood up and said, ``Over my cold, dead, political body.'' When we reached that point in the battle when the American people came to understand that this was not a debate about health care and jobs, but instead a debate about freedom, that one little stone slew Goliath. So I think we have had plenty of debate about health care. If I might say, I reintroduced my health care bill. Bill Clinton did not reintroduce his. Obviously, there was a belief that mine was supported by the American people; he concluded that his was not. Now, in terms of this Pentagon budget issue, the plain truth, as we all know, is that since 1985, we have cut defense spending by over a third. If we had cut Government spending in total half as much as we cut defense budgets, we would have a Federal surplus. Even the President says today that his defense budget will not fund the level of defense that he claims the Nation needs. So this idea that we can go around talking about how can we write a budget without cutting defense, I remind my colleagues we have already cut defense. The problem is we did not cut anything else. We have already cut defense and raised taxes. The problem is we spent every penny of the tax increase so that now the Congressional Budget Office says that the underlying budget and the underlying deficit is no different today than it was before Bill Clinton imposed the largest tax increase in American history. Now, how can you have the largest tax increase in the history of the country, the lowest levels of defense and not have the deficit go down? There is only one way. And that is you spend all the money, which is exactly what we have done. In terms of Medicare, can anybody stand here and say that we are going to able to keep Medicare as it is? Last Last year, the average insurance policy held by a worker in the private sector did not have his premium go up. Competition improved efficiency. Cost consciousness meant that the private sector part of medicine saw no cost increase and yet the public sector part of medicine grew by 10.5 percent. Does anybody believe that either the taxpayer or our senior citizens can sustain that rate of growth in a program that jointly they are paying for? Does anybody believe that we should not try to reform that program and bring efficiencies and economies and choices into it or that we cannot do it? I remind my colleagues that the Medicare trustees, appointed by President Clinton to look at the financial problems of Medicare, concluded that Medicare was going to be broke by the year 2002, the year that we hope to balance the Federal budget. What we are asking is that we respond to the urgent call by the two independent members of the Commission who urge Congress to address this problem. Now, as for the old tax-cut-to-the-rich song, let me remind my colleagues that we are talking about a $500 tax credit per child so that families can invest their own money in their own children. No one has failed to conclude that at least 75 percent of that tax cut will go to families that make $70,000 or less. But look at the capital gains tax rate. I know my colleagues will say, ``Well, if you cut the capital gains tax rate, rich people are going to immobilize their capital and they are going to invest and they are going to create jobs and, if they are successful, they are going to earn profit.'' Welcome to America. Welcome to America. That is how our system works. If America is going to be saved, it is going to be saved at a profit. I was thinking the other day, as I listened to our President make a similar statement to that our colleague has made, I have had a lot of jobs in my life. When I was growing up, I was very fortunate to have a lot of jobs. I worked for a peanut processor, I worked in cabinet shop, I worked in a boat factory, in addition to the same jobs we all had, throwing papers and working at the grocery store. No poor person ever hired me. Never in my life has a poor person ever hired me. Every job I ever had, and I suspect the same is true for virtually every American, every job I ever had I got because somebody beat me to the bottom rung of the economic ladder, climbed up, invested their money wisely, created jobs, and made it possible for someone like me to get my foot on the bottom rung of the economic ladder and climb up. What is wrong with encouraging people to invest to create jobs, growth, and opportunity? In terms of corporate welfare, if my colleague means by that subsidizing corporate America to invest in a technology the Government chooses or subsidizing American business to invest in areas that the Government chooses, one of the things that I want to do in the budget, and one of the things I will do if I have to offer a substitute, is dramatically cut the $86 billion of Government spending where Government tells business where to invest. That is how I would like to fund cutting the capital gains tax rate and indexing so that we can let the market system and not the Government decide where that investment will occur. As far as children, it is interesting to me that after all these years of exploding Government, after all these years of the failure of Government, that we still see Government as the solution to every problem involving the American child. In fact, American Government is doing such a great job that now President Clinton wants the United Nations to get into the act. His administration has now signed the U.N. Convention on the Rights of the Child and he is going to ask us to ratify it. And it supersedes State law. So now not only are we going to help raise every child in America by the Federal Government, but we are going to let the United Nations do it. We are doing such a great job now, I guess we think the United Nations can help us do even better. Forgotten in this whole argument is that child rearing is a parental concern. Parents ought to make decisions about children. And part of our problem is over the last 40 years we have taken more and more money from parents, we have spent their money on their own children, and we have done a much poorer job than they would have done had we simply allowed them to spend their own money on their own children. In terms of good jobs, where do good jobs come from? Does anybody believe that Government can create jobs? Does anybody believe, as Bill Clinton says, that Government can empower people? Freedom empowers people. Government entraps people. Finally, in terms of this whole debate about Government, we are not talking about eliminating the Government. We are talking about a budget that, if we fulfill the Contract With America, Government will spend about 2\1/2\ percent more each year for the next 7 years. Now I know, for those who want Government spending to grow at three or four times as fast as the family budget, that that is cruel and unusual punishment. It means Government has to make decisions. But there are a lot of businesses in America that have had to make a lot tougher choices than limiting their budgets to 2\1/2\ percent growth a year. And they have had to do it just to keep their doors open. There are a lot of families in America that make much tougher choices than that. All we are asking Government to do is to live in the real world with everybody else where you have to make tough decisions. So, I think that we can see that this is going to be an interesting debate. And it is a defining debate. I respect my colleague from Minnesota because, basically, his view is the view of his party. Not all the members of his party are so honest as he is to basically point out that they believe that Government is the answer; that they really believe that if we can make Government bigger, if Government could make more decisions, if we could spend more money at the Federal level, that America could deal with every problem we have. I do not believe that. I believe that if we can put the Federal Government on a budget, if we can let working people keep more of what they earn, if we can make hard choices at the Federal level, if we can reform welfare to demand that people, able-bodied people riding in the wagon get out of the wagon and help the rest of us pull, if we can demand that we end this situation where we are subsidizing people to have more and more children on welfare, and if we can end the absurdity where millions of people are getting more money riding in the wagon than millions of other Americans are getting for pulling the wagon, then I think we can make America right again. The point is, we have two distinct visions for the future of America. Our dear colleague from Minnesota and most Democrats, including the President, believe that the vision that leads us home, the vision that brings back the American dream, the vision that shares the dream with people who missed it the first time around is more Government, more spending at the Federal level on education, more spending at the Federal level on health, more spending at the Federal level on nutrition and housing and training. Of course, how are we going to pay for it? Well, of course, we are going to raise taxes. And who are we going to raise taxes on? Rich people. And who are rich people? Anybody who works. That is their vision. My vision, the vision of most Republicans, is exactly the opposite. We want less Government and more freedom. In fact, I would not want the Government we have today even if it were free. If you could give us this Government, I would not want it because I think the Government is too big and too powerful. It makes too many decisions. Free people should make more decisions for themselves and they should not have their Government making decisions for them. And we are not just talking about freedom and efficiency, we are talking about virtue. It is not good that people turn to the Government to fix every problem they have, to indemnify every mistake they make because in turning to Caesar, they turn away from God, they turn away from their family, they turn As a result, they become dependent, and when they become dependent, they become less free. That is what this debate is all about. I yield the floor. Mr. WELLSTONE addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Mr. President, on the day that President Clinton gave the last State of the Union Address during which he talked about reducing the regulatory burden, his administration published over 300 pages of new regulations in the Federal Register. In fact, in the first 2 years of the Clinton administration, the level of regulatory burden, as measured by the number of pages in the Federal Register, has been higher than the first 2 years of any President in the history of the United States. Despite all of the rhetoric to the contrary, the Clinton administration is imposing more regulations than any administration at a comparable point in that administration's term in the history of the United States of America. I congratulate our leader here, Don Nickles, for bringing to a final vote a bill that does make some marginal improvement. But this bill is a far cry from the original bill. I think a regulatory moratorium is called for. I think it is something that is needed. I am still strongly in support of it. And while you might say this is a kiss, it is a kiss from your sister and not your sweetheart. This is not something that is going to dramatically change American Government. The Congress is already burdened with doing what it is doing. The idea that we will be able to go through regulations and assess them, I think, is fairly unrealistic. There will be one positive result that will come out of it, however. That is, we will be able do zero in on some items where clearly the Federal Government is dramatically increasing the cost of doing business, dramatically limiting our ability to create jobs, and making decisions through regulations that do not make any sense. So, this is a marginal improvement. This is a long way from a victory. I think the House approach was better. I intend to vote for this because it is an improvement on the current procedure. This is not the end of this debate. This is the first short step in trying to bring rationality to Government regulations which, today, cost the average American family $5,000 a year. Something has got to be done about these regulations. This is a marginal improvement. This is a long way from victory. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I rise today to voice my support for H.R. 831 and the protections it will provide to America's self-employed business owners--the men and women who create the jobs on Main Street. Today, the Senate is finally ready to deliver the tax relief that should have been provided a long time ago. And today, more than 3 million small business men and women-- including as many as 146,000 in my home State of Minnesota--are breathing a sigh of relief. Up until last year, the self-employed were allowed to deduct 25 percent of their health insurance premiums. It was a powerful incentive: Small business owners were much more likely to buy insurance for their employees when they were offered an incentive to purchase health insurance for themselves. That deduction, however, was allowed to lapse in December 1993 when it appeared that Congress would address health care reform in 1994. But health care reform never materialized--and Congress never restored the deduction. The self-employed have seen their 25-percent deduction expire five times over the past 8 years, leaving them in the precarious position of trying to second guess Congress each time as to whether the deduction would be extended. H.R. 831 will restore the 25-percent deductibility for 1994--increase it to 30 percent this year--and make it permanent. That is good news for the 3.2 million unincorporated, self-employed Americans the U.S. Treasury Department estimates would claim the deduction on their 1994 returns. H.R. 831 moves us in the right direction, and I am pleased to join my colleagues in acting swiftly today to approve this desperately needed tax relief. Yet, Mr. President, we should not look at 30 percent deductibility as our final goal. We should use this opportunity during the 104th Congress to give small businesses the same benefit enjoyed by big business and their employees--by increasing the health insurance deduction to 100 percent for 1995 and beyond. That is why I have also committed my support to S. 262, the Grassley- Roth-Pryor-Dole 100 percent deductibility bill. Self-employers face the worst of all possible worlds in the health insurance marketplace. Far too often, there aren't enough options--the price is too high-- and the self-employed are denied the very incentives and tax treatment big business has come to expect. And too often, the self-employed lack access to cost-saving managed care arrangements because insurers are reluctant to create and market them in the small towns and rural areas where most self-employers are located. Even when they do buy insurance, self-employed business owners often pay approximately 30 percent more than larger companies for similar benefits. That is because of costly State mandates for specific types of insurance coverage, which prevent self-employed business owners from shopping for only the basic care that they and their employees might need. Larger firms that self-insure, on the other hand, are not subject to these costly mandates. The health insurance deduction helps small business owners defray at least some of the high cost of insurance. The businesses that would benefit most from deductibility legislation represent almost 10 percent of the working population, and cover a tremendous variety of employers--from farmers and florists--grocers and bankers--to smalltown clothing stores, hardware stores, and photographers. Mr. President, a tax deduction for the cost of insurance premiums would go a long way to help these self-employed business owners and their employees--especially in high-risk fields such as agriculture, where the hazards of the job often result in relatively high health insurance costs. way for the Federal Government to help the people who create the jobs and deliver the paychecks on Main Street. Small business needs encouragement, along with some incentives, to survive and continue creating jobs--providing for their employees. It is in our best interest to see that they do. Since the 1970's small business has created two of every three new jobs in this country, and a substantial majority of those jobs were created in firms with fewer than five employees. Congress should not neglect these entrepreneurs, Mr. President. Self-employed business owners are the very people whose firms will have to thrive in order to create the jobs of the future. These are often people with very little cash, but a lot of good ideas and talent, struggling to make their ideas work. For them, the health insurance deduction could mean the difference between an ``Open for Business'' sign on the door and one reading ``Going Out of Business.'' It is time, Mr. President, for Washington to treat America's job providers equally. I want to thank my colleagues for coming together in a bipartisan manner to ensure that 3.2 million more Americans will have access to more affordable care. In fact, this is our first step toward serious and sensible health care reform. It is legislation like H.R. 831 which I believe helps restore the people's faith in this great institution. Mr. President, our ultimate aim should be to give the self-employed the same 100 percent health insurance deduction we've granted to incorporated businesses. But today, passage of H.R. 831 moves us closer toward a goal we all share: Insuring more people, under policies that cost less, that allow them greater access to the health care services and providers they choose.

