Jon Kyl

Mr. KYL

Mr. KYL. I appreciate the example that the Senator has cited. In recent years, on important votes, most Members of the House of Representatives are present. It is only in situations of illness or in situations where there has been a family emergency or something of that kind that Senators and Representatives do not care enough to be in the Chamber voting on very important national security matters. If it is the argument of the Senator from Maryland that this is such an important point that the national security of the United States of America is jeopardized but he suggests, on the other hand, that a lot of Members will not bother to be present to vote, I suggest the argument fails. On important votes, Representatives and Senators do their duty.

Mr. KYL. Of course.

Mr. KYL. Of course, I am happy to yield.

Mr. KYL. Mr. President, I would like to respond to a couple of comments that have been made and respond to the Senator from West Virginia, who I know makes this suggestion with the integrity of the Constitution and the institution and the defense of the United States very much in mind, and we all do. I served in the House of Representatives for 8 years on the Armed Services Committee and have been criticized for being a hawk, so I appreciate arguments that could negatively impact our ability to carry out our defense functions as much as anyone. But with all due respect to the distinguished Senator from West Virginia, I think this argument overstates a potential problem. In fact, I think there is no potential problem. Essentially, what we are arguing about here in the U.S. Senate is the difference between 51 votes and 50 votes. And in the U.S. House of Representatives, it is the same 218 votes as would be required in any case to carry a majority issue if all of the Members are present and voting. So the only question is whether some Members may be absent or not voting and therefore you still have to have the constitutional majority of 218. In my experience, in very few instances did you not have, on the major, important votes, almost all of the Members present and voting.

Mr. KYL. Mr. President, has the Congress ever refused to fund an ongoing military operation of the United States? Not to my knowledge.

Mr. KYL. Mr. President, I know that we have some additional time. I would be happy to have the colloquy continue on our time, if that is the preference.

Mr. KYL. Mr. President, if it were.

Mr. KYL. The vote the Senator is talking about is to fund the strategic defense initiative, not a vote to support an ongoing military conflict or ongoing military operation. It simply has no relevance to the amendment that the Senator from Maryland is espousing.

Mr. KYL. Mr. President, no, no.

Mr. KYL

Mr. KYL. Mr. President, if I might, I would like to respond to the challenge of the Senator from Wisconsin very briefly before we hear the comments of the Senator from Minnesota.

Mr. KYL. I thank the Senator. I will challenge it in this way, without talking about all of the proposals in the Contract With America. One of the key proposals in the Contract With America is to reverse part of the tax increase, the largest tax increase in the history of this country, that raised a tax on seniors. As a matter of fact, it says that if you are a wealthy senior making a grand sum of $34,000 a year, we are going to tax 85 percent of your Social Security. We think that is wrong and we think that tax increase should be repealed. That is part of the Contract With America. What the amendment of the Senator from Wisconsin suggests is that that tax cut ought to be off the table, that we should not consider any part of the Contract With America tax cuts, because it will make it too hard to balance the budget. Well, in some respects it does make it harder to balance the budget because you have to, in effect, pay for the tax cuts and the reductions called for in balancing the budget. But there are some of us who think the Federal Government spends far too much and we can achieve the savings to accomplish both goals. We also believe that it is important as a matter of public policy and as a commitment to the seniors of this country to repeal that pernicious tax increase that was part of the President's large tax increase of 2 years ago--this Social Security tax increase. In the last several days, a lot of Members--particularly from the other side--were in the body here proposing that we protect seniors by taking Social Security off budget. ``We cannot allow the balanced budget amendment to hurt seniors,'' they said. But they are willing to say that we should not help seniors by repealing this onerous 85- percent Social Security tax increase. It is a little bit like playing the first half of a ball game--of course, the Democratic party was in the majority 2 years ago; they had the House, the Senate, and the Presidency, so they had the power to ram that tax increase through--and then when the second half of the ball game starts and the Republicans are in control of the Senate and the House of Representatives and we would like to play in the game and repeal that tax increase that the President got through and that they supported, they say no, no, we are going to call an end to the ball game now. We are not going to play the second half. We are going to leave that tax increase in the law so that a wealthy senior who makes $34,000 a year--wealthy by that definition, of course--is going to be taxed 85 percent on Social Security. We say that is not right, that we should repeal that tax and that we can repeal that tax at the same time that we are beginning the process of balancing the budget. It will take 6 or 7 years, but we will get there and we will get there for one reason: Because the balanced budget amendment will force us to get there.

