Orrin Hatch

Mr. HATCH

Mr. HATCH. I would like to recognize the distinguished Senator from New Hampshire, but first let me take 1 minute. I heard the dialog between the distinguished Senator from Massachusetts and the distinguished Senator from Illinois, and I have to say that I am fully familiar with all those groups. And about 78 percent of the American people--between 68 and 78 percent of the American people--have always been for this balanced budget amendment. They come from all walks of life, from every group. The reason they do is they are deathly afraid that if we do not get this spending under control, the very people that my good friends have been talking about are going to be hurt the most. There is no question about it. To just keep arguing that we can continue to do business as usual, as has been argued here, that is the biggest joke of all. I yield 15 minutes to the distinguished Senator from New Hampshire.

Mr. HATCH. Madam President, I know there are 2 minutes left before we end debate on this amendment. I acknowledge my colleague is sincere. It does not negate the fact we have to live within budget constraints or this country will go down and children will be the first to be hurt. That is why this amendment is so important. You cannot make any exceptions. If you make exceptions, then it does not become important. It does not work and it will not be the constraint that we need, it will not be the fiscal discipline, that it will make a difference whether this country really continues to be the greatest country in the world or not and whether it can do for children and families what we would all like to do. The best thing we can do is pass this amendment and pass it without exceptions, like my good friend who is very sincere thinks we ought to do. I just want to bring that to the attention of everybody, that it takes guts to stand up and do what is fiscally responsible, because it is easier to offer spending through all these constituencies then it is to have to make priority choices. This amendment will force us to make priority choices. I think that is critical in any kind of nation that really wants to call itself great.

Mr. HATCH. Madam President, it may not be to the distinguished Senator from Minnesota, but I really believe it is time to pass a balanced budget amendment, and this is the context in which this is in. With regard to tabling, we have always done it and intend to table the amendments if we can, and that is a right that we have. It is not meant to hurt the Senator or his position, it is just a matter of procedural choice, which I--and I just want to make it clear up front-- will probably do on all, if not most all, amendments that come before the body on this matter. I realize the distinguished Senator from Minnesota is very sincere, that he would not bring this amendment to the floor if he didn't mean it and it wasn't meaningful to him. I am not meaning to disparage his amendment at all, other than I think it would be a terrible way of writing the Constitution, putting words in the Constitution that would be almost impossible to define and I think would, basically, gut the constitutional amendment. Even if we put it in, even if somehow or another we could find some way of putting it in the amendment, I don't believe we would have the vote of the Senator from Minnesota anyway. To make a long story short, it is one of a long series of amendments that are intended to defeat the balanced budget amendment, and I hope my colleagues will vote to table. Mr. LEAHY addressed the Chair.

Mr. HATCH. The fact of the matter is, you cannot budget without putting everything on budget and you cannot handle it right. And the President is doing what the Secretary of Treasury said he should do, and that is keep all items on budget. There are 31 trust accounts, at least in the Federal Government. Are we going to take them all off because somebody makes the unfounded allegation that we are ripping off the trust funds? The fact is, the only way not to rip them off is to keep everything on budget. And that is a pretty important point. I do not see how you can argue to take it off budget. It just makes sense that we face all the music here, not just part of it, and that we do not make any exceptions so that we have to make priority choices if we are going to have a balanced budget amendment. The Senator is right on one thing and that is this amendment does not require a balanced budget. We can choose not to balance the budget. All we need to do is get a supermajority. This is not a pure democracy in this country. This is a representative democracy, and the Senate is a perfect illustration of how we do not always have a majority vote. The fact of the matter is, each State has two Senators, regardless of population, and that gives a disproportionate amount of voting power to some States over others. The House of Representatives is a purer democratic body, and our Founding Fathers in their wisdom understood this. They also would understand, if you are going to do a balanced budget amendment, you have to keep everything on budget. And it still does not rebut my point, which is that this is a gutting amendment. This amendment basically says when we have an economic emergency we can go off budget, the amendment does not apply. Again, I ask you, what is an economic emergency? There is a wide disparity of belief as to what is, and we provide for a way around that by a three-fifths vote, which I think, in a true economic emergency, will be easily obtained here and should be easily obtained here. In response to the supermajority requirement, the Senator from North Dakota raises the vote on war, a military threat. Senate Joint Resolution 1 provides a lower threshold for votes to waive the balanced budget rule in times of war or national security emergency. With regard to economic emergencies, during the past 15 years Congress has passed emergency unemployment compensation by supermajorities every time but once, and it can be legitimately argued that the once was a time when they should not have. Disaster relief has been enacted by a similar supermajority every time except twice over the last 7 years. What is wrong with requiring people who have not balanced a budget in 28 years and who keep saying the same things, what is wrong with requiring some fiscal restraint of these people? It is apparent that Congress is not going to live with fiscal restraint unless it is imposed upon them, and the only way we can impose it--after five tries in the last few years of budget restraint by statute, none of which have worked--the only way you can impose it is through an amendment to the Constitution that everybody in this body and in the other body is sworn to uphold. I think it is just that simple. There is room for legitimate disagreement here, I am sure. I do not mean to imply that my colleagues are not sincere in every word that they are saying. But, on the other hand, I think those of us, the vast majority in this body, who will vote for this are sincere as well. We have seen 28 years of sincerity. People were sincere in trying to get balanced budgets during those years, but they did not do it. The reason they did not do it is because they did not have to do it and it was easy to borrow. It was a lot easier to borrow and mortgage the future of our children than it was to face the music. Our amendment will require we face the music. I yield the floor and reserve the remainder of my time.

Mr. HATCH. I will use my own time. I am sorry.

Mr. HATCH. Madam President, I listened to these arguments, and I did not make the argument that we should have Social Security in the balanced budget amendment because the President is doing it. Everybody has done it because it is a unified budget that requires everything to be on budget. And on the other side of that coin, starting about the year 2014 Social Security goes in deep deficit. What are we going to do, keep that off budget so that we do not have to face the music, so we can keep borrowing?

