Orrin Hatch

Mr. HATCH

Mr. HATCH. But let me say this. I happen to believe that this little booklet that contains the Constitution of the United States, without the balanced budget amendment, will hopefully have a balanced budget amendment in it. Because, if we do--and I know that sincerely dedicated people like my friend from West Virginia will be voting for more fiscal responsibility and restraint than we do now. And he will have more leverage on not only his side, but our side, to get people to stand up and do what is right. I do not think that these comments, ``Let's just do it''--I have heard that now for 21 years. ``Let's just do it. Let's just have the will to do it.'' Here is the will of the Congress of the United States. Mr. President, 28 years of unbalanced budgets. I think these volumes speak worlds of information for us, of how ineffective we have been in doing what is right. The Constitution provides, in article V, for ways of amending it when it becomes necessary in the public interest to do so. I cannot imagine anything more necessary in the public interest than a balanced budget amendment, Senate Joint Resolution 1, if you will, a bipartisan amendment, bicameral bipartisan amendment, that literally, literally puts some screws to Congress and some restraints on Congress and makes Congress have to face the music. Right now, we don't face any music. Let's have the will? Give me a break, we haven't had the will in almost 66 years, but certainly not in the last 28 years, as represented by these huge stacks of unbalanced budgets of the United States of America. I have to pay respect to my colleague, because I care for him so much. He is sincere, he is eloquent, and he is a great advocate, and I respect him. In fact, it could be said I love him. The fact of the matter is, I think he is wrong. He thinks I am wrong. But I think his charts are very, very good reasons why, and these books are very good reasons why something has to be done. We cannot just keep frittering away our children's future and the future of our grandchildren. I know he shares that view with me, and I just wish we could do more together to protect their future. I am doing everything I can with this amendment.

Mr. HATCH. I am being honest.

Mr. HATCH. I think it promises a balanced budget, I don't think it mandates one. It gives us the flexibility to do whatever we want to do, as long as we comply its requirements.

Mr. HATCH. No, no, it gives us the flexibility to do whatever we want to do, but we have to stand up and vote to do it by supermajority votes. If you want to increase the deficits, you have to stand up and vote by a supermajority to do it. If you want to increase taxes, you can do it, but you have to vote on a constitutional majority of both Houses, to do it. That is a considerably different situation from what we have today where there are no constraints and, in many cases, or some cases that are very important, at least over the last 21 years, no votes. It has been done in the dead of the night, to use a metaphor, a metaphor that is all too real. These budget volumes are real. These are not mirages. These volumes are actually real. They represent 28 years of unbalanced budgets, 8 years longer than I have been here, and I see many, many more in the future if we don't pass this balanced budget amendment.

Mr. HATCH. Let me just say this, Moses also struck the rock at Meribah and gave water and was forbidden from entering the promised land after 40 years of traveling in the wilderness.

Mr. HATCH. That's right, Horeb. The fact of the matter is that he was following, in a sense, the same pattern, but without God's will. And I am tired of following the same pattern which I cannot believe is God's will. I am sorry that we have 28 years of unbalanced budgets in a row, and we are looking at 28 more because we are unwilling to do what is right. Now, look, the balanced budget amendment moves us toward a balanced budget by requiring supermajority votes if we want to unbalance the budget or increase the taxes to balance it. It requires a balanced budget unless there are emergencies in which we need a three-fifths majority to waive balanced budget requirements. In all due respect, my friend from West Virginia is actually arguing that one should oppose the balanced budget amendment because it doesn't require utopia, because we can rely on estimates. Well, utopia, means ``nowhere.'' But relying on good faith estimates, as the report does say, is ``somewhere,'' rather than ``nowhere.'' And it will lead us to balanced budgets. The first Congress and the States ratified the Bill of Rights. If we took the Senator's line, one should have opposed them, let's say, the first amendment, for instance, free speech, because it did not define free speech or show how free speech was going to be enforced. But we all know that's ridiculous, and I believe it's ridiculous, but I believe we should be better equipped to deal with estimates of outlays and receipts with a balanced budget amendment in the Constitution that all of us are sworn to uphold.

Mr. HATCH. Sure.

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

Mr. HATCH. Mr. President, I yield 3 minutes of my time to the distinguished Senator from West Virginia, and then I have the Senator from Nebraska waiting to speak.

Mr. HATCH. How much time remains?

