Phil Gramm

Mr. GRAMM

Mr. GRAMM. Mr. President, I rise today to introduce a Balanced Budget Constitutional Amendment which is designed to protect Social Security. Since we last considered a balanced budget amendment in the Senate, we have achieved balance in the unified federal budget for the first time in 30 years, and have made substantial progress toward achieving balance without relying on the surpluses currently accumulating in Social Security. For 1998, the most recent projections by the Congressional Budget Office show a unified budget surplus of $63 billion, and an on-budget deficit of just $41 billion when the $104 billion surplus in Social Security is not counted. This on-budget deficit is projected to disappear by 2002 under current budget policies. The Balanced Budget Constitutional Amendment I am introducing today is identical to S.J. Res. 1, which received 66 votes in the Senate on March 4, 1997, except that surplus revenues in Social Security are not counted in determining compliance. It is also identical to the Dorgan substitute and Reid perfecting amendments to S.J. Res. 1, which received 41 and 44 votes respectively, except that while Social Security surpluses are not counted, any deficit in Social Security must be offset by an equivalent on-budget surplus. This distinction is important because Social Security is projected to begin running cash- flow deficits in the year 2013. The President and a majority of Congress have expressed support for balancing the budget without counting Social Security surpluses, and now that goal is within our reach. We should take this opportunity to approve this Constitutional amendment and send it to the States for ratification. This Constitutional amendment would provide the structure and enforcement mechanism to allow us to achieve this bipartisan goal.

Mr. GRAMM

Mr. GRAMM. Let me review for you the emergencies the President wants to spend money on. Let me remind you of the Daschle quote. And the Daschle quote was, he was not against tax cuts, he was simply against taking the money away from Social Security. I am not going to argue that any of these things are bad uses of money, but what I am going to argue is, they are not emergencies, most of them are ongoing problems. We are spending $1.7 trillion in the Federal budget this year. Any one of these things could have been funded had the President chosen to make them a priority. But back when he submitted his budget, they were not even a priority, they did not exist as a priority. Today they are an emergency. Why? Because the President wants to bust the budget and spend $20 billion. The first problem is the problem related to the fact that we are about to enter a new millennium. It seems that we have suddenly discovered that the year 2000 is only 2 years away--in fact, a year and 3 months away. Does this come as a shock to anyone? And I thought I would look back at: How long have we known there was going to be a year 2000? Some might find it instructive that we started using the term ``in the Year of Our Lord,'' AD, in the calendars in the year 525--an abbot in Rome started in the year 525 to measure dates in the modern era from the birth of Christ--``in the Year of Our Lord.'' It came into common usage and then was officially adopted by papal decree in the Gregorian calendar in 1582. In short, we have known for 1,470 years that the year 2000 was coming, and yet all of a sudden it is an emergency. If we have a problem with computers about the year 2000, why did those problems not exist when the President submitted his budget? Why all of a sudden is this an emergency? Well, my point is, it is clearly not a surprise. For 1,470 years we have known the year 2000 was coming, and for at least the last decade we have known that some computers would have difficulty in making the transition. We have an administration that claims to be a high-tech, computer-literate administration. Our Vice President pled in vain for the Government to take over and create an information superhighway where the Government would run the Internet. We rejected it. And now the Internet continues to flourish as basically a private system. But the point is, the President is asking between $3.25 billion and $5.4 billion as an emergency for something we have known about for 1,470 years and something he could have asked money for and did not when he submitted his budget. The second emergency is, we are going to have to do a census in the year 2000. That hardly comes as a surprise. The Constitution, in article I, requires that there be a census every 10 years. We have done a census every 10 years in the history of the Republic. It is hardly a surprise that we are going to do a census this year. But everybody who is familiar with it knows that this administration has consistently underfunded the census, and now they are on the verge of declaring it an emergency, when they created the emergency. Embassy security. Everybody knows the terrible tragedy of where we had two Embassies bombed in Africa. Both of those Embassies had asked for enhanced security, and in both cases the administration had rejected it, to spend money on other things. But the important point is, the $1.6 billion being requested will be spent over the next 10 years. I could understand if you said, ``Well, we want to begin it now, and until we can write a new budget and make it part of our budget, would you designate that as an emergency?'' I could understand that. But the President is asking us to designate as emergency spending an item which we have been debating and looking at for a decade and an item which in many cases the money will not actually be spent, and the construction will not occur, for 4 or 5 or 6 years. Then there is defense readiness. All of a sudden, this administration has discovered that we have been cutting defense spending every day that President Clinton has been in office. And these dramatic reductions in defense spending are beginning to affect retention, they are beginning to affect recruitment, they are beginning to affect modernization. This is hardly a surprise. Many Members of the Senate, both Democrats and Republicans, have stood up and denounced these cuts in defense. But yet they have been made so that money could be spent on programs that were deemed by this administration to be of higher priority. Now that the Joint Chiefs of Staff have gone public for something they clearly must have known for years, but remained silent about because the process has become politicized, in my opinion. Now the President is saying we have an emergency in defense. My point is, this emergency was created by an administration that would not support defense, and now they want to bust the budget to try to correct problems that they produced. My alternative is, let the President, in next year's budget, propose a permanent change in defense spending within the overall cap in spending that he agreed to last year. And I will support it. But let's not raid Social Security to try to correct a problem that, in fact, has been created by our own budget decisions. The next emergency is Bosnia. There is an emergency because we have discovered that we have troops in Bosnia. That sounds almost comical. We sent troops to Bosnia in December of 1995 and they were supposed to be there until December of 1996. Then we expanded the mission in October of 1996 and they were supposed to be there until March 1997. Again in November 1996 we extended the deployment of troops to Bosnia until June 1998. Finally, in December of 1997 the President announced that troops would be deployed to Bosnia indefinitely. Now, how can it be an emergency to fund troops in Bosnia when they have been there since 1995 and the President has told us they are going to be there indefinitely? Why didn't the President put money in his budget to pay for troops in Bosnia? You know why he didn't. He didn't because he wanted to take the money out of Social Security. So here is where we are and this is the concern that I want to raise. The President has said--and rightly so, in my opinion--we have a big job to do next year in fixing Social Security. Don't cut taxes, don't increase spending, and let's take this surplus and fix Social Security first and then we will decide what to do if any is left. That is what he said on January 27 of 1998. Since then, the President has said less and less about spending, more and more about taxes, and now the President is saying, ``Don't cut taxes with a Social Security surplus;'' but, at the same time, the President is pushing $20 billion worth of new spending. The tax cut passed in the House would cost $6.6 billion; the President is talking about increasing spending by $20 billion. Now, my point is a very simple point. If it hurts our ability to save Social Security to cut taxes by $6.6 billion, and that is wrong, how can it be the right thing to do to increase spending by $20 billion-- more than three times as much? The bargain I would like to strike so that I and others could support the President on a bipartisan basis: we won't do our tax cut, you don't do your spending. Let's just say no. Then next year, let's fix Social Security. I believe we will have money left for a substantial tax cut next year, but let's not start a spending spree this year that would endanger our ability to save Social Security next year. Now, I know that as people get ready to go home it is always hard to not say yes to every spending interest in the country. But I believe the President took the right position in January. He has changed that position now. My proposal is straightforward and simple: Don't cut taxes this year and don't increase spending this year. Save the $6.6 billion that we would have used on tax cuts for Social Security next year; save the $20 billion or as much of it that we can that we would have spent this year for Social Security next year. And once we have fixed Social Security, then let's look at cutting taxes for the American people. That is the challenge. We are going to see this debate in the next few weeks. I intend to be here saying no on spending--not because I don't want to build up defense. I voted against many of the defense cuts of the last 5 years. But nobody can say that this is an emergency when we created it and the President created it through his budget problems or policy. Nobody can say it is a shock that the year 2000 is coming and the President didn't know about it when he sent us his budget in January. Nobody can say they didn't know we were going to do a census. Nobody can say they didn't know we were going to be in Bosnia. These are not emergencies as the law was intended to apply to emergencies. I urge my colleagues to stand up for the President's position and call on the President to do it. The President said on January 27th, don't cut taxes and don't increase spending. I say yes, don't cut taxes, don't increase spending. The only problem is the President continues to say don't cut taxes, but the President is the driving force behind an effort to increase spending by $20 billion this year. And that spending, every penny of it, will come out of Social Security, and it will diminish our ability to rebuild the financial foundations of Social Security. I say no. I yield the floor.

Mr. GRAMM. I ask unanimous consent that I have 10 additional minutes.

