Orrin Hatch

Mr. HATCH

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

Mr. HATCH. Right.

Mr. HATCH. I yield such time as the Senator needs. I yield 15 minutes to the distinguished Senator from New Mexico.

Mr. HATCH. How much time does the Senator need?

Mr. HATCH. Furthermore, to nail the point home, the nonpartisan Concord Coalition entered the fray. In a memorandum dated February 18, 1997, the Coalition concluded that the Senate position--that if the balanced budget amendment does not exempt Social Security it will somehow nullify Social Security benefits and prevent payments of benefits to retired baby boomers--is, and I quote, ``nonsense.'' Let me quote further. ``What the balanced budget amendment would do is to raise national savings, and thus make Social Security--along with the myriad other claims on tomorrow's economy--more affordable. It would be ironic indeed if concern about funding Social Security, whether real or pretended, turns out to be the issue that sinks the balanced budget amendment.'' ``Let us be clear,'' they go on to say, ``The balanced budget amendment would in no way alter the status of the Social Security trust funds.'' I ask unanimous consent that an article entitled ``Facing Facts, The Truth about Entitlements and the Budget, A Fax Alert from The Concord Coalition,'' dated February 18, 1997, be printed in the Record at this point.

Mr. HATCH. I ask how much time is remaining?

Mr. HATCH. Mr. President, it is my fervent hope that during the debate over the proposed exemption of the Social Security funds from the requirements of Senate Joint Resolution 1, I have convinced my colleagues to support the balanced budget amendment. As Justice Brandeis so eloquently wrote in the 1927 case of Whitney versus California, ``It is the function of speech to free men from the bondage of irrational fears.'' I truly believe that many of my well-meaning colleagues' desires to exempt the Social Security Program is based on unfounded fears. Look, if we take the largest item in the Federal budget and put it outside of balanced budget purview, we are left with no mechanism at all for its protection. Social Security will be out there all alone, with no protections whatsoever. Whereas, if we keep a unified budget and keep everything in it, Social Security will be protected because everybody in the Congress wants to protect it, and it can compete better than any other Federal program for the available funds. Frankly, I know it would get them. Every one of us would vote for Social Security, for its protection. But if you agree to the risky gimmick of putting Social Security outside the budget, and everything else is subject to balanced budget amendment requirements but Social Security, then those who want to destroy Social Security or those who want to continue to spend for social programs, all they have to do is statutorily--because that is all Social Security is, a myriad of statutes--statutorily add anything they want to to Social Security and go on spending forever more without any budgetary restraint at all. The more provisions they add to the total Social Security bill outside the purview of the budget, the more Social Security will be watered down, diminished, and eaten away. That is the difference here. We have a unified budget, and with a balanced budget amendment that unified budget is going to have to be balanced by the year 2002 or we are going to have to stand up and vote not to balance it. There is no reason in the world to put the largest item in the budget outside of the purview of the balanced budget amendment, since every dime that comes in from the FICA funds will be invested in Federal Government securities anyway. Whether we keep it in budget or put it out on its own without any budgetary restraints, those surpluses are going to go into Federal Government bonds, and the only way we can pay those bonds off, the absolute, only way, is if we pass this balanced budget amendment intact without excluding any program from its purview. Last but not least, in this limited time, if you write a statute into the amendment, that means you make it constitutional. Can you change Social Security to reform it or make it better or help people or increase funds without a constitutional amendment? Unfortunately, I am not sure we can answer that today. It might well be the case that it would take a constitutional amendment to do it. If that is so, that would be a tragedy. I do not think this amendment is well thought through. I hope our colleagues will not support it. Constitutionally, it is the wrong thing to do. Most important, even if you do what the distinguished Senator from Nevada sincerely wants to do here, you are not protecting Social Security because you cannot protect it outside of the budget from suspect spending practices. It is free floating without any of the budgetary restraints that the balanced budget amendment would put on the whole unified budget. Let us do what budget people really know we have to do, and that is live within the constraints of the unified budget, keep Social Security in there where it will compete better than any other program, and, in the end, I think our country will be so much better off because we will be able to balance the budget, reduce interest rates, and make this country really run properly. It is always helpful to put this debate in a larger context. Today, the accumulated national debt is nearly $5.4 trillion. Interest payments on this debt consumes $250 billion annually, which the Washington Times recently estimated, is more than the combined budgets of the Departments of Commerce, Agriculture, Education, Energy, Justice, Interior, Housing and Urban Development, Labor, State, and Transportation. This means that the share of the debt for every infant born today is about $20,000. There is a crying need for sound fiscal reform. Unless we do something, this Nation will continue to have stagnant economic growth with less jobs. Unless we do something, the interest payment on the debt will continue to devour capital that could be otherwise used for investment or Federal programs. Let's not kid ourselves that Washington politicians will remedy this problem; the blunt truth is that no balanced budget deal has worked in the past, that is why we need to amend the Constitution to provide for fiscal sanity. Yet, opponents of Senate Joint Resolution 1 argue that Social Security should be removed from the protection of the balanced budget amendment. But to do so as they request would be a risky gimmick that would harm Social Security and open a loophole in the constitutional amendment.

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

Mr. HATCH. Mr. President, I move to table and ask for the yeas and nays.

Mr. HATCH. I yield 8 minutes to the distinguished Senator from Oklahoma.

Mr. HATCH. I yield 2 minutes.

Mr. HATCH. Let me first suggest the absence of a quorum with the time to be divided equally. I suggest the absence of a quorum and ask unanimous consent that the time be divided equally.

