Robert Packwood

Mr. PACKWOOD

Mr. PACKWOOD. Yes, the clause ``or the material terms of such contract'' is not intended to exclude binding contracts from the benefits of the legislation's binding contract rule simply because the parties included a relatively minor price adjustment of less than 10 percent in the original binding contract to compensate for the failure of the FCC to issue a tax certificate. Mr. President, we are waiting for Senator Dole to come, and then we will be ready to close up on this bill, I believe. I suggest the absence of a quorum.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I ask unanimous consent that there now be a period of morning business.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I believe we are prepared to yield back our time.

Mr. PACKWOOD. Mr. President, I move to reconsider the vote.

Mr. PACKWOOD. Mr. President, I move that the Senate insist on its amendment to H.R. 831, request a conference with the House, and that the chair be authorized to appoint conferees on the part of the Senate.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I had prepared over several days a speech for this morning. But because of a news article this morning on the death of Senator Fulbright the day before yesterday, I decided to change my approach and have thrown away all of the comments I was going to make. I will try to put this debate in a different light. The Washington Post article on Senator Fulbright is well worth reading, because he was a figure of great consequence here. As we are debating this, another matter of great consequence, I look back at some of the other events that have taken place in my career on this Senate floor. I will not use Yogi Berra's famous expression, ``It's deja vu all over again,'' because I think a more apt expression might be Justice Holmes' comment about the law, but it really relates to all of us. He said, ``The life of the law has not been logic. It has been experience.'' I think, as we look at this balanced budget amendment, we are better off to look at it in the light of experience rather than the light of logic. I mentioned Senator Fulbright because I recall in this Chamber the most extraordinary event--certainly the most extraordinary debate, but extraordinary event--that I have ever witnessed in my life. It was an unusual situation. It was a closed session of the Senate on the debate--this was in 1969--on the antiballistic missile system. There were two extraordinary Senators who were Symington of Missouri, high up on the Armed Services Committee, was unalterably opposed; Senator Jackson of Washington, high up on the Armed Services Committee, was unalterably in support. These two Senators had access to identical witnesses, identical information, and came down on absolute opposite sides. The antiballistic missile was a touchstone between the so-called hawks and doves. We were then enmeshed heavily in Vietnam. This, I suppose, would have been the equivalent of the star wars of its day. Could we invent a missile that would go up in the air and shoot down other missiles? We finally agreed, under a unanimous consent, as I recall, to either 6 or 8 hours of debate. And because it was going to be highly sensitive, classified information, the Senate was cleared of all press. The galleries were closed. The staff left. We had all 100 Senators on the floor and the Vice President presiding. We started the debate. Senator Symington, in opposition, spoke first. He spoke for an hour without notes. The only references he had were some charts behind him, showing the Russian missile system and its progress. When he finished speaking, I thought to myself, that is the end of the ABM, the antiballistic missile. No one can rebut that argument. Then, Senator Jackson arose and spoke for an hour, without notes. I remember him turning to Stewart Symington and saying: ``Let me take you just a few charts further than where my distinguished colleague from Missouri left off.'' And Senator Jackson went on with his seven or eight charts, taking us up to what was probably the SS-18 or SS-19 at the time--a brilliant argument. And I thought when he finished, that is it. We are going to have an antiballistic missile system. No one can rebut that argument. Then these two giants began to ask questions of each other. Like great fencers, they parried and thrusted. They each knew the answers to the questions they were asking. They hoped that somehow they could pinion the other. And the reason the questions and answers were so critical is everyone knew this was a close vote, just like this coming vote on the balanced budget amendment. Everyone knew it was one or two votes, one way or the other. President Nixon desperately wanted the ABM because he needed it as a bargaining chip with the Soviets to attempt to begin arms reduction. Without it, he knew he could not begin. So when the two had finished their speeches and had