Fritz Hollings

Mr. HOLLINGS

Mr. HOLLINGS. He doesn't mind. He loves it. I just heard coming on the floor the expression that ``every nickel'' is expended for Social Security. Is that correct, under this amendment?

Mr. HOLLINGS. Mr. President, will the distinguished Senator yield for a question?

Mr. HOLLINGS. It could be held in trust over in the Treasury. We have a measure to do that.

Mr. HOLLINGS. I know the Senator was not here with Senator John Heinz, a Republican Senator from Philadelphia. He and I worked together back in 1990 and we held the floor for quite some time. We thought at that time--that is why I am questioning and speaking advisedly--we thought at that time we had a lockbox. We put in section 13301. Mr. President, I ask unanimous consent to have section 13301 printed in the Record.

Mr. HOLLINGS. And that is how you pay for it, by paying down their debt. You pay down the debt of the war, the debt of the spending program and everything else. That is what we have been doing. That is why on this chart, I showed it, under CBO we owe Social Security $857 billion. The particular amendment that has been introduced and is now subject to a vote tomorrow does not pay down Social Security's debt. It pays down the public debt, which is any and every other debt than Social Security.

Mr. HOLLINGS. Right. But when you say ``pay it back,'' you will use Social Security moneys to pay down debt that is caused by any and every other Government program, be it entitlements or defense or foreign aid or Kosovo or military pay that we voted for--whatever it is--but it is not a debt that was caused by Social Security. Is that correct?

Mr. HOLLINGS. No, invested under section 201. Under section 201 it must be invested.

Mr. HOLLINGS. Long-term securities. It takes securities but you can take that money and put it back into the trust funds so it can earn the interest.

Mr. HOLLINGS. Right.

Mr. HOLLINGS. Actually almost a billion a day. Interest costs are over $363.8 billion a year. So the debt is going up. That is a beautiful little description that Alan Greenspan and the rest give that when you pay down the public debt, the interest costs go down. That is not the fact at all. Interest costs continue to increase. The Senator from Ohio has been very indulgent. He has the floor, and I apologize. I think he and I have the same frustration and the same intent. I advisedly and very seriously and very sincerely say look at this particular entry on page 3. That is exactly what they do, they reaffirm the lockbox, but on page 10 they transfer the money back to the debt, and it is every and any debt but Social Security. It can be spent for any and every amount, and it runs up Social Security and that goes into the national debt and that goes into the interest costs and that continues to increase. That is what has happened. When I was Governor, we had an insurance scandal, and we began to clean up the industry. One of the companies reorganized and said, ``Now we need a new slogan.'' I said, ``Capital Life will surely pay if the small print on the back don't take it away.'' That is exactly what we have here in this amendment. You have it on page 3, the lockbox, and now on page 10, you take it away.

Mr. HOLLINGS. That is where we differ. Why would they loan the money? Why not put it back in trust when we make that profit, the maximum amount allowable under law.

Mr. HOLLINGS. We have about $3.6 billion in public debt and about $1.8 billion or $1.9 billion in Government debt. Yes, you reduce the public debt, but you increase the Social Security or Government debt. What happens is the overall debt continues to go up. It is like I explained a little bit earlier about having two credit cards. I have a Visa card and a MasterCard. I want to pay down the public debt with the MasterCard. I said what I will do is use my Visa. So I pay down the MasterCard with the Visa card, but my name is on the Visa card, and I owe just that same amount of money. You can see by paying down the public debt, that is the unified deficit using the trust funds. It has been going down, and even the regular debt has been going down until now. It is going to start back up. The overall debt has been increasing up, up and away. It was less than $1 trillion. This is the cancer you and I worry about, not just the Social Security recipient getting their money, but it was less than $1 trillion when President Johnson balanced the budget, and the interest cost was only 16. Now it is $5.7 trillion and interest costs of almost $1 billion a day. That is all for nothing. That is almost $340 billion in increased spending each and every year for absolutely nothing. That is the biggest waste. When you say Government is big, that is the big part.

Mr. HOLLINGS. How?

Mr. HOLLINGS. The Senator has the floor. I apologize for interrupting. It says: ``Uses the Social Security Surplus to Reduce the Debt. . . .'' Then it goes on to say: The surplus could not be used for non-social Security spending or tax cuts. But when you say pay down the debt, that is actually what you are doing, is using the money for non-Social Security spending or maybe a tax cut, but it is not Social Security spending.

Mr. HOLLINGS. We can buy those--you said the Government needs to do it?

Mr. HOLLINGS. It is not a question of need, it is a question of law.

Mr. HOLLINGS. I will get into the point about the national debt. I wish, as the Senator just outlined, ``pay down the national debt''--the truth of the matter is paying down the public debt has caused the national debt to continue to rise. We are not paying down the national debt. I wish Mr. Greenspan and Chairman Domenici, and all the rest who are talking about paying down the debt, would say, just as the Senator from Michigan has said, pay down the national debt, but the assumption is you have money left over. The truth of the matter is having used Social Security over the last several years, since 1983, to pay down the public debt, we now owe. We don't have a surplus in Social Security. This year the Social Security surplus is estimated to be $127 billion, but by the end of the year we actually will owe $857 billion to Social Security. Why? Because we loot money from the trust fund and use it for other things. That is my problem. And it was intended for the surplus money to stay there and to earn under section 201, in regular Treasury bills, government securities. And this year, if left untouched, it would earn almost $50 billion in interest for the Social Security trust fund. Incidentally, I know the Senator is a good businessman. That is the policy for corporate America. We make it a felony to pay down the company debt with the pension fund. Here we are paying down the government debt, whether it is public or the national debt, we are paying down the debt with Social Security, or the pension money, where it is a felony in private practice. We think that is a wonderful policy.