Mr. KYL

Mr. KYL. Mr. President, today, along with Senator Thurmond and other Senate Armed Services Committee members, I am introducing the Ballistic Missile Defense Revitalization Act of 1995, for the purpose of requiring the Secretary of Defense to develop for deployment, at the earliest practical date, national and theater ballistic missile defense systems. The companion legislation, section 201 of H.R. 7, has passed the House National Security Committee and will soon be voted on by the full House. I am submitting this legislation in an effort to get the Pentagon's current ballistic missile defense program back on track. Currently, and in the forseeable future, the United States continues to be woefully unprepared to cope with the threat of ballistic missile attack. This must end; and the bill I have introduced today will help end our vulnerability. Twelve years ago during his State of the Union Address, former President Ronald Reagan posed a simple challenge to America's scientific community: Find a way to make ballistic missiles impotent and obsolete. Because, he asked, ``Is it not better to save lives than to avenge them?'' With those words, President Reagan chartered one of the most important and controversial defense programs of the modern age--the strategic defense initiative. Through the years the SDI program was pushed and pulled in many different directions by both the Congress and administration. No push, however, equalled the shove the Clinton administration gave the program in 1993. With the elimination of key ballistic missile defense programs, the United States is now almost exclusively focused on theater ballistic missile defenses which, hopefully, will be able to defend our troops deployed overseas. But, this limited protection comes at the expense of the development and deployment of national missile defenses. Focusing only on theater defenses and the threat that is here and now, the administration completely ignores analysis from our Nation's best intelligence experts about the potential future threat to the continental United States. Intelligence experts have repeatedly warned that terrorism is on the rise, that the quest for nuclear weapons in the Third World has not subsided, and that Russian nuclear materials have shown up on the black market. But, the administration has failed to heed those warnings. Even the headlines lay bare the future vulnerability faced by the American people. The Washington Times recently carried the headline ``Yeltsin Can't Curtail Arms Spread.'' A Clinton administration official recently stated, ``The out-of- control weapons of mass destruction industries in Russia are the No. 1 national security issue facing the United States.'' China has sold to Saudi Arabia the CSS-2, a medium-range missile capable of reaching any place in Europe. Iran is desperately shopping the blackmarket for the technology to develop nuclear weapons, and Russia wants to sell to Iran. The threat is real. As former Director of the CIA, Bob Gates, said, ``History is not over. It was merely frozen and is now thawing with a vengeance.'' The CIA claims that 25 nations could acquire chemical, biological, and nuclear weapons by the end of the decade. That's 20 more than we have today. And, potentially, 20 nations that are lead by despots who see it as their duty to annihilate the United States. One of those leaders could be Abul Abbas, head of the Palestinian Liberation Front, who promised revenge on the United States for attacking Iraq. He said, ``Revenge takes 40 years. If not my son then the son of my son will kill you. Someday we will have missiles that can reach New York.'' In day-to-day terms, the proliferation of weapons of mass destruction among the Third World and the lack of defenses against those weapons could radically alter the manner in which the United States carries out its foreign policy. Would we have deployed 15,000 troops in Haiti if General Cedras had a weapon of mass destruction and a missile that could reach Florida? Probably not. Would America stand up for human rights and democracy in a starving nation if warlords had stolen nuclear weapons from Russia? Probably not. Would the Persian Gulf war have been fought if Hussein had succeeded in his quest, and acquired a deliverable nuclear weapon? Probably not. The world will be dramatically different in the 21st century. We cannot predict the future. We don't know who will do it or when it will happen. But, it will happen. Some day, someone, somewhere will launch a ballistic missile at the United States. When the warning comes, most Americans will believe that we will be able to defend ourselves. We can't. When the codes to launch a nuclear ballistic missile are entered and the keys are turned, there is no way to prevent the missile from reaching its target. We cannot intercept it. We cannot interfere with its guidance system. We cannot make it self-destruct. There is nothing we can do to stop even one single missile from reaching the United States of America. Nothing. The Clinton administration won't change the situation either. In fact, it's getting worse. The Clinton administration and congressional opponents have destroyed any future strategic capability to defend the United States and are on their way to destroying potential theater defenses as well. This is being done by their decision to clarify the ABM Treaty to define The ABM Treaty, recall, was signed in 1972 by Leonid Brezhnev and Richard Nixon. It shouldn't have been endorsed in 1972, and it shouldn't be reendorsed in 1995, 23 years later. It most certainly should not be redefined. The threat has changed. Technology has improved. And the Soviet Union doesn't even exist. But, the Clinton team insists on deliberately drawing a distinction between strategic and theater ballistic missiles, something that was left undefined in 1972. What the administration's negotiators have accomplished is not only to negotiate away strategic systems--which came as no surprise--but, also to negotiate away the only advanced theater systems in research and development in the United States. The Clinton administration has done this by arbitrarily placing speed limits on interceptors. If an interceptor breaks 3km/sec, it is defined as a strategic ABM interceptor and would not be deployable as a theater missile under the new terms of the ABM Treaty. Key theater defense systems, including THAAD and Navy Upper Tier, have capabilities beyond 3km/sec. and, thus, could not be further developed as designed. Over the last 2 years, the opponents have won significant budget cuts in ballistic missile defenses and have succeeded in canceling all space-based options. This is especially disturbing because space-based sensors and interceptors are critical to the success of any global strategic defense system. They provide worldwide, instanteous detection of and protection against missiles launched from anywhere in the world, and are both cheaper and more effective than their ground-based counterparts. During Operation Desert Shield, it took the United States 6 months and 400 airlifts to put in place the Patriot interceptors that were used to shoot down some of the Iraqi Scuds. With space-based interceptors, coverage would be instanteous. Yet, all systems capable of accomplishing that mission have been zeroed. Zeroed, because using space for military purposes is politically unpopular. This narrowmindedness and refusal to view space for what it is--the high frontier, boundless in opportunity--will have serious consequences for our future military successes. Like earlier forays into the air and the sea, the use of space will change the course of warfare. It's already happening. The United States should not deny itself that capability. The Ballistic Missile Defense Revitalization Act restores the focus of the BMD program to development and deployment of defenses capable of protecting a theater as well as the continental United States. This is an important step in establishing a firm basis for a national response to the growing threat from Third World ballistic missiles. In closing, I will note that 12 years of ballistic missile defense research has produced a series of successes. There is no longer any doubt that defense against ballistic missiles is feasible. It is my hope that the next few years of ballistic missile defense research will achieve President Reagan's original goal--to make nuclear weapons impotent and obsolete. The moral imperative is, as President Reagan said, that it is better to save lives than to avenge them.

Mr. KYL

Mr. KYL. Mr. President, may I say, I thank the Senator from Utah for his very kind remarks and look forward to continuing cooperating with him in passing this very important amendment.