Mr. GRAMM. Mr. President, I don't know to what extent it will run in headlines in the papers tomorrow or to what extent it will be a feature on the news tonight, but today is a very important day because today, for the first time since 1969, the Federal Government has balanced its budget. Today, for the first time since 1969, the Federal Government has done what every family and every business in America has to do every year, and that is balance their books. And it is a very big deal. It is a very big deal because it gives direct benefits to every citizen because we are not going to borrow any money next year. What it means is that the Federal Government, with all of its borrowing power, will not be crowding out small businesses, will not be competing against homeowners, and, as a result, rather than the Federal Government running a $200 billion deficit, which would be $200 billion we would borrow, taking it away from small businesses that would have created jobs and new economic opportunity, taking it away from families that would build new homes, new farms, and invest in building new factories, now that money will go in the private sector. I noticed on Saturday that there was a headline in the Real Estate section that said, ``Loan Rates Fall to 30-year Low.'' It is not a coincidence that we have balanced the budget for the first time in 30 years. If we had a deficit today at the same level that we had 5 years ago, mortgage rates, rather than being 7 percent, would probably be 9.5. What that would mean is that millions of Americans who today can build and buy their own homes would not be able to build and buy those homes. People would be paying hundreds of dollars a month in interest payments that they are not now paying. We have literally created millions of jobs. We have seen the largest growth in equity values in the history of the country. Today, the average American family has more money in financial assets than it does in the equity of its home. That has never happened before in American history, and it is probably true that last year the average white-collar worker saw the value of their financial assets in their 401(k)s and their IRAs grow more than their income. So the American people are happy. The approval rating for the President is at a record high. The approval rating for Congress is at the highest ever recorded for any Congress in history. And I think the basic reason is because we have balanced the Federal budget, the economy is strong, and, despite all the economic problems in the world, there is one economic oasis of prosperity, and that economic oasis is America. It is the product of a Government which has been willing to say no when no is the right answer. What I would like to do today is the following. I would like to try to address this sort of age-old question of who did it. I don't want to spend a lot of time on that because I am willing personally to give credit to lots of different people and institutions, but I want to make an important point about the role of the American people. I then want to talk about a threat that I see on the horizon, and that threat is that I see growing signs in the waning days of this session that Congress is poised, at the prodding of the President, to initiate another spending spree that could endanger the surplus, that could drive up interest rates, and that could reverse everything that we have done. So let me begin with a question. I have a chart here. It is about balancing the budget, and it really poses the questions: Who led? Who followed? And who got out of the way? My guess is, to the extent that anybody in the country is interested, there is going to be a lot of effort today for people to try to claim credit, so I thought it would be instructive to go back to 1995. In 1995, we have a new Congress, a Republican majority for the first time since 1954. We have had a dramatic election which has changed the political landscape of the country. And President Clinton, in January of 1995, submits a budget that has a deficit of approximately $200 billion. That $200 billion deficit rises for a couple of years and then basically comes back to a $200 billion level. In fact, the President in that budget that he submitted showed for the fiscal year 1998 an on- budget deficit of $274.8 billion, with an off-budget surplus with Social Security of $78 billion. So roughly a $200 billion deficit. That was the budget the President submitted in 1995. The new Republican Congress submitted a budget that sought to implement this document which was much discussed in 1995--is largely forgotten today; unfairly forgotten, in my opinion--and this document is the Contract With America: A Bold Plan to Change America. The budget that flowed from this plan--this plan principally being a plan developed by Newt Gingrich and Dick Armey in the House--produced a budget submission that, for the first time since 1969, proposed to balance the budget, in this case over a 7-year period, with a practical program to achieve that result. What actually happened? You can look at the red to see what Clinton proposed, and that is $200 billion deficits as far as you can see. You can see what the new Republican Congress proposed, and that is a proposal to gradually, consistently lower the deficit to balance the budget in the year 2002. Finally, you can see in yellow and black what actually happened. What actually happened was, with the election of a Republican majority in both Houses of Congress, interest rates started to fall immediately, equity values started to rise almost immediately, and the net result is, the American people started to believe that something might have actually changed because they went to the polls in 1994 and voted for a change. The net result is, we have a balanced budget today. The point I want to make is, if you want to know who led, the American people led. Those who should be given credit here--and I think the lion's share of the credit--are basically the people who came out and voted for a change in 1994. Elections have consequences. Elections make a difference. They rarely live up to their billing. We did reform welfare. The House did vote on every item they committed to in the Contract With America. But, as you know, the President vetoed the spending cuts and the substantial tax cut contained in the Contract With America. So Republicans advertised more than they were actually able to deliver. The point is, by changing the political environment in Washington, DC, the American people did the rest. The economy performed, and we have a balanced budget today. Who led? The American people led. Who followed? Republicans followed. And who got out of the way, and reluctantly got out of the way? Bill Clinton. Today, we are facing a new crisis. I guess it was predictable. With a surplus, the first surplus in many of our adult lives, we are seeing an intensifying debate about what to do about it. Everybody will remember the President in the State of the Union Address stood up and said: But whether the issue is tax cuts or spending, I ask all of you to meet this test: Approve only those priorities that can actually be accomplished without adding a dime to the deficit. Now, if we balance the budget for next year, it is projected that we'll then have a sizable surplus in the years that immediately follow. What should we do with this projected surplus? I have a simple . . . answer: save Social Security first. Tonight, I propose that we reserve 100 percent of the surplus . . . every penny of [it going to Social Security]. That is what the President said on January 27. Then he said it even more clearly on February 9. This was in a speech on Social Security at Georgetown University. He said: I think it should be the driving principle of this year's work in the U.S. Congress: Do not have a tax cut; do not have a spending program that deals with that surplus; save Social Security first. Interestingly enough, this clear rhetoric by President Clinton has started to change. If you follow the evolution of it, it has changed in one fundamental way, and that is, he has stopped talking about spending. All he is talking about now is tax cuts. I read from the Washington Times on September 27. The President says: The Republican tax plan drains billions of dollars from the surplus before we have done the hard work of strengthening Social Security. It is dead wrong to return a portion of the surplus to the American people via tax cuts. But for the last month, the President has not mentioned spending. The President started out in January saying, ``Don't spend it, and don't give it back in tax cuts.'' When the President stood up and said those things, since I and many others have been working on trying to develop a plan to rebuild the financial foundations of Social Security, I applauded. What has happened--and it has been a subtle change which I am sure has not been recognized by many people--is the President has gone from saying, ``Don't spend it, and don't give it back in tax cuts, save it for Social Security,'' to, ``It's dead wrong to return a portion of the surplus to the American people via tax breaks.'' What is left out is a discussion of spending. The minority leader, Senator Daschle, says: We're not opposed to tax cuts, we're just opposed to using the Social Security trust fund to pay for those tax cuts. Where is the rhetoric about using the Social Security trust fund to pay for new spending? Let me tell you why the President and his supporters have stopped talking about spending. They have stopped talking about spending because they have started spending. Under the President's proposals, those that have already been adopted and those that are pending before the Congress and those that are being dealt with day and night now in the last 2 weeks of this session, the President has proposed busting the budget by up to $20 billion. The tax cut in the House, which the President has committed to veto because it takes money away from Social Security, costs, according to the Congressional Budget Office, $6.6 billion in fiscal year 1999. The President has said, ``Don't give that $6.6 billion back to the American people; save it for Social Security.'' But the President has proposed, and Congress has either adopted or is in the process of adopting, up to $20 billion of new spending. I ask the question: If it hurts Social Security to give $6.6 billion back to working families, to repeal the marriage penalty and to get rid of the earnings test which prevents people who are retired from being able to work to supplement their income without losing their Social Security--both of those provisions I strongly support, but both those provisions I am willing to defer if the money is going to Social Security. What I don't understand is, if it is wrong to give $6.6 billion back in tax cuts, how can it be right to spend $20 billion-- over three times as much--on new Government programs? So the President's first speech was right in January. He told the whole story: ``Don't spend it. Don't give it back in tax cuts. Use it to save Social Security.'' But for the last month, the President never mentions spending anymore. You read quote after quote from the President's allies, and over and over and over again you find the same thing: They are against cutting taxes, but they never mention spending. Congressman Bonior, who is the House Democrat Whip, said in the debate on the tax cut, ``This tax bill is a raid on the Social Security trust fund. It is nothing less.'' Where is his speech about $20 billion worth of new Government programs now pending before this Congress? Are we concerned about raiding the trust fund only when the money is going back to working Americans, or do we have any concern when the money is going to spend money on the same old Government programs? Obviously, for some people it is only a problem if it is going back to the taxpayer; if Government is spending it, it is not a problem. Some might ask, how is this happening, given that we have a budget and that we have committed to a balanced budget? Well, how it is happening is a loophole in that agreement that allows the President to declare spending an emergency. And by declaring it as an emergency, it can become law in violation of the budget. I want to, in the brief time I have left--and let me ask, Mr. President, how much time do I have left?

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent that the Senate Committee on Indian Affairs be authorized to meet during the session of the Senate on Wednesday, September 30, 1998, at 9:15 a.m. to conduct a markup, on S. 1870, to amend the Indian Gaming Regulatory Act; H.R. 1805, Auburn Indian Restoration Act; and S. 2097, to encourage and facilitate the resolution of conflicts involving Indian tribes. To be followed immediately by a hearing on S. 2010, to provide for business development and trade promotion for native Americans. The hearing will be held in room 485 of the Russell Senate Office Building.

