Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent to lay aside the pending amendment and send an amendment to the desk.

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

Mr. KYL. I thank the Senator. Mr. President, this amendment is very modest, but I think it will provide a real test of whether everyone who likes to call themselves sensible about fiscal policy really means it. It is a test of whether we are really serious about holding the line on spending, or whether we are even unwilling to make a small step to balance the budget. This amendment deals with the so-called LIHEAP program, the Low- Income Home Energy Assistance Program. It accepts the President's spending figures, his budget, for this program for the next 4 years. This is a forward-funded program, but it accepts the President's figures through the year 2000, and then for the last 2 years of the program it continues spending at exactly that level. By contrast, the President would allow spending on that program to dramatically escalate in the last 2 years, which just happens to be the campaign year. So what I am proposing here is a very slight reduction in spending in the last 2 years of the 6-year program and spending at the administration's request for the first 4 years. This, therefore, is a good test. Will big spenders even vote against this modest cut? I am reminded of what happened about 3 years ago when the Senator who occupies the Chair and I both served in the House of Representatives and we were engaged in a similar debate. We had failed to cut 15 percent from a program. We then failed to cut 12 percent, and then 10 percent, and then 5, and then 3 percent. Finally, our colleague from Pennsylvania, Representative Walker, got up and said, ``All right. Then would you at least cut $19.93?''--that being 1993. Again, there was a vote taken. And, no, the House of Representatives would not even reduce the program by $19.93. This is a little more than $19.93. This will provide some real savings--a few hundred million dollars, which I know in Washington does not seem like much, but to Americans it is real money. So we will see whether we are even willing to cut a little bit in the last 2 years of a program by continuing the spending levels that the President has deemed sufficient for the next 4 years for the full 6 years of the program. Let us talk about the actual numbers involved here. The budget resolution assumes that funding for LIHEAP will be constant at about $1 billion for each of fiscal years 1997 through fiscal year 2002. But the President recommends LIHEAP funding of $1 billion for fiscal years 1997 and 1998, declining to $910 million in fiscal year 1999 and $819 million in the year 2000. What this amendment would do is to take that level of funding, $819 million, as I said, and have it be constant for the remainder of this period of time. So that under the amendment, LIHEAP would be funded at $1 billion in year 1, $1 billion in year 2, under the President's recommendation would decline to $910 million in fiscal 1999, $819 million in the year 2000, and then stay at $819 million for the year 2001, and the year 2002. It adopts the President's figures, as I said, and then keeps the spending constant for the last 2 years. The President otherwise would allow LIHEAP spending to increase to $934 million in fiscal year 2001 and $1.064 billion in fiscal year 2002. As I said, curiously enough, the high years are the election years. Here is what the Office of Management and Budget has said. The Office of Management and Budget, which is the President's office for calculating budget matters and working on budget matters, has said that the declining figures for those middle years--1999 and 2000--are due to standard percentage reductions applied to programs that are not a top priority--that are not a top priority. The President's own Office of Management and Budget has taken all of the items in the President's budget and has weighed them, has prioritized them, and has said that for those that are not a top priority, we are going to apply a standard rate of reduction. That is why even though it is $1 billion this year and $1 billion next year, it is going to go down to $910 million in 1999 and then $819 million in the year 2000. The President's 1995 budget request, I would note, proposed to reduce LIHEAP's funding by half--by over $700 million. His 1995 budget proposal would have left $730 million in LIHEAP. So you see, Mr. President, while the Office of Management and Budget and the President of the United States have said that the appropriate level was $730 million, in the last 2 years of the program they increase it to ultimately being over $1 billion a year. All we are doing is taking the Office of Management and Budget at its word, we are taking the President at his word that these programs really are a little lesser priority than some of the more important programs. But instead of taking the spending down to $730 million where the President would have taken it, we leave it at $819 million, almost $100 million more in the last 3 years of this 6-year period of time. So we would provide more for LIHEAP every year compared to what the President proposed just 2 years ago. I hope this will preclude anybody from arguing we are savaging the LIHEAP budget. We are spending more than the President proposed, and we are spending the same amount in the last 3 years of the program, the amount the President recommended in year 4, and then we are continuing that spending in year 5 and 6. Here is the reason for my amendment. The President's outyear figures are, obviously, unrealistic. They are not going to be obtained. You cannot backload all of the money into the last 2 years of the program, and this is because the President has relied on gimmicks to get to balance by the year 2002. Again, remember what I said before. Without those gimmicks, his budget would be $84 million in deficit according to the Congressional Budget Office. So the additional spending in these years cannot really be justified. It is not going to happen. I am simply saying, let us recognize that now and ensure that the budget that we pass will be an honest budget. Let me conclude with some statements and thoughts about LIHEAP that help demonstrate why this is not a top-priority program and, therefore, the President is right in suggesting that the spending be reduced somewhat. Remember that this program was initiated in 1981 to temporarily-- temporarily--supplement existing cash assistance programs and to help low-income individuals pay for escalating home fuel costs which resulted from the energy crisis of 15 years ago. Around Washington, every temporary spending program and every temporary tax seems to become permanent, and this one has, too. But it does not have to bankrupt us as well. Let me just mention that one of the major utilities in Arizona-- Arizona Public Service--has advised that average residential rates have declined 10 percent in real terms between 1980 and 1995 in constant 1980 dollars. These real lower prices mean that it is time to reconsider the LIHEAP program, which assumed continuously escalating prices back in the days of high inflation. The Clinton administration informed the House Appropriations Committee in 1994 that low-income families now spend one-third less of their income on home energy than they did when LIHEAP was initiated. So they have confirmed this reality. And according to CBO's February 1995 report, ``Reducing the Deficit: Spending and Revenue Options,'' 26 States--this is the real test, Mr. President--transferred up to 10 percent of their LIHEAP funds, which was then legal to do--it is not any more, but they transferred up to 10 percent of their LIHEAP funds during 1993 to supplement spending for five other social and community services block grant programs which obviously had a higher priority to them. The transfers obviously indicate that some States believe that spending for energy assistance does not have as high a priority as other spending does--the same thing that the President himself confirmed. The point is this. LIHEAP has evolved from a temporary energy crisis assistance program to a broad income supplement which the Clinton administration in its 1995 budget request said, and I am quoting, ``does not target well those low-income households with exceptionally high energy costs in relation to income and which does little to help assisted households achieve independence from the program.'' So the Clinton administration has been quite honest about this. It has acknowledged it is not the best program to help the low-income families. It has acknowledged that the original purpose, to temporarily help people in an escalating time of fuel bills, is no longer a high priority because, as I noted, the fuel bills are going down, and therefore in its own budget request has assigned the LIHEAP program a lower budget priority applying an across-the-board reduction. It has, therefore, recommended that from the $1 billion we are going to spend next year and the year after, it be reduced to $934 million--fine--down to $819 million--fine--and my amendment simply says and hold it at $819 million for the last 2 years of this 6-year period. What could be more reasonable? And yet I suspect this will put some of our colleagues to the test. I would just offer a challenge to those members particularly who come from the States that utilize LIHEAP significantly. This is an opportunity, an opportunity to do something that does not occur very often and that is to be able to say I voted to cut a program that is used by people in my own State quite a bit because I knew it was wrong, I knew that in effect because of changed circumstances this had become fat, not muscle, this had become almost a pork-type project. Of course, we know that we all have to pay for these spending programs, and we are willing to do our part to bring the budget deficit down. Members even from States that utilize this program can say that now because we are spending all we need to spend on the program, according to the administration. And so by holding the figure at the administration's level, we will be helping to reduce the budget and we will be also demonstrating in at least one small way that we really mean it when we say we can achieve deficit reduction. So not only for those States that do not particularly rely upon it but for the Members who come from those States that do, it is a real opportunity that does not come along very often. As I said, it will really help us to determine whether or not we are serious about achieving balancing our budget by the year 2002 or whether it is just rhetoric and we are leaving it to our children to pay the bills. I hope that when this LIHEAP modest reduction by in effect having level spending in the last 3 years of the program comes to a vote on Tuesday, all of our colleagues will join in supporting the amendment. Mr. President, I reserve the remainder of my time. Mr. BYRD addressed the Chair.