Mr. HATCH. Madam President, the Senator from North Dakota has been very eloquent. The problem is that what he seems to be arguing for is a continuation of the status quo. For instance, on Social Security, at the very time he is arguing that it is immoral and that it is a rape of the trust, that it is a ripoff to keep Social Security within the purview of the balanced budget amendment, he supports a President who is doing exactly that. That is what the President's budget does. That is what every budget of every President has done ever since we started the unified budget system. And it just makes little or no sense to take it out of the Federal budget, out of the unified system, because if it cannot stand on its own, which Social Security can, then why would we make any selectivity. The fact is it is a gimmick to take it off budget, and it is a risky gimmick at that. What they are trying to do is really defeat the balanced budget amendment. Then to argue that we have to take care of economic emergencies, well, what are economic emergencies? I must be able to list at least 3,000 of them right now that could occur to which everybody could argue that the balanced budget amendment does not apply. It is one thing to argue for the status quo. I have seen 28 years of it. I have been here 21 of the 28 years. And I have to admit I fought for a balanced budget every one of those years, and there have been a number of us who have done so, but we have been in a distinct minority as unbalanced budget after unbalanced budget has been passed. Now they are saying let us keep the status quo. Even though this gimmick is going to take Social Security off budget and subject to all budgetary matters, we should take it out of the balanced budget amendment, as though Social Security cannot stand on its own. Come on. That would be one of the most risky things we could do. Every item ought to be on budget. Social Security is the largest item in the Federal budget. It ought to be in the budget. And we can work around the problems that are concerning the Senator from North Dakota and others who argue that. To talk about economic emergencies and try to write that into the Constitution, everybody knows that is a gutting amendment that would destroy the balanced budget amendment. To say that you cannot get a three-fifths vote is an insult to everybody who believes in this country and who is patriotic and who really believes that the country should go forward. If we have a true economic emergency, we will be able to get the three-fifths vote, and there will be a lot of us who are conservative who will be voting for the three-fifths vote. The fact of the matter is if it does not measure up, then that three- fifths vote will not be granted. And a lot of these very same people will be saying, ``Oh, this is the most important thing in the world,'' as we go into another year of unbalanced budgets. That is what we have been doing. I hear these people saying, ``Oh, we can do it. Just do it. Just do it.'' I have heard that for 21 solid years. We have never done it yet in the last 28 years. What makes us think that ``let's do it'' means we are going to do it the next year. The fact is the President's budget is not going to be in balance, according to the CBO; the one he sent us is not balanced. And keep in mind the last 2 years are where all of the budget cuts have to occur in order to be in balance, according to the President, or there will not be any tax relief to the American people. So, look, we know that these amendments are intended to gut the balanced budget amendment. People who are arguing for them may be doing it sincerely, and I presume they are. But they are people who are not going to vote for this balanced budget amendment no matter what we do. They are not for it no matter what we do. We heard the distinguished Senator from Minnesota. Why, he has four or five major items that he would exclude from any budgetary restraint. There are others who would exclude Social Security from any budgetary restraint. And there are 98 others in this body who would also like to exclude some of their special projects. The best we can do is work together on the unified budget and face the music and make priority choices within a budgetary constraint system, and if we do that we will save this country, we will protect our children, protect our seniors, protect those who need it, and we can. Otherwise, we are going to monetize the debt in order to stave off bankruptcy, and that means ruining our country, having interest rates going out of sight and inflation through the roof. We are talking about saving the country right now. That is what we are talking about. With these gutting amendments, if any of them pass, the balanced budget amendment will become a lot less effective. I yield the floor.

Mr. HATCH. Madam President, I yield 8 minutes to the distinguished Senator from Colorado, so he can finish his statement.

Mr. HATCH. Will the Senator yield on that point, just on that point?

Mr. HATCH. If the Senator would.

Mr. HATCH. Will the Senator yield?