Mr. KYL. Thank you, Mr. President. First, I want to compliment the Senator from Utah. His reference to the famous historian Alexander Tytler, I think, is an apt way to characterize the dilemma that faces our Nation today, because it is true that certain segments of our society have determined that they can vote themselves largess from the public treasury. And it was at that point that this famous British historian and many others have concluded a democracy would not thereafter long last. So the point that the Senator from Utah makes, I think, is critical to understanding the reasons for our support for a balanced budget amendment. I compliment him for that reference. Mr. President, by the end of this fiscal year, Congress will have added another $309 billion to the national debt. It will amount to a total of over $4.9 trillion, nearly $19,000 for every man, woman, and child in this country. Mr. President, $19,000 is more than the average Arizonan makes in a year. The $296.8 billion spent to service the debt last year amounted to over $1,100 per capita. That $1,100 is enough to pay the tuition of a young man or woman at Arizona State University for a year; enough for a healthy young person in a group plan to buy health insurance for an entire year. Mr. President, Congress and the President are debt addicts. The addiction is destroying the Nation. Almost 50 cents of every $1 paid in individual income taxes is required just to pay the interest on the national debt. That is 50 cents of lost opportunity for every income tax dollar paid by hard-working Americans. The overspending makes us feel good today, but Congress is ruining the economic future of generations to come. Congress has denied its addiction for too long. Many in this Chamber will continue to deny it, claiming that we can balance the budget without the discipline of a balanced budget amendment to the Constitution. That is just not going to happen. Just as it is difficult for drug and alcohol abusers to overcome their habit, it will not be easy for Congress to overcome its addiction. But we can either wait until the addiction destroys the country or we can take action now, suffer some pain, and get on the road to long-term recovery. The first step to recovery is to admit the problem and seek treatment for it, treatment in the form of a balanced budget amendment to the Constitution. House Joint Resolution 1 will establish the framework and impose the discipline that is so urgently needed to force Congress to put its fiscal house in order. It is the best and the only chance to send a balanced budget amendment to the States for ratification in the immediate future. Still, it is not the amendment I would have written, not the comprehensive treatment for the problem that I would have prescribed. House Joint Resolution 1 will force Congress there is more to responsible budgeting that just balancing the Nation's books. It also matters at what level Congress balances the books relative to the size of the Nation's economy. For example, gross national product now exceeds $6 trillion. But no one would be happy if Federal outlays were $6 trillion, and Federal tax revenues were $6 trillion, even though the budget would be balanced at $6 trillion. It matters how much the Government spends in taxes as much as it matters whether we balance the budget. In that regard, House Joint Resolution 1 represents the intensive care treatment, the step needed to stop the hemorrhaging, to ensure recovery over the long term. However, it is a Federal spending limit that is needed. The balanced budget spending limitation amendment, Senate Joint Resolution 3, which I introduced January 4, including a spending limit, requires a balanced budget and limits spending to 19 percent of the gross national product, which is roughly the level of revenue the Federal Government has collected over the last 40 years. Mr. President, I will refer to this chart to my right a couple of times during my presentation. But the first thing that you can see by examining the chart is that revenues which are characterized in blue on the chart at this level here, almost uniformly from 1955, denoted on this chart to 1995 here, are at the 19 percent level of gross national product or relative to gross domestic product, 19.5 percent. We can see if we drew a line at 19.5 percent, that blue line is a very close approximation. That is how much Americans are historically willing to pay into the Treasury. Through bad times and good economically, through Democrat Presidents and Republican Presidents, through times of tax increases and times of tax cuts, it does not matter. It stabilizes very quickly at about 19 percent of the gross national product. That is how much Americans are willing to pay in revenues. When we say ``willing to pay,'' what do we mean? Just quickly, by way of example, when the Federal Government increases tax rates, what do people do? Do they say, OK, we will simply pay more in taxes, or do they begin to adjust their behavior? Of course, we know the answer. They seek tax shelters. They do other things with their incomes so they do not have to pay as much in Federal income taxes. That is why, even though we increase income tax rates, revenue stabilizes at about that level of 19 percent. What happens when we cut tax rates? Do revenues go down? No. We know that that stimulates the economy. It produces more gross national product. It produces more income, and even at a lower rate of income tax, more revenue is generated by virtue of that growing economy. It is a lot like the grocery store putting things on sale. They do not do it to lose money. They know the volume will make up for the reduction of prices; in fact, more than make up for it. That is why you see so many sales. The bottom line is Americans are willing to pay 19 percent of the gross national product in income taxes. The way to balance the Federal budget is to limit spending to that level of revenues. As we see the other line, the line that is represented in red, represents the spending as a percent of the gross domestic product on this chart. We can see that 20 or 30 years ago, it was roughly the equivalent of the revenues in the country, whereas in more recent years, the lines, two lines have begun to separate. Today, we have spending in the neighborhood of 22 percent or 23 percent of the gross domestic product, with revenues at 19 percent. That is the gap that needs to be closed with a balanced budget amendment. Limit spending and there is no need to consider tax increases, obviously. Congress would not be allowed to spend the additional revenue it raised, and knowing politicians as I do, they will not raise taxes just for the heck of it. Link Federal spending to economic growth as measured by the gross national product and an incentive is created for Congress to promote progrowth economic policies. The more the economy grows, the more Congress is allowed to spend, but always proportionate to the size of the economy. A spending limitation has a further advantage. It reflects the fact that the economy has already imposed an effective limit on revenues relative to GNP. As I said before, despite tax increases and tax cuts, recessions and expansions, and fiscal policies pursued by Presidents of both political parties, revenues as a share of GNP have fluctuated only around a relatively narrow band, between 18 and 20 percent for the last generation. As I said, the primary reason for that is because the Tax Code changes people's behavior. That is why the debate about raising taxes is less important than the debate about limiting spending. Lower tax rates stimulate the economy, resulting in more taxable income and transactions and more revenue to the Treasury. Higher tax rates discourage work production, savings, and investment, so there is ultimately less economic activity to tax. Revenues amounted to about 19 percent of GNP when the top marginal income tax rate was in the 90 percent range in the 1950's. They amounted to just under 19 percent of GNP when the top marginal rate was in the 28 percent range in the 1980's. Revenues amounted to about 19 percent of GNP in the 1970's, during one of the longest postwar contractions and during the peacetime expansion of the 1980's. Since revenues remained relatively constant, 19 percent of GNP, the significance of our Nation's tax policy is how Congress taxes, not how much it can tax. The key is whether tax policy fosters economic growth and opportunity, measured in terms of GNP, or results in a smaller and weaker economy. In other words, 19 percent of a larger GNP represents more revenue to the Treasury than 19 percent of a smaller GNP. The benefit of writing a spending limitation into the balanced budget amendment is that it would preclude futile attempts by Congress to balance the budget by raising taxes. Raising taxes will merely impede economic growth and harm the Nation's standard of living. A spending limitation provides Congress with the guidance at the outset that there is really only one way to balance the budget, and that is by cutting Government spending. While my preference is that a spending limit be included in the constitutional balanced budget amendment, I believe the issue can only be addressed, if need be, in subsequent implementing or enforcement legislation. The quest for the perfect in this case should not be an excuse to defeat the very good. The stakes are too high in terms of the mountain of additional debt Congress is passing on to future generations to miss yet another opportunity to send a balanced budget amendment to the States for ratification. Of course, what the Senate has concluded to do is to take up the resolution which was adopted by the House of Representatives by 300 votes, rather than to bring forth our own version of a balanced budget amendment. The reason: To ensure that we can secure passage by both Houses of the same provision and, thus, pass it on to the States at the earliest possible stage. So if there is insufficient support for inclusion of a spending limit in the amendment itself, I believe Congress should approve House Journal Resolution 1, which we took from the House of Representatives last week and then turn to consideration of the Federal spending limit as a means of implementing the balanced budget requirement. Mr. President, the Senate has an historic opportunity to ensure that we begin to invest in the future of the country, not just continue to borrow from it. That will take courage, the courage to say no to special interests who benefit from the status quo. We should pass the balanced budget amendment. We should pass it in the form that it passed the House of Representatives. We should then send it on to the States for their ratification, and then we should make a couple of very important points to the States. Point No. 1, we will not pass on the costs of a high-spending Congress to the States as our way of balancing the budget. We have a plan for achieving a balanced budget, and that plan, I hope, will be adherence to a legislatively adopted implementation guideline of spending limits. Those spending limits could be tied to the gross national product, as I proposed. that will get us to the 19 percent we need to be at within the 6 or 7 years that it will take to adopt a balanced budget amendment. That is a rational, disciplined, proper way to achieve the balanced budget amendment. Those who say that we should propose our plan before we adopt the discipline of a constitutional balanced budget amendment overlook the fact that we can impose an implementation plan without all of the specifics of every single budget. There is not a one of us here who knows how we are going to balance our own household budget 3 years from now, but we sure enough know we are committing ourselves to the fiscal discipline of doing it. We also understand the way we have to do it is to conform our spending to our income, and that is what the Congress would be doing by immediately adopting an implementation plan to achieve a balanced budget through spending limitation. So when our colleague from Utah, the chairman of the Judiciary Committee, Senator Hatch, proudly proclaims that the balanced budget amendment has passed the U.S. Senate, I think the very next thing we should do is to say, ``And here is how we are going to do it so that you States who are considering whether to adopt it or not, to ratify it, will know we mean business back here in Congress, we don't mean to pass the costs on to you.'' That is the second part of the two-part commitment we made to the States. The first part we already adopted as legislation prohibiting unfunded mandates. So with those kinds of commitments from the U.S. Congress, we can be assured that the States will adopt or ratify a balanced budget amendment to the Constitution and finally put this country on the road to fiscal discipline. Mr. President, I thank you and certainly thank the chairman of the Judiciary Committee for the many years of hard work he has put into this very important endeavor. Mr. HATCH addressed the Chair.