Mr. KYL. Mr. President, I rise to offer this amendment which expresses the sense of the Senate regarding a supermajority for the raising of taxes. It essentially says that once the Congress has achieved fundamental tax reform we would then move to the adoption of a resolution proposing to the States a constitutional amendment that would require a supermajority to raise taxes. The budget resolution that is before us now projects that revenues to the Treasury will rise from $1.42 trillion in 1996 to $1.85 trillion in the year 2002. That is an increase of $430 billion or about 30 percent by the end of that 6-year period, an increase that is attributable primarily to economic growth since the budget resolution assumes no new taxes. In fact, the increasing revenue figures actually factor in the effect of the $500 per child tax credit for families. Even taking into account the tax changes, revenues to the Treasury will continue to grow. What all of this means is that we can achieve a balanced budget without new taxes. We can do it by limiting spending, and pursuing tax policies that promote economic growth and opportunity. Mr. President, the budget resolution recommends the kind of change that people have been demanding: more responsible spending, tax relief, and progress toward a balanced budget. And yet it represents only part of the change that the people have been seeking. Fundamental tax reform represents the second part of the equation. By the time that Americans had filed their income tax returns on April 15, they had spent about 1.7 billion hours on tax-related paperwork. That is according to Internal Revenue Service estimates, and they should know. Business spent another 3.4 billion hours. According to the Tax Foundation, the cost of compliance will approach $200 billion. If that is not evidence that our Tax Code is one of the most inefficient and wasteful ever created, I do not know what is. Money and effort that could have been put to productive use solving problems in our communities, putting Americans to work, putting food on the table, or investing in the Nation's future are instead devoted to wasteful paperwork. It is no wonder that the American people are frustrated and angry and that they are demanding real change in the way that Washington taxes and spends. Mr. President, I am offering this amendment today with two objectives in mind. First, to put the Senate on record with regard to the need for fundamental tax reform and, second, and perhaps even more important, to put Senators on record with regard to the concept of a supermajority requirement for raising taxes. Last month the House of Representatives considered the tax limitation amendment, a proposed amendment to the Constitution to require a two- thirds vote to raise taxes. The measure was similar, though not identical, to Senate Joint Resolution 49 which I introduced earlier this year. The Constitution Subcommittee of the Judiciary Committee held a hearing on my proposal on Tax Day, April 15. I hope it will be scheduled for action by the full Senate later this year. The amendment I am offering today, however, merely deals with the concept of a tax limitation, something that is important whether fundamental tax reform succeeds or not, but which takes on added significance and importance if tax reform results in the elimination of most of the deductions, exemptions, and credits in which taxpayers find some refuge from high tax rates today. Deductions, exemptions, and credits have less significance if one low rate is applied to income. But without a supermajority requirement for raising taxes, people would be particularly vulnerable to any changes that Congress might make in a new single rate income tax or sales tax. A supermajority requirement for raising taxes would make it much harder for Congress to increase the burden on taxpayers after fundamental tax reform has been accomplished. That is, I believe, both appropriate and necessary. In fact, Mr. President, a supermajority requirement for raising taxes was recommended by the National Commission on Economic Growth and Tax Reform appointed by Majority Leader Dole and Speaker Gingrich. The commission, which was chaired by former HUD Secretary Jack Kemp, advocated a supermajority requirement in its recent report on how to achieve a simpler single rate tax to replace the existing maze of tax rates, deductions, exemptions, and credits that makes up the Federal income tax as we know it today. Here is what the Kemp commission report said: The roller-coaster ride of tax policy in the past few decades has fed citizens' cynicism about the possibility of real, long-term reform, while fueling frustration with Washington. The initial optimism inspired by the low rates of the 1986 Tax Reform Act soured into disillusionment and anger when taxes subsequently were hiked two times in less than 7 years. The commission believes that a two-thirds supermajority vote of Congress will earn Americans' confidence in the longevity, predictability and the stability of any new tax system. Mr. President, ideally, a tax limitation should be put into place after this comprehensive tax reform that is recommended by the Kemp Commission is accomplished. That is because tax reform necessarily aims to broaden the tax base and then apply one low rate to whatever amount of income is left. Because base broadening would be subject to a supermajority vote under the proposed constitutional amendment, some are concerned it could make comprehensive tax reform more difficult to achieve. In fact, that is correct. The sense-of-the-Senate amendment which I am offering today takes into consideration that particular concern, recommending that a supermajority requirement would occur in the context of fundamental tax reform. In other words, only after fundamental tax reform had been achieved. As I said before, however, a tax limit is needed whether tax reform succeeds or not. There is no small irony in the fact it will take a two-thirds majority vote of both the House and the Senate to overcome President Clinton's veto and enact last year's Balanced Budget Act with its tax relief provisions. By contrast, the President's record-setting tax increase of 1993 was enacted with only a simple majority--and not even a majority of elected Senators at that. The Vice President had to break a tie of 50-50 to secure passage of the tax increase bill in the Senate. The idea of a tax limitation is based on a simple premise: It ought to be at least as hard to raise people's taxes as it is to cut them. What we are attempting to do here is to force Members of Congress to think of tax increases not as a first resort but as a last resort. A tax limitation will make it harder to raise taxes, of course. But perhaps more than that, it will force Congress to fundamentally assess the ways it goes about raising revenues. Mr. President, this is perhaps the most important thing I have to say this morning. We should remember that the amendment does not limit revenues to the Treasury; it merely precludes tax rate increases without a supermajority vote. There is a reason for this. Most of us would agree that lower tax rates stimulate the economy, resulting in more taxable income, more taxable transactions and, therefore, more revenue to the Treasury. Lower tax rates, within limits, end up producing more revenue to the Treasury. So it matters how we raise revenues. Do we do it by trying to raise taxes or do we do it paradoxically, by lowering taxes? The latter is obviously preferable. The tax cuts of the early 1980's are a case in point. They spawned the longest peacetime expansion of our economy in the Nation's history. Revenues to the Treasury increased as a result, from $599.3 billion in fiscal year 1981 to $990.7 billion in fiscal year 1989, up 65 percent. Revenues to the Treasury during those Reagan years increased substantially with tax rate reductions. That is the way we should raise the revenues that fund Federal programs. High tax rates, on the other hand, discourage work and production and savings and investment. So there is ultimately less activity, less economic activity, to tax. That is precisely what Martin Feldstein, the former chair of the President's Council on Economic Advisers, found when he looked at the effect of President Clinton's 1993 tax increase. He found that taxpayers responded to the sharply higher marginal tax rates imposed by the Clinton tax bill by reducing their taxable incomes by nearly $25 billion. They did that by saving less, investing less, and creating fewer jobs. The economy eventually paid the price in terms of slower growth. It is interesting to note that revenues, as a percentage of the gross domestic product, have actually fluctuated around a very narrow band: 18 to 20 percent of the GDP for the last 40 years. In fact, revenues amounted to about 19 percent of GDP when the top marginal income tax rate was in the 90 percent range in the 1950's, and they also amounted to just under 19 percent when the top marginal rate was in the 28 percent range in the 1980's. Now, why the consistency? Mr. President, this is the most important point I want to make. Why do revenues to the Federal Treasury stay constant at about 19 percent of the GDP, whether tax rates are 90 percent or 28 percent? It seems counterintuitive. Why is it so? It is because tax rate changes have a greater effect on how well or how poor the economy performs than they do on the amount of revenue that flows to the Treasury relative to the GDP. In other words, how Congress taxes is more important than how much it taxes. The key is whether tax policy fosters economic growth and opportunity, measured in GDP, or results in a smaller and weaker economy. The point is this: 19 percent of a larger GDP represents far more revenue to the Treasury and is, therefore, preferable to 19 percent of a smaller GDP. We raise revenues for the Federal Government not by raising marginal tax rates, but by reducing them. It is a paradox, but it is true. Requiring a supermajority vote for tax increases is, I think, sound policy. It is not a new idea. It is an idea this has already been tried and tested in a dozen States across the country. In 1992, an overwhelming majority of the voters of my home State of Arizona, 72 percent, approved an amendment to the State's constitution requiring a two-thirds majority vote for tax increases. There is a reason that the idea has been so popular in Arizona and other States. Tax limits work. According to a 1994 study by the Cato Institute, a family of four in States with tax and expenditure