J. Kerrey

Mr. KERREY

Mr. KERREY. I thank the Chair, and I thank the distinguished Senator from Alabama. Having gained majority support for an amendment that added approximately $300 million to the rescissions package, this at least, it seems to me, will now decrease that by $1.8 billion. I believe that this is wise given the fact that we are going to be cutting, we are going to be taking up amendments immediately following this that have to do with low-income energy assistance and it will not be the last time that we visit a program where real people are going to have their lives affected in rather serious fashion. This, it seems to me, is setting our priorities straight. I am pleased that the distinguished Senator from Alabama is offering it as a second-degree amendment, and I am pleased to urge my colleagues to support it strongly.

Mr. KERREY. Mr. President, I take the point that the distinguished Senator from Indiana makes. To be clear on this, the GSA timeout review process was completed in 1993 and then modified after for a variety of reasons. It is one criterion. In my Dear Colleague letter I listed four, and even there, I must say, at some point you do become arbitrary. The distinguished Senator from Alabama in offering his own arguments against the underlying amendment indicated as much is the case. It is absolutely the case. At some point we do try to make good judgments based upon what we think is fair. And obviously, if it hits us, it does not quite sound fair. I understand that. We try, I would say to my friend from Indiana, to be fair. And as I said earlier, I am quite pleased that instead of $300 million, we now have before us $1.8 billion. The question must fall to all of us with this second-degree amendment. What happens to the country if this $1.8 billion is not spent. In comparison to other things that we are going to be considering not only in this rescission package but later on in the budget resolution when the distinguished Senator from New Mexico finishes his work, I suspect that we are going to look back upon this as a rather small item in comparison and say that it was good policy the distinguished Senator from Alabama rose and put another $1.5 billion on the table. So I hope my colleagues will when the time comes support the amendment of the Senator from Alabama.

Mr. KERREY. Mr. President, I am prepared to yield back the remainder of my time.

Mr. KERREY. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. KERREY. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. KERREY. Mr. President, this is a very straightforward amendment. I offered it in the full committee. It has been altered somewhat to add additional items. For my colleagues, what I am doing with this amendment is to rescind an additional $324.579 million from the courthouse projects. Mr. President, I offered this amendment on behalf of myself and the Senator from Maine [Mr. Cohen], who has also been very actively involved for the past several years in trying to get the GSA to do some reviews of the courthouses that have been both authorized and appropriated. The GSA did what they call a ``time-out'' review and came back with $1.3 billion worth of savings. We have taken some but not all. To be clear, the distinguished chairman of our subcommittee, the Senator from Alabama, Senator Shelby, points out quite accurately that we use the GSA's recommendations as a guideline. These are not hard and fast recommendations. These are not things that we always watch. Indeed, we have some things on our list in the rescission package that were not recommended by GSA already. Nonetheless, my colleagues who are considering this amendment really should ask themselves one question, and that is: What happens if this amendment passes? Will there be damage done to the Nation? Will there be children that get less food? Is day care involved? Is education involved? Is national defense involved? I mean, the argument really has to center on what happens if this amendment passes. Well, Mr. President, I am going to respectfully say that what happens is a number of projects are not going to be built. The list that I have includes a Phoenix, AZ, courthouse, $128.890 million; Tucson, AZ, $70 million; Southeast Federal Center in the District of Columbia, $58 million; an additional $26.272 million in Hammond, IN; in Holtsville, NY, an IRS Service Center for $19.183 million; in Corpus Christi, TX, $6.446 million; in Santa Teresa, NM, a border station, $4.004 million; Seattle, WA, $3.764 million; and in the spirit of fairness, $5 million from an Omaha, NE, courthouse; a Secret Service headquarters in DC. for $10 million. The total, Mr. President, is $324.579 million. Again, the simple question really has to be: What happens if this amendment passes? What happens is that these projects are not going to be built, or they will be scaled back. Mr. President, I hardly think those of us who are trying to find ways to cut spending, those of us who recognize reduction done, to get to a balanced budget, are explaining to various interest groups, educators, health care people, interest groups that come constantly into our offices saying, ``Why, why, why,'' It seems to me that this is a relatively easy step for us to take and a relatively painless step, I must say, Mr. President. There will be no interest groups that will object. There will be no people that will say, gee, this is going to hurt us in some measurable or appreciable fashion. These are merely projects, Mr. President. I appreciate that they do have value. I am not arguing that they are without value. I merely argue that in this time when we are trying, in an unprecedented fashion, to achieve a bipartisan consensus to reduce this Nation's deficit to zero, this kind of action, this little list of additional cuts, is not only appropriate but quite reasonable.

Mr. KERREY. Mr. President, the distinguished Senator from Alabama quite correctly said that he has tried to be fair. He has been fair. We are with our subcommittee offering cuts in excess of what the House of Representatives had in their piece of legislation. Again, for those Members who try to figure out how to vote on this amendment, the question really still fails to answer what happens if this amendment passes. All that happens, Mr. President, is some projects that are proposed to be built will not be built, or they will be scaled back. I have had--as I am sure all have had to do--to justify spending in a variety of ways. One of the tests that I used with various groups and individuals who come forward and ask me to support one expenditure or another, is to try to calculate what a median family income pays in the way of tax. In my State, a median family income is about $35,000 a year. They have to work about 3 months to pay the Federal income taxes of roughly $7,500. That means that 43,740 Nebraska families have to work 3 months to generate the money I am requesting to take out. I do not offer that observation in some sort of grand fashion. I merely say this is a lot of money. I do not believe the Nation is going to suffer. Indeed, I say the Nation will not suffer at all with this additional rescission. I hope that my colleagues, rather than being concerned about whether or not a project in their home State is going to be cut, I hope that they will, in fact, vote based upon the observation that this Nation can afford to lay these projects aside. Mr. President, I am prepared to yield back the balance of my time.

Mr. KERREY. Mr. President, I request the yeas and nays.

Mr. KERREY

Mr. KERREY. Mr. President, I ask unanimous consent to vitiate the yeas and nays on my amendment.

Mr. KERREY

Mr. KERREY. Is the Senate in quorum call?

Mr. KERREY

Mr. KERREY. Mr. President, last week, the Senate Commerce Committee reported out a piece of legislation, the Telecommunications Competition Deregulation Act of 1995, that I consider to be a very important piece of legislation. I have come to the floor here this morning, though, to alert my colleagues, who are also interested and excited about this legislation, that I think it would be very unwise for Members to rush the enactment of this bill. I take that position not because I have major objections to the legislation. Indeed, I have been intimately involved not just with this bill, but 1822 and the farm team coalition that worked it, trying to make certain there would be universal service for high-cost rural areas. I have been very much involved with the deregulation of telecommunications. I suspect I am the only Member of Congress who is actually able to say I have signed a significant deregulation act in 1985 when I was Governor. The delay that I am suggesting, Mr. President, comes as a consequence of a very interesting, what I would call, disconnect. Just last November I finished a successful reelection campaign. In meeting after meeting, in debates and so forth that we have when facing the voters, they were asking me about term limits, balanced budgets, health care, and agriculture policy. Crime, of course, dominated almost every discussion and debate. What are we going to do about crime? I must say, Mr. President, that never in my campaign did the issue of telecommunications arise. I say to my colleagues, as important as this legislation is, and I think it is an urgent and exciting opportunity here, the citizens, in my judgment, are not prepared for the change that this legislation would bring to them--significant change. I suspect the occupant of the Chair can remember in 1983 when the divestiture occurred. I know in Nebraska, if I put it to the voters, do voters want to go back to the old AT&T or do voters like the new divestiture arrangement, a very large percentage would have said, ``Give me the good old days.'' Because, all of a sudden, choice meant confusion, choice meant competition, choice meant a lot of problems that people were not prepared for. The same, in my judgment, is apt to occur here. I believe that we need to come to the floor and argue such things as access charges, so we not only understand what an access charge is but what happens when the access charges are decreased, understand what happens when something called rate rebalancing occurs at the local level in a competitive environment--which I am an advocate of. Chairman Pressler and Senator Hollings deserve an enormous amount of credit for being able to move this bill out of committee. One of the things I brought in a focused way to this argument was the need to make sure we had straightforward competition at the local level. So when an entrepreneur comes to the information service business and wants to go to a household and sell information, and that entrepreneur buys his lawyers at $50 an hour, he should know with certainty they are going to prevail over a company that buys, at $500 or $1,000 an hour, its lawyers who have regular, familiar contact with the regulators. If we are going to have that competition, we need that level playing field for the entrepreneur. They need to know with certainty they are going to be able to offer their services to the customer as well. But in a competitive environment, you cannot price your product below cost for very long. That is what we have a competitive environment prior to 1934. The country made a conscious decision at the time that we wanted a monopoly, both at the local and long-distance level. We changed the law in 1934. We created a monopoly arrangement. And, as I said, people, I think, would be hard pressed to argue against the statement that it has resulted in the United States having the best telecommunications system in the world. Though monopolies in general do not seem to work, this particular one did. We made a good decision, although it was unpopular, in 1983 to divest. The divestiture has worked in the context of providing competition in the long-distance area. We now see rates have gone down. We see increased quality. We see improvement as a consequence of this competitive environment. But, again, to be clear on this, all of us should understand the implications of the statement that in a competitive environment you cannot price your product below cost for very long. What that means is that if I have a residential line into my home and I am paying $12 a month for that residential line and a business is paying $30 a month for the very same thing, we cannot, as residential users, count on that for long. If the price and the cost to provide that residential service is $14 or $15, we are not going to be able to count for very long on being able to get that service for $12. And many of our rural populations now enjoy $4, $5, $6, $7 a month for basic telephone service. There are other issues that I think are terribly important for us to bring to this floor under the rules of the Senate, which allow unlimited debate. We need to have a debate. There is tremendous promise in telecommunications, promise for new jobs, particularly in a competitive environment, particularly from those entrepreneurs who are apt to create most of the new jobs. Those individuals who come in as small business people with a great new idea tend to be enormously innovative and competitive when it comes to pricing their good or service. I am excited about what competition is going to be able to do, not just for price and quality, but also for the creation of new jobs in the country. There is tremendous promise, second, Mr. President, in our capacity to educate ourselves. I give a great deal of praise, again, to Senator Pressler and Senator Burns and Senator Rockefeller and others on the committee who put language in here to carve out special protection for our K-12 environment. Some will say, why? If it is going to be market oriented, why would you do that? For the moment, at least, our schools are not market- oriented businesses. By that I mean they are government run. At $240 billion a year, about 40 million students at $6,000 apiece have to go to school for 180 days a year and learn whatever it is that the States have decided they are supposed to learn. It is a government-run operation. And they are going to be unable, if property taxes and State sales and income taxes are the source of revenue, they are going to be unable to take advantage of this technology. So I was pleased we carved out provisions for schools in this legislation. We are going to have to debate how do we get our institutions at the local level to change. It is not going to be enough for us merely to change the Federal regulation, giving them the legal authority to ask their local telephone company for a connect and to get a subsidized rate. There is a need for institutional change, both at the local level and at the State level. There is tremendous promise, in my judgment, in communication technology to help our schoolchildren and to help our people who are in the workplace to learn the things they need to know, not just to be able to raise their standard of living, but also to be able to function well as a citizen and to be able to get along with one another in their communities. Finally, there is tremendous promise with communication technology in helping a citizen of this country become informed. When you are born in the United States of America or you become a citizen of the United States of America through the naturalization process, it is an extraordinary thing to consider. We are the freest people on Earth. No one really seriously doubts that. And the freedoms that we enjoy as a consequence of being a citizen are very exciting. But balanced against that, a citizen of this country also has very difficult responsibilities. It is a hard thing to be a citizen, a hard thing. Pick up the newspaper, and if you read a newspaper cover to cover today, you have processed as much information in one single reading as was required in a lifetime in the 17th century. We are getting deluged with information. Suddenly a citizen needs to know where is Chechnya, for gosh sakes? What is the history of Haiti, for gosh sakes? All of a sudden I have to know things that I did not have to know before. To make an informed decision is not an easy thing to do. This technology offers us an opportunity to help that citizen, our citizens--ourselves included, I might add--make good decisions. That will necessitate institutional change, I believe, at the Federal level, but also at the State level to get that done. This, along with education, along with jobs, and along with the changes that our people can expect to have happen, need a full and open and perhaps even lengthy debate on this floor before we enact what I consider to be a pretty darned good piece of legislation. The committee finished the bill. They are fine tuning it now. They have not actually introduced it yet or given it a title. I am very appreciative of the fine work that Chairman Pressler has done and that Senator Hollings and other members of the committee have done to bring this legislation out. I consider it to be at least as important as many other things that we have debated thus far this year. Indeed, over the course of the next 10 years it is apt to be the most important thing that we do. Therefore, I believe it is incumbent upon us not to just come here with an urgency to change the law, but it is incumbent upon us to come here and examine the law we propose to change and examine the details of the law as we propose to change them and engage the American people in a discussion of what these changes are going to mean for them. Again, I have high praise for the committee and look forward and hope we have the opportunity to come to this floor for a good, open, and informative debate for the American people. Mr. President, I yield the floor and I suggest the absence of a quorum.