Mr. GRAMM

Mr. GRAMM. Mr. President, I came over this evening to speak briefly about H.R. 10 and where we are in our efforts to bring that important bill to the floor of the Senate. I want to explain to our colleagues the concerns I have--those concerns are shared by Senator Shelby and by others--and explain the compromise that we have proposed in the hopes that those who are for this important bill will prevail upon those who are holding back on reaching a compromise on a key issue in the bill, and who by doing so are jeopardizing enactment of this important legislation. Let me try, as briefly as I can, to lay out where we are in terms of the parliamentary situation, what the issue is that is contested in this parliamentary maneuvering, why that issue is so important to me, and what we can do, in my opinion, to resolve it. First of all, thanks to the great leadership of Senator D'Amato in the Banking Committee, we have put together a comprehensive financial modernization bill. While there are still parts, in my opinion, that need to be changed, it is a good bill. There are many provisions of the bill that I support. I congratulate Senator D'Amato. I have to say that getting this bill through the Banking Committee with as little time as is left in the legislative session and bringing together most of the disparate interests that are ultimately represented, benefited or hurt, in a bill like this is one of the great legislative achievements that I have seen. I congratulate Senator D'Amato for his effort. Unfortunately, I cannot and do not support the bill in its current form. While there are many provisions of the bill that I do support, and while I would like to see the bill become law, and while if this problem could be dealt with I could step aside and allow the bill to come to the floor of the Senate, with this problem now pending, I am opposed to the bill. Now, what is the problem? The problem has to do with a provision that sounds innocent enough. In fact, perhaps it sounds good to the ears of some. That is the so-called provision for community reinvestment. These are provisions of law that were adopted without a whole lot of debate in the late 1970s. The objective of these provisions of law was to force banks to lend money in the communities in which they were operating. The assertion was made that there were a lot of banks that were simply taking deposits and using them in other areas of the country and that, therefore, there ought to be a provision of law to require banks to meet the lending needs of their local communities. Now, the purpose of the Community Reinvestment Act, or CRA, was to establish a procedure for an evaluation of whether or not banks were making loans in the communities where they were chartered or whether banks had simply become deposit takers and were taking those deposits and making loans somewhere else or buying government bonds or whatever other activities they might be involved in. I personally don't think much of having the government require banks to use their capital in a particular way pleasing to the government or some government functionary. It sort of strikes me as crony capitalism. It is an unjustified intrusion into banking, in my opinion. However, that is not what I have been objecting to in connection with this bill, nor is this government-directed capital allocation the only problem with CRA. The aspect of CRA in practice that I wish to bring to the attention of my colleagues is that CRA has become a vehicle for fraud and extortion. In fact, as strong as it may sound, the Federal banking regulators, through their delay of approval of applications, actually strengthen the hands of those who would use this law, the CRA law, in ways that it was never proposed to be used. Let me give an example of how this works and how it is abused. Banks periodically have to be evaluated for meeting the CRA requirements. This is an evaluation done by the Federal banking regulators, at the conclusion of which they give a bank a rating. Whenever the bank wants to engage in some activity that requires approval of the Federal Reserve Board, or of the Comptroller of the Currency--like opening a new branch, merging with another bank--they have to make an application. Any person or group of persons can file a protest to that action in the name of CRA. They can do it even though the bank may have an excellent rating in its last evaluation of its community reinvestment activities. For example, when Senator Sarbanes, who is a strong proponent of this provision of law, talked about the law, he pointed out that perhaps the bank that has done the ``best job'' of meeting community reinvestment requirements was Bank of America, that they have gotten sterling ratings for lending money in the communities they serve. But when Bank of America announced a merger with NationsBank, even though Bank of America had the highest ratings of any bank in America in lending in the communities that it served, professional protesters came in and opposed the merger and demanded concessions from the bank. In fact, one of the spokesman for the protesters, in making demands on the bank that has the best CRA record of any bank in America said: We will close down their branches and ensure they fail in California. This is going to be a street fight and we are prepared to engage in it. So here is a bank, Bank of America, that has the best CRA rating of any bank in America, and yet when they apply to merge we have professional protesters come in and protest and threaten to delay their merger and ultimately strike concessions from this bank. Now, what kind of concessions are being granted? The purpose of CRA was to have lending by banks in the communities they serve. But what CRA has turned into is a vehicle for extortion, whereby banks are accused of not meeting the CRA requirements, whether they have an excellent CRA record or not, but the protest are withdrawn in exchange for agreeing with protestors to meet a series of demands, and often these agreements include cash payments, thinly disguised as donations. Banks are being required to make cash payments to the professional protester groups. They have, in the past, under duress in my opinion, agreed to donate a percentage of their profits to the very institutions that have filed protests against their actions with the Federal regulator. They have been forced, in my opinion, under duress, into agreeing to quotas and set-asides in hiring, in purchases, in promotions. So what has happened all over America is that under a provision of law that was supposed to encourage banks to lend in the communities that they serve, we now have banks being extorted and being forced to make cash payments which are little more than bribes, being forced to set up quotas and set-asides, being forced to give concessions to people who are selling goods and services, being forced to agree to hire and promote based on things other than merit. Needless to say, there is a growing concern about this in America. That concern is reflected in the Senate where we rejected a proposal to extend this CRA requirement to credit unions. We also had strong support to exempt small banks from the CRA requirement. Now we have before the Senate a bill that would try to promote a more competitive financial structure in America, a goal I very much support and have advocated for years. So let me make it clear, I am for legislation. But unfortunately, the bill has four different provisions that dramatically expand CRA powers, and in essence, give the Federal Government, for the first time, the ability to impose penalties on banks, and even to impose penalties on nonbanking subsidiaries and affiliates, as well as create new hoops and new hurdles that banks would have to jump through to get certification as financial services holding companies or to engage in certain activities in subsidiaries. What this would do is literally set up the vehicle for billions of dollars to be extorted from financial institutions in America by people who are professional protesters. You can hire groups to go to your hometown and stage a professional protest under the name of CRA, with the objective of extorting banks and forcing them to contribute, forcing them to make cash payments, and forcing them to do things that are an embarrassment in an economy that has always been the freest, most honest and most transparent economy in the world. Now, when we set out to write this new major piece of legislation, particularly since it came over to us from the House of Representatives very late in the session, it appeared, for a time, that we reached an agreement that in this legislation we would leave the CRA battle alone, that this bill would not be used as a vehicle either to expand or reform CRA. That is to say that people like Senator Shelby and myself would not use the bill to try to repeal CRA or reform it, something we very much favor; but we asked those on the other side not to use this bill to try to expand CRA. That effort apparently, broke down, and we have in the bill now four major expansions of CRA. Senator Shelby and I have said that we are going to oppose this bill as long as these provisions are in the bill, as long as the bill is not neutral with regard to CRA. Now, I want to make it clear that we are willing to work out an agreement. I want to go on record here today as to what we are willing to do. I see that my distinguished colleague, the senior Senator from Alabama, is here. Let me speak for both of us for a moment, and then I will let him speak for himself. We are willing to do either one of two things that could expedite the consideration of this bill. No. 1, we are willing to reach an agreement where the bill would be silent on community reinvestment. We would not seek to repeal it, we would not seek to reform it or restrict it; we would leave this evil where it lies. But we would require that it not be expanded. When I made this proposal in the Banking Committee, it reminded me of Lincoln's position on slavery in the 1860 Presidential campaign. His position was that, as much as he abhorred the institution of slavery, where this evil existed, we would leave it alone, but we would not allow it to be expanded. Now, with regard to CRA, that is a proposal that we have made in the past. I wanted to go on record making that proposal today, as much as I am opposed to CRA and believe that it is powerfully abused. If someone is representing the interests of banks or security companies, or insurance companies, and they are for this bill, all they have to do to get this bill before the Senate and in a position where it can become law is induce the people who want to expand CRA simply to agree with us to drop the CRA provisions from the bill. Proponents of CRA won't try to expand CRA, and we won't try to use this bill a vehicle to overturn those provisions that already exist in law. A second, alternative proposal that we have made in writing, both to the minority members on the committee and to the chairman, is a proposal that says the following: the bill would expand CRA to include being considered at the formation of the new financial institutions that will exist under this bill. In other words, just as with the formation of a bank holding company, CRA performance can be evaluated in connection with the creation of a financial services holding company. But if we are going to expand CRA in that manner, there are two reforms to CRA that we want, and I submit that neither of these reforms is unreasonable. The first reform we want is an anti-extortion provision, which says that CRA is about lending in the community you serve. Under this reform, we would have a strict prohibition against kickbacks, cash payments, quotas, and set-asides, in connection with purchases, hiring, and promotion. The idea that professional protesters, as part of withdrawing their protest and letting banks proceed with their business, would then be hired by the bank in an advisory capacity to advise them on various issues conjures up in my mind the ``protection'' racket of an earlier era, where the little merchant had the gangster come into his place of business and say, ``You know, somebody could come in here and do you some real harm, and I am willing to protect you.'' Now, some people have said--being critical of Senator Shelby and myself--well, the banks aren't complaining. Well, the plain truth is that many of the merchants who were being extorted by the gangsters were afraid to complain. But it was wrong and we did something about it. You can call up the President of any bank in America, or any head of any Government regulatory agency and, if you have their confidence, ask them off the record, ``Is CRA, as it now works, extortion?'' They are going to tell you, in all probability, that the answer is yes. So what we want is a simple anti-extortion provision that says that CRA performance can be evaluated in connection with the formation of financial services holding companies under the bill, but these institutions can't pay under-the-table bribes or kickbacks, or they can't, as part of the settlement, enter into agreements that have nothing to do with the purpose of CRA and have everything to do with extortion. The second change we want is eminently reasonable, as well. It is that if a bank is in compliance with CRA, if they have been examined for CRA and they have been given a favorable CRA rating, then they should be deemed to be in compliance with CRA on anything they want to do that requires CRA compliance until their next examination. The idea that a bank today can get an excellent CRA rating, and then they apply for a merger and CRA protesters come in and shake them down again is unconscionable to me, and it is unreasonable. I can't, for the life of me, see how anybody could be against an anti-extortion provision, and I can't see how anybody could be opposed to a provision that says if you have a passing rating on CRA when you apply for a merger or an acquisition, you are deemed to be in compliance until you are reviewed again and get another rating. Senator Shelby and I have offered to do one of two things--either drop all the CRA requirements and go on with this bill, or expand CRA as we have described, but together with a simple anti-extortion provision and a simple provision that says if you are in compliance, you are in compliance. Now, in the absence of an agreement on these issues, Senator Shelby, I, and others intend to resist. We are simply a small number of Members, and I understand that there are many powerful interests around America who have interest in this bill. I say that Senator Shelby, I, and others have a principle in this bill. Our principle is that we are against extortion, and we are not going to be parties to expanding it. We may not have the votes today to get rid of it. We may not have the votes to purge this evil from the American financial system. But I think under the rules of the Senate we do have the power--I hope we do--to prevent it from being expanded. I just want to say to those who have an interest in this bill, if you want this bill passed, urge those who are on the other side of this issue to look at our reasonable proposal. The rules of the Senate were established to protect the rights of the minority. They were established so that if a few Members felt strongly about something and they were willing to stand up for their principles and beliefs, it was hard to run over them. It is like Washington said when Jefferson came back from France, where he had been Foreign Minister to France while the Constitution had been written. Jefferson asked Washington what the Senate was for. His argument was, if you have a House of Representatives and that is the voice of the people, what do you need a Senate for? Washington, who, like Jefferson, was a southerner, was accustomed, when he was drinking tea, to sometimes pouring it into the saucer and letting it cool for a moment and then pouring it back into the cup and drinking it. So he said to Jefferson that the House-- which has passed this financial services bill, even if only by one vote--will be like this cup and it will catch the heat and the fire of the moment; but the Senate will be the saucer in which we will allow the passions of the moment to cool. That is what role Senator Shelby and I intend to fulfill as we exercise our rights. It may be that we can be run over and this bill can be passed; maybe not. I believe that those who want this bill would be well advised to urge Senator Sarbanes and Senator Moseley-Braun, who are so determined to expand CRA--I think it would be advisable to ask them whether that is worth killing this bill over. Can't you just take a time-out on CRA and leave it out of the bill? Or, if you can't do that, why not agree to a compromise whereby those who oppose CRA are willing to let you expand it, but you have to give them an antifraud provision, and you have to give them reasonable enforcement, so that if you are complying with the law, you are considered to be complying with the law? I hope people who are for this bill with their great economic interest will call on those who are on the verge of killing it in the name of CRA to be reasonable and let us move ahead. I say today that unless there be any confusion from this point on, as one single Member of the Senate, I intend to do everything in my power to impede this bill unless these problems are resolved. I intend to do everything in my power to use all the rules of the Senate, no matter how long it takes, no matter how difficult it may be. It may be that Senator Shelby and I, and others, can be run over, but it may be that the rules of the Senate are sufficiently strong that with our determined resistance this bill will die unless some accommodation is given on this issue. I urge those on the other side of this issue--I am not talking about the other side of this body. I am talking about the people who have invested millions, billions, trillions in banks, insurance companies, securities companies who know in their heart that we are right about community reinvestment--I urge them to call on those who are trying to use this bill as a vehicle to expand community reinvestment not to kill this bill over this issue. I yield the floor. Mr. SHELBY addressed the Chair.

