Fritz Hollings

Mr. HOLLINGS

Mr. HOLLINGS. We have to pay the bills. We have to stop playing games and telling the people that somehow you can get tax cuts, when the resolutions says that next year we will be running deficits in excess of $227 billion. Mr. President, it is obvious this is just a sordid political game that is totally shameless. They come in here with these political, long pass plays. Let us get rid of the gasoline revenues--but just temporarily until after the Presidential election. Nobody ought to appear in the U.S. Congress where we are supposed to be responsible with that kind of nonsense. But they come in here with that. Now with deficits projected at $227 billion for fiscal year 1997, they say, ``We can get a tax cut and balance the budget.'' I yield the floor.

Mr. HOLLINGS

Mr. HOLLINGS. The most objective, most analytical journalist and editorialist that we have writing talks about a budget game. He argues that the ``President's budget is suspiciously like a shell game,'' quoting the distinguished Senator from Missouri, Senator Bond as saying, ``It is not an honest budget.'' Then let me quote Mr. Broder's words further down. That may not be cheating, as Rivlin says, but it's playing a game that is too clever by half. Balancing the budget means making tough choices. Clinton is postponing those choices, and by giving the people the sense that the goal can be reached without giving up anything that's important. Heavens above. Have we just discovered these budget games? Is the Clinton budget the only one deserving of blame? Just look at the Republican budget. Look at the Bush budgets. Look at the Reagan budgets. Look at the Carter, Ford, and Nixon budgets. We have not had anything but a shell game since Senator Lyndon Baines Johnson balanced the budget back in 1968-1969. The press--Mr. Broder and others--continually refer to the Republican budget as balanced, but the facts say otherwise. I have in my hand the document itself, the fiscal year 1996 budget resolution conference report. That is what Mr. Dole says is balanced. ``Last year we passed the first balanced Federal budget in a generation.'' Absolutely false. And they know it. On page 3 of their own conference report, it shows in black and white that the expected deficit in the year 2002 is $108,400,000,000. And over on page 4, the debt increases in the year 2002--the year of supposed balance--by $185,100,000,000. How can they talk about a balanced budget when on the face of the document itself it shows a $108 billion deficit? The distinguished majority leader has to know better when he says, ``Last year we passed the first balanced Federal budget in a generation.'' It is absolutely false. Let me take one other particular statement, because the distinguished leader is, of course, the Republican candidate for President. We are so quick to accuse the other of not leading. In fact, Senator Dole says that the balanced budget amendment demonstrates that the President lacks leadership. I quote again: President Clinton's opposition continues to be the single largest obstacle standing in the way of a balanced budget amendment to the Constitution. I have not heard anything from President Clinton or the White House concerning the balanced budget amendment. But then again I happen to know that the single greatest obstacle to a balanced budget amendment is the intransigence of the Republican leadership with respect to not protecting the Social Security trust fund. Because my time is limited, let me say a word about deficits and refer immediately to another article. Mr. President, I ask unanimous consent to have printed in the Record the article in full, the ``Ace in the Hole'' by John Cassidy in the recent New Yorker magazine dated June 10, 1996.

Mr. HOLLINGS. Remember, the entire sing-song and chant, Mr. President, on the other side of the aisle has been ``When is the President going to do something?'' So I quote from this particular article. There is yet another important statistic that is rarely mentioned in the public debate. For the past 2 years the United States Treasury has been collecting more money in revenue than Congress has been spending, not counting interest payments on the national debt. Economists refer to this situation as the Government running a primary surplus. What it means is that if we didn't have to service the vast debt run up during the past 15 years, the budget would now be balanced. Imagine that. The very crowd that is accusing the President of not wanting a balanced budget and not doing anything about the deficit, is the very crowd that has caused the deficit. Bill Clinton did not cause it. He was down in Arkansas during that 10-year period actually balancing budgets. He comes here with these inherited interest costs, and what does he do? He reduced deficits by $500 billion, cuts over 200,000 Federal employees, taxes gasoline, cuts Medicare $57 billion. Here is a man that has done something being accused of not wanting to do anything. Instead of commenting on the facts, we're treated to tax and spend and liberal Democrats. It is all sloganism. It is all symbols. It is all pollster politicking. It is not the facts. They ought to have ashes in their mouths. We who have been here the past 15 years can be accused of causing this fiscal cancer, but you cannot accuse William Jefferson Clinton of causing any deficit. I read further from Mr. Cassidy's article, Mr. President. Both Alan Greenspan and his predecessor, Paul Volcker, have gone on the record to praise the 1993 package. ``I don't think there's any doubt that the package was part of an honest effort to reverse the train of the budget deficit,'' Volcker told me. ``I wouldn't call it particularly structural in the sense that it did not involve any constructive changes in the tax system, and it certainly didn't solve the entitlements problem, but it was an honest-to-goodness attempt to come to grips with the budget deficit.'' That was none other than Paul Volcker. Yet, the constant refrain is that the President is dishonest, that he lied, that he is not following his pledge to the people, that he does not care about deficits. Yet he is the only person that has done anything about them. Now, quickly, with respect the recent statements of Senator Domenici, I had to go back, Mr. President, to his talk on June 6, included in the Congressional Record. I refer to page S5879. Here, Mr. President, I finally got him to admit that you cannot truly balance the budget without increasing taxes. He explains that if Social Security surpluses are protected, there are few remaining options: Frankly, some would get up and say, ``No. We're going to do it another way.'' How? There is only one other way, and that is to dramatically increase taxes. I do not mean a little bit--a huge amount. Now, Mr. President, I challenged the distinguished chairman of the Budget Committee, last year. I said, ``If you can present to me a balanced budget over the 7-year period that excludes Social Security surpluses and does not increase taxes, I would jump off the Capitol dome.'' Now we have confirmation that it cannot be done. It took us almost a year to get it, but better late than never. Someone should tell Mr. Broder that the President's budget and the Republican budgets have all been backloaded. This particular balanced budget that Senator Dole is likewise backloaded. Look at it. Most of the cuts happen after the Presidential election in the year 2000. I read here, quoting Senator Domenici, ``Over the next 6 years, from 1997 until 2002, the cumulative unified budget deficit, that is the total receipts less total outlays, a simple proposition, will be $1.1 trillion, according to CBO. Over that same period, Social Security will run a surplus of $525 billion, including $104 billion in the year 2002.'' Now, here is the confusion, the misunderstanding, or the categorical falsity. In reality, whether we owe it to the private markets or to future Social Security retirees, it is still an obligation. When the bill comes due, our children and grandchildren will end up having to make good on $1.563 trillion of Social Security IOU's by the year 2006. Our failure to pay back the $522 billion that we already owe Social Security is the height of irresponsibility. On paper, we should be accumulating a surplus. In reality, we are spending these funds to finance current consumption. By the year 2006 we will owe Social Security $1.563 trillion. I repeat, by the year 2006, under the best case scenario of the Republican plan, $1.563 billion would be owed Social Security. It should be of little surprise as to why I, or the Senator from North Dakota, or the Senator from California, or others voted against such a resolution. They are all crying ``Jefferson, Jefferson,'' and ``children and grandchildren.'' But there is a conspiracy of silence when it comes to the $1.563 trillion bill that the Republican plan leaves in the Social Security trust fund. The best way to protect Social Security is to quit decimating it. The distinguished Senator and the chairman of our Budget Committee continued in his speech last week, ``I am concerned about the looming and massive Social Security deficits that are on the horizon.'' But, Mr. President, looming and massive deficits are not on the horizon; they are here. It is not children and grandchildren, it is us. We wrap ourselves in glowing rhetoric about our children and grandchildren and then do nothing. The truth of the matter is, since posterity can do nothing to us, we see no reason to do anything for posterity. We look to the next election and not the next generation. Entitlements are continually blamed for our current deficit woes. Yet, Social Security, is in surplus to the tune of $522 billion. Medicare has $130 billion surplus in it this minute. They are not causing our current deficits. Thus, the shell game continues. It is one of the longest running games in town and we all take part in it. The distinguished chairman of the Budget Committee, who has the next hour and a half, refers to the exclusion of Social Security surpluses in the balanced budget amendment as a smokescreen. I can tell you here and now that we are in trouble when the fire chief in the firehouse cannot only smell the smoke and see the fire, but starts the fire with these misleading statements. We are in desperate circumstances. We have deficits and debt going through the ceiling. We are spending $1 billion a day just on the interest costs to the national debt, but we continue to fail to face up to this particular problem. Republicans charge that President Clinton does not care about the deficit, has not done anything about it. But Paul Volcker, the former Chairman, says he is the only one who has made an honest try. Find that statement by Paul Volcker about anybody else's budget. President Clinton made an honest-to-goodness effort in 1993. And the facts show that it is working. I voted for it. But not a single Republican did. They caused the deficits. And if they had not caused this horrendous cost of $1 billion a day, we would not be talking about deficits but would be in surplus under President Clinton's budget. Mr. President, since nobody is here, let me complete the thought. I use as my text none other than the daddy rabbit of the budget in Reaganomics in back in the 1980's. I quote Mr. David Stockman, the former Director of the Office of Management and Budget, dated March 1993. I ask unanimous consent that this article be printed in the Record.