Mr. GRAMM

Mr. GRAMM. Mr. President, our system of State and federally chartered banks has served Americans well over the years. Many of the bank products that are most popular with consumers were first developed by State banks. Today, together with the chairman of the Financial Institutions Subcommittee, Senator Shelby, I am introducing legislation to strengthen the dual banking system by providing for State bank representation on the board of Directors of the Federal Deposit Insurance Corporation [FDIC]. The FDIC Board currently is made up of five members: the Chairman of the FDIC, the Comptroller of the Currency, the Chairman of the Office of Thrift Supervision, and two independent members. Mr. President, while the FDIC insures the deposits of both State and national banks, no one is seated at the table who can be counted on to present the perspective of State-chartered banks. Decisions made and regulations issued by the FDIC have a powerful impact on banks, whether they have a State or national charter. We are in some degree, a dangerous degree, flying blind without having both elements of our dual banking system participating on the FDIC Board. Our legislation contains several procedural safeguards. The bill would ensure that no one State would be favored over other States in serving on the FDIC Board. First of all, the State bank supervisor would be appointed to the Board by the President and confirmed by the Senate. Second, such a supervisor would serve for only 2 years and could not be reappointed. Neither could supervisors from the same State serve consecutive terms on the Board. Finally, to ensure that it is the point of view of State bank supervisors that is being represented, should the individual while serving on the FDIC Board cease to be a State bank supervisor, then membership on the FDIC Board would also be lost. The President, in that case, would need to appoint another supervisor, with the advice and consent of the Senate, to serve for the remainder of the unexpired term. Such new appointment could be, but would not have to be, an individual from the same State as the individual originally appointed to that term. As with the Comptroller of the Currency and the Chairman of the Office of Thrift Supervision, a State bank supervisor would receive no Federal salary for service as a member of the FDIC Board. Mr. President, I believe that provision should have been made for a State bank supervisor on the FDIC Board when the Comptroller of the Currency was included on the Board. This legislation will rectify that oversight and bring about the balance that currently does not exist. Mr. President, I ask unanimous consent that the text of the bill and a summary be printed in the Record.

Mr. GRAMM

Mr. GRAMM. Mr. President, we should invoke cloture. We should pass this amendment, and we should stop the President's effort to use Executive power to do what he could not do in Congress and what, I believe, is clearly within the jurisdiction of the legislative branch of Government. What we are debating today is nothing more than special interest politics undertaken by the President to reward a special interest group--organized labor in America. The President is giving them something that is not in the public interest through Executive order since he was unable in the last Congress to get a very similar provision adopted into law. Let me review very briefly what the issue is. Under current law, if I do not want to work for you, I have the right to quit. If I feel that your pay or your working conditions are unfair, I have the right not only to quit, but to join with other workers to withhold our labor. That is my fundamental right as a free American. That is a right that, so far as I know, is supported by every single Member of the U.S. Senate. But the employer, who has put up capital and who has made an investment, also has rights. Those rights basically are that if I refuse to work for you, or if I join other employees in denying my labor, you have a right to hire someone else. I, as a worker, understand that I have my rights and you have your rights. Under the balanced system, which is the law of the land, we have not had any major labor unrest since the short period immediately after World War II. That is because every worker knows what his or her rights are, and every worker understands the employer's rights. With that balance of relative power in the marketplace, we have had negotiations, we have had settlements, we have had progress, and we have had labor stability. As a result, we have experienced economic growth and prosperity. What is being proposed now is not really a labor issue, it is a freedom issue. Basically, what the President has tried to do by Executive order is that which we had previously rejected; that is, to tell employers that if an employee quits or, in conjunction with other employees, withholds his or her labor, you do not have the right to hire someone else permanently to replace that worker. That is a violation of the rights of Americans who have put up their capital and who have made investments. In my opinion, this is a freedom issue. And if you believe in freedom, you ought to be for this amendment. So there are three issues. First, the President has tried, by Executive order, to do what he could not do through the legislative process. We ought to stop him because it is a violation of the implicit principle of separation of powers. Second, the President is trying fundamentally to change labor law in a way that is not only unfair but in a way that will clearly result in more labor unrest. As a result, we will have more strikes than we have had in the last quarter century. Finally, we ought to stop the President's special interest power grab, because this is a freedom issue. If someone proposed on the floor of the Senate that we stop workers from exercising their legitimate right to withhold their labor, I believe that every Member of the Senate would rise to his or her feet and denounce that effort. How can it be right to denounce that abridgment of freedom and yet not denounce the abridgment of freedom that results from telling an employer, who saved and worked and put up his capital, that he cannot hire someone to take the place of a worker who voluntarily refuses to work? I think that is the issue. I hope my colleagues will vote for cloture and vote for this amendment.