Mr. GRAMM

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

Mr. GRAMM

Mr. GRAMM. Mr. President, let me reiterate, in fact, when the Senator from Alaska finished his speech, Senator Byrd and I were having a conversation. I had thought as I left my office that he had spoken. I assumed that he was simply here listening to the Senator from Alaska. Again, I reiterate, if the Senator from West Virginia had come over to speak, he was on the floor before I was, and I believe he should be recognized.

Mr. GRAMM. Mr. President, I ask unanimous consent to proceed as in morning business for 25 minutes.

Mr. GRAMM. Is the Senator from West Virginia waiting to speak? I will be glad to withhold and let him speak and then I will speak.

Mr. GRAMM. I will be happy to.

Mr. GRAMM. Mr. President, this reminds me of the time when I was on the elevator for the first time with Senator Thurmond, and Senator Thurmond insisted that I get off the elevator before he did. I determined when I was on the elevator with Senator Thurmond again that I would not get off the elevator before Senator Thurmond did. But I was wrong. I stood there for almost 2 minutes insisting that Senator Thurmond get off the elevator before I did. In the end, Senator Thurmond had more patience. I got off the elevator first.

Mr. GRAMM

Mr. GRAMM. Mr. President, our dear colleague from Massachusetts came over today and responded to a speech I gave yesterday. As he always does--and I think it is one of the things we admire about him--he spoke with great passion because I think he clearly is one of our Members who cares deeply about these issues. Whether he is right or whether he is wrong, I think we all respect that in one of our fellow Members. What I would like to try to do is to briefly respond and make the key points that I made yesterday, given that so much reference has been made to the speech of yesterday, and try to make all these points in such a way as to deviate from my background as a former schoolteacher and be brief so that Senator Byrd can give his speech and we can both go home for the weekend. Yesterday, I made the point, which I am continually struck by, that 5 years ago in the Senate, we were debating a proposal to have the Government take over and run the health care system. A substantial majority of the Members of the Senate at the beginning of that debate, following the lead of Senator Kennedy and President Clinton, had decided that the problem we had in American health care was access; that 40 million Americans didn't have health insurance and that a price we should be willing to pay to solve that access problem was to deny people the freedom to choose their health care provider and force every American into a health care purchasing cooperative or health care purchasing collective which would be one giant HMO run by the Government. I have on this desk--and I want to be careful because one of these bills fell on my foot over there and I want to be sure all of them don't fall--but I have here those bills from 5 years ago. Each one of these bills denied the American people freedom to choose their health care provider, forced them into a Government-run collective in order to deal with the problem of access. Each one of these bills, this massive pile of bills--Kennedy I, Kennedy II; Moynihan I, Moynihan II; Mitchell I, Mitchell II, Mitchell III and Mitchell IV--each of these bills was about denying Americans the freedom to choose their doctor, choose their health care, choose their hospital, and we had a big debate about it 5 years ago. The argument from the sponsors of these bills was that the denial of this freedom was a small price to pay in order to guarantee access to health care. I had an alternative then. It was a very modest bill. Here is a copy. I want people to see what freedom looks like. It is simple. It was a small bill, as these kind of bills go. Basically, what it did was deal with the access problem by helping people who didn't have health insurance to get it without denying freedom to everybody else. It established risk pools at the State level where we would help people with preexisting conditions get health insurance. But the point is, the same people who are saying today that we should be willing to drive up costs and deny access to people in the name of guaranteeing freedom are the same people who 5 years ago said, ``Let's deny freedom in the name of access.'' Now, 5 years later, after we debated the original Kennedy-Clinton bill--and I am very proud to have played a small role in seeing that effort defeated--5 years later, now we have the same people saying, ``The problem is not access--don't worry that by driving up costs millions of Americans might lose their health coverage--the problem now is HMOs.'' Five years ago, the same people were saying, ``HMOs are so wonderful that we ought to have one HMO run by the Government, and it will be great for everybody.'' Now they say HMOs are evil and what we have to do is, we have to regulate HMOs. What I would like to do is simply explain why the new approach is not the approach that I believe we should follow. Let me first define the real problem with HMOs, then what I believe the solution is. And then I want to say a little bit about the bill, and I will be finished. Fifteen years ago, almost every American had a low deductible health policy funded by either Medicaid, Medicare, or by themselves and their employer through private health insurance. These were health insurance policies where the person who bought health care, using this coverage, paid relatively little of the cost. Fifteen years ago, the average American who went to the hospital was responsible personally for paying only about 5 percent of the bill. And this was a wonderful system. It produced the greatest quality health care the world has ever known. It created wonderful new technology, but it had one terrible problem, and that is, we could not afford it. And it is easy to see why we could not afford it. If you can imagine--imagine you had grocery insurance that, when you went to the grocery store, paid 95 percent of the cost of the food you put in your basket. If we had grocery insurance like we have health insurance, when we went to the grocery store, we would end up eating differently, and so would our dog. The grocery stores we know today would be totally different. You would have 20 or 30 times as many people working at the grocery store. You would have all kinds of precooked foods. You would have all kinds of specialty items. And grocery costs would be exploding. We would all be cussing the cost of grocery insurance. So it is not surprising that our old fee-for-service medical system, with low deductible insurance where the patient did not care about controlling costs, the physician did not care about controlling costs, and so nobody controlled costs--it is not surprising that that system did not work. The Government talked about it for 15 years, but we never did anything about it. There are a lot of things we could have done. We could have let people have tax deductibility to buy their own health insurance, so that if I did not like the health insurance provided by my employer, I could take the employers contribution and with some of my own money, on a tax-deductible basis, choose and buy my own health insurance. We did not do that, have not done it to this day. There are other things we could have done, but we did not do them either. The private sector started to respond to the problem, and the net result is that we now have over 100 million people who are in HMOs. HMOs have advantages and disadvantages like anything else in life, with any choice you make. If you buy a Cadillac, the advantage is, you have a good car; the disadvantage is, it costs a lot of money. If you buy a Chevrolet, the advantage is that it does not cost as much as a Cadillac, but generally it is not as good or as fancy. And we should not be surprised that in life, even with the Government, we face these kinds of tradeoffs. We have over 100 million people in HMOs. The advantage of HMOs is that they are more efficient, they do control costs, they have brought the medical price index down from twice the Consumer Price Index--twice the growth as goods in general--down to the same growth as goods in general. Fifteen years ago, we would not have believed that it was possible, but it has happened. But there is a disadvantage. And the disadvantage is, when you enter into a contract with an HMO, you are bound by the terms of the contract. It describes what they will cover and what they will not do, and the HMO exercises some control over the amount of health care you consume and from whom you consume it. And everyone knows that when they enter into these contracts. This creates a problem, which Senator Kennedy and others have put their finger on, and which is a real problem. The problem is that you have, in these HMOs, gatekeepers whose job it is to try to see that you get good enough health care to meet your needs, so that next year you renew with the HMO, but they also attempt to prevent the consumption of health care that you do not need because such usage drives up costs. The problem is, they are deciding--not you. So I have likened the problem to, you go to the doctor, you go into the examining room, and instead of being alone with your doctor, you have--not literally--but figuratively, you have a gatekeeper in the examining room with you. And you want him out. You want to be in the examining room with your doctor. You do not want somebody there, who is not a doctor, second-guessing your doctor. That is the problem. On that point, Senator Kennedy and I are in agreement. The question is, How do you fix it? How do you get a Cadillac at Chevrolet prices? Well, nobody has, throughout 5,000 years of recorded history, figured out how to do that. Maybe we will. But if we do, we will be the first. But the point I made yesterday was that in reality the solution that is being proposed in the Kennedy bill can be depicted as I've done here, using a Greek invention, the stethoscope. The problem basically is that here you are with your heart right on the other side of this stethoscope, and what you want is, you want your doctor's ears at the other end trying to be sure that your heart is working right and fixing it if it is not. Senator Kennedy's complaint is that in a very real sense the HMO has this gatekeeper who is listening in on the stethoscope. You would like to get him out of the examining room. But in an incredible paradox, the bill that Senator Kennedy presents not only does not get the HMO gatekeeper out of the examining room but it brings two other people in. It lets the Government hire a bureaucrat, who comes in and he gets his ears to the stethoscope so that he can regulate your HMO and your doctor, and then, under the Kennedy bill, you can also hire a lawyer who can come and listen so that he can join the bureaucrat in listening to your heart with your doctor and with the HMO so that he can sue the HMO and sue the doctor. The point I made yesterday was that, people are already unhappy about having the HMO gatekeeper in the examining room with them. And we are certainly not going to make them happier by bringing in a Government bureaucrat, who we choose, and by letting them hire a lawyer. What they want, literally and figuratively, is to be alone with their doctor in their examining room. What they want is a system where their doctor is using this stethoscope; their heart is at this end and their doctor's ears are at this end, and nobody else is involved. That is the ideal that people want. Now, how can we get it? I believe the best way to get it is to make a dramatic change in the system. Therefore, I and others have proposed what we call medical savings accounts. Here in essence is how it works: Say I currently have a Blue Cross/Blue Shield policy, standard deduction, and it costs about $4,000 a year. It has very low deductibles. If that policy had a $3,000 high deductible, I could buy it for about $2,000. What the bill that I have introduced with Senator Nickles and others would do is give people the choice. It doesn't make anybody do it. Nobody is forced under our bill to do anything. They can stay in the HMO they are in if they are happy. We set out reasonable things to do to try to deal with the problems that Senator Kennedy and others have raised, without driving up costs and forcing young working couples out of the health care market and out of their HMO because they can't afford it. In addition to that, we do something more important; that is, we give people the right to choose a medical savings account. Here is how it would work: I am a young man and I am married to a young woman. We have two little children and we are both working hard and we both have modest incomes. It lets my employer join with me in buying the high deductible policy I've described, with a $3,000 deductible. Then we would take the $2,000 we saved--we bought the high deductible policy for roughly $2,000; we were paying $4,000 for Blue Cross/Blue Shield-- and we put the $2,000 into a medical savings account out of which I can pay deductibles. At the end of the year, if I don't spend the money on medicine, I get to keep it. I can use it to get braces for my children or I can get tutors for them or save it and send them to Texas A&M, the University of West Virginia, or the University of Alabama, or wherever they want to go. Now, that is how this system is different because 90 percent of American families don't spend $3,000 on medicine. If I go to the doctor and he says, ``Phil, you have a headache. I think it is just a headache. Take two aspirin. If it doesn't go away, come back in 2 days and we will give you a brain scan which costs $1,000, or we can give you the brain scan right now.'' Currently, I might ask, well, does my insurance cover the brain scan? If it does, it is interesting, you get to look at it, I may say let's do the brain scan right now. But if I would get to keep that money for my children, and