Mr. HOLLINGS. Mr. President, I quote: The root problem goes back to the July 1981 frenzy of excessive and imprudent tax cutting that shattered the Nation's fiscal responsibility. A noisy faction of Republicans have willfully denied this giant mistake of fiscal governance and their own culpability in it ever since. Instead, they have incessantly poisoned the political debate with a mindless stream of anti-tax venom, while pretending that economic growth and spending cuts alone could cure the deficit. It ought to be obvious by now that we cannot grow our way out. Mr. President, there it is. Someday, somehow, David Broder and these other columnists will pick up the truth and quit ipso facto reporting balanced budgets. We have do not have a balanced budget plan; all plans use the trust funds. We owe the Social Security trust fund; we owe the Medicare trust fund; we owe the highway, airport, and Civil Service trust funds. We have been borrowed well over a trillion dollars from these trust funds. In addition, other sleights of hand include factoring in speculative interest dividends for budgetary savings. Mr. President, we started that back in 1990. You know what the projection was? In the 1990 budget, we said we would not only have a balanced budget by 1995, but a $20 billion surplus. Can you imagine that? Instead, there is a $277 billion deficit. That is how far off these are. Yet, Mr. Broder comes up alleges that, ``This is too clever by half.'' Tell him to wake up. He should know better than that. Mr. President, I am watching history repeat itself. I joined in the opposition to Reaganomics and what Stockman says was the worst mistake we ever made. I joined in the tax increases to try and reverse it. I joined in Gramm-Rudman-Hollings. When they write now, as Senator Rudman has, that Senator Hollings wanted a divorce, they should be clear about the facts. Instead of using the automatic cuts as a spear to urge and require fiscal discipline, they started to use it as a shield for fiscal irresponsibility, and I wanted no part in that. I voted for the tax increases here in 1993. At the time, my colleagues on the other side of the aisle said, ``Well, you cannot trust that Washington crowd. If they increase the taxes, that means all they will do is increase the spending.'' False. In 1993, we increased taxes and cut spending to the tune of $500 billion. In direct result, we have an economy with low unemployment, low interest rates, steady growth, and low inflation. And they say that the President is ``too clever by half,'' and is ``postponing choices.'' Once again, Mr. President, when they say the President did not make any honest try, perhaps we should remember Mr. Volcker's words on the 1993 package: I don't think there is any doubt that the package was part of an honest effort to reverse the trend of the budget deficit. I yield the floor and suggest the absence of a quorum.

Mr. HOLLINGS. Mr. President, let me revise my original topic. Because the distinguished majority leader is leaving, I want to talk in that context. When Senator Dole first came to the U.S. Senate, I had recommended Clement Haynesworth for the U.S. Supreme Court. My distinguished senior colleague had recommended another individual for that post, and I was looking to the Republican side for leadership in support of the Haynesworth nomination. The then distinguished junior Senator from Kansas, who had recently arrived in the Senate, was very, very helpful to this Senator from South Carolina. Let me get right to the point, Mr. President. I have the greatest respect for Senator Dole. The fact is that when we had the recent Republican primary in my State of South Carolina, I was asked to give my thoughts regarding who I thought was the best candidate in the Republican field. I categorically replied that of those vying for the Republican nomination, the distinguished Senator from Kansas, Senator Dole, could handle the job, and there is no doubt in my mind that he could. I think his difficulties arise from the crowd he has to carry with him, which gets right to the point of this so-called balanced budget amendment to the Constitution. On last week, the distinguished majority leader said: We tried to reach out to those Senators to ensure Social Security surpluses can never again be used to mask deficit spending. I believe that after a suitable phase-in, the Federal budget could be balanced without counting the surpluses in the Social Security trust funds. Mr. President, that is a remarkable statement, in light of the history of Social Security and the Social Security trust fund. Specifically, in 1983, the distinguished majority leader served on the Greenspan Commission which was charged with rescuing Social Security. The Greenspan Commission recommended that after a certain period of time--which later that year was agreed to be 1992--Social Security should be off budget. We now talk in the context of Presidential campaigns and children and grandchildren. But the same was true some 13 years ago, when the majority leader, himself a member of the Greenspan Commission, issued its report and said, ``Let's put Social Security off budget.'' Thereafter in 1990, I offered a resolution before the Senate Budget Committee that removed Social Security outlays and receipts from deficit calculations. By a vote of 20 to 1, the Budget Committee adopted my amendment. When it reached the floor, I teamed up with the former distinguished Senator from Pennsylvania, Senator John Heinz, and on October 18, 1990, saw the full Senate adopt our amendment by a vote of 98 to 2. We said, Social Security should not be used to obscure the size of the deficit, that it should be off budget and that it should never be included in any reporting of the deficit whether by the President or by Congress. The distinguished Senator from Kansas voted for that amendment. And on November 5, 1990, President George Herbert Walker Bush signed it into law. Today it stands as section 13301 of the Congressional Budget Act. So much of the confusion over the budget is brought about by the failure of politicians to respect this law. This is true even though the continuing validity of the law has since been reconfirmed several times, by Senator Dole and Senator Hollings and others. So I say when the distinguished majority leader says, ``We tried to reach out to those Senators to ensure that the Social Security surplus can never again be used to mask deficit spending''--that is already the law. It is required. They act like the constitutional amendment would give us something new. The truth is, Mr. President, that the constitutional amendment trumps and repeals the existing law. That is why we did not get the votes for the balanced budget amendment. Here is House Joint Reslution 1. The language in section 7 clearly includes Social Security trust funds in deficit calculations. It states, ``Total receipts shall include all receipts of the United States Government except those derived from borrowing.'' But the Government not only borrows from the public markets but also from the Social Security trust fund. As a result, at least five Senators have said, ``You have got our votes if you spell out the exclusion of Social Security trust funds from deficit calculations.'' If we had included such language, we could have easily passed the amendment. But the majority leader paints a different picture. That somehow or other we need a constitutional amendment that repeals the protection that we already have in the law. That is where I differ with the distinguished leader. He knows and I know that there are three stages of denial with respect to the Social Security trust fund, as my distinguished friend, Senator Dorgan, has pointed out. First, the statement is made that there is no Social Security trust fund; second, that there is one, but we are not spending it; and, third, there is one, we are spending it, but we will stop in the future. Therein is the source of the intentional confusion that is being perpetrated on the American public. They know it, and I know it. That is why I wanted to come and correct the record, particularly with respect to the statements made by the chairman of the Budget Committee, Senator Domenici, and recent statements made in the press. Let me just allude to ``Clinton's Budget Game,'' by David S. Broder in the Washington Post, dated Sunday, June 9, 1996. Mr. President, I ask unanimous consent that this particular editorial be printed in the Record in full.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I ask unanimous consent that we slightly amend the unanimous consent agreement. The distinguished Senator from Massachusetts wants 6 minutes. I ask unanimous consent to yield him the 6 minutes now and that I be granted my full half-hour, until just past 1 o'clock.