limits faces a State tax burden that was $650 lower, on average, 5 years after implementation than it would have been if the State tax growth had not been slowed. Tax limitation works. It will force Congress to be smarter about how it raises revenue. It will force Congress to look to economic growth to raise revenue instead of simply increasing tax rates, which does not work, anyway. It will protect taxpayers from additional rate increases. I encourage my colleagues when we have the opportunity, I presume on Tuesday, to support this simple sense-of-the-Senate amendment, to support the concept of tax limitation, to in effect, say, when we have achieved fundamental tax reform, then we should require a supermajority to raise the taxes. Mr. President, I want to conclude this part of the discussion on the more general subject of the budget that is before the Senate. As I said, relative to the amendment I am proposing here, revenues to the Treasury depend more on whether we have a healthy economy, whether we are conducting Government in a way to encourage growth, investment and savings, than it does on whether we are raising tax rates. What the budget that has been presented by the Republican Budget Committee has done here is to work in several ways toward that goal, to foster economic growth and investment, and, therefore, opportunity. I want to begin by commending the chairman of the Budget Committee, the Senator from New Mexico, and the members of his committee, for producing a budget which balances and, as I will note later, as a result of which quickly puts more money into the pockets of Americans, helping to stimulate this economic growth that I have been speaking of. It not only achieves balance, but it adheres to the schedule that we established last year for eliminating the budget deficit by the year 2002. And I would also note that the progress that we have made since last year is really quite extraordinary. It might be assumed by the general public, watching the machinations in the Congress and the President's vetoes and gridlock reported by the media, that nothing has been accomplished. But the fact of the matter is, a lot of money has been saved, and $23 billion, or 9 percent, has been cut from domestic spending levels. And even more could have been saved had Congress not been forced to add back $5 billion to satisfy President Clinton's demands for more spending, and to ensure that he would sign the final budget for 1996 into law. But the point is that, with our efforts of last year, as controversial as they were, as contentious as they were, as much as the President made us put back money because he wanted to spend more, we still saved $23 billion last year. In last year's budget, the Congress eliminated about 200 Government programs. That is 200 programs that have been eliminated before we even start this year's budget cycle. It is really the great untold story of last year, that savings were achieved--not with President Clinton's help, but in spite of it. We made progress on taxes as well, Mr. President. Again, this came in spite of President Clinton's objections. We raised the Social Security earnings limitation to ease the burden on nearly 1 million seniors. We passed tax relief for our troops serving in Bosnia. We permanently increased the health insurance deduction for the self-employed from 25 to 30 percent. We would have liked to have done much more, of course. And we prohibited States from taxing the pension income of former residents who retired and moved to other States, the so-called source tax repeal. So we provided a lot of tax relief for Americans. There would have been additional tax relief for the American people if President Clinton had not vetoed the bill that we passed last November--vetoed it on December 6 of last year. When he vetoed that bill, he precluded an extension of the exclusion for employer-provided education assistance. He precluded a $500 per child tax credit. He prevented us from instituting a marriage penalty tax relief provision. He prevented us from implementing capital gains tax reform, and also a tax deduction for the first $2,500 in interest on a student loan. These are all tax relief provisions that we passed but the President vetoed. We would have provided Americans with enhanced opportunities to save in their individual retirement accounts. And we would have given them more choice in obtaining affordable health care through the medical savings accounts that were, again, in the bill we passed but that the President vetoed. The President said ``no'' to tax relief. In fact, it seems to me, Mr. President, that there is no tax that the President is willing to part with. Even the gasoline tax debate that we have had--it has obviously been grinding on the President, and he suggested that maybe he would approve it because it is very popular. But he will not commit to it. He admitted that he raised taxes too much back in 1993. But when it came time to roll the tax increases back, he has said ``no.'' Now, the committee-reported budget before us today again challenges President Clinton to do some of the things that he has promised for so long. I am going to be offering another amendment, in a moment, which will really put this, I think, to the test. But the budget that we have produced here, which Senator Domenici and his committee presented to us, includes real welfare reform and middle-class tax relief. It ensures the solvency of Medicare and reforms Medicaid--all the things the President has said he wants to do. It balances the budget honestly, without the kind of gimmicks and triggers recommended by President Clinton, which, by the way, are gimmicks that will require deep cuts in domestic discretionary programs, including the environment, scientific research and education, if balance is to be achieved at all. In fact, despite the claims to the contrary, President Clinton's budget does not balance. I am going to repeat that. Despite the claims of some of our friends on the other side of the aisle, the President's budget is not in balance. The director of the Congressional Budget Office, June O'Neill, in her testimony on April 17, said, ``Under CBO's more cautious economic and technical assumptions, the basic policies outlined in the President's budget would bring down the deficit to about $80 billion by 2002, instead of producing the budget surplus that the administration estimates.'' In other words, even though the administration estimates that it will be in balance at the end of 6 more years, the CBO says, in fact, it will be in deficit by $80 billion. In contrast, the budget proposed by Senator Domenici, called the Republican budget, is, of course, in balance. The bottom line here is that, for all the President's proclamations that he is now a true believer in a balanced budget, he still has yet to offer an honest plan to achieve balance by any certain date. As I said, the Senate Budget Committee's proposal does exactly what we promised. We promised not to cut Medicare. This budget does not. Medicare spending would be allowed to grow at twice the rate of inflation. In fact, per beneficiary spending would grow from $5,200 in 1996 to $7,000 in 2002, a 35-percent increase. We allow it to grow, but at a sustainable level. We provide a $500 per child tax credit for every child under 18. We protect Social Security. We reform Medicaid. And we continue progress toward more market-oriented farm policies. There are very good reasons for us to be proposing this honest balanced budget, Mr. President. One is, of course, that it protects priorities, like Social Security and Medicare, and, importantly, it accommodates tax relief for middle-income families. First and foremost, it is the right thing to do. In fact, Mr. President, no generation before us has spent so lavishly on itself, only to leave the bills to future generations to repay. House Speaker Newt Gingrich said recently: There is great delight in working hard and living within our means so our children could be better off than we have been. Only in the last generation has this bias toward the future been reversed. Now we are borrowing against the farm to pay today's living expenses, and leaving our children to pay off that debt. Mr. President, the Speaker is right. But balancing the budget is not just about the future. A balanced budget would produce substantial benefits for today's generations as well. The Congressional Budget Office predicts that a balanced budget would facilitate a reduction in long-term interest rates of between 1 and 2 percent--some say as high as 2.7 percent. Among other things, that means that Americans will have the chance to live the American dream and to own their own homes. A 2-percent reduction in the typical 30-year mortgage in Arizona would save homeowners over $220 a month. That is $2,655 a year. Let me repeat this. By balancing the budget now, interest rates will come down, and a 2-percent drop in interest rates would save the average family with a home mortgage in Arizona $2,655 each year. That is money in our pockets, Mr. President. So it is not just about the future, though the future is critical. It is about today, helping the working families of today keep more of what they earn, just as a result of making a commitment that we will have the Federal budget balanced in another 6 years. A couple of other examples. A 2-percent reduction in interest rates on a typical $15,000 car loan would save buyers $676. That is real money. The savings would also accrue on student loans, credit cards, and loans to businesses who want to expand and create new jobs. Reducing interest rates is, perhaps, one of the most important things we could do for people all over the country today. So the point I want to make in relation not only to the amendment that I have just proposed, which would commit the Senate to the proposition that economic growth is important and that we can achieve it more by reducing tax rates than by increasing them, is that the budget that we have proposed promotes that kind of growth, that kind of opportunity as a result. It is a good budget, a responsible budget. It accepts the challenge to rein in Government spending and to ensure that we leave our children and grandchildren with a legacy of more than debt and despair. So I urge my colleagues, when the time comes, to support this budget. Mr. President, I would like to reserve the remainder of the time on the amendment which I have just been discussing. I ask unanimous consent to lay this amendment aside and to send another amendment to the desk.