Mr. HATCH. Mr. President, I thank my colleague for his willingness to lead off in our efforts to pass the balanced budget amendment. Naturally, I disagree with him on the Social Security issue. But I know that he is a person of eminent qualification and one who does what he believes is right. I have had many years of opportunity to know the distinguished Senator from Pennsylvania, and I have a lot of respect for him. Mr. President, today we begin the second week of one of the most important debates that has ever taken place in the U.S. Senate. The subject matter goes to the heart of the Founding Fathers' hope for our constitutional system--a system that would protect individual freedoms with the maxim of limited government. In the latter half of this century, however, the intentions of the Framers of the Constitution have been betrayed by multiple Congress' inability to control their spending habits. The size of the Federal leviathan has grown to such an extent that the very liberties of the American people are threatened. Like some of the provisions of the Constitution, the proposed constitutional amendment, Senate Joint Resolution 1, is an appropriate addition to constitutional limits on the powers of the Federal Government designed to increase the freedom of the people by limiting the freedom of the Federal Government to act in ways that are harmful to the people. It is identical to the balanced budget amendment that was passed by the House of Representatives in the last Congress. A number of our new Members voted for it at that time. It has broad support in the country and among Democrats and Republicans in that we need to ensure a sound fiscal discipline in our budgeting process in order to leave a legacy of a strong national economy and a responsible national Government to our children and grandchildren. Mr. President, our Nation is faced with a $5.3 trillion--going to $5.4 trillion--national debt that gets worse every year that we run budgetary deficits. The Government is using capital that would otherwise be available to the private sector to create jobs, and to invest in the future of this country. Increasing amounts of capital are being wasted on merely financing the debt because of spiraling interest costs. This problem presents risks to our long-term economic growth and endangers the well-being of our elderly, our working people, and especially our children and grandchildren. The debt burden is a mortgage on our children's and our grandchildren's future. The total debt now stands at almost $5.3 trillion. By the end of this debate it may very well reach $5.4 trillion. That means every American, every man, woman, and child in this country has an individual debt burden of about $20,000 per person. It took us over 200 years to acquire our first trillion dollars of debt. We have been recently adding another $1 trillion to our debt about every 5 years. While the trends on this front seem to be better, the fact is we are still running sizable deficits every year. And, unless we take prompt and decisive action, those deficits will continue to rise again this year, next year, and year after year. In fact, if you look at the President's budget, he even waits until he is out of office before they have to make the tough decisions to really balance the budget by the year 2002. Yet, Mr. President, opponents of the balanced budget amendment claim that there is no problem. They repeatedly point to the marginal slowdown in growth in debt over the past few years as though all our problems are solved. They say President Clinton has already dealt with this problem. They are dead wrong. Only inside the beltway can people claim that when the debt is exceeding $5 trillion and still on the rise that we are on the right track. Everyone on Capitol Hill knows and the Congressional Budget Office has confirmed that we are currently not on a glidepath to a balanced budget, or to the balanced budget that the President may suggest. According to CBO's most recent projections, our 4 years of declining deficits that followed the enactment of President Clinton's record-setting 1993 tax hike will come to a grinding halt this year. What lies ahead is a familiar path of steadily increasing deficits rivaling anything we have ever seen before unless we take action to put us on the road to long-term fiscal discipline and balanced budgets. As this chart behind me shows, the Congressional Budget Office predicts that under current policies the deficit will begin to rise this year and continue to rise throughout the foreseeable future. The Congressional Budget Office projects the deficit will rise to $124 billion in fiscal year 1997 and continue rising to $188 billion in fiscal year 2002. The deficits just keep rising until in 2007 our annual deficit is projected to be $278 billion. Added up, these deficits will add a total of more than 2 trillion additional dollars to the debt from now--in 1997--until the year 2007. There is no balanced budget in this chart. And I have to tell you, I doubt that there ever will be without a balanced budget constitutional amendment putting the fiscal discipline into the Constitution that will require us to live within our means. The simple fact is that with every additional dollar that we borrow we throw more coal on the fire of the runaway train that we are all riding on. The sad reality is shown by this stack of unbalanced budget submissions. The President's budget submission, which promises a path to balance in the year 2002, causes me substantial concern that this pile is just going to keep getting higher. And this only lists the last 28 years of unbalanced budgets since the last balanced budget in 1969. Actually, there have only been eight in the last 66 years. But the last 28 years have all been unbalanced. Each one of these volumes represents one of those unbalanced budgets during each of those 28 years. The sad reality is shown by this stack of unbalanced budget submissions. The President's budget submission which promises us a path to balance in the year 2002 just makes it very clear, if you believe in the Congressional Budget Office projections, that this stack is just going to grow that much higher over the next number of years. For example, the President's new budget projects a modest surplus in the year 2002 but also requires a 75-percent deficit reduction to get there in the 2 years after he leaves office. Now, get that. Up through the year 2000, this President's budget does not require much sacrifice or much effort to try to balance the budget. But in the years 2001 and 2002, 75 percent of the cuts have to take place, and we all know around here that that is basically impossible to do. So the game continues, the same game we have put up with for 28 years, and it is pathetic, is what it is. This just indicates more of the same status quo, an avoidance of the tough decisions and deferral of the costs to the next guy, or should I say to our children. Additionally, the Senate Budget Committee has suggested that recomputing the numbers under CBO's more conservative economic assumptions puts the President's budget off balance in the year 2002 to the tune of an additional $66 billion. So the President's budget that he submitted just last week is not going to balance. The point is that we cannot yet congratulate ourselves for a job well done. There is hard work ahead for each of us to do, and there is no assurance of success. Based on the sad history illustrated by each of these 28 years of unbalanced budget submissions and the continued resistance of the President to take on the tough choices during his actual tenure in office, success is in serious doubt. That is one of the reasons why we need a balanced budget constitutional amendment. It has been called an insurance policy that we will get the budget actually balanced in the year 2002 and, more importantly, that we will keep it balanced thereafter. I would also note that it comes as no surprise that these increases in our Nation's debt mirror increases in Federal spending. The first $100 billion budget in the history of the Nation occurred as recently as fiscal year 1962--that was the whole budget--more than 179 years after the founding of our Republic. It took only 9 years for that figure to double, and in just another 6 years Federal spending had doubled again to $400 billion in 1977. I know, I was here. With another 6 years came another $400 billion increase in the Federal budget, and by 1986 our Nation had seen its first $1 trillion annual budget. Today we face an annual budget for fiscal year 1997 projected to exceed $1.6 trillion, as is the case under the budget recently submitted by the President. The Federal Government's appetite for spending the American people's money is the engine that has been driving this debt up and up because it has been easier to take the money in the form of a hidden tax like interest costs and future taxes, than in the form of a direct tax. One of most pernicious effects of the enormous deficit beast is the interest costs required to feed it. Interest on the public debt in 1996 amounted to some $344 billion. That is roughly $50 billion more than total Federal revenues in 1975. In other words, we spent less than $300 billion in 1957. In 1996, just 20 years later, gross interest costs took nearly 25 percent of all Federal revenues and more than half of all individual income tax revenue. And as this chart shows, net interest payments on the debt make up the third largest charge of our Federal budget. It is the red pie that is taken out of the total pie--the third largest payment in the Federal budget--exceeded only by defense spending and Social Security. It is really amazing when you look at it: Social Security spending, 22 percent, defense spending is 18 percent, and net interest is 15 percent. And it is going up every year and will go up exponentially unless we do something about it. And yet we have the same people around here year after year saying, ``Oh, let us just exercise our will and let us just do it.'' That is what they said for every 1 of these 28 years of these unbalanced budgets, and that is what they will be saying 10 years from now without any balanced budget, if we do not have the balanced budget constitutional amendment. Opponents of the balanced budget amendment suggest that we cannot afford to create a constitutional impediment to deficit spending because they believe that balancing the budget will result in decreased social spending. I do not personally understand the logic of continuing to waste such a large portion of our budget on interest on the rationale that we cannot afford to cut spending. What we cannot afford to do is continue to throw away so much of our budget on interest payments. Think of how much we could do on crime control, defense, disaster relief, health, science, and education if we had $344 billion available next year instead of paying interest against the national debt with that money. To help my colleagues put this in even better perspective, gross interest on the debt in 1966 amounted to more than the entire defense budget of $266 billion; 99 percent of Social Security payments, $347.1 billion; 64 percent of all discretionary outlays, $535.4 billion, and nearly 45 percent of all mandatory programs of $784.9 billion. The $334 billion of gross interest payments on the debt in 1996 could have covered our entire