Mr. HOLLINGS

Mr. HOLLINGS. I thank the distinguished Chair.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, it is a fortunate man who can know at the end of his life that he not only earned the respect of others, but that he dedicated himself to a cause in which he believed. Herman Starobin was certainly one of those men. He died recently at the age of 75, having led a full and inspirational life. Herman was a longtime friend of mine, whose compassion for and dedication to the American worker set an example for us all. A true renaissance man, he distinguished himself in many fields over the course of his lifetime. During the Second World War, Herman covered the European theater as a freelance journalist. After the war, he took over the family business from his father, and manufactured steel doors. While running the business Herman studied economics at New York University, where he went on to earn a doctorate. In 1969, he joined Harman Industries as corporate economist, and eventually rose to the presidency. Along the way, he garnered the well-deserved reputation as an expert on international trade. Herman's experience at Harman Industries left an indelible impression on him. It led him in 1984 to pursue his next career with the International Ladies Garment Workers Union, where he fought valiantly for the future of American working men and women. At the time Herman had joined Harman Industries, the United States was the preeminent manufacturer of consumer electronics, but when he left 15 years later, the United States had lost its lead in manufacturing. Herman had witnessed the devastation of communities and tearing asunder of families that resulted from the deluge of imports, and that lit the fire under him. His firsthand experience and knowledge led him to devote the rest of his life to fighting to save our manufacturing base. In his position as Director of Research for the I.L.G.W.U., Herman was at the forefront of every major trade debate of the last decade. When Herman spoke, he spoke with authority. He did not live in the esoteric world of economic modeling; he possessed the conviction of one who understands how the real world operates in this era of global competition. We will miss his vigor, his humor, his encyclopedic knowledge and his endearing charm. On behalf of Peatsy and my staff, I would like to express our deepest sympathies to his wife Carol and his daughter Christina. Herman was a true champion of the people, and it was an honor to have known him.

Mr. HOLLINGS

Mr. HOLLINGS. I referred earlier to the Bob Dole we know and love. I earlier remarked because he and I have worked to try to balance this budget over the years. More particularly I put in the Record a statement, and the vote and record made of the Greenspan commission upon which the Senator served where they recommended that Social Security after a period of years be off budget. Of course, the vote the Senator and I both joined in doing just that. In 1990 we put it off budget. The law was signed by President Bush. Now we have the Senator's amendment, and he got my vote. If we just do exactly what he intends, I think here in section 7, ``total receipts shall include all receipts of the U.S. Government except those derived from borrowing.'' That has been interpreted as borrowing from the public. Why borrow from Social Security? In other words, we owe Social Security $530 billion. These budgets which have been put out by both sides all use Social Security. So by the year 2002 we will owe $1.1 trillion. So you can pick up not only my vote. By the letter we sent --I have talked to these Members; five of us, and at least more--pass this constitutional amendment by just protecting borrowing from the public but in conformance with the law which the Senator and I support; not borrow from Social Security. In other words really eliminate the deficit rather than move the deficit from the general Government over to the Social Security fund.

Mr. HOLLINGS. If the distinguished Senator will yield, we would not do it immediately. In other words it would be part of the Senator's joint resolution, or balanced budget amendment, to the Constitution, and as the Senator's comments just indicated it would go back to the States for several years to be ratified. In the meantime, it would be in there and protected but it would not control immediately. And while they are ratifying we could be working, as the Senator indicated, to bring it into line without using Social Security funds. So I do not see the harm done if we could just include that. We can pass the balanced budget amendment to the Constitution.

Mr. HOLLINGS. Will the distinguished Senator yield?

Mr. HOLLINGS

Mr. HOLLINGS. Yes.

Mr. HOLLINGS. Senator Coats of Indiana said the amendment will enforce the discipline, force us to meet our responsibilities. Of course, that is not the case at all. On the contrary, I have been trying to do that. I tried freezing, I say to the Senator. He is nice to stay around so I have someone to talk to. Usually they just go ahead somewhere else. At least I can talk to C-Span. And now I see the distinguished Senator from North Dakota. I want to read an article. I will not read the whole article, I will just read from this, referring to ``Ace in the Hole'' in the New Yorker, in the June 10 issue that has just come out. This is an article, ``Ace in the Hole,'' by John Cassidy. I commend it to my colleagues for their reading. Despite some suggestions to the contrary--notably by the Heritage Foundation, a conservative think tank--this year cannot be compared with 1992, let alone 1980 or 1932. In the first quarter of 1996, inflation-adjusted growth in national output, which is the broadest index of economic performance, 2.3 per cent on an annualized basis; over the full course of the Clinton Administration, such growth has averaged around 2.5 per cent a year. This record is about average for the post-1973 era but well above the growth rate of 1.6 percent eked out during the Bush Presidency. A number of other measures also suggest that the economy is doing significantly better than it was four years ago: two of the most widely followed are the ``misery index,'' which is the rate of inflation added to the rate of unemployment, and the size of the federal budget deficit. At the moment, the unemployment rate is 5.4 per cent, and the inflation rate is 2.9 per cent. Added together, these numbers produce a misery index of 8.3, which is an extremely low number. The last year it was lower was 1968, when the unemployment rate was 3.6 per cent and the inflation rate averaged 4.2 per cent. For much of the nineteen-seventies and eighties, the misery index well into double digits. As recently as 1992, it stood at 10.4. Perhaps the most important, and least heralded, achievement of the Clinton Administration is the improvement it has wrought in the national finances. According to the Congressional Budget Office, the federal budget deficit for the 1996 fiscal year, which began last October, will be about $145 billion. This is a large number, but it is only half the size of the deficit that the federal government recorded in 1992, which was $290 billion. And these raw numbers don't tell the full story. In ranking budget deficits, economists usually look at them in relation to the size of the economy. Measured in this way, the federal deficit this year will be about 1.9 per cent of the gross domestic product, according to the C.B.O. This figure is down from 4.9 per cent in 1992; indeed, it is the lowest such figure recorded since 1979, the year before Ronald Reagan was elected, when the budget deficit was just 1.7 percent of G.D.P. That takes us to our distinguished friend, Senator Muskie, who was chairman. We had a Democratic House and Senate. Senator Muskie was chairman of our Budget Committee, and I was right in there behind him. I took over in 1980. So we were working and had more or less succeeded, under President Carter, in reducing the deficit from what we had inherited from President Ford. However, in came President Reagan with Reaganomics and the fiscal disaster that we are now experiencing. I tried, during the early 1980's, what they called the Fritz freeze. They gave it a name because I was so intent. I said every Governor would come in and he would say let us just take spending the way it is now and let us just take this year's budget for next year. There would be no cuts, there would be no increases. That way we would save $50 billion at the Federal level. We tried the freeze. We tried to hold the line. We could not get it done. I tried with Gramm-Rudman-Hollings. And then I came with a value-added tax in 1987. There is no question that I have been trying to head off annual deficits with about $180 billion in revenues from a 5 percent VAT. I went to Darman in 1989, after we could not get it past the Budget Committee in 1987. In 1989, when President Bush took office, I met with Dick Darman. I had been a close friend of his father's, Mr. Morton Darman. We had a good, heart-to-heart talk. I said, ``By 1992, if President Bush doesn't get on top of this monster, it is growing so, he is going to need the Secret Service.'' I said that in a jocular fashion, but politically that is what happened to him. ``It's the Economy, Stupid.'' I will put in the chart. There have been intermittent figures, but the real deficit then was $403.6 billion. That is without using those trust funds, $403. So we were up, up and away. I got a nice note from the President, President Bush, that he just did not think it was timely and he wanted to get himself more stabilized in office. Again, when President Clinton took office, I went. I will never forget the conference that we had. When I suggested a VAT for the deficit and the debt, President Clinton said, ``I got a call last night from Lane Kirkland. The AFL-CIO has its annual meeting at Bal Harbour, in Florida. He said that he would go along with a VAT for the deficit and the debt.'' And I said, ``Heavens above, Mr. President, that's who opposed me.'' I came before the Finance Committee and testified for a value-added tax. I had the experts there and everything else to answer all the econometric issues and questions. It was the AFL that said, ``Wait a minute, this is regressive, regressive, a heavy burden, and everything else.'' Of course, every industrialized country has a value-added tax. Our competition in Europe has a VAT. You cannot be a member of the European Economic Community unless you have a value-added tax. Out in the Pacific rim, every country there has a value-added tax. In Korea, for example, it is 25 percent. So the competition is economically succeeding. They have 5 percent in Japan. They will be the largest economy, according to Eamon Fingleton in ``Blindside,'' by the year 2000. They are presently a larger manufacturing nation than we are here in the United States. So I said it would solve our deficit in the balance of trade because it is rebatable at the bottom, at the border. So if you produce something here today in Washington, this desk and chair, for $500, you will pay all the corporate taxes, all the income taxes, all the sales taxes and everything else. If you ship it to Paris, France, they will add on a 17 percent VAT and sell it. But, if you produce that same chair and desk in Paris, France, they add a 17 percent value-added tax, a VAT at the time of manufacture, but when it leaves the port at Le Havre to come to Washington, DC, they subtract or rebate the 17 percent. So you can see the tremendous advantage to move the industry offshore. We have been talking about slave labor, about child labor, about 27-cents-an-hour labor down. But let's talk about the advantage they have in Europe and in the Pacific rim where they employ value added taxes. I have introduced this legislation again in this Congress. That particular bill now, Mr. President, is S. 237. It is in the Finance Committee. When the distinguished Senator from Texas, Senator Hutchison, says, ``Let's do something now,'' let's go to the Finance Committee that the majority of the Republicans control. I will testify. We will get the expert witnesses, and we will get something done. We do not have to wait 7 years on States to find out whether or not we are going to meet our responsibilities. I really resent the idea of us like a crowd up in the grandstand hollering, ``We want a touchdown, we want a touchdown, we want a touchdown,'' when we are the team, we are on the field.