Mr. KYL. I send an amendment to the desk.

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

Mr. KYL. Mr. President, I am going to speak on this amendment for a little while and then again reserve the remainder of my time.

Mr. KYL. I am happy to yield.

Mr. KYL

Mr. KYL. Thank you, Mr. President. I would like to respond to some of the challenges just raised by the Senator from Arkansas. They are good questions. They deserve a response, and I think we have the response. Before doing that, though, let me pay a compliment to the Senator from Iowa for raising this amendment, even though I strongly oppose it. The Senator from Iowa cares very much about the spending of taxpayer dollars in this country, and he knows that there are some places in the defense budget where we could make savings, and he is right in that. But I believe it is also the case that if that money were to be cut, we would not make the savings in the places where they ought to be made, but rather would continue to cut on important research and development, on readiness and on procurement, on the things that we have to spend more money on, and that is why I will end up opposing the amendment of the Senator from Iowa. I would like the attention of the Senator from Arkansas because he raised some important questions a moment ago. He said, ``Who is our enemy?'' Mr. President, the United States of America is now the only superpower in the world. We are the country to whom everyone else in the world looks to for protection, not only of themselves but for the democratic ideals that animate many countries' pretensions to become a part of the civilized world. I just returned from a conference in Prague, the Czech Republic, in which Central European nations said to the United States, ``Please continue to assist us to help bring us into the European Community, because we have the same basic ideals that you do.'' We cannot do that if we do not have a strong defense. Who are our enemies? Well, it all depends. If we want to come to the defense of Kuwait, then our enemy in that situation is Iraq. If we want to protect Taiwan, then our enemy might be China. If we want to protect South Korea, then our enemy is North Korea. If we want to stand up to Qadhafi, then our enemy is Libya. If we want to stop the terrorism from coming from Teheran, then Iran may be our enemy. The point is, there is not any other country in the world that everybody looks to to stop this kind of aggression than the United States of America. Mr. President, I will never forget what Dick Cheney said when everyone was patting him on the back for winning the gulf war. Secretary of Defense Dick Cheney at that time said, ``It wasn't Dick Cheney who won the war. It wasn't George Bush. It wasn't Norman Schwarzkopf.'' He said, ``As great as they were, it wasn't even just our great troops that won this war. We won the gulf war because of decisions that were made by courageous members of previous administrations and previous Congresses 10 and 12 and 15 years ago to give us the weapons, the high-tech weaponry and to provide for the training of our troops,'' so that we would be prepared to win a conflict that nobody could have even predicted back then, could not even have predicted just a few weeks before the invasion of Kuwait, in fact, apparently was not predicted by anybody until the invasion occurred. So the point is, Mr. President, you cannot say that until we have identified a specific enemy, in the sense that we have been attacked, we should not be spending money on defense. That argument is absolutely wrong. Dick Cheney was absolutely right. What he said is, ``I hope that the decisions that I'm making as Secretary of Defense today will enable my successor's successor, maybe 10 or 12 years from now, to win a conflict that nobody today can predict but which, as surely as we're sitting here, will occur.'' Mr. President, that is the challenge of all of us sitting in this body today. We cannot predict who the enemy is. But we have an obligation to provide for that basic research, that readiness, that procurement that we know will win the next conflict wherever it is. To those who say we are savaging education, savaging the environment, spending overall on those accounts has not gone down, has not gone up much, but it has not gone down. Defense spending has gone down now for 12 straight years, the only department of Government where that has occurred. As a matter of fact, defense spending last year and this year will be less than we spent before Pearl Harbor. Either as a percentage of the Federal budget or as a percentage of gross national product, we will be spending less on defense than we did the year before Pearl Harbor. Now we are the only acknowledged superpower in the world. We are the country that everybody else turns to. Before my time is out, Mr. President, let me simply note that there are numerous reports, statements, pieces of testimony from representatives of the administration who say that we are already spending too little. If we were to cut the Republican committee request even further, as our friend from Iowa is suggesting that we do here, we would be setting our procurement program back by years and we would not be in a position to win that kind of conflict of which I spoke. One of the people who I think we should rely upon here is the Chairman of the Joint Chiefs of Staff, General Shalikashvili. He stated in his 1996 Force Readiness Assessment report a little bit earlier this year: As overall defense spending has been reduced, permanent accounts have been the bill payer for other readiness-related spending. We can no longer afford to push procurement into the outyears. Specifically with regard to the spending and the amounts, General Shalikashvili summarized the situation this way: We are now fast approaching the time when we will no longer be able to rely on what we built in the 1980's, and so we must commit ourselves to a sufficient procurement goal, a goal I assess to be approximately $60 billion annually, if our force is to remain as ready tomorrow as it is today. Mr. President, despite General Shalikashvili's assessment, the administration's 1997 request devotes less than $40 billion to procurement spending, less than at any time since the Korean war. What that means is, we are still going to be $20 billion short. Now the committee has added $11 billion back. That is still $9 billion short just with regard to procurement. If we were to adopt the amendment of the Senator from Iowa, we would be back to the point where we are at least $20 billion short just in the area of procurement, according to the Chairman of the Joint Chiefs of Staff. Without reading the statements made by other members of the Joint Chiefs and other representatives in the military, let me just summarize it this way. There is not anybody in the military who does not believe we could make good use of the money that the Armed Services Committee has put back in. There is a list here presented by each of the services that spends more than that amount of money. They would like to have it if they could. They are good soldiers, following the Commander in Chief, who sent his budget up and said, we are not going to spend any more than the amount requested. But if you ask them, they will give you the list of things they say they need. That is why I conclude again by answering the question of the Senator from Arkansas. We know who our potential enemies are. We know who we have to be prepared to defend against. What we are doing, in as best a way as we can, in the budget of the Armed Services Committee, in the authorization from the Armed Services Committee, is to request the minimal amount that we think we are going to need to sustain those requirements. To go back to what Secretary Cheney said when he was Secretary of Defense: If we have the courage today to make the kind of decisions that people 10 and 15 years ago did that permitted us to be able to win the cold war, and win the first hot war since then in Iraq, then we will be able to say that at the time that it counted we stood up and we did the right thing. We had the foresight, we had the courage, and we were willing to defend the position to spend the money necessary to fulfill the first and most important obligation of the U.S. Government, of the Federal Government, and that is to defend the people of the United States. That is why at the end of the day I support the distinguished chairman of the Senate Armed Services Committee, Senator Thurmond, and the work of his committee in bringing forth their requests and respectfully oppose the amendment of our good friend from Iowa, Senator Grassley.