Mr. HATCH. The Social Security FICA tax receipts are used to pay benefits, and any excess is, by law, loaned to the Treasury to pay other Federal obligations in exchange for Treasury bonds. These bonds are interest-bearing bonds. That is all. They are evidence of the debt the Federal Government owes itself. The most important question for future retirees is whether the Federal Government will be able to pay off its debts. The only way they will be redeemed in the future is if a budget is balanced and we have enough revenue to redeem the securities. Mr. President, the best protection for Social Security is passing and ratifying Senate Joint Resolution 1. This would create the needed discipline to balance the budget. Payments on debt interest would be substantially reduced. The chance for Government default would be significantly diminished. The economy will grow at a brisker pace, repayment of Social Security obligations will be more secure, and we will end this process of never-ending mounting national debts, which have been continuing since--well, 58 of the last 66 years, but 28 of the last 28 years. As I stated, the Social Security system is facing a future crisis. By the year 2029, the system will be bankrupt. We will put that chart up and you can see, when you get up to 2029, the system is bankrupt and we go into very serious deficit. Sadly, the Social Security trust fund's board of trustees estimates that by the year 2070, Social Security will be facing a $7 trillion annual deficit. In 1996 dollars, that amounts to more than $1 trillion in deficits each year. Our current total annual Federal budget is only $1.5 trillion. Where will we get the revenue to redeem the Social Security securities, then, unless we plan and budget for it as required under our balanced budget amendment? The trust fund securities are only a claim on the General Treasury funds with no capital to back up that claim. If the country ever defaults on its debts, the Social Security trust funds will suffer. For this reason alone, Social Security recipients, both current and future and those who are concerned about them, should strongly support the balanced budget amendment--for that reason alone. The biggest threat to Social Security, therefore, is our growing debt and concomitant interest payments. The Government's use of capital to fund debt slows productivity and income growth and, thereby, lessens the pool of revenues available to fund Social Security. The real way to protect Social Security benefits is to pass Senate Joint Resolution 1. The proposal to exempt Social Security will not only destroy the balanced budget amendment, or any plan to balance the budget, but in all probability will also pose a real risk to the Social Security system. Section 13301 of the Budget Enforcement Act of 1990 does not require that Social Security be placed ``off budget.'' Supporters of exempting Social Security argue that section 13301 of the 1990 Budget Enforcement Act literally exempts Social Security trust funds from the President's and the Congress' budget calculations. They claim that the balanced budget amendment would change this because it requires a unified budget. These critics of the balanced budget amendment are wrong on both counts. Under section 13301(a) of the Budget Enforcement Act, the receipts and outlays of the Social Security trust funds are, indeed, not counted in both the President's and Congress' budgets, but only for certain specific purposes. The primary purpose for this exclusion was to exempt Social Security from sequestration by the President under the Gramm-Rudman-Hollings procedures and from the act's pay-as-you-go requirement. In addition, as added protection, sections 13302 and 13303 of the Budget Enforcement Act also created firewall point of order protections for Social Security trust funds in both the House and the Senate. All this is made clear by the conference report accompanying the 1990 act. Indeed, the 1990 Budget Enforcement Act does not preclude both Congress and the President from formulating a unitary budget that includes Social Security trust funds for national fiscal purposes. Surely the opponents of the balanced budget amendment are not suggesting that the President of the United States and the Congress have been flouting the law when they include the Social Security trust funds in their respective budget calculations. Look, we all know that Social Security will need reform if it is to continue to be viable over the long haul. This chart shows that. There is no way that we can continue to go the way we are going without reforming Social Security. We all know that, but the problem is not the inclusion of Social Security trust funds in the budget. The problem is that at the time of the retirement of baby boomers, there will not be enough FICA taxes to fund their retirement. Moreover, the surplus Social Security taxes being collected today will not cover the future cost of the system. Most of the current Social Security taxes are used to cover benefit payments to present retirees. Outlays will exceed receipts of the system in about the year 2019, maybe even before. The guarantee of future benefits, therefore, will depend on the Federal Government's future ability to pay benefits. Not including Social Security in the budget would harm the program. Congress could redesignate programs as part of the exempted Social Security system. The distinguished Senator from Nevada yesterday said Social Security is statutorily defined. Let's understand what that means. When something is statutorily defined, a subsequent statute can change the definition of it, and that only takes a simple majority in both Houses of Congress to do. Anybody who doesn't understand that doesn't understand the legislative process. Let me tell you, if you don't include Social Security in the budget, the program is going to be harmed. Congress could rename anything ``Social Security,'' as they have done before, by a simple majority vote. If they just name it Social Security and use the FICA taxes to fund these programs, then you will really see the program raided. The problem that the Reid amendment raises in reality is not with the balanced budget amendment, but with the problems that the Social Security Program faces. We need to fix that, and adopting the balanced budget amendment and getting rid of these unbalanced budgets is a heck of a good start. The balanced budget amendment does not overturn existing statutory protections for Social Security. In a related argument that seeks to justify the exemption, some have argued the balanced budget amendment will override the existing statutory protections for Social Security. Contrary to this assertion, it is clear that the current statutory protections for Social Security would not be eliminated by the amendment. Of course, the supremacy clause of the Constitution provides that any legislation contrary to a constitutional provision must fail. As the great Chief Justice John Marshall held in the landmark 1803 decision of Marbury versus Madison: An act of the legislature repugnant to the Constitution is void.'' But what critics fail to mention is that there is absolutely nothing in the balanced budget constitutional amendment that is inconsistent with current statutory schemes. The Social Security statutory protections are not legislative acts ``repugnant to the Constitution'' as amended by Senate Joint Resolution 1. Congress, under the balanced budget amendment, can also create statutory protections for the Social Security Program. Further, the Reid amendment has absolutely no protection against Social Security benefit cuts. The plain fact is that the best thing we can do for Social Security, the best thing we can do for retirees, and the best thing we can do for all Americans is to enact the balanced budget amendment without loopholes, without exemptions, and bring fiscal sanity and a little common sense back to Government. Opponents of Senate Joint Resolution 1 who argue for a Social Security exemption contend that the balanced budget amendment will not in reality produce a balanced budget because gross debt will still rise. This is clever but it is misleading. Mr. President, the balanced budget amendment does indeed require a balanced budget. Outlays must not exceed receipts under section 1 of Senate Joint Resolution 1. But it is also true that gross debt may still increase even if the budget is balanced. That is because the Government's exchange of securities for incoming FICA taxes is counted as gross debt. It is merely an accounting or bookkeeping notation of what one agency of Government owes another agency. It is analogous to a corporation buying back its own stock or debentures. Such stock and bonds are considered retired obligations that once paid have no economic or fiscal significance. Thus if we enact the