Mr. GRAMM

Mr. GRAMM. If the Senator will yield, I am always educated when I listen to the great former chairman of the Appropriations Committee, and I think he has given us a great lecture this afternoon. I appreciate him yielding because I have to go back for an appointment, but I wanted to make a point. Everything that the Senator has said today I agree with. There was a time in this country where power was vested too greatly in the hands of business, and it created a distortion in the marketplace. That needed to change, and we changed it. Now, some people did escape it. I am looking at one of those people, a great testament to the fact that America works. Robert C. Byrd is a great testament to the fact that America is a great country and a land of opportunity. My point, Mr. President, is that you can go beyond the point of having a fair balance. It is one thing to guarantee the rights of people to strike, to be a member of a union and give them the ability to go to the employer and say these are things we demand or we will withhold our labor. But once you reach the point where you can say to the employer, not only will we withhold our labor but we will have Congress, or in this case the President using Executive power, prevent you from hiring anybody else, that puts us in a similar position today that we were in during the era of which the Senator speaks--only this time it is those who provide the jobs having their rights denied. I am concerned that we are going too far in strengthening the rights of labor as compared to the rights of people who invest their money. I am concerned that we are going to have a rash of strikes, and we are going to initiate labor unrest. Since the short period after World War II, where we had labor unrest for good reason--we had held wages back; prices had risen in the war--we have had relative stability. I am concerned that if we take away the rights of the employer to hire a replacement worker or replacement workers when the union will not come back to work, that we will go to the opposite extreme from that the Senator spoke of. And I simply say that you can go too far in the direction of management, as the law did in the 1930's, but I think you can go too far in the direction of labor, as I believe this Executive order does. So, with profound respect for everything that the Senator is saying, I think the President's Executive order was wrong. Obviously this is a free society. This is the greatest deliberative body in the world. And one of the reasons it is, is because the distinguished Senator from West Virginia is a Member. But this is an issue where I think the President is wrong and I believe that this is a case of promoting the interests of one special interest--and it is a special interest. Just as business is a special interest, so is labor. I think the President is going too far. I think it hurts the country. That is why I am in support of the amendment. It is not to say that I would ever go back; and I hope, had I served when the Senator served, that on many of those issues we might have been on the same side. But today I do not think anybody can argue that labor lacks rights. It is a question of what are the legitimate rights of the people who invest their own money, who create jobs. It is the balance of the two that I seek, and I believe this goes beyond that delicate balance. I appreciate the Senator yielding. I am not opposing the question, and it is very generous of him, as he always is.

Mr. GRAMM. Mr. President, I know it does not have anything to do with the debate we are having, but I want to answer two questions that were posed by our colleagues. Let me go back to the Executive order issued by President Bush, because the Executive order issued by President Bush was to enforce a Supreme Court decision called the Beck decision. I am not terribly proud of the fact that Executive order was delayed for 2 years before it was finally issued. The Beck decision came about when a man named Beck, who was working in a State that permitted mandatory unionism, said that part of his dues were being used for political purposes and that he did not support the political aim of organized labor. So Mr. Beck, through long court battles that ultimately reached the Supreme Court, argued that his constitutional rights were being violated, because he was being forced to provide money for political purposes that he did not support. The Supreme Court ruled that Mr. Beck was right and ordered that he and every other worker be told how much of their union dues went for purposes other than to fund collective bargaining. President Bush and the Bush administration, after delaying the implementation of that ruling, finally issued an Executive order to implement it. So the Beck decision was based on a Supreme Court ruling having to do with the constitutional rights of a worker. It is hardly worth arguing the point raised by our dear colleague from Massachusetts when he asked if our men in combat want spare parts produced by replacement workers? Well, if the alternative is no spare parts, the answer is clearly, yes. None of this, however, has anything to do with this issue. People want to cloak this issue in the union-management cloak. And since there are more people who work than people who hire workers, it is a good cloak in which to try to hide that which is a legitimate issue of freedom. But the issue involved here could not be clearer, no matter how you define it, when looking at the rights of a free people. If I do not want to work for you, I have the right to quit, and no one can deny me that right as a free person. But if I do not want to work for you, I do not have a right to keep you from hiring somebody else. What is being proposed here is that the Government step in and say, oh, it is all right, if I decide not to work for you, for me to quit; but if I decide to quit through a strike--even though it may put you out of business, even though it may decimate the city in which your company is located--you cannot hire people to take my place. Now, you can hire temporary workers, who have to be fired the minute I want to come back, which means in reality that the company has almost an impossible time finding people to work for it. So what you are doing, in essence, is giving one party to a labor contract the right to put the other party out of business. We have debated this issue. It has been debated many times in Congress. It was debated in the last Congress when the Democratic Party had a majority in both Houses of Congress. And under the rules that we operate under, as a free society and as the greatest deliberative body in history, it was rejected. Those who supported taking away the rights of an employer to hire another worker when a worker refused to work for that employer were defeated in the U.S. Senate. Now President Clinton has come in and said that what he could not do through the legislative process, he is going to do through Executive order; that by Executive order, he is going to say to any company that has a contract with the Federal Government of over $100,000, that the Secretary of Labor will be empowered to say to those companies that if you have a strike and the strikers will not come back to work, you cannot hire permanent replacement workers who want to work to keep your company in business. And if you do hire permanent replacement workers, we have the right to take away and break any Government contract you have and bar you from getting any contracts with the Federal Government. There are a lot of gray areas here, but as I read this, if General Dynamics--of course now Lockheed of Fort Worth--had a sand and gravel operation, in addition building F-16's, and they had a strike in their sand and gravel operation that shut them down as the major employer in a small town in North Carolina, and that small town had lots of unemployment and many people who were willing to come to work in sand and gravel extraction, those people could not come on as permanent employees because General Dynamics would have its contracts in Fort Worth with the Federal Government abrogated. Mr. President, why, in a free society, should we want to do this? Why, in a free society, should we say to someone who, after all, has put up their capital, saved all their lives to start a business, created jobs--which people voluntarily took and voluntarily decide leave--that they are prohibited from hiring somebody else who wants to do the work? Why should we do that? Well, there is no argument for doing that other than greedy special interests. A President who says that he is some new kind of Democrat, whatever that means, a President who says that he was coming to Washington to end the cozy special-interest way of doing business, comes to Washington, and by Executive order, gives one of the largest and most powerful special-interest groups in America the right to intimidate and the right to destroy people's businesses. It is not right. This ought to be stopped, not because of labor and management rights; it ought to be stopped for the very simple reason that it is fundamentally and profoundly wrong to do this. What the President is doing is using the contract power of the Federal Government to deny people their rights. What he is doing is denying the rights of the people who have put up their life savings, who have started businesses, and who want to provide jobs when there is a strike. The people who had the jobs do not want to do the work. Under our existing laws, under our legal system, if other people are willing to come in--and often subject and verbal--and take a job and work because they want the job, they have that right. The Congress voted on this issue and the President was unable to prevail. He certainly could not prevail in this Congress, because Americans, based on the areas where he did prevail, said no to exactly this kind of special-interest deal. Now the President is trying to do this by Executive order. What we are trying to do is to stop the President. This is within the prerogative of Congress to make the law of the land. And I do not think anybody here who looks at this will see this as anything more than a payoff to special interest. I do not know what is going to happen on this amendment. I understand there is going to be a motion to table. There may be a point of order. I, for one, am going to vote to overrule the Chair on this issue. And I want to promise my colleagues this issue is not going to go away. I do not know how many times we are going to debate it, but I am determined that the President is not going to win on this issue, because it is not right. I can assure you that, in good time, when the American people finish the job they started in 1994, if this Executive order is still standing, it will not be standing much longer after 1996. But this is a very important issue. This is a freedom issue. This does not have anything to do with unions. This does not have anything to do with employers. It has to do with the right of a free people to withhold their labor and the right of the employer to hire somebody else who is willing to work. To get into all of this jargon about collective bargaining confuses the issue and is an attempt to cloak the fact that we are really talking about the rights of a free people. I am going to do everything I can, as one Member of the Senate, to stop the President from limiting the freedom of employers, people who put up their capital, to hire replacement workers when the people who are currently working refuse to work. And I am going to do it not because of labor versus management, or management versus labor, but because you either believe in freedom or you do not, and I do. I think this is a fundamental issue. I congratulate our colleague for bringing this issue up. I want to urge her to stand by this issue. I would rather lose on a technicality and continue to fight this issue than to pull this down and allow the President to do this. He may be successful. But I think people ought to know where our party stands and where our Members stand. We are opposed to this kind of special-interest power grab and political payoff, because it is fundamentally wrong and it is fundamentally rotten, and it ought to be stopped. So I urge my colleagues to support this amendment, whether we vote on a motion to table or whether we vote on the germaneness rule--we have overruled germaneness on many occasions, and it takes simply a majority. I think that we ought to do it in this case. If we cannot do it this time, we will have a lot more bills that this President is going to want to pass. He will face this issue on each and every one of them until finally we prevent this outrage from occurring. I yield the floor. Mr. BYRD addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Madam President, I know we are going to debate this issue tomorrow, but I wanted to come down and make a very short statement on it tonight. I believe that the President, through Executive order, is trying to accomplish something that he has been unable to accomplish through Congress and the legislative process. I think it is very important that we not allow the President to use an Executive order to limit the freedom of our people. The issue of whether or not an employer can hire someone to replace a worker who refuses to work is not a matter of labor rights. It is a matter of freedom. If I do not want to work for you, I have the right to quit or to strike, but I do not have the right to prevent someone else from working for you. I think this is a very important issue. I wish to commend the Senator from Kansas for providing leadership on this issue. I think it is very important that we pass this amendment, and I intend to vigorously support it. Mrs. KASSEBAUM addressed the Chair.

Mr. GRAMM. Madam President, I ask unanimous consent to add my name as a cosponsor of the pending amendment.