Mr. KYL

Mr. KYL. Mr. President, I thank the Chair and the Senator from Vermont for accommodating my request. (The remarks of Mr. Kyl pertaining to the introduction of legislation are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. KYL

Mr. KYL. Mr. President, nearly 600 illegal immigrants are arrested every day in Nogales, AZ. These statistics will most likely set an all- time illegal immigrant apprehension arrest record for Arizona. Ensuring that adequate resources are allocated to stop these aliens at the border is the most important step we can take toward halting illegal immigration in this country. Renegotiating prison transfer treaties is another important step and one that will free up Federal and State dollars to go toward effective border control. We are a land of legal immigrants and we should be proud to be and say so. But, no American, foreign-born or U.S.-born, believes we should be a land of criminal and illegal immigrants. The Criminal Alien Transfer and Border Enforcement Act will provide a necessary step to ensuring that we do not become a nation of illegal and criminal aliens. Mr. President, I encourage my colleagues to join me in urging the President to renegotiate our Nation's bilateral prison transfer treaties and to cosponsor this bill. I ask unanimous consent that this bill be printed in the Record.

Mr. KYL. Mr. President, today, I am introducing the Criminal Alien Transfer and Border Enforcement Act of 1995, legislation to make it easier to return criminal aliens back to their country of citizenship to serve out the remainder of their sentences. I was an original cosponsor of similar legislation introduced in the House last year by Representative Steve Horn of California. Representative Horn reintroduced this legislation in the 104th Congress on January 18. His hard work in this area is very much appreciated. The Criminal Alien Transfer and Border Enforcement Act advises the President to renegotiate bilateral prison transfer treaties with countries which have large numbers of alien criminals in U.S. prisons. The elimination of any requirement of prisoner consent would be a primary focus of the renegotiation. As an incentive to renegotiate their treaties, this bill would allow foreign governments that renegotiate and comply with a new treaty to send their law enforcement personnel to the Border Patrol and Customs Service academies where an integrated approach to drug interdiction and border management would be developed. The tremendous financial burden that the Federal Government and States incur to imprison criminal aliens continues to grow. The Bureau of Prisons, for example, estimates that the incarceration of criminal aliens in U.S. and State prisons costs U.S. taxpayers approximately $1.2 billion a year. Criminal aliens make up about 24 percent of the total 91,000 Federal prison population. At a cost of $20,803 per Federal prisoner, taxpayers from Maine to California to Arizona are footing the bill to incarcerate these criminals. A national approach to returning these criminal aliens home and eliminating these costs must be developed. On a State level, Arizona knows all too well about these costs. According to the Arizona Department of Corrections, the number of criminal aliens in Arizona State prisons has increased from 596 in 1984 to 2,066 as of December 31, 1994, a 250-percent increase. Criminal aliens comprise 10.4 percent of Arizona's inmate population; that compares to a State criminal alien inmate population of 4 percent nationally. Those 2,066 criminals cost Arizona taxpayers $16,020 each, or nearly $40 million in total last year. The logical way to reduce these costs would be to work out an agreement where a country would except the responsibility for taking its own citizens back and ensuring that the prison term is completed before the individual is released back into his or her own country. But, current bilateral prison transfer treaties allow criminal aliens to choose whether they will serve time in the United States or their country of citizenship. As a result, the criminal can circumvent any agreement worked out between two countries or a State and foreign government. This must change. Our Nation's citizens are shocked when they hear that this is how our Nation's prison transfer treaties work. For example, in June of 1994 I had a constituent from Phoenix write me with some good suggestions about immigration reform. In the letter he said, ``Can you enlighten me as to whether or not we have a law on the books commit and are convicted of felonies? * * * [Someone] told me that once the alien is convicted of a felony, he is immediately deported to the country of origin with no appeals process and no bail.'' My answer to him was that this is how it should work but, because of the way our bilateral prison transfer treaties are written, I reemphasize, criminal aliens choose whether or not they are deported to their own country to serve out their sentences. Arizona has been particularly negatively impacted by this aspect of prison transfer treaties, specifically the United States-Mexico Prison Transfer Treaty. Gov. Fife Symington and Department of Corrections Director Sam Lewis have been working with Mexican authorities and the State Department to return some Mexican inmates to serve their sentences in Mexico. But, without the elimination of the prisoner consent provision of the outdated United States-Mexico Prison Transfer Treaty, the likelihood of their return is minimal. ``Of those who we have determined to be eligible under the present [voluntary repatriation] criteria, 5 percent or less have demonstrated any willingness to return [to Mexico],'' said DOC Director Lewis in a recent conversation. Something is clearly wrong when States such as Arizona, which have ideas about how to reduce the burden of incarcerating illegal aliens, are kept from doing so because the criminal does not like the idea of serving time in the prison system of his or her country. Mr. President, this problem is not going away. The INS estimates that as of October 1992, approximately 3.4 million illegal aliens were in this country and, according to INS, that number is growing by about 300,000 yearly. In the Tucson border sector of Arizona alone, illegal immigrant apprehensions for the month of January are up 80 percent over the same period last year. I ask unanimous consent that a table be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I make this statement on behalf of the Senator from Wyoming, the chairman of the Immigration Subcommittee of the Judiciary Committee, relating to the Boxer amendment which would require an advisory commission report on immigration-related unfunded Federal mandates. Mr. President, I have discussed this amendment No. 201 with Senator Simpson, who as I said is chairman of the Immigration Subcommittee. As he noted, the issue of the cost of illegal or legal immigrants to State and local governments is very complex. As a matter of fact, it is not the result of a mandate by the Federal Government but, rather, because the Federal Government has failed to carry out its obligations to secure our international borders. The congressionally established Commission on Immigration Reform is examining this issue at the present time. The Subcommittee on Immigration will be looking at this issue in its oversight capacity. I strongly urge my colleagues to table amendment No. 201, and, if necessary, the Congress can deal with it later when some of these complexities are resolved. Senator Simpson has assured me that the Subcommittee on Immigration will hold hearings on various immigration reform proposals, and it is clear that this issue will be raised and considered in these hearings. I might add, Mr. President, that as a Senator from a border State, this is an issue of vital concern to me and to my State. Senator Simpson has noted that the Congress has not ignored the costs to State and local governments resulting from immigration legislation. In the 1986 Immigration Reform and Control Act, Congress included $4 billion for assistance to States that were impacted by the legalization program in that assistance where immigration legislation was likely to create new costs for State and local governments then, and Senator Simpson assures me he would support similar assistance in the future. To require the advisory commission to provide a report and a plan at the same time the Commission on Immigration Reform is examining and preparing to report on the same issue would be duplicative and unnecessary. So I suggest, Mr. President, that we wait for the findings and report of the Commission on Immigration Reform this spring and not require this advisory commission to go over the same ground as would be called for in amendment No. 201. I urge my colleagues when this amendment is considered by the Senate to table it. I would again indicate that this is a reflection of the Senator from Wyoming [Mr. Simpson]. Amendment No. 213 (Purpose: To provide a reporting and review procedure for agencies that receive insufficient funding to carry out a Federal mandate) Mr. BYRD addressed the Chair.

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

Mr. KYL. I ask unanimous consent to speak on amendment No. 201 offered by the Senator from California [Mrs. Boxer].