Mr. HOLLINGS. Mr. President, let me thank the distinguished Senator from Oregon. First, I will surprise him by thanking him for the telecommunications bill. I welcome him to the Senate and thank him for introducing a constitutional amendment for a balanced budget that does not move the Government's deficit over to the Social Security trust fund. But more particularly, with respect to the telecommunications bill, I wish to thank him for his work. We passed that bill by an overwhelming majority here in the House and in the Senate. It came out of the conference committee and we reconciled the differences--which was a very difficult job. And, just before Christmas the distinguished Vice President appeared on NBC News, where he was being interviewed, and proclaimed, ``We now have the information superhighway, and I got everything I want.'' Well, that really put the Speaker of the House into a tizzy, and we, the conferees, were told that our telecommunications bill was dead. Between that time, some 10 days before Christmas, and the first week of February, Congressman Bliley and I had to hold the fort, but we worked in a bipartisan fashion. We did not change a single word. What really occurred is that our colleague, Senator Wyden, won the special election out in Oregon, causing the Speaker of the House to say, ``Heavens, we have to show we can do something.'' I said we have an overwhelming majority ready for the telecommunications bill in the House and in the Senate, and that is how we got it. So I think it ought to be stated for the record that the Senator from Oregon was instrumental in ensuring passage of the telecommunications bill. And perhaps tomorrow if the Republicans really want a balanced budget amendment to the Constitution, we will obtain one. All that is required is a specific language in section 7 of the resolution excluding Social Security funds from deficit calculations. The present language includes Social Security funds. So there is no argument about the form, the present language already has exceptions in section 7: ``Total receipts shall include all receipts of the U.S. Government except those derived from borrowing.'' That has been interpreted as borrowing from the public. But how about borrowing from yourself, borrowing from the Social Security trust fund. All they have to do is change ``from borrowing'' to ``from the public and Social Security trust fund.'' That is all we have to add. I and several Senators on this side of the aisle formally informed the distinguished majority leader in a letter last year that we would support a balanced budget amendment that protected Social Security. I waited all year long for a joint resolution that I could amend. We in the Senate are used to putting an amendment on anything so you can get a vote. But oh, no. A constitutional amendment can only be offered as an amendment to another joint resolution. So, I waited and then the flag burning joint resolution came up in December. And so I said I have an amendment. In fact, I had two. I had one constitutional amendment that would have allowed the Congress of the United States to control expenditures in Federal elections. It would have overturned the flawed decision of Buckley versus Valeo. My other amendment was a real balanced budget amendment that protected Social Security, identical to the balanced budget amendment that the Senator from Oregon will ask unanimous consent to consider tomorrow. I will be in there supporting the Senator, and I hope we can work it out. I hope it is not true that they want to pass up this opportunity, because it is right here. I am tired of the media saying the balanced budget amendment failed by one vote, when they know differently. That is technical reporting, because the truth of the matter is that they could easily have picked up at least five votes if they had agreed to add language excluding Social Security. So I will be working with the Senator, and I thank the distinguished Senator from Oregon on his leadership. I thank publicly, of course, the Senator from Arkansas, for coming to the floor. I also want to thank Senator Dorgan of North Dakota. He understands all these particular problems and issues, and he is the most eloquent, I know, in the Senate on all of them. He gives categorical leadership and very common-sense observations, and you can follow his rationale. I happen to agree with most of it all the time. The Senator from California, Senator Feinstein, has been a leader in trying to do something about a balanced budget. But let me go, Mr. President, to statements made earlier before I forget them. The distinguished Senator from Texas, Senator Hutchison, got right to the point saying, why don't we do something. She kept talking about generations in the future and everything else like that. We tried to do something, not pass it off in a 7-year passing of the buck. This constitutional amendment is really putting off the tough decisions. It is not biting the bullet or making any hard decisions. Heck, you can say anything in rhetoric, in language. But should know from hard experience that actions speak louder than words. I came in as a Governor of a State, where the budget I inherited was totally in the red. We had in the constitution of 1895, still do in the constitution of the State of South Carolina in 1895, ``thou budget shall be balanced.'' But that didn't mean anything. There a number of accounting gimmicks that they employ like borrowing and moving trust funds. And so at this particular point, Mr. President, I want to ask unanimous consent to list the 48 States with a balanced budget requirement, the type of requirement, whether it is constitutional or statutory. They are all supposed to be balanced at the end of year. The chart lists the balances in the general funds and in the transfer funds. So the States, even with the constitutional requirement, do not a balanced budget give. I can tell you here and now, if I say it once--I have the time, fortunately--I say it again: A constitutional amendment requiring a balanced budget does not a balanced budget give. They play the gamesmanship. I ask unanimous consent to have this printed in the Record, so we will have those documents in there to show the game that the States are playing.

Mr. HOLLINGS. I yield 15 minutes to the Senator from Oregon.

Mr. HOLLINGS. Amen.

Mr. HOLLINGS. Yes.