Mr. KERREY

Mr. KERREY. Mr. President, I ask unanimous consent to speak for 15 minutes as in morning business.

Mr. KERREY

Mr. KERREY. Mr. President, I must state at the beginning I normally read, when I have the opportunity, Mr. Trudeau's comics or cartoons and find much humor in them. In this one, however, not only did I find no humor but I found in it great sadness and much in fact to be ridiculed. First, let me say that I have only on a number of relatively small occasions been moved by the words of another politician. I say that straight out. I sometimes say that I was moved. But it is rarely the case where I am genuinely and deeply moved. One such occasion was in, I believe, 1988 when--it might have been 1987--Senator Dole announced his intent to run for the Presidency in Russell, KS. I watched him on television and watched him recollect his homecoming to Russell, KS, and the kindness that was expressed by the people of Russell, KS, to him, and he could not go on. Now, this is a man whose persona is, to say the least, a tough persona. This is a man, as the Senator from Arizona has just said, who never complains about his injury. At least he has not complained to me, he has not complained in my presence, and he has not complained in the presence of anybody that I know. This is a man who does not talk about his injuries and does not talk about his injuries easily when he does. For the cartoonist to portray Mr. Dole as sort of playing upon his war wound is a lie on its face. It does not happen. Quite the contrary, Mr. President. Senator Dole, as I indicated, feels great warmth and is moved by people who saved his life. I have heard Senator Dole talk about the people who restored his life and put his life back together. On a second occasion when I was moved--I must say I find it odd that Senator Dole, who is supposed to be one of the meanest guys in politics today--that is his reputation anyway--has on two occasions moved me so deeply. The second one was I believe the Larry King interview, or it might have been--it was not Larry King. It was one of the other journalists who was interviewing Senator Dole at length, and he began to talk about his father coming to visit him while he was in the hospital. On many occasions when asked how is it that I could admire Bob Dole, since he is the Republican leader and I am a proud member of the Democratic party, how is it that I could admire Bob Dole and like Bob Dole, my answer almost always begins with a declaration that this man loves his country and is a patriot. It guides him, in the end, to make decisions that sometimes are not in his best political interest. He did not serve in World War II as a consequence of calculating what was going to be in his best interest. It did not turn out to be in his best physical interest. He started to describe this moment when his father came to see him and described the swollen ankles of his father. He, once again, could not go on. He was moved, not by his own suffering, Mr. President, not by his wound. He did not go before this journalist, he did not stand before an audience in Russell, KS, and say, ``Pity me for this wound.'' Quite the contrary. What he did on both occasions was say, to a certain extent: Pity the audience. My sympathy goes to them. My appreciation goes to them. My respect and admiration go to them for what they did for me. I have great personal respect for Senator Dole and admiration for his patriotism. And, above all of the things, his ability to put his life back together, his capacity to put his life back together, I admire deeply. He has never worn his war record or his injuries in front of the public as if it was some sort of badge of honor. I have never heard him talk about, never heard him express that. Quite the contrary. So I, like the Senator from Arizona, am deeply offended by this cartoon. It says something about Americans who served that is reprehensible. And it says something about a great American patriot that is particularly reprehensible. Very often those of us who have been wounded are described that way. ``Bob Kerrey, wounded in the war in Vietnam.'' I do not ask to be described that way, but that is how it occurs. We are described that way. And in today's modern journalism, the way things get beat around electronically, very often that comes back and somebody says, ``Well, I saw you war.'' I did not make a statement. And Senator Dole does not talk about his injuries, but he gets labeled with it. Unfortunately, today, in modern politics, the tendency is to look for the worst. And in Senator Dole, not only do we not have the worst, we have the best impulses of human beings and of Americans--an American who was willing to serve and willing to come back and not with bitterness say, ``You owe me,'' but an American who was willing to come back and say, ``The debt is still on my side. I feel compassion to those in Russell, KS, who welcomed me home. I feel compassion and respect for my father, who did the same. I feel compassion and respect for all Americans who continue to try to struggle not just with their lives but to overcome adversity, as well.'' Mr. President, I yield the floor. I would be pleased to engage in a colloquy with my friend from Arizona.

Mr. KERREY. Mr. President, if I could add one additional thing.

Mr. KERREY. Mr. President, the public should not view this as a couple of old veterans wandering down here to the floor to defend another old veteran that got beat up by a cartoonist. Senator Dole has the capacity to make fun of himself, as I do and as does the Senator from Arizona. This is not saying our skin is so thin we cannot take a cartoonist's deprecating comments about us. Lord knows, it happens all the time. It is hard to pick up an account of something you have said or done and not find something being said in a deprecating fashion. I do not mind that at all. I do not object to any cartoonist or journalist that wants to take some foible of mine, a weakness of mine, and magnify it and have some fun with it. But that is not what is occurring in this case. There is a deep offense given, as a consequence, to isolating something that, in fact, does not occur. Senator Dole does not wear his wound out in front of the public. He does not try to use it to gain some kind of advantage. Quite the contrary is the case. I am here this morning to say that I admire that. Indeed, beyond admiring it, I believe that it is sort of something that Americans need to emulate--to emulate a man who says, ``I may be suffering, but my concern is for my friends and neighbors who welcomed me home. My concern is with my father who made a trip to Chicago to visit me. My concern is still with others who are struggling in their lives.'' I yield the floor. Mr. McCAIN addressed the Chair.

Mr. KERREY

Mr. KERREY. Mr. President, is there a time limit for morning business?