Mr. KYL

Mr. KYL. The Senator is absolutely correct. According to the budget which we will be taking up here in the next couple of days, revenues to the Treasury are expected to exceed $1.7 trillion in the 1997 fiscal year. This amount factors in the proposed repeal of the Clinton gas tax. I also note that that figure compares to $1.05 trillion collected by the Government just 5 years ago. In other words, Mr. President, the Treasury is flush with a 40-percent increase in revenues in just the last 5 years. We hardly need the revenue from this 4.3-cent gas tax. I talked in the beginning about the effect on the State of Arizona where motorists have to travel fairly large distances to get where they are going. I note that in my own State, in the city of Phoenix, for example, the price of regular unleaded gas is now about $1.39 to $1.45 a gallon. Super is about $1.63 gallon. So clearly this spike in gasoline prices is hurting motorists. One thing we can do. The Congress cannot repeal the law of supply and demand. We cannot directly affect the market by what we do. At least, we should not try to. Clearly, the market is working here. But if we can have an effect on the tax burden imposed by the gas tax and reduce that by 4.3 cents, that is an additional savings for the people in my State which would certainly help them. It may not be a big deal, as some of the opponents are talking about here, but it does add up. As a matter of fact, I point out that the Heritage Foundation recently estimated that the cost of the Clinton gas tax on a State-by- State basis--in this case for the State of Arizona--will result in motorists paying an additional $78 million in 1996. To some opponents of the gas tax, $78 million may not seem like a lot of money. But, frankly, to the people of the State of Arizona, $78 million out of their pockets is a fair amount of money. Repeal will put that much money back into the pockets of the citizens of Arizona, whom I trust to make better decisions on how to spend that money than I do bureaucrats back here in Washington, DC. It was also pointed out by the Senator from Idaho that no part of this 4.3-cent levy goes toward transportation costs, which most motorists think is happening to their money. It goes instead to the general fund of the Treasury where the President would like to use it to finance additional Government spending rather than to be used for deficit reduction. In order to satisfy the President's demand for more spending, Congress recently had to add $5 billion to the omnibus appropriations bill. Although the additional spending was ostensibly offset by savings in other areas, Congress had in fact counted on using much of that savings to implement the balanced budget that it passed last year. Using the offsets to finance the President's additional spending instead will, in effect, make it $5 billion harder to achieve the balanced budget. Mr. President, as I said a moment ago, the real question here is, Whom do you trust to spend the money the best? Is it the people who earn it, who would like to spend it on their families back home, or is it bureaucrats back here in Washington, DC? This money is not being used to build more highways. It goes into the general fund where the President wants to use it to spend more money. I believe, and we Republicans believe, that this is the time and the place to start by cutting. For those who say it is not much, I say a long journey starts with the first step. Every little bit will help. If we can cut out this 4.3- cent gas tax that was part of the Clinton increase of 2 years ago, No. 1, it will help reduce the price of gasoline a little bit; No. 2, it will help restore some balance to our budget because we will be cutting the size of Government rather than using this money to spend on Government programs. And third, and perhaps most importantly, it will begin to further our efforts to put more trust in the American people-- let them keep what they earn rather than sending money back here to Washington to be spent by Washington bureaucrats. Mr. President, I thank the Senator from Georgia for yielding this time. Mr. COVERDELL addressed the Chair.

Mr. KYL. Thank you, Mr. President. I thank the Senator from Georgia for yielding the time and for bringing us to the floor to talk about this most important matter. In my State of Arizona, people drive long distances, as they do in the State of Idaho. The gas tax, therefore, is a very important matter to us. Most Arizonans, by the way, are very much in favor of the repeal of this Clinton gas tax. I want to start by quoting from Bill Clinton, who was then a candidate for President. When he ran for office, he said, ``I oppose Federal excise gas tax increases.'' Then, of course, about 2\1/2\ years later, he included a Federal gasoline excise tax as part of the biggest tax increase in the history of this country, which he and the majority of the Members of Congress imposed upon our taxpayers. The point that I would like to begin with is that, as much as the President talks about trying to protect the poorer in our society, the gasoline tax is a tax that hits the poor the hardest. As a matter of fact, according to the Bureau of Labor Statistics, in 1987, it shows that the poorest 20 percent of Americans devote 8.8 percent of their expenditures to gasoline and motor oil while the wealthiest 20 percent devote only 3.1 percent of their expenditures to such things. So when we talk about a tax that really hits those who are the poorest in our society, it is the gasoline tax that stands right up there as one of the harshest taxes on the poor. That is one of the reasons why Republicans are so dedicated right now to trying to repeal this 4.3- cent gas tax because of the harm that it does to the poorest in our society. Taxes are a lot like Federal spending programs. They are very difficult to cut, and once they are in place they are almost impossible to repeal. Repealing this Clinton gas tax is illustrative of the efforts that we have had underway here to change the status quo in Washington and to begin to send power back to the people. It is very hard to do. But it is a question of whom you trust. Who would you rather have spending the money--the people of the country, the taxpayers, or the bureaucrats here in Washington? We believe that repealing this Clinton gas tax of 4.3 cents per gallon is a small but necessary step toward reducing the overall tax burden imposed upon the American people. It represents a ratcheting down of the size of the Government. It reduces taxes and it reduces spending. Mr. President, I want to make the point. Opponents of repealing the gas tax said, ``Well, Republicans are just trying to make a political issue out of this. It is not very much money,'' to which there are two or three answers. First, if it is not very much money, then why are you so concerned about it? Why are you opposing our efforts to repeal the tax if it is not a big deal? Second, if it is not very much money, then we certainly do not have to worry about what it does to our efforts to balance the budget. As a matter of fact, we can balance the budget very easily, as I will point out in a minute. Our budget for this next year assumes the repeal of the gas tax. We do not need that money to run the Federal Government. It seems to me that there is not a good argument against reducing the-- --

Mr. KYL. I am happy to yield to my friend from Georgia.

Mr. KYL

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

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the Senate stand in recess until 5 p.m..