Mr. HOLLINGS. Mr. President, I appreciate the distinguished Senator from Michigan yielding and engaging in a colloquy with me. Moving right to the point, it is not a question of this particular approach or that particular approach. It is this particular amendment by the distinguished Senator from Michigan. I think it ought to be withdrawn. What has been prompting this maneuver? They have been planning to see how in the world they could kill the President's program in one instrument while ensuring a tax cut on the other hand. In order to do that, they brought out the budget resolution with all that language I pointed out earlier yesterday repealing the pay-go rule. After repealing that pay-go rule, they can come in later with tax cuts. Incidentally, the tax cut is going to be scheduled so that it brings in, over the first 5 years, only a tax cut of about $142 billion; but over the next 5 years, $736 billion. That is how they get by the pay-go rule with that language in the concurrent resolution. Reading from the handout from the distinguished majority leader, and the author, the distinguished Senator from Michigan, it ``uses Social Security surplus to reduce debt held by public.'' What they are saying is they are using Social Security money to pay a debt. Now, if it was to pay the debt owed Social Security, the $857 billion which we will owe at the end of this year. Why is that? Because we have been paying down the public debt with Social Security trust funds. That is exactly why there is a debt in Social Security. Under the policy set by this particular amendment, you say that is exactly what we love to do, we are going to use the Social Security surplus to reduce the debt held by the public. This activity is illegal, in the sense that section 13301 of the Budget Act says you cannot use the particular moneys of Social Security in the general budget. There should never be a budget reported using Social Security moneys by the Congress, by the President, or in the budget resolution. That law, the Budget Act of 1990, was signed by President Bush. I heard a Member mention 99 Senators; 98 Senators, bipartisan, voted for section 13301, but that has been violated ever since its enactment, and that is why the debt continues to grow. Now, I would shut up, sit down, and take my seat if this amendment said ``use Social Security surplus to pay down the Social Security debt,'' but you are going to use the Social Security surplus to pay down any and every debt but the debt in Social Security and in the same breath say we want to save Social Security and this is how--put it in a lockbox. You say we will put it in a lockbox, and every nickel will be used for Social Security, yet this amendment actually guarantees that every nickel of that surplus will be used for any and every thing but Social Security. I am sure the Senator from Michigan wants to look at that closely with the Senator from Mississippi, the majority leader, because I had this particular debate last year in the election. My poor Republican opponent came with the same kind of language, and we put him right. We have different organizations to save Social Security. Max Richmond and the rest came down and gave me an award. This is a fact. And we wonder why there is no confidence in the Congress and why our Republicans get in trouble on Social Security. They get in trouble on Social Security because they tried to take it away in 1986. That is when they lost the U.S. Senate. Then they fought me. I finally embarrassed them into voting in 1990 to save it. I thought they would obey their own law. They didn't. Now, in an effort to get on top of the Social Security, they put out the rhetoric that every nickel is going to be saved for Social Security. I can state in this submission exactly what was said. Senator Domenici, the chairman, when asked, ``Why is that the case?'' ``Because we say put 100 percent of the accumulated surplus that belongs in the trust fund in the trust fund.'' That isn't what the amendment says. It doesn't say, ``keep it in the trust fund.'' It says, ``use the money to reduce the debt''--any and every debt. How is the debt caused? Kosovo spending. How is the debt caused? Military pay. How is the debt caused? Foreign aid. Any and every program. The distinguished Senator from Michigan said that the Commerce Department was running up a debt unnecessary to the Department--abolish the Department. We are going to use Social Security money to pay for the Commerce Department--the very Department that the distinguished Senator said we ought to abolish. Let me read further. Here is the chairman of the Budget Committee: In addition, for those who are wondering what we are doing about Social Security and what the President does about it, let me remind you, we do not spend one nickel of Social Security, of their money, for any new program. When the President of the United States spent $158 billion in the first 5 years out of Social Security trust fund without any apologies, just said spend it, we say ``Don't spend it, keep it in the trust fund and put it in a statutorily created lockbox that would be tied to debt so it never can be spent.'' Further down: You do not have to be worried whether that Social Security trust fund is going to be used for tax cuts because we cannot direct that any of that money be used for tax cuts. It can be used for the debt caused by tax cuts. They are running around wanting to reduce the debt. How can you reduce the debt by giving an across-the-board tax cut? That reduces your revenues and causes the debt to increase. Senator Gramm says: What this budget does on Social Security is very, very simple. It says every penny [not just every nickel; the Senator from Texas is a real conservative] every penny that we collect in Social Security taxes that we don't have to pay Social Security benefits should be dedicated to Social Security, not to any debt caused by other programs in the government. We should not spend it on any other Government programs, nor should we use it for tax cuts. Senator Domenici, in a proposal that is enshrined in this budget that we will have to vote on, sets up a lockbox. We will not be able to spend one penny of the Social Security surplus. This is vitally important because, as everybody in the Senate knows [I am quoting Senator Gramm] and I wish every American knew, our Government has been using every penny of money coming into the Social Security trust fund for other programs. We currently have IOUs for this money. Mr. President, $857 billion, those are the IOUs. So the Senator from Texas and I agree that we have been stealing it. And how do we steal it? We use it to pay down the public debt. How is the debt caused? By tax cuts. So, what goes around comes around. I know the distinguished Senator does not want to join in that because he wants to save every nickel, he says. I will get the Congressional Record tomorrow and I hope they do not change it. But the quotation is there: ``Every nickel to be spent for Social Security.'' That is what Senator Gramm, the chairman of the Budget Committee, Senator Domenici, and the majority leader said. If you really want to save Social Security rather than spend it, you are going to, by gosh, vote against cloture, continue this debate so people can come to their senses. I can tell you that right now, I do not mind voting against it. You can tell my opposition to it. I will ask the distinguished Senator from Idaho, what about Social Security? I am trying to get sense out of this language here. Fortunately, the 19-page amendment is reduced. As it is described in the handout by the distinguished majority leader, it ``uses the Social Security surplus to reduce the debt.'' How do you use the Social Security moneys to reduce the debt and yet spend every nickel--or every penny, as Senator Gramm says--for Social Security? The debt is not caused by Social Security. The debt is caused by anything and everything but Social Security. So, once you use Social Security moneys to pay the debt--I will be glad if somebody will just explain that to me and I will be glad to stop. But I just do not understand how we save Social Security by spending its money on any and every other program--the debt of every other program but Social Security. Would the distinguished Senator want to respond? Mr. CRAIG addressed the Chair.