balanced budget amendment the debt the United States owes to everyone but itself will stop growing. This is very different from obligations owed by the Federal Government to the public. This type of debt--termed net debt or debt held by the public--is legally enforceable and is what is economically significant. If net debt zooms--because of interest payments of debt-- which last year amounted to more than $250 billion--budget deficits balloon with all the dire economic consequences. To assure that budgets will be balanced unless extraordinary situations arise, debt held by the public cannot be increased unless three-fifths of the whole number of each House concur. That net debt is considered to be of far greater economic significance than gross debt is a widely held truism among economists. Indeed, in the study ``Analytical Perspectives: Budget of the U.S. Government Fiscal Year 1998,'' the Clinton administration no less concludes that net debt or ``borrowing from the public, whether by the Treasury or by some other Federal agency, has a significant impact on the economy.'' On the other hand, the study also maintains that gross debt or debt issued to Government accounts ``does not have any of the economic effects of borrowing from the public. It is merely an internal transaction between two accounts, both within the Government itself.'' Now, it is true that the balanced budget amendment does not by itself reduce the $5.3 trillion national debt. But what it does do is straighten out our national fiscal house and make it orderly. Passage of Senate Joint Resolution 1 will increase economic growth and allow us to run surpluses. With this, our national debt may be decreased if Congress desires to do so in the interest of national economic stability and prosperity. Without Senate Joint Resolution 1, this would be and will be an impossibility. The Reid amendment, on the other hand, adds nothing to protect the trust funds from accumulating debt. In fact, by creating this loophole, this risky gimmick, this riverboat gamble, the Reid amendment may cause the trust fund to dry up sooner and run deeper deficits. Thus, the Reid amendment is a risky gimmick that endangers Social Security. The Reid amendment is confusing and its application is going to harm Social Security. Let me just say, finally, Mr. President, the Reid amendment should be rejected because it is confusing. As I have said, its application may harm the Social Security Program, the very thing the Reid amendment claims to protect. The amendment exempts the Social Security trust funds from the balancing requirement, but it also includes the proviso ``as and if modified to preserve the solvency of the Funds.'' Explicitly exempting Social Security by placing it in the Constitution may ``constitutionalize'' the program in perpetuity unless a subsequent constitutional amendment provides for the program to be altered or abolished. As a result of the Reid amendment, do minor technical changes to Social Security every year require amendments to the Constitution? The constitutional amendment process was designed by the Framers to be lengthy, to prevent specious changes to the Constitution. If we must go through this time-consuming process for every change to Social Security because we have written specifically a statutory scheme into the Constitution, a statutory program into the Constitution --even minor technical alterations--I fear major needed reforms to Social Security will come far too late if at all. Similarly, does the proviso language mandate the solvency of the Social Security system, or does that language merely allow the Congress to take such steps? If the answer is that Congress must take measures to assure solvency, does this require mandated tax increases or benefit cuts? Frankly, this proviso language strands us in unchartered territory. We do not know exactly how this language is going to be interpreted. Once it becomes part of the Constitution, assuming this amendment would pass, this language could also very well mean that the scope of Social Security as a constitutional provision could be amended by statute. For instance, in 1965, Social Security was broadened by a statue to include hospital insurance. That is, part A of Medicare. My question is this: If under the Reid amendment Social Security can be variously modified by statute, would we be constitutionalizing a massive loophole through which we could constitutionally enforce spending on any program redesignated as ``Social Security?'' If, on the other hand, we can only modify Social Security by constitutional amendment, will that not require a two-thirds Senate vote, approval of 37 States, and a 7-year delay to enact even the most minor changes? All of this demonstrates the danger that the Reid amendment as a whole creates--that Congress ought to be responsible and not amend the Constitution to include specific statutory programs like Social Security. A constitutional amendment should be timeless and reflect a broad consensus and not make narrow policy decisions. We should not place technical language or overly complicated mechanisms in the Constitution and undercut the simplicity and universality of the balanced budget amendment. Explicitly exempting Social Security may constitutionalize the program in perpetuity unless a subsequent amendment provides for the program to be altered or abolished. It would also invite, in the opinion of many, gaming, and I can tell you it will invite gaming and endless litigation as the terms of the program are altered. Former Assistant and Acting Attorney General Stuart Gerson and attorney Alan Morrison, on different sides of the fence, both have extensive experience litigating constitutional issues and testified in a Judiciary Committee hearing on Senate Joint Resolution 1. Although the two disagree about the wisdom of the balanced budget amendment, they agree that exempting Social Security is a bad idea, and both strongly oppose exempting Social Security from the balanced budget amendment. Stuart Gerson is for the balanced budget amendment. Alan Morrison was against. But both agree Social Security should not be exempted. Nothing should be. It ought be in the unified budget, to approach it intelligently. According to Alan Morrison, a liberal, against the balanced budget amendment, a litigator with Public Citizen who opposes the balanced budget amendment and testified for the minority: Various proposals have been floated to exclude Social Security from the amendment, presumably as a means of attracting additional votes. Given the size of Social Security, to allow it to run at a deficit would undermine the whole concept of a balanced budget. Moreover, there is no definition of Social Security in the Constitution and it would be extremely unwise and productive of litigation and political maneuvering to try to write one. If there is to be a balanced budget constitutional amendment, there should be no exceptions. That is pretty important testimony given before the Judiciary Committee by a person who, although he hates the balanced budget amendment and does not want it as a liberal, nevertheless believes it would be tremendously detrimental to the Constitution if we put a statutory scheme in the Constitution. In conclusion, Mr. President, the biggest threat to Social Security is our growing debt and concomitant interest payments. Debt-related inflation hits hardest on those on fixed incomes, and the Government's use of capital to fund debt slows productivity and income growth and siphons off needed money for worthwhile programs. The way to protect Social Security benefits is to pass Senate Joint Resolution 1, get rid of the year after year of unbalanced budgets, get us living within our means. The proposal to exempt Social Security will not only destroy the balanced budget amendment, but in all probability would also cause the Social Security trust funds to run out of money sooner than they would have without an exemption, perhaps mortally wounding the very program the Reid amendment was designed to protect. That would be the paradox indeed. Let me just finally conclude, anyone who believes Social Security will not be harmed are simply wrong. The Reid amendment is a risky gimmick. The Reid amendment is a gamble. Special interest scavengers will sniff out Social Security. Before long, we will be using Social Security to fund all sorts of perks like the S.S. Social Security battleship. If we can put that chart up to make the point. We can see it happening. Now, that is bizarre but not nearly as bizarre as what has been done for 28 years, with all these unbalanced budgets. There is nothing in the Reid amendment that protects Social Security. Indeed, the Reid amendment threatens Social Security. It is a risk, it is a gamble, and it should be defeated. I reserve the remainder of my time.