health spending, including Medicare and Medicaid, that is, $293.6 billion, all veterans-related entitlement spending, $18.8 billion, unemployment compensation, $22.6 billion, the cost of Federal law enforcement activities of $8 billion, and we would still have $1 billion to spare. Last year, in fact, we spent more money on net interest payments on the debt than we did for the combined budgets of the Department of Commerce, the Department of Agriculture, the Department of Education, the Department of Energy, the Department of Justice, the Department of the Interior, the Department of Housing and Urban Development, the Department of Labor, the Department of State, and the Department of Transportation. Just think about that. Interest on the debt is the fastest growing item in the annual Federal budget. According to the current Congressional Budget Office projections, gross interest on the debt will continue to rise substantially over the next 5 years from $360 billion in 1997, to $412 billion by 2002, and by 2007 just the interest on the debt is projected to be $493 billion. If we keep going like we are, we are going to be paying almost everything on interest that could be used to solve a lot of problems in our society. This $495 billion is just $50 billion shy of our entire discretionary budget for the current fiscal year. Over the past 4 years of short-lived deficit reduction, we have paid roughly $1.3 trillion in interest on the public debt. That is more than the Federal Government took in during all of 1994. Without the gross interest on the debt, we would not have had a deficit in 1996. In fact, we would have run a budget surplus of $237 billion. But we cannot even begin to think about reallocating this money to more productive uses until we begin to reduce our debt. If interest rates go back up, the problem will be increased exponentially. Self- propelled interest costs will continue to eat a larger share of our National Treasury, destroying our choices to fund new programs and eroding our ability to keep the commitments we have already made. This is serious stuff. And even if we are successful in passing a budget this year that will balance our budget by the year 2002, we will never begin to reduce our debt unless we can provide some assurance that such balanced budgets will become the rule rather than the exception. That is what the balanced budget amendment is geared to do. Mr. President, both sides will recite lots of numbers and figures during the course of this debate. One such figure is our current $5.3 trillion national debt. But how does one communicate the implications of our staggering debt? In 1975, before this recent borrowing spree, the Federal debt amounted to approximately $2,500 per person. That was each American's share of it in 1975, and the annual interest charges were roughly $250 per taxpayer. At present, the Federal debt amounts to about $20,000 per person, with annual interest charges that each person in this country, each man, woman, and child in America, has to pay, totaling nearly $1,350 per person, or roughly $2,975 per taxpayer. That is at today's interest rates, which will go even higher if we do not get things under control. The Congressional Budget Office predicts that in the year 2002, total Federal debt will be more than $6.8 trillion. That means roughly $24,000 of debt for every man, woman, and child in America, with annual interest costs projected to be over $3,100 per taxpayer. These last figures would mean a nearly tenfold increase in per-capita debt and a nearly twelvefold increase in annual interest charges per taxpayer since 1975. Over time, the disproportionate burdens imposed on today's children and their children by a continuing pattern of deficits could include some combination of the following: Increased taxes, reduced public welfare benefits, reduced public pensions, reduced expenditures on infrastructure and other public investments, diminished capital formation, diminished job creation, lower productivity enhancement and less real wage growth in the private economy, higher interest rates, higher inflation, increased indebtedness to and economic dependence on foreign creditors, and increased risk of default on our Federal debt. Senator Simon would always make this point: If we keep going like we are going, ultimately we are going to have to monetize the debt--that is, print cheap money--where it will cost you a bushelful of dollars to buy a loaf of bread like it did in Germany in the 1930's, and then write off all the debt on cheap dollars. But the United States of America as we know it will be gone at that point. Mr. President, this is fiscal child abuse and it must end. But, as I indicated earlier, there is no end in sight. After 4 years of declining deficits--financed partly with the largest tax increase in history--we have not reduced our staggering $5.3 trillion national debt 1 penny. We have only slowed the growth in the national debt. More important, as my Republican colleagues and I predicted would happen during the debate on the President's 1993 budget package, the Congressional Budget Office now predicts--and if you look at this chart--it now predicts that annual deficits will resume their upward climb beginning this year from an annual deficit of $124 billion in 1997, to $188 billion in the year 2002, and then exceeding $200 billion the next year and reaching a near record $278 billion high in the year 2007. Even OMB's estimates from the President's newly proposed budget, which predict lower debt totals than CBO, project that gross Federal debt will top $6.6 trillion, exceeding 66 percent of our gross domestic product by the year 2002. That means, according to their own estimates, the Clinton administration's self-proclaimed victory in bringing down the deficit will result in an additional $1 trillion or more being added to the national debt between now and the year 2002. Mr. President, we do need to do more. It is time for Congress to pass Senate Joint Resolution 1, to permanently restore the fiscal environment in which the competition between tax spenders and taxpayers is a more equal one--one in which spending decisions will once more be constrained by available revenues. The time has come for a solution strong enough that it cannot again be evaded for short-term gain. We need a constitutional requirement to balance our budget. Senate Joint Resolution 1 is that solution. It is reasonable, enforceable, and necessary to force us to get our fiscal house in order. There are those who oppose the balanced budget amendment because they say that Congress and the President are already committed to balancing the budget by the year 2002. As a matter of rhetoric, that is true; as a matter of what people say, that is true. But as a matter of real world politics, it is clear that the bridge between such rhetoric and reality is a rather long one. Since 1978 alone, there have been no fewer than five major statutory regimes enacted which promised to deliver balanced budgets. This includes Gramm-Rudman-Hollings. But there has not been a single balanced budget since 1960. Here are the 28 succeeding budgets. In about every one of these it was promised there would be an effort made to balance it, every one of which is unbalanced right up to today. Notwithstanding all of these budget plans and the five statutory attempts to require a balanced budget that I have mentioned, the national debt has increased by roughly $4.5 trillion since 1978. In other words, nearly 85 percent of our current national debt has accumulated during the period of time in which Congress has operated within statutory budget frameworks designed to ensure the types of fiscal discipline that would be required under Senate Joint Resolution 1. While I support the efforts of the past and commend the dedication expressed by leaders of both political parties to reaching a balanced budget, I seriously doubt whether, without the weight of a constitutional requirement to balance the budget, we will achieve balance by the year 2002. Even if we did, there is nothing to prevent future Congresses from yielding to the inherent political pressures that would lead to renewed deficit spending. We need a constitutional amendment if we are truly committed to solving this problem. Mr. President, the proposed constitutional amendment will help us end this dangerous deficit habit in a way that past efforts have not. It will do this by correcting a bias in the present political process which favors ever-increasing levels of Federal Government spending. In seeking to reduce spending bias in our present system--fueled largely by the unlimited availability of deficit spending--the major purpose of Senate Joint Resolution 1 is to ensure that under normal circumstances, votes by Congress for increased spending will be accompanied either by votes, A, to reduce other spending programs or, B, to increase taxes to pay for such programs. For the first time since the abandonment of our historical norm of balanced budgets, Congress would be required to cast politically difficult votes as a precondition to politically attractive votes to increase spending. The American political process is skewed toward artificially high levels of spending. It is skewed in this direction because Members of Congress have every political incentive to spend money and almost no incentive to forego such spending. It is a fiscal order in which spending decisions have become increasingly divorced from the availability of revenues. The balanced budget amendment seeks to restore Government accountability for spending and taxing decisions by forcing Congress to prioritize spending projects within the available resources and by requiring tax increases to be done on the record with record votes. In this way, Congress will be more accountable to the people who pay for the programs, and the American people, including our future generations who must pay for our debts, will be represented in a way they are not now represented. Congress will be forced to justify its spending and taxing decisions as the Framers intended, but as Congress no longer does. Senate Joint Resolution 1 represents both responsible fiscal policy and responsible constitutional policy. Passage of this resolution would constitute an appropriate response by Congress to the desires of the people and the States for a constitutional amendment on this issue. The Senate must approve Senate Joint Resolution 1, the balanced budget amendment. It is the right thing to do for ourselves, our children, our grandchildren, and future generations, and it will give us back responsible and accountable constitutional Government. The faithful stewardship of public funds that was so prized by our Founding Fathers can be restored for 21st century Americans. The virtues of thrift and accountability can be rekindled by this very 105th Congress, so I urge Senators to join with me and the other 61 sponsors of Senate Joint Resolution 1 in support of the bicameral, bipartisan, consensus balanced budget amendment which has taken years to develop and for which we have fought for over 20 years. This is the thing to do. This is the chance to do it. This is the chance to do what is right. I hope our colleagues will do so. I apologize to my colleague who has been on the floor, who would like to call up an amendment, so I yield the floor to him at this time.