Mr. KYL

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

Mr. KYL

Mr. KYL. Mr. President, the conference to which I referred was to discuss the future of the Atlantic alliance given the fact that the Central European nations of Europe have not yet been taken into either the economic or the political organizations to which the Western European nations have belonged since the end of World War II. Specifically, would these countries be taken into NATO, and would they be taken into the community of European nations in terms of the economic arrangements that currently exist? The answer to those questions by most of the members at this conference was that it was time for the Western European nations, including the United States, to reach out to the Central European countries like the Czech Republic, Poland, Hungary, and others who wished to be a part of the alliance both to develop stronger economic ties and also to provide for common security arrangements. The basis for this conclusion was primarily philosophical, not practical, though the practical benefits of the arrangement are clear for all to see. From a practical standpoint, it goes without saying that exports and imports benefit all nations participating, that there are benefits to common defense, and certainly from the United States' perspective a forward defense by having friends in Europe as preferable to an isolationist position. But the philosophical reasons were the ones that were dwelt upon by the participants in this Atlantic alliance conference because of the understanding that the Western nations, among others in the world, share a common set of values, a common heritage, and an understanding that mankind should be free, that government should protect that freedom and independence based upon the philosophical and moral values of the Western nations. There is a sense that we do not have an option to be apart but rather must continue to work together to advance that philosophy. Why is that so? Mr. President, it is important for the people of the United States to see the advantages of democracy in the world. If I could sum up in one sentence what our national interest is abroad, it would be to advance the cause of democracy for the peoples who share that common value with us. As I said, it benefits the United States from a philosophical point of view because, if there is conflict in the world, the United States is less free not only from a military point of view but from the point of view of the rights that we exercise as American citizens. We know from the depths of the cold war that Americans were less free at home because of the commitments that we had to make abroad. That is why, both from a practical and a philosophical point of view, it is important for the United States to participate with our Western European allies and why it is important for all of us to try to advance the cause of freedom by extending the number of democratic states in the world. There is another important point that was reached by most participants in the conference. That was that of all of the threats that face the civilized nations of the world today, as Lady Margaret Thatcher said in one of the key addresses at the conference, the most critical threat of all is the threat of weapons of mass destruction and the missiles to deliver those weapons. That same theme was articulated by others at the conference as well. The conclusion of the policy statement at the conference was that a concerted action by the alliance leaders to develop and to deploy an effective ballistic missile defense for all of the democratic peoples of the world was an important goal for us to be achieving, and that, if we could achieve that goal, we would no longer have to answer the question of why NATO continued to have a purpose in the world today. Conceived as an organization to protect Western Europe from the threat of communism and the expansion of communism, some have felt that NATO has no more purpose because that ideological threat no longer exists. That is true; but what does exist is the threat from rogue nations, whether ideologically oriented or not, rogue nations who are, one could say, the world's criminal element because they have no regard for the democratic rights of other nations and have exhibited aggressive tendencies. Iraq and Iran are two of the most recent examples. These are nations, along with others like North Korea, who have acquired or are acquiring both weapons of mass destruction and the missiles, the means, to deliver them, and who can use those missiles not only in military activity against the Western alliance such as in the gulf war but also in conduct of their foreign policy to blackmail states such as the Western European nations and the United States. Let me conclude with this point. As Margaret Thatcher pointed out to the conference, the threat is primarily against nations of the so- called civilized world attempting to advance legitimate foreign policy goals by making threats with the use of ballistic missiles. If Iraq, for example, had had a nuclear capability and we knew that, the question that I posed in the conference was, would the United States have, and would the United States conference have voted to use military action against Saddam Hussein? It was a close enough question in the conference even knowing that we could defeat Saddam Hussein, but if Saddam Hussein had had a nuclear warhead, or if we knew that he would use chemical or biological weapons, would the United States Congress have voted to thwart his actions after he invaded Kuwait? For that matter, would the European nations have joined the grand coalition if they knew that they were vulnerable to a missile attack from Saddam Hussein? Asking that question raises the point of the use of these weapons for blackmail, because a nation which can blackmail, others obviously is a criminal nation and a nation who can expand its foreign policy goals and thwart ours. But with the development and deployment of effective missile defenses, that ability to blackmail is gone because the United States and the Western European allies, who would have such an effective defense at that point, would be able to say to Saddam Hussein or to the rulers of Iran or North Korea or Syria, whatever country it might be, ``You cannot push us around; you cannot threaten the nations of Europe; you cannot threaten your neighbors with these ballistic missiles because, as you know, we can destroy them; we have a defense against them.'' So, Mr. President, I think it is an important development that, at this Atlantic alliance, leaders there concluded by and large that it was important for us to develop in a concerted way--our European allies as well as the United States--an effective ballistic missile defense to thwart this blackmail use of weapons of mass destruction by the outlaw or so-called rogue regimes of the world. I will just conclude by saying that the importance of the United States proceeding with this and bringing it to the floor in the next couple of weeks, along with the budget that we will be debating later this week and the authorization bill for the Armed Services Committee which the distinguished Presiding Officer sits on--as we debate this bill we will be discussing specifically the issue of whether or not we will continue to adequately fund and to begin deployment of an effective missile defense system. That will be a matter of great debate on this Senate floor, and I hope my colleagues, in consideration of that, will pause and reflect upon the conclusions of this Atlantic alliance which, as I said, has now come much farther along the path of agreeing that in the end there should be a coordinated, combined effort. It would not just be the United States, but it would be our Atlantic allies as well participating with us in some kind of effective global ballistic missile defense system. Mr. President, I will at a future time insert in the Record some of the statements that were made at this important conference. For the moment, I simply wanted to alert my colleagues to the fact that, as we begin this budget debate and as we begin the debate on the Defense authorization bill, a consensus is developing around the world, and the United States needs to lead in this effort. I know the distinguished Presiding Officer and I will be involved in that debate in a significant way as it unfolds in the next few days. Thank you, Mr. President. I suggest the absence of a quorum.

Mr. KYL. Mr. President, this weekend there was an important conference in Prague, the Czech Republic, in which both Europeans and Americans discussed the future of the Atlantic alliance. I wanted to report briefly on that and submit statements for the Record later. First, let me ask unanimous consent to have printed in the Record an op-ed piece written by our colleague, the Senator from Mississippi, Senator Cochran, relating to the subject of missile defense.