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

Mr. KERREY

Mr. KERREY. Mr. President, every year the President of the United States is required by law to send an economic report not just to the Congress but to the people of the country. It is a very, very important report. It provides us with the administration's assessment of where the economy is and what needs to be done both to sustain economic recovery and to adjust in certain areas. There is a section in the President's economic report described as farm policy reform. I would like to comment upon that here this afternoon in the time that I am allowed. Mr. President, one of the first statements that this document says is: Efficiency requires that farmers be given greater opportunity to respond to marketing incentives, and the cost- effective public policies used to correct market failures in agriculture. Revising agriculture to meet better these objectives will help unleash more of the innovative energy that has long characterized American agriculture. Mr. President, there is very little barrier between the farmer and the marketplace today, notwithstanding a lot of the political rhetoric that seems to imply that somehow agriculture is heavily subsidized. If agriculture was heavily subsidized, Mr. President, one would expect an economic analysis to reveal very low rates of productivity. That is typically what one sees. If I subsidize somebody a great deal--we hear this in the welfare debate--subsidize somebody a great deal, it is apt to encourage not increased productivity, it encourages just the opposite. If agriculture was heavily subsidized, one would expect to see very low rates of productivity and would expect to see economic analysis, particularly analysis that showed how the agriculture sector compared to other sectors of the U.S. economy and our international competitors, it would show that we are relatively unproductive. Just the opposite, Mr. President. Compared to our OECD competitors, agriculture is more productive than computers, more productive than automobiles, more productive than steel, more productive than pharmaceuticals, more productive than chemicals, more productive than all other sectors of our economy. This report, Mr. President, implies that the Government of the United States of America somehow is standing in between farmers out there who would like to be competitive and the market, and it just is not true. The report, in my judgment, distorts what is actually in plain view out there in the countryside. The report says that ``The farm sector no longer looms large in the macroeconomy.'' Now, that is based on a GAO analysis that showed that only 2 percent of the U.S. population is now in agriculture production. But 18 percent of all the jobs, according to this report, are either directly or indirectly related to agriculture production. So if farmers are not making money, if the profit shifts someplace else, Mr. President, these businesses are going to have a tough time making ends meet and, in the micro-sense but in the macro-sense of the entire U.S. economy. Now, let me provide what I would have hoped this kind of report would have provided. Instead of beginning with, I think, an incorrect identification of what is going on in agriculture, let me provide those in America who are wondering what this farm program is all about with some basic facts. First, there are only 500,000 full-time farmers left in this country. This report has a statement in here, a commonly applied statement, that agriculture production is increasingly concentrated. Well, you would think--increasingly concentrated --does that mean that it is like automobiles, where we have three? Is that like pharmaceuticals, where we have 9 or 10? Is that like computers, where we have half a dozen? Is that what we are talking about? No. There are 500,000 fully competitive, relatively small businesses-- even a big farm is relatively small, Mr. President. A farm that an economist might describe as a large farm might not have as much revenue as an average McDonald's restaurant, for gosh sakes. So these are very competitive businesses. Indeed, if you ask a Nebraska farmer, ``Honestly, what is your idea of an enlightened policy?'', they will say, ``We pray for bad weather in Iowa.'' Well, you know, we do not honestly do that. But the truth is, it is very competitive. We are competing out there not just with each other, but we are competing throughout the world. We would not be this productive were we not faced with the blessing of having this large number, still relatively large number, of full-time, highly competitive small businesses, family-operated businesses, mostly, that are manufacturing food products. Now, one of the common things that I very often hear, not just in Washington, but I hear in Grand Island or Hastings and other communities in Nebraska, they will say, ``Well, why do we have to have any kind of a Government program?'' Well, there are a couple of reasons that we do this. This report here, by the way, traces it all the way back to the 1920's and 1930's. It says in this report, ``Today's agriculture commodity support programs are rooted in landmark New Deal legislation that followed the agricultural depression of the 1920's and 1930's.'' Again, feeding a misperception that this is a 60-year old program, started by Franklin Roosevelt, no longer needed; modern times no longer needs this sort of thing. Well, Mr. President, one thing today is true that was true in 1930. And Americans who wonder why we have a program need to take this into consideration. Unlike other manufacturing businesses that I have referenced--automobiles, textiles, computers--we manufacture food out of doors. You might think that is kind of a silly and simple observation, but as long as we manufacture food out of doors we are always going to be dependent upon God to give us good weather. If we do not have good weather, if we have drought, we do not produce food. It is as simple as that, Mr. President. You think, well, that is not a big deal. Well, in 1987, I remember just after I left the office of Governor and went back into business, in 1987, swirling in the country was this big debate: What are we going to do with these enormous reserves that built up after the 1985 farm program was enacted? It is too costly-- $125 billion a year, I believe it was. What are we going to do with these large reserves? We had a drought in 1987. Then in 1988, we had another drought. I was campaigning at the time for the U.S. Senate. I almost remember the day when the American people stopped talking about these excess reserves and they started to say to themselves, ``Oh, my gosh. Maybe we do not have enough inventory.'' Suddenly, the reserves became an inventory. Now, I say that to Americans who are saying, ``Is this worth it?" We have an $8 billion program, the Commodity Credit Corporation program. There are $450 billion worth of food purchases in the United States. So you really pay $458 billion, $8 billion through farm price deficiency payments and $450 billion at the supermarket. The reason that this reserve issue is important, I say to consumers, is because--I will tell you, as somebody who represents about 55,000 of those full-time farmers in the State of Nebraska, if we cut this program back too much and listen to the rhetoric, both Republican and Democrat, around here, it leads me to believe that may happen. You may find this Senator on the floor saying to the American consumer, no longer are we going to maintain a reserve, because that reserve serves the American consumer, Mr. President. It does not serve the producer. In spite of what this report says, that reserve is there because the American consumer is concerned about what happens if we find ourselves short of food. You say, ``Well, that's an exaggeration.'' It is not. In 1993--and again, this report would lead you to believe that farm policy does not have any impact at all on macroeconomic policies--in 1993, the Secretary of Agriculture, at that time Secretary Espy, was having to make a decision: What should our reserve program be? Should we set a 5-percent reserve, a 10-percent reserve, a 0-percent reserve? What should our reserve be? The farmers in Nebraska, the farmers in Iowa, but particularly in Nebraska where we are polled a lot, said, ``Set it at 10 percent acreage reduction program.'' Secretary Espy said out loud and in public, ``I am going to set a 0- percent acreage reduction program.'' Go back and look at what Secretary Espy said. He said: I'm afraid if I set a 10-percent ARP that my food prices are going to be higher, and if food prices get higher, inflation comes back in the economy, high interest rates could come back in the economy and this entire recovery could get shut down. That was the economic analysis done by the administration. You say, ``Well, OK, so he did that, what is the impact?'' It is a big impact. Farmers were asking for a 10-percent acreage reduction program. They got a 0-percent acreage reduction program, and here is the effect: In 1993, the corn payments under CCC in the State of Nebraska were $600 million. In 1994, they dropped to $160 million. This year they are probably in the $700 million range again. You say, ``My gosh, why are they going back and forth? Why is it 600, 160, 700?'' The answer is, the price is impacted by the decision that the Secretary makes to set the reserve. When the Secretary set the reserve at 0 percent, farmers wanted 10 percent. When he set the reserve at 10 percent, we produced a bumper crop in 1994, along with tremendous weather that we had in 1994, we have lower prices and higher deficiencies in 1995. So the higher budget exposure in 1995, which would probably be $700 million in my State, is not something I asked for. I asked for a 10 percent reserve which probably would have cost the taxpayers $160 million again. But USDA says, ``No, we're going to go with the 0- percent reserve.'' The cost to the taxpayers ends up being four times greater, and guess who gets blamed? The farmer. The farmers in Nebraska are accused of wanting more welfare. The farmers in Nebraska are accused of wanting more money from the Government. Mr. President, American taxpayers should understand that the farmers were asking for a higher reserve which would have resulted in lower payments by the Federal Government. Now it may be, I must say, that this kind of language, and others that I have heard, will result this year in deficiency payments being cut back. Perhaps the permission granted to this program is going to be pulled out if we change it radically. Mr. President, if we change it radically, consumers need to understand that this representative for American farmers is going to come to the floor and say we ought to get out of the reserve business altogether. No more reserve for the American consumer, no more holding food back on behalf of the American consumer, and we will just let the market set the prices. There will be times, as a consequence of that, when the price ends up being much higher. This is not the only area where increasingly we come down and hear this mantra: Well, 60 years of failure, 40 years of failure. You hear it a lot about welfare today. You hear it a lot about other programs. I heard the chairman of I guess it is called the Health and the House side. The committee chairman, Representative Goodling, stood on the floor of the House of Representatives the other evening--I watched on C-SPAN--and he said, ``Just name me one thing this Federal Government of ours does well. Just name me one.'' I wish that he was a Senator in some way so in unlimited debate we had an opportunity to challenge that. I would have said, ``Senator Goodling, how about you, are you one good thing? Are you efficient and effective? Because, if you are not, get out of here, resign and let somebody else take your job. If the answer is yes, then at least we found one.'' Then I would pursue it. How about your staff, buddy? They work about 16 hours a day. Are they efficient and effective? Are the taxpayers getting their money's worth out of your staff? How about those folks over at NIH trying to find a cure for AIDS or cancer? Are you getting your money's worth? How about those folks up in the Endeavor a week ago exploring space? Are you getting your money's worth there? I must say, Mr. President, I think as we come and debate, particularly as we are trying to find ways to balance the Federal budget and trying to find ways to restore America's confidence in Government, we ought to take care not to throw out those things and, in fact, to work it and take care not to throw out those things that, in fact, are lifting a little bit of hope in the country. I find, as well, a tendency to blame the wrong people, blaming farmers for the farm program, while farmers are arguing for something that would cost taxpayers less; blaming the poor, for gosh sakes, for their own behavior. We know that the nonpoor behavior is having some difficulty as well. Mr. President, I came to the floor because I did not like the language in the President's economic report to the Nation. I hope, though I am not overly optimistic given what I have seen thus far, I hope that we are, in 1995, able to write not just a farm program but a health program, a children's program, an education program, a welfare program that takes into account what is going on in the countryside. I yield the floor. Mr. REID addressed the Chair.