Mr. HATCH

Mr. HATCH. Mr. President, today I am introducing the Orphan Drug Act of 1997, legislation to extend permanently the orphan drug tax credit. I am pleased that my good friend and colleague from Montana, Senator Baucus, is joining me. Similar legislation was introduced in the House last year by Representatives Nancy Johnson and Robert Matsui. I am confident that they will once again introduce legislation this year to make the credit permanent. Mr. President, this credit encourages private firms to develop treatments for rare diseases. As many of my colleagues know, we extended this medical research tax credit last year, but, it will expire on May 31 of this year. Since the 1983 enactment of the orphan drug tax credit we have seen very encouraging progress in developing new drugs to alleviate suffering from a number of so-called orphan diseases, those diseases that afflict a relatively small number of people. Because the process of research, development, and approval for new pharmaceuticals is so costly--running into hundreds of millions of dollars--the small market for a drug discourages drug companies from undertaking it. Mr. President, the incentive provided by this credit gives hope to individuals who suffer from such rare but devastating conditions as Tourette's syndrome. Huntington's disease, and neuro- fibromatosis, to name a few. Many drugs designated as orphan drugs have a much small potential market than even the 200,000 patients referred to in the definition in this credit--sometimes they are for conditions that affect as few as 1,000 persons in the United States. This means that without some incentive there is simply no possibility for a firm to profit from its decisions to develop drugs that treat these diseases. Fortunately, the orphan perception has been changing over the years that this research credit has been in effect. In fact, Mr. President, pharmaceutical companies have made great strides in discovering treatments for these orphan diseases. While only seven orphan drugs were approved by the FDA in the decade before the credit's initial passage, over 100 have been approved since and approximately 600 are now in development. Last year, I mentioned the first-ever treatment for Gaucher disease, a debilitating and sometimes fatal genetic disorder. This disease afflicts fewer than 5,000 people worldwide, yet the company who discovered the treatment expended its time and money to search for a treatment precisely because of the orphan drug credit's incentives. There are other examples as well. Mr. President, this credit's effectiveness has been tested for the past 14 years, and it has passed with flying colors. Few provisions of the tax code can claim to have clearly reduced human suffering and to have expanded our store of medical knowledge. This credit has done both. By helping small, entrepreneurial firms to take advantage of the orphan drug credit, we can make it even more effective. Before last year, the tax credit only served as an incentive for companies that earn a current-year-profit. If the credit could not be used immediately, it was lost forever. For large, profitable drug companies, this was rarely a problem. However, for many small, start-up pharmaceutical companies, this current-year restriction made the credit of little or no use. These firms typically lose money in the early years since they put all available funding into research. They only expect to see profits many years into the future. In order to improve the credit's usefulness, we modified the credit in legislation last year to allow firms to carry the credit back 3 years and carry it forward 15 years. This will give small, growing companies an incentive to find ways to treat these rare diseases that cause so many to suffer. I have been impressed by the strides being made in the biomedical field, including growing firms in my home State of Utah. In the course of research, scientists often stumble upon treatments that could, if developed, improve the lives of victims of rare diseases. However, because of the high cost of drug experiments and the enormous expense involved in gaining FDA approval, many researchers reluctantly set these promising drug innovations aside. Mr. President, this should not happen, not when so many are suffering from these rare diseases, and we have an effective credit available that has proven its benefits. The following national groups officially endorse the Orphan Drug Act of 1997: National Organization for Rare Disorders [NORD], National Multiple Sclerosis Society, Tourette Syndrome Association, United Parkinson Foundation, American Autoimmune Related Disease Association, Leukemia Society of American, Cystinosis Foundation, New England Biomedical Research Coalition, Biotechnology Industry Organization, and the Epilepsy Foundation. I urge my Senate colleagues to join us in sponsoring this bipartisan legislation. Mr. President, I ask unanimous consent that the text of this bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, yesterday the President of the United States submitted his budget. I have to say that the President has come a long way. He now says that he agrees that the budget needs to be balanced by the year 2002. This budget is a legitimate departure point from which to move in developing a final budget package. I was disappointed, however, to see that the President's 5-year cost of Government is almost identical to what he proposed a year ago. This does not look like the era of ``big government is over.'' It is not even shrinking according to this budget. Even more disturbing, the budget deficit over the next 5 years is nearly $200 billion higher than what was proposed just a year ago. And the deficit does not even decline until the year 1999. The bulk of the spending cuts contained in his budget occur after the President leaves office. So he has left all of the hard decisions to the years 2002 and 2001. Seventy-five percent of any fiscal responsibility has to occur in the 2 years after he leaves office. That is not what I call political courage. That is not what I call attending to the structural problems and the economic problems of this country. It is more of the same that we have had for the last 28 years. These huge stacks here on the table to my right represent 28 years of unbalanced budgets. These are the actual 28 budgets. Keep in mind that only involves the last 28 years, since 1969, the last time we balanced the Federal budget. For most of the last 60 years we have not balanced the Federal budget. So this is just a small smattering. If we put them all up here for the last 60 years, they would reach almost to the ceiling. Then we have this budget which came up here yesterday that has all the tough decisions made after he leaves office. The reason we elect Presidents is so they can make the tough decisions and help us to work in a bipartisan way so that nobody can scream at the other side. In this particular case this budget is filled with smoke and mirrors. What this means is that many of the tax cuts and spending increases contained in this budget are not even likely to occur or will not be offered until the last 2 years of the budget's projections, well after this President is gone. Just as important as reaching a balanced budget in 2002 is reforming the entitlement programs. This is what we are going to have to face. We are going to have to face the growing financing and deficit problems we see looming in the next century. This may sound far away, but it is only a few short years before we see the next century begin. We cannot be lulled into a false sense of security because we have not reached the crisis yet. I had hoped that the President