Mr. HATCH. I yield 3 minutes to the Senator from Connecticut. Amendment No. 4, as Modified

Mr. HATCH. Let me take 1 minute of my remaining time, and that is to say that this amendment will have a loophole in the balanced budget amendment second to none, and a loophole for any kind of spending--not military spending, any kind of spending. It means more of the 28 years of unbalanced budgets. I hope my colleagues will vote down this amendment. I yield back the balance of my time.

Mr. HATCH

Mr. HATCH. I admitted I could not.

Mr. HATCH. Mr. President, I would like to take this time to briefly respond to my friend from North Dakota and others. In their press conference that was held this morning, as I understand it--I was not there, but Senators Conrad, Dorgan and Reid were--at that event a one- page memorandum from the Congressional Research Service, which was inaccurately termed a ``study,'' was characterized as proof that passage and ratification of the balanced budget amendment will harm Social Security. The problem is that the CRS memorandum did not conclude that at all. All the CRS memorandum concluded was that the Social Security existing surpluses after 2019--the year the program no longer produces surpluses because of the retirement of the baby boomers--cannot be used to fund the program unless such expenditures were offset by revenue or budget cuts. Of course, this is technically true. That is what a balanced budget does. It balances outlays and receipts, and expenditure of any part of the budget is an outlay. But these critics of the balanced budget fail to mention a few things. They fail to mention that CRS, in the memorandum, also concluded that the present day surpluses are ``an accounting practice.'' Past CRS studies clearly demonstrate that the Social Security trust funds are, indeed, an accounting measure. There is no separate Federal vault where Social Security receipts are stored. Social Security taxes--called FICA taxes--are simply deposited with all other Federal revenues. The moneys attributed to Social Security are tracked as bookkeeping entries so that we can determine how well the program operates. As soon as the amounts attributed to FICA taxes are entered on the books, Federal interest-bearing bonds are electronically entered as being purchased. That is the safest investment that exists in the world today. This country has a unified budget. This means that the proceeds from Social Security taxes are part of the Treasury--of general revenue. CRS has recognized this. Moreover, I might add, without including the present day surpluses, the budget cannot be balanced. That is why President Clinton has included Social Security funds in every one of his budgets. Do Senators Dorgan, Conrad, and Reid oppose that? If they do, they have a right to, but the President includes them because he has to. I recognize that Social Security is in danger. But the problem is not the inclusion of Social Security funds in the budget. The problem is that, with the retirement of the baby boomers and that generation, there will not be enough FICA taxes to fund their retirement. CRS, in a study, concluded that the present day surpluses would not be sufficient to resolve this problem. CRS concluded that the Social Security program needs to be fixed. Finally, not including Social Security in the budget would harm the program. Congress could rename social programs--as they have done before--as Social Security and use the FICA taxes to fund those programs to the detriment of senior citizens; that is, if we do not handle this matter the way the balanced budget amendment requires us to do. My colleagues' problem, in reality, is not with the balanced budget amendment but with the problems the Social Security program faces and will face in the future. We need to fix that. Adopting the balanced budget amendment is a good start. If we do not do that and if they take these matters so they are not part of the unified budget, then I submit every senior in this country is going to be hurt some time in the future because there will not be the will to get matters under control and spending under control. We saw the charts of the distinguished Senator from West Virginia all afternoon, which I think make my case, and so do these 28 years of unbalanced budgets. The only way we are going to face up to the needs of Social Security and the needs of our seniors is if it is part of the unified budget. Frankly, the CRS is right, this is an accounting process. The way to do it right is to have a balanced budget amendment passed that works. Mr. President, I ask unanimous consent that the Congressional Research Service, Library of Congress, February 12, 1997, letter to the Honorable Pete V. Domenici, attention Jim Capretta, from the American Law Division, on the subject of ``Treatment of Outlays from Social Security Surpluses under BBA,'' signed by Johnny H. Killian, Senior Specialist, American Constitutional Law, be printed in the Record at this point.