Mr. KERREY

Mr. KERREY. Mr. President, my comments on health care begin with a thank you to the Democratic leader, Senator Daschle, for insisting that health care reform top our legislative agenda in 1995. It would have been easy for Senator Daschle to ignore an issue that has obviously gone from very hot to very cold in the wink of a political eye. In fact, Mr. President, as I was thinking about what it was I was going to say in response to Senator Daschle's invitation to come here this morning, I thought of a tune that I learned in my childhood. I was, unfortunately, unable to locate the junior Senator from New York, who I am sure would have come here and sung it for me here on the floor, so I will have to resort to reading it instead of singing it. But the song goes: Where or where has my little dog gone Oh where oh where can he be With his tail cut short and his ears down long Oh where oh where can he be? Where has the health care issue gone? Did all those uninsured Americans get coverage while I was out campaigning for reelection? Did the horror stories cure themselves? Did the market fix the whole darn thing? Or did we just grow weary of having to educate the American people on a subject too attractive for even the amateur demagogue to resist? Last year, as we struggled against the odds, to hold together a group of Republican and Democratic Senators who saw health care reform as moral and economic imperative I said: In our hearts, where we are able to understand the need for health care security, and in our heads, where the numbers are calculated, we know the status quo is not acceptable. What was true last year is even more true this year. There are still tens of millions of Americans who work but who cannot afford to bury health insurance. There is still forecast a staggering and unaffordable increase in Federal health care spending over the next 10 years. The impressive and unprecedented change in the marketplace while giving us hope that costs can be controlled has not altered the need for reform. And, the horror of job lock, lack of portability, and fear of uninsurability are still tormenting millions of our citizens. Unfortunately for these Americans they do not represent a majority, or even a powerful enough minority. The majority are comfortably and temporarily able bodied, fully insured, and employed. And, the majority has been led incorrectly to believe that the status quo is just fine. I am encouraged that Senator Daschle, Senator Dole, and other Republican and Democratic Senators continue to work for change. We must not give up this fight. I hope we will have the courage this year to consider more than just a little change. I am encouraged by many of the things that I have heard, again from both Republicans and Democrats, about how we can alter our current Federal and our private sector programs. I hope, for example, we will consider changing the way eligibility occurs. Rather than proving that you are poor enough or proving that you are old enough or disabled enough or that you work for just the right boss, it would be better in my judgment, more efficient and simpler and fairer to simply say that if you can prove that you are an American or a legal resident, that is how you become eligible for our system. Once eligibility occurs, however, we must make it clear that all Americans have to contribute, both financially and in a personal way to cost controls. Otherwise the system will not work. I hope we will consider changing the rules so that health rather than health care is the goal of our system. Incentives should be present to providers and patients to become healthier and not sicker. This is particularly true for families with babies. The responsibility for care should not end after 1 day normal delivery. I hope we reform insurance practices so that everyone can purchase health insurance regardless of health or job status, so that we make it more likely that in the long run we can achieve a system where all Americans are eligible for coverage. I hope we reform the Government health programs, not simply by cutting payments to providers but by studying ways to provide more options to beneficiaries and allowing market forces to reduce costs, so that we make it more likely that we can achieve a system where all Americans are eligible for health coverage. I hope we reform the Tax Code so that the self-employed have the same incentives as larger companies to purchase health insurance, so that we make it more likely that we can achieve a system where all Americans are eligible for health care. I do hope we reform our tort system as well, so the fear of being sued does not dominate the relationship between the provider and the patient. But above all, I hope we do not forget the stories we all told last year about Americans and businesses who needed a changed system in order to have the freedom to pursue their dream without the fear of financial ruin. I intend to work and support reform that improves the current health care situation and makes it more likely that we can achieve a system where all Americans are eligible for health care. I am confident that if we continue working on this issue as a priority issue we can pass reform legislation this year that improves the short term situation and that makes it more likely that we can achieve, in the long term, a solution to the problem of access to and the high cost of health care for all Americans. Mr. President, I yield the floor and I suggest the absence of a quorum.

Mr. KERREY

Mr. KERREY. Mr. President, I ask unanimous consent to speak on leaders' time.

Mr. KERREY

Mr. KERREY. Mr. President, this debate is about amending the U.S. Constitution. If we approve the proposal as offered by the distinguished Senator from Utah and others--as the House already has-- it will be up to the States of this country to ratify or reject what would become the 28th constitutional change in 206 years. The Constitution of the United States represents the greatest democratic achievement in the history of human civilization. It--and the self-evident truths which are its bases--has guided the decisions and the heroic sacrifices of Americans for two centuries. Its precepts are the guiding light and have been a shining beacon of hope for millions across the globe who hunger for the freedoms that democracy guarantees. It has served not only us, it has served the world, as well. It is not, Mr. President, a document, therefore, to be amended lightly. Indeed, my strongest objection to this proposal is that it does not belong in our Constitution; it belongs in our law. In addition to this argument, I also intend to suggest that the political will to enact changes in law to balance our budget--which was missing from many previous Congresses--now appears to be here. In fact, I wish the time taken to debate this change in our Constitution was instead spent debating the changes needed in the statutes that dictate current and future spending. This does not mean, Mr. President, I agree with those who have complained about the length of time we have spent on this proposal. This complaint is without merit. This great document should not be amended in a rush of passion. It is evident from the Constitution itself that its authors intended the process of amendment to be slow, difficult, and laborious. So difficult that it has been attempted with success only 17 times since the Bill of Rights. This document is not meant to be tampered with in a trivial fashion. As I said, the proposed 28th amendment to the Constitution is intended to affect the behavior of America's congressional representatives. In that regard, it is unique. Except for the 25th amendment, which addresses the issue of transfer of power, other amendments affecting the behavior of all Americans by limiting the power of Government, protecting public freedoms, prohibiting the majority from encroaching on the rights of the minority or regulating the behavior of the States. This would be the only amendment aimed at regulating the behavior of 535 Americans, who the amendment assumes are incapable of making the difficult decisions without the guidance of the Constitution's hand. That theory is grounded in the assumption that Congress and the public lack the political will to balance the budget. Specifically, the proposal contains 294 words. It would raise from a simple majority to three-fifths the vote necessary in Congress for deficit spending. It would set a goal of balancing our budget by the year 2002. The amendment empowers Congress to pass legislation detailing how to enforce that goal, but does not itself specify enforcement measures. The only answer to the question of what will happen if Congress and the President fail to balance the budget is that nobody knows. The only mechanism our country has for enforcing the Constitution is the courts. So the amendment's ambiguity prevents the serious possibility of protracted court battles which give unelected judiciary unwarranted control over budget policy. The proponents of this amendment sincerely believe our Constitution needs to be changed in order to force Members of Congress to change their behavior, which supporters argue they will not do because they are afraid of offending the citizens who have sent them here in the first place. On that basis there is a long list of constitutional change they should propose, including campaign finance reform, lobbying reform, and term limits, just to name a few. Mr. President, I support the goal of a balanced budget, and have fought and am fighting and will continue to fight to achieve it. However, desirability of a goal cannot become the only standard to which we hold constitutional amendments. Constitutional amendments must meet a higher standard. The Constitution and its 27 amendments express broadly our values as a Nation. The Constitution does not dictate specific policies, fiscal or otherwise. We attempted to use the Constitution for that purpose once, banning alcohol in the 18th amendment, and it proved to be a colossal failure. Fundamentally, we should amend the Constitution to make broad statements of national principle. And most importantly, Mr. President, we should amend the Constitution as an act of last resort when no other means are adequate to reach our goals. We do so out of reverence for a document we have believed for two centuries should not be changed except in the most extraordinary circumstances. We have used constitutional amendments to express our preference as a Nation for the principles of free speech, the right to vote and the right of each individual to live free. The question before Members today is whether the need for a balanced budget belongs in such distinguished company. While I oppose this amendment, Mr. President, I understand the arguments for it. I have had the privilege of serving here for 6 years and I am entering my seventh budget cycle as a consequence. Every time the President of either party, since I have been here, has sent a budget to this body it has been greeted with speeches and promises and rhetoric about the need to balance the budget. And each time, those speeches and promises and rhetoric have been greeted with votes in the opposite direction. Many of those whose judgment I most respect in this body support this amendment, including the senior Senator from Nebraska, whose reputation as a budget cutter needs no expounding by me. I am sympathetic. Clearly something is wrong with a system which so consistently produces deficits so large. The question for me is not whether something is wrong, but precisely, what is wrong? Do we run a massive deficit because something in the Constitution is broken? Were the Founding Fathers mistaken in assigning the elected representatives of the people the task of setting fiscal and budget policy? And is a constitutional amendment, as opposed to a statute requiring a balanced budget, the only workable solution? If the answers to these questions were yes, then a constitutional amendment in my judgment would be appropriate. But my answer in all three of these questions, is a resounding no. If, on the other hand, the problem lies in the behavior of the 535 individuals whose actions produce the deficit, as opposed to the document that governs it, then a constitutional amendment is both an inappropriate and ineffective means for balancing the budget. If