Mr. HOLLINGS. Mr. President, I will yield the floor in just a few seconds here. The statement was made that it would not put Social Security in a straitjacket. But the amendment does. I have the letter here from the distinguished Secretary of the Treasury. In yesterday's debate, we introduced the letter, substantially the same, dated March 17. This is dated April 21. It explains the serious objections that the distinguished Secretary of the Treasury has to the particular amendment. I ask unanimous consent that the letter be printed in the Record.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, the interesting thing to this Senator, of course, is the date, March 17. Nothing has changed. We knew that the distinguished chairman of the Budget Committee and his colleagues would be conspiring, as they have delayed us this afternoon to get the exact right conspiracy. To do what? To eliminate President Clinton's budget, on the one hand, and to engage in a charade or fraud, on the other hand, to make the Members, and particularly the media that covers this thing, see the perception is the reality. They are still talking surplus, surplus, surplus, surplus when we pointed out time and time and time again there is no surplus. We are spending $100 billion more than we are taking in. But this is to get everybody to think there is some change. All you have to do is read the distinguished chairman's summary of the Social Security Surplus Preservation and Debt Reduction Act, summary of amendment, April 20, 1999. This is 1 month later. The distinguished Secretary of the Treasury foresaw this amendment. There is nothing complicated about it except its wording and rewording of the statutory provisions of 13301 and many, many other provisions, to mislead, as if it were really doing something. But, 2, ``Uses Social Security surplus to reduce the debt held by the public.'' Mr. President, we have been doing that for years and years on end. That is what we call the unified--there it is--the unified deficit. That is when they use the Social Security surplus. We have this chart. We have been using this for years. As a former chairman of the Budget Committee--I speak advisedly, not politically--I have been trying my dead level best to do what the chairman in this amendment proposes to do, but it is the same act, the same scene, because in 1968 President Lyndon Baines Johnson brought about a merging of the Social Security trust fund with general funds of the U.S. Government so we could then talk about a unified deficit with trust funds. Therefore, you could get a surplus rather than a deficit. The truth of the matter is, the trust fund surplus from Social Security is $126 billion. You use Social Security trust funds and you continue to do so. They say pay down the public debt. Let me get into that paying down the public debt, like it is something other than the national debt. I am in my 33rd year, and the real problem is to really try to stop increasing the national debt and to pay down the national debt. When we say pay down the debt, do not give monkeyshines of paying down public debt, thereby increasing Social Security debt. The distinguished Senator from Missouri said just a minute ago, if you inherited money, rather than going off to Las Vegas you ought to pay off your home mortgage. This does not pay off the home mortgage. This does not pay down the national debt. It just levels off and obscures the true size of the national debt, whereby we are thinking we are reducing the public debt and we are paying our bills. Not at all. (Mr. SMITH of Oregon assumed the chair.) Let's assume, Mr. President, individually I had two credit cards, I had a MasterCard and I had a Visa card, and I got in a big bill from MasterCard, and I said, ``Well, I'll take care of that crowd. They've been bringing a lot of pressure on me, so I will just take the Visa card and pay off the MasterCard.'' I still owe that much more money. I have just transferred it from MasterCard to Visa. In this case, I am just transferring it from public debt to Social Security. I am using, borrowing, spending--ah, spending--the Social Security moneys to pay down the public debt. That is all this amendment says, and that is what we have been doing since 1968. But on this long sheet here of--how many pages are here? It is a 17-page amendment, with all these facts and figures. You can find the triggering mechanism on page 10, when they say, ``After the Secretary determines the actual level for the social security surplus for the current year, the Secretary shall take the estimated level of the social security surplus for that year specified in paragraph (1) and subtract that actual level.'' And when you subtract that level, you bring down the public debt. That is the triggering mechanism. The amendment has 17 pages, and you will find it on page 10. The debt goes up, up, and away. Mr. President, I had to go to the Congressional Budget Office and ask for the trust fund balances. As of February 1999--I have not gotten it for March yet. Let me give you the Congressional Budget Office figures here of what we owe Social Security. That is something you ought to remember, that there isn't any Social Security surplus. Yes, each fiscal year there has been for several years, because we really bring in more than what we have to pay out that particular year. But having spent it, having been paying down the public debt, we have been spending the Social Security money. So Social Security, as of 1998, $730 billion in the red; 1999, $857 billion. These are CBO figures. These are shockers--shockers--to you, because I am reading out how we are increasing the debt, not paying it down. We are the board of directors of the Government. We are not stock analysts up on Wall Street hoping that the Government does not come in with its sharp elbows, borrowing to pay its bills, running up interest rates, perhaps causing inflation, crowding out corporate finance. So you will find that the financial community and the Greenspans--oh, they love this ``pay down the public debt.'' They are not elected to office. We are elected as the trustees of the fiscal condition of the U.S. Government. Here is the most important program we have domestically, the Social Security program. And in 1998, $730 billion in the red; in 1999, it is projected to be $857 billion; in 2000, $994 billion; in 2001, $1.139 trillion; and in the year 2002, under current policy, paying down the public debt, $1.292 trillion; in 2003, $1.453 trillion; in 2004, $1.624 trillion; in 2005, $1.808 trillion, in 2006, $2.001 trillion; in 2007, $2.205 trillion. And at the end of the 10-year period this particular amendment contemplates, in the year 2008, we will owe, paying down the public debt and increasing the Social Security debt, $2.417 trillion. Now, come on. When you need the money to make the payments, when you can't just depend on the interest cost in 2013, at the end of the year in 2012, you are going to have to start borrowing money. And in 2034 you will be outright broke and you will owe nearly $4.5 