Daniel Moynihan

Mr. MOYNIHAN

Mr. MOYNIHAN. I wish to join my esteemed chairman, the Senator from Delaware, in stating that, indeed, this legislation is necessary. It is in fact urgent, a fact which in and of itself speaks to the awkwardness with which Congress has approached the most elemental of duties, which is to ensure the full faith and credit of the U.S. Government. Here we are in a fiscal year that began October 1. We can look out the Senate doors and there in the park between here and the Supreme Court we see spring rains; we see spring buds; the daffodils are all but upon us; and we still have not extended the debt ceiling, which we will have to do. We are now in an extraordinary pattern of putting in jeopardy the world's primary currency, the world's largest economy but also the world's largest debtor nation. The full faith and credit of the United States is of interest not just to Americans but to the world itself. I hope we will, indeed, make this extension. I believe my esteemed chairman placed Mr. Rubin's letter in the Record. Mr. Rubin's letter was accompanied by a letter from the Honorable John D. Hawke, Jr., who is the Under Secretary of the Treasury for Domestic Finance, explaining in detail why this particular extension is urgent and must not be put off. I ask unanimous consent that the letter be printed in the Record so that it will be seen out in the rest of the world that at least the Treasury Department knows what the problem is.

Mr. MOYNIHAN. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. MOYNIHAN. There is no disagreement.

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

Mr. MOYNIHAN. Mr. President, as best I understand, we have a 30- minute time period running. Inasmuch as the Senator from New York suggested the absence of a quorum, I fear that in 4 minutes time our opportunity to debate the matter will have expired. I wonder if I might ask unanimous consent--I am sure my esteemed friend from Delaware would not mind--if I could ask that the next 10 minutes be charged to the majority.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, I rise today to wish great congratulations to Bruno M. Ponterio, who retired on December 22, 1995, after 32 years of dedicated service to the Ridge Street School in Rye Brook, NY. Mr. Ponterio was honored on December 12, 1995 by generations of students, teachers, families, and friends of the Ridge Street School at a ceremony celebrating his magnificent career. Mr. Ponterio was the school's assistant principal for 7 years and its beloved principal for 25 years. He announced his retirement in June of 1995 but as a testimony to their love and appreciation for his work, school officials, parents, and children appealed to him to stay on until the end of the year. Marked by a constant dedication to the future of both the Ridge Street School and the children who roam its corridors, Mr. Ponterio has set an example for educators nationwide. For 32 years he has served as a role model, a father figure, a leader, and a friend and it is fitting that the Blind Brook Board of Education has decided to rename the school the Bruno M. Ponterio Ridge Street School. I congratulate him on a wonderful career and on behalf of so many in New York thank him for his years of service and guidance. Mr. President, I hope my colleagues will join me in wishing him the best of luck in his much deserved retirement.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, I rise in enthusiastic support of the amendment offered by Senator Gregg and Senator Reid to phase out sugar price supports over 2 years, rather than 7, which is the provision in the underlying bill. First, let me point out that sugar price supports are set to expire in 2 years under current law. So the pending amendment merely maintains the status quo. Under freedom to farm, the sugar price support program receives a 5-year reprieve. And the underlying bill contains a powerful incentive to hold raw sugar imports at 1.5 million tons, some 25 percent below current levels. If the Gregg-Reid amendment is not adopted, I predict the domestic cane sugar refining industry will virtually disappear. The Federal sugar price support program properly belongs in Cuba, not in a free market economy. It is a caricature of how a farm program ought to work. The program is cleverly designed to operate at little or no direct cost to the Federal Government. The Department of Agriculture [USDA] provides nonrecourse commodity loans to sugar growers. If raw sugar prices fall below the loan rate currently 18 cents per pound--the growers simply default on the loan and forfeit the sugar they put up for collateral. To prevent loan forfeitures from occurring, USDA sets very tight import quotas and domestic producer allotments which limit supply and drive prices above the loan rate. As a result of this program, at 22 to 25 cents per pound, domestic prices for raw sugar are about twice world market prices. Domestic cane refiners, such as Domino of Brooklyn and Refined Sugar of Yonkers, pay more for raw material acquisition and refining than they are able to receive for their finished product. Domestic food processors and confectioners lose market share to foreign competitors who purchase their sugar supply on the world market. The Federal Government pays higher prices about $90 million annually, for products it purchases for nutrition programs. And consumers pay $1.4 billion more than they need to for sugar and products containing sugar, according to the General Accounting Office. Since the mid-1980's, the number of cane sugar refineries nationwide has declined from 22 to 11. Fifteen hundred jobs have been lost in the refining industry just in the last 5 years; capacity has been reduced by 40 percent. Domino has been forced to close its Brooklyn and Baltimore refineries six times in the past year because of raw cane sugar shortages. What is particularly galling about the situation is that the refinery jobs are good-paying jobs located in inner cities and around dockyards where other employment opportunities are scarce. Moreover, the sugar program is, perhaps, more distorted than any other farm program in sending enormous benefits to the few largest producers. The top 1 percent of sugar growers, about 150 farms garner 42 percent of program benefits in the form of higher prices. The largest 33 producers each receive over $1 million annually. The Fanjul brothers, who farm 180,000 acres of cane in Florida, receive some $64 million annually. The Fanjuls, whose family dominated sugar production in Cuba before Fidel Castro took over in 1959, are not even United States citizens. All sugar producers receive price and income supports wildly disproportionate to the Federal support received by other farmers. USDA estimates that sugar price and income supports average $472.30 an acre. Corn is supported at the rate of about $33.60 per acre; wheat is supported at $23.40. Most important, Mr. President, is the fact that the artificially high price for sugar acts as a very regressive tax on low-income consumers. We committed ourselves to phasing out sugar price supports when we passed the 1990 farm bill. We ought to stick to that commitment. I urge the adoption of the pending amendment.