I am a truck driver, my wife is a waitress, I will say, you know, Doc, I will take those two aspirin. If it doesn't go away I will come back. One of the benefits of the medical savings account is that it provides incentives to be cost conscious. But that is not the most important thing. The most important element is it allows me freedom to choose. I showed this chart yesterday and I will show it several times in this debate because it is so important to me and I think to the people I represent. I and my staff did a little experiment. We took one column of doctors on one page selected at random from the Yellow Pages. We called up every one of these doctors and we took the most popular, most-participated-in HMO in our region, which is Kaiser HMO. We took the largest participating PPO, preferred provider option, which is Blue Cross/Blue Shield preferred provider. Then we called everybody on this list and said, ``Do you take Kaiser HMO?'' In other words, we called William D. Goldman, pediatric and adolescent medicine, and we said, ``Do you take Kaiser HMO? Do you take Blue Cross, PPO?'' When we did this, 10 of the physicians listed on page 1017, in the left-hand column, took Kaiser payments. If I were a member of Kaiser, I could have gone to 10 of these physicians. If I were a member of Blue Cross/Blue Shield preferred provider, 17 of them would have taken me. But if I had a medical savings account, and even though the current law doesn't really permit a full-blown system to work, there are several options. One is Golden Rule Insurance in Indiana. They give you the option of a medical savings account checking account. Out of that checking account you pay your deductibles, and above that level they pay for the costs. We have other MSAs that use Mellon Bank with MasterCard. This is your medical savings account. It keeps the record for you as to what you are spending the money on. And then American Health Value Medical Savings Account uses Visa. Let's just assume that you have a baby and your baby has a fever of 104 and you want to go see William D. Goldman who is in pediatrics and adolescent medicine. You call him. If you are with Kaiser--he may be one of the 10 people on this list that takes it, but he may not be; if you are with Blue Cross PPO you call up, he may be one of the 17, he may not be; but if you have a medical savings account, which I want people to be allowed to choose, you call up and you don't say do you participate in Kaiser HMO? You don't say do you participate in Blue Cross PPO? You simply say, Do you take a check? Or, Do you take MasterCard? Or, Do you take Visa? The point being, every single person who is a physician on page 1017 in column 1 of the Yellow Pages takes a check, MasterCard and Visa. If my baby is sick I don't have to go to some gatekeeper to get to see a specialist. All I do is take my Visa and go. I make the decision. The medical savings account sets me free. It makes me the decision maker. It gives me the freedom to choose. I believe that is a better way. Finally, we have had a lot of discussion about trying to get started on this debate. We have 10 days left in the session. We have a lot of things left to do in this session. We have passed to completion, I think, only one appropriations bill which has been signed into law. We know at some point we have to deal with all of those legislative problems. We don't know how they will all work out. It will take lots of time and lots of long nights. Senator Kennedy and others have a proposal that they believe is the answer to our health care system. Senator Nickles, I and others have a proposal that we think should be part of the health care system. Granted, the normal procedure of the Senate would be to bring a bill to the floor, have unlimited debate, and unlimited amendments. We could do that, but I think everybody here knows with 10 days left we will not pass a bill if we do that. So a proposal has been made to let Senator Kennedy and others write their bill however they want to write it, make whatever changes they want to make in it, and we will agree to set a time to vote on it--as the Presiding Officer knows, and as many people who follow our debate know, we often operate under what is known as unanimous consent where we agree to a more truncated procedure. What I have proposed is the following: Let those who have an idea write their bill exactly as they want it written. In the case of Senator Kennedy, I don't want to change his bill before we vote on it. What often happens in that process is we get something that nobody wants and that doesn't work. The proposal I have made is that we enter into unanimous consent that Senator Kennedy and others can present their proposal and we will vote on it, up or down, without amendment, however they write it. Then Senator Nickles, I, and others will present our proposal. If their proposal gets 51 votes, then it will be adopted by the Senate. If our proposal gets 51 votes, it will be adopted by the Senate. Now, it is true that that is not the normal way we do business. But with 10 days left, if we really want to pass a health care bill, that is the option we are down to. I believe we have written a good bill. I am proud of our bill. I know Senator Kennedy is proud of his bill, and I am sure he feels at least as passionately about his as I do about mine. But the point is, we are never going to get to choose his bill or choose the bill I and others have worked on, unless we work out some kind of accommodation, because we only have 10 days left in the session. So we are down to having to make a decision. Do we want to take this into the election and campaign on it and then come back, which is perfectly legitimate? I am not criticizing anybody for wanting to do that. But if we do, then I think we would continue the standoff and then this would be an election year issue and we would decide next year. On the other hand, if we actually want to pass a bill this year-- and the House has passed a bill--the only way I can see that we can do it is with an agreement where we simply present the bills and let the Senate vote up or down on the bills. I don't have any desire to amend Senator Kennedy's bill. I want him to have his best shot, and then we would have ours. I thank the Senator from West Virginia for withholding and allowing me to speak. I yield the floor. Mr. BYRD addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Mr. President, about an hour ago, our dear friend, Senator Kennedy from Massachusetts, came on the floor to talk about health care and, like Goliath of old, challenged us to respond to his cry to allow him to dramatically change our health care system. Since it appears that there is a break in the legislative action,---I see no one standing around waiting to speak or amend--I thought I would make Senator Kennedy's day, so-to-speak, by coming over and responding to him. Mr. President, there are several points I want to make and I will try not to belabor any of them. First of all, there is something to be said about having an institutional memory. I would like to take our colleagues, at least those who are now eager to remake our health care system in their ideal image, down memory lane, and remind them that it was only in 1993 that President Clinton and Senator Kennedy told us in a debate, which lasted for 18 months in the Senate, that they knew how to solve our health care problem. Our health care problem, in 1993, according to President Clinton and Senator Kennedy, was an access problem, that 40 million Americans did not have health insurance, and their solution was to have the Government take over and run the health care system and create one giant HMO that I think they called a ``health care purchasing collective.'' All Americans were going to be forced into one giant Government-run HMO, and the benefit we were going to get from it was that everyone would be covered. The cost of it, obviously, was that we would lose our right to choose. Now, in that program, no one had the right to sue the Government based on poor medical treatment. They had the right that you have under current law to sue an HMO if they violate their contract. But we were told in 1993 that the problem was access to health care, and that the right to choose your own doctor, the right to choose your own hospital, and the right to sue was not important. What was important--in the words of Senator Kennedy and the President, which still ring in our ears --was ``access.'' Now, here we are 5 years later and we are now being told that the problem is not access, the problem is not that 40 million Americans are having trouble paying for health insurance, and that in fact we should take action to make millions more unable to pay for their health insurance; we are now being told that the problem is that HMOs limit choice. Now, Mr. President, I can't help but be struck by the fact that the same people who, 5 years ago, said the problem is access and we should sacrifice choice by putting everybody into one giant Government-run HMO called a ``health care collective,'' and that we should limit the ability of people to sue in the name of access--those same people are now saying that the problem is that HMOs limit choice. Specifically, they are saying the problem is that, under current law, you can't sue an HMO. The only point I want to make--and I think it is a very important point--is that, 5 years ago, the President and Senator Kennedy loved HMOs. They loved them so much they wanted to put every American into one, regardless of their circumstances, and not allow anyone, under punishment of law, to buy health care outside the system. They wanted to have everyone in one giant Government health care HMO called a ``health care collective.'' Now, they don't love HMOs anymore. Then they cared about people having health insurance, and now they don't care about people having health insurance. In fact, under their bill, even under the most conservative estimates, hundreds of thousands, millions of families will lose health insurance. Suddenly, they don't like HMOs, and they want to protect people from the very same health care system that they wanted to impose on the Nation on a mandatory basis just 5 years ago. Now, what is their real objective? We all know their real objective because, one thing about them--and they are not trying to hide it--is that they really believe the Government ought to run the health care system. We know what their ideal plan looked like; we had it 5 years ago. By the way, it looked very menacing. We had about 70 Members of the Senate who were cosponsoring these Government-run health care collectives. It looked like a 20-foot tall giant until, finally, a few Members of the Senate went up and stuck a pin in its big belly and it deflated. People realized that when their mama got sick, she was going to have to talk to a bureaucrat instead of a doctor, so we killed the Kennedy-Clinton health care plan. Well, they are back. Since we are not going to let them run the health care system, they have decided they are going to tell the private sector how to run it. Let me address the problems with HMOs. Let me say that, unlike the President and Senator Kennedy, I never was in love with their idea of an HMO. I was opposed to forcing people, on a mandatory basis, to go to a Government-run HMO. I want people to have choices. Now, Senator Kennedy says these HMOs are bad, but he doesn't want to give people the power to fire them, which I want to do. He wants to give people the ability to sue them. I want to give people the ability to have real choices. That is what our bill is about. Let me try to define the problem. I want to define it generically, and then I want to talk about the problem as people see it. Then I want to talk about Senator Kennedy's solution and then about the Republican solution. Here is the real problem. HMOs have grown like wildfire because of exploding medical costs. Under our old medical system, which we all loved and which was wonderful, except for one thing--nobody could afford it--with fee-for-service medicine and low-deductible health insurance policies, we all bought health care where somebody else paid for it. Under our old health care system, if you went to the hospital, somebody else paid 95 percent of your bill. Sometimes that was private health insurance; sometimes it was Medicare; sometimes it was Medicaid; sometimes it was indigent care. But the bottom line was, under our old fee-for-service health care system where Americans with Medicaid, Medicare, and private health insurance had a third party paying, when you went to the hospital somebody else paid 95 percent of your costs. Can you imagine if we had grocery insurance, so that when we went to the grocery store 95 percent of everything we put in our basket was paid for by our grocery insurance? We would all eat differently, and so would our dogs. Grocery stores as we know them wouldn't exist. They would have 20 times as many people working at the supermarket as they have now. They would have all kinds of luxury foods and prepared foods. And we would all love the grocery store, and we would all hate our grocery insurance bills. That is the situation we were in. Government, as usual, did nothing about it. In fact, Government policy made all those problems worse. Then the private sector started to move to solve the problem. And one of the innovations was the development of the HMO. People have gone into HMOs, through their jobs, by the millions because they are cheaper, because they exercise more judgment in spending and because they make health care more affordable. But there is a problem. The problem is that the way the HMOs control cost is by exerting influence over the health care you consume. Here is the problem with our national psyche. The problem is, we all want the benefits of cost control, but we don't want to bear the burden of having the cost control imposed on us and our family. We want the lower rates of the HMOs. We want to make the HMOs give us whatever we want, but we don't