would take a leadership position and tackle these difficult programs. Unfortunately, the budget contains only short-term fixes. We see no sign of the structural reforms that are absolutely needed. We see more signs of business as usual. By the way, while the President says that his budget balances the budget, the Congressional Budget Office--which he has touted himself as being accurate through the years and which certainly has not been what I consider a conservative Congressional Budget Office for all the time I have been here--the Congressional Budget Office says that his budget will not be balanced in the year 2002; and that the Administration is using economic assumptions that just are not realistic. I want to applaud the President for providing some tax relief in the budget. It is a solid first step in giving some tax relief to the American people. But it is only a baby step, and really a tentative one at that, because all of the tax increases--and there are plenty of them in this budget that he submitted yesterday--are permanent. The spending programs are permanent. But, the tax cuts are temporary and are likely never to occur because they go away if he does not meet his standards. So it is a big shell game again. I get so doggone tired of it. It is almost unbelievable. It is just more of the same of what we have had over the last 28 years, and it is really another reason why we simply have to pass this balanced budget amendment. The Presidents just do not seem to have the courage to stand up and do what really has to be done. I am really concerned about it. Well, I could go on and on on the President's budget, but I want to leave time for others. As we open the debate today on the balanced budget amendment to the Constitution, I have to refer again to this stack of unbalanced budgets. These are the actual 28, the last 28 years' budget packages. I keep these budgets here, Mr. President, as a reminder of the generation of bipartisan budgetary failure. Here it is, 28 straight years of unbalanced budgets. There has not been one single balanced budget since 1969, not one in 28 years, and yet we have people on the other side come and say, ``Oh, let's just have the will to do it. Let's just do it and the President will sign it.'' Give me a break. That is not going to happen any more than it happened over the last 28 years. Paul Simon said, ``Your hair will turn green before that happens, unless we have this balanced budget amendment.'' I might say, Mr. President, there has only been one balanced budget in the last 36 years. If we had 36 up here, it would be much higher, the 36 individual budgets that have not been balanced. And there have been only eight balanced budgets in the past 66 years. Just think about it--58 years of unbalanced budgets. Only eight balanced budgets since 1930. This sad history of budgetary failure is not a Democratic problem or a Republican problem. It is an American problem. Those of us who are proposing a constitutional amendment to require balanced budgets do not do so as Republicans or Democrats; we do so as Americans, Americans concerned about America and the future of our children and our grandchildren. Let me just give you a few illustrations of how bad our debt problem has become. The national debt, as we all know, is now over $5.3 trillion--$5.3 trillion. That is a debt for each and every American of more than $20,000. CBO, the Congressional Budget Office, projects that in the year 2002, total Federal debt will exceed $6.8 trillion. That means roughly $24,000 of debt for every person, every man, woman and child in America, with annual interest costs projected to be over $3,100 per taxpayer. That is just what we have to pay on the interest against the Federal debt, $3,100 for each taxpayer a year by the year 2002. The national debt has increased more than $4 trillion since the Senate last passed a balanced budget amendment in 1982. We passed it in the Senate. Tip O'Neill and the liberals in the House defeated it at that time. The debt, which started this year at a baseline of $5.3 trillion, has increased over $550 million each and every day since then. Since we began debate this year on the balanced budget amendment in the Judiciary Committee, the debt has increased by more than $10 billion-- just since we began debate this year. In 1996, gross interest exceeded $344 billion. That is more than the total Federal outlays in 1975--all outlays--and is nearly $50 billion more than the total revenues in 1975. In 1996, gross interest consumed nearly 25 percent of the Federal budget and more than one-half of all personal income taxes. In 1997, for the first time, we will pay more than $1 billion a day in gross interest on the debt. That is more than $41 million each hour and $685,000 each minute that we are losing in just interest costs. Net interest payments on the debt are currently the third largest budget category, amounting to 15 percent of the Federal budget, and it is the fastest growing item in the Federal budget. Our annual net interest payment on the debt is more than the combined budgets of the Departments of Commerce, Agriculture, Education, Energy, Justice, Interior, Housing and Urban Development, Labor, State, and Transportation. I think these basic facts should make it plain why the balanced budget amendment is an idea with appeal for Republicans and Democrats, for liberals and conservatives. There are liberal Democrats who see the money we waste on interest payments that could be used in better ways to help the disadvantaged. There are conservative Republicans who see the wreckage we are doing to the opportunities for our citizens and our people by strapping debt, interest, and future economic and tax burdens on them. We are all concerned that our resources are being misallocated because the Federal Government is spending willy-nilly, with thoughtless borrowing, rather than making deliberate choices. As we close this week of debate, I thank my colleagues who have participated in the debate who have expressed why we, Republicans and Democrats, are concerned about the debt the Government piles up just like the stack of these unbalanced budgets here, and why we, Republicans and Democrats, believe the only answer is the constitutional requirement that the Government act more deliberately in its spending decisions without always taking the easy recourse to borrow. This is a proposal that can unite us as Americans across party lines. Let me mention again that every Republican Senator is a cosponsor of this amendment. That is a great signal. But equally important is that seven courageous and bold Democrats have also signed on as original cosponsors. I wish to pay special tribute to those Democrats who support this and who have spoken in support of a constitutional amendment either in the Chamber or by signing on as cosponsors. Senators Bryan, Graham of Florida, Kohl, Baucus, Breaux, Moseley-Braun, and Robb have stood up for America and its future, and I applaud them for standing for principle and our children. Mr. President, I am also pleased to say that six other Democrats have voted for this in the recent past and have promised to support it in their most recent campaigns. I welcome their support for this most important insurance policy that this stack of budgetary failures will not grow too much higher and, more importantly, that our American future will be brighter. If all of these folks honor their commitments to their constituents, all 55 Republicans and all 13 Democrats who have said to their constituents they will vote for it, we will pass the balanced budget amendment this year and it will be a great day for all Americans. I thank the Chair.