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, I rise in support of the conference report to S. 652, the Telecommunications Competition and Deregulation Act. This legislation will promote significant new investment in and improvement of our Nation's telecommunications infrastructure. It will heighten opportunities to export American goods overseas. It will increase competition in many industries--the telephone industry, cable television, utilities, long-distance telephone service providers, telecommunications equipment manufacturers, and the alarm industry, to name several--leading to greater economic efficiency. Above all, the telecommunications bill marks a victory for consumers, who will enjoy lower prices and better services. Mr. President, I voted against the bill when the Senate first considered it last June because I was concerned about a provision which purported to prohibit computer transmission of obscene or indecent material, particularly to minors. Such activity is, of course, reprehensible. But I voted against that amendment, No. 1362, which the Senate adopted, because I feared that we were taking action improvidently and without adequate consideration for its constitutional and practical implications. I remain concerned that the conference report's provisions dealing with computer transmission of obscene or indecent material and language may be overly broad, but this is a matter for the courts to decide and the conferees have paved the way for expedited judicial review of the measure's constitutionality. Therefore, if this language is determined to be troublesome when put into practice, the courts will be able to correct it at the earliest possible moment. Notwithstanding my concern about this particular matter, the bill on balance is meritorious and I urge the adoption of the conference report.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, H.R. 2924 is, in effect, a temporary increase in the debt ceiling. Under the bill, the Secretary of the Treasury may issue Treasury securities in excess of the current $4.9 trillion ceiling in order to pay the March 1996 Social Security benefits. Coupled with the normal end of month redeeming of Treasury securities held by the Social Security trust funds, this bill permits the Federal Government to meet all of its financial obligations on March 1. The bill provides much-needed time to consider a longer and perhaps permanent increase in the debt ceiling. Congress may not take up this issue again until the week of February 26, and, without this legislation, action would be required almost immediately to prevent default on February 29 or March 1. That is cutting it too close. Under this bill, we will have until March 15 to work out a long-term increase in the debt ceiling. And, importantly, this legislation commits the Congress to timely action. Item 1 in the bill's ``FINDINGS'' states: (1) Congress intends to pass an increase in the public debt limit before March 1, 1996. This is a welcome statement of good faith. It will shortly pass the House of Representatives. I urge the Senate to concur.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, just over a half century ago, as a young sailor, Harry Hall, also in the Navy at that time, sent me a copy of ``The Folded Leaf,'' a novel by William Maxwell. It may have been the first novel I ever read seriously, or at least the first that seemed seriously addressed to my own experience as a young man. Whatever, it has remained with me ever since, not least the lines from Tennyson, Lo! In the middle of the wood, The folded leaf is woo'd from out the bud I am happy to report that William Maxwell has just received the PEN- Malamud Award. It was given to him at the Folger Shakespeare Library, a mere two blocks from the Capitol, and I know the Senate would wish to join in congratulations. William Maxwell spent nearly 40 years as a staff writer and fiction editor at the New Yorker. ``Talk of the Town'' celebrated his award. Mr. President, I ask that this article be printed in the Record following my remarks. The article follows: [From the New Yorker, Dec. 25, 1995 and Jan. 1, 1996] Maxwell's Smarts ``The lights are so bright I can't see your faces,'' William Maxwell said, stepping up to the podium at the Folger Shakespeare Library, in Washington, D.C. ``Being here makes me think of ghosts,'' he went on. ``I had a dear friend who spent many days and weeks here, researching to write a book on Shakespeare. And I had another who worked in the library for a time. I hope they are both present tonight.'' He was standing on the stage of the Folger theatre, an antique- feeling space with high galleries, square columns, and a wood-and-plaster Elizabethan stage house, all of which give it a ponderous elegance. The occasion was the eighth annual PEN/Malamud Award reading, and Maxwell was being honored, along with Stuart Dybek, for excellence in the practice of the short story. A large, warmly appreciative audience was present, including Maxwell's wife, Emily; members of Bernard Malamud's family, and the writers Charles Baxter, Nicholas Delbanco, Alan Cheuse, Maxine Clair, Michael Collier, Patricia Browning Griffith, Howard Norman, Susan Richards Shreve, William Warner, and Mary Helen Washington. A few minutes earlier, Dybek had spoken of how privileged he felt to be on the same stage with William Maxwell. He then honored the elder writer in the best way one writer can honor another: by being terribly good. He read a densely lyrical and dramatic story called ``We Didn't.'' It charmed the house and made everyone glad of the short story, this superior form of entertainment. And now Maxwell was standing on the podium. Well into his eighties, with the slightest hesitation in his movements, he still seemed wonderfully calm, a man spending a little time with friends. He wore a dark suit and looked very trim; his dark eyes were animated with the same humor and interest one finds in his stories. As a staff writer and fiction editor at The New Yorker for nearly forty years, Maxwell worked with such writers as John Cheever, Eudora Welty, and Mavis Gallant. Meanwhile, he wrote stories and novels that are as good as or better than