Mr. GRAMM

Mr. GRAMM. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRAMM

Mr. GRAMM. Mr. President, I thank our distinguished colleague from Utah for yielding me time. Mr. President, today we have an opportunity to change the course of American history. I guess each of us in our own way came into public life because we wanted to make historic decisions. I think it is fair to say that every Member of the Senate initially ran for office because he or she wanted to make a difference in the lives of the people in their State and across this country. We have an opportunity today in one vote to rewrite the history of the United States of America. That one vote is adopting a balanced budget amendment to the Constitution of the United States of America. I would like to talk today about what happens if we do not pass a balanced budget amendment to the Constitution, and to also talk about what happens if we do, not in abstract terms but in concrete terms that have to do with the well-being of the forgotten people in America who do the work, pay the taxes, pull the wagon, and who ought to be the focal point of this debate, but unfortunately are not. Then I wish to touch very briefly on some of the arguments that are being made against the amendment. First of all, I think we have to understand that Government spending means Government taxing. In 1950, the average American family with two children sent $1 out of every $50 it earned to Washington, DC. Today, that same family is sending $1 out of every $4 it earns to Washington, DC, and in 20 years, if we do not create a single new Federal program, if we simply pay for the Government that is already on the books, that family is going to be sending $1 out of every $3 it earns to Washington, DC. It seems to me we have come to the moment of truth where either we are going to stay on this 40-year spending spree and squander the future of our children or we are going to the spending so as to save the American dream. That is the choice we make today. Since 1950, the Federal Government's budget has grown 2\1/2\ times as fast as the family budget. Since 1950, the Government has spent money at a rate 2\1/2\ times as fast as the institution in America which created the income that the Government spent, the American family. Now, what difference has it made over the last 40 years that Government spending has grown 2\1/2\ times as fast as family spending? Let me give you a startling statistic. If the ability of the family to spend the money it earned had grown as fast as the ability of Government to spend the money the family earned, families in America today would be spending $120,000 per family. Conversely, if Government spending had grown only as rapidly as spending by the family, the Federal Government would be roughly one- third the size it is today. When you think about the American dream, when you think about the kind of America you want for your children and grandchildren, which pictures fits your view of America's future: Families with incomes three times as large as they are today and the Government a third the size it is today, or the reverse? It seems to me that the priority of the family's budget over the Federal budget is the definition of what we are talking about. The debate here is not a debate about how much money is going to be spent on education and housing and nutrition and all of the other things that we are all for. The debate is about who is going to do the spending. For many of our colleagues on the left, many of the Democratic Members of the Senate, the President of the United States, Bill Clinton, their vision for America's future is that they want Government to do the spending. Our vision for America's future is that we want the family to do the spending. We know the Government; we know the family; we know the difference; and we know something else. We are betting the future of America on the decision we make today. We want to bet the future of America on the family and not on the Government. Now, in looking at these mind-numbing figures, since they are so big, we tend to forget that they really mean something. Let me give you some figures. If we adopt and enforce the budget proposed by Bill Clinton, that will mean that in 10 years we are going to be spending $412 billion simply paying interest on the public debt. That is more money than Jimmy Carter's budget for the whole Government of the United States in 1977. That was not that long ago. Let me give you another figure that gives you an idea of the magnitude of the choice we make today. If we do nothing, if we stay with the status quo that Bill Clinton would have us adopt, the interest cost on the public debt in a decade is going to rise by $177 billion. Now, nobody knows what $1 billion is except Ross Perot, but let me convert that into English. If we stop the deficit spending, if we did not borrow all that money, we could give every family in America a $13,000 tax deduction for the money we are going to squander paying interest on debt simply because this Congress has been incapable of saying no to any special interest group with a letterhead that has asked for our money. Now, I wish to address very briefly some of the arguments that are made against the amendment. One argument, which many of us heard this weekend on television, is that deficit spending is a powerful medicine that can cure recessions, that can cure depressions, and if we lost the ability to use this medicine we might forever be pushed into a great recession and a great depression. Mr. President, deficit spending is a drug to which we have become addicted. We have engaged in deficit expenditures in expansions, in contractions, in recessions, in inflations, and if deficit spending ever had any curative power, that curative power has long ago been lost. We debate today whether to end this addiction to deficit spending. We debate today whether or not to force the Government to do what every family and every business in America has to do, and that is say no. Finally, let me try to set this in perspective. Balancing the Federal budget is not going to be easy. It is going to mean hard choices. It is certainly not going to be easy for Members of Congress. But we cannot forget the benefits to be derived for the future of America in terms of opportunity and growth, and we must not forget what this means in terms of freedom. We should not get so caught up in the dollars and cents of the deficit and the budget debate that we forget that what is being squandered here is not just our money, it is our freedom. Government has grown so big, so powerful, so expensive, so distant, so hostile that this is a process that has to be reversed and we have it within our power today to do it. We all stand here on the floor of the Senate and wring our hands about the deficit. To balance the Federal budget means we have to freeze Government spending at its current level for 3 years. How many businesses in America have made tougher choices than that just to keep their doors open in the last year? How many families in America have had to make tougher choices than that when a job was lost or when a parent died? The difference is that families and businesses in America live in the real world where you have to say no, where bad things happen, where you have to make adjustments, where you have to change. Change is a fact of life everywhere except in Washington, DC, in America. Our Government has not lived in the real world for 40 years. We have it within our power today to change that. We have it within our power to pull our Government into the real world with our people, and in doing so enrich the lives of millions of Americans who want the kind of opportunity that has been routine in the American experience. If we can adopt the balanced budget amendment to the Constitution today, we will change the course of the history of our Nation. And I am prayerfully hopeful that when our colleagues cast this vote they will realize we are shooting with real bullets and we are determining the future of the greatest country that the world has ever known.

Mr. GRAMM. What about 15?

Mr. GRAMM

Mr. GRAMM. I ask for the regular order.