want them to charge us more to pay for it. In other words, as usual, we want a free lunch. We want something for nothing. But that can never be, because one of the things God decided a long time ago is, you can't get something for nothing. If you drive up costs, you have to pay for it ultimately. Here is Senator Kennedy's definition of the problem, and here is his solution. His definition of the problem, which millions of Americans identify with--and so do I--is when you go to see your doctor and you are a member of an HMO, when you go into the examining room, the HMO has its gatekeeper in the examining room, in essence, making decisions with your doctor as to what you need. We don't want somebody else in our examining room. When we go into the examining room with the doctor, we want to be alone with the doctor. The problem is, with HMOs, one of the prices we pay for lower cost is having a gatekeeper involved in our health care, which almost literally means having a third person in the examining room. What do Americans want, and what does Senator Kennedy want? Americans want to get the gatekeeper out of the examining room. They want to be alone with their doctors. What Senator Kennedy says is, ``OK, you do not like having a gatekeeper in your examining room. So what we will do is this.'' If you will adopt Senator Kennedy's bill, he will bring into the examining room a Government bureaucrat, whom he will choose, who will be there to regulate the gatekeeper and your doctor. And then you will get to hire with your money a lawyer, who can be there to watch the doctor and the gatekeeper and to be there to sue them on your behalf. I thought it would be instructive to take a simple medical device, the stethoscope, invented by the ancient Greeks and used to this day to listen to people's hearts, and demonstrate graphically what Kennedy- Care looks like. What Kennedy-Care looks like is this stethoscope. When you go into the examining room, under Senator Kennedy's program, you are at this end--this part right here where they put that right up against your heart. So that is where you are. Then your doctor has one set of earpieces so that he can listen to your heart and determine if something is wrong with you. Then the problem everybody is concerned about is, the HMO has a gatekeeper there with his stethoscope next to your heart listening to your beat, second-guessing your doctor. What you would like to do is cut this part of the stethoscope off. That is what every American who is a member of an HMO would like. But what does Senator Kennedy do? He adds another stethoscope for the Government bureaucrat that he is going to choose. So the Government bureaucrat is going to be listening to your heartbeat, second-guessing the HMO, and second-guessing your doctor, and trying to tell them both what to do. In addition, Senator Kennedy lets you hire a lawyer to come, and gives him another stethoscope. So here you are. What you wanted was to be alone with your doctor. But now, under the Kennedy plan, you are in the examining room not only with your doctor and the HMO gatekeeper, but also with a bureaucrat chosen by Senator Kennedy, and a lawyer, whom you pay for. So there you are, and there are four people in the examining room with you, three of whom you don't want. It is Senator Kennedy's solution to the problem. You wanted to get rid of the gatekeeper. But he keeps the gatekeeper, because he doesn't give you the ability to fire the HMO, but he sends his bureaucrats in and then takes your money to hire you a lawyer. Suddenly, you have four people in the examining room with you and you are three times as unhappy as you were before. That is not the solution that most Americans have in mind. What is the solution they have in mind? The solution they have in mind is what I call ``medical savings account care.'' Under our program, which is embodied in the Republican alternative, this is what the stethoscope looks like--again, exactly like the Greeks designed it. Here you are. The doctor is listening to your heart. Here is the doctor. But you have gotten rid of the HMO gatekeeper. You didn't have to hire Senator Kennedy's bureaucrat. You didn't have to hire Senator Kennedy's lawyer. What you have is simply you and your doctor. That is what people want. How do we do it? I conducted an interesting experiment the other day and I want to show you a chart and share the results with you today. I took a page of medical providers out of the Yellow Pages. I called up, and asked them if they were part of the largest HMO in Washington, Kaiser HMO. Then I asked if they were part of the largest preferred provider organization. That is Blue Cross, PPO. Then I asked them about the Republican solution, which is based on medical savings accounts, and I will explain more about them in a minute. The Republican bill--I want to congratulate our leader, Don Nickles, and the members of our task force who put together an excellent bill that deals with the legitimate concerns that Americans have about HMOs. But we do more on that to try to deal with HMO abuses, because we give people the power to fire their HMO--something Senator Kennedy does not do. He gives you the power to have a Government bureaucrat oversee your HMO, gives you the power to have a lawyer to sue them, but he doesn't give you the power to fire them. Now, in addition to dealing with the legitimate concerns about HMOs, we did something so much better, and that is we brought freedom into the Patients' Bill of Rights. What are the Bill of Rights about if they are not about the right to choose. So we create real medical savings accounts, and here is how they work. Let's say I have two children, which I do, and I have a wife. And I am grateful for the children and my wife. I buy the standard option Blue Cross/Blue Shield, and it costs my employer about $4,000 a year. Now, I could buy that same coverage, if it had a $3,000 high deductible, for just $2,000 a year. That is because the first $2,000 of medical costs are prepaid medical expenses rather than insurance. So under our bill, people would have the right--no one would make you do it, but you would have the right to choose a medical savings account. What it would mean, especially for young couples with a moderate income, is that you could at a low cost buy a high-deductible policy to protect your family in case something really bad happened and yet you could still afford it. The way it would work is your company, which is currently buying you a $4,000 Blue Cross/Blue Shield standard option, low-deductible policy, would instead buy for $2,000 the high-deductible plan and then deposit the $2,000 it saves into your medical savings account. With that $2,000, and the $1,000 you would normally spend on both health premiums and out of pocket medical expenses, your medical savings account would have $3,000 to pay for all your health care expenses up to $3,000. Any further medical expenses above $3,000 in a year would be covered by your high-deductible insurance. Now, there are two reasons why this is important. One, at the end of the year, if you had not spent that $3,000 in your medical savings account on medicine, it is your money. If you go to the doctor and you say, I have a terrible headache, and the doctor looks at you, examines you, and he says, look, you probably have a headache and you have two options: One, I can give you two aspirins and it will probably go away, or I can give you a brain scan that will cost $1,000. If you take the two aspirins and it doesn't go away, you can come back tomorrow and I can give you the brain scan. With the medical savings account, since you get to keep that $1,000 if you don't spend it on a brain scan, you will see more rational economic decisions. You will probably ask the doctor what he really thinks, and in all probability, you re going to take the two aspirins and come back tomorrow if the headache is not gone. On the other hand, under Senator Kennedy's plan, if you have low- deductible insurance, you will say, well, does this brain scan hurt? And they will say, no, it doesn't hurt at all. In fact, it is very interesting. You can actually watch it. You might say, great, let's have the brain scan. The point is, if I am spending my money I behave differently than if I am spending someone else's money. But under the medical savings account, at the end of the year, if all I had was a headache, I am $1,000 better off in my pocket--to send my children to Texas A&M or to go on a vacation or buy a refrigerator--if I went with the two aspirins and I didn't need the brain scan. But the most important thing about our medical savings accounts is I get to choose. Now, let me get back to my experiment. I took a page out of the Yellow Pages. In my Yellow Pages test on the Kennedy health care plan and the Republican health care plan, I decided to give him the benefit of the doubt and assumed that everyone was in the biggest HMO in Washington. Many people won't be. Or let's say everyone went with the most popular preferred provider organization, the Blue Cross/Blue Shield PPO. So what we did was, starting with Ginsberg, Susan M. Ginsberg, M.D., at 106 Irving Street, NW, 723-4015, we went through and called each of these physicians and we asked them three questions: One, Do you participate in the Kaiser HMO? Ten of them did. So if I were a member of the Kaiser HMO, I could see one of their doctors. If I could get to see somebody under the Kennedy plan, I would even have a Government bureaucrat in the examining room with me sharing my intimate experiences, along with a gatekeeper at Kaiser, but only 10 doctors of the 28 on this list would see me under the Kaiser HMO plan. Now, if I had the Blue Cross PPO, 17 physicians that are listed on page 1017 of the Yellow Pages, 17 of the 28 physicians would take Blue Cross/Blue Shield. But then we asked them another question. We asked these physicians if they would take a check from a medical savings account. Golden Rule is a just one company that offers these MSA checking accounts. When you go to the doctor, you simply pay with your MSA check. Then you have, through Mellon Bank with MasterCard, a MasterCard medical savings account. The way it works is you don't call up any gatekeeper. You don't say, do you take my preferred provider? Or, do you participate in this HMO? You simply call up and say, do you take MasterCard? And through the medical savings account at Mellon Bank you can get a MasterCard for participating in the program. And then there is Health Value, which has a medical savings account through Visa. I performed an additional experiment. After we had asked them, Do you take Kaiser HMO, and 10 of the 28 did; Do you take Blue Cross preferred provider, and 17 of the 28 did. Then we said, Do you take Visa? Every one of the 28 took Visa. Do you take MasterCard? Every one of them took MasterCard. If I have identification, do you take a check? Every one of them took a check. Now, there is the power of real freedom of choice. The freedom of choice is you do not have to go to an HMO. You do not have to go to some preferred provider. You do not have to appeal to an outside appeals board. You do not have to file a lawsuit. You do not have to have a Government bureaucrat. All you have to do is pick up the phone and call the doctor or the specialist you want and say, ``Dr. Goldbaum, do you take MasterCard?'' If he takes MasterCard, you don't care whether he is on somebody's preferred provider list or whether he is a referral specialist. He is your primary care physician, if he takes MasterCard. What our proposal does is set people free to choose. Senator Kennedy and the President hate medical savings accounts. They respond to medical savings accounts the way vampires react to a cross. And the reason is simply this: They understand that medical savings accounts empower people. And once somebody has a medical savings account, they do not want a Government bureaucrat. They do not need a lawyer. And if they need one, they can go into court and hire the lawyer. They do not have to fool around with gatekeepers. They just simply pick up the phone and dial William D. Goldman, Pediatrics-Adolescent Medicine. He could be a referral doctor for Kaiser or Blue Cross/Blue Shield. But they call up Dr. Goldman, and they have one simple question for Dr. Goldman: ``Dr. Goldman, do you take Visa?'' If Dr. Goldman takes Visa, they are in. We set them free to choose. Now, Senator Kennedy and the President understand that if we ever have medical savings accounts that will work, their idea of having the Government taking over and running the health care system of America is dead. It will never be brought back to life. So they do not like this provision in our bill. But the wonderful thing about it is we do not make people buy medical savings accounts. Many people love HMOs. My mother-in-law participates in an HMO and loves it, and she ought to have the right to choose it. Many people love preferred providers. All we do is make it possible for people to have real choice so if their baby is sick and they want to get in to see a specialist, if they want to see William D. Goldman, pediatrics and adolescent medicine, they don't go to a gatekeeper; they just pick up the phone and say do you take MasterCard? He does? They are in. Senator Kennedy tells us that he wants to vote on health care. I find it very interesting that we have offered him the ability to present to the Senate his plan, change it any way he wants to change it--put two Federal bureaucrats in every examining room, hire five lawyers, whatever works for him--develop the best system he can develop for America, we will not try to change it. We will not try to be mischievous and offer an amendment to it. He tells us how to fix the health care system. And then the Republican Task Force, of which I am a proud member, will present our alternative and what will happen is we will let people choose. Senator Kennedy, knowing we are in session for 10 more days--I ask unanimous consent for 5 additional minutes.