Mr. HATCH. The Reid amendment will make it harder to balance the budget. And it will harm not only Social Security, but other social programs. Furthermore, in another paradox, the exclusion of the present-day surpluses in the budget would make it extraordinarily difficult to balance the budget by the year 2002, the date Senate Joint Resolution 1 mandates balancing. Between now and the year 2002, the surplus is estimated to be over $500 billion; over $500 billion. On this chart we have 10 years of the surplus. You will notice at the bottom the surpluses are worth $1.067 trillion, that is 10 years from now. Mr. President, $1.067 trillion is more than our expenditure this year on Medicare, education, veterans' benefits, the environment, national defense, Social Security, transportation, and infrastructure and national resources combined. In fact, between the year 2002 and 2019 when Social Security outlays will exceed receipts, the trust fund is expected to earn more than $1.9 trillion. Where do supporters of the Reid amendment propose to come up with the money necessary to cover this supposed shortfall? This is an annual surplus average of approximately $100 billion each year. According to current budgetary figures, $100 billion per year is more than our current annual expenditure on education, the environment, transportation and infrastructure. Where will we come up with the money if this goes off budget to fund these programs if we exclude Social Security surpluses from the unified budget, and if we are serious about getting to a balanced budget by the year 2002? Show me the money. We are going to have to come up with $1.067 trillion, and it is going to have to come out of these programs that are critical programs, if you follow this amendment that the distinguished Senator from Nevada has filed here. Federal programs would have to be cut under his amendment, or taxes raised by that amount to reach the balanced budget goal. If the American people think they are taxed enough now, wait until they have to be taxed to make up part or all of $1.067 trillion in the next 5 years. Keep in mind, the fact of the matter is, Social Security goes from the people to the Social Security Administration, funds go into the Treasury, and then they are invested, the surplus funds are invested in bonds that go back to the Social Security Administration to be redeemed later. They happen to be invested in the most important securities in the world. The only way we are going to be able to pay those bonds is if we have a balanced budget amendment without any gimmickry or games, and especially risky gimmicks at that, that literally help us to have a good enough economy to redeem those bonds. If we do not do that, then many of these discretionary spending programs such as Head Start, education, entitlement spending programs such as veterans' pensions and benefits are going to be seriously harmed. It is just that simple. Additionally, I have to point out again, not all of President Clinton's budgets have included the Social Security surpluses in their calculations. Doesn't that bother you, that the President says, ``Oh, I think we ought to take Social Security out just like Senator Reid does?'' Why doesn't he? Why doesn't he take it out? Because he knows he cannot even make a claim to getting close to a balanced budget without those surpluses and he also knows he would have to cut most of the expensive social welfare programs that he and most of us up here would like to keep going in the best interests of people. Indeed, Secretary Rubin, the Secretary of the Treasury, testified in a recent judiciary hearing, that without including the surpluses in budget calculations, it would be virtually impossible to arrive at a balanced budget. In his recent press conference President Clinton admitted the same when he confessed, and this is what he said, ``Neither the Republicans nor I could produce a balanced budget tomorrow that could pass if Social Security funds cannot be counted.'' And the reason is because those surpluses are now being used to help balance the budget. But the obligation will be the same. The bonds are still going to be there. It will still be invested in bonds, whether the Reid amendment passes or whether we continue the same system. So, to say if we were in the private sector doing this we would all go to jail is not only a misnomer, or a misstatement, the fact is that we are putting them into the securities that are the only great securities in the world. But they are only as great as this country is. And if this country continues to spend into bankruptcy, we will not have the money to redeem those securities. If we do what the distinguished Senator from Nevada wants done here, we will not have the monies. Then you really will harm those trust funds by putting them out there all alone, not subject to balanced budget requisites, not subject to any reforms that need to take place with regard to the whole budget as a whole, but out there, vulnerable to the special interest rats who come along and eat it like cheese. The Social Security trust funds consist not of cash but of debt securities, as this chart shows. And they will be, whether this amendment passes, the Reid amendment passes, or not. But these debt securities have to be paid back. How do you pay them back if you don't get the country's spending under control? If you look at reality--that is these 28 budgets that have been unbalanced since 1968--how are we going to get spending under control so we can pay back those bonds and redeem those bonds and pay back that money to the Social Security fund? Part of the problem in addressing the Social Security issue in this debate results from the confusing terminology used by our opponents. They complain that the present trust fund surplus will be ``raided'' if we have a unitary budget that includes Social Security. But the fact is the Social Security trust funds are not a giant wallet of $100 bills or $1,000 bills or gold, for that matter. The FICA tax receipts come from the people to the Social Security Administration, and the bonds are given to the surplus, which are used to balance the budget today, and it will be the same system if the Reid amendment is adopted. The only difference is there is no balanced budget amendment. That is the only difference. (Mr. GORTON assumed the chair.)