Mr. KYL

Mr. KYL. Mr. President, today is tax freedom day, the day that average Americans can expect to quit working for the Government and begin working for themselves and their families. Mr. President, it has taken the average American 128 days this year-- the 128 days leading up to tax freedom day--to earn enough to pay the tax collectors at the Federal, State, and local levels. Had the average worker devoted every dollar earned every day for the last 128 days, not to food, clothing, or shelter, but exclusively to paying off his tax obligations, it would be only now that his tax bill would have been satisfied and he could begin working for himself. May 7 is the latest tax freedom day ever--6 days later than it was when President Clinton took office in 1993. In other words, it will take the American people an extra 6 days--nearly a week--to pay for all of the additional taxes that have been imposed during President Clinton's time in office. Mr. President, it is no wonder that Americans are anxious about their economic security. The harder they work, the more the Government takes. Compared to the 3 percent of income paid in taxes in 1948, the average family now pays nearly 25 percent of its income in taxes to the Federal Government. Add State and local taxes to the mix, and the burden approaches 40 percent. That is why Congress passed the tax relief bill last year--to begin to roll back the huge tax increase that President Clinton imposed in 1993. We want to see that the American people can earn more, keep more, and do more with their families, their churches and synagogues, and their community. President Clinton says he wants to help the middle class, too. Why, then, did he veto last year's tax relief bill? Seventy percent of the tax reductions would have gone to those with incomes under $75,000. Looking at the tax relief bill in detail, it included a new deduction for interest on student loans, a $500-per-child tax credit, a tax credit for adoption expenses, and marriage penalty relief. Those four components alone made up 64 percent of the tax relief provided by the legislation. In fact, the Heritage Foundation had estimated that 47,552 low-income taxpayers in Arizona--3.5 million nationwide--would see their entire income tax liability eliminated as a result of the $500- per-child tax credit alone. But President Clinton said no to tax relief. In fact, the President is still trying to justify his 1993 tax increase as a tax on the wealthy. Tell that to the millions of Americans who are struggling to cope with the soaring price of gasoline made worse by the Clinton gas tax increase. I am sure they would be surprised to learn that they are among the wealthy the President talks about so cavalierly. They are the ones paying the higher gas tax. Young couples working two jobs and earning a combined total of only $30,000 would be surprised to learn that they are among the wealthy that President Clinton talks about. With two children, they would have saved $1,000 on their taxes if the $500-per-child tax credit became law. President Clinton vetoed that relief. I am sure the older American who has an income just over $30,000 a year would be surprised to learn that he is one of the wealthy the President is so fond of taxing. He was hit with the Clinton Social Security tax increase in 1993. According to the Tax Foundation, total Federal taxes on a median- income family--not the rich, but an average family--increased by more than $2,000 during the Clinton years. Just about everyone across the country has felt the ill effects of President Clinton's economic policies. When the President talks about taxes, it is always in terms of what it means to the Government--can the Government afford tax relief for the middle class? How much more can it squeeze out of working Americans? Well, I think we have to begin to consider how taxes affect working people's budgets. After all, it is Government that is supposed to serve people, not the other way around. A government that confiscates nearly half of its citizens' hard-earned income has, in my opinion, lost sight of why it was created and just who it was intended to serve. With that in mind--and recognizing that various levels of government already take far too much of a family's income in taxes--I recently proposed a constitutional amendment, Senate Joint Resolution 49, to require a two-thirds majority vote in the House and Senate to increase taxes. Twenty Senators cosponsored the resolution. The House of Representatives debated a version of the initiative, known as the tax limitation amendment, on April 15. Mr. President, according to a recent Reader's Digest poll, the maximum tax burden Americans believe a family of four should bear is 25 percent. That is not just the amount of Federal income taxes, but taxes from all levels of government, including Social Security taxes, sales taxes, excise taxes, and State and local taxes. As I noted before, however, the average family feels a tax bite of nearly 40 percent-- almost twice what the public believes is a fair amount of tax. Even though the tax limitation amendment only applies to new taxes, it has the tax collectors and the Clinton administration squealing. They cannot stand the thought of not being able to take more out of the taxpayers' pockets. Mr. President, there is no small irony in the fact that the Clinton tax increase of 1993 passed only by a simple majority--and not even a majority of elected Senators at that. Vice President Gore broke a 50 to 50 vote tie to ensure passage of the tax increase bill--higher taxes on gasoline and Social Security, and job-killing taxes on small businesses. Yet, while the largest tax increase in history became law with the bare minimum of votes, it will take a two-thirds majority vote in each House to enact our tax relief bill over President Clinton's veto. Well, many of us believe that it ought to be just as hard for President Clinton to raise taxes as it is for Congress to cut them. That is the very premise of the tax limitation amendment--to make government think of tax increases, not as a first resort, but as a last resort. President Clinton, who always seems to think of tax increases as a first resort, not only wants the American people to accept his tax increases but believes that his 1993 budget plan helped the economy. The facts just do not support that contention. A recent report by the Heritage Foundation found that the Clinton tax increase has cost the country a total of 1.2 million additional private sector jobs between 1993 and the end of 1996. Every household in American has lost a total of $2,600 in after-tax income as a result of sluggish economic growth. Personal savings are off by about $138 billion. Some 40,600 new businesses were never started. 1.3 million new cars and light trucks were never produced. A total of $208 billion in lost economic output. What the Heritage Foundation refers to the Clinton crunch--the dual effect of declining real wages combined with higher taxes--has cast a dark shadow over the economy. Since January of 1994, the number of people working more than one job has gone up 17 percent. The number of women working more than one job has gone up 21 percent. President Clinton talks about the number of jobs created during his administration. Yes, there are more, but the fact is that more than a third of the new jobs have gone to people taking an extra job in order to make ends meet. How has the Federal Government fared while people's incomes have been stagnating and their jobs are put in jeopardy? It seems to be doing pretty well. Revenues to the Treasury have increased from $1.15 trillion in 1993 to an estimated $1.43 trillion this year--up almost 25 percent--thanks, in large part to the Clinton tax increase. The President just forced Congress to add another $5 billion to the Federal budget 2 weeks ago. That is $5 billion more for the government, not American families, to spend. President Clinton's budget for fiscal year 1997 would even add 13,700 full-time Washington bureaucrats to the Federal payroll. In other words, the era of big government is not over. If President Clinton has his way, it will continue to grow and flourish at the expense of hard-working taxpayers. Mr. President, there is a way to put a stop to this continuing assault on taxpayers. It is the tax limitation amendment. It would make it harder for Congress to raise taxes any further, requiring a two- thirds vote of each house on tax increase bills. It would have prevented the Clinton tax increase from becoming law in 1993 and thereby promoted more vigorous economic growth across the Nation. Many of us will try to roll back the Clinton tax increase, or parts of it, like the gas tax. With the tax limitation amendment, however, we can also make sure that tax freedom day comes no later than May 7 in any future year. Hopefully, it will come a lot sooner. The time for the tax limitation amendment has come.