Mr. GRAMM. Mr. President, I am going to get to the issue of Social Security toward the end of my speech, but I think it is very interesting that the focal point of the debate here is what would happen if we did not do what the American people want us to do, after we have amended the Constitution to require that we do it. It seems to me that the focal point of debate ought to be how do we do what the American people have demanded in overwhelming numbers that we do. That is, how do we balance the Federal budget? Mr. President, there are a lot of issues about which I wish to talk. I certainly want to speak about Social Security because one of the things that I believe many people watching this debate do not know is that because of a profound election result on November 8, if every Democratic Member of the Senate were to vote the way that Senator did when we voted on the balanced budget amendment to the Constitution the last time, we will adopt it--the House has already adopted it--it will go to the States; it will be ratified; and it will become the law of the land. So it is of some profound importance when Senators who voted for this very amendment in the last Congress now raise a multitude of objections against the very amendment that they voted for in the last Congress when there was no chance of it being adopted, when we were not shooting with real bullets, because now we are in fact shooting with real bullets and we have the opportunity to change the Constitution and to change the history of the United States of America. Mr. President, I wish to begin by pointing out that, while I am sure there are a lot of people who believe this debate on the balanced budget amendment to the Constitution is driven by the tax and spend history of our country in the last 40 years, a history of runaway Government spending, of the explosion in growth of the Federal Government, of an explosion in the tax burden, in reality we are engaged today in an old debate and not a new debate. In fact, no less of an authority than Thomas Jefferson, when he first saw the Constitution, raised his concern about the absence of a provision which in essence is the provision that we are debating today. If some of you will remember, Thomas Jefferson was the Minister to France when the Constitution was written, and he is one of our Founding Fathers who did not attend the Constitutional Convention. When Jefferson had an opportunity to read the Constitution and to understand its provisions, he talked in a letter about one change that he would like to make. Some of us are familiar with this quote, but many engaged in the debate are not, and I wish to read it. Here is what Jefferson wrote: I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution. I mean an additional article taking from the government the power of borrowing. So, Mr. President, there is no doubt that we are here today debating a balanced budget amendment to the Constitution because of the utter failure of the Congress and the President, Democratic Presidents and Republican Presidents, primarily Democratic Congresses, but both to get the job done. But this is not a new debate. Thomas Jefferson recognized at the beginning of the Republic that it was desirable to put into the Constitution a limit on the ability of government to borrow money, and in a sense we are correcting a problem in the Constitution that Jefferson recognized from the beginning. While I am on the subject of Jefferson, it is important to note that we see each day, I believe, in the numbers that we look at on the deficit, a debate which Jefferson engaged in with John Adams. Jefferson and Adams were political enemies during their careers, but once they had retired they became close friends. They engaged in correspondence. And part of that correspondence has become famous as the Jefferson- Adams debate. It is more than I will outline, but the essence of the debate was as follows. discover that they could use Government to redistribute wealth and that once they made the discovery that Government power could be used to redistribute wealth, Adams argued that it would reward indolence, that it would impose a burden on productive behavior, and that democracy would fail. Jefferson, ever the optimist, argued that people would make the discovery--they would discover that Government, through taxing and spending, could be manipulated by special interests and that it could be used to take the fruits of the labor from the laborer and give it to people who were not equally productive or who were more powerful politically. But Jefferson argued that the American people would always be so committed to broad-based opportunity that they would recognize that what the Government could take from someone else today and give to them, they could take from them and give to someone else tomorrow, and Americans would therefore reject Government as an instrument for redistributing wealth. In a very real sense, today we are immersed in the Jefferson-Adams debate. While I believe that Jefferson is right, the debate as it is now structured is biased in favor of the Adams argument. Let me give a practical example. I guess my first experience in budgetary politics was after I was elected to Congress in 1978 as a Democrat. In 1979 and 1980 the country got into trouble. We had 13.5 percent inflation, we had 21.5 percent interest rates under President Carter, and President Carter in 1980 withdrew his budget, in an extraordinary action, and he sent to the Congress, as best I can remember, about a $6 billion savings package. Most of the package was phony. Some of it supposedly saved money by spending money sooner rather than counting it in the future year. We have all seen that happen and some have practiced it. He also moved some spending to a future year. But there was $1 billion of real savings that he proposed by denying Government retirees a twice a year cost-of-living increase. That saved $1 billion by giving Government retirees a once a year cost-of-living increase instead of a twice a year cost-of-living increase. At the time, 98 percent of all private retirees had no cost- of-living increase, but my purpose is not to debate the merits. When we voted on the Carter budget revision, over 250 Members of Congress voted with the President to try to save the $1 billion. I was one of them. And then, when a conservative Republican, as it turned out, offered an amendment to force us to vote straight up or down on the twice a year cost-of-living increase rather than voting on the general concept of dealing with the deficit, as I recall there were about 50 brave souls in the House who stayed with the once a year cost- of-living increase and I was one of them. I was up for reelection at the time. I was running against a candidate who, at least initially, appeared to be a potential challenge. So I was doing a poll. It is a very small poll but it made a very big impression on me and I wanted to share it with my colleagues and with the people who are interested in this debate. I asked in that poll: ``How many people knew that we had a vote on the twice a year cost-of-living increase for Federal employees and how many people did not know?'' Interestingly enough, not one person that I polled in my district who was not a Federal employee or a Federal retiree even knew the vote had occurred. But every Government employee and every Federal retiree that we polled knew it. In addition, on the second question, ``Knowing it, how did it affect your support in the upcoming election?'', every person who knew it planned to vote against me because of the vote. There is nothing wrong with that. The essence of democracy is accountability. But here is my point. The reason the system is biased in favor of spending is because we vote on individual issues and every time we vote on spending money we have special interest groups--and we are all part of them--looking over our left shoulder, sending letters back home telling people whether we care about the old, the poor, the sick, the retired, the bicycle riders--and the list goes on and on. Nobody is looking over our right shoulder telling people back home whether we care about the people who do the work and pay the taxes and pull the wagon in America, or whether we care about our children and their future. I remember in 1979 we were going through a fairly boring period in Congress. As a young freshman Member I tried to keep up with real votes we cast. Not votes on big bills that cost billions of dollars where the vote would be 380 to 20, but actual amendments. In my little casual empiricism I made a discovery. The discovery basically was this. The average little amendment add-on we were voting on cost about $70 million. The average beneficiary, as best I could estimate, got about $1,000 to $1,500 apiece. And since there were 100 million taxpayers the average taxpayer was paying about 70 cents. You did not need a Ph.D. in economics to understand that a few people are willing to do more to get $1,500 than a lot of people are willing to do to prevent spending 70 cents. My conclusion was that only if we change the way we spend money do we have any chance of gaining control of spending, because what tends to happen--and our colleague in the Chair is a new Member here, but as he will discover--what tends to happen is the only people who ever know how you vote on spending issues are the people who wanted the money and they remember most when they do not get it. It is like in a religious sense saying if you do good that when you get to the Golden Gate and Saint Peter opens the books that there is not going to be anything written down; no record of it. You are asking people to be responsible simply because that being responsible is the right thing to do. The problem is, the Lord did not make many zealots. And that is why we have consistently, vote after vote, year after year, been losing the battle on Government spending. And as a result the Government has become bigger and bigger and bigger, more and more distant, more and more hostile, more and more burdensome. And that is why we are here debating this issue today. In trying to deal with this problem we passed what was called the Gramm-Rudman law. On the day it passed, I stood up and said in that debate that the bill was the engagement but the balanced budget amendment to the Constitution was the marriage; that the problem with the Gramm-Rudman law was that it was a law, and what Congress could make, Congress could unmake. I did not realize, when I was saying that in 1985, that exactly that was going to end up happening. What happened under the law is that we were able, in the 4\1/2\ years it was in place, to lower the deficit burden on the economy by about 42 percent. We were able to limit the growth of Government spending to 1.4 percent a year while the economy grew by 3.1 percent a year and the Government actually got smaller relative to the economy for the first time in the postwar period of the country. But what happened is when the hill got steep from the recession and S&L bailout, then Congress bailed out on the Gramm-Rudman law, gave the new President the power to suspend it, and the first official act of Bill Clinton was to suspend the Gramm-Rudman law. What is the problem we are looking at in terms of the deficit? I have some charts. Let me just basically go through them. We are engaged in an intensive debate here on what happens if we balance the budget but with relatively little attention paid to what happens if we do not. This chart is basically the question of when are we going to do it? But all of this red shows going back to 1969. The one time in the last 34 years, since 1961, that we have actually had a tiny little surplus was in 1969. From that point on, every year, we have run a Federal deficit. And right here is where we are headed if we do not adopt a balanced budget amendment to the Constitution and if we continue business as usual. This next chart is a projection from the Congressional Budget Office. If you look at the last 34 years, this is what it looks like. Starting in 1961, we ran a deficit. We ran a deficit every year to 1969. That year we had a tiny little surplus, which is a lot of money for anybody but Ross Perot; $3.2 billion. But in the big scheme of things, it is a fairly have run a cumulative deficit which has raised the debt by $3.4 trillion. Given current projections, nobody can honestly anticipate, short of a balanced budget amendment to the Constitution, that we will balance the budget anytime in the next 15 years. I ask my colleagues, is it possible for a country, year after year after year for half a century, to spend more money than it takes in and to pile up these debts so that the interest on the debt in the year 2005 will be greater than the total level of Government spending in 1975? If we do not pass a balanced budget amendment to the Constitution, given the bills that are already the law of the land, given the spending that we are already committed to, by the year 2005, 10 years from now, we are going to be spending $334 billion a year simply paying interest on all of this debt. That is more money than we spent on Social Security, defense, discretionary spending, and every other single program of the Government in 1975. In fact, there are a number of Members of this body who were Members of the Senate in 1975. We are not talking about that long ago. What happens if we do not balance the budget has to do with real people and real families. People talk about the difficulty of balancing the budget and the supposed excruciating pain that is presumed to result from what we are going to have to do, but I hear relatively little discussion about the excruciating pain that is going to occur if we do not do something about the deficit. Let me talk about that very briefly. In 1950, the average family in America with two children sent $1 out of every $50 it earned to Washington, DC. Today, that average family is sending $1 out of every $4 it earns to Washington, DC. And if we do not pass a single new law in the next 20 years, if we just pay for the laws that are already on the books, if we just pay for the Government that we have already thrust upon the American people, that average family is going to be sending $1 out of every $3 it earns to Washington, DC. That is the cost of doing nothing. The General Accounting Office has estimated that, if we pass a balanced budget amendment and we enforce it, the impact of balancing the budget will mean that our children can expect their family income to be 36 percent higher than if we do not eliminate a situation where government is borrowing 50 cents out of every $1 available meaning that 50 cents out of every $1 saved in America does not go to build a new home, a new farm, a new factory, to generate new economic growth; it instead all goes to pay for Government deficit spending. The last time that we had a sustained period of a balanced budget so that the Government was not borrowing 50 cents out of every $1, mortgage rates were 3.5 percent. In fact, in the history of this country, whenever we have had any kind of prolonged period where the Government was living within its means, long-term interest rates have been down around 3 percent. The average home in America would have a mortgage payment of $500 a month less today if we had the fruits of a balanced budget. So when we are talking about all of the excruciating pain that is held out, about what it would mean if the Government had to do what families and businesses have to do every year, I think it is important to ask ourselves what is going to happen if we do not do it. A couple of other points: I just mentioned that over the next 10 years, the interest payment on the debt, at the rate at which we are piling up new debt, is going to rise by $134 billion. We are going to be paying an additional $134 billion a year in 10 years on interest payments because we are not balancing the Federal