Mr. GRAMM. Senator Kennedy, knowing we are in session for only 10 more days, wants to do all these amendments. He wants to amend our proposal. We do not want to amend his proposal. All we want to do is give people a choice. We think we have a better way. He, obviously, thinks highly of his plan. It is much closer to the world as he sees it. What we are saying is, if he really wants to vote on his plan, we can have a vote this afternoon. But what we want to do, instead of getting into all these games with only 10 days left where we try to amend each other's plan and mess it up and end up with something nobody in the world wants, what we have offered, and very generously offered as the majority--I don't ever remember it happening when we were the minority on a major bill--we have offered to Senator Kennedy, you take your health care plan and you write it exactly as you want it and you offer it and we will vote on it. And if you get 50 votes, you can get the Vice President to come over, break the tie, and you are in. You can put a Government bureaucrat in every examining room, you can have people hire lawyers, you can do it however you want to do it. But we think we have a better way. What we would like to say to Senator Kennedy is, we will give you a vote on your plan, and then you give us a vote on our plan. If we win and you do not, then we go forward with our bill. If you win and we don't, we go forward with your bill. But I am afraid there is a growing suspicion--I would never say this because I try to never be suspicious of people's motives--but there are some people who believe all of this discussion about health care is political. There are some people who believe that Senator Kennedy does not really want his bill voted on because he knows it is not going to pass. Some suspect he knows some of the Democrats are not going to vote for it. And I believe he suspects our proposal would pass. But the point is, if we really want to vote on health care with just 10 days left, let's stop all the games; let's let the Democrats sit down in a room and write the best plan they can write and we will not try to amend it. We will not try to stall it. We will let them bring it forward, tell us why it is the right idea, and we will vote up or down. Then we would like to have the same right on our plan, and if we are successful then we can go to the House very quickly, work out our differences, and let the bill go to the President. If we really want to do something about health care, that is what we need to do. Finally, before my time runs out, I want to simply say that I believe that a lot of work has gone into this issue. I will congratulate Senator Kennedy and others for raising the issue. I think we have a better way, as Republicans. I think our bill is better. I think it gives more choice. I congratulate Doug Badger, who has been the staff director who, through some 25 meetings, has helped us put together, with Senator Nickles' leadership, what I believe is an excellent program. I would be happy for our program to become law. But we have 10 legislative days left. If we want to have any opportunity to do something about health care, there is only one way: the Democrats put together their best bill. If that is Senator Kennedy's bill, that is fine. If they want to change his bill, we are not going to interfere because we are not trying to make mischief. But we have a better way which we think will improve health care in America. We think it will make HMOs more responsive. We think it deals with legitimate concerns without denying millions of people access to health care because they will not be able to afford it, and it gives people the freedom to choose. Remember the Yellow Pages test. On the Yellow Pages test, if the Republican plan passes and you want a medical savings account--you can have one, but nobody makes you get one. You can do a HMO, you can do Blue Cross/Blue Shield, you can do whatever you want to do. But if you want to choose for your family, we put you in a position so when you call up Seth Goldberg--who is ear, nose, throat, facial plastic reconstructive surgery--you don't have to go through a gatekeeper, on the Republican plan. You just call up Dr. Goldberg and say, ``Dr. Goldberg, I wanted to come see you but I had to ask you a question.'' So Dr. Goldberg gets out his big file and he figures we are about to ask him do you participate in the Joe B. Brown HMO, and he is going to look it up and see if he does. We just simply say, ``Dr. Goldberg, will you take a check?'' He is going to say, ``Yes.'' And when he says yes, if your baby has a throat problem, you are going to get to see a specialist and you are not going to have to go through a gatekeeper. Senator Kennedy will let you sue if the gatekeeper says no, and he will have a Government bureaucrat there, with your child, if you ever get in to see the ear, nose and throat specialist. But the point is, if your baby is sick and your baby has a 104-degree fever, you don't care about suing. You want to go to see Dr. Goldberg. Our plan gets you in the door. Our plan gets your baby medical attention because it empowers you. Hallelujah.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent to speak as in morning business for 25 minutes.