Mr. KYL

Mr. KYL. Mr. President, I shall be quite brief. If the ranking majority and minority members wish to discuss a time agreement, that would be fine, or perhaps while I am speaking they could do it, but I will not speak more than 15 minutes for sure. Mr. President, I rise in opposition to the amendment. The discussion that my colleague from Ohio has just engaged in primarily relating to the issue of the birth certificate, I will leave to Senator Simpson. I should rather respond to arguments primarily made earlier by the Senator from Michigan and, to some extent, the Senator from Ohio relating to the problem of verification of employment status. I wish to go back in time to set this issue in proper context. In 1990, 6 years ago, the Congress increased the limit on legal immigration to the country by 37 percent because we thought the laws that imposed serious sanctions for hiring illegal immigrants would have the effect of reducing that illegal immigrant population; that making it harder to employ illegal immigrants would in effect remove that magnet--employment--that was drawing many people across the border, particularly from Mexico. Unfortunately, it has not worked out that way because the system just has not worked very well. Unfortunately, between 300,000 and 400,000 illegal immigrants are now entering the United States every year, many of them people seeking these job opportunities. In fact, in my own State, the INS estimates that about 10 percent of the State's work force is made up of illegal immigrants. I hope Members of the Senate believe that it should not be acceptable to have so many illegal immigrants taking jobs here in the United States. The question, then, is what we do about it. We have a system that is not working, and we need to do something about it. That is what the bill attempts to deal with. We started out with a bill that dealt with it in a much more effective way. But in order to compromise and get more support over the weeks and months, many changes were made, to the point, now, that it is really a very modest approach. This is a very modest change we are seeking, to try to find out how to strengthen this verification process so not so many illegal immigrants are working in the United States. This is clearly the focus of the effort, to reduce the effect of the magnet of employment. It has been illegal to hire illegal aliens for 10 years now. So I think the first thing you have to do is ask what is not working and what can we do about it? The Jordan commission, which has been referred to many times in this debate, studied this problem as much as any, and it came up with several recommendations. What the Jordan commission and many other immigration experts have concluded is that the best way to reduce the number of illegal aliens working in our country today is to implement some kind of an easy-to-use, reliable employment verification system. In fact, the Jordan commission reported that current employer sanction laws cannot be effective without a system for verifying the work eligibility of employees. So, if the current system is not effective in weeding out those individuals who are here illegally and, as the Jordan commission and others have said, we have to find a way to develop a workable system, what is the next step? You do some research. You try to do some pilot projects, some experiments, some demonstration projects, as they are sometimes called, to find out what will work the best. That is what the committee did. It adopted a verification provision which authorizes a series of pilot projects. We are not changing the law. We are not imposing a system. We are certainly not imposing a national system. We are simply authorizing the Attorney General to experiment with some pilot projects over a short period of time, 4 years, to determine what will work, what is the most effective way for employers to verify that the person they have hired is legally authorized to work. That is very straightforward. These projects are intended to assist both the employer and, frankly, the person seeking employment. Because, if an individual seeks employment and, frankly, looks like me, there probably are not going to be too many questions asked. But, in my own State of Arizona, we have a very large Hispanic population. There are a lot of people who seek employment in which the employer is basically in a dilemma, in a catch- 22 situation. If he asks too many questions of that individual, perhaps because he or she looks Hispanic, speaks with a Spanish accent, that employer can be charged with discrimination. But if the employer does not ask enough questions to verify the legal status of the employee, he can be charged with violating our immigration laws for hiring somebody who is not legally authorized to work here. As Senator Simpson and others have said, the system we have tried to devise to verify the working status, or legal status, of the individual for work purposes is not working because it relies on a series of documents, all of which are easy to forge. Therefore, you end up with a situation where it is virtually impossible for the employer to really know whether the individual is entitled to work or not. The employer fills out what is called an I-9 form to verify the eligibility of each person hired. But, as I said, that system is open to great fraud and abuse. So one of the purposes of the verification system is, obviously, to make the law work. Another purpose is to make it easier for the employer to verify the legal status of the individual. Another purpose is to protect the individual seeking employment. I want to make it very clear that the bill specifically prohibits the establishment of any national ID card. What many of us believe, ideally, is there is no card at all. Let us take the Social Security number. You are frequently asked to give your Social Security number, but you do not necessarily have to have a card with you that identifies you as an individual for other purposes. On those few occasions in your life, hopefully few for most of us, where you are applying for a job, you give the Social Security number. Perhaps one of the pilot projects is a 1-800 number that the employer can dial up and punch in the numbers of the Social Security number and get information back that the individual who he has just hired is, in fact, legal. In any event, we are not talking about a national ID card here, and the debate should not be confused with that prospect. Moreover, the employee verification would only be used after an individual was hired, so you do not run into problems of discrimination here. Perhaps most important--and I really view this as a deficiency in the bill, not something to brag about, but it certainly answers one of the objections of my opponents--is that these pilot projects would not in and of themselves establish any new verification system for the country. The Congress would have to actually act, would have to pass a law implementing a verification system before it ever took effect. So there would be plenty of opportunity for those who oppose this, once a pilot project had established some good ideas here, to pick those ideas apart if they do not like them. Basically what they are arguing against is something that has not even been created yet. They are saying we cannot imagine a system that would work well and therefore we should not even try to find one. As one of my colleagues said, it is impossible to have a foolproof system. That is the last argument, except for the ad hominem argument, that is made in a debate when you do not have a good answer. It makes perfection the enemy of the good. There is only one perfect thing in this universe and that is He Who made the universe. None of us is perfect. None of our laws is perfect. No system we can devise is perfect. Nothing is foolproof. Nothing is even tamperproof for people who are not fools but are very clever individuals. But we can try to do something to enforce a law that, 10 years ago, everyone thought was still a good law and none of the opponents of this verification system is trying to repeal. They are, in effect, willing to allow a law on the books they know cannot be enforced. Nothing detracts more from a society than keeping laws on the books that everyone knows are not being enforced. It breeds an attitude against the law, and, after all, the law is the underpinning of the country. We are a nation of laws. If we willingly, knowingly, allow a lot of laws to be on the books that everybody ignores because we know they do not work, it makes them unimportant, in effect. It make the purpose behind them unimportant. I submit we are not seriously doing our job if we simply argue against trying to improve a law with nothing to substitute to make it better. There are no concrete, positive suggestions here, no constructive criticism. It is all negative criticism. You cannot make a perfect, foolproof system, they say. Nobody is saying we can. But we can sure make it a lot better than it is. We cannot make a foolproof system along the border either, but that does not keep us from trying. Almost everyone here is going to support training 1,000 new agents to put on the border and in our cities every year for the next 7 years; to build fences, to build lights, to do all the other things to try to keep the border more secure than it is. It will never be totally secure, but we do not give up. We try to seek new ways of protecting that border. In fact, we have some pilot projects in this bill to experiment with different kinds of fencing and different kinds of lighting and roads, to see what works the best to secure the border. Why can we not have some pilot projects to experiment, to see what are the best ways of verifying the legal status of people for employment purposes--and welfare benefits, I might add? It is a false argument, to make perfection the enemy of the good. All this bill does is allow us to try some new things to see if they will work. Now what is wrong with that, Mr. President? I also heard an argument that it is going to cost the employers. Absolutely false. First of all, we made it very clear that the pilot projects cannot cost the employers anything and, secondly, one of the reasons we are trying to develop a new verification system is to decrease the cost of compliance. It is not easy to comply with the filling out of these I-9 forms. I know, I talked to a lot of employers who do it. It is a hassle. It will be much easier and less costly for them if we can implement a truly effective verification system. In the end, Mr. President, as I said, the verification system that is contemplated in this legislation is really a very minimal effort. It is a pilot project only. There is no assurance, as the original bill provided, that a nationwide system will ever be implemented. Such a system would only arise if we concluded that there are some really good ideas that come out of this pilot project, presumably with a majority of the House and Senate agreeing to implement that verification system with legislation. As I said, this can really only be called a beginning, but it is an important first step, and I think that the verification provisions of this bill, minimal as they are, should not be eliminated as the opponents suggest, but rather should be retained. Therefore, I urge my colleagues to vote against the motion to strike these important provisions from the bill. Mr. KENNEDY addressed the Chair.

Mr. KYL

Mr. KYL. Mr. President, I rise to comment on a provision that is included in the managers' amendment to S. 1664, the immigration reform bill. I am pleased to introduce this amendment, which will require verification of citizenship and/or immigration status for those applying for housing assistance. The applicant will have 30 days to provide proper documentation, or assistance will not be provided; applicants who have failed to provide documentation in that time will be taken off the waiting list. For those who already receive housing assistance, a verification of immigration status may be required at the annual recertification. Annual recertification for housing assistance is already required to determine income levels, and I would urge housing authorities to make good use of this option. If a housing authority requests verification, a household will have a 3-month period to obtain proper documentation or assistance will be terminated. Once the 3-month appeal is exhausted, a hearing may be granted in the fourth month. It is important to note that political refugees and asylum seekers are exempt from my proposal. The amendment I offer today passed the House immigration reform bill unanimously as part of the managers' amendment. In 1980, Congress passed the Housing and Community Development Act, which included a section prohibiting illegal aliens from receiving Federal housing assistance. In 1995, 15 years after the bill passed, HUD issued regulations to implement the 1980 changes. Its regulations, however, will do little to prohibit illegal aliens from continuing to receive taxpayer-supported housing. Under current regulations, illegal aliens can be placed on a waiting list and then granted housing assistance without having to provide documentation proving that they are eligible to receive the assistance. If a household is not eligible to continue receiving assistance currently it may appeal the decision in 3-month increments for up to 3 years. That is 3 years of taxpayer assistance for someone who may not be eligible to receive the funds. In my home State of Arizona, officials of the Maricopa Housing Authority (which is primarily Phoenix) told me that, by their estimates, fully 40 percent of the people receiving housing assistance in Maricopa County are illegal. In Maricopa County, there are 1,334 Section 8 units and 917 public housing units available. The waiting list for units has 6,556 on it. If 40 percent of the current occupants are illegal, that means 900 housing units should be made available to those citizens or legal immigrants waiting their turn. The problem in Arizona is dramatic; nationwide it is even more dramatic. In his report entitled ``The Net National Costs of Immigration,'' Dr. Donald Huddle of Rice University estimates that the cost of public housing provided to illegal immigrants in 1994 was roughly $500 million. Even President Clinton acknowledged that there is a problem. When proposing guidelines for public housing this year, he said most public housing residents have jobs and try to be good parents, and, that it is unfair to let lawbreakers ruin neighborhoods, especially since there are waiting lists to get into public housing. ``Public housing has never been a right,'' he said, but rather ``it has always been a privilege. The only people who deserve to live in public housing are those who live responsibly there and those who honor the rule of law.'' The public housing authorities, of course, are the entities that will have to implement any new policy we enact. I contacted the housing authorities of Tempe, Yuma, Tucson, and Maricopa County. Not one of the housing authorities disagreed with my proposal. They all said that once an applicant or resident checks on an affidavit that he/she is a legal citizen, they are not allowed to pursue the issue. The housing authorities currently only ask for verification of immigration status if the applicant checks that he/she is an immigrant. This amendment will curb the amount of housing assistance--paid for by taxpayers--going to illegal immigrants. It will return housing opportunities to the people who are here legally. I thank my colleagues for supporting this amendment.

Mr. KYL

Mr. KYL. Mr. President, I understand there is a bill due for its second reading.

Mr. KYL. Mr. President, I object to further proceedings on this matter at this time.

Mr. KYL

Mr. KYL. Mr. President, I suggest the absence of a quorum.

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

Mr. KYL

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