budget. Do you know what we could do with $134 billion a year? The Senator from California got up and talked about Social Security. With $134 billion a year put into the Social Security trust fund, we could guarantee that we could finance the retirement of the baby boomers. With $134 billion a year, which we are going to be squandering on interest while we debate whether the world will come to an end if we have to live within our means, if we took that $134 billion a year and used it to cut taxes, we could double the personal exemption and have a flat tax rate of 17 percent. We are talking about a tremendous ability to let working families benefit from their own creativity, from their own hard work. But what is going to happen if we do not do it? What is going to happen if we do not do it is that $134 billion is not going to go to Social Security. That $134 billion a year is not going to be returned to families to invest in the American dream. That $134 billion is going to be squandered the way the $200 billion a year we are spending this year is being squandered in paying interest on a debt that we have run up because this Congress and others like it have refused to say no to any organized special interest groups. How would we balance the budget? This is a much discussed issue. We have heard some of our colleagues on the other side of the aisle make an argument that runs basically as follows: We have not balanced the budget since 1969. We are out of practice. We do not know how we would do it. How could we commit to do something when we cannot tell you exactly how we are going to do it? I am going to talk about how to do it for a moment. But let me submit that is not the way people operate in the real world. In the real world, we commit to do things all the time even though we cannot tell you going in exactly how we are going to get the job done. If, in the real world, you had to be able to say exactly how you were going to achieve something down to the finest detail, before you committed to a good and worthy goal, no one would ever commit to one. If you had to know how you were going to pass all those courses when you went off to the university, nobody would ever go off to college. If you had to outline exactly how you were going to make your business work in good times and bad, nobody would ever start a business. If you had to figure out how you were going to make a marriage successful before you got into it, how you were going to deal with the 1,001 problems that you know are going to come up, nobody would ever get married. After my wife-to-be turned me down for the second time and I got down on one knee in San Antonio and said, ``If you will marry me, I will spend the rest of my life trying to make you happy,'' my wife did not look down at me and say, ``Well, how are you going to do it?'' She looked at me and tried to gauge how much I was committed to it, and 25 years later I am still working on it. So forgive me if I feel a little bit cynical toward my colleagues who say, ``How can we commit to balancing the budget if we cannot sit down and write out in the greatest detail how we are going to do it,'' knowing that if anybody wrote out the detail, then they would stand here and say the world is coming to an end if we have to do these things. I hope when people hear this debate, they will always remember these numbers--and nobody disputes these numbers. The White House, the Congressional Budget Office, nobody disputes these numbers. What I have here on this chart is a projection of Federal Government spending, which is the line in red, and then Federal Government revenue, which is blue. One thing that is clear, if you look at this chart, is that both of them have been growing. Both of them have been growing very rapidly. The problem is that the spending has been growing more rapidly. What has happened is that, since 1969, spending has been growing by an average of 8.7 percent a year. In fact, spending by the Federal Government has been growing 2\1/2\ times as fast as spending by the American family has been growing. I think that is a real index of our problem. Revenues have been rising, but they have not been rising as fast as spending has been rising. So if you look here, in 1995, where that red ends and the yellow begins, that is where we are. The Office of Management and Budget and the Congressional Budget Office project that over the next 7 years, the economy is going to grow--not as fast as it is growing now, but at a fairly modest rate compared to the kind of growth we had in the 1950's and 1960's. no more than 3 percent a year, where we are spending only 3 percent more next year than we spent this year, we would balance the budget by the year 2002, which is what we are calling for in this balanced budget amendment to the Constitution. Here is my point. I know that there are many people who say we cannot balance the budget, that it means hard choices, and that we have a Congress that in 40 years has not said no to any organized group with a letterhead. Obviously, it is a self-fulfilling prophecy. But I think if you go to main street America and you say to the people, ``Would you want the Government to balance the budget, to eliminate the kind of debt burden and taxes that we are looking at in the future if we do not do it, if it requires that the total growth of Federal spending be limited to no more than 3 percent a year for 7 years?'' my guess is that 95 percent of the people in this country would say ``yes.'' The other 5 percent are the people who understand this well enough to know that they are getting the 7 percent a year spending increase, and that they do not want it balanced; even if it mortgages the future of the country, it is worth it to them to get this extra spending. I am not saying this is easy. I have worked on the budget as long and as hard as any person who has served in the Senate in the period of time I have been here. Limiting the growth of Government spending to 3 percent means you have to reform welfare, which we need to do anyway; it means you have to reform Medicaid; it means you have to reform Medicare. When the average insurance policy in the private sector did not go up in price last year, and Medicare went up by 10.5 percent, and the Government is paying for it and our senior citizens are paying for it, we ought to go back and look at it and we ought to be reforming it. It also means you have to go through discretionary spending, because there are some parts of it that are going to grow, and that should grow, and you have to set priorities and cut spending elsewhere. The point is, how many families in Illinois last year, or in Tennessee, or Texas, had to deal with budgets that were tougher than limiting their growth in spending to 3 percent? On almost every street, on almost every block in the Nation, there were families that had to make tough decisions last year. They did not like it, but they did it. They had to say ``no,'' not to strangers but to people they love. They did not want to do it, but they did it. How many businesses in America have had to restructure their business in the last 10 or 20 years, compared to which living within a 3 percent growth rate would look like child's play? Literally hundreds of thousands of them. What is the difference? Families and businesses live in the real world, and the Federal Government does not. The balanced budget amendment to the Constitution is an effort to bring it into the real world. I now want to address the Social Security issue. First of all, there are profound questions that have to be answered if you are suddenly deciding that you want to not count the second-largest Federal revenue flow and the second-largest outlay flow as transactions of the Federal Government. We heard the distinguished Senator from California talk about protecting Social Security. But the reality is that taking Social Security out of the budget in no way protects Social Security. In fact, when we ran into trouble with Social Security in 1982, what did we do? What we did is we started shifting money from trust funds; we started shifting money from among the various trust funds, and we took money out of general revenue and we saved Social Security, and we went back-- finally, when we were shamed into it, when our parents were about not to get a check--on a bipartisan basis and we made the changes we needed to make. Had we had this provision in place, we would not have been able to do that. But there is a more profound question. If you balance the budget and you did not count Social Security's revenues or the expenditures, you would be, today, running a surplus of about $80 billion. Do we want the Federal Government to run a surplus of $80 billion? We have done that, by the way. From 1867 to 1879, the Federal Government, as a policy, took in more than it spent. And what happened is, it imposed a deflationary pressure on the economy, prices fell, on average, 1 percent a year, and we resumed our gold payment at $20.67 an ounce, which is what it had been in 1860. That was the objective of the Government, but it achieved it by pushing prices and wages right through the floor. Is that a policy we want to undertake? My view is that if we do, it is something we need to make a fundamental decision about. The reality is that we have always lived up to our commitment under Social Security. We have always kept the promise on Social Security without any constitutional requirement. But we have not balanced the budget in a quarter of a century and with no realistic prospect of doing so any time in the next decade, we clearly have an urgent need for a constitutional requirement to do so. I also have to admit that I am somewhat amazed at this sudden desire of our Democratic colleagues to protect Social Security, because I remember that last year when we had the Social Security tax increase go into effect, one of our own colleagues--I believe Senator McCain-- offered an amendment that said that the Social Security tax increase had to be dedicated to the trust fund, and his amendment was defeated on a partisan vote. In fact, if you look at your new IRS 1040 income tax form, which every American is about to get in the mail, you are going to find that on page 7 it has a new section. The new section says ``Social Security Benefits.'' And it says, ``If your income, including one-half of your Social Security benefits, is over $34,000 a year,'' and then it goes on and says you have to pay taxes on it. This Senate in the last Congress voted to dedicate those taxes not to the Social Security trust fund but to spend on social programs, which was the policy of the Clinton administration. Now we have the same people saying, ``Well, I voted for the balanced budget amendment in the last Congress, but now I do not know that I can vote for it because of Social Security.'' My point is this: The way to protect Social Security is to deal with this deficit. If we do not deal with this deficit, if we let it continue to mount, we are not going to be able to fulfill our promises anywhere. If people are for protecting Social Security--which I am absolutely dedicated to and I believe that every Member of this Congress understands that it is a commitment that has been made. The Contract With America makes it clear that Social Security is not going to be tampered with as part of the deficit. There is a 60-vote point of order in the Senate for doing anything that lowers the solvency of the Social Security system. So we have a built-in protection. It is clear, when you look at the fact that, if every Democrat who voted for this amendment in the past votes for it again, and based on the election of 11 new Republicans, the balanced budget amendment is going to pass and subsequently become the law of the land. When we start having people say, ``Well, look, I am for this and I voted for it in the past, but before I vote for it again, you have to fix this, you have to fix that,'' it raises the specter that now because we are shooting with real bullets, and are actually on the verge of achieving something, we are starting to see the possibility that this whole thing could come apart. And I hope it does not. I think we have reached the moment of truth. I think we have to decide whether or not we want to force the Government to live on a budget like everybody else. I know that there are some of my colleagues who say, ``Well, what could a President do if you did not fulfill the Constitution?'' Well, I hope a President, who had put his hand on the Bible and sworn to uphold, protect, and defend the Constitution, would live up to the commitment. But I think we are asking the wrong questions. We are asking the wrong questions about what the President will do and what the courts will do. The question we should be asking is: What are we going to do? Everybody understands the current system is broken. Everybody understands the current system is not working. Everybody understands that if we stay on the road that we are on today, country that we grew up in. We are going to lose the unique opportunity that has been part of America--the opportunity for someone to grow up in Tennessee I say to my distinguished colleague in the chair and, from very humble beginnings, have an opportunity to go to college, to go to law school, to be successful, to become a Senator; the opportunity for people all over the country to do extraordinary things. That is what is on the line here. That is what this vote is about. A final point--and I have spoken a long time, but I wanted to be sure I addressed all these issues. This is not a new amendment that we are talking about. The Senator from Illinois and many people on our side and many people on his side have worked on this amendment for many years. I have been working directly or indirectly on this amendment for 15 or 16 years. I have sat in on numerous meetings with Congressman Stenholm, who is a Democrat, with Senator Simon, who is a Democrat, and we have worked out an amendment that we can agree on. I would love to have a three-fifths vote requirement to raise taxes. I think the country would be better off if we had it. I want to deal with the deficit not by raising taxes but by cutting spending. But I am willing to fight it out. And I can tell you right now, if we impose a balanced budget amendment to the Constitution and if I am here or if I am involved in Government debate, I will not support raising taxes. I want to deal with this problem by controlling spending. I am sure there are others who feel differently. But the point is, I cannot get 67 votes for the three-fifths tax protection requirement. There are always things that we could do that would be improvements. But, as Benjamin Franklin said so long ago when the original Constitution was written, you come down to a point where you have to make a decision. If we want to alter American history, this is the amendment to alter it with. We have the votes to pass it. The House has already acted. The Nation is now looking to us to see if we have the will and the courage. And I know you could come up with 1,001 excuses for changing your vote. But I believe the American people will understand that this is a test about who is serious about forcing the Federal Government to live within its means, who is interested in changing politics as usual in Washington, DC. I am hopeful, prayerfully hopeful, that those on the other side who are now talking about changing their vote at the critical moment when we have the votes to pass the balanced budget amendment to the Constitution will engage in some prayerful deliberation and realize that, if they do that, we are going to lose a golden opportunity. We have no guarantee that the opportunity is going to come back and America's future is going to be permanently altered one way or another by what we do here. I hope people will look at this opportunity and not squander it. I yield the floor. Mr. DODD addressed the Chair.