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

Mr. GRAMM

Mr. GRAMM. Mr. President, I move to reconsider the vote.

Mr. GRAMM

Mr. GRAMM. Mr. President, I requested some morning business time. It is my understanding that our colleague from Minnesota came over and asked unanimous consent to speak as in morning business. I also had checked with our dear friend, the Senator from Iowa, about the possibility of doing the same. If I wouldn't be delaying the important business of the Senate, I ask unanimous consent to speak as in morning business for 15 minutes.

Mr. GRAMM

Mr. GRAMM. Mr. President, I wanted to express some concern about what is happening in terms of Federal spending this year; about the fact that now, for two weeks, we have not passed an appropriations bill; about the fact that it is clear from watching the process now that the minority, operating strictly within its rights, has held up the passage of any of the remaining appropriations bills by simply drowning these bills in riders and amendments. We are beginning to hear talk, both in the administration and the Congress, about the need for a massive expansion in spending. I decided earlier this week to sit down and look at all the proposals that have been made under the name of ``emergency spending.'' That is important because, as my colleagues know--the public may not fully understand--while we have a binding budget, there is a gigantic loophole in that budget. That gigantic loophole is, if the President and the Congress agree to designate an expenditure ``an emergency,'' it doesn't count. Since President Clinton has been in office, we have had $31.5 billion worth of emergency spending. During election years, that level of emergency spending has ballooned to a whopping $8.6 billion per election year. Now, in looking at where we are and in looking at the threats of vetoing appropriations bills if we don't appropriate as much money as the President has called for, I put together the following list of emergency requests that have been made by the President or have been discussed in the Congress. The first is $2.9 billion for natural disasters. I remind my colleagues that we know at the beginning of every year that we are going to have disasters. Now, we don't know exactly where they are going to be. We don't know whether they are going to be earthquakes in California, or hurricanes in Texas and South Carolina and North Carolina, or floods in the Dakotas. But we know, based on experience, that every year we are spending about $5 billion on disaster relief. But instead of putting the money in the budget so that it is there, instead of setting priorities, as any family would, what we do is wait until a disaster occurs and then we designate it as an emergency, so we can spend beyond our budget. In the President's own words as he stood before the Congress in the State of the Union Address, he said: ``Save Social Security first, don't spend one penny of the surplus, and don't give any of it back in tax cuts.'' But what we declare spending to be an emergency, it means that we are, in fact, spending the surplus and taking money away from Social Security. Let me go over this list of what is now being called ``emergencies.'' The next item on the list is the fact that we are about to enter a new century and a new millennium and, in the process, we are going to incur a computer problem called the ``Y2K problem.'' In other words, the year 2000 is coming and we are entering a new millennium. Now, is that a surprise? Is anybody shocked that every day we get closer to the year 2000? Is it news to anybody that we have a potential computer problem in the Federal Government? Yet, while we have known about this--in fact, we have known from the beginning of the calendar of Julius Caesar that we were going to reach the year 2000. We have known it since the ancient Greeks. We certainly have known that we had this problem for the last 5 or 6 years. Yet, suddenly, we have a proposal saying that there is an emergency, the year 2000 is coming and there is going to be a new millennium, so the Federal Government needs an additional $3.25 billion to $5.4 billion. How can anybody say that that is an emergency if it is obviously a problem we knew we would have to face? It is something that we are going to have to face in the year 2000. But why should it not be dealt with within the context of the ordinary budget? Now we hear talk of emergency funding for the census. We are required by the Constitution to do a census every 10 years. Surely it doesn't come as a shock to anybody that we have known since 1787 that we are going to make preparations for doing a census in the year 2000. Yet, there it is, as if somehow there is an emergency in that suddenly we have realized that we have been grossly underfunding the census in order to fund other programs, and now we have a funding problem in the census. But is that a shock or an emergency? I would say no. Suddenly it has been realized that all these cuts we have made in defense are having a detrimental impact on defense. That hardly comes as a shock to me, since I and others have spoken out for the last 10 years about the level of cuts in defense readiness. But now we are looking at a potential emergency supplemental appropriation for defense readiness of between $3 billion and $4 billion this year. Now the shock of all shocks: We have troops in Bosnia. You would think that as long as we have had troops in Bosnia, the President would have put in his budget this year funding for the troops in Bosnia. But what is going to happen in the next 3 weeks is that we are suddenly going to be awakened to the fact that we have troops in Bosnia and the President wants an additional $1.9 billion of funding that will be designated as an ``emergency.'' I submit that it is no emergency that we have troops in Bosnia. I submit that it is not a shock that we have troops in Bosnia. Everybody knows we have troops in Bosnia, and everyone has known we have troops in Bosnia. Yet, we are looking at an emergency supplemental to fund it. We are also seeing requests--our Democrat colleagues have proposed busting the budget by $7 billion to help agriculture. Others on my side of the aisle are talking about $2.7 billion to $3 billion or more. The bottom line is this. When you add it all up, we now have serious discussion at the White House and in the Congress about raising the total level of spending this year by almost $20 billion. That is $20 billion that we may spend over the level of the budget that we set out just last year. I simply want to make several points. First of all, I have, because of the work I have done on Social Security, concluded that we would be well advised not to create any new spending and not adopt a tax cut until we have taken action to fix Social Security. And it is my hope that we can fix Social Security early next year, and the funds that are not required in the surplus to fix Social Security could be given back to the taxpayer in the form of substantial tax cuts. My problem is that, having concluded that it would be best to hold the money in the surplus to fix Social Security first, I now see the specter of the Congress and the President spending that money. I want to remind my colleagues that for the $20 billion of ``emergency spending'' that we are looking at this year, we could repeal the marriage penalty; we could give full deductibility for health insurance to all Americans who either don't get it provided by their employer or are self-employed; we could provide a change in the Tax Code so that farmers could income average and better shield themselves against the kinds of fluctuations in agriculture income that we have; we could repeal the earnings test under Social Security. All of those things would cost less as a tax cut than the money we are talking about spending on an ``emergency basis.'' So I want to conclude by making the following points. No. 1, I intend to resist these emergency spending items. If somebody wants to sit down and come up with a real emergency, I am willing to look at it. But if we are talking about this kind of spending where we knew it was coming but decided to call it an emergency--and I now understand that the President is considering designating research and education spending as an emergency--if we are talking about this level of spending, I intend to resist, and we are going to have to have 60 votes in the Senate if this kind of spending is to occur. Secondly, I have been among those who have publicly stated that we should set aside the budget surplus this year, not spend the money, not give it back in tax cuts, until we fix Social Security. But if the other side decides that we are now suddenly going to start spending massive amounts of money, I would much rather give it back to working Americans by cutting their taxes than to see the Federal Government spend it, although my first choice is to save the money for Social Security. I remind my colleagues that the tax burden on working families in America at the Federal, State, and local levels is at the highest level in American history. So my two points are: No. 1, I intend to resist this effort to begin a massive spending spree, the likes of which we have not seen in a decade. No. 2, if this effort continues to have the government spend the surplus, the argument that we must wait to do tax cuts is over. If we are going to see one group in Congress try to spend the surplus, while asking those of us who believe it should be safe for Social Security but who also believe that giving it back to the taxpayer is a much higher and better use than seeing the Government spend it, then that argument is over. So I wanted to alert my colleagues to this problem. I hope that we can serve the public better than we would be if we simply ignite a new spending spree, because for the first time since 1969 we have a surplus. I think that is wrongheaded policy. Let me say also to the threats that the administration might veto appropriations bills if we don't spend enough money that I think the Congress should stay in session, pass appropriations bills at reasonable and responsible levels, and, if the President wants to veto them, let him veto them. And then we can be here and we can pass them again; then pass them again, pass them again. I believe at some point that the public would awaken to the fact that this is a debate about how much money is being spent, and thats what we are seeing here is a very subtle blackmail where the administration says, ``If you do not spend more money, I am going to veto bills, and I am going to shut down the Government.'' I believe, if we will stand our ground on fiscal principle, if we will save the surplus for Social Security, that we will serve the public interest well. But, if the money is going to be spent--if that is the alternative--then I would much rather move ahead with a major tax cut and give the money back to the American worker than to see the Government spend it. I yield the floor.

Mr. GRAMM

Mr. GRAMM. I congratulate my colleagues, especially my dear colleague from New Mexico and my fellow Senator from Texas, for doing an outstanding job. I think anybody who has listened to the debate, and who started the debate with an open mind that was not totally empty, would conclude that you are right and this amendment should be tabled. My opposition to the amendment is very simple. Congress should make decisions about collecting fees and imposing taxes. Article I, section 8, clause 1 of the Constitution says, ``The Congress shall have the power to lay and collect taxes, duties, imposts and excises.'' We should not be granting our constitutional powers to faceless bureaucrats who have agendas that may not reflect the will of the American people. If our colleagues wanted to mandate by law that we raise royalty fees, that would be one thing. But to simply set a process in place where bureaucrats are going to effectively raise taxes, I think, is fundamentally wrong. So I want to urge my colleagues to reject this amendment, and I want to especially congratulate those who I believe have made an excellent case in opposition to the amendment. I reserve the remainder of my time. Mrs. BOXER addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Mr. President, I wanted to respond, if I might, for just a minute, to Senator Byrd. First of all, I would like to thank him for the lesson of his speech today. Our founders did not write the Constitution and then sit down and wonder about what they would do about corruption in public men. In fact, when they wrote the Constitution the first power enumerated for the House of Representatives in the Constitution is the power to impeach. This was no afterthought. When the founders wrote, in article I, section 3, about the first power of the Senate, it was the power to try all impeachments. So Senator Byrd, I would like to thank you for reminding us that this is a high constitutional responsibility. None of us will be judged based on what the President did or did not do, but we will be judged on what we do or what we do not do. One of the quotes from the Federalist Paper No. 65, from Alexander Hamilton, that you did not use, which I think defines the role you have taken in this debate, is the line where Hamilton sees a Senate which is ``unawed and uninfluenced.'' I think your lesson today to us is we should be unawed, but we should also be uninfluenced. And I can say that if I were to be tried in the Senate, if I were innocent, I would look to Senator Byrd as my greatest hope; if I were guilty, I would look to him as my greatest fear. Finally, before yielding the floor, the Senator asked, Where are the heroes? I would like to say that for those who know him, Robert C. Byrd is a hero. When I think of great men and women who have sat in this body as Senators whose names you might want to put up next to Cicero and Cato, I include the name of Robert C. Byrd on that list. I am very proud to serve in the Senate with him. I think his comments today really reflect on the posture that the Senate should take. I have no doubt that Senator Byrd will take that posture. I intend to do my best to take it as well. I yield the floor.

Mr. GRAMM

Mr. GRAMM. May we have order, Mr. President, so we can hear the Senator from Kansas?

Mr. GRAMM

Mr. GRAMM. Mr. President, I enter a motion for reconsideration of the amendment numbered 3368.

Mr. GRAMM. I move to reconsider the vote.