Mr. HATCH. Even more important, yesterday, the very same Concord Coalition revealed a major analysis studying the effects of exempting Social Security from the unified budget. This is the Balanced Budget Amendment and Social Security, the Concord Coalition Issue Analysis, 97-1, dated February 24, 1997, as of yesterday. Because of the significance of the analysis, let me quote its major conclusion: Trust fund accounting is, and always has been, an arbitrary legislative artifact. Whether a trust fund is in surplus or deficit has little economic relevance. What does matter is the net difference between total Federal revenues and outlays, otherwise known as the unified budget balance. Although some Senators and Representatives mistakenly believe that exempting Social Security from the balanced budget amendment would protect boomer retirees, it would, in reality, do nothing to guarantee future Social Security benefits, which would remain mere statutory promises, subject to change by Congress at any time. ``Instead,'' and let me go to this next chart--``Instead,'' it says: . . . legislators should focus on how the balanced budget amendment without an exemption for Social Security would strengthen the Social Security program and the ability of our Nation to finance retirement benefits not only for the baby boom generation, but for succeeding generations as well. The BBA, the balanced budget amendment, would raise national savings and thus make Social Security--along with Medicare and other claims on tomorrow's economy--more affordable. That's a statement of the Concord Coalition, The Balanced Budget Amendment and Social Security--6, in 1997. The Concord Coalition is a nonpartisan group made up of Democrats and Republicans, business people and nonbusiness people, people who are concerned about fighting these budget battles in an appropriate way. They do not have any axes to grind except they are leading the fight to try to balance the budget. They are not playing games with the letters from the Congressional Research Service. Which really has occurred in this matter. ``Right now we find ourselves waist deep in deficit water,'' the Concord Coalition goes on to say. The purpose of the balanced budget amendment is to require Congress to raise the deck above water and keep it there. The Social Security exemption would defeat this purpose. I ask unanimous consent to have the Concord Coalition's Issue Analysis 97-1, the Balanced Budget Amendment and Social Security, printed in the Record at this point.