those of just about anyone else: ``Over by the River,'' for instance, and the short novel ``So Long, See You Tomorrow,'' which is set in his native Illinois and, like so much of his work, evokes the simple grandeur of life in a small Midwestern community in the recent past. Now, opening the bound galleys of his recently published collected stories, ``All the Days and Nights,'' Maxwell looked into the brightness again and said, ``I'm going to read a story called `The French Scarecrow.' '' There was a murmur of recognition from the crowd. Very gracefully and somehow confidingly, he began to read. He read softly, pausing--without seeming to monitor the sound--for the laughs. His precise, elegant, and quietly humorous study of unease was a perfect complement of the electricity of the Dybek story. When Maxwell finished and the applause died down, Janna Malamud Smith was introduced. In the name of her father, she presented the award to both writers, and then everyone adjourned to the Great Hall for wine and finger food. The wine tasted as though it had been aged in a stone jar, but nobody seemed to mind. Maxwell and Dybek signed their books and answered questions amid a general feeling of well-being and affection. If the ghosts of Maxwell's friends were somewhere in the sculptured brown lines of the Folger theatre and Great Hall, then they must certainly have been travelling in the company of Bernard Malamud, for the spirit of that marvelous writer of stories was invoked by every facet of the evening.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, last month the people of the Catskills region suffered some of the worst floods of their history. The waters swept away homes and property, roadways and bridges, schools, and businesses. There was injury and death. But the people endured with grace and courage and, as a recent editorial by Paul Smart in the Mountain Eagle attests, they have harnessed that same spirit to begin rebuilding their dreams. Mr. President, I ask that this editorial be printed in the Record following my remarks. The editorial follows: [From the Mountain Eagle, Tannersville, NY] The Force of Nature The past week has been a wearying one for us here in the Catskills. Friday saw us all battling against floodwaters. Saturday morning was a time of assessment and reassessment. By Sunday, clean-up had begun. Driving around our coverage region, which enfolds most of the damaged areas, the largeness of real disaster crept up on us. Snapping photos and gathering stories, we went from an unconscious comparison of one township's horrors to others to an almost overbearing sense of tragedy. The damage is everywhere. The most visible cataclysms of Margaretville, Walton and the Schoharie Valley are the tip to a sad iceberg. Roads and bridges were damaged in nearly every township. Basements and yards and driveways, not to mention whole first floors and entire homes, have been trashed by the oft-forgotten force of nature. The damage totals, still being added up as we go to press, are staggering. In the midst of all this, though, were incredible moments that defined man's hope, that characterized people's resilience better than any example we've encountered. Everyone chipped in to help each other. Battered business people and homeowners laughed at their fate, then vowed recovery. Outside help started pouring in. Bitterness was given no toehold amongst the destruction. Of course, much of this can be chalked up to the closeness between invigoration and enervation. There are times when one has no alternative but to look up. The call of the moment has been deafening; we've had no choice but to focus on the now, on the jobs at hand. It will only be later that the real pain of what we've been through will hit. We must prepare for then. We must remember that the recent floods have proven our region's cohesion, at least in nature's eyes. And we must remember that it has only been through our shared efforts that we've come through all this. The outside world has not forsaken us, just as we have not forsaken each other. Nature is a cruel mistress. We sometimes scoff at the ideas of 100-year flood plains that rule our planning documents, sometimes think that we've reached an age where our human efforts can thwart all. But then matters fall out of our hands. We are forced to realize where we live, what we must deal with for our choices. And when we rebuild our dreams, we must do so cogniscent of the tragedies that have preceded our actions. Good times still lie ahead of us, just as they occupy our memories. As humans, we know how to persevere, how to rebuild and fortify. The future is always ours. Please let us know what we can do to help. We care for this region. We know its days of glory have yet to come. And we bless all our angels for helping us through this past week: our local officials, our emergency volunteers, our neighbors and saviors. We even thank dear Mother Nature for having dropped our temperatures below freezing last Friday night so the waters would abate and we could get on with the hard business of life.

Mr. MOYNIHAN

Mr. MOYNIHAN. I thank the Chair.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, may I say to my friend, the distinguished chairman--and I understand his reasons full well, and they are wholly appropriate--what separates this moment from others in the past is that the full faith and credit of the United States is even now being questioned in international markets. That has never happened. It has not happened since 1792 when Hamilton worked out the assumption of the State debt. I think the fact that the President and the Republican leaders in the House and here in the Senate have come to an understanding that there will be a balanced budget agreed to--and the distinguished chairman of the Budget Committee was there--that should be enough for us to say that will happen. And, incidentally, do not for a moment ever think that the United States would default on their debt. That is all we seek in the spirit of good will. I point out that the budget agreement, already tentatively marked up, cuts domestic discretionary spending of the Federal Government by one- third in 7 years. David Stockman, in his moment of the utmost optimism, could never have conceived that such an amount of drastic reduction would not only be agreed to but hardly remarked upon. The era of big Government is, in fact, over. But the era of default, bankrupt Government, surely must not commence. Mr. President, I suggest the absence of a quorum.

Mr. MOYNIHAN. I see my distinguished chairman of the Committee on Finance is on the floor, and I look forward to his agreement and collaboration. Mr. President, I suggest the absence of a quorum.