Mr. GRAMM. Mr. President, I must raise a point of order. Under the rules of the Senate, you cannot yield for comments. You cannot yield through the person who holds the floor for someone else to ask questions. We have people who are waiting to speak. We have an order under which they speak. And I think if people want to speak, they should wait, be recognized, make their point, raise these profound questions about what happens if we do not do what the American people want us to do. The debate here is about how we do what the American people want us to do.

Mr. GRAMM. Mr. President, the Senator does not control the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, we have heard recently requests from a number of colleagues and the President for an explanation of exactly how those of us who support the balanced budget amendment to the Constitution propose to achieve that goal after the States have ratified the amendment. Frankly, the demand for details has come from some of the same individuals who opposed the balanced budget constitutional amendment when it was considered last year and it is my belief that no matter how detailed a plan was presented, they would find fault with it. However, I do believe it is worth demonstrating to my inquiring colleagues that there is a specific, legislative path that we can follow in order to balance the Federal budget--S. 149, the Balanced Budget Implementation Act, which I introduced on January 4 of this year, the first day of the 104th Congress and which I originally introduced on February 16, 1993, as S. 377. The legislation outlines the procedures necessary to bring the Federal requirement that the annual budget resolution be signed into law by the President, the implementation of zero-based budgeting which requires the reauthorization of most current Federal spending programs in order for them to remain eligible for funding; the application of the Social Security spending formula to other entitlement programs; and an extension to the year 2002 of the limits placed on discretionary spending. These requirements will be enforced with 60-vote points of order and other mechanisms. This is the path to a balanced budget. I hope those of my colleagues who have requested such guidance will join me in following it. I ask unanimous consent that a more detailed explanation of the legislation be printed at the conclusion of my remarks.

Mr. GRAMM

Mr. GRAMM. Madam President, let me just make a couple of points. First of all, one of these amendments is technical, one is substantive. One is trying to strengthen the mandate bill. Under the mandate bill we are now considering, if someone wanted to impose an unfunded mandate on local government, county government, or State government, there would have to be an estimate of the amount of cost. And if that cost exceeds $50 million, the unfunded mandate would be subject to a point of order and a 50-vote margin--50 votes plus 1, a majority, would have to be achieved in order to waive that point of order. I have gone back and looked at what 50-vote points of order have done under the Budget Act. In fact, you have to go back to 1988 to actually find 50-vote points of order that anyone raises. In 1987-88 we had five 50-vote points of order raised. This was under the Budget Act, for busting the budget. Four of them were waived, and no one has raised one since that time, the reason being if you only have to get 50 votes to waive the point of order, since it takes 50 votes to pass the bill, almost anything that is going to pass will get the votes to waive the Budget Act. That is why we went to a 60-vote point of order, to make the point of order have some meaning and substance. I have offered an amendment that would change the bill in one fundamental respect, and that is it would require 60 votes to waive the point of order in the Senate to allow us to impose an unfunded mandate on local government. Madam President, I want to make one observation about this bill. I understand obstruction. I have engaged in it myself. It is an important part of the American system and, while those who are being obstructed are unhappy about it, in fact it is the guaranteed right of those who serve in the Senate to obstruct. I would like to note one observation that I think is relevant to this process. I engaged in obstructing the passage of the President's health care bill. For 7 months I was engaged, with other Members of the Senate, in relentlessly trying to prevent the President's health care bill from being passed. I would say, however, that I had no qualms about standing up and saying I oppose the President's health care bill and it is going to pass over my cold, dead political body, which fortunately, such as it is, is alive today. The President's health care bill is deader than Elvis. And unlike Elvis, it would not be welcomed if it came back. But I would note it is very strange to me that, though we are in our second week of deliberation on this bill, we have been unable to get cloture to go on and pass the bill when we have 63 cosponsors. My question is this: If so many people are for this bill, why do we have so much trouble in passing it? So I think obstructing is an important part of the process. I think it allows us to analyze, to discuss, to reason. And I think ultimately if you have a determined minority that is opposed to a bill, that you ought to be able to show voter strength in the Senate in order to override that minority. But I do continue to be puzzled by the fact that so many people say they are for this bill, and yet we cannot seem to get on with the job of passing it. I think that is an important point to make and I yield the floor. Mr. BYRD addressed the Chair.

Mr. GRAMM. Madam President, under the previous unanimous consent request, all amendments have to be submitted before 3 o'clock, so I ask unanimous consent that I might send two amendments to the desk for immediate consideration.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent that additional material be printed in the Record.

Mr. GRAMM. Mr. President, for the last 40 years, government has spent an increasing share of the income of American families and because government has spent the family's income less wisely than the family would have spent it, the well-being of American families and America has diminished. This proposal will cut government spending and allow families to spend their own money on their own children for their own future. To give families their freedom and their money back, every family with children will get an immediate tax cut so that families can invest in the needs of their own children. The current $2,500 exemption allowed per child will be doubled to $5,000. The total exemptions for a family of four now shield from Federal income taxes just $10,000 or about 20 percent of the average income of such a family. With this change, the amount of family income protected for its own use would rise to $15,000 or about 33 percent of average family income. While this is an important step toward allowing families to spend their own money again, the amount of average family income shielded from the tax collector will still be only about half of the level which existed in 1950. ------------------------------------------------------------------------ Tax cut--$124 billion Spending cut--$124 billion ------------------------------------------------------------------------ Double the dependent exemption for Cut the discretionary budgets of all children from $2,500 to the Departments of Education, $5,000, thus allowing families to Energy, Labor, Health and Human spend more of their own money on Services, Housing and Urban their own children. Development, and Transportation (non-trust fund) by 16% over 5 years. ------------------------------------------------------------------------ Facts on the parent and child exemptions: In 1950, exemptions alone shielded 65 percent of the income of an average family of four from any Federal income taxes. By the end of the 1970's, the protection of family income provided by the exemption had dropped to just 16 percent of the income of an average family of four. In the 1980's, Republicans stopped the erosion of the exemption by indexing it for inflation, and then restored part of that lost protection so that by 1992, 21 percent of the income of an average family of four was protected from Federal income taxes. This increase in the dependent exemption would further protect the family budget from Federal taxation by increasing the exemption to 33 percent of the average income of a family of four. It will reduce by $1,400 the Federal income tax on an average income family of four earning $45,000.. We will force the government to tighten its budget so families can loosen theirs, reversing a 40-year trend. This transfer of spending power from government to families is a down payment on restoring the American Dream.