a simple statute rather than an alone. Supporters of the amendment note we tried statute in 1985 in the form of the Gramm-Rudman-Hollings law and that law failed miserably. Therefore, the argument goes, a more powerful tool than ordinary statute--in other words, constitutional amendment--is necessary. The assumption, apparently is that a constitutional amendment mandate would provide the legal and the political cover needed to cast the tough votes in a climate in which the political will for doing so does not exist. But the fact is, Mr. President, Gramm-Rudman-Hollings failed not because it was a statute as opposed to an amendment, but because the political will to balance the budget did not exist in 1985. Gramm- Rudman-Hollings set deficit targets to set up on a glidepath, a term we are hearing again today, to achieve zero deficits by 1991. The deficit target for 1986 was $172 billion. We end up $222 billion in the hole. President Reagan's budgets did not even meet the Gramm- Rudman-Hollings targets in that year, much less a balanced budget. And even though Gramm-Rudman-Hollings provided the legal and political cover for deficit reduction, neither Congress nor the President has the stomach for it. Now we are attempting to find in the Constitution what we could not find in ourselves. I believe, Mr. President, that 1995 and 1985 are two very different times. I have heard the American people say loud and clear in this last November election that not only does the will to balance the budget exist, it thrives. We all know that the political will to balance the budget exists today to a much larger degree than it did in 1985. In fact, there is much more enthusiasm than existed even in 1994. The political dynamic has changed in this Congress. I believe the political will now exists to make the tough choices. To illustrate this change, consider our attitude toward spending cuts today. A year ago when a bipartisan coalition of Senators offered and fought for an amendment which would have cut $94 billion in spending over 5 years, the administration argued against it, saying our economy would enter a recession. But since the election, Mr. President, the same administration opponents are scrambling to propose cuts that are larger than the ones that they opposed just a little over a year ago. There are far more Senators and Representatives today who are prepared to vote for spending cuts than there were last year. And there is evidence of a willingness to form bipartisan coalitions in the beginning to tackle the problem, including our most politically charged problem, Federal entitlements. So I say that after the rhetoric for and against this amendment is over, let Senators get to work to show Americans we have the courage this amendment presumes that we lack. While it is true that the President's recently submitted budget does little to reduce the deficit, the stomach for the tough choices does exist in this body. If the appeal of a balanced budget amendment is simply the legal or political cover it provides for the tough choice, a statutory change would provide the same cover. If the presumption behind the amendment is that the political will to balance the budget does not exist, then make no mistake, those who lack that political will can find a way to circumvent this amendment. An amendment to the Constitution of the United States is a powerful weapon, not one to be taken lightly. This weapon can be disarmed with 60 votes in the Senate, only 9 more than it takes for deficit spending today. And beyond all the legal maneuvers, there is no cover for tough decisions but the courage to make them. So I simply am not convinced a balanced budget amendment is necessary. It assumes a structural flaw in our Constitution that prevents the 535 Members of Congress from balancing the budget. In fact, there is no such flaw in the Constitution. To the extent such a flaw exists, it is in the 535 Members of Congress themselves, not the document that governs us. The fact is, we can balance the budget this year if we wanted to, and we can by statute direct the Congress to balance the budget by 2002, 2003, or any other date that we choose. Furthermore, I believe this debate is misdirected. The balanced budget amendment tells us what to do over the next 7 years but ignores the following 20, the years which ought to command our attention. A balanced budget by the year 2002 still ignores the most important fiscal challenge we face: The rapid growth in entitlement spending over the next 30 years. The year on which we ought to be focused is not 2002, but 2012 when the baby boomer generation begins to retire and places a severe strain on the Federal budget. Our biggest fiscal challenge is demographic, not constitutional, and the amendment before us does not and cannot address it. Unfortunately and conveniently, this demographic challenge is kept from our view, not by an incomplete Constitution, but by a budgeting process that discourages long-term planning. The budget the President sent us tells us what to do for the next 5 years--5 years, Mr. President. The balanced budget amendment tells us what happens over 7 years. Five- and seven-year spans are completely inadequate when the most difficult budget decisions we need to make deal with problems we will face 20, 25 and 30 years down the road, when the aging of our population propels entitlement spending out of control. The most important recommendation of the Bipartisan Commission on Entitlement and Tax Reform is that we began to look at the impact of the budget over 30 years, rather than just 5 or 7. The reason that our country looks very different and our current budgets look very different viewed over that span is, as I said, not one of our Constitution, not, indeed, even one of our statute, but one of demographics. We can see the trend in the short-term. The big four entitlement programs--Social Security, Medicare, Medicaid, and Federal retirement-- will consume 44 percent of the budget this year. Mandatory spending will consume 65 percent. By 2000, it will be 70 percent. By 2005, the number is 78 percent. Those numbers, Mr. President, are straight from CBO. If we project further, we see that by 2012, mandatory spending plus interest on the national debt will consume every dollar we collect in taxes. By 2013, we will be forced to begin dipping into the surplus of the Social Security trust funds to cover benefit payments, a practice that will go on for no more than 16 years before the trust fund goes bankrupt in the year 2029. These trends have nothing to do with the Constitution, political will or pork barrel politics. They have to do with the simple fact that our population is getting older while the work force gets smaller. My generation did not have as many children as our parents expected and, as a consequence, the system under which each generation of workers supports the preceding generation of retirees simply will not hold up much longer. Indeed, long-term entitlement reform, coupled with a reasonable reduction in discretionary spending, including defense, would reduce interest rates dramatically and achieve the goal of this amendment without tampering with the Constitution. In this context, I need to address the role of Social Security in this debate. I have heard speaker after speaker come to the floor on both sides of the issue and announce their support for this program. I agree with them all. Social Security is one of the most, if not the most, important and successful Government programs we operate. Social Security should not and, indeed, does not need to be used to balance the budget. However, we cannot ignore the fact that Social Security will start running a deficit in 2013, due, as I mentioned earlier, to the retirement of the baby boomer generation and the fact that more retirees will be drawing from the trust funds while fewer workers contribute to it. The general fund currently borrows against the surplus, and when Social Security begins running a deficit, the decisionmaking capacity of future Congresses will be limited, because large amounts of the general fund will have to be used to repay the money we are borrowing from the trust fund today. That situation will tempt future Congresses to run Social Security in deficit if it is exempted from deficit calculations. That development would, of Even today, our decisionmaking capacity is already limited by the growth of entitlement spending. In 1963, a little more than 30 years ago, spending on entitlements and interest on the national debt consumed 30 percent of our Federal budget. This year, entitlements and net interest will devour 65 percent. The present budget assumes 66 percent for next year and by 2000, the number will be 70 percent. Mr. President, that is the problem that we face. That is why we are forced year after year after year to come and cut domestic discretionary programs, whether it is defense or nondefense. The pressure is coming from entitlement programs that are consuming a larger and larger percent of our budget inexorably by the year 2013, it will be 100 percent, converting the Federal Government into an ATM machine. The result is a question of fairness between generations. Today there are roughly five workers paying taxes to support the taxes of each retiree. When my generation retires, there will be fewer than three workers per retiree. Unless we take action now, the choice forced upon our children will be excruciating. Continue to fund benefits at current levels by radically raising taxes on the working population or slash benefits dramatically. Finally, Mr. President, as we debate this amendment, I hope we keep our eyes on a larger prize in blind reference to the idea of a balanced budget. Our goals should, in my view, be economic prosperity. I support deficit reduction as a means to that end. Deficit reduction is important not as an abstract ideal but as an economic comparative. I believe in balancing the budget because it is the surest and most powerful way to increase national savings. And increased national savings will lead to increased national productivity which in turn will lead to higher standards of living for the American family. There is no short cut to savings and no substitute that will get results. Increased national savings mean lower long-term interest rates and increased job growth in the private sector. The balanced budget amendment assumes that a balanced budget is always the best economic policy. A balanced budget, Mr. President, is usually the best economic strategy, but it is by no means always the best strategy for this country. Downward turns in the economy complicate the picture. Downward turns will result in lower revenues and higher spending so there will be times, although very few of them, when a strict requirement for balancing the budget harms the economy by requiring the collection of more and more taxes to cover more and more spending in an economic environment which makes revenue collection more difficult in the first place. As I say, I believe those times are few and far between. But the Constitution is too blunt an instrument to distinguish between good times and bad. The American people hired us to do that job, not to cede it to a legal document that cannot assess the evolving needs of our economy. The bottom line for me as we debate this amendment is whether it moves us toward achieving the correct goals and whether, if it does, we need to amend the Constitution to get there. My answer to the first question is mixed. I believe a balanced budget is an important goal, but only as a component of an overall economic strategy which recognizes that skyrocketing entitlement spending is the most serious fiscal challenge we face. My answer to the second question is more certain. I believe that once we set those goals, we can achieve them by statute or, more importantly, by changing our own behavior rather than changing the Constitution. My respect for this document precludes me from voting to tamper with it when I am not convinced that we must. This proposal for a 28th amendment does not command for me the same reverence in which I hold the 1st amendment or the 13th or the 19th and, therefore, Mr. President, while I will continue to fight for its admirable goal, I will vote no on the balanced budget amendment. I yield the floor. Mr. WELLSTONE addressed the Chair.