Mr. HATCH

Mr. HATCH. Mr. President, on behalf of the majority leader, I will announce the schedule. Today the Senate will be resuming consideration of Senate Joint Resolution 1, the constitutional amendment requiring a balanced budget. The majority leader announced that there will be no rollcall votes during today's session. Under the order the time between now and 1 o'clock will be equally divided in the usual form. I will remind all Senators that by consent we will resume debate on Senator Durbin's pending amendment at 3:30 on Monday. There will be 2 hours for debate at that time. Senators should be aware that there will be a rollcall vote on or in relation to the Durbin amendment beginning at 5:30 on Monday, February 10. On Monday, Senator Wellstone is expected to offer at least two amendments to Senate Joint Resolution 1. However, any votes ordered on those amendments will occur during Tuesday's session.

Mr. HATCH. Mr. President, we are pleased to welcome the Reverend Jack Michael Loo as guest Chaplain today. For the past 4 years, Reverend Loo has been senior pastor of the Church of the Master in Mission Viejo, CA. Prior to that, he served as executive pastor of the First Presbyterian Church of Hollywood, where Dr. Lloyd Ogilvie, our Chaplain, was senior pastor prior to becoming Senate Chaplain. We want to express our personal gratitude and thanks to Reverend Loo for opening our session today with his excellent prayer. I was particularly pleased that he said in spite of our fears we should stand up and do what is right. We are grateful to have you here and are grateful for your prayer over this body. We appreciate the service which you give to your congregation and to the people throughout this country. Thank you so much.

Mr. HATCH

Mr. HATCH. Mr. President, I thank the distinguished Senator from Wyoming for the excellent remarks he has made here on the floor today. I have really been appreciative of the new Senators coming and talking about this because each and every one of them is a prime cosponsor of this amendment. What a change that is from two Congresses ago when we lost this by three votes, one Congress ago by one vote. I am very grateful to have had the good people we have listened to all day today. It makes a lot of difference to me. I am happy to yield the floor. Ms. COLLINS addressed the Chair.

Mr. HATCH. I yield to the Senator from Wyoming [Mr. Enzi].

Mr. HATCH. I think we have a few more remarks. The distinguished Senator from Wyoming would like to speak, and the distinguished Senator from Maine wants to speak. I could then wrap up, and that should end it for the day. Do you have anybody over there desiring to speak?

Mr. HATCH. Mr. President, I just want to take a second here and thank the distinguished Senator from Arkansas for his remarks that he has made. I do not know when I have been more impressed with a group of new Senators than I have now, unless it was the last time when we brought the balanced budget amendment up and lost by one vote, when all of the new Senators spoke together on the last one. I was just really impressed with that. And these Senators this year have been doing very well. I appreciate the Senator coming to the floor and making these cogent remarks. I thank my colleague. Mr. LEAHY addressed the Chair.