Mr. KYL

Mr. KYL. Mr. President, I would like to turn for a moment to the subject of a balanced budget amendment in this overall context that we are debating unfunded mandates, and soon we will be debating the balanced budget amendment because the Joint Economic Committee held a hearing this morning and took testimony from both House and Senate Members on their proposals for achieving this goal. When we talk about the Federal Government achieving a balanced budget without passing the costs on to the State and local governments in the form of unfunded mandates, the question of course, arises, how are we going to do it? In fact, some people, some Members of the Senate, have challenged those of us who support a balanced budget amendment as to how it is going to be done. They say be specific. Of course, we have said, ``You say we don't need a balanced budget to achieve balance. So why don't you tell us how you would do it? Why don't you be specific? You have had 40 years in the case of the House of Representatives and you have not gotten the job done. Give us a chance and we will do it.'' First, we want to establish the discipline that requires us to do it. Assume we had passed the balanced budget amendment in the House and it is the version that did not pass but almost passed the House of Representatives and, we believe, has the votes to pass in the Senate now and will pass the House of Representatives. That merely requires that the Federal Government balance its budget. What then? We know that there are people in both the House and Senate who propose that we also limit taxes. I am for a three-fifths vote to raise taxes. That would put an additional constraint on the House and Senate and would make it more difficult for us to try to achieve a balanced budget by raising taxes. The fact is that has never worked. In March of 1993, W. Kirk Hauser wrote an article, an op-ed piece, in the Wall Street Journal in which he noted that over the last 30 or 40 years revenues to the Federal Treasury have been almost static at about 19 percent of the gross national product or 19.5 percent of the gross domestic product. It has ranged very little, and it does not matter whether we try to raise taxes or lower taxes or whether we have a Democrat President or a Republican President or we were in war or good times or bad times. None of that mattered. Over a few weeks revenues would fluctuate a little bit. But very soon they would stabilize at 19.5 percent of the GDP. In fact, when we tried to raise tax rates in order to bring in more revenue, for a very short period of time more revenue came in. Then, as people changed their behavior, it settled right back into 19 percent of GNP. When we lowered tax rates momentarily there was a reduction in revenues. But very quickly the increased economic activity that resulted from those lower rates resulted in more taxes to the Federal Treasury even though at a lower rate. How could that be? It is like a store that has a sale. When you reduce the prices you do not necessarily reduce income. You bring more people into the store. You sell more goods, and you can make more money than if you price the goods at a very high price. It is the same thing with revenues to the Treasury. So we reduced tax rates. We have not reduced revenues to the Treasury. They have stabilized at 19 percent of the gross national product. The lesson to be learned from this is this: People change their behavior based upon governmental actions. You cannot expect people to just sit there and take it when the Government does things to them. The result is that if we limited spending to 19 percent of the gross national product we would be limiting spending to the historic level that the American people have been willing to pay in the form of Federal tax revenues. We would also be balancing the budget because our spending would be the same as our revenues. That is what a balanced budget is all about. The other advantages to this kind of approach--and I have to confess that the very first bill that I introduced as a Member of the House of Representatives was a Federal spending limit as the way to balance the budget and it was also the very first bill that I introduced here in the U.S. Senate; a bill that would require a balanced budget and achieve that by limiting spending There are additional advantages to that approach. In addition to spending the historic amount that Americans have been willing to pay to the Federal Government, we would also be achieving another extraordinarily important objective. Mr. President, I cannot stress this point too much. People who say that all we have to do is have a requirement for a balanced budget are, in effect, saying that we could balance the budget at twice what it is today, or three times as much or four times as much as long as we bring in the revenues to pay for that. Would anybody support that? I think not. We have a $6 trillion economy right now. Would anybody suggest that we should have a $6 trillion Government budget and try to raise the money to pay for that budget? We would be in balance if we could do it. But, of course, that would be extraordinarily detrimental to our standard of living, to our economy, and nobody, I think, suggests that there should be an unlimited amount of money that could be spent so long as we raise it. So it matters as much where we balance that budget as the fact that we require it be balanced. We need to balance it at a sensible level. I suggest that the level is again a historic amount that Americans have been willing to pay to the Treasury, 19 percent of the gross national product. That is where we need to balance the budget. It also matters how we try to balance the budget. Did we raise more revenues by raising tax rates? The answer is no, because people change their behavior. The luxury tax of a few years ago is a perfect example. Congress thought that by raising the rates on yachts and jewelry, expensive cars, we would rake in more money. Of course, rich people are not necessarily dumb. And they just stopped buying the yachts and the jewelry and the cars. So guess what? The tax revenue did not come in. And there was another very serious unintended consequence. The people who made the yachts, for example, lost their jobs because people stopped buying them. You price yourself out of the market in the private market. Government can do the same thing in the case of tax rates. So it matters how we achieve a balanced budget, and you cannot do it by artificially raising tax rates. No. You need to do it the simple, straightforward way by getting at the heart of the problem. What is our problem? The problem is Congress spends too much. Is there any other problem? Why are we out of balance? It is because we spend too much. So the simple and straightforward way to deal with that problem is by limiting Federal spending. There is another very important reason why I believe that a Federal balanced budget amendment and spending limit makes a lot of sense. We need to do things to stimulate economic growth, to provide more jobs in this country. Fortunately, our unemployment rates are low right now. But it is a constant challenge, as the Secretary of Labor would attest, it is a constant challenge for us to keep this economy growing, to keep providing jobs so that future generations will have the same kind