finished questioning each other, then the rest of us had an opportunity to ask questions. Again, you have to picture a full Chamber, 100 Senators, in closed session. There was no one here but us: no press, no gallery, no staff. And the third or fourth question was from Senator Fulbright to Senator Jackson. Senator Fulbright said, ``Would my good friend from Washington yield to a question?'' ``Yes,'' Senator Jackson said. Senator Fulbright said, ``Has my good friend had a chance, yet, to digest the remarks of the Russian Foreign Minister, Andrei Gromyko, in Warsaw last week, in which the Soviet Foreign Minister said that the Soviet Union wanted to reach a new era of detente--of cordiality with the United States? And doesn't my friend from Washington think that before we rush pellmell into this unproven missile system, we should give just some little credence to the words of the Russian Foreign Minister?'' Senator Jackson shot back, as if it had been a prompted question. He pointed his finger at Senator Fulbright. I remember the gesture so well. They sat no more than two or three desks apart. He said, ``Let me call to memory for my friend from Arkansas'' and then Scoop Jackson moved his hand like this and said to the--others, who were not here at that time--``that morning, when President Kennedy, in October 1962, asked Russian Foreign Minister Gromyko, who had been at the United Nations the day before, to come to Washington to chat with him. Andrei Gromyko flew down from New York and went to the White House.'' Scoop Jackson related this scene: ``That day, the President asked Gromyko, if there were any Russian missiles in Cuba.'' ``No, came the answer.'' ``Were there any Warsaw Pact country missiles in Cuba?'' ``No.'' ``Had any missiles been transported on Russian ships to Cuba?'' ``No.'' ``Were there any Russian troops in Cuba assembling missiles?'' ``No.'' Then Scoop Jackson made this gesture. He reached down and said-- ``Then the President opened the drawer of his desk, took out the pictures from the U-2, threw them in front of Mr. Gromyko--showing the missiles, showing the ships, pictures so good that you could see the chevrons on the sleeves of the Russian troops in Cuba assembling the missiles.'' Scoop Jackson said, ``Andrei Gromyko left that room an acknowledged liar. If my friend from Arkansas wants to rest the security of this country on the truthfulness and credibility of Andrei Gromyko, that's his business. I would not ask a single American to sleep safely tonight based upon the credibility of Andrei Gromyko.'' The vote that afternoon was 51 to 50, with the Vice President breaking the tie. And the answer to that question was the difference of one or two votes. So do we on occasion have the opportunity to participate in great events where we can make a difference? We do. With that vote, President Nixon was able to start negotiations with the Soviet Union, and it was the first of our major negotiations leading to arms reductions over the years. I cite that moment because I think we are approaching a similar moment again. This time on the balanced budget amendment and just one or two of us may make an extraordinary difference for the future. I have said, quoting Holmes, it is experience, not logic. Let us take a look at some of our experiences from that time on. In 1972--this was an open debate, it is in the Record--we did not have budget bills in those days. We thought we had a terrible budget problem. The deficit was $15 billion. The budget was $245 billion. This is in my lifetime in the Senate; 1972, barely 20 years ago, a budget that was smaller than some of our deficits have been in the last few years. But we thought this was so terrible that we were going to vote on a bill to delegate to President Nixon the power to cut the budget anyplace he wanted--once it exceeded $250 billion. You talk about a line-item veto. This was not just a line-item veto. It was carte blanche power to cut it wherever he wanted it. It had passed the House with Wilbur Mills leading the fight for it. It came to this body. We had an extraordinary debate. There is not even a baker's dozen of us left now from that time. I am not going to read into the Record all of the debate. Most of the people who were involved are now gone. But interestingly there are still a few left that opposed that effort. I was one that opposed it. I made what I thought was an extraordinary speech on the history and the power of the purse, going into the parliamentary debates and the fights with the kings' efforts over the centuries to gain power over the purse. Did we want to give to the President a power which the Parliament and the Congress had fought for the better part of 500 years to gain for itself? I said no. And all of us who talked and opted against that legislation said we the Congress can do it. We have the courage in Congress to narrow a $15 billion deficit. We do not need to give away