trillion-- almost $5 trillion. Who would want to be Senators running for reelection? Who would want to get elected to that mess? All you can do is cut down all the programs and raise taxes, unless you can get away with this fraud that is going on. I use the word ``fraud'' advisedly. We learned, as freshmen in law school, that it had to be false, and it was intended to be false, and intended to deceive, that it was relied upon, it did cause damage, and the damage was the proximate cause. This particular amendment is knowingly with intent to deceive. It is a fraud. It does not change a thing. We have been paying down the public debt with Social Security money, and we are running up Social Security's debt, sticking it more and more and more in the red, all under, ``We're going to save Social Security 100 percent. It is going to be spent on only Social Security''-- absolutely false. When you pay down the public debt, that debt could have been caused by defense, Kosovo, it could have been caused by food stamps, it could be caused by foreign aid or Lawrence Welk's home--I remember when we appropriated money for Lawrence's home--it could be anything. So when you are paying down the debt, as it says right here on the face of the handout by the distinguished chairman of the Budget Committee--and I read, again, ``uses the Social Security surplus to reduce the debt held by the public''--the debt held by the public is cumulative with every and any amount of different expenditures. So it has more to be spent on every and any thing but Social Security, all the time saying they are saving Social Security. Let me make absolutely clear about this fiscal condition that we are in, because we have a cancer; we have fiscal cancer. Mr. President, I have a good friend over on the House side, the chairman of the Transportation Committee, Mr. Shuster. And he is finally going to spend some highway moneys on highways. Bless him. I am 100 percent for him, because I have been in this game now ever since we started the budget process in 1973, 1974, with Senator Muskie. I have been the chairman of the committee. But here are the trust funds. The Secretary of Treasury refers to trust funds. Somebody will say, they are not trusts, but they are supposed to be. ``For the investment of Federal trust funds'' is the expression used by Secretary Rubin. I am using the same expression: ``Trust fund looted to balance the budget.'' In 1999, here is what we owe Social Security: $857 billion; Medicare, we got $129 billion for the HI portion of Medicare and 39 billion for the SMI portion; for military retirement, $141 billion; for civilian retirement, we owe $490 billion--that is civil service employees; they ought to know it; it is going up--unemployment compensation fund, $79 billion; highway moneys, $25 billion; airport moneys, $11 billion; railroad retirement, $23 billion; and ``other,'' like the Federal Finance Bank, $57 billion. So we owe our trust funds $1.851 trillion. By this 5-year period, at the end of 2004, we will owe $2.954 trillion under current policy, and the amendment of the Senator that has just been put in by the majority leader--I wasn't here when it was introduced, but I understood he was going to put it in or the chairman of the Budget Committee--the one under consideration, in 5 years, we will owe $3 trillion to all of the particular trust funds. And the distinguished Senator from Texas came down to the floor of the Senate, and this is a quote of what he said on April 15: I believe that this is an excellent budget. I think, looking at the whole package, it is the finest budget presented in America in the 20 years that I have served in Congress. Do you know what it does, Mr. President? It just breaks all the discipline, the little discipline that we do have that has been in the pay-go rules. So once we settle out, then any amendment that came in, you had to have an offset. Here is what they do in the conference report so that they can go ahead with tax cuts and anything else they want. Of course, the manifest intent is to do away with Social Security, privatize it. In order to privatize it under Milton Friedman's plan, you need what? You need these surpluses. You need the $1.8 or the $2 trillion or, if you do it in the year 2004, you will need $3 trillion. So you will need these surpluses. Here's how you get them. Section 202 of this budget--here is the conference report on the budget: Whenever the Committee on Ways and Means of the House or the Committee on Finance of the Senate reports a bill or an amendment thereto is offered or a conference report thereon is submitted that enhances retirement security through structural programmatic reform, the appropriate chairman of the Committee on the Budget may, one, increase the appropriate allocations and aggregates of new budget authority and outlays for the amount of new budget authority provided by such measure and outlays flowing therefrom for that purpose. Two, in the Senate, adjust the levels used for determining compliance with the pay-as-you-go requirements of section 207. And, three, reduce the revenue aggregates by the amount of the revenue loss resulting from that measure for that purpose. There go your tax cuts. What does this mean? It means what the distinguished chairman of the Budget Committee says. Whenever the Committee on Ways and Means of the House or the Committee on Finance reports a bill, an amendment thereto, the chairman can decide, the appropriate chairman of the Committee on the Budget, he can tell you what that means; it means what he says. I am speaking as seriously as I know how. I have never seen the extreme of the shenanigans and the maneuvers and the misleads and the fraud going on politically, all to get by the next election, specifically using Social Security trust funds. Let's go back, Mr. President, to the Greenspan Commission. The Greenspan Commission, in 1983, said we are going to institute this payroll tax; namely, the 6.2 percent, the payroll by the employer, and 6.2 percent by the employee, for 12.4 percent. And we know that is a high payroll tax. But we are putting that in to take care of the baby boomers in the next generation. That is why it was put in that way. And to make sure that it was set aside, section 21, Mr. President, provided just exactly that. It provided that it be set aside and that-- if I can find that section, I will show it to you, section 21. It said remove Social Security from the unified budget. That has been the on- budget, off-budget, unified and all that, un-unified, private debt, public debt, trust fund debt, everything else--it is just one account. But I will read section 21: A majority of the members of the National Commission recommends that the operations of the OASI, DI, HI and SMI Trust Funds should be removed from the unified budget. It took this Senator on the Budget Committee almost 7 years before I could finally get it reported out of the Budget Committee, that particular provision. I ask unanimous consent that section 21 of the Greenspan Commission report be printed in the Record.