Mr. HATCH. Mr. President, I say to my dear friend and colleague, that would be one of the most tragic errors we could make. To me, that would be almost fiscal insanity. I am not saying anything is purely technical. What I am saying is that the money, not the securities, the money from FICA is commingled with all Treasury funds. Everybody knows that. That is No. 1. No. 2, as to the outyear issue, CRS says in various studies that the present surplus is not enough to fund the needs of the system when the baby boomers retire. That is a reality. No. 3, not including Social Security within the purview of the balanced budget amendment will ultimately hurt that program, because there will not be the same force to reform the program and make sure it works when the baby boomers come on that there may be now, that is included in the unified budget. I might also add, Mr. President, this is very important. This is the highest item in the Federal budget. How can we take it out of the unified Federal budget and not consider it? Yes, we have surpluses for a few years, but then all of a sudden, it goes into deep deficit. Both sides need to be in the full balanced budget if we are going to meet our realities and meet our necessities. The question of the Senator from North Dakota, Senator Dorgan, ``If the balanced budget amendment would truly require a balanced budget, then why will the debt increase,'' is, with all due respect, a bit of sophistry. The balanced budget amendment will require a balanced budget. Outlays must not exceed receipts under section 1 of Senate Joint Resolution 1. It is true that gross debt may still increase even if the budget is balanced. That is because the Government's exchange of interest-bearing securities for the present Social Security surplus is counted in the 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 stock or debentures. Such stocks and bonds are considered retired obligations that, once retired, have no economic or fiscal significance. Moreover, the Defense and Energy Departments list billions of dollars of environmental and nuclear cleanups as liabilities. All in all, gross debt, which includes all debt, is simply an overall indicator of Federal Government obligations. This sets the floor on increasing debt that has a direct, current effect on the overall economy, as the administration agrees. 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 $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. It is true that a balanced budget amendment does not by itself reduce the $5.3 going to $5.4 trillion national debt. But what it does do is straighten out our national fiscal house. Passage of Senate Joint Resolution 1 will increase economic growth. Almost everybody agrees to that on Wall Street. It will increase economic growth. It will allow us to run surpluses. With this, our national debt may be decreased if Congress desires to do so in the interest of national security, stability, and prosperity. Without Senate Joint Resolution 1, as we saw from the charts of the distinguished Senator from West Virginia all afternoon long today, without Senate Joint Resolution 1, this will be an impossibility. We will just continue the same darn programs producing deficits producing the 28 years of unbalanced budgets, unbalanced budgets that will just continue on ad infinitum. Ultimately our kids are going to have pay these debts, and it will be a doggone big debt for them. We just cannot do it to them. I just suggest to my colleagues, as sincere as they are, the worst thing they can do for our senior citizens is to try to exclude Social Security from the budget because then all these big spenders around Congress are going to find everything to be a Social Security expenditure. Ultimately, it will impinge on the Social Security program and ruin the program, which Senator Reid this evening has rightly called one of the greatest programs in the history of the world. He called it the greatest. I will certainly say it is one of the greatest in the history of the world. If we want it to continue, it seems to me we have to treat it, since it is a high item in our budget, as a budgetary item. These accounting approaches are going to go on no matter what happens. So I think if we pass the balanced budget amendment, a balanced budget will ultimately become a reality. We are going to have to face reform of Social Security in the best interests of our senior citizens. If we keep going where we are going, there will not be any moneys for Social Security and a lot of people are going to get hurt. To exclude Social Security from the budget is penny wise and pound foolish and it is a fiscal gimmick to try to take the largest item in the Federal budget out of the Federal budget without reforming the program to keep it solvent. Passage of the balanced budget amendment will pressure Congress to fix Social Security. Passage of the balanced budget amendment will help increase revenues and economic growth that will aid Social Security. I yield the floor.

Mr. HATCH. Let me just say I never did learn how to juggle things. I think that is one reason why I strongly believe in balanced budgeting, is because I am tired of all the juggling that has gone on around here. But under the exemption proposal of the distinguished Senator from North Dakota, the debt will increase much faster because there is nothing being done about it. His proposal does not change that one bit. Our proposal says we are tired of this. We are tired of 28 straight years of unbalanced budgets, and we want to face the music of budget deficits and do it within the realm of fiscal restraint. And, if we do not keep all items together, then there are going to be loopholes that literally will blow this country apart. We will have the regular budget and a separate Social Security budget. One will be required to be balanced under the constitutional amendment and the other will be an exempted Social Security budget that can run deficits because under the proposal it will be excluded from the constitutional amendment. Congress will transfer costly programs to the exempted budget. These costly programs will be funded out of Social Security revenues. This will ruin and hurt every senior citizen in this country. Exempting Social Security is just a fiscal gimmick. Mr. DORGAN addressed the Chair.

Mr. HATCH. Of course not. Of course not. But passage of the balanced budget amendment is the first and only real step toward a balanced budget and fiscal sanity.