Mr. KERREY

Mr. KERREY. Mr. President, the fact is that Medicare spending will continue to skyrocket due to an aging population, even in the miraculous event that Federal health care costs were held to the rate of inflation--highly unlikely. Any time anybody gets close to looking at that, I note with some disappointment, some considerable disappointment the President saying no Medicare reductions can be used for deficit reduction. But any time you get close to making changes that would keep Medicare, the Federal costs going at the rate of inflation, we get providers coming in--the distinguished occupant of the chair, I am sure, has heard his cohorts talk about what happens when we reduce reimbursements under Medicare. We get hospitals coming in here. We get all sorts of people coming in here telling us about the terrible things that happen. Even if it miraculously occurred that the growth of the Federal program stayed at the rate of inflation, it would still be a substantial increase in the program merely because, as I said, of the tremendous demographic change. The Kerrey-Danforth proposal tries to fairly and evenly control the growth of entitlement programs. We allow Medicare beneficiaries to buy into risk-adjusted pools. We try to apportion the increase, the wedge that we see coming, between adjustments in what is paid to providers, adjustments in what the beneficiaries themselves pay in, and we say the general fund can pick up approximately a third of it, as well. We try to apportion the changes that are required between all three of those sources. In the area of other entitlements, Mr. President, we use, as I indicated earlier, an adjustment in the CPI, a different CPI to better reflect inflation. This proposal would apply to all other entitlements including veteran's compensation. We take a rather difficult but I think correct action of means testing Medicare, veterans compensation, and unemployment insurance. It is phased in. It is difficult, I know, but I believe if Americans examine the details of this proposal, they will see that we are not taking away a benefit that is offered. A person like myself that was service-connected disabled, that was wounded and injured in the war in Vietnam, you do not take away my benefit. You merely say that if my income comes up, the size of the benefit, I think most appropriately, would be reduced. In the third area, Mr. President, the area of tax expenditures, we make some recommended changes, as well. I note with some amusement and concern, every time we talk about entitlements, tax expenditures are a real favorite target. But when the rubber meets the road and it comes time to put them on the list, it is awfully difficult to find much enthusiasm for doing it because they do unquestionably have a historic impact upon people. The Kerrey-Danforth plan suggested that we limit itemized deductions to 27 percent. The adjusted CPI that I described earlier would apply to income taxes, standard deductions and personal exemptions. We cap the employer-paid health insurance deduction, a proposal that is consistent with our belief that we ought to move in a direction where individuals are taking more responsibility for making price and quality decisions in the health care market as opposed to having the Government make those decisions for them. Mr. President, these are the long and the short--a bit long--of the proposals that the Kerrey-Danforth solution has. They were extremely controversial at the time. They were greeted with almost unanimous opposition from most of the interest groups that were affected. We were described in not altogether complimentary terms by most of these organizations, many of which I think are doing an awfully good job and are trying to protect their programs. I say to them with great sincerity that I want to protect these programs as well. Inaction does not protect them. Our proposal is not a proposal that destroys Social Security. It strengthens Social Security. We are responding to the challenge of the trustees. Now, there may be Members who want to come down here and raise taxes. Maybe that is the solution you want to propose. Well, propose the solution. You can come at this problem and solve it whether you are a liberal or a moderate or a conservative. Any ideology can solve this problem. You cannot solve the problem, though, if you are afraid of the consequences of proposing a solution. So I say let the debate begin. But let us not stop the debate merely because there was strong and vocal opposition at the first proposal out of the box to solve it, Mr. President. I say again with great sincerity that if we delay on this and wait, we are going to be alarmed by the consequences. Mr. President, I would also like to show--I will use one of the rare charts that I put up in the Chamber--the future as described by current law, which is what this chart over here is. And I do this for the purpose of saying to Americans who wonder what is in this for me, what is going to happen, we are proposing to make changes in retirement and health care, what happens in the future. Mr. President, this is the future of current law. This the future of Kerrey-Danforth were it enacted just as it is. I do not hold any illusions it is going to be enacted just as it is. I have already had some suggestions made to me that I think are altogether good and reasonable, and I have indicated you can solve this with a liberal, moderate, or conservative ideology. And I suspect that those ideologies will be expressed when and if--and I hope it is soon--this floor and the House as well begin to engage in what ought to be done. What it shows is that this future of current law becomes this future. This is very important, Mr. President. These bar charts are not just bar charts. They are our economy. This green line here represents the historical rate of taxation in America. One of the few things that has remained constant in Washington, DC, is the approximate rate of taxation. Measured as a percent of our entire economy, it has stayed at about 19 percent. It has gone up to over 20 percent during World War II, spikes up a little bit during the war in Vietnam, but all the rest of the time it has stayed at about 19 percent. Now, again, maybe someone comes down here and says, gee, I think the rate of taxation ought to be 25 percent. Let them argue that. That is fine. Let them argue. But let the majority decide what we think is the rate of taxation. And it appears that the majority, going from liberal to conservative Congresses--and we have been all over the place on this--it appears that the majority of Americans have kind of settled in, perhaps without intent, but they have settled in at about a 19 percent rate of taxation. Here is where we are today, Mr. President, 1995, with a deficit of about 3 percent. The red line is entitlements; the blue line is net interest. And what to move up. This is where I was saying earlier that in the year 2013, entitlements and net interest consume everything that is available. Again, maybe in 2013 we are going to have a Congress saying we were elected on a promise to raise taxes. Maybe it will happen. I doubt it, but maybe it will happen. Maybe in 15 years Americans will say: They kept our taxes down 18 years; now we are really ready to raise them up again. Let's jack them up 5 percent of GDP and suck up these new entitlements out here and add a bunch of discretionary programs on top. I think it is unlikely, Mr. President. What that means is you could eliminate all the discretionary spending, which we may end up doing. The discretionary spending went down last year. It is going to go down again, while entitlements are going to go up $50 billion and health care and retirement is almost the entire piece of that. We are going to whack the discretionary spending one more time, and that is going to continue until and unless we face it. Under our proposal, this levels out, as I point out to Members and to citizens, if we do not even balance the budget. You still have to do more if that is what you want, to balance the budget. But we get within striking distance. You can do it with discretionary spending after that. It is not a discretionary spending commission. We did not address the problem of discretionary spending. The purpose of this commission was not to make recommendations to balance the budget but to get the two large insurance programs, the retirement and the health care programs, in balance so that we could say to the trustees that we in the Congress have taken action to bring these accounts into long-term balance. This rather confusing chart shows what happens just with the Social Security trust funds. Again, this is the most controversial one of all. This is one the Speaker says we are going to leave off the table; the President says we will leave it off the table; everyone says we will leave it off the table. We will deal with it sometime out there in the future. Maybe in 2000, when the third millennium arrives, that is when we are going to deal with it. There was a lot of wailing and gnashing of teeth earlier when we had that amendment on the balanced budget, but fortunately it was defeated. Here is the fact. This is what is going on out there in the future. So when you are out there talking about your kids, my kids are 20 and 18. My kids are 20 years old and 18 years old. And this is the kind of future they face. This is what they are looking at. It is fine for me. I am in good shape. It is fine for me until the year 2029. And mark my words, the trustees, in my judgment, are going to come back and say sometime later this year it is now not 2029; it is 2024. They have been moving this due date closer and closer since we recently fixed it. That is the future under the Kerrey-Danforth proposal. You may have a more liberal proposal that says no, no, no, Senator; we want to raise taxes. Bring it down here. Let us vote on it. Let us vote to consider some alternative to this. I do not mind that at all. But ignore this problem at not just your peril but our peril, and I predict that in 1997 or 1998, we are going to begin to hear some very, very serious statements made about what is going to happen by more and more people if we do not take action. I hope that this entitlement commission report that we are delivering to the President and to the leadership will be given consideration because this kind of a future will change America as we know it today. We will be able to say to our kids and our grandkids: Yes, Social Security will be there for you. Yes, Medicare will be there for you. But just as important, ask an economist, ask Alan Greenspan, if you are on the Banking Committee or on the Joint Economic Committee, the next time he comes before you. Ask him directly what happens if this kind of future is enacted. What happens if the Kerrey-Danforth plan or some modification that achieves the same effect, what happens if that takes place? I will predict to you he is going to say that long-term interest rates go down at least 200 basis points, or 2 percent, and maybe as much as 4 percent. It is this inflationary expectation that is causing the bond market still to bid up the long-term price of money. If we could get that kind of action taken quickly, we would continue the economic recovery. It would enable us to keep interest rates low, employ more people, allow us to build up our skills and our wages, and get the standard of living rising, as most Americans want, and probably, although we have not put a pencil to this and calculated it, probably produce the opposite of what we have right now, which is compounding interest working against us. We could probably get compounding interest working in our favor and find ourselves with good news, possibly able to adjust taxes down or make some other extension out there so that Americans would say: Gee, this is a payoff, a good payoff, for having made the tough decisions. I will close by saying I am very grateful for the leadership that Senator Danforth put in on this and all the other members of this Bipartisan Commission on Entitlements and Tax Reform. I am very much appreciative and sensitive to the political problems surrounding this issue. One of the things I have learned in this is it does not do any good, I believe, when you are discussing this, to hyperventilate and exaggerate the impact. We have attempted to present the facts. I have not said in any of this discussion: America is going to go bankrupt. We will not go bankrupt. We may devalue our currency, but we are not going to go bankrupt. We are just not going to be able to fulfill a generational promise we made. We are not sitting here saying Social Security is broke. It is not a short-term crisis. We are saying we are operating a very large insurance fund and we ought, on behalf of future beneficiaries, to make adjustments today so they get the promises that are currently on the table and that we ought to make long-term planning a part of our thinking. As difficult as it might be, we ought to make that long-term planning a part of our thinking. We have also suggested that we make incremental reform, incremental steps towards changing both our retirement and our health care programs. I have been more explicit on the retirement programs than I have on the health care programs. But as I see it, there are four large entitlement programs in America. By ``large''--I define large to be $200 billion plus. Three of them are Federal: That is Federal retirement, Federal health care, and Federal tax entitlements. There is a debate about whether or not taxes are entitlements. The fourth is K through 12 education. You are entitled to that as well, but that is a State and mostly local issue. I am saying we should use this opportunity. As we solve this long- term structural problem--as we solve the long-term actuarial problem, as the insurance folks call it--we ought to consider making changes in our regulation in our taxes, particularly as it relates to retirement, so we will provide Americans with the opportunity to acquire more private pensions and a larger pool of private savings as well. I intend to repetitively come and try to make the point. I hope Americans understand that there will be concerted effort in the U.S. Senate and in the House of Representatives to try to give Americans a legislative vehicle they can rally behind, a specific set of recommendations that are open to amendment, open to changes, open to any suggestions that might improve it, and change the future as we are currently heading upon it. Mr. President, I thank the Chair and I yield the floor.