Mr. HOLLINGS. Mr. President, let me first respond to our distinguished budget chairman by reading a letter addressed to our distinguished minority leader by the Secretary of the Treasury, Robert Rubin. It is dated March 17, 1999. Dear Tom: Thank you for inquiring about the impact of the new debt limits contained in the Social Security Surplus Preservation Act. I appreciate the opportunity to respond to your question. In brief, I am deeply concerned that these limits could preclude the United States from meeting its future financial obligations to repay maturing debt and to honor payments--including benefit payments--and could also run the risk of worsening a future economic downturn. It has been this Administration's view that fiscal restraint is best exercised through the tools of the budget process. Existing enforcement tools such as the pay-go rules and the discretionary spending limits in the Budget Enforcement Act have been key elements in maintaining fiscal discipline in the 1990's Debt limits should not be used as an additional means of imposing restraint. Debt is incurred solely to pay expenditures that have previously been authorized by the Congress and for the investment of the Federal trust funds. By the time the debt limit is reached, the Government is obligated to make payments and must have enough money to do so. If Treasury were prohibited from issuing any new debt to honor the Government's obligations, there could be permanent damage to our credit standing. The debt obligations of the United States are recognized as having the least credit risk of any investment in the world. That credit standing is a precious asset of the American people. Even the appearance of a risk that the United States of America might not meet its obligations because of the absence of necessary debt authority would be likely to impose significant additional costs on American taxpayers. Yet, in November 1995, a debt crisis was precipitated when Government borrowing reached the debt limit and in January Moody's credit rating service placed Treasury securities on review for possible downgrade. As you know, there is currently a statutory limit on the amount of money that Treasury can borrow in total from both the public and from Federal trust funds. The proposed ``lockbox'' provision would add a new statutory limit on debt to the public. The proposed new debt limit runs the risk of precipitating additional debt crises in the future. Although the proposal adjusts the debt ceiling for discrepancies between the actual and projected Social Security surpluses, it does not make similar corrections for unanticipated developments on the non-Social Security side of the budget. While our forecasts have been conservative, the current forecast of the non-Social Security budget could prove too optimistic because of changes in the economy, demographics, or countless other factors. This could cause the publicly held debt to exceed the new debt limit. Furthermore, even if the debt limit appears sufficient because if covers the annual debt level--measured from end- of-year to end-of-year--it could easily be inadequate for the Government to meet its obligations at a given point during the year. Under normal circumstances, every business day, Treasury makes payments--including Social Security payments on certain days. In any given week, Treasury receives revenues, makes payments, and refinances maturing debt. Weekly and monthly swings in cash flow can easily exceed on-hand cash balances. When this occurs, Treasury then borrows from the public to meet its obligations. If the amount of publicly held debt were to reach the level of the debt limit--or if the debt limit were to decline to below the level of publicly held debt--Treasury could be precluded from borrowing additional amounts from the public. If Treasury could not borrow to raise cash, it is possible that it could simply have to stop honoring any payments--including Social Security payments. In this case, Treasury could be prohibited from issuing any new debt to redeem maturing debt. Every Thursday, approximately $20-23 billion of weekly Treasury bills mature and, every month, an additional $60-85 billion in debt matures. These securities must either be paid off in cash or refinanced by issuing new debt. Treasury could be put in the position of having to default for the first time in our nation's history. Congress could defuse the debt limit problems by immediately voting to raise the debt ceiling. Under the ``lockbox'' proposal, however, it would take sixty votes in the Senate to do so. As past experience indicates, obtaining a super-majority for this purpose is often time-consuming and difficult. Moreover, this requirement would greatly enhance the power of a determined minority to use the debt limit to impose their views on unrelated issues. Finally, the proposed debt limits could run the risk of worsening an economic downturn. If the economy were to slow unexpectedly, the budget balance would worsen. Absent a super-majority vote to raise the debt limit, Congress would need to reduce other spending or raise taxes. Either cutting spending or raising taxes in a slowing economy could aggravate the economic slowdown and substantially raise the risk of a significant recession. And even those measures would not guarantee that the debt limit would be not be exceeded. A deepening recession would add further to revenue losses and increases in outlays. The tax increases and spending cuts could turn out to be inadequate to satisfy all existing payment obligations and keep the debt under the limit, worsening a crisis. To summarize, these new debt limits could create uncertainty about the Federal government's ability to honor its future obligations and should not be used as a instrument of fiscal policy. While we certainly share the goal of preserving Social Security, this legislation does nothing to extend the solvency of the Social Security trust funds, while potentially threatening the ability to make Social Security payments to millions of Americans. I will recommend that the President veto the bill if it contains the debt limit provisions. If you have any additional questions, please do not hesitate to contact me. Sincerely, Robert E. Rubin. t(Mr. DOMENICI assumed the Chair.)