Mr. GRAMM. Mr. President, on February 4, 1993, I introduced legislation to authorize the negotiation of free agreements between the United States and the countries in North and South America. This was a step toward the realization of my hopes for a free trade area stretching from the Elizabeth Islands of Canada to Tierra del Fuego in South America. The subsequent approval of the North American Free Trade Agreement [NAFTA], is the most significant accomplishment to date on the road toward the achievement of free trade throughout our hemisphere. On January 25, 1994, I introduced the American Free Trade Act. This legislation was similar to the bill that I introduced the preceding year, with the addition of special provisions regarding free trade with a post-Castro, post communist Cuba. Those provisions defined the standards by which we would be able to identify the return of freedom to Cuba and would give priority to the negotiation of a free trade agreement with a free Cuba. The Index of Economic Freedom, recently published by the Heritage Foundation, listed Cuba, together with North Korea, as the most repressive nation on the earth with regard to economic rights and freedoms. Cuba and North Korea remain the last bastions of unrepentant Marxism. While such a repressive regime remains in power in Cuba, free trade would be meaningless and free trade negotiations would be a waste of time. On the other hand, in a post-Castro environment, free trade can play a crucial role in promoting and reestablishing economic and political freedoms. The bill contains five standards for measuring the return of freedom in Cuba. These standards are: 1. The establishment of constitutionally-guaranteed democratic government with leaders freely and fairly elected; 2. The restoration, effective protection, and broad exercise of private property rights; 3. The achievement of a convertible currency; 4. The release of political prisoners; and 5. The effective guarantee of free speech and freedom of the press. These, of course, are minimum conditions upon which free trade relations can be established and which free trade can strengthen. In fact, free trade will serve to expand the economic and political freedoms of the people of Cuba. Mr. President, the bill sets forth an additional requirement that necessarily must be met for our Nation to enter into a broad free trade arrangement with Cuba, and that is that the claims of U.S. citizens for compensation for expropriated property are appropriately addressed. This last December, the leaders of all of the nations of the Western Hemisphere, except for Fidel Castro, met in Miami and agreed to the goal of achieving free trade throughout the Americas early in the next century. I have long supported that goal. I hope that this bill that I am reintroducing today can be speedily enacted to give the President the authority to begin negotiations right away. Mr. President, the time is not at all premature. Several countries have already expressed a desire to enter into a free trade arrangement with the United States. Among those are Chile, Panama, Argentina, and others. Several of these and other countries in the hemisphere have entered into, or are negotiating, free trade arrangements among themselves. While NAFTA is the largest free trade area in the hemisphere, Brazil, Argentina, Uruguay and Paraguay, are scheduled this year to initiate the second largest free trade area, called Mercosul/ sur, a free trade area with nearly $650 billion in combined gross domestic product. Four other trade arrangements are or soon will be in place in the Americas and the Caribbean. These trade arrangements are the building blocks of an eventual free trade area embracing all of the Americas. The Americas Free Trade Act would encourage the President to conduct negotiations with such groups of nations, in order to build upon the progress that they are achieving in lowering the barriers to trade among themselves. Mr. President, the last 15 years have witnessed victories for freedom in the governments and economies of the Americas. Their rejection of authoritarianism has accelerated, and the United States has been the model for this development. After almost two centuries of forsaking the example of freedom that made us the greatest, most prosperous nation on the planet, the nations of this hemisphere are more willing than ever to emulate our formula for success. Now is the time for us to encourage and embrace our neighbors as we lay the foundation for a new century of prosperity and opportunity for all of the people of the New World. Mr. President, I ask that the summary and text of the bill be included in the Record.

Mr. GRAMM. Mr. President, we see no reason why the takings clause of the Fifth Amendment, as much a part of the Bill of Rights as the First Amendment or Fourth Amendment, should be relegated to the status of a poor relation. With these words in the recent landmark Supreme Court decision Dolan versus City of Tigard, Chief Justice Rehnquist correctly points out the evisceration of one of the most fundamental rights protected by our Constitution. Sadly, with all the talk about rights in America today, the fundamental freedom to acquire, use, and dispose of private property has become a poor relation. In fact, it has very nearly been drummed out of the family because of the Federal Government's relentless assault on private property. The Founding Fathers were keenly aware of the need to protect private property rights, so much so that they provided in the Bill of Rights that private property--shall not--be taken for public use without just compensation. Indeed, the courts have been very clear that if the Government builds a highway across your property, then the 5th amendment's just compensation provision applies. However, one form of taking which has become more common than outright condemnation is the regulatory taking. This occurs when the Government imposes such stringent controls on the use of private property that its value is eroded or destroyed. Currently, farmers, small businesses, and homeowners are in the path of an avalanche of Federal regulations and restrictions affecting their property. During President Clinton's first year in office, the Federal Register, which is the daily depository of all proposed and final Federal regulations, totalled 69,684 pages--the highest count since Jimmy Carter's record level. Moreover, the Unified Agenda of Federal Regulations reveals an enormous increase of regulatory activity, with a 22 percent growth since 1992 in the number of regulations under consideration or recently completed by the 60 Federal departments and agencies within the Clinton bureaucracy. Two examples of Federal regulatory takings involve wetlands and endangered species. In Texas, the U.S. Fish and Wildlife Service [USFWS] has listed 65 species as threatened or endangered. Nationwide, 853 species are already listed as endangered, and approximately 3,900 are candidates for inclusion on the list. The mere presence, however fleeting, of a listed species on a parcel of land has profound ramifications for small, individual landowners whose property holdings are often their most significant source of income. In the Woods of East Texas, if a red-cockaded woodpecker landed in your tree, you could suddenly be threatened with a government taking that barred you from cutting your own timber. Without the income generated by such economic activity, how are those whose jobs are put at risk expected to provide for themselves and their families? All over the country under wetlands provisions, entire counties or significant portions of coastal land in States such as Texas and Maryland have found that the ability of people to use their property has been restricted dramatically because a Government bureaucrat redefined what would qualify as a wetland. The destructive impact of these regulatory actions on jobs. the economy, family well-being, and individual freedom has been enormous. To help revive this important freedom, I have reintroduced The Private Property Rights Restoration Act, which will restore the Constitutional mandate that just compensation be paid when government action reduce private property value. This bill will safeguard the rights of individuals whose land is taken by Government regulations or policies which reduce or destroy the value of the property. The legislation or policies which reduce or destroy the value of the property. The legislation requires compensation to be paid when such an action has reduced property value by at least 25 percent or $10,000. However, such protection will not be extended to uses of property which are deemed to be a public nuisance. The payment of compensation to, and legal fees for, property owners who successfully plead their case in court must be paid with funds from the budget of the agency issuing the regulation. Mr. President, I will work toward passage of this legislation to help every American whose constitutionally guaranteed property rights are being ignored or threatened by the Federal Government. I hope we can work together to protect private property rights and to bring the Fifth Amendment back into the family of the Bill of Rights on behalf of the people who own property, till the soil, and produce the goods and services in our country. I ask unanimous consent that a one page description of the legislation and the bill itself be printed in the Record.

Mr. GRAMM. Mr. President, I ask unanimous consent that an outline of S. 121 be printed in the Record.

Mr. GRAMM. Mr. President, today I am introducing legislation that will aid the Securities and Exchange Commission [SEC] in targeting resources to enforce the Investment Advisers Act of 1940. Increasingly, American families are investing in mutual funds, individual retirement accounts, municipal bonds, a variety of insurance products, and many other financial instruments. Often, American families rely upon investment advisers to assist them in making investment decisions and in managing their assets. Millions of people have benefited from the services provided by these investment advisers. For several years, the Securities and Exchange Commission has expressed in testimony before Congress the need to improve supervision of investment advisers. While not lacking for resources, given the dramatic increase in the SEC's budget over the last several years, the SEC has had difficulty targeting funding to this area of responsibility. The bill that I am introducing will take two important steps toward focusing the SEC's efforts. First, the bill would highlight the importance of enforcing the Investment Advisers Act of 1940 by identifying specific amounts from the SEC's budget to be devoted to that purpose. The bill authorizes $10 million for fiscal year 1996, and $12 million in 1997, recognizing that organizing and training for this purpose is unlikely to be completed in the first year. The SEC could devote more of its budget to this enforcement effort if the Commission chose to do so, but these amounts will at least ensure increased priority. Mr. President, I proposed to direct those efforts where the problems are likely to occur. Frankly, the fraud is going to be where the money is, and that is where we should direct the SEC's attention. For example, as few as 5 percent of registered investment advisers manage more than $500 million each of client assets, and yet this group has 70 percent of all assets under management. The SEC should not have its attention diverted from these advisers by inspection of advisers managing little or none of their clients' assets. In fact, Mr. President, about half of all investment advisers do not manage any client assets at all. This bill would exempt from SEC registration all investment advisers managing less than $5 million in assets, with one important condition. That condition is that adviser is registered with his or her State securities regulator, who would then have responsibility for supervision. Should a State not wish to take on responsibility for supervision of such investment advisers, then that State need not register them, and the investment adviser would continue to require to register with the SEC and be subject to SEC supervision. If the SEC determines, however, that there is a need, and that the SEC has sufficient resources, the Commission may limit this exemption to investment advisers managing no more than $1 million in assets. The SEC would in such event supervise investment advisers who manage 99 percent of all assets under management. This would target the SEC's efforts less sharply, but it would still reduce the SEC's inspection load by as much as two-thirds. The legislation would preserve full authority for the SEC to investigate aggressively any investment adviser where allegations of fraud are raised. Moreover, the SEC could disqualify from registration as an investment adviser any individual who in the previous 10 years had been convicted of a felony. This bill avoids the approach of earlier proposals, which would have imposed a new tax on all investment advisers, and thereby on all of their clients. In my view, such a tax is unconscionable, especially while existing SEC fees impose a tax on investment, raising enough revenues to fund the SEC two or three times over. Moreover, the most harmful stage of the economic cycle on which to levy a tax is investment. Every investment dollar lost to pay for government is not just a loss of one dollar, but it is the loss of the many more dollars that this investment would have generated in economic activity. Mr. President, allow me to emphasize again, that the SEC has not been starved for resources. The budget of the SEC has tripled since 1986, up by 60 percent since 1990. The challenge to the SEC has not been obtaining resources, but rather assigning those resources to what the SEC has testified is a priority area of concern. This legislation will aid the SEC in that effort. Mr. President, I ask that a summary and the text of the bill by included in the Record.