Mr. KERREY. Mr. President, I rise to talk at length about the Bipartisan Commission on Entitlements and Tax Reform, a subject that I believe eventually this body will be compelled to address. When it does, it will be, of necessity, a bipartisan effort. We will not get it done if Democrats take advantage of Republicans, or vice versa. With that in mind, I note with considerable pleasure, before talking at length, that at a critical point during the debate on the unfunded mandate bill, an effort was made to place an amendment on the constitutional amendment to balance budget that would have required us to, in the Constitution, separate Social Security from the rest of the budget. That may make good policy sense at one level, but I was happy to join many Republicans in opposing that effort, as I was happy to join in an effort to oppose but not defeat the sense-of-the-Senate resolution that followed. It will take that kind of bipartisan effort if we are going to be able to address this issue. I note, for the record, that when the Republican leader earlier commented that perhaps this 10 days was a waste of time in debating this bill, I note for Americans that we are debating the health and safety and security of their lives. This is not a small issue. There is no economic imperative driving this legislation. The Government is not about to go broke if we do not pass this bill. I was proud to vote for this bill. I think it is a good piece of legislation. But the imperative to get it done right away is a political imperative, not economic. I note as well, with great interest and concern, that out of 44 amendments with rollcall votes on this particular piece of legislation, there was only one time when a single Republican crossed the line and voted for a Democratic amendment. That was on Senator Boxer's amendment to exempt child pornography. Even in that case, only the Senator from Pennsylvania, Senator Specter, could cross the line and vote for a Democratic amendment. I must say, Mr. President, if we continue in that kind of forum with the Republicans, joined by some people's measurement of admirable unity, while Democrats on almost every single amendment had to be persuaded to vote for the Democratic sponsor of an amendment, we are not likely to continue making successful efforts in this body. The reason the unfunded mandate bill passed was that there was bipartisan support for the underlying effort. It was a good effort. I hope that the actions, at least as I witnessed them, of unprecedented unity, as I might point out, unprecedented willingness to basically say whatever you say, I will vote for it, do not continue as we take up other matters. Mr. President, the American people have heard a lot of speeches this week about the future. I am here to add my voice to this clatter. I want to talk about the year 2013. It is a long way off. It is in a completely different decade, a separate century, and new millennium. I suspect most of us would rather think about matters that are more current. But unless we take action to the contrary, Mr. President, something very important will happen that year. Somewhere in America, a senior citizen will find in his or her mailbox the first check the Treasury of the United States ever financed out of the Social Security trust fund, a pot of money that we will, until that day, have saved for a rainy day. By the year 2029, 16 years later, the drizzle of that first rainy day will have deteriorated into a downpour--that is, if adjustments are not continued to be made in that due date. It was just 7 years ago that that year 2029 was forecasted to be another 35 years later. In 17 years after the first check was cut with funds from the Social Security trust fund, another retiree will find in his or her mailbox the last check financed from the Social Security trust fund. Then the Social Security system and its much flaunted trust fund will be bankrupt. Today a document will be delivered to the President of the United States and the leadership of Congress that describes that future--a future in which the Federal budget consumes nearly 40 percent of the economy, and every dollar we collect in taxes will go directly to fund entitlements and interest on the national debt. And our Government will be paralyzed and unable to do little but operate as an oversized ATM machine whose only function is to collect money and hand it back out. One of the arguments that was made, Mr. President, during the debate about attaching a requirement that Social Security be funded as a separate budget was that if a private sector trust fund was operated in this fashion, the individual operating in the private sector would go to jail. Well, Mr. President, any private sector insurance company that operates the way we are operating two of the largest social insurance programs in the world--Social Security and Medicare--any private sector company that operated insurance companies in the fashion that we operate, essentially ignore what the trustees are saying, which is what we are doing. In February of 1994, the trustees of the Social Security and Medicare fund delivered to the Congress and the President a report that said we should take action sooner and not later, because we have promises on the table that we simply cannot expect to be able to reasonably fund. That is the way insurance companies operate, Mr. President. That is the way they operate. Well, if a private sector company operated in that fashion, we would also likely close them, shut them down. That is the bad news. The good news is that in the same document, the final Reform describes a brighter and bolder future for our country, a future in which our economy is stronger, our senior citizens more secure, and our treasury more solvent. The difference, Mr. President, is up to us. I am here today because I find the challenge of building a stronger future an invigorating one, and because I see the road ahead as one paved not with problems but with opportunities--opportunities to modernize our retirement programs to meet the needs of a changed and changing population, and to address some fundamental defects in our economy. Before getting to these changes, let me describe what necessitates them. The American population is aging in a way that requires us to rethink the structure of our entitlement programs, the two largest of which, retirement and health care, were designed as systems in which each generation of workers would pay taxes to support the generations of retirees that preceded it. In return, each generation expects its successor in the work force to support their benefits. The system succeeds, provided that each generation has enough children to grow up and pay the taxes that support its benefits. Mine, Mr. President, did not. Today, there are nearly five workers paying taxes to support each retiree; when my generation retires, there will be fewer than three. And, as life expectancies continue to expand, Americans will collect more in lifetime benefits. This is an unprecedented event, Mr. President. Those who caution that I am overstating the case, who say, ``Well, we have always waited until we reached a crisis and then we fixed the problem,'' are urging us to ignore the unprecedented nature of the baby boom population moving into retirement and the unprecedented nature, as well, of the changes that are going on in the underlying economy of the United States of America. Quite plainly, Mr. President, the arithmetic, which not only our Commission has examined but the trustees of the Social Security and Medicare trust funds have said themselves, the arithmetic does not compute. We will be able to support the aging population without immediate consequences for three decades because we have built a massive surplus in the Social Security trust fund. Because in 1983, for the first time, we ended a pay-as-you-go system, imposing larger taxes than were necessary to pay-as-you-go on people that are in the work force. Now, one of the prevailing myths that always goes on--and we heard it again in the debate about whether or not to keep Social Security separate--is that Social Security is generating a surplus. I hear it all the time from people saying, ``Just keep your hands off of my Social Security.'' Mr. President, that money comes from people who are in the work force. And we, in 1983, imposed and, as a consequence of using that money, agreed to ask Americans in the work force, particularly those who are paid by the hour, to shoulder a disproportionate share of deficit reduction. Our retirement entitlements, Mr. President, are in much better shape than our health care system. I have already described a crucial historical moment in the year 2013 and another in the year 2029. Again, it is not only likely but almost assured that those times will be closer than 2013 and 2029. Let me describe a few that will occur before that. The first is in the year 2001. Mr. President, you can reach out and touch that. That is not a long ways away, 2001. That is when the Medicare hospital insurance trust fund, the part A trust fund, soaked up by an aging population and escalating health care costs, goes bankrupt. The second is in the year 2008, when the baby boomer generation begins to retire. In a single decade, beginning at that moment, in my State, the overall population will go up by less than 2 percent, while the retired population goes up by over 28 percent. That states the problem right there. That refutes the common argument that is made, ``Well, we faced this thing in the past. We will face it in the future. We will just do as we have done previously.'' We cannot do as we have done previously, Mr. President, because we are facing something the likes of which we have not seen before. In 2012, spending on entitlements and interest on the national debt will consume every dollar we collect in taxes, leaving literally nothing for defense, infrastructure, law enforcement, or any other function of Government. If those dates seem too distant to merit attention, consider a figure that is right here and now. In Nebraska, as is true with most of the Nation, the population for those who are retired over the age of 65 and the population for those who are in our primary and secondary schools, the K through 12 environment, is almost identical. There are 275,000 retirees in Nebraska, Mr. President, and another 275,000 children in kindergarten through the 12th grade. We spend $1.3 billion of revenue, of tax revenue--property and State sales and income taxes--about 8 percent of that comes from the Federal Government --on those kids. We spend $4.5 billion on retirees. Mr. President, much more ominous than that, we are going to spend $50 million more incrementally on the kids and we are going to spend $400 million more on retirees. I pause to say, I do not intend, nor do I urge on others, to engage in any intergenerational warfare. It is not necessary for us to exaggerate this problem, but it is unquestionably a problem. It is a problem that gets worse as you examine the demographics. We do not need to look for a demon, for an enemy, for something that is causing this. It is demographic. It is, in many ways, our own success. The technology of health care gets more and more expensive, but the disparity in investment is stark. In my opinion, Mr. President, we will have dire implications for our future. Fixing these problems and building a better future is a challenge because it requires those of us whose occupation teaches us to think in 2-, 4- and 6-year cycles to think, instead, in decades and generations. Many of the benefits of entitlement reform will take hold in our economy years after most of us leave this institution--if not this planet--as will the consequences if we fail to act. If our political cycle teaches us to think in terms of 6 years at the most, the myopia of our budget cycle is worse. As families across America evaluate their finances over decades, planning for education, for retirement, for health care, their Government looks only 5 years into the future and then turns its eyes away after that. The most important recommendation of the Commission on Entitlement and Tax Reform may be the need to expand our budget cycle to include the consequences of our action 25 and 30 years out. We just passed a piece of legislation that requires us to think about the costs that we impose upon States, Mr. President. It would be incumbent upon us, as well, to think about the costs that we impose upon future generations, not only with our current action but with our current neglect. We hear time and again that entitlement reform must be done, but we always struggle to get the job done. And one of the reasons that that occurs, in my short and happy experience with dealing with this issue, is entitlements are typically not only misunderstood, but are highly charged politically. People are vested in this program and they get very upset and concerned and in an angry mood or hardly in the mood to listen to reason. In addition, politicians very often turn a cloudy situation downright muddy by intentionally describing entitlement programs inaccurately. We hear on Social Security time and time again this quote: ``Social Security isn't a problem. It's self-funded.'' Well, yes, it is self- funded, but it is not self-funded by Saudi Arabia, it is not self- funded by current beneficiaries. It is self-funded with a 12 percent tax on every American worker. Tomorrow is a different story, Mr. President. Tomorrow 12 percent will not get the job done. Now what the Entitlement Commission is saying is that by the year 2013, the entitlements and interest will consume every single dollar of available tax revenue and will nearly double, by the year 2029, payroll taxes if action is not taken soon to change these trends. entitlements. I do not exaggerate, nor do I consider it particularly funny, that I could have scored points in my recent reelection effort if I had asked my campaign consultant who did my television ads: I would like you to produce a 30-second ad in which I will go face on the camera and say, ``If reelected, I promise to keep the Government out of your Medicare. I promise there will be no big Government takeover of your Medicare program.'' Time and time again, I have heard Members come to this floor and say, ``I'm against national health insurance. I oppose the Clinton plan, because the Clinton plan represents national health insurance.'' Then come back to the floor within an hour sometimes opposing any change in the Medicare Program, causing people to believe it is something other than what it is. Medicare is national health insurance but only those who are 65 years of age and older are eligible. That is what it is. It is not a program like Social Security; it is not anywhere nearly as self-funded. As I indicated earlier, not only is the program going to be insolvent, part A, but over time we have required a larger and larger amount of general fund subsidies to pay for physician services, and increasingly, to pay for hospitalization as well. Yet we continue to go out and pander to the audience. We do not want to antagonize the audience. They vote in large numbers, this audience, so we misrepresent the program. And it should not come as a surprise, therefore, that Americans are confused about their health-care entitlements. While I do not accept the rhetoric of those who describe entitlement reform as a process of pain rather than an opening of opportunities, the fact remains it is also difficult because it requires the Senate on occasion to utter one of the most uncomfortable words to utter in this city--that is the word ``no.'' Particularly to those who are apt to vote against us because we use that dreaded word. We have, Mr. President, all the excuses we need to postpone action. Let me give a few reasons for acting today. The first and most important is that it is relatively easy to fix the problem today. Tomorrow