Mr. HOLLINGS. I thank the distinguished Chair. I will read ``Exclusion'': Section 301(a) of the Congressional Budget Act of 1974 is amended by adding at the end the following: ``The concurrent resolution shall not include the outlays and revenue totals of the old age, survivors and, disability insurance program established under title II of the Social Security Act or the related provisions of the Internal Revenue Code.'' And it goes on in paragraph (a) saying that the Social Security trust fund . . . shall not be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of the budget of--(1) the budget of the United States Government as submitted by the President, (2) the congressional budget, or (3) the Balanced Budget and Emergency Deficit Control Act. Now, true it is, the amendment reiterates that particular section. But that has been in the disabuse, the disavowal, the violation thereof ever since 1990, when President Bush signed it into law on November 5 of that particular year. And this particular amendment continues to put it within the unified by paying it down. Now, that has been the big problem all along. And so at the beginning of the year, when I fortunately began to hear music to my ears that both the White House and congressional leaders on both sides were saying again and again that they were going to save Social Security, I got with my friend Ken Apfel, who used to work for the Budget Committee and is the Administrator of Social Security today, and, as a result, we introduced S. 605, a bill to solidify the off-budget status of the Old Age Survivors and Disability Insurance Program under title II of the Social Security Act and to protect program assets. Let me read section 5: Notwithstanding any other provision of law throughout each month that begins after October 1st, 1999, the Secretary of the Treasury shall maintain in a secure repository or repositories cash in a total amount equal to the total redemption value of all obligations issued to the Federal old age and survivors insurance trust fund and the Federal disability insurance trust fund pursuant to section 201(d) of the Social Security Act that are outstanding on the first day of such month. Mr. President, that really puts it into a lockbox. It is in the Budget Committee. I have asked the chairman to let us bring it up. I would be delighted to have hearings on it. We would give anything to have a vote on it, but they have filled up the tree so I can't put it in as an amendment here. Maybe we can get it at the end of the so- called cloture vote and put it in when we get an up-or-down vote on this. But section 201(d) requires the Social Security Administration to invest in Treasury bills, Government securities. Necessarily, they get the IOU and the Government gets the money. But if you immediately transfer an equal amount of money back to a trust fund in Treasury, as section 5 requires, then you have the lockbox where the money is only expended for Social Security purposes. Now, this has been drawn with the assistance of the Social Security Administration. And some of my colleagues, when I showed it to them, they said: Wait a minute, that's what you are going to do. What you are going to do with the money is, you do exactly with the money as you did between the years 1935 and 1968 before you started this monkeyshine of a unified budget, spending all of the Social Security trust funds. That is what happens. You keep it right over there and it gets the highest amount permissible by law under T bills today, which this year in interest will be $48 to $50 billion in interest that it earns. This money is supposed to be earning, on the one hand, and kept in trust, those earnings, and the total fund on the other hand. Instead, we are spending the interest and the fund itself. We are breaking Social Security, and coming out here baldfaced and saying we all want to save Social Security, and not one red cent is going to be spent on any other than Social Security. It is one grand fraud. Mr. President, let me just emphasis, since I have the page turned here on public debt and private debt, or gross Federal debt--I am referring to an analysis of the President's budgetary proposals for fiscal year 2000. I asked CBO, ``What do you really leave out when you call it this public debt? What part of the debt, the overall public and private, or trust fund debt, goes into the national debt?'' This is held by the public. I am referring to page 74, April 1999, the most recent report of the Congressional Budget Office: Debt held by the public is the amount of money that the Federal Government has borrowed by selling securities to finance all of the deficits less any surpluses accumulated over time. Under the CBO's apparent baseline forecast, debt held by the public is estimated to decline from $3.6 trillion in 1999 to $1.2 trillion in 2009. Gross Federal debt consists of debt held by the public and debt issued to Government accounts. Like you issue and you receive in Government accounts, most of the latter type of debt is held by trust funds, the largest of which are Social Security and Federal civilian employee retirement funds. Because Treasury handles investment by trust funds and other Government accounts, purchases and sales of such securities do not flow through the credit markets. Therefore, interest on those securities is considered to be an intragovernmental transfer. That is what I call the monkeyshine when they take from one and give it to the other. You only are talking about the one that you are giving, and you are saying you are reducing the public debt, but you are increasing Social Security debt and saying in the same breath you are saving Social Security when you are looting it, when you are savaging it. You are ruining it. There is no question that is what is going on, and that is what this amendment calls for. Back in 1983, if we had any idea that Social Security trust funds were going to be spent for any other purpose, you would have never passed that tax increase on Social Security, that payroll tax. You would never have been able to get the votes. We all talked and revered ourselves out here on the floor with the flourishes of how we were saving Social Security, that we weren't going to let it get in the red anymore, and how we are going to take care of the baby boomers in the next generation, and that we are not going to have it go bust. Instead, it is not the baby boomers that continue to talk. It is the adults on the floor