Mr. HATCH. Mr. President, I am always happy to work out the schedule for my colleague from Massachusetts and always enjoy hearing my colleague. I think it is good for the acoustics from time to time, and it is also good for all of us who seem to talk at just a normal level. I always enjoy hearing my colleague, and I have enjoyed hearing him on this today, as bad and as dire and stressful as he seems to think things are. But then again, let's go back. Simply put, Senator Reid's amendment would exempt Social Security from section 1 of the balanced budget amendment, which requires that total outlays for any fiscal year not exceed total receipts for that fiscal year unless a three-fifths vote of both Houses concurs. Senator Reid, and many of those who favor exemption of Social Security, make the rhetorical points that we should not balance the budget on the backs of the elderly; that the Social Security trust funds will be raided. Poppycock. The fact is, those funds are going to be invested in the very same bonds, no matter whether it is off budget or on. The question is, what is the best budgetary approach to take? What is in the best interests of our senior citizens? What is in the best interests of our senior citizens is to understand that everybody in Congress will protect Social Security, and it is better off having it in the unified budget where it has always been protected. Show me a time when it wasn't. It has always been protected, at least in all the time I have been here. Put aside whether it is a riverboat gamble or whether it is a risky gimmick; it is pretty pathetic when you stop and think about it. We have heard a lot of talk about how our uses of surpluses would be criminal conduct if done by business people and done in the private sector. But no one is going to prison around here. The fact is that removing Social Security from the protection of the balanced budget amendment would be the worst thing we could do to senior citizens. Talk about a risky gimmick, a riverboat gamble. The primary paradox of this debate, as I have said before, in a debate full of paradoxes is the fact that removing Social Security from the protection of the balanced budget amendment would create an overwhelming incentive to do exactly what these critics say they fear. For this would focus budget pressures on the Social Security trust funds that could destroy the very viability of the Social Security program itself. It is a folly that has no real relationship to the goals sought. And that goal should be the protection of the Social Security trust funds. Furthermore, another paradox that I will mention is that exempting the trust funds is simply unwarranted. There already exists a statutory scheme of firewalls that protect the trust funds from Presidential and congressional tampering. Nothing in the balanced budget amendment is inconsistent with the statutory firewall scheme that would warrant the firewall protections being declared unconstitutional. The truth is, the passage of Senate Joint Resolution 1, the balanced budget amendment, will be the best protection to Social Security that we can get. Yet another paradox is that the Reid amendment does nothing to respond to the concern that Social Security benefits will be reduced. There is no language in his proposal that would protect Social Security recipients from either further budget cuts or tax increases. In fact, the Reid amendment expressly reserves the right to cut benefits. Get that. It expressly reserves the right to cut benefits. Removing Social Security from the protection of the balanced budget amendment would weaken the financial integrity of the Social Security system. Presently, the Social Security program is producing annual surpluses because the huge baby boomer generation is still working and paying FICA taxes into the system. But the surpluses will end no later than the year 2019, when most of the baby boomers retire. Moreover, under current projections, Social Security will have exhausted the trust funds and will be running a huge deficit by the year 2029. By the year 2070, Social Security will face a startling $7 trillion annual shortfall. Excluding Social Security ignores this problem and places this system in dire jeopardy. Including Social Security in the budget calculations forces Congress to address the pending crisis in a responsible manner before it becomes too late. Let me just explain this in more detail. Let me talk about the Social Security exemption that they are asking for here. This risky gimmick of exempting Social Security would open up a loophole in the amendment and siphon off revenues from the trust funds. Placing the trust funds off budget will harm the Social Security program and make balanced budgets a virtual impossibility. The consequences of this could be very dire indeed. Further, I must emphasize that nothing in the Reid amendment protects recipients from either budget cuts or tax increases. Under the Reid amendment, we would have two budgets. One would be based on sound principles of solvency and the other, the Social Security budget, would not be. One budget would be required to be in balance unless a supermajority votes to allow a deficit. The other, the Social Security budget, if they have their way, would be raided and bloated with costly unrelated projects. Anybody who doesn't believe that has not watched this outfit for the last 28 years as we unbalanced the budgets in each of the last 28 years. Social Security--don't leave it out. If you leave it out, you are going to have special interest rats eating all the Social Security cheese, whereas if we leave it in, it is protected by the balanced budget amendment. We protect it because we keep a sound, good economy. We all know who these rats are. They are special interests that come in here and buy their way into influence. Taking Social Security off budget will subject funds to Washington special interest scavengers. When you have rats in your house, you need to plug all of the holes. If you do not, they are going to find a way in. If we leave Social Security off budget, new and old special interest spending initiatives which cannot survive or make their way if they have to compete against other programs, will smell out the scent of Social Security and destroy it just like these high-class rats are destroying the cheese here on this chart. That is what is going to happen to Social Security. We all know it. This is a game. The people who are arguing for it, with the exception of a few--certainly, Senator Reid is very sincere about this--the people arguing for this hate the balanced budget amendment. It puts the screws to their spending programs, programs that are eating us alive and mortgaging our children's and our grandchildren's future. They want to defeat this amendment at all costs. And, therefore, they use these phony arguments that taking Social Security off budget is going to protect it when everybody knows it will not. This loophole will not only blow a hole in the balanced budget amendment, but it would also seriously harm Social Security. Senator Reid and supporters of the Reid amendment incorrectly contend that including present day Social Security surpluses in the unified budget would ``raid'' the trust funds. This is a complete misnomer. Here is how it works. The people pay the FICA tax. The Social Security Administration gets it and then sends it to the Treasury. All FICA tax proceeds are commingled with the general funds. The Social Security Administration receives Treasury bonds in recognition of the debt--and those bonds are the greatest redeemable securities in the world, United States bonds. They buy them to be redeemed later. The only way they are going to be redeemed is if we have a sound economy. The only way we are going to have a sound economy is if we live within our means. We clearly are not living within our means. These documents are just 28 years. If we put the 58 years of the last 66 years, my goodness, what we have done to America is criminal. That is the where the real criminals are: people who continue to spend. The fact is if you are looking for people who have committed wrongs, then look to Congress, and it would be a double wrong if we moved Social Security out the protection of the balanced budget amendment, where it is vulnerable, where it is out there open, where all these special-interest rats can attack it because it is the only thing left to be able to spend and spend and spend. That is exactly what is going to happen here if we do not watch out. The FICA tax, moneys that they get from the bonds of Social Security, are going right now for entitlement spending and discretionary spending. Many of these programs are critical programs. If you take this Social Security off budget in the sense they want to in the Reid amendment, every one of the important social spending programs we have in this country, every one of them is going to be hurt. And in the end Social Security will be hurt because then there will be that much more of a push to go to that nice big second budget there that is not subject to balanced budget requisites and hang all these programs on it. If that happens, mark my word, senior citizens, every one of you are going to be hurt. Social Security receipts are by law used to purchase interest-bearing securities, as I have said. Nothing in Senate Joint Resolution 1 would change the Social Security program, but if Social Security were removed from the protection of the Senate Joint Resolution 1 balancing requirements, the trust fund really would be raided. Under the Reid amendment, Social Security receipts would not be designated as ``receipts'' or ``outlays,'' as under the balanced budget amendment. Spending Social Security surpluses, therefore, would not have to be offset by other receipts as it must if there is no exemption. This creates a powerful, yet perverse, incentive for Congress to spend the surpluses by redesigning other programs as Social Security. That is what they will do to you. You know that. They want it off so they can redesign other programs, call them Social Security and eat up the surpluses and add to the deficit that we are all dying from right now. Look, it is the biggest con job I have ever seen. Sincere or not, it is a con job. Let me just say this. This would be real raiding because what constitutes ``Social Security'' will be expanded, with the present day surpluses funding newly relabeled programs, only they will be called Social Security, and they will just continue to spend just like we have been doing for 58 of the last 66 years. This is only 28 of those unbalanced budgets, the last 28. If projects are not immediately redesignated Social Security as I just discussed, thereby consuming accumulated Social Security surpluses, surplus proceeds would be used in the only possible manner that would avoid section 1's prohibition on outlays exceeding receipts, and that is to make debt repayment. Normally, this would be wonderful, but, in fact, it creates a dangerous mechanism for the Congress to continue deficit spending if we adopt the Reid amendment. If the surplus is used to pay down the public debt, the total debt level will be reduced, creating a gap between the public debt total and the statutory debt ceiling. As a result, Congress would then be able to increase spending out of Social Security, which is not constrained by a balanced budget rule, without immediately bumping into the statutory debt ceiling. This would in essence allow a future Congress to again increase the Nation's debt without facing the balanced budget amendment's required three-fifths vote. Thus, any surplus generated by Social Security and used to pay off the debt would be squandered because the Congress could simply deficit spend under the Social Security exemption until the statutory debt ceiling is reached. This scenario would not be possible if Social Security was not exempted from the balanced budget amendment. This secondary loophole constitutes an indirect way of using surplus Social Security receipts. So, Mr. President, through one loophole or another, the Reid amendment would drain off the Social Security surpluses in the short term and fail to protect Social Security from tremendous deficits in the long term. Consequently, the Reid amendment not only fails to protect Social Security but is a risky gimmick, a riverboat gamble that will endanger the trust funds. The net effect of the loopholes will be the depletion of the trust funds years early. When the balanced budget amendment does take effect in the year 2002, the trust funds will stop growing as all annual surplus funds would be reallocated for programs that have been redesignated Social Security. So instead of growing from 2002 to 2019, the years the trust funds are estimated to stop growing, the system would become stagnant. Exemption of Social Security from the balanced budget amendment will consequently speed up the system's demise. If you do not believe that, then you have not watched Congress over the last 28 years. I think there might be some logic to what they say if you really stretched the cord, if you did not have the good old 28 years of unbalanced budgets sitting here, knowing the Congress cannot stop spending unless there is something in the Constitution that says we have to stop; you have to start living within your means; you have to start budgeting; you have to start doing what is right for the American people and especially the future of our children. Removing Social Security from the protection of Senate Joint Resolution 1 would make balancing the budget virtually impossible. Based on the gimmickry of the past, the most likely scenario Congress will follow is to pass legislation to fund any number of programs off budget through the Social Security trust funds. The budget could be balanced simply by shifting enough programs into the Social Security trust funds. Where would the senior citizens be then? You would be the ones who are being ripped off. You talk about criminal conduct. Congress could simply add to an exempted Social Security enough budget items to make up any deficit from the official budget. Congress could then eliminate the deficit by simply transferring costly programs to the exempted Social Security program. We would have a balanced budget but on paper only. Talk about a risky gimmick. FICA taxes have grown significantly over the years. Odds are that the loophole would only accelerate this increase. In fact, all kinds of new ``Social Security'' taxes would be enacted such as a ``Social Security'' income tax or a ``Social Security'' value-added tax. As this process continues, the loophole created by this exemption by the Reid amendment would easily swallow both the spending and taxing provisions of the balanced budget amendment. The balanced budget amendment will allow the use of Social Security surpluses to fund benefits. Some Senators have proffered another argument in support of removing Social Security from the protections of Senate Joint Resolution 1. They allege that the very wording of the balanced budget amendment will not allow the use of surpluses in following years. This is so, they claim, because in succeeding years the spending for benefits from the saved surpluses becomes ``outlay'' under the constitutional amendment. They created quite a storm when they claimed that a CRS memorandum confirmed this. The only problem with their elaborate theory is that it is wrong. Simply put, Mr. President, I must say once more that passage and ratification of the balanced budget amendment will not harm the Social Security Program. In fact, the very passage of Senate Joint Resolution 1 will help stabilize the program. CRS never concluded that the balanced budget amendment will harm Social Security. I believe that the Congressional Research Service memorandum my friend from Nevada was alluding to was, unfortunately, quoted out of context. Let me explain. The CRS memorandum, dated February 5, that my colleague was alluding to, did not conclude in any way whatsoever that the balanced budget amendment would harm Social Security. All the CRS memorandum concluded was that, assuming the Social Security surplus survived through to the year 2019, the year Social Security will start running huge annual deficits, this previously accumulated surplus could be used to help pay for future deficits but only if it is offset by revenue or budget cuts. Now, despite what my good friend asserted, under the balanced budget amendment, assets of the Federal Treasury could be drawn upon to ensure payments to beneficiaries when the system starts running deficits, annual deficits, that is. To clear up any confusion, the Congressional Research Service produced another memorandum dated February 12, 1997, at Senator Domenici's request. This memorandum stated ``We,'' that is, the Congressional Research Service, ``are not concluding that the trust fund surpluses could not be drawn down to pay beneficiaries. The balanced budget amendment would not require that result.'' So where is the problem? In the near future, when Social Security runs in the red, the Congressional Research Service concluded that under the balanced budget amendment, ``The trust funds will be drawn down to cover the Social Security deficit in that year, and the Treasury will have to make good on the securities with whatever moneys it has available.'' Senator Mack and I also requested that the Congressional Research Service clear up any confusion concerning the use of the February 5 CRS memorandum. CRS stated, in a letter dated February 14, that its memorandum was quoted out of context, and reiterated that under the balanced budget amendment, Federal receipts, including Social Security surpluses, could be used to pay for Social Security benefits. I ask unanimous consent that the letter dated February 14, 1987, be printed in the Record at this point.