the power to balance the budget. It is particularly interesting to read the statements of one or two of the Democratic Senators who were in opposition to the balanced budget amendment, speaking in opposition to this particular bill in 1972, as to how we in Congress could do it. That is almost now 25 years ago. The deficit was $15 billion. In 1978--there have been several people who have made reference to it--we had the Byrd amendment. This is not Robert Byrd of West Virginia. This is Harry Byrd of Virginia. We passed it in 1978. It is very simple. All it says is beginning with fiscal year 1981 the total budget outlays of the Federal Government shall not exceed its receipts. It is pretty easy to understand. It is a balanced budget statute. Somehow we did Do you know what the problem with a statute is? Every time you pass another statute later that is in conflict, the later one governs. So we passed a later nonbinding law that says in 3 years we have to balance the budget, and, then, this Byrd law is just irrelevant. We just ignored it. I thought it was ridiculous. It was embarrassing to have it on the books and ignore it year after year. So in essence, we repealed it. Then we knew that we had to face the deficit ourselves. We had the courage to do it. We in Congress could do it. Even then we were starting to talk about constitutional amendments. But we had not quite gotten to there yet. Now I want to go to 1981, again this experience. It is amazing how myths are perpetrated. ``The Reagan tax cuts are what led to the deficits.'' How many times have we heard that? Again, I was here. I was on the Finance Committee. But sometimes when you hear it long enough your memory plays tricks on you, and you wonder if you remember as it actually happened. So I had Dr. Reischauer, the head of the CBO, check it for me. And indeed my memory was right. From roughly January 1980 until July 1981, a period of about 18 months, every budget projection we had from the Congressional Budget Office, from the Office of Management and Budget, from the Joint Committee on Taxation and private economists said we were going to have by 1985 between a $150 billion and a $200 billion surplus--not a deficit; a surplus. So President Reagan proposed tax cuts in 1981. I want to emphasize something. His Treasury Department came and made staging estimates. They assumed that the tax cuts would parallel these projected $150 to $200 billion in deficits. President Reagan correctly understood that if we did not give this money back to the taxpayers, we would spend it; no question about that. Do not worry. We have plenty of experience on that. But they were to parallel the projected surpluses. Well then, did we ever become generous. The House Ways and Means Committee took the President's bill and added to it more tax cuts. Then it came to the Senate Finance Committee. We added tax cuts to the House version. We even gave real estate 15 years for depreciation. It is no wonder that we had a building boom--built on taxes, not on economics-- from 1981 on--when you could depreciate real property over 15 years. You could not lose. You did not even have to rent the building. In fact, many of them were not rented. That is what happened. But that is not the point. They were not being built to be rented. They were built for tax losses. We piled everything on we could. We went to conference, and we took the most expensive provisions of both bills and sent it down to the President. He signed it. What the economists did not foresee in those 18 months were three things: First, the rapid decline in inflation. This was before we had, indexed, the Tax Code. We had run 4 years of inflation of 13, 14, or 15 percent. We could presume that before we indexed the Tax Code we would get about 1.7 percent increase in revenues for each 1 percent of inflation. So if you could presume 10 or 11 or 12 percent inflation compounded from 1981 to 1985, it is no wonder we were projecting surpluses. But we did not foresee that inflation would absolutely nosedive, nor did we foresee that recession. It wasn't anybody's fault. It was not President Reagan's fault. It was a rosy scenario. This was everybody's projection. When the recession comes down, revenues go down, expenses go up. So we had an immense shortfall by 1982. Just to corroborate this, so that those that believe in the myth do not think that I do not know of what I speak, I want to insert two letters from Dr. Reischauer in the Record, one of November 8, 1994, and one of December 15, 1994, and then just a portion of his testimony, just 2 weeks ago on January 26, 1995, before the Finance Committee. I will quote just one sentence when he is referring to this period. It is reasonable then to ascribe nearly all of the underestimate of deficits during that period to errors in economic forecasts. Mr. President, I ask unanimous consent that those three documents be printed in the Record.