Mr. HATCH. I think that is true. Let me just say, so I clarify, I did not say that the distinguished Senator from North Dakota is a sophist, though I think he would make a good one. I did say that I think his arguments are--

Mr. HATCH. Let me say this. I think there is a good argument the gross debt increase does not matter in this context. Why? Because it is just evidence of what one agency in the Government owes another agency. What is of economic consequence is net debt--net debt; that is debt held by the public which is legally enforceable. Now, I have to say that the Senator's proposal does not stop the debt from growing, and under his proposal, if this balanced budget amendment goes down, if his amendment was added--and it will go down and everybody knows that--the gross debt will grow at least as fast. So his solution is not a solution. We all know that the only balanced budget amendment we have a chance of passing is the underlying amendment that includes everything on the budget. We also all know, in all fairness, that Social Security should be included because it is more than capable of competing with other programs, and it ought to have to compete. Let me tell you this, if it is not on there, I think it is a risky gimmick to take it out. When somebody says our balanced budget amendment is a gimmick, I agree with the Senator from Maine, Olympia Snowe, who said today, if it was a gimmick, we would have passed it long ago. The fact is that it is why it is being fought so hard against. It will put fiscal restraints and discipline on all items of the budget that has been long overdue. I think that has to be done. I yield the floor.

Mr. HATCH. Will the Senator yield?

Mr. HATCH. That is quite a bit different from what I am saying. We did not include Social Security in the budget in Gramm-Rudman-Hollings solely so as to not give the President the right to sequester Social Security funds. But this exclusion was not from the budget itself. But we should not lock the exemption into the Constitution. We can always change statutes. It is much harder to amend the Constitution. We should not lock into the Constitution the largest item in the Federal budget, which is outside the purview of the constitutional amendment. If you start doing that, that is risky. You do not know how that will affect senior citizens. It is likely to hurt the senior citizens, and it is better to keep things on budget. I suspect that there is no question in anybody's mind that Social Security is more than capable of fending for itself and of getting another 98-to-2 vote in the Senate and an equivalent vote in the House that you cannot tamper with it. Frankly, I am one of those that would make sure to vote that you do not tamper with Social Security, to lock the exemption in the Constitution forever. Such a budgetary practice, is risky. That could have a terribly bad effect on senior citizens. I think senior citizens are starting to wake up to that. They know this issue has been used blatantly and politically and demogogically for years now. I think they are getting tired of it.

Mr. HATCH. Will the Senator yield?

Mr. HATCH. I will end with this. The 1990 Budget Act basically stated in one section to take Social Security out of budget. It said in another section to leave it in. This is confusing. But both Congress and the President have construed the Budget Act of 1990 to allow Social Security to be included within the unitary budget. Second, Social Security is not a pay-go system under the 1990 act. I want to add that once you make that decision to take the largest item out of the budget, you have provided a loophole where people can impinge on Social Security and hurt senior citizens. Anybody who does not believe in those loopholes better look at these stacks. They are filled with loopholes like that. We are trying to stop those loopholes. I might also mention this, because I think it is pretty important. All constitutional scholars who testified before our committee, those for the balanced budget amendment and those against the balanced budget amendment, Senate Joint Resolution 1, testified that exempting Social Security in the Constitution was constitutionally risky. It is a risky gimmick to do that. No one knows how that will hurt the seniors, but we know it will. It would subject Social Security and the Constitution to a gaming approach. They could game the process. They could game Social Security. They could game the Constitution. That would be a disaster for our country. Alan Morrison, one of the leading constitutional lawyers in this country, who disagreed about the wisdom of the balanced budget amendment, said: ``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.'' In conclusion, the biggest threat to Social Security is our growing debt and the concomitant interest payments. That 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, the balanced budget constitutional amendment. The proposal to exempt Social Security would not only destroy the balanced budget amendment--the only one that can pass, a bipartisan amendment, a bicameral amendment, bipartisan in both parties--but, in all probability, would very badly hurt Social Security and every recipient of Social Security, and would definitely guarantee that the baby boomers would not have any Social Security in the future. They will come to the realization that it is going to hurt Social Security, too. The best thing we can do is keep everything in the budget and start being budget people who work, and who do what's right, and get rid of these 28 years of unbalanced budgets that have just about wrecked the country. And it could very well wreck Social Security. I yield the floor.

Mr. HATCH

Mr. HATCH. Hopefully, by 2 o'clock tomorrow, the majority leader should be able to let us know what will be done thereafter. We can't extend morning business past 3 o'clock tomorrow.

Mr. HATCH

Mr. HATCH. Mr. President, for the information of all Senators, tomorrow, the Senate will be in a period of morning business to accommodate a large number of requests. It is still possible that the Senate will consider a resolution regarding milk prices during Thursday's session. Rollcall votes are, therefore, possible tomorrow. The Senate may also be asked to turn to the consideration of any other legislative or executive items that can be cleared.