Mr. HOLLINGS. I thank the distinguished Chair. So we know from all the quotes from the Wall Street Journal, the New York Times, and everything else that the largest tax increase was back in 1982 under the chairman of the Finance Committee, the Senator from Kansas. The first balanced budget in 30 years--I showed the two letters that we put in from the Director of the Congressional Budget Office, June O'Neill. One day in October of last year on the present 1996 budget, she had a slight surplus, and then 2 days later when we reminded her of section 13301, she said it is a $105 billion deficit. The distinguished Senator from North Dakota did it in more dramatic terms. Here, again, my colleagues should look at this year's budget resolution, Senate Concurrent Resolution 57. Turn to page 5: Fiscal year 2002, deficits, $108.3 billion. Come on, how can you keep on saying the first balanced budget when the document itself shows a deficit. You talk about backloading. The President had a backloaded budget. Almost two-thirds of the cuts in that particular phony budget was to occur after the second Presidential election, the last 2 years. Two-thirds of it. It ought to be ashes in their mouths. So there they are with their first balanced budget in 30 years. All the children and grandchildren--come on, it is us. You can look at these particular charts and you can see at a glance, even with the President halving the deficit--and he is the only President who has--spending on interest costs continue to rise. The interest costs during the last 4 years has gone up $50 billion. That is just interest costs; that is spending on automatic pilot. We have increased these costs, forcing the American people to pay more and get less. We are getting hit now; I cannot fully fund women, infants, and children feeding and Head Start and title I for the disadvantaged and student loans and get the economy rebuilt, do the bridges, the highways, expand the airports, and strengthen our economy. I talked about that early this morning. Why can I not do it? Because my money is going to interest costs on the national debt. President Reagan promised a balanced budget in 1 year. He came in and said, ``Whoops, this problem is way worse. I'll do it in 3 years.'' But, Mr. President, instead he added almost $270 billion in forced spending for nothing. The interest cost on the national debt after 217 years of history in 1981 was $74.8 billion. Let's call it $75 billion. Now it is projected at $344 billion. He has added almost $270 billion in unnecessary spending that we get nothing for. We cannot get funds for prisons or the environment. In fact, it just was pointed out, if he had done what he promised--and they all say ``President Clinton promised; President Clinton promised; President Clinton promised''--if Reagan had carried out his particular promises, what would we have done? We would be talking about a surplus around here. So the unmitigated gall of this crowd that comes aboard--the freshmen. It reminds me of a saying in the Navy during World War II, ``When in danger, when in doubt, run in circles, scream and shout.'' And they come down and get their 2-hour session. I do not know if I have all the time to go down through, because I was making notes. We need to focus on the problem at hand. It is not Social Security which is presently in surplus. It is not Medicare that the distinguished majority leader saw fit to come in and talk about. Medicare is in surplus until 2001, they say, which is what it was when President Clinton came to office. So we have not gone backward. We had gotten it up to 2002 when Senator Exon and I voted for the 1993 $57 billion cut in Medicare. That is what we did in 1993. So we have been cutting spending and making progress. As Senator Hutchison says, we ought to really do something. They all come in with ``children and grandchildren, children and grandchildren,'' that is on some silly pollster's chart; it is like parrots at a pet store. Then quoting Thomas Jefferson. Ha. They ought to quote Lyndon Baines Johnson. He was conscientious. He was being blamed for the Great Society, the War on Poverty, and the war in Vietnam. I pointed out how Senator Dole voted back in 1968 as a House Member for, what, a 10-percent surcharge on income tax for individuals and corporations, $6 billion in spending cuts, $200,000 in employees' cuts, extended excise taxes, and everything else. But we did it. We balanced the budget. We do not have to go to what Thomas Jefferson said and a constitutional amendment that puts off everything, passing the buck to the legislatures, and the people generally arguing again for another 7 years with interest costs of $353 billion. I can tell you now the interest cost will be over $500 billion by the time they get their so- called constitutional amendment if they can get it. Mr. President, right to the point, do not quote Jefferson on that. Quote Jefferson on what he said: If between a free press and a free government, I would choose the former. Jefferson's point was, you can have a free government, but unless you have a free press to keep the politicians honest, it is not going to stay free long. That is what is occurring. The free press has joined in the conspiracy with the politicians in making the news, getting polls, reporting ahead of time, making more news. You cannot get them to report the true deficits that we have, the true interest costs that we have, the true initiatives that we make and have made. There is the ``Balance the budget. Who stands for a balanced budget?'' when the only gentleman in this city that has done something about it, and cannot be blamed, is President William Jefferson Clinton. You can blame me. I have been here. I am in my 30th year. You can blame the Senator from Nebraska or some of the Senators that have been here before 1992. January 1993 is when President Clinton came to town. We are the ones who gave him the spending on automatic pilot, this horrendous debt, the horrendous interest costs. What does he do? He faces up to the task. He brings in his Vice President and he gets every Democrat to vote for $500 billion in spending cuts, increasing taxes on liquor, beer, cigarettes, and increasing taxes on gasoline, increasing taxes on Social Security. Who is really serious about Social Security? The Senator from Pennsylvania came here and said, ``You are trying to hide. You're trying to hide,'' he said, ``hide behind Social Security.'' Who is hiding? Old Joe Louis said, ``You can run, but you can't hide.'' The Senator from Pennsylvania. We made it crystal clear. We have it written in the law. What you are trying to do is hide, in section 7, the repeal of that law. You are the one that is hiding. You are the one that wants to move the deficit from your political accounting in the Government over to the Social Security trust fund and decimate the program. That is exactly what has been going on. Mr. President, how much time do I have?

Mr. HOLLINGS. I would gladly yield to the distinguished ranking member of our Budget Committee. I thought he was eloquent. I thought he made a masterful statement that was common sense. Out in the Midwest they think that way. I would be glad to yield to the distinguished Senator from Nebraska if he would like a little bit of time in the remaining few minutes I have. Mr. EXON addressed the Chair.

Mr. HOLLINGS. Mr. President, how much time do I have?

Mr. HOLLINGS. I thank the distinguished Senator. In the 2 minutes I will read from the daddy rabbit of Reaganomics where they start talking about growth now, David Stockman: The root problem goes back to the July 1981 frenzy of excessive and imprudent tax cutting that shattered the Nation's fiscal stability. A noisy faction of Republicans have willfully denied this giant mistake for fiscal governance and their own culpability in it ever since. Instead, they have incessantly poisoned the political debate with a mindless stream of antitax venom while pretending that economic growth and spending cuts alone could cure the deficit. It ought to be obvious by now that we can't grow our way out. With the time left I see the distinguished colleague from Texas, the senior colleague from Texas. I know we will hear a lecture about who is in the wagon. It is the contention of the Senator from South Carolina that it is the Senators and Congressmen in this wagon. We have been in the wagon for 15 years, spending $270 billion for nothing, having a wonderful time, and now with this so-called balanced budget amendment we will get from a wagon into a limousine to ride around the countryside and tell them how we bit the bullet and something will happen two Presidential elections from now.

Mr. HOLLINGS

Mr. HOLLINGS. October 20, 1995, to the Honorable Kent Conrad. Dear Senator: After taking Social Security off budget-- Actually, the budget projected would have a deficit of $105 billion. We might get that truth out. We fought to get adherence to that law. We put up an amendment, and we cannot get support for it. But we continue to put up that amendment and everything else to say we want a balanced budget. I have worked in the vineyards for 30 years for a balanced budget up here. I got one back when I was Governor of my State, and I will go along with you, but just do not move deficits. Let's eliminate deficits. Let's not move the deficits from general Government over to Social Security putting it in debt $1.100 trillion by the year 2002. All you have to do is add ``Social Security trust fund'' where you say, ``except for borrowed funds.'' ``Except for borrowed funds from the Social Security trust fund.'' That is all it is, a little language. They do not want to do it, because the truth hits them in the face when they go around the corner. If they put that in a constitutional amendment, there is no way in the world that they can produce a balanced budget without increasing taxes. Their political singsong is, ``We can just balance the budget. We're conservatives, and they're spending us blind, and the liberals there, they want to continue spending and all we need is spending cuts and you can eliminate the Government.'' Mr. President, with $267 billion in domestic spending eliminated and with the $344 interest cost increase, you would still have a deficit. Do not just cut--eliminate. Eliminate Commerce or housing or energy or education. Eliminate Interior, eliminate the Justice Department, get rid of the FBI, the DEA, the Border Patrol and just eliminate it all, and you still have a deficit. That is the dilemma we are in. Today's problems are not entitlements. It is not Social Security and AARP. My distinguished friend from Wyoming comes in here and says there is no trust fund. Well, that is his view. But in the view of the Congress and under his vote, there is a trust fund. Under the recommendation of the Greenspan commission, we put it off budget. Since 1990, we have had it formally in the law and they now want to repeal the law with section 7 of this particular constitutional amendment. Mr. President, thank heavens for the sobriety of the Members on this side who have dutifully written a letter saying, Dear Mr. Dole: Just go along with the protection under the law that we have in section 13301 of the statutory laws of the United States of America and you've got us five and you can pass a constitutional amendment in a flash. They do not want a constitutional amendment. They want to get the credit, but they do not want to get the duty and responsibility. It is an absolute fraud, and they know it. I retain the remainder of my time.

Mr. HOLLINGS. Mr. President, that letter of October 18, 1995, said that we produce a small budget surplus with this 1996 budget we are under. But, Mr. President, when reminded of the law--do you think you have to remind a trust officer in a bank of the law? Do you think a director of the Congressional Budget Office has to be reminded of the Budget Act on Social Security? I ask unanimous consent that this letter be printed in the Record.