Mr. PACKWOOD. It was not President Reagan's fault, not really our fault. We were just wrong. The only reason I say that is because now we are not facing the same situation we were facing on projections in 1981. Now we are projecting $200 billion to $400 billion deficits as far as the eye can see. Could we be wrong? I suppose so. We were wrong in 1981. Should we base the budgeting of this Congress on the assumption that we are wrong, we are not going to have these deficits? I do not think so. I do not think so. Let us go on to 1982. We have the recession. So a number of people say to President Reagan, we are going to have to increase the taxes to cut this deficit. He was not wild about that. To the best of my knowledge, President Reagan is perhaps the only person that ever lived who actually paid 91 percent in income taxes. He hit it in Hollywood when the rates were 91 percent, and I do not think he had to count. I think he remembered 91 percent. He was reluctant to go back to a tax increase. We promised him--we the Congress--if he will give us $1 in real tax increases, we will give him $3 in real spending cuts. Mr. President, it is not logic. It is experience. He did not get a dime of those spending cuts. We did not pass them. All he got was a tax increase. None of us should start down that road again of promises in this Congress. I am not here attacking anybody as being immoral, malevolent, or anything else. We should not accept promises that we do not need a balanced budget amendment and we will pass spending cuts. We have not done it, and we will not do it. Anybody that was here in 1982 and bought that charade maybe can excuse themselves the first time. Remember the old adage, ``Fool me once, shame on you; fool me twice, shame on me.'' That was 1982. That is when we first had the balanced budget amendment vote in this Senate. Up until 1981--or maybe 1982, I cannot remember --I had been opposed to a balanced budget amendment. I believed we could do it. But I realized after 1981 and 1982--and especially 1982--there was never any hope that we would have the courage, and unless we were compelled to do what every city, county, and State has to do, we would never, ever, ever balance the budget. So I voted for the balanced budget amendment in 1982. Now, let us go forward a bit again, to 1985. I feel privileged to have been a part of the 1985 budget bill. Bob Dole, in one of the most extraordinary acts of leadership I have ever seen, from a Republican or a Democrat, managed to cobble together the Republicans--because we only got one Democratic vote--on a budget bill that had a 1-year freeze on Social Security COLA's. We were not eliminating them. We were not cutting them back to the Consumer Price Index. A 1-year freeze. It passed by one vote. It passed because we wheeled Pete Wilson into this Senator--who had an appendectomy just 24 hours before and could not walk. We wheeled him in and he voted from a gurney right over there. The controversial part of it was this 1-year freeze on the COLA's on Social Security. Unfortunately, here I have to be critical of President Reagan. Before it got to the House, he said he would not accept it. That finished it; it was over. The Republicans had to pay for it in 1986. We had already paid for it once, politically, in 1982. Budget Director Stockman, at that time, suggested a modest change in the amount of money you could get in your Social Security benefits if you retired at 62. For that suggestion, we never even got to the place of seriously considering it. For that suggestion, he got unshirted hell. The Democrats used it in 1982 to further their campaign, and they clobbered us. I remember a cartoon afterward--Tip O'Neill was Speaker at that time--that showed Tip O'Neill and he has his mother there, and it says ``Social Security'' on her. He is dropping her off at the nursing home, saying, ``Good to see you, Ma. I will call you in 2 years when we need you once more.'' From that day on, the Republicans have been frightened of ever talking about Social Security. The fright is on both sides. You will recall the 1984 Democratic convention in San Francisco, where Fritz Mondale said, ``The President has a secret plan to raise taxes. He will not tell you, but I am courageous enough.'' And President Reagan says, ``There he goes again.'' For the rest of that campaign, Fritz Mondale was on the defensive about tax increases. So we are all skittish. It is understandable why we are politically skittish. None of us, Republicans or Democrats, or the President, want to take the step forward that we all know needs to be done. The most freshman Member of this Congress, who has never been in politics before, knows what the problem is. This argument about term limits and that you have to have 8, or 9, or 10 terms to understand the problems--no, no, no. You do not have to be here 10 minutes to understand the problem. Maybe you have to be here 8, 9, or 10 terms to have the courage, when you finally feel safe enough to face the problem and say, let us solve it. We know what the problem is. Well, where are we now? The President has given up. He, in essence, has thrown in the towel. Last year, when he proposed his health bill, he had $475 billion in Medicare and Medicaid restraints. Someone called them ``cuts'' because they were not lower than we were, but over the period of 5 years, $475 billion in Medicare and Medicaid restraints. He has no health care in the budget this year and has no restraints of any consequence in Medicare or Medicaid--as if to sort of say it is Congress' problem, or maybe the Republicans' problem, to come up with a budget. You know, it is funny. It is all right to have those $475 billion in reductions if we were going to spend them, but it is not all right to have them if we are going to save them