of the Congress totally in violation of all Government policy. We are going to private corporations. And in 1994 we passed the Pension Reform Act and said there are too many of these takeovers. Well, these fast money artists come in and pay down a good conservative-run company. They pay down the company's debt with the pension fund, and then take all the money and run. We said that is going to have to stop, and we are going make it a felony if you do it. So we passed the Pension Reform Act of 1994. Colleagues have heard me tell the story of Denny McLain, because I saw it in the New York Times whereby Mr. McLain, the all-time pitcher for the Detroit Tigers, became the head of a corporation, paid off the debt with the company pension fund, got fired, convicted of a felony, and sentenced to 8 years. Mr. President, if you can find what cell poor Denny is in, tell him next time run for the Senate. Instead of the jail term, he would get the ``Good Government Award.'' We stand out here baldfaced and say how we are saving Social Security when we are spending it on the debt. Don't get all caught up with public debt like they want. That is what they want. They want us to meet ourselves coming around the corner. By the year 2000, next year, we will owe $2 trillion, and by the end of the 5-year budget period, we will owe trust funds--the Government itself--$3 trillion. I can tell you. You couldn't do this in corporate America. We would be all fired as the directors. But that is what happens and what occurs then. Finally, the fiscal cancer grows in droves. What happens is then it is projected that this year there is $356.3 billion in interest costs. Let me just say a word about that. I see other colleagues here on the floor, who I would be glad to yield to. But I am trying to emphasize again and again that this amendment does nothing more than increase our fiscal cancer. It does not save Social Security. It puts Social Security deeper in the red. That is what happens here when you get the forced spending like taxes for interest costs on the national debt, which is part of the public debt, too, and the debt owed to the trust funds--what they might call if we were a private entity our ``private debt.'' But what happens is, as with Lyndon Johnson, President Johnson, back in 1968 when we last balanced the budget, when the Government last balanced the budget, in 1968-1969 we ended up with a surplus. We didn't use Social Security moneys, incidentally. At that particular time, there were about 200 years of history, and the cost of all the wars from the Revolution on up to World War I, World War II, the cost of Vietnam, Korea, the debt was less than $1 trillion. And the interest cost was only $16 billion--one- sixth--$16 billion. Here, without the cost of a war and the ensuing years, it has gone up to $1.2 trillion. So we have increased spending for nothing, absolutely nothing. This is what I call ``fiscal cancer.'' You put in a sales tax. You get a school. You put in a gas tax. You get a highway. You put in other taxes. You get general government. But you put in this interest tax, for this charade, fraud, maneuver, political maneuver, and the cancer continues to grow. As the amount shows here on its face, for the next 5 years, the interest costs go up. Here we are forced to spend $340 billion more than what President Johnson spent when the budget was last balanced. Mr. President, just think of that $340 billion that I am going to spend this year, next year, next year. In fact, it is going up, up and away in interest costs. This is all under current policy, incidentally. And we have already destroyed current policy by passing an $18 billion military pay bill. We have now, and we are all going to vote for it, I think, $6 billion for Kosovo. We have already busted the caps $21 billion. That is not the case here. This is saying that you have not busted the caps, that you had no Kosovo, that you had not voted $18 billion for the military. But just think of that $340 billion more. I could give $80 billion to paying down Social Security or saving Social Security. I could give $80 billion to pay down the public debt. I could give $80 billion for the Republican tax cut. I could give $80 billion for the Democratic spending programs, for Medicare and otherwise. That is only $320 billion. I would still have $20 billion for a parade and a party. As I promised my distinguished chairman, I would jump off the Capitol dome if he balanced the budget by the year 2002. That was a couple of years ago--or 2001. I am still willing to reiterate that pledge. They are not balancing the budget. We are spending, as you can see, $105.2 billion more than we are taking in, according to CBO this year, and $91.8 billion more than we are taking in for the budget that we are working on for the year 2000. That is what I call fiscal cancer, and nobody wants to talk about it. They want to say: Oh, everything is coming up like roses. It is morning in America, whatever else, any kind of political jargon. But the reality is there. I have a record and I did not just come to this recently. I put in the sales tax, back in 1949 and 1950 for public education in my own State. I got the first triple-A credit rating of a southern State. I have been chairman of this Budget Committee and I have been watching. I am trying to educate the media, that is the only saving grace I have, if they could finally come out like Barron's did and say there is no surplus. Everybody is talking about using the Social Security surplus. Mr. President, I do not think I can get this printed in the Record--but here the Concord Coalition has finally come around, and a few others have come around and said it--but Barron's, dated March 1: ``There is no budget surplus.'' If we could talk sense to each other, we could figure out how to get out of this thing. I said let's do it the way the Social Security Administration said; let's save it, let's put it in a true lockbox, S. 605. I thought when I passed 13301 that I had put it in a lockbox, on November 5, 1990. We said it never would be spent and be used to reflect the financial condition, but they violate it regularly. S. 605 now says that you have to keep the money there. That is how we did it for years on end. It was fiscally sound. That is what is required of other pension funds, that they maintain their fiscal soundness. With that in mind, I yield the floor. Several Senators addressed the Chair. Mr. LAUTENBERG addressed the Chair.