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

Mr. MOYNIHAN. Mr. President, I will remark, if I might, on the brevity of this measure, the succinctness of its purpose, which is to increase the debt ceiling of the United States from the present $4.9 trillion to $5.4--one should not use decimal points when referring to trillions--$5.4 trillion. This $500 billion increase will provide sufficient borrowing authority for the Federal Government until about the end of May 1997. Mr. President, I offer this amendment on the circumstance of the 11th time since 1984 that the Federal Government has been in a ``debt issuance suspension period,'' commonly known as a debt ceiling crisis. The repeated past crises of the debt ceiling, and the present unprecedented, protracted crisis that has been upon us since the debt ceiling was reached over 2 months ago, has left the Secretary of the Treasury, the distinguished Secretary Robert Rubin, with little recourse under law by which he could allow the Government to continue. But he has now stated that there are three remaining ones, with the very specific sums associated with each, and that in no circumstances can the Government meet its financial obligations after the 29th of February or the 1st of March. What we face, Mr. President, is the prospect of default. Moody's Investors Service has placed on review for possible downgrading--those are the terms--some $387 billion of obligations of the U.S. Treasury for interest payments falling due between February 29 and April 1, the first time in our history that the credit of the United States has been potentially brought into question by an investment advisory service. How to scale this event? We are not going to have many people participate in this debate and not many people will be on the floor as we proceed. I wonder if there is not some apprehension about this issue that leads to a kind of avoidance. How would you scale this prospect of default, Mr. President? I give you the typical prospect. It would be the equivalent of losing a war. We are not talking about a program. We are not talking about appropriations. We are talking about the United States of America. The War of 1812 was perhaps the closest we ever came to losing a war. In 1814 the British seized Washington. They burned the White House. They burned the Treasury building. They burned the Capitol. But the service of the debt of the U.S. Government went forward undisturbed out of subtreasuries elsewhere, prominently New York and Philadelphia. We were a debtor then, a debtor nation, rapidly paying off our debt. We would have none whatever by 1837. We had acquired that debt in the course of the Revolutionary War. State governments incurred this debt, and Alexander Hamilton insisted that the Federal Government assume that debt. Paying it off established the credit of the United States in Europe and in a mode that allowed us to be a great importer of capital through the 19th century as we built our industries and infrastructure. Today we are not only a debtor once again but we are the world's largest debtor, the result, Mr. President, not of the War for Independence, but of the working out of the long-term strategy that took shape in the late 1970's designed to refashion the American National Government by dismantling its finances. Mr. President, I spoke upon that subject on any number of times in the 1970's. In July 7, 1980, I wrote a long article for the New York Times describing it. And I said of that strategy which came to be known as starve the beast: The Republicans' dominant idea, at least for the moment, seems to be that the social controls of modern Government have become tyrannical or at the very least exorbitantly expensive. This impression, so the strategic analysis goes, is made possible by taxation such that cutting taxes becomes an objective in its own right, business cycles notwithstanding. And 3\1/2\ years later, with the new administration in place and a budget deficit now steadily rising, I wrote of this same subject. Might I just add, Mr. President, that on January 20, 1981, the debt was about $900 billion. In the intervening 15 years we have added $4 trillion. I spoke again of this basic proposition, not easily understood, not widely even noted. The proposition is that the deficits were purposeful, that is to say, that the deficits in the President's initial budgets were purposeful. They were expected to disappear. They have not disappeared. The then-Director of the Office of Management and Budget, Mr. David Stockman, said there are $200 billion deficits as far as the eye can see. And in that mode, the debt was beginning to accumulate. I put it up to the whole legislative budgetary agenda at that time. I quote--this is in the New Republic of December 31, 1983. I said: There was a hidden agenda. It came out--hidden in plain view like pearls of a purloined necklace. It came out in a television speech sixteen days after President Reagan's inauguration, when he stated, ``There were always those who told us that taxes couldn't be cut until spending was reduced. Well, you know we can lecture our children about extravagance until we run out of voice and breath. Or we can cut their extravagance by simply reducing their allowance.'' That was the pattern, starve the beast. It would be pointless to try to argue out of existence this program, that program, another appropriation. Simply make it impossible to go forward because there are no funds, and indeed we looked the unthinkable prospect of default in the very face. I wrote then that there was an alternative, that the possibility of a historical compromise was present. Democrats might come to understand the sense of the opposing party that Government, indeed, had become too big, too interventionist, at times, indeed, an obstacle to the private lives and private fortunes of the citizenry. There is that edge, the regulatory state. Republicans would have to understand that they could not put it in service of the political strategy, they could not put the integrity of the United States of America at risk and that compromise may finally have been reached. It has been agreed that we will balance the budget in 7 years. This will involve reducing a great many programs. It will involve preserving others. I stand here, Mr. President, to say to the Republican Members across the aisle, ``Your strategy has worked.'' The President, in the State of the Union message 2 days ago, declared: ``The era of big Government is over.'' He said it not just once, he said it twice. The debt service did it, not quite as anticipated but effectively so. The strategy has worked. I might give you a specific, and I will not be long. In 1994-1997, the period we are in, spending on Government programs is less than taxes for the first time since the 1960's. If you go back 30 years to the Kennedy-Johnson era, you will find a time when we were spending less than we collected in revenues, and at that time, a great source of concern arose for economists: the phenomenon of fiscal drag. Congress was not spending as much money as it brought in. That changed so dramatically. The deficits of the 1980's, as far as the eye can see, continued until, in 1993, under President Clinton, we passed legislation that reduced spending and increased revenues by half a trillion dollars. After that, the deficit premium, as it is called, on interest rates declined. The anticipation that we would deal with the deficit reduced interest payments, and outlays were reduced by another $100 billion. So right now, revenues are running ahead of outlays, save for the debt service. The debt service has done its work. Debt has done its work, and now it seems to me, it appears to me, that we have an understanding of the reality. However little either side might like it, it is there. Can we not go forward now to agree to extend the debt ceiling in the context of an agreement to bring about a balanced budget, not to put the United States at risk in a world in which we are the largest debtor, and our debt is held by central banks and elsewhere all around the world? To bring it into question is to bring the fundamentals of the American Government into question as well. I urge the Senate, I urge my friends on the other side of the aisle to declare victory and preserve the authority and integrity of the United States Government because, Mr. President, nothing less is at issue. Mr. President, I ask unanimous consent that the two articles I mentioned be printed in the Record.

Mr. MOYNIHAN. Mr. President, I would like to thank all of those who have participated in the debate. I would like particularly to thank the chairmen of the Committee on Finance and the Committee on the Budget for the undertakings that they have made, and to say again that I hold them in full faith and credit of the United States. I think we can work this out, and clearly we intend to do so. It can be done.