the fixes will be draconian. The Secretary of Health and Human Services, as the Secretary is required, every 4 years, has put together last year a 13-person Commission that is examining Social Security, examining Medicare, examining the disability insurance trust fund, examining on behalf of the Secretary, as required by the Social Security law, and will make recommendations as to what action is required. The people who staff and work for that Commission say that unless we put action in place in 1997, unless we change the law at the latest by 1997, to take effect in 1998, we will begin--as our Commission says as well--we are going to begin to see the size of this thing grow so quickly that we will look back and people will wonder, Americans will wonder, ``Well, for gosh sakes, why did you not take action when it was relatively easy to fix?'' The answer will be, again, well, we budget for 5 years, Mr. and Mrs. Citizen, and we get reelected for 2, 4, and 6 years. The second, taking action today means that we can fix the problems with little or no impact on current retirees. The third reason for acting today, Mr. President, is that planning for our national future also means we can give American citizens, particularly workers who are not currently retired, time to plan for the changes. Understanding the problem, what do we need to do to fix it? There are several options outlined in the report of our Commission. I would be remiss if I did not salute those who had the courage to submit their own ideas along with the distinguished Senator from Wyoming, Senator Simpson, who submitted a plan. I hope to be able to work to develop a piece of legislation that will give Americans an opportunity to say we support this specific piece of legislation. Most of the people who are on this Commission had much to lose, particularly those who were elected and holding office had very little to gain, given the political climate, by doing so. I want to describe today some of the ideas that were laid out in this document by former Senator Jack Danforth and myself. Now I want to alert people, this is a proposal in motion. We hope to be able to make some changes in it. I will go through this thing so that citizens understand that when we talk about entitlement reform, at some point it gets tough. And it gets tough in a hurry. It stops getting tough after we deal with congressional retirement, which is one of the first things on my list. After that it goes downhill in a hurry. There are no easy choices. There are no choices that we can make where somebody is not finding themselves, saying ``Oh, my gosh, this will require a change in my life.'' Mr. President, we try to say we should lead by example. We tried to say we need to have it fair and balanced and everyone participating. I believe, in fact, that generalized efforts to reduce discretionary spending will be good news, as well. It should lay the groundwork to make entitlement reform easier, but it will not make entitlement reform in the end an easy piece of business. We began with the premise that Congress must lead before asking the American people to accept entitlement reform. For that reason, the Kerry-Danforth proposal would cut in half the rate at which Members of Congress accrue pension benefits beginning in the year 1996. Also in this spirit, we would bring retirement programs for Federal workers more in line with private pensions. Other proposals offered in the spirit of putting the Government's house in order include raising the Federal retirement age to 62. This proposal would gradually phase out eligibility for unreduced benefits for Federal workers before age 60. Beginning in 2000, for workers with at least 5 or fewer than 20 years of service, the retirement age for unreduced benefits for CSRS and FERS is increased by 4 months each year until age 62 in the year 2020. We have additional details with this proposal, Mr. President. The second thing we do is adjust the CSRS to high-5 pay. Third, reduce the rate which military retirement benefits accrue. The next thing we do, Mr. President, is to adjust the Consumer Price Index calculation to better reflect inflation. I will spend a bit of time with this, Mr. President, because it is a very key provision that has gotten a great deal of attention in the news lately. A number of Federal programs are adjusted annually, based on annual increases in inflation as measured by the CPI. The CPI is based on a marketbasket of goods and services purchased by a representative urban worker. Adjusted every 10 years, the current marketbasket was last revised in 1987 using data for the period 1982 to 1984. As a result, the CPI does not capture dynamic annual changes in the pattern of consumer preferences. In addition, the CPI may not adequately measure the consumer benefit derived from improvement and quality of existing goods or the introduction of new goods. A number of economists have supported this change. Most individuals who have looked at it say it is a reasonable, fair change. It is also one of the easier changes that we have to deal with. The next large category is an effort not just to preserve and strengthen Social Security, Mr. President, but to begin to consider the other sources of retirement income that very often are neglected. There are three major sources of income that Americans look to for their retirement years. The first is Social Security. Twelve percent of payroll tax, 12 percent of payroll is collected. We all know how it works. Comes into the Social Security trust. The trust is required to invest only in Treasury bonds. The average rate of return is somewhere between 1 and 2 percent in real terms inflation adjusted. That is source No. 1. Unfortunately, for many years, it is their only source of retirement, creating a real serious problem for individuals who are on fixed income, and that is their only source of retirement. But the second large source of retirement, Mr. President, is private pensions. Unfortunately, it appears that in the 1980's we took action in tax and in regulation that may have had a counterproductive effect, because we see a decline in private pensions being offered to employees, particularly in small businesses, Mr. President. And recommendation in that regard, I, myself, am particularly interested in the context of reforming our retirement programs to better suit the changed and changing needs of our work force, to consider changing our tax and regulatory laws as they relate to private pensions. The third source of retirement is individual savings. It has been noted, and I will note it later, there has been a decline of savings in the United States of America. There is a disproportionate amount of savings in certain sectors of the economy. Obviously, it is true that if you make some $130,000 a year, as 535 Members of Congress do, that you are apt to be able to save a lot more money than if you make $12,000 to $15,000 a year, as an awful lot of Americans do, or $8,000 a year as an American living on the generous $4.25 minimum wage we provide as a minimum standard for wages. Those are the three sources of income that people have to consider. I mention this lower income American, Mr. President, for a very specific reason. We tried to make our proposals as progressive as possible. I am open to suggestions as to how we can make them more progressive. They need to be. One of the blessings of living in the great State of Nebraska is that I have had the opportunity to acquire a friendship with a man by the name of Warren Buffett, a local businessman that has done pretty well in life. And Warren Buffett once said to me one of the problems you have in dealing with these kind of issues and others like it where you are concerned about what is going on in the work force is that at any point in time if you have 120 million people in the work force, which is approximately what we have today, 60 million will be above average, and 60 million will be below. When you have a market, as we do today, that is international, and when you have technology ripping through the workplace increasing productivity but reducing the number of people who need to work, what happens is the market is bidding down large numbers of people and the services that they deliver into that market. It is a reality. There are very few workplace environments, Mr. President--Congress may be the exception--where workers are protected from the forces of the market. What happens, therefore, is that we have a lot of people in this country who are in the work force who cannot afford health care, who are in the work force and even if we change our tax and regulatory policies simply are not going to have the resources to be able to save. It does not mean that tax change and regulatory change is not needed. It just means that those of us who get $135,000 a year in an environment where we are protected from the economic marketplace need to be sensitive to the dilemma faced by lower-income individuals. The chief goal of the Kerrey-Danforth proposal is fulfilling our promises to today's retirees while ensuring the long-term health of Social Security. I have already described the challenges that face the system. Our proposal for redressing these problems is among the most exciting in our entire plan. We propose to make changes in the Social Security Program that enable us to reduce the employee payroll tax by 1.5 percent in exchange for a revised long-term contract. It shifts more responsibility and control to the individual, provides opportunity for higher returns on investment, and allows us to return Social Security to its intended purpose, as a supplement to personal retirement savings. Let me be clear, Mr. President--although there will be allegations to the contrary--no reductions in Social Security benefits affect anyone over the age of 50, and no Social Security reductions are used to reduce the deficit. The savings we propose to Social Security would go back into the trust funds and strengthen the program. We would require these younger workers to invest in the savings payroll tax cut in a mandatory IRA-type personal savings account. Mr. President, I believe this simple and single change would alter the culture of savings in America. Every young worker, when their first job is taken, whether they are 16, 17, 18, would have to come home to Mom or to Dad and say, ``I have a 1\1/2\ percent decision to make.'' We were attacked by many when we put this proposal out. One of the things you will hear later is we proposed to move the normal retirement age to 70 while keeping the reduced benefit age at 62. We were attacked by the Washington, DC, Chapter of the NAACP as almost being racist because black Americans have a shorter lifespan than white Americans do. We were attacked by many people in organized labor who said this is going to be bad for American workers. But I urge Senators and Members of Congress and Americans, in particular, before you buy that rhetoric, to examine what 1\1/2\ percent over the course of a working life in a safe individual retirement account would do. It not only provides a higher rate, but it provides the kind of flexibility that I think Americans want in their retirement program. Mr. President, this proposal has a number of important economic benefits. Companies can save and invest more, grow faster, and have more rapid improvements in the standards of living of their citizens. Private savings in the United States of America have fallen from more than 8 percent of the economy in the sixties to 5 percent today, and the trend line is down; it is not at a plateau, it continues to decline, perhaps because of tax and regulatory changes. But for whatever the reason, the savings rate continues to decline. The Kerrey- Danforth proposal takes an important first step towards reversing this trend. More exciting, though, is the fact that this proposal gives workers more control over planning for their own retirements by transferring authority for these investments from the Government to the individual. The return on these savings provides workers the potential for far more lifetime benefits than they can expect from the Social Security system if it continues on its current course. Thus, those who attacked our proposals need to compare the current system as most reasonable people would expect is going to happen to it--and that is significant adjustments made out in the future--they need to compare the current system with the one that Senator Danforth and I are proposing. Mr. President, this is a middle-class tax cut with both a purpose and a payoff. We also propose over a period of 30 years to raise the eligibility for full benefits from age 67 to 70, while still allowing partial benefits at age 62. This option accelerates the phasein to age 67 that is already in current law. The age for full eligibility will reach 70 for those under age 28 today. So for one who is thinking of going out this evening and interviewing somebody and finding out, what do you think about this adjustment that Senators Kerrey and Danforth are proposing, please do not go out and interview somebody over the age of 50; it does not affect them. Go interview somebody under the age of 28. That is who this thing affects, and they are going to be affected mostly if no action is taken at all. Mr. President, let me address a great misunderstanding about the previous two proposals. The term we use to describe the age at which Americans are eligible for full benefits, the term ``retirement age'' is very misleading. Americans do not want to retire at age 70. If anything, they want to retire early. They cannot do so, Mr. President. They cannot mathematically do so without a substantial pool of private savings. The previous two proposals, therefore, are designed to increase an individual's control over when they retire. Make no mistake, the age at which Americans retire is set by genetics, economics, and personal preference, not by statute. A low statutory retirement age means nothing for those who lack the savings to enjoy, and that is true for the individual and it is also true for this Nation. Our other proposal to restore solvency to the Social Security System is including State and local workers in the Social Security Program; indexing the Social security bend points for CPI instead of average wage growth; reducing growth of benefits to mid- and upper-wage workers using a third bend point; and adjusting the CPI formula to better reflect inflation. Mr. President, I have run through four or five things here to change our them require us to think, first of all, in the context of an entire retirement program: of Social Security, of private pension, and of individual savings. We need to make adjustments in all three, and it requires us, most importantly, to be able to look out 25 or 30 years to connect our action with our words. Rarely is there one of us who does not get up and give a speech and talk about our kids and grandchildren. If we do not take the trustees' advice and take action to restore the strength of this program, in particular, then those who hear our words will wonder why it is not accurate to describe us as hypocrites. In the area of health care and other entitlements, there are many critics who oppose reform of Medicare and they point out correctly the fact that much of the increases in this program are due to escalating health care costs. This concern is true enough, but it also ignores, at great peril, in my judgment, the fact that in addition to higher health care costs, our health care entitlements are growing because more Americans are retiring and taking advantage of them. Again, there is no enemy. I am not pointing at seniors and saying: You are the problem. We have a big demographic change that is occurring, and the simple way of saying it is our generation did not have as many children as our parents thought we were going to have. (Mr. FRIST assumed the chair.)