and apply them to the deficit. At least that is what the President is saying. Then the critics say, well, we cannot vote for this until we know the direction we are going to go in. I have heard the Senator from Ohio, the Senator from Michigan, the Senator from South Dakota say that, until we know specifically what the roadmap is, we cannot vote for this. I would defy any Governor in this country right now --and nearly all of them operate under a balanced budget requirement--to tell me how they are going to balance their budget in 2002. I bet you they could not. They will have to raise the sales tax, or cut welfare, cut the highway fund and say we can use the State highway funds for the State. They know they have to do it and will do it, and they will do it because they have to do it. And we will do it if we have to do it. But if we use the excuse that because we do not have a roadmap now as to how it is going to be done, we will not vote for this amendment. That is a patsy's way out. That means we do not want to face the problem. This is an excuse to avoid it. But if they want suggestions, I will give them some. My favorite one that everybody comes up with is that we will tax the rich--however you define who is rich. If we just tax the rich, that will take care of our problem. Well, I had the Joint Tax Committee do a chart for me, an estimate and a letter of how much money we could get. I asked how much money could we confiscate from those earning over $200,000? We will have a 100 percent rate of taxation. We will take it all. They said they could not quite answer that question. They had never run that on their computers, but they could tell me how much untaxed income there was with people above $200,000. So, they sent me the letter. And this year, if we were to tax all of the rest of the income that is not now taxed above $200,000, 100 percent of it, we would get about $182 billion,--billion, with a ``b''--not enough to narrow our deficit. My hunch is we would never get it again, because I do not think anybody would ever, ever again make over $200,000 if they had to give it all to the Government. And the Joint Committee had a wonderful paragraph in this letter. I will just read the paragraph and then put the whole letter in. This is the effect of a 100 percent rate of taxation. These effects would be extraordinary. If the 100 percent tax rates were to be in effect for a substantial period of time. . . then in our judgment there would be a substantial reduction in income-producing activity in the economy and, thus, a significant reduction in tax receipts to the Federal Government. I do not know why that should surprise anybody. But so much for the goose and the golden egg. We can get it once, then that deficit problem is right back with us again. Mr. President, I ask unanimous consent that the text of the letter from the Joint Committee on Taxation be printed in the Record.

Mr. PACKWOOD. So, let us go on down some other suggestions. Restrain spending. We all get this from home. If we just spent no more next year than we spend now, in 3 years we will balance the budget. If we spend no more than we spend now, we will balance the budget. I will give you some problems. You can decide what you want to do with them. Security now spends $1,000. You have 10 recipients and they each get $100 apiece; $1,000, that is all we spend on Social Security. And let us say there is 10 percent inflation. Under the present law, all of those recipients would get a 10-percent increase. They would all get $110, and we would spend $1,100 on Social Security. But we said we are not going to spend any more than we spend now. Therefore, do they all get just $100 and their purchasing power declines a bit? Or I will give you another scenario. We are only going to spend $1,000. There are 10 recipients on Social Security. But the population is aging. Let us say next year one more person becomes eligible. Now we have 11, not 10. But we are only going to spend $1,000. Do they all get about $90 instead of the 10 that got $100? When you pose this to people, they say, ``Well, we did not think about that. Maybe we can give Social Security recipients their cost-of-living increase and still hold all others.'' But now they do not expect to hold all other things this year. You are going to have to spend less this year. Do you know what you get? ``Well, we have to spend more for defense. Don't spend any more than we spent last year. Increase defense, increase education, increase health, but don't spend any more than you spent last year and take it out of somebody else. Don't take it out of me.'' I was intrigued with a statement in the paper, if quoted accurately, by the American Medical Association the day before yesterday. I like the American Medical Association, but here is the statement. AMA leaders said at a news conference here that Medicare needs a major restructuring to save it from bankruptcy, but insisted that should not be achieved by slashing doctors' or other health care providers' fees. The American Hospital Association and others that provide health services have taken a similar position and a coalition is forming to fight such cuts. Mr. President, there are only two expenses to Medicare. One is we reimburse the patient on occasion and the other is we pay the doctors and hospitals and labs and what not. That is all there is. Those who provide the services say, ``Not us,'' and the beneficiaries say, ``Not us, but cut spending.'' Well, if you do not cut those who provide the medical services and if you do not cut those who get the medical services, where do you cut the spending? You do not. These are the things we want to gloss over. The same problem exists if, instead of cutting spending, you say, ``Well, let's do it at the Consumer Price Index minus 1 percent