Mr. MOYNIHAN. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. MOYNIHAN. Before yielding to the distinguished Senator from Rhode Island, may I welcome the statements by the chairman of the Committee on Finance and the chairman of the Committee on the Budget. I take them wholly with integrity and give them the full faith and credit of the U.S. Senate. I have to point out that we have not always had as good an experience on the House side. A Member on the House side, the counterpart to the distinguished chairman of the Budget Committee, once openly said, ``Let's do this,'' and then disappeared. We cannot put the United States, the integrity of the United States of America, at risk this way with complete understanding of the Senator from Virginia's concern that the Federal Government stay open. I still hope we might have a vote on this. I do not want to prolong matters. The Senator from Rhode Island has risen. I yield 3 minutes.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, it would be just 16 years since I came to the Senate floor to speak to a large new idea in our politics which seemed to me was then taking shape and which, as I do believe, has since become a central fact of American government. This was the idea on the part of those who legitimately, from their perspective, felt that the U.S. Government had become too large, too interfering, too dominant in the affairs of the State and local governments, and in general moving in a direction that this group did not desire. They spoke to the futility of seeking to dismantle the great edifice of Government that had been growing, not truly since the New Deal, but since the beginning of the century with the administrations of Theodore Roosevelt, Woodrow Wilson, and thereafter, of course, President Franklin Roosevelt, President Johnson, President Nixon --a growth in Government that had never been fully accepted by all parts of the electorate, nor need it have been, and now was attaining very considerable opposition. The effort to reverse this direction by repealing this statute and amending that and reducing this program and such was not so much countervailing as beyond the capacities of the legislature. Indeed, the Government had attained to a size and complexity that dismantling even a small part of it was a huge enterprise. So the reasoning of this new school was that this would never succeed. What would indeed succeed, it was argued, was to deprive the National Government of revenue. By systematically reducing revenues through tax cuts, there would come a time when there was simply not the available resources to maintain the level of outlay that was then taking place. This had many informed and sophisticated iterations, if you like, but the whole idea was put in one compact phrase that appeared in the first year of the administration of President Reagan. And it was in usage in the White House, as we understood. It was ``starve the beast.'' At that time, 1980, the debt of the Federal Government was about $900 billion, a sizable enough sum but in no way an unmanageable one. Debt had risen during the two world wars and had been brought back down. Some debt occurred in the 1930's, nothing spectacular; revenues were well within the range of obligations, and the Government was moving forward. Two things then happened. Government outlays began to grow very rapidly as several entitlement programs took hold. Medicare is but the most important example. A good indicator, also, however, is Medicaid. Medicaid, which is a Federal entitlement to persons with very limited resources. Those Medicaid costs doubled in the 8 years of the administration of President Reagan, doubled again in the 4 years of the administration of President Bush. If you project this trend, as we have done, and put them in the form of a geometric progression, you find that the costs of Medicaid would double on the 29th of December of this year. So those outlays began to go up rapidly. Then in 1981, there was a large tax reduction, and revenues ceased to grow. The income tax brackets were indexed so that there was not an inflationary increase in revenues that had previously been the case during the 1970's. Mr. President, we passed five tax cuts, and indeed the level of inflation in 1980 was such that the Office of Management and Budget anticipated a surplus even with the tax reductions. The 1982 recession brought that inflation down. The tax cut took hold. And so we were on a path simultaneously of increased outlays and reduced revenues, very much that which those who advocated this particular approach had anticipated. What they had not anticipated was that President Reagan, who very much wanted a tax reduction, did not want programs reduced in any large amount and certainly in no very few particulars. Mr. David Stockman, President Reagan's Director of the Office of Management and Budget, in his memoirs, ``The Triumph of Politics,'' records the options he would present the President. There was a program, it costs this much, it should be abolished, it should be left alone, it should be reduced a little, and the President, in the kind of generous nature we know he has--happily--cut it a little, perhaps, but nothing large was done. Instead, debt in enormous amount was incurred. We went from a debt of about $900 billion to a debt of almost $5 trillion in a very short time, and debt service began to crowd out other activities of the Federal Government. While there had been very little articulation of this theory--``starve the beast''--the practice has gone forward with extraordinary, almost inexorable, relentless thoroughness. We are now in this 16th or 17th year since I first spoke on the matter, and the situation approaches crisis. The crisis that we come to is the working out of the theory, if you might, the debt having attained to its present level, the decision is being talked about of not extending the debt any further, with the consequence not that we would reduce the size of the American Government--a legitimate strategic objective I did not necessarily share; I do not disavow it in every respect nor does anybody in this Chamber. The idea today would be not to extend the debt ceiling and let the U.S. Government default on its obligations for the first time in our history. I was remarking, Mr. President, to the Democratic caucus at noon today that in 1814, the British invaded Washington, burnt the White House, burnt this Capitol Building, the part just the other side of the door here, the original building. They did not burn the Marine Commandant's house, because they were staying there, but they overtook the Capitol completely. The President fled, the Congress fled, and the Nation seemed in the most dire possible circumstances: Our Capitol had been seized. Yet the service on the national debt continued to be paid. I think it probably was the case it was most paid overseas and in specie out of various subtreasuries. In that degree of crisis in a newly formed nation, not fully even formed perhaps, we never defaulted. We never defaulted during the Civil War. The question did not arise in the great wars in the 20th century. But here, in a moment of peace, we may be about to do this. The consequences would be immeasurable. From the very height of its position in the world and in the history of