of standard of living that we have been able to enjoy. You do not do that by sucking all of the money out of the private sector for Government revenues. I have never understood how you make people better off by taking more of their hard-earned tax dollars. It is like the old practice of bleeding a patient with leeches in order to make the patient healthy. They figured out after a while that taking a patient's blood did not make him more healthy. The same thing is true with extracting more tax dollars. If you leave those dollars in people's pockets, they invest them, they spend them on things that are important in their lives; they will send their kids to college, they will put some money in a savings account. By the way, what happens if they buy a stock or bond? Say they take a little of that and put it into a money market account --that is a stock; it is money that goes to a corporation which needs the money to expand, to build a new plant, let us say. Then they build a new plant. Plants are empty, so what do they do? They hire people to work in them. Putting money to work in the private sector is capitalism. That is what our economy and a free market is all about. If you leave that money in the private sector, we will have a growing economy. Congress too often has pursued policies that are inimical to economic growth and to sound market principles. I believe if we had a spending limit requirement on a balanced budget amendment, what we would find is--particularly if we tied it to a percent of the gross national product--that Congress all of a sudden got real smart about economic policy. If we said--as my amendment says--Congress can only spend 19 percent of the gross national product, what would Congress' incentive be with respect to the gross national product? It would be to pursue policies to grow the gross national product, because the more the gross national product grew, the more the Congress could spend. If the gross national product grew $100 billion, Congress could spend $19 billion more. What does Congress love to do? It loves to spend money. Let us take advantage of a little human nature here. If we want Congress to promote sound economic policies, to help the economy grow, as measured by the gross national product, we say to the Congress, you can have more money to spend if the economy grows. So why do you not do some things to help it grow? What are things we can do? We can reduce certain tax rates that are too high to promote economic growth. Studies show that there is $7 trillion locked up in our economy because of our capital gains tax rates today. That means if we were able to reduce the capital gains tax rates, people would say: Now there is incentive for me to turn this piece of property over that I have been holding all these years. I inherited this from Grandma Jones, and we have held onto it because if we sold it, we would have to pay a huge tax on it. But we could use the money and would like to invest it in something. With reducing the capital gains tax rates, that family might make the decision to sell that piece of land, to reap the liquid result, the liquid capital from the sale, and invest that into something else. Economists believe that this $7 trillion that is thus locked up could be freed by a reduction of capital gains tax rates in a way that would generate huge economic growth because of the turnover of this capital in our market. So there is additional incentive to balance the budget by limiting Federal spending as a percent of the gross national product. I believe it would cause Congress to be more responsible in the way we deal with our economy. Mr. President, these are just a few thoughts that I have regarding my proposal to limit Federal spending as a percent of the gross national product. I realize that this is too tough and, in a sense, it is too sensible, and that it is going to be easier to get the votes to pass a balanced budget amendment if we are not too tight, if we are not too tough, because some people have a view that we should be able to raise taxes, for example. And so the only version that probably has a chance of passing is one that simply requires us to balance the budget. It does not set the level or tell us how to do it. It does not provide incentives to help the economy grow. But we can achieve those objectives by the way we implement the balanced budget amendment. In conclusion, what I am going to be suggesting here very soon is that as soon as the balanced budget amendment is adopted, we need to come in behind that, in the wake of the passage of the balanced budget amendment, with implementing legislation. A lot of our friends have said, ``How are you going to do it? Tell us how.'' Here is how I would do it. I think if we can provide implementing legislation that limits Federal spending, we can guarantee that we are going to achieve the objective in the right way. There will have to be enforcement provisions, and we will still have to make the tough, specific decisions as to exactly which programs in which to reduce spending, for example. But in terms of an outline of how we will achieve the objective, I think this spending limitation approach is exactly the right approach. So while I would support the balanced budget amendment that does not have the spending limit requirement in it--because that is all I think we can get passed--I think we have to come in right behind that with a proposal to constitutional balanced budget amendment. Of course, as a mere statutory program, Congress can override it. We can always unpass what we just passed. But at least I think it sets forth a blueprint, a guideline for achieving the objective. Finally, Mr. President, I think almost all of us agree that if we pass this balanced budget amendment and send it to the States for ratification, we have to begin achieving that balanced budget today. We have to go back to last year's budget and see if there is anything in the appropriations we passed last year that we can pull back--money that we can save. We need to look at this year's budget as the first of the budgets that gets us on the glidepath to a balanced budget, and set the outside limit of perhaps 7 years. But we probably ought to try to do it in a shorter period, if we can, so that when the balanced budget amendment has finally been ratified by all of the States, it will not be an impossible task for us; so that we will have already started the process and each year intervening will have brought that budget deficit down another ratchet. If we do that, in the last couple of years when we actually have to do it as a constitutional requirement, it will be an achievable objective, and in the last year or two, we will be able to make the savings and limit spending in such a way that we can achieve that balanced budget at the time it is called for in the constitutional amendment. So these are some of the things we are going to have to think about as the balanced budget debate begins to unfold. I think it is important to at least begin to think about them in the context of the debate we are having on unfunded mandates, because as the Governors and State legislators that have to deal with the balanced budget amendment tell us, they know we have to mean business and get on with the balanced budget amendment. At this point, I suggest the absence of a quorum.