Mr. HOLLINGS. I thank the Chair. I think we have in here section 13301. I ask unanimous consent that we print in the Record at this point section 13301 of the Budget Enforcement Act.

Mr. HOLLINGS

Mr. HOLLINGS. Mr. President, I wish to draw my colleagues' attention to an opinion piece in today's Washington Post on air safety. The article, titled ``Yes to Air Safety'' by Congressman Shuster, Chairman of the House Transportation and Infrastructure Committee, talks about the critical need to fully fund our air traffic control system and to build our nation's airports. It is a simple proposition that is being put to Congress--if you take money from airline passengers, you must use that money to build and sustain the system. We all leave here every weekend, journeying across the country. Each of us encounters delays at Reagan National. Right now, the FAA operates the safest air transportation system in the world. Maintaining this high standard requires money--plain and simple. We can underfund the agency and we can take the airline passenger money and give people a tax cut. If we do this, then we can not complain about delays--it is our fault for the shortchange. If we take the Trust Fund money and use it for a tax cut or other purposes, it is our fault, not Jane Garvey or Rodney Slater's, but ours alone. We have an opportunity to restore the ``Trust'' in the Airport and Airways Trust Fund, and to give to our constituents what they need and have paid for--a safe, and efficient air transportation system. We should not let it pass us by. Congressman Shuster has got it right. Here are the facts: From Fiscal Year (FY) 1982 through 1999, Congress appropriated more than $27 billion for the modernization program. FAA estimates that the effort will need an additional $14 billion for FY 2000-2004. The FAA requested $2.3 billion for FY 2000, which represents an increase of 11 percent over the FY 1999 appropriation level of $2.1 billion. But it is not enough to fully modernize the national air system (NAS). Accident rates for the U.S. air transportation system, compared to other areas of the world or other modes of transportation, all indicate that the U.S. aviation system remains the safest in the world. For example, aircraft hull loss rates for the U.S. and Canada are 0.5 per million departures, compared to 3.8 per million for Asia and the Pacific islands. For 1998, there were no commercial passenger fatalities within the U.S. As the FAA aviation forecast information, released just a few weeks ago, indicates, there will be almost 1 billion passengers (up from 607 million in 1998) and an increase in the total number of flights from 65 million to about 82 million by 2010. Today, the FAA, in many instances, is using outdated equipment that must be replaced in order to meet the expected demand. In 1997, the Congressionally created National Civil Aviation Review Commission (NCARC) found that gridlock in the skies is a certainty in the near future unless the ATC system is modernized. According to the report, an increase in delays of just a few minutes per flight would seriously inhibit the ability of carriers to operate hub and spoke systems. I must note that one DOT study suggests that adding 48 more flights at Reagan National would create approximately 3 to 4 minute more delays per aircraft. This report was further supported by an American Airlines study detailing how a four minute increase in delays would seriously impact the ability of carriers to operate hubs. The FAA estimates that if demand increases as expected, no new runways are added to major airports, and no advances are made in air traffic control, then 15 of the U.S.'s major airports will be severely congested by 2006. In January 1997, the White House Commission on Aviation Security and Safety recommended that we expedite the modernization of the ATC system and complete the project by 2005, ten years earlier than originally planned. If we do manage to fix the air traffic control system to make it more efficient, we still need to have more runways and terminals to accommodate the expected growth. Again, it is simple, if one has too many planes trying to land on one runway, one will have delays. Runways do not come cheap. The runway in Seattle, which we agree is sorely needed, will cost more than $830 million. A new runway in Atlanta, Chicago, or Dallas likewise will cost hundreds of millions of dollars. Without that added capacity, delays will increase. We know this. No one disputes this. It gets back to money--we have a Trust Fund which will have $79 billion by 2008 just sitting there. The General Accounting Office has also told us of the looming funding crises for airports. We simply can not ignore our duty--we can not use that $79 billion for anything other than funding our air transportation system. I ask unanimous consent that the editorial be printed in the Record.

Mr. HOLLINGS. Mr. President, I just came to the floor to hear my distinguished colleague from Texas say this is the finest budget in 20 years.