or minus 2 percent.'' You have these same variations all the way through. I am not saying it cannot be done, but you have to realize that while Social Security only goes up with the cost of living each year, plus any new members that come on--it is not just the cost of living; you have more people, more expenses--but Medicaid and Medicare go up anywhere from 7 or 8 percent, at a minimum, to 15 to 16 percent a year--a year. Do you know what would happen if we take a 15-percent increase and compound it over 5 years? You have more than doubled your spending. So we say, ``Well, still spend the same we spent last year. Spend what we spent last year plus inflation. It is doable and, if we are forced to do it, we will do it and we should do it.'' And everybody says the problems are the entitlements. That is a term we use here in Washington. It is not a term any ordinary American uses. Entitlement means nothing more than a Government program that is passed and put into law and we never have to appropriate the money for it. Again, you get it automatically, unless we change the law. Social Security is the one that is best known. Medicare is one. Unless we change the law--positively vote to change it, the President has to sign it, or if he vetoes it we have to override the veto--this law goes on forever and it spends money forever. They say, ``Take it out of the entitlements.'' We have about 410 entitlement programs in this country--410--that automatically spend money, so surely we can find some money in entitlements. So I took a look at some of the entitlements. I have some where we can save some money. The Canal Zone Biological Area gets $150,000 a year. This is an island in the Panama Canal Zone. The money comes out of the Department of the Interior, administered by the Smithsonian, but it is an entitlement. Well, there is one we could save. There is 150,000 bucks. The John C. Stennis Center for Public Service Development trust fund. Now this is a big one--$680,000. This program trains State and local public servants to become more efficient. This program ought to be applied to the Federal Government, not the State and local governments. It also ``increases awareness about the importance of public service.'' We all revere John Stennis and we would hate to do anything to demean his memory, but this is $680,000 in spending. Now, another: The Pershing Hall revolving fund. General Pershing, of course, was the commander of our troops in Europe in World War I. Pershing Hall is a Department of Veterans Affairs building in Paris, France. It does not get many tourists. It is currently being subleased to a hotel firm which is gutting the building and will turn it into a hotel. A hotel firm is going to gut the building, and turn it into a hotel. But it is an entitlement of $114,000 in fiscal year 1996. Let us take the last one. Payment of Government losses in shipment fund. This is a permanent, indefinite appropriation in the Treasury Department. The fund would cover losses incurred by the Postal Service or any Federal agency in shipping coins, currency, and savings bonds-- $500,000. I have added up these four, and I think they come to a couple million total for these four entitlements. I said we have 410 entitlements. These are four inexpensive ones. But the bottom 400 of them altogether--there are about 410--the bottom 400, in terms of expense, cost about plus or minus $50 billion. Fifty-billion dollars is big money, but it is for 400 of the entitlements--$50 billion. The top four entitlements, plus interest--and the top three are Medicare, Medicaid, and Social Security, and then fourth is other Government retirements, military, civilian retirements--just those four, plus interest, are $900 billion a year. You know interest is the ultimate entitlement. We have to pay it or we can be sued. The entire cost of the bottom 400, the $50 billion, is less than the amount that these four, plus interest, goes up a year. You want to get rid of the 400? Go ahead. Save the $50 billion and the deficit, then, instead of being $200 billion will be $150 billion. The problem is, we are all afraid to approach these big entitlements. Now what is the old expression? If you want to go duck hunting, you go where the ducks are. The ducks are these big programs. You think they are growing? Boy, are they growing. You take those four that I mentioned, plus interest, in 1964 those four, plus interest, were 23 percent of all of the money that the Federal Government spends--23 percent. Ten years later, in 1974, they were 39 percent. In 1984, they were 48 percent. In 1994, they were 56 percent. In the year 2004, they will be 67 percent. One day all the money the Federal Government spends will go for these four programs, plus interest. And we are afraid to touch them. One of two things happens, or maybe three things, if we do not do something soon. First, as we begin to spend more and more and more on these programs, if we do not increase taxes, all the other programs of Government get squeezed. We spend less on the Coast Guard and less on education and less on environmental protection and less on defense. Less on everything. So we can fund these four. Or we raise taxes--and I am not suggesting that, and I do not want that--we raise taxes to try to fund the other programs. Do not worry about narrowing the deficit. We will not use the taxes to narrow the deficit. We will spend it if we have it, so we still have a deficit. That is the other alternative. Or maybe we do nothing and we finally get to the place where there is a cataclysmic catastrophe coming. It is coming first in Medicare. There are two parts to Medicare. One is part A, that is hospital payments; the other is part B, and that is doctor payments. exhausted. The part B portion which is the doctor payment--on which we