Mr. HOLLINGS. Mr. President, I thank the distinguished Chair. The entire article is there, but let me just read this paragraph. How did this all get started, that chart of yours--if you want to know where that chart started, it did not start under President Clinton. He has reduced the deficit. He has reduced the deficit. The debt they show on that chart that goes from less than $1 trillion on up to over $5 trillion occurred under you and me. And I quote: The root problem goes back to the July 1981 frenzy of excessive and imprudent tax cutting that shattered the Nation's fiscal stability. A noisy faction of Republicans have willfully denied this giant mistake of fiscal governance and their own culpability in it ever since. Instead they have incessantly poisoned the political debate with a mindless stream of antitax venom while pretending that economic growth and spending cuts alone could cure the deficit. It ought to be obvious by now that we can't grow our way out. So much for growth, so much for tax cuts, so much for the ying-yang of entitlements. They had in the Atlantic Monthly this past issue an article by my friend Peter Peterson, former Secretary of the Treasury as well as in the Department of Commerce, and eminent fiscal expert. But he says the father of all unfunded mandates is Social Security and Medicare. It's absolutely ridiculous when you get the best of the best talking that nonsense. Social Security has a surplus of $520 billion. Medicare has a surplus of $130 billion according to the April 30 Treasury report. So we have surpluses that they would call unfunded mandates. This misconception is followed by Time Magazine saying that the biggest thing causing the deficit is these runaway entitlements. All absolutely false. What is in deficit, Mr. President, is the general Government. There is one big sham, one big fraud that is going on here in the National Government. And the people are enraged because they know about it. They are paying more and getting less Government. And, of course, the pollsters are off on that bit about get rid of the Government, get rid of the Government, get rid of the Government. The Government is not the solution; the Government is the enemy. The fact is that we can spend money and save money, but these interest costs on the debt keep going up and away. Payment is required just like taxes. They say two things you cannot avoid are death and taxes. The third thing is interest costs on the debt. They are interest taxes going up on automatic pilot. As we talk today, while we talk, it will go up another billion bucks. And what is broke today is the Government, not the entitlements. Now, I commend my distinguished friend from Nebraska, Bob Kerrey, and the former Senator from Missouri, Jack Danforth. I voted for the Kerrey amendment to the budget resolution because, yes, I agree we have to get a bridle on this animal. We are going to have to gradually raise the retirement age. We are going to have to consider other changes such as holding up on the COLA's. I have voted for a COLA freeze in the past. I have proposed budget freezes. I have proposed automatic spending cuts across the board. I have even proposed increasing taxes to reduce the deficit. But, Mr. President, you cannot get it now from this group. They are the ones who do not want to pay for Government. And they have the audacity to come here with these runaway spending programs and ridiculous allegations that the President is against defense. It is all a political act. They know he is oversensitive about defense and that he is going along with what the Joint Chiefs want. I was with Danny Graham. I got the first SDI award. Do not tell me about SDI and its support. I still support it. But after spending almost 90 billion bucks and having nothing to show for it, now is the time to stop, look, and listen and move in a measured way, as the distinguished Senator from Georgia, Sam Nunn, says to do and the Joint Chiefs say to do. But instead of being practical, they give us political theatre. And this particular constitutional amendment is another act where they try to make the President look bad for not being able to get the Democrats' vote. Come on. The President did not get my vote on GATT. He did get my vote on NAFTA. I have a lot of things on which he is not going to get my vote. What are you talking about, get the vote. But the Republicans can get Hollings' vote in a flash if they protect Social Security. Just put in section 7 that Social Security funds are excluded. Why not write what the law requires and what we all say should be done to give the children and grandchildren a sense of trust, reliance, and respect for Government. There is no such thing as a unified budget with Social Security. By law Social Security is off- budget. But now they put in the constitutional amendment these different statements here. Some may ask, what does the Senator from South Carolina want? Everybody knows, or should know, that the Senator from South Carolina works in a bipartisan fashion. This Senator, you are looking at him, got the only bipartisan thing done in the last 2 years, the telecommunications bill. I know it. The public knows it. I worked for 4 years on that. We worked with the Republicans and Democrats and we got 91 votes, 91 of the Senators on the floor. So I know how to work in a bipartisan way. In fact, I worked with President Johnson to balance the budget in a bipartisan way. But when President Reagan came to town with the so- called Kemp-Roth tax cut, I knew we were headed for the pits. I knew it. Senator Dole knew it. I can show you his statements critical of Kemp-Roth. He was not any supply-side chairman of Finance. He knew better. Senator Howard Baker, the majority leader, sat right down there at that first desk and he shrugged his shoulders and said this is a riverboat gamble. You did not get elected to come up here and gamble like a riverboat gambler. And I will not go along with it. Vice President George Herbert Walker Bush called it ``voodoo.'' How in Heaven's name can you cut your revenues, increase all your spending for defense, as elicited by Warren Rudman in his recent book, and expect a balanced budget? Who is that stupid? We continue to practice pollster-driven politics and focus on hot-button issues. But the public knows better. So I voted against Reaganomics. I voted for the spending cuts. I voted for the tax increases. And I want to correct the record in that Rudman book, which I have a little time to do. The inference is, in that first chapter, that Senator Hollings had some doubts about Gramm-Rudman- Hollings and later asked for a divorce. It implies that I acted like I was just along for the ride. Let me tell you now, the Senator from South Carolina worked in a bipartisan fashion like a dirty dog, over the objection of the Democratic majority leader, over the objection of the Democratic chairman of the Budget Committee. On 14 votes, up or down, we got a majority of Democrats to vote for across-the-board spending cuts of Gramm-Rudman-Hollings: $36 billion a year. Incidentally, I helped write Gramm-Rudman-Hollings. I used this budget tool as Governor. I got a balanced budget. I got the first triple-A credit rating. The distinguished former Governor and occupant of the Chair knows what I mean. We do not have a triple-A credit rating in the great State of South Carolina now. I got it. It has been lost. So I know how hard it is to work and get from Standard & Poor's a triple-A credit rating. I did it with a rule we had in the legislature of automatic cuts across the board, and that is all Gramm-Rudman- Hollings was. If you did not meet the target of spending cuts, then the law did it for you. You could see the maneuvering and extension of a year and extension again of another year. So, 1987 we were still serious, eight of us, in a bipartisan fashion. I am qualifying myself as a witness. With six Democrats and two Republicans, Senator Boschwitz and Senator Danforth, myself and others, we voted for a value-added tax of 5 percent to eliminate the deficit and the debt. We knew we needed spending cuts. We knew we wanted Gramm-Rudman-Hollings. We knew we had to cut the size of the Federal Government. We knew we had to have spending