Mr. HATCH. Madam President, the fight to adopt a balanced budget amendment is a bipartisan one. I congratulate my Democrat colleagues who have argued for the balanced budget amendment. Their support shows that this constitutional amendment is a nonpartisan solution to a nonpartisan problem. Exhibit 1 [From the Washington Times, January 15, 1997] (By James Miller) Giving Credit Where Due for Lower Deficit A week before the election, President Clinton announced the scorecard for fiscal 1996 (which ended Sept. 31): the deficit was $107 billion--lower than any time since 1981. As someone who would easily take credit for a brilliant sunrise or a starry night, Mr. Clinton wasted no time in claiming the deficit record was the product of his ``economic plan.'' Credits aside, the deficit record is very good news indeed. More U.S. saving is available for private investment, and the Federal Reserve is less likely to act in such a way as to restrain the economy. Tragically, had Congress adopted the budget discipline President Reagan recommended in his 1988 budget, the deficit would have been $108 billion and ``going South'' eight years ago. Think of what spending restraint to balance the budget (by 1991) would have meant for economic growth in the meantime! But who should get the credit for the latest deficit figure? Bill Clinton likes to say his tax increase did the trick, although in a moment of weakness he admits he raised taxes too much. He also emphasizes his ``cuts'' in spending, although in the package ultimately enacted most of the claimed slowdown in spending growth takes place after 1996. Is the Clinton economic plan of 1993 responsible for the decline in the deficit? It's especially helpful to focus on the outcomes in two fiscal years, two years apart, reflecting two Congresses: 1994 and 1996, the first being the product of a Democratic Congress, and the latter of a Republican Congress. In April 1993, soon after taking office, Mr. Clinton proposed a budget for 1994 that forecast a 9.2 percent increase in receipts--from an estimated $1,146 billion for 1993 to $1,251 billion. The latter figure included $36 billion in additional taxes from his economic plan (``A Vision of Change for America'') announced two months earlier. Actual receipts in 1994 were $1,258 billion--$7 billion more than the initial forecast, and an increment due to the economic boost attributable to further spending restraint (see below). In the budget, Mr. Clinton proposed a 3.2 percent increase in outlays--from an estimated $1,468 billion to $1,515 billion, the latter figure reflecting his plan's $5 billion net reduction from the spending baseline. Actual outlays in 1994 were $1,461 billion--$54 billion less than Mr. Clinton asked for. Clearly, the deficit reduction in 1994--from $255 billion (actual) to $203 billion (actual) was due more to spending restraint by Congress ($54 billion) than to Mr. Clinton's economic plan ($41 billion). In 1995, receipts were $13 billion higher than forecast, such forecast reflecting $47 billion in new taxes from President Clinton's economic plan. Outlays were within $1 billion of Mr. Clinton's request, which reflected an $18 billion reduction from the baseline due to his economic plan. The actual deficit fell from $203 billion to $164 billion, and in this instance one can argue that Mr. Clinton's economic plan is the major factor. In February 1995, President Clinton submitted his budget for 1996. In it, he forecast a 5.2 percent increase in receipts--from $1,346 billion to $1,416 billion, the latter figure reflecting a $54 billion increase due to his economic plan. Actual receipts, announced a week before the election, were $1,453 billion--$37 billion more than forecast, arguably attributable to Congress' additional budget restraint (see below). In that same budget, Mr. Clinton proposed a 4.7 percent increase in outlays--from $1,539 billion to $1,612 billion, the latter figure reflecting a $34 billion reduction from the spending baseline due to passage of his economic plan. Actual outlays were $1,560 billion--$52 billion less than Mr. Clinton asked for. Thus, the sizable reduction in the actual deficit in 1996--from $614 billion to $107 billion--was due to additional spending restraint by Congress ($52 billion) as well as the combined effects of the spending restraint and the new taxes in President Clinton's original economic plan ($88 billion). Thus, if you give President Clinton all the credit for the forecast changes due to his economic plan, he accounts for $194 billion of reduction from the baseline deficit over the three fiscal years, whereas Congress deserves credit for at least $107 billion because of further spending restraint. If you give Congress credit for the $57 billion revenue boost in 1996 (see below), Congress can claim credit for $164 billion in deficit reduction. If you give Mr. Clinton credit only for the tax portion of the plan (his negotiations with Congress focused on its demand for spending restraints vs. his demand for tax increase), Mr. Clinton's contribution is only $137 billion; Congress accounts for the rest--$221 billion. Of further interest here is that, contrary to the rhetoric over alleged excesses of the (104th) Republican Congress in paring programs indiscriminately, its record on spending in its first year was almost precisely the same as that of the first year of the last (103rd) Democratic Congress--both gave the president some $50 billion less than he asked. Receipts in 1994 (and 1993) were close to forecast. But what explains the substantially larger-than-forecast receipts in 1996? If the stock and bond markets are any guide, the determination expressed by the new Republican majorities in the House and Senate to balance the budget by restraining spending improved the economic outlook and was responsible for the better-than-expected economic performance during the last fiscal year (3 percent real growth vs. 2.5 percent forecast) which in turn led to higher federal receipts.

Mr. HATCH. Mr. President, I cannot tell you how much I personally appreciate the distinguished Senator from Florida, his courage and boldness in standing up for the balanced budget amendment, which he has always done. He and Senator Bryan are the two principal Democratic cosponsors of this amendment, and they have both worked very hard with us to try to bring this to fruition, not only on the floor but through the whole Congress. I want to personally thank him for his kind remarks, good remarks this day, and I look forward to the rest of the debate.

Mr. HATCH. Mr. President, I want to compliment the distinguished Senator from Alabama. When Senator Heflin left the Senate, I have to say that I personally felt very badly about it. But I think Senator Heflin, who worked very hard for the balanced budget amendment, would really have appreciated this wonderful set of remarks that the distinguished Senator from Alabama gave today. I want to compliment him for it. Mr. President, as I understand it, there was a unanimous-consent request. I ask unanimous consent, if I can get this, that the order be Senator Grams, who I understand was supposed to go first, then Senator Byrd, then finally Senator Durbin, who has an amendment that he will bring forward. I ask unanimous consent for that.

Mr. HATCH

Mr. HATCH. For some of these freshmen Senators, it will be their first speech as U.S. Senators. I can't believe that there is anything more fitting than the balanced budget amendment in their very first speech. This is a historic issue, and I think these freshmen Senators will help us understand how truly historic it is.

Mr. HATCH

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