now spend $47 billion out of the general fund--this is general taxpayers' money. This is not from the beneficiaries' premium that is deducted from a Social Security check. But this scenario does not hold a candle to where we will be in Social Security in the lifetime of most of the Members of this Senate. At the moment, Social Security is taking in more money than it pays out. We will take in $70 to $80 billion more this year than we take out. That will continue on until about the year 2013. The reason we are doing that is because we know the baby boomers born from 1945 to 1965 start to retire in about the year 2010. Give or take a few years or so from 2010--2013--the Social Security starts to pay out more than it takes in. But at the moment it is taking in more money and investing it in Government bonds. That is all we allow it to do, Government bonds. If we had cut them lose and let them invest what they wanted in 1978, they might have invested in Texas real estate and they would be broke now. Here comes the $70 billion more than we pay out. In it comes. Social Security administration, in essence, gives the $70 billion to the Treasury Department. The Treasury Department gives the Social Security administration a bond for $70 billion, a Government bond. We, thereupon, spend that money now, the $70 billion. We spend it on the Coast Guard, on education. We spend it on defense, we spend it on environmental protection, we spend it on everything Government spends money on. The $70 billion is gone. This continues, in the next year, the year after that, the year after that until about the year 2013 when I estimate Social Security will probably hold almost 3 trillion dollars' worth of Government bonds. Now, at this stage they start to pay out more than they take in. The Social Security Administrator takes their bond to the Treasurer of the United States and says, ``Here, give me some money to pay these benefits.'' The Treasurer looks at the Administrator and says, ``Are you crazy? We spent that money 20 years ago. What do you mean, give you money? I don't have any money.'' At that stage we have to start redeeming the bonds. For example, if we keep faith with the recipients we have to raise the taxes to pay those bonds. That is not bad enough. About the year 2013 we start to pay out more money than we take in. By about the year 2029, only 34 years from now--look backward 34 years and that is but a memory. That is not history. Much of it is as clear today as it was 34 years ago. We think that is not a very long time. Yet think ahead and we think it is an eternity. About the year 2029, not only is Social Security paying out a lot more than it takes in, all of the bonds are gone. They have now redeemed all of the bonds, and by that year Social Security is paying out about $3 trillion a year. Unfortunately, it is only taking in about $2.2 trillion, roughly, $700 to $800 billion shortfall and no bonds to turn in. At that stage, if we are going to keep faith, and we are going to do it with a payroll tax we will have a whopping increase in the payroll taxes. I cannot even estimate how high it will have to be to pay that kind of a deficit. What I fear is going to happen is this: Your children or your grandchildren at that stage will say, ``I am not going to pay that money. I will not pay that much. And I will not vote for anybody that will tax me that much,'' and this is where the cataclysmic coalition comes between generations. We can cure that if we would face the problem now. But we are not going to, I fear. We are not going to unless we pass the balanced budget amendment. Then what does that require of Members? It does not require a cut. We spend, this year, 1995, rounded off to the nearest $100 billion, we will spend this year about $1.5 trillion, $1.5 trillion if we spend in what I referred to earlier as baseline. If we do not change the laws at all, we do not add new spending, we do not add prescription drugs to Medicare, we do not add long-term care to Medicare, we spend as we are doing under the present law, in 7 years, in the year 2002, instead of spending $1.5 trillion, we will spend $2.2 trillion--$700 billion more. When people talk about cutting, that is not a cut. We are not talking about cutting. In order to balance the budget in the year 2002, instead of spending $2.2 trillion we might have to spend $2 trillion. Now we are spending $1.5. Now to balance the budget we would have to spend about $2 trillion instead of $2.2. Is that impossible? Can we not do that? The answer is, based upon experience, no. Better phrase it differently. We will not do that. Because in order to do it, we would have to undertake steps that we do not politically want to undertake and we are afraid. I talked about some of the significant debates of 20-25 years ago and some of the steps we took and the one-vote margins that made a difference. And yet in my quarter of a century in this Senate there probably will be no more important vote that I have cast, or if I stayed here another quarter of a century, that I ever would cast than the one that says to my kids and my grandkids I was able to help save this country. Sometimes what you do is a holding action. In the military it is referred to as a holding action. Major Devereux at Wake Island, shortly after the Japanese bombed Pearl Harbor, 200, 225 marines on this atoll, and the Japanese invaded it and we can see the footage of it, men swarming to shore like ants. There is Major Devereux, and his men, holding on, knowing they were defeated, waiting for the time. Or maybe it was General Wainwright at Corregidor, when we moved in and it was clearly a loss. Or Jack Kennedy, a young PT boat commander being part of that rescue. Or Colonel Travis at the Alamo, extraordinary courage, when Sam Houston says to him, ``We