freezes. But we also realized in that vote--and it was after a very serious, studied debate in the Budget Committee--that balancing the budget also required increasing revenues. I appeared before the Finance Committee. I have testified twice. I met with the expert, Dr. Cnossen, who knows all about VAT's. I later met with the then-chairman, Senator Moynihan of New York, of the Finance Committee, and I am willing to appear again. I have introduced my legislation again in this Congress because I know you cannot possibly get a balanced budget without also raising revenues. The way they have been doing it is, No. 1, rob the trust funds, not just Social Security to the tune of $1.2 trillion. They have the highway trust funds, and the House crowd just acted to take the transportation trust funds off-budget. They said, ``Wait a minute, you are taking our highway funds.'' They said, ``Wait a minute, you are taking our airport improvement moneys,'' to make the airports safe and everything else of that kind, ``and using it on foreign aid, or welfare, or defense, or whatever. You are not spending it for its purpose.'' So the House is has acted on that measure. But there are still other trust funds: They are using military pension surpluses, they are using civil service pensions, and everything else of that kind, to the tune right now of $1.2 trillion. So, we put forth, in a bipartisan fashion, a value-added tax. Then, in a bipartisan fashion, we enacted section 13301 to protect Social Security. Thereafter, in April 1991, we wanted to answer the catcall that we heard from some Members on this side and on the other side of the aisle about the annual surpluses in Social Security. The distinguished Senator from New York, Senator Moynihan, Senator Kasten of Wisconsin, and myself, we offered an amendment to cut--what; taxes? Social Security payroll taxes. We had the argument about the payroll taxes. I do not know why they are talking about cutting taxes again, just in time for the 1996 election. Why don't they look at how the distinguished Senator from Kansas voted back in 1991. He could have cut Social Security taxes, and supported truth in budgeting. We offered that amendment in April 1991, in a bipartisan fashion, and we got voted down. Now, they have the audacity to come here, at this particular time, and talk on and on and on about who is for deficits. Let me be categorical about this. I know what President Reagan did, because I put into the Record the statement made by none other than the Director of his Office of Management and Budget, David Stockman. I was there and I saw it. I said, man, if this thing works, we can all go back home. Every Governor will start cutting his revenues. Go to the mayor of the city. I wish you would go back to your mayor wherever you live and say we have a new way of doing things. What we ought to do is cut your revenues. But cut your revenues 25 percent and see what your bond rating is then. You will have to lay off your firemen and policemen and everything else like that, and you will get run out of the mayor's office. Try that on as a Governor. They try to give these tired arguments a kind of dignity and bring out charts and everything else. They claim they need a $500 or $600 billion cut to get the economy moving, but then they have Greenspan trying to hold growth down to 2.5 percent. We could take care of a lot of deficits here if we had more growth, but that is another debate. The fact of the matter is, they come out with all of these things about tax cuts, getting rid of the 4.3-cent gasoline tax added in 1993, $30 billion over those years. I voted for it. It is working. In fact, we know the price of gasoline went down after we put on the tax. It is the fourth quarter in the Presidential race. They are throwing the bomb, anything to bring the candidate alive, anything to bring the candidate alive--actually changing his entire congressional record of fiscal responsibility. You have him now for growth where he was not before. You have now for tax cuts when he was for tax increases and voted for and supported them and led the way for fiscal responsibility. You have him going along with any kind of thing to satisfy some small group that they have there--even assault weapons, I think. Anybody knows you cannot let assault weapons be used around this country. Come on. But now they want to court another particular group in the polls, so they pick another hot-button item, and try to complete a long pass play. Welfare reform--let it be shown that on welfare, we have worked and worked hard and had a good record. But then they wanted to abandon the children. I think it is on course again now, so I will not say any more, but I would be glad to get into that debate, because you cannot immediately save money by putting people to work, instituting an employment program, instituting day care, transportation and all these other things. In the outyears you might, hopefully, get them off welfare, and I would go along with that and want to support it. But in the meantime, let us not continue to attack children's programs to the tune of $60 billion and then in the same breath say, Let's have $60 billion for SDI, because we've put ``Defend America'' in the title of the bill. The time is now, Mr. President, to rebuild the strength of our economy. Our Nation's strength is like a three-legged stool. We have the one leg of values as a nation. That is strong. We feed the hungry in Somalia. We help develop democracy in Haiti. We commit troops for peace in Bosnia. We stand for freedom around the world and for this Americans are willing to sacrifice. The values leg is strong. The second leg of military is unquestioned. The third leg that is fractured and almost causes us to topple is the economic leg, and that is easily understood. For 50 years now, in trying to spread capitalism, defeat communism, spread democracy the world around, we sacrificed our economy. I have had many a debate on textiles. Others have had it on steel and iron and different manufacturing. The truth is that Japan is a larger manufacturing nation than the United States of America. The truth is, we have been blindsided. Read ``Blindside'' by Eamon Fingleton. Now is the time to start rebuilding our Nation's health. Let's start with those on welfare and, more than anything else, yes, let's continue this initiative for children because in the long run, it will save us money. I wrote a book on hunger. I worked to establish the women, infants and children feeding program or WIC. You cannot rebuild a strong America by denying the infants and expectant mothers access to nutritional programs. For every dollar we spend in WIC, we save $3. You are not going to build a strong America by denying Head Start to 5- and 6-year-olds. For every dollar we put in to Head Start, we save $4.25. We are not going to build a strong America by denying school lunches to the 6- and 7-year-olds. We are not going to build a strong America by denying title I to the disadvantaged 9- and 10-year-olds. You are not going to build a strong America by denying summertime jobs. You are not going to build a strong America by denying student loans for youngsters, 16-year-olds, to go to college. These are the programs we are cutting, and meanwhile we are all talking about who is really telling the truth, who is really for reducing the deficit, who is really for a balanced budget, and we go through this silly act. People blame both sides, and they should blame both sides. That is why the American public does not turn out in force for national elections. Now is the time to get real. Cut out the balanced budget amendments and let's balance the budget. Give it to us, and I will support it, I will go to conference. As a former chairman of the Budget Committee, I will work in a bipartisan fashion. We can balance this budget. It is going to be tough, but we will all have to work together to do it. We can't afford to keep turning it into Presidential political headlines. It goes without saying that these particular budgets have never been balanced. Mr. President, I ask unanimous consent a letter from June O'Neill of October 18 to the distinguished chairman of the Budget Committee be printed in the Record.