Mr. HATCH. I will forego, so the Senator can have the floor.

Mr. HATCH. Mr. President, simply put, Senator Reid's amendment would exempt Social Security from section 1 of the balanced budget amendment, which requires that ``total outlays for any fiscal year not exceed total receipts for that fiscal year,'' unless three-fifths of each House of Congress concur. Senator Reid, and many of those who favor exemption of Social Security, make rhetorical points that ``we shouldn't balance the budget on the backs of the elderly,'' and that ``unless exempted, the Social Security trust funds will be raided.'' Those are direct quotes from those who have spoken on the other side of the aisle. The primary paradox of this debate, in a debate full of paradoxes, is the fact that removing Social Security from the protection of the balanced budget amendment will create an overwhelming incentive to do exactly what these critics of the amendment fear, for this would focus budget pressures on the Social Security trust funds that could destroy the viability of the Social Security program itself. It is a folly that has no real relationship to the goals sought, which should be the protection of the Social Security trust funds. What they are doing is a risky gimmick; it's a riverboat gamble. Frankly, it's a real mistake should this amendment be adopted. Furthermore--another paradox--exempting the trust funds is simply unwarranted. There already exists an elaborate statutory scheme of firewalls. Mr. President, I notice the distinguished Senator from Massachusetts is here. I have a rather extensive statement to make. So what I will do, if he cares to make his statement, I will yield the floor at this time, and then I will finish my statement afterward. I ask unanimous consent I not lose my right to the floor following the distinguished Senator from Massachusetts.

Mr. HATCH

Mr. HATCH. I suggest the absence of a quorum, with the time equally charged.

Mr. HATCH. Mr. President, on behalf of the majority leader, I announce today that the Senate will resume consideration of Senator Reid's amendment to Senate Joint Resolution 1, the balanced budget amendment. Debate is expected throughout the day on this amendment, with the vote occurring on or in relation to the Reid amendment at 6 p.m. today. By previous agreement, at 2:10 p.m. today, the Senate will begin 5 minutes of closing remarks, followed by a rollcall vote on adoption of House Joint Resolution 36, the resolution regarding U.N. population control. On Wednesday, the 26th, the Senate will debate Senator Feinstein's amendment from 9 a.m. to 11 a.m. Following the vote at 11 a.m. on or in relation to the Feinstein amendment, Senator Torricelli will be recognized to offer an amendment relating to capital budgeting. Senator Torricelli's amendment is limited to 3 hours of debate. I also remind Senators that on Thursday, February 27, at 10 a.m., there will be a joint meeting of Congress for an address by His Excellency Eduardo Frei, President of Chile. Members are asked to meet in the Senate Chamber at 9:40 a.m. to proceed as a group to the joint meeting. I thank my colleagues for their attention.

Mr. HATCH. Madam President, this is an important amendment, but it is not as important as the proponents think. The fact of the matter is that Social Security is much better protected within the purview of the unified budget than it will be out there standing all by itself where they can add anything to it, or take anything away from it that they want to, and where it will become a spending loophole device that I think will be to the detriment of the senior citizens. To say that the trust funds are raided is the biggest charade I have heard in all my time in the Senate. First of all, when the FICA funds come in, they are immediately invested into U.S. Government bonds, the best securities anywhere in the world. Those bonds are kept. There is no great big trust fund or a big place where they keep all this money. They are bonds due and owing by the American people some time in the future. The only way we are going to be able to pay back those bonds is if we get spending under control and get our economy under control. The only way we are going to do that, after looking at 28 straight years of unbalanced budgets--those 28 straight years of unbalanced budgets are represented by these actual unbalanced budgets, since 1969--the only way we are going to do that is to pass a balanced budget constitutional amendment. Some say, well, we want another type of an amendment. The fact is that this is a bipartisan amendment that has been put together over 21 years. I know because I have participated in every word of it with my bipartisan colleagues in the House and Senate, on the Democratic side as well as the Republican side. This is the only amendment that has a chance of passage, the only thing that actually will give a real sense of protection and actual protection to those people who are on Social Security now. For people to come on this floor and say, They are raiding the trust funds, because literally they are exchanging bonds for the funds and helping to balance the budget with whatever surplus exists now, is not only a charade; it is absolutely false. I get a little tired of people saying they are raiding the trust funds, not treating the trust funds right. The fact is, if you take Social Security out of the purview of the balanced budget amendment--if this amendment passed and we take it outside the purview of the balanced budget amendment, first of all, this amendment won't do what they say it will do. It is very poorly drafted. Even if it does do what they say it would do--and I will, just for the sake of discussion this morning, argue within that context, that it will do what they say it will--and you take Social Security out of the budget, the surpluses that will occur between now and 2008 will be invested in Federal Government bonds, which is exactly what they are doing now. The only difference is that the moneys they have then may be used for social spending programs other than Social Security, and that means another ability to spend more without making the reforms that have to be made in programs like Medicaid, Medicare, and so many others in our society, which are running out of control today. And the people who are going to be hurt the most are going to be those people who are counting on the Social Security funds being there some day, because we will not get Federal spending under control without this balanced budget amendment. We will continue to have these tremendous stacks of unbalanced budgets that will go all the way to the ceiling. When people come to the floor and say, ``Let's just have the will to do it''--and I have heard it from opponents of the balanced budget amendment now for 21 years of unbalanced budgets--they ought to look at this stack and realize it is going up every year, and there is no will to do it. It is too easy to spend, too easy to spend the taxpayers' money. It is too easy to just act irresponsibly. Putting Social Security outside of the purview of the unified budget and outside the purview of this balanced budget amendment would be one of the most reckless things we could do. It would be the most risky gimmick you could have. I think it is not only a risky gimmick, it would be a riverboat gamble, where you are almost guaranteed to lose. Social Security would become a football to be kicked back and forth by those who want to play games with the budget, because there would be no fiscal discipline involved in that particular issue. They want to take the largest item in the budget out of the unified budget. Now, to show how ridiculous it is to take that riverboat gamble, put it out there where it is all by itself, where it could be attacked by anybody, instead of keeping it within the budget, I ask this one thing. Why do that when Social Security is the one item in the whole budget that everybody, every person sitting in the Congress today, be they Republican or Democrat, would support, would help, would keep viable? It is the largest item in the budget. I have to tell you that it can compete better than any other single budgetary issue. So where is the issue? Where is the meat here? The fact is that those who are bringing these amendments to the floor, by and large--and I am not talking about the distinguished Senator from Nevada; he is very sincere in this amendment, and he believes this. I don't know why he believes this, if you look at the facts of the 28 years, and at what all of us have done throughout the years. But most of the others who are bringing this to the floor and arguing for this are people who would not want a balanced budget constitutional amendment in the Constitution for any reason, or for a variety of reasons, some very sincere and some because they want to spend and tax more with ease, and they want to do it with voice votes so they don't have to come here and stand up and let people know how they voted. I have to tell you, they want to defeat the balanced budget amendment. Now, that might be all right to have this out there if it were a better system, but it would not be. You would be exposing Social Security to direct attack and to direct manipulation over and over. Madam President, I will have more to say in a few minutes on this. I notice the distinguished Senator from Michigan is here. He came to speak. I yield such time as he needs.