need a holding action until we can get our army organized.'' And when the siege starts February 23, and the battle is on March 6, for 2 weeks they held out, wiped out the men but gave Sam Houston time to put the army together and win at the battle of San Jacinto. These actions made a major difference in American history. Well, we are at that point now, but I think it is not a holding action. Every now and then, there is a difference between a holding action and an action you are going to take that is priceless. It is not Corregidor Island or Wake Island or San Jacinto. Shakespeare said it best in Henry V. You recall the history. The French and the English in the Hundred Years War had been battling. France had clearly the superior position in geography, and they were a unified nation and the biggest nation in Europe. The British had beat them at Poitiers and then at Crecy in the early part of the Hundred Years War. But the final battle was coming at Agincourt, and the English were utterly at a disadvantage--foreign soil, 9,000 troops, the French had 30,000. Picture Shakespeare's opening scene: Westmoreland is the king's cousin, and Westmoreland comes in. They know the battle is going to take place the next day. He said: O', that we now had here But one ten thousand of those men in England That do no work today! And the king responds: What's he that wishes so? My cousin Westmoreland? No, my fair cousin. If we are marked to die, we are enow To do our country proud, and if we live, The fewer the men, the greater share of honor. Going on he says: This day is called the feast of Crispian. He that outlives this day and comes safe home Will stand a-tiptoe when this day is named He that shall see this day and live old age Will yearly on the vigil feast his neighbors And say ``Tomorrow is Saint Crispian.'' Then will he strip his sleeve and show his scars, [And say ``These wounds I had on Crispin's day.''] And gentlemen in England now abed Shall think themselves accurs'd they were not here, And hold their manhoods cheap whiles any speaks That fought with us on Saint Crispin's day. Today is an interesting day. Fortunately, there is a feast day for almost everyday. Today is Saint Scholastica Day, named after Saint Scholastica. It means ``learned.'' amendment that I think will determine whether or not we pass the balanced budget amendment. Some will flee, some will stand. I quote one other part from the soliloquy that I left out at the time when Henry turns to his troops and says: Let he which hath no stomach for this fight depart. His passport shall be made And crowns for convoy put into his purse. I would not die in that man's company That fears his fellowship to die with us. On this Feast Day of Saint Scholastica, the ``learned,'' we are going to vote. The vote we make will probably have a greater effect on our children and grandchildren than anything else we will ever do, and I would hate to be that man or woman that serves in this Senate whose child or grandchild comes to you 10 or 20 or 50 years from now and says: ``Where were you on Saint Scholastica Day?'' And you say: ``I fled the battlefield.'' I thank the Chair. I suggest the absence of a quorum.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I rise today to congratulate a very special effort by a group of Oregonians that could serve as a model for this body in the 104th Congress. Wallowa County in the northeast corner of my home State is one of Oregon's smallest counties. Yet, that has not stopped the devastating effects of the sole-purpose Endangered Species Act from being felt there. Just this year alone, two sawmills have closed in Wallowa County, taking away over 100 jobs. This is a significant impact on a population of only 7,000. Every Senator knows my feelings on the Endangered Species Act, and the critical need that it be changed to reflect the needs of people as well as bugs and plants. I am quite hopeful that we will soon reform this act so that the families in Wallowa County and throughout Oregon who have been so gravely injured by it can be made whole. But I will not use my time today to restate my concerns about the Endangered Species Act and the tens of thousands of families whose hopes and dreams it has shattered in my State in the past 5 years. Instead, I want to focus on the positive response the people of Wallowa County have had to the listing of several species of salmon on the Columbia-Snake River System. Residents of Wallowa County and representatives of the Nez Perce tribe, in cooperation with the U.S. Forest Service, have developed the Wallowa County-Nez Perce Salmon Habitat Recovery Plan. This plan is a responsible, locally developed effort to protect not only habitat for threatened and endangered species, but also to protect the people of northeastern Oregon and their economic base. This plan takes into account the deteriorating condition of the northeast Oregon forests, as well as the need for timber cutting and salvage, species protection, cattle grazing, and other uses. Here is a working example of what Americans asked for when they went to the polls. This is not some huge new bureaucratic effort seeking to manage the public lands of Wallowa County by remote control from Washington, DC. Instead, the people affected put their heads together, and using the best information available, crafted a workable, meaningful plan. If there was any single message last November, it was a cry for less Government intrusion. My friends in Wallowa County have been sending that message for a long time. The bureaucracy's response was, unfortunately, predictable. The National Marine Fisheries Service and the Forest Service have refused to adopt this site specific plan that can be put into place, and begin to have a positive effect, immediately. Instead, these agencies have