Mr. KYL

Mr. KYL. Mr. President, the debate we are engaged in, and have been for 8 days now, is important not only because the American people are tired of the Federal Government telling them what to do--and, in the case of State and local governments and tribal governments, having the additional burden of then having to pay for those Federal mandates. It is important, therefore, not only because the unfunded mandates legislation would put a stop to that in the future and say that from now on the Federal Government is going to have to identify the cost of mandates on the private sector and is going to have to pay for the mandates it imposes on the public sector--it is important not only for that reason, but it is also important because when we pass the balanced budget amendment and send that to the States for their ratification, the State legislatures and the Governors are going to be considering whether or not to ratify that amendment. One of the concerns that they are going to have is that the Federal Government might attempt to achieve its requirement of meeting a balanced budget by simply foisting the costs onto the State and local governments and tribal governments. I would add as a footnote that in my State of Arizona the business of tribal governments is significant, and they have to bear the burden of some of these mandates. So they are all concerned about this. In the case of the people in the State legislature, they suggested to me that if we want the balanced budget amendment to be ratified by the State legislatures, we had better make it very clear that the Federal Government is not going to attempt to achieve that balance by laying all of these mandates on State and local governments. We might have done that in the case of the health care legislation that, I think fortunately, was killed last year. One of my friends back in Arizona called it ``justifiable homicide.'' I am delighted we did not pass the kind of bill that was originally proposed because it would have created a huge mandate on the private sector. In fact, it was called employer mandates. And employers would have been required to pay substantial amounts of money. In some cases I believe there were situations where they really could not afford it, which is the reason they do not provide that health care today. So both for the public and private sectors it is important that the Government not impose these mandates. But as I said, it is important not only in its own right but because of the connection to the balanced budget amount.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent I be allowed to address the Senate in morning business.