the world, the United States would become a nation in default, a nation whose currency is in question, whose debt has, in effect, been repudiated. We may not think of it this way. We may not imagine others thinking of it this way. It could happen, Mr. President, and if we do not do something in the next days, it very possibly will happen. The unimaginable, the unthinkable will happen. We have reached the debt ceiling of $4.9 trillion. Either we raise the debt ceiling or we undermine the foundations of American democracy and the American economy and who knows what in the world at large. I might recede and say, Mr. President, during the last Congress, I then had the honor to be chairman of the Committee on Finance. We raised the debt ceiling twice, not out of any unconcern for the deficit, but out of the realistic appreciation of what we could do. In August 1993, we passed in this body a deficit reduction package of $500 billion. It was signed. It brought about the largest reduction in the deficit in history. Interest rates declined--a fiscal dividend--or as described by Secretary Rubin described, a reduction in the deficit premium on interest rates. We did that, and we reduced the deficit. At the same time, we had to increase the debt ceiling. Twice we did that, leaving it at $4.9 trillion. This last November 9, I came to the floor and offered an amendment to increase the debt ceiling just a very small amount to $4,967,000,000,000, enough to get us through, as I hoped, until there was a Budget Reconciliation Act agreed to. And knowing what we would have to have in the way of additional debt expenditure in the course of the next 2 years, we could then pass a proper 2-year debt ceiling increased to perhaps $5,500,000,000,000. That measure--offered, as I say, on November 9--failed by a vote of 47 to 49, a very close margin. Two votes would have put us over into the present moment, but not to a true resolution of a 2-year prospect. Mr. President, in the absence of that, the debt ceiling was soon reached, and the Secretary of the Treasury was reduced to borrowing moneys in ways that were entirely lawful but not really anticipated as a more than temporary steps to avoid a debt crisis. He had to deal with the fact that the Federal Government was without a budget. I say, it is no accident that this was the 11th time since 1981 that the Federal Government has been without a budget and without resources. Within 1 year of my having observed this strategy here on the Senate floor, it was in effect. They were short-term events. They were referred to as monument closings: The Government would close down for a day and some national facilities would not be available but with no real interruption of the Government itself. This time, we have had the longest shut down ever. It is not perhaps noticed, but we almost shut down the Federal courts, the third branch of Government, indispensable to governing but of itself the least dangerous branch, as one of the ``Federalist Papers'' referred to it. It depends entirely on the Congress and the Executive to provide these choices. It had none. It was at the point where it would not have had money to pay criminal and civil jurors or security guards. The prospect of the Federal courts closing was upon us, and we did finally act, but only almost reluctantly, not as if performing a duty, but dealing with an irritating necessity. Now, here we are again. Yesterday, the Secretary of the Treasury told us in the most explicit terms that he has reached the end of measures that he can legally take, that he is willing to take, or legally can take, the two being coterminous. He has said that he has three final measures. He will suspend the reinvestment of approximately $3.9 billion in Treasury securities held by the Exchange Stabilization Fund. That is the total amount of dollars in that fund. If we were to use the German mark and Japanese yen also, the dollar would be subject to the most extraordinary turbulence in world markets. The Secretary also said that the Federal Financing Bank will exchange $9 billion in assets in its portfolio, primarily, I believe, from the Tennessee Valley Authority, with which the distinguished Presiding Officer is very familiar, and several other Government activities, which he can do. The exchange of assets will permit the Treasury to obtain $9 billion in cash. Finally, he has the ability to extend the 12-month debt issuance suspension period. That, I have to say, is what we are in, a debt issuance suspension period, from 12 months to 14 months. This will permit the Treasury to obtain an additional $6.4 billion in cash by temporarily using interest-bearing assets of the civil service retirement fund. And that is it. Nothing more. These actions would raise $19.3 billion. They will take the U.S. Government through until February 29 or March 1. At that point, sir, the U.S. Government will default on its obligations--something that could not have been imagined in the world 20 years ago. We are facing it, but we are not facing up to it. I had hoped that I might offer a measure to increase the debt ceiling, a clean simple increase, on tomorrow, or on Thursday, but I understand we may not be in session. On Friday, I will try to do this, but it is not clear whether it will be possible with the continuing resolution that keeps the Government open for certain purposes and the rest of the fiscal year. Then I am told we will not be back until February 26. That is 3 days before default. I would hope something would concentrate our minds. This measure would simply allow the Federal Government to meet its obligations while the negotiations about the budget continue between the Congress and the administration. There is room for agreement in those negotiations. The distinguished senior Senator from Pennsylvania was on the floor just now talking about the areas where no principle is involved. It is just a question of at what rate Medicare outlays grow. They are growing at say 9 percent, and another party says 8 percent, and another party says 7 percent. They are only discussions of increments where if there is a will, there is surely a way to agreement. Maybe there is no will to reach final agreement on some issues that are thought to be of principle. Very well, let us have a national election. We are going to do that. The Republican Party caucuses begin--I guess, caucuses for both parties will begin in Iowa and then primaries in New Hampshire, and off we go. It is an extended period. There are days when you can wish this were Canada and if we had to have a national election we could do it in 2 weeks' time, and people would know what the issues are and vote and settle them for the parties involved, and the Parliament would resume. We have a Constitution and we will abide by it. It provides for quadrennial elections and we will have them. It is all very well if we do not create a catastrophic crisis or undergo a catastrophic failure in the interval. We have to increase the debt ceiling. Secretary Rubin, an honorable man, the able Secretary of the Treasury, has done what he can do under law. He is acting as his predecessors did in the Reagan administration and in the Bush administration. But he can do no more than the law allows. He will do no more than the law allows. And the world watches. I