Mr. HOLLINGS. Mr. President, the distinguished Senator is running for President and he is getting the praises. He also ought to get the facts. He is running on his record. ``He gets results, results, results.'' Well, heavens above, what is the result? We are spending $1 billion a day for nothing. Now, they could perhaps assess the blame to the Senator from South Carolina, or the Senator from Kansas, or any of the other Senators that have been around the last 15 years, but you can look at your books--Mr. President, they cannot blame President William Jefferson Clinton. He is the only President who has come to town since Lyndon Johnson that has cut the deficit. The Republicans have the unmitigated gall, totally shameless, to single out the one individual that came in and said we are going to cut the deficit $500 billion, we are going to tax gasoline, we are going to tax Social Security and in return get the finest result to the economy that you could possibly imagine. Meanwhile, Senators on the other side of the aisle said they would be hunting us in the street and shooting us down like dogs and all that nonsense. We could not get a single Republican vote in the U.S. Senate. We could not get a single Republican vote in the U.S. House of Representatives. But President Clinton stuck to his guns. We stuck to our guns. Yes, we were responsible for those spending cuts. We are responsible for those tax increases and we are responsible for the wonderful economy, the low inflation rate, the creation of over 8 million jobs and everything else. Yet they have come out to point fingers, when they are the ones who caused this waste of $1 billion a day for nothing. Interest costs have gone up from $75 billion in 1980-81 to $353 billion. Just in round figures that is a $275 billion increase in spending for nothing--no Government, no schools, no highways, no law enforcement, no foreign aid, no welfare, no nothing. The crowd that caused this waste has now come around in this Presidential race and are trying to throw a long pass. Please. I never heard of such foolishness--here we are dead broke, we are spending $1 billion a day. Nobody has proposed that kind of spending cut or tax increase. Now we have the distinguished Senator from Kansas who wants to repeal the gas tax, $30 billion. He wants to have a missile defense of $60 billion. He now is going to propose an across-the-board cut of $600 billion. Anything to get elected. Come on. I have a hard time when I wake up every morning and come to the office to face this problem. That is why I asked for this extra time on this measure. They should not get the votes for this disaster. Coming around here with a constitutional amendment, like a crowd at a football game up in the grandstand hollering, ``We want a touchdown, we want a touchdown.'' Heck, we are the team. We are on the field. What have they done, other than procedure--to pass it on to the States, and after two or three elections, 7 years from now, with the State's ratification--or 2, 3 years, whatever--pass it to the States and let them ratify and come back and let the Congress then go along with the ratification. Anything to push off our responsibility and act like we are not here. They bring in charts and blame the one individual that has cut the deficit since he took office. Down in Arkansas he had a track record of 10 years of balancing budgets. He comes to town with these interest costs and a horrendous debt. What does he do? He submits a realistic budget that would have the economy in good shape, and we can not get a single vote. And they have the unmitigated gall to come up here and say they are leading the way, and that President Clinton does not want a balanced budget while they do. They are the ones who caused these horrendous deficits. Then I look at the screen from the Republican TV channel, channel 2, and here is what it has on there. It says: ``Interest costs on the national debt account for 15 percent of all Federal spending.'' False. Interest costs on the debt are 27 percent of all Federal spending. Mark it down. I have to correct this myself. I cannot get the newspapers to do it. Republican statement on the TV channel: ``40 cents of every Federal income dollar goes to pay interest on the national debt.'' Fact: 54 cents of every Federal income tax dollar goes to pay interest on the national debt. Republican statement: ``Annual interest cost on the national debt almost equals annual discretionary spending.'' Fact: Annual interest costs far exceed discretionary spending. Discretionary spending--which is inclusive of international affairs--for 1996 is $267 billion. The 1996 interest on the debt is $344 billion. Another Republican statement--they just put out--you talk about truth and who has character, come on. ``Annual interest costs on the national debt almost equals the cost of national defense.'' That is on the Republican screen right now, so all the Republican Senators can glean these quick misinformations and run out on the Senate floor and act like they have studied the problem and know what they are talking about. False. The fact is, annual interest costs far exceed the cost of national defense. The 1996 defense spending is $265 billion. Interest costs on the debt are $344 billion. Now, Mr. President, I hardly know how you are supposed to make sense out of this ``non-sense''. All that these plans accomplish is to move the deficit from the general Government over to Social Security. And they talk like it is a given: ``Unified budget, unified budget, unified budget.'' That is my distinguished colleague from New Mexico, the chairman of the Budget Committee. I know he is a brilliant Senator, and I know he knows differently. I want to go now to the Social Security record because, Mr. President, we have had a difficult time zeroing in on how we got to where we are. I hold the report of the National Commission on Social Security Reform, dated January 1983--right on page 23 it says: ``The National Commission was able to reach a consensus for meeting the short-range and long-range financial requirements by a vote of 12-3.'' The distinguished Senator from Kansas was included in that vote, Mr. President, and he bragged openly to the Catholic Conference on May 26-- just this past month--that he helped save Social Security in 1983. In the short term, he did. He was a member of the commission. And one of their conclusions, point 21 on page 224, was: ``A majority of the members of the national commission recommends that the operation of OASI, DI, HI, and SSI trust funds should be removed from the unified budget. Some of those who do not support this recommendation believe that the situation would be adequately handled if the operations of the Social Security Program were displayed within the present unified Federal budget as a separate budget function, apart from the other income security programs.'' Now, Mr. President, there is no question that the distinguished Senator from Kansas supported that. And Senator Dole referred, in his additional views along with Congressman Conable, who was chairman then on the House side, in statement 5, page 2, to the short and long-term deficits in Social Security: ``In our judgment, $150 billion to $200 billion is the amount required to keep the system solvent through 1990, and over the very long-term, the next 75 years, the needs of the system amount to about $25 billion a year.'' Thus, there was an understanding that we were making necessary changes to ensure the integrity of the Social Security system. Now, moving on, to save time, Mr. President, again, on statement 5, page 7: ``Accumulating considerably larger reserves is desirable,'' said the Senator from Kansas. But now those reserves are what he is trying to eliminate--eliminate about $600 billion to get this farcical constitutional amendment. We have never written a farce into the Constitution. I hope we do not put a farce in it now, because we know what the farce is. ``Accumulating considerably larger reserves is desirable.'' And then the Senator said later on, ``Trust fund reserves have been on a downhill coast for years.'' So he was very concerned as chairman of the Finance Committee at that particular time. He stated so in his submission of the particular bill on March 16, 1983, as the chairman when he said, ``OASI, DI in the particular bill actually generates a surplus.'' Again, a particular caveat or catchall to make sure it does not go below. On page 22, on March 16, Senator Dole says, ``If the reserves fall below 20 percent of the annual outgo, the annual COLA would be based on the lower increase in wages and prices.'' So they put in the 20-percent cushion, and constantly throughout referred to the effect on the trust funds. Now, the only reason I emphasize that is to show that in 1983 the distinguished Senator wanted to have trust funds. But they also wanted to ensure that the trust fund was off budget. Let me read from the actual Congressional Record of March 24, 1983, on the House side. It says: D. Separate treatment of trust fund operations under unified budget. Beginning with 1969, the financial operations of the Social Security trust funds have been included in the unified budget of the Federal Government. House bill: House bill provides for the display of OASI, SI and DI fund operations as a separate function within the budget. Beginning with the fiscal year 1989, these trust fund operations would be removed from the unified budget--Senate amendment, no provision. The conference agreement, here is what they agreed to: The conference agreement follows the House bill except that the trust fund operations would not be removed from the unified budget until the fiscal year 1992. So the conference committee chose to follow the recommendation in the Greenspan commission report and adopted into law that by 1992 you would take Social Security off-budget as a true trust fund. When we started to see these surpluses being used to make the deficit look smaller, we decided we couldn't wait until 1992. On July 10th, 1990, in the Budget Committee, by a vote of 20 to 1, we put Social Security trust funds off budget and abolished the unified budget, including inclusion of Social Security. In that vote, 20 to 1, the one dissenting vote was the distinguished Senator from Texas, Senator Gramm. Let me say what we did when we adopted the law in 1983 and go back to what Mr. Heinz said, the former distinguished Senator from Pennsylvania, our great colleague, John Heinz, and I quote: Mr. President, unless we separate Social Security from the budget, it is absolutely inconceivable to me that we are going to be able to finance Social Security in any kind of rational way in the long run. Left in the unified budget, there does not seem to be anything we are going to be able to do except spend Social Security surpluses on other programs in the surplus years and our Social Security in the deficit years. Without some assurance that this program will be treated like the Social Security insurance program that it is, how can we expect young workers who are paying millions to pay anything into Social Security today, nearly 100 million of them, to trust that the benefits that they pay in taxes are going to be in when they retire 30 years from now? The answer is, unless we separate Social Security, as I provided, I do not think we can. So it was Senator Heinz on the Republican side, in a bipartisan initiative in 1990, by a vote of 98 to 2--who worked with me to do just exactly that by law. It is the law today. It was signed by a Republican President, George Bush, but now under this constitutional amendment is about to be repealed. They talk about protecting Social Security. But they are trying to disregard the protection we already have. We owe Social Security $520 billion as of the end of April. That is how much has been borrowed from Social Security. Tack on under this particular constitutional amendment another $600 billion as planned in the Republican budget by the year 2002. In the end, we may pass a constitutional amendment, but even if it was adhered to and things fell into place under a best-case scenario, we would end up saying, Yes, we balanced the budget, but we devastated Social Security. We would owe Social Security $1.14 trillion. And who is going to raise taxes for that? Yet, they sit up here in solemn dignity talking about who is for balanced budgets, the very crowd that devastated us, devastated the plan. I do not know how you make sense out of this crowd. I do not know how you make sense out of the media. James Fallows wrote a very interesting volume entitled ``Breaking the News.'' In there he discussed the dichotomy between Walter Lippmann and John Dewey. Lippmann and Dewey both agreed that we should have an outstanding press and an expert press, and to a great extent, we do. They know these things. Unfortunately, they have gotten into the habit of taking polls, because they want to be ahead of the news. So they gather news and then they find the stories to support the polls. That is an incestuous kind of thing and consequently, the press ends up making the news rather than reporting the news. But Dewey went further, by saying that the American public should be engaged. It is Fallows' position that the public has not been engaged, nor have they been made to feel a part of the process so that they could understand hard facts. He states in his book that the press has a duty to report the truth even if they have to go against public opinion. We as a society are not getting those truths reported. Unfortunately, this particular Senator takes issue with the idea about the public being engaged. The public knows, and they want to be disengaged. They get this all ``spew time'' on the 7 o'clock news, they get this all spew time in the magazines, the daily press, and the media. It is a deluge. All they hear from us is this preelection off- Broadway show on the floor of the national Congress complete with charts. The little tidbit of the moment this morning is that Medicare is going broke in the year 2001. So what has changed? That was the report when President Clinton took office. It was going broke in the year 2001. He extended--oh, they do not want to say that--he extended it into 2002; 1993 was his first assault on Medicare spending, because, yes, we not only cut spending $500 billion, we not only increased taxes some $240 billion, but we cut Medicare $57 billion without a Republican vote. They came in here with these tremendous tax cuts, which, unfortunately, my friend, Stevie Forbes, has the Republican nominee talking about now. I hope he does not go overboard with that nonsense. Because I can report to you exactly where that nonsense started. Here it goes again. I want to include, Mr. President, an article from the New Perspectives Quarterly of March 22, 1993, by none other than David A. Stockman, the daddy rabbit of Reaganomics. I ask unanimous consent that it be printed in the Record.