Mr. HATCH

Mr. HATCH. Sure.

Mr. HATCH. Mr. President, I don't want to spend a lot of time on this because I don't think that is a good point. Ever since the Civil War, the 13th, 14th, 15th, 19th, 24th, and 26th amendments have used the language ``appropriate legislation,'' which, under the Chadha decision of the Supreme Court, is interpreted as a law as signed by the President. It has to be submitted to the President.

Mr. HATCH. Let me just respond. I guess I will do it again. I will stand behind these two stacks of unbalanced budgets for the last 28 years and I will just repeat what the Senator said, the distinguished Senator from Vermont. All you have to do is sign the bill and send it to the President, but we have not been able to do it for 28 years, or 58 out of the last 66. And, by the way, I will give the President credit for bringing down the deficit from around $170 billion to $107 billion, but in each of the next 4 years, according to his budget, the deficit goes up until we are almost back to where we were until you reach 2001 and 2002, after he leaves office, when 75 percent of the cuts are going to take place. And everybody knows that is impossible. I should also mention that there were a lot of factors that helped lower the deficit that had nothing to do with the President. So he deserves some credit, but certainly not all of it. So, the same game is still going on, saying all you have to do is present the budget to him and he will sign it. If you believe that, you don't believe that these are real. Anybody who makes that argument just does not know what has gone on for 28 years and they just don't believe these books are real. I am telling you they are real. This is America, this is where we are going. We are in a fiscal deficit like you cannot believe and only in Washington, DC do people believe that a $107 billion deficit for a fiscal year is wonderful. And, by the way, even the poor are paying more under the so-called tax cuts that the distinguished Senator is talking about. When you look at the Social Security tax they are paying, they pay more in Social Security taxes than they do income taxes; user fees, various user fees; they are paying more for pharmaceutical products because of user fees. I was not very happy with it at the time. They are paying higher gas taxes, at least 4 cents or 5 cents a gallon more. That hits the poor harder than anything else. You can go right on down the line. There are an awful lot of extra taxes that people are paying that we hide around here every year because we don't have to be responsible under the current system. We have shared responsibility for our debt. I am not just blaming colleagues on the other side. There are colleagues on our side--all of us are responsible for it. And we have shared responsibility for our recent gains because some of the cutbacks in programs and restraint of growth occurred from this side of the aisle. The tax increase did occur from that side of the aisle. We did not support that. I think we should stop the partisan bickering and do what we need to do. I think what we need to do is adopt Senate Joint Resolution 1, the balanced budget amendment, and if we do that, I really believe we will be able to make real headway in a joint effort and in a bipartisan way to solve the problems of this country, especially the fiscal problems. As I have pointed out, common-sense reliance on estimates is the best way to apply the balanced budget rule. Further, the opponents' claim focuses only on the deficit vote in section 1 of the balanced budget amendment, but ignores the debt ceiling vote that is required in section 2. Under the balanced budget amendment, if we want to raise the limit on the debt, we need a three-fifths vote of both Houses of Congress. The debt is not an estimate. It is the real, cold, hard fact. The bottom line is, regardless of what the estimates say, under the balanced budget amendment, our children cannot be saddled with more debt unless there is a vote under the appropriate provision, and, in this case, it is section 2. There are no loopholes here. Reliance on estimates is both reasonable and sound. If we did not permit a reliance on estimates, someone on the other side would be arguing that the balanced budget amendment would be unworkable because it does not let us rely on estimates. You can just bank on it. Indeed, on the one hand, some opponents argue that the balanced budget amendment would be a straitjacket, while this proposal by my friend from West Virginia argues that it is not stringent enough. If this pending amendment of the distinguished Senator from West Virginia were adopted, this balanced budget amendment would be much harder to work with, and you could bet that we would hear from the critics then. Mr. President, this balanced budget amendment that we are debating is the real thing, and that is why so much noise is being made about it. If it wasn't important, there would not be this colossal fight every time we bring it up. It would shake things up in Washington, and there are some who are afraid of that. Personally, I think this town could use a good shaking by its neck. I am not one of those who is afraid of what the balanced budget amendment would do. I am not willing to add many more books to this pile. Even if we pass the balanced budget amendment and it is ratified by 38 States, or three-quarters of the States, we will still have another 5 years leading up to a balanced budget, but at least we know the game is over; we will have to get there. I am not willing to ruin this country's economy, and I am most certainly not willing to increase that $20,000 in debt that every man, woman, and child in America currently owes as their share of the national debt. I hope our colleagues will defeat the pending amendment and move on to passing Senate Joint Resolution 1, the balanced budget amendment. Mr. President, how much time do I have?

Mr. HATCH. Let me finish. If there is a minor or negligible drop below balance at the end of the year, and we find out that has occurred after the fiscal year has ended, we can avoid constitutional problems for minor deviations. However, we still have an incentive to get the budget back in line because section 2's debt ceiling provision does not rely on estimates. That is where the distinguished Senator is missing the point of this amendment. Section 2 does not rely on estimates. It requires that we not increase the debt without a three-fifths vote, and to avoid hitting the debt ceiling we have every incentive to stay at or above balance and to ensure that small deviations are actually made up. All of this is substantially better than the current system, which is not working. The current system is where we make our estimates and then we immediately forget about them and pass whatever legislation we want to, and that is why they are always out of balance. It has given us 28 straight years of unbalanced budgets, and deficits for 58 of the last 66 years--enough to drive anybody who is fiscally responsible wild. To argue that this current way of doing things is better than having fiscal discipline written into the Constitution, I think completely misses the point. Senate Joint Resolution 1 is a necessary step to give us the incentives to do something about this mess of unbalanced budgets that are going to continue unless we have something like this.