would say, if I could direct my views principally to the Congress, reach some agreement with the President and agree on what you can agree to, let the rest be decided in the Presidential election, and let the Government go forward. I would also speak to the President in this matter. The President has a responsibility that goes far beyond electoral politics. He is required under the Constitution--and I sometimes think this is the only thing in article II that he is required to do. It says, ``He shall take care that the laws be faithfully executed.'' Certainly, those laws extend to preserving the full faith and credit of the United States. If, in some measure, agreement with the Congress would permit the debt ceiling to be extended and the solvency of the U.S. Government, the value of U.S. currency, the worth of the American credit and faith in our word, if in some measure this requires giving more in the way of negotiations than otherwise might be the case, I would say, sir, he has that responsibility, just as the Congress has an equivalent responsibility. This is something that transcends the issue of which party will have a majority in the next Congress or what kind of majority, which party will have the White House and under what circumstances. These are temporary measures. They come and they go. This comes with regularity. What happens in November--2 years from that there will be another set of congressional elections, and 4 years another Presidential election. There will never be a moment after a default on the debt like the two centuries preceding. This will scar our national existence. We will be remembered in history for this--not for what we did to the Medicare trust funds, not for what we did to the Tax Code or this entitlement or that discretionary program. This is what will mark our time--mark our time in history. We will not be forgiven nor would we deserve to be if, in a feckless, shortsighted, irritated, calculating, what-do-the-overnight-polls-say mode, we bring about an irreversible disaster to the American Nation. That is the option before us. We do not need to. We clearly are of the view that we should not. On November 9, a mere two votes separated the decision to extend the debt ceiling. We know that. We know we have to do it. To fail to do it, we fail in our first obligations as Members of the Congress. The President, too, must understand he has an obligation to help see that this does not come about. We can do it, Mr. President. It will require 20 minutes in either body. If it takes all day, we take all day. There is no argument against this measure. If there is one Member of the Senate who wishes to stand up and say I think it would be a good thing if the U.S. Government defaulted on its debt, such that every Treasury bond in every investment portfolio, every retirement trust becomes, suddenly, a piece of paper not backed by the full faith and credit of the United States, if we want that, if we want the yen to become the world reserve currency, if we want our inflation to double, if we want our unemployment to suddenly soar, or see our national growth collapse, it is all within our power, and it will not simply be a negative act, it will have been an affirmative choice because we know what the consequences will be. I cannot think we will do this. If there is any Member of the Senate who thinks we ought, he or she is welcome to come to the floor. There will be none. We know what to do, I hope in a bipartisan spirit as we have done in the past. This is something that the Nation needs, and no party would wish to deny. I hope we do this, Mr. President. I dare not think of the consequences if we do not. I see my friend, the distinguished member of the Finance Committee on the floor. I yield the floor.

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

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, as he had indicated he would do, the President has now vetoed H.R. 4, the Personal Responsibility and Work Opportunity Act of 1995. As the bill passed the Senate, December 22, 1995, with a margin of only 5 votes, 52-47, there can be no question of a veto override. Hence, the judgment of Robert Pear of the New York Times that ``The President's action concludes a 4-year drama that began when Mr. Clinton, as a Presidential candidate in 1992, promised to `end welfare as we know it.' '' Last September 19, essentially the same bill, indeed H.R. 4, passed the Senate 87-12, with only 11 Democrats opposed. In the interval Elizabeth Shogren of the Los Angeles Times and Judith Havemann and Ann Devroy of the Washington Post reported that the Department of Health and Human Services had submitted an analysis of the bill to the White House. Owing largely to the 5-year time limit, it would throw some 1.5 million children into poverty. No one could have wished this, and Democrats were especially bound to take into account this assessment of a Democratic administration. And so, in the end, 45 of 46 Democrats voted against the measure, Republican Senators Campbell and Hatfield joined us. On the day of the final Senate vote, the 11 Democratic Senators who had been opposed from the first, wrote President Clinton to warn against including any ``broad welfare measure * * * in the end of session budget agreement.'' This was not something, we judged, to be concluded in a matter of days by a small group under great pressure. However, we now learn that on Saturday, January 6, as part of a balanced budget proposal offered by the President in those talks, a section ``Welfare Reform Savings''--$46 billion over 7 years--includes this: Cash Assistance: AFDC would be terminated and replaced by a new conditional entitlement of limited duration. There would be a 5-year maximum time limit with a state option for vouchers at the end of that period to assist children. Thus, the administration seemingly proposes to deliver the same 1.5 million children into poverty. Why is this happening? I can think of two partial explanations. First, it is widely assumed that AFDC is a Federal entitlement that the Federal Government can restrain without relinquishing. It is not. There is no Federal entitlement to welfare for individuals. Each State devises its own program. The Federal Government provides a matching grant. Abolish the matching grant and you can reasonably expect a race to the bottom. Second, even as we deplore welfare dependency, we do not seem to grasp just how serious it really is. A quarter--24 percent--of American youth just turned 18 have been on AFDC. Half--46 percent--of the children in Chicago will be on AFDC in the course of a single year. Of children on AFDC, three-quarters are there for more than 5 years. Hence, a 5-year limit invites chaos and ruin. In particular, liberal-minded persons must proceed with care. For decades now there has been a liberal tendency to understate, even to deny the welfare problem. Now, of a sudden, a liberal administration proposes a repeal measure that would have been unthinkable just a few years back. Both positions have the common fault of underestimating how serious and dangerous this problem really is. Even so, let us all be ready for a careful, bipartisan exploration of the issue in the 105th Congress. It was, I think, a close call. But as Churchill remarked, there is nothing so exhilarating as to be shot at and missed. Mr. SPECTER addressed the Chair.