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

Mr. KYL

Mr. KYL. Mr. President, as an original cosponsor of S. 1, the Unfunded Mandate Reform Act, I rise in strong support of this legislation. The unfunded mandate reform bill is not only important in its own right, but it is also important to ensure that the balanced budget amendment to the Constitution--an amendment which I believe will be approved by the Senate and House of Representatives in the coming weeks--will be implemented as the American people intend. The ideal balanced budget amendment would do more than just require a balanced budget. It would, in my view, limit Federal spending as well as the ability of the Federal Government to impose unfunded mandates. As the Washington Times editorialized recently, ``the real problem,'' referring to the budget deficit, ``is lawmakers' dipsomaniacal spending habits. This is what we must control, one way or another.'' The Times went on to note my balanced budget/spending limitation amendment Senate Joint Resolution 3, which includes an explicit spending limitation, saying, ``this version has obvious appeal--it is simple and straightforward,'' and, as such, that ``a spending limit may do the job better than a tax limit.'' Mr. President, I would assert that a spending limit is more than just ``simple and straightforward.'' Whether or not a spending limitation is included in the balanced budget amendment, the only way to comply with a balanced budget requirement will be to limit Federal spending. Some will no doubt argue that tax increases must be part of the solution. [[Page S1147]] But I believe that, if they were, the budget would be balanced by now. We have had record-setting tax increases in 1990 and 1993. The cold fact is, however, that tax increases do not work--will not work--because tax increases ultimately change people's behavior. Higher tax rates discourage work, production, investment, and savings, so there is less economic activity to tax and less revenue than expected to the Treasury. Lower tax revenues, on the other hand, encourage people to work, produce, save, and invest, so more revenue flows to the Treasury as a result of increased economic activity. As pointed out in a column which appeared in the Wall Street Journal in March 1993 by W. Kurt Hauser, a member of the board of overseers of the Hoover Institution, ``no matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5 percent of gross domestic product.'' Hauser went on to write that, ``if history is any guide higher taxes will not increase Government's take as a percentage of the economy.'' Hauser's observation is borne out in President Clinton's last budget, which reported revenues fluctuating around a relatively narrow band of about 18 to 20 percent of GDP for the last 40 years. That is despite tax rate increases and tax cuts, bull and bear markets, and Presidents of both political parties. Over that same period, Federal spending has risen from 17.8 percent of GDP in 1955 to more than 23 percent in 1991 and 1992, and now stands at about 22.5 percent. It is Federal spending that is the problem. Congress spends too much, and it will never be able to balance the Federal budget until it constrains spending. With that reality in mind, I believe the ideal balanced budget amendment to the Constitution ought to include an explicit spending limitation. We will have that debate in the coming weeks. I suspect that the votes aren't there for an explicit spending or tax limitation in the balanced budget amendment, but as legislation to implement and enforce a balanced budget amendment is considered in the months ahead, I will vigorously pursue the issue. Today, however, we are considering a second component of what it would take to implement what I consider to be the ideal balanced budget amendment. S. 1 represents the first step toward resolving the problem of unfunded Federal mandates. Without such legislation, a balanced budget amendment might merely encourage Congress to shift the burden of programs and policies it is unable to fund to State, local and tribal governments, as well as the private sector. That shifting of the burden is not what the American people intended when they overwhelmingly voted for change--and less government--last November. Mr. President, I said that S. 1 represents a first step, a first step because it only applies to future mandates. It does not address the problem of existing mandates, which already impose a significant burden on State, local and tribal governments and the private sector. And, it is the burden of existing mandates that has so enraged the American people. I believe they care less about this Congress relieving them of future mandates which we have yet to conceive of or impose, than they do about relieving them of the burden they currently bear, the morass of Federal mandates and regulations that are strangling our economy. According to the Clinton adminstration's own National Performance Review, the cost of private sector compliance with Federal regulations is at least $430 billion a year, or 9 percent of our GDP. Other economists believe the regulatory burden imposed on the private sector and State, local and tribal governments is between $500 to $850 billion per year, more than the amount collected in personal income taxes in 1994. Add to that the indirect and cumulative productivity losses from Federal regulations, and the annual costs could double. Let me talk for a moment about some of the existing mandates, which are discussed in a superb report prepared by the Goldwater Institute in Arizona, a report aptly titled, ``Summary Orders from Distant Gods.'' Dr. Douglas Munro, in a preface to the Institute's report, characterized the problem of unfunded mandates very succinctly: that Federal mandating is rooted in the idea ``that the Federal Government's solutions to all problems are preordained to be superior to others.'' They are not. In Arizona, for example, the Salt river is fully regulated and monitored--at State expense--to be in compliance with standards set by the Clean Water Act for fishing and swimming. That is despite the fact that the Salt River is usually dry for 50 of the 52 weeks of the year, and when it's running, people do not fish or swim in it. Citing testimony before the Arizona State Legislature by the president of the Water Utility Association of Arizona, Paul Gardner, the Goldwater Institute reports that as many as 200 to 500 small water businesses in the State are expected to go bankrupt over the next 5 years as a result of the costs of testing for contaminants which are very rarely present. The director of the Arizona Department of Environmental Quality, Ed Fox, further testified to the problems faced by small water companies under the Safe Drinking Water Act [SDWA], noting that those small companies must test for an additional 25 or so EPA-selected pollutants every 3 years, regardless of whether or not any pollutants are ever found as part of the regular testing process. But, the access by those small companies to the funds necessary to conduct such testing is severely limited. According to Goldwater Institute data, the State of Arizona will pay at least $184 million in direct, unfunded mandate costs. Add to this the $693 million that the State will spend to secure matching grants and the $145 million in maintenance of effort requirements, and the result is about $1.2 billion, or 15 percent of Arizona own-source revenue is directly tied to Federal directives. Probably the largest portion of costs to the State of Arizona--49.5 percent of the total--are associated with the provision of services to, or incarceration of, undocumented aliens. This, of course, is not the result of a Federal mandate per se, but rather the Federal Government's failure to adequately perform its responsibility to control the Nation's borders. That, in effect, has the same effect as an unfunded Federal mandate. That the Federal Government does not do its job foists additional costs on other levels of Government to fill the gap. According to the National Conference of State Legislatures [NCSL], there are now 192 operative legislative mandates, an all-time high. The overall cost of mandates to the State, local and tribal governments is hard to pinpoint, but a report by the NCSL put estimates at between $15 and $500 billion. Price-Waterhouse reports aggregate fiscal year 1993 costs for just 10 mandates--mainly environmental--at over $54 million for just the 4 Arizona cities of Gilbert, Phoenix, Scottsdale, and Tucson. I would emphasize, as the Arizona Republic did in a January 11 editorial, that resolving the problem of unfunded mandates does not ``mean, say, that environmental regulations would not be approved. Just that Congress will have to prioritize its spending to fund them.'' Most of what S. 1 addresses relates to mandates imposed on State, local and tribal governments, but the burden of unfunded mandates is borne by the private sector as well. S. 1 merely requires reporting of the costs to the private sector of future mandates. It does nothing to make it harder for Congress to impose future mandates on the private sector except document their cost, nor does it require the Federal Government to help offset their cost. That is why I believe S. 1 really represents just a first step. It is what is doable now, but bolder steps must follow to satisfy the public's demand for real change, for relief from the crushing burden of Federal mandates and regulations. If the Federal Government's solutions to problems were indeed superior, then the Federal Government should be willing to back those solutions, those mandates--future as well as existing mandates--with the funds to implement them. That Congress has not, at least until now, been willing to fund the mandates it imposes on State, local and tribal governments, or the private sector, illustrates that either Congress has found a convenient way to elude budget constraints while still imposing its will on others, or that it does not [[Page S1148]] believe the mandates are important enough to back them with Federal dollars. Responsible budgeting is a matter of prioritizing. If the functions that the Federal Government mandates on others are truly important, then they should be of high enough priority to warrant a commitment of Federal funds to pay for them. Congress and the President must be constrained in the amount of taxpayer dollars they are able to commit, either directly or indirectly in the form of unfunded mandates. That is the essence of responsible budgeting, and indeed responsible government. Mr. President, we should support S. 1 now and immediately go to work to protect the private sector from Government mandates and determine effective ways to end inappropriate existing mandates on State, local and tribal governments and the private sector.