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, our Nation has lost one of its most distinguished Naval heros, Adm. Arleigh A. Burke. Had World War II continued beyond September 2, 1945, I might have served in the Pacific under ``31 knot Burke,'' as he was nicknamed for his exploits against the Japanese. Admiral Burke was awarded 13 decorations, including the Distinguished Service Medal, the Navy Cross, the Legion of Merit, the Silver Star, and our Nation's highest civilian honor, the Medal of Freedom. In 1991, for the first time in Navy history, the man for whom a ship--U.S.S. Arleigh Burke--was named was on hand to see her commissioned. Mr. President, I ask that the obituary of Arleigh A. Burke from the New York Times of January 2, 1996, be included in the Record. The obituary follows: [From the New York Times, Jan. 2, 1996] Arleigh A. Burke Dies at 94; Naval Hero of World War II (By Robert D. McFadden) Adm. Arleigh A. Burke, a battle-decorated Chief of Naval Operations whose combat exploits against Japanese naval forces in the South Pacific made him the Navy's most celebrated destroyer squadron commander of World War II, died yesterday at Bethesda Naval Hospital in Bethesda, Md. He was 94 and lived in Fairfax, Va. Admiral Burke, who retired in 1961 after 42 years in the Navy, including a record six-year tenure as the Chief of Naval Operations in the Administration of President Dwight D. Eisenhower, died of complications of pneumonia, said a Navy spokesman, Lieut. Comdr. Ed Austin. In a career that took him from Annapolis to Washington via the high seas, Admiral Burke, a stocky pipe smoker with an easy smile, served in battleships and aircraft carriers, was a member of the United Nations truce negotiations team in the Korean War and in Washington became a strong advocate of a powerful nuclear fleet for the Navy, including its missile- launching Polaris submarines. But he was best known as ``31 Knot Burke,'' a nickname supplied by Admiral William F. Halsey, for his exploits as the commander of Squadron 23, a pack of eight destroyers that staged high-speed torpedo attacks that devastated enemy warships in the Solomon Islands in late 1943 and early 1944. ``Stand aside! Stand aside! I'm coming through at 31 knots,'' Mr. Burke, then a Captain, radioed darkened American troop transports as his squadron, named Little Beavers for a comic-strip character, steamed up the slot at boiler-bursting speed to attack a Japanese task force off Bougainville on the night of Nov. 1, 1943. In a widely heralded action, the squadron covered the landing of thousands of American troops while attacking enemy vessels and aircraft. When the battle of Empress Augusta Bay ended the next day, the Japanese toll was horrendous. A cruiser and four destroyers lay on the bottom, and two cruisers and a pair of destroyers had limped away heavily damaged. Later that month, the squadron engaged another Japanese task force off Cape St. George, New Ireland, and sank three destroyers without taking a hit. In 22 engagements from November 1943 to February 1944, the Navy said, Capt. Burke's squadron was credited with sinking one cruiser, nine destroyers, one submarine and nine smaller ships, as well as downing approximately 30 aircraft. Later, Mr. Burke became a chief of staff to Vice Adm. Marc A. Mitscher, whose carrier task forces attacked the Japanese at Iwo Jima, Okinawa and Tokyo. Mr. Burke was aboard the flagship Bunker Hill and later the Enterprise when they were hit by Japanese suicide planes off Okinawa. In 1949, during interservice disputes that followed the unification of the armed forces, Mr. Burke fell into disfavor with some officials of the Truman Administration by heading a group of high Navy officers that campaigned for supercarriers and against a strategic reliance on the Air Force's B-36 bombers. His role in what was called the Admiral's revolt seemed to scuttle his chances for promotion. But his name went back on the lists a year later, when he became a rear admiral, and in 1951, he became a member of the allied cease-fire commission in Korea for six months. In 1955, he was selected by Eisenhower over 92 more senior officers to be Chief of Naval Operations. In that post, he advocated a balanced and versatile fleet, new antisubmarine technology, the development of Polaris submarines and other nuclear systems, and new aircraft designs. He served three two-year terms, but insisted on retiring in 1961, when President John F. Kennedy offered him a fourth term. Arleigh Albert Burke was born on a farm near Boulder, Colo., on Oct. 19, 1901. his parents were of Swedish and Pennsylvania Dutch stock, his paternal grandfather having changed the name from Bjorkegren. He graduated from the United States Naval Academy in 1923, and after five years of sea duty, earned a degree in chemical engineering at the University of Michigan in 1931. He was an inspector at a naval gun factory in Washington when World War II broke out. He immediately applied for sea duty, but his application was not granted until 1943, when he was sent to command destroyers in the Solomons. For his ensuing exploits, he was awarded 13 decorations, including the Distinguished Service Medal, the Navy Cross, the Legion of Merit and the Silver Star. In January 1977, he was awarded the nation's highest civilian honor, the Medal of Freedom, by President Gerald R. Ford. In 1984, the Navy named a class of missile-launching destroyers for him. And in 1991, it launched the U.S.S. Arleigh Burke, an $864 million destroyer, and for the first time in Navy history, the man for whom a ship was named was on hand to see her commissioned. Mr. Burke is survived by his wife, the former Roberta (Bobbi) Gorsuch, to whom he was married for 72 years.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, the new year is now upon us, a Presidential year, and already the competition is fierce among candidates for election to ``Safire's New Political Dictionary: The Definitive Guide to the New Language of Politics.'' Accordingly, Mr. President, I have the honor to propose as first-in-the-field, a remarkable triple- hyphenated safe bet and sure winner from the new year's day editorial of the Washington Post entitled, appropriately enough, ``The New Year.'' The editorial looked back to its predecessor 50 years ago, when the Post editorial writer of that age, contemplating the end of the Second World War, pondered whether the United Nations might now bring peace on Earth. This year's editorial comments, ``That sort of world- federal-ish talk seems almost quaint today.'' Indeed, it does. Cord Meyer apart, there are not likely to be as many as half a dozen Americans alive who remember the World Federalists and their unflinching attachment to world government. That, of course, is just the role editorials play in our lives; to remind us of forgotten fancies and dashed dreams, lest we become too much impressed with the wonders of our own age. Mr. President, I can report that Mr. Safire, interviewed by telephone in his posh Washington offices, readily concurred that ``world-federal- ish'' was definitely an early starter for this year's pol-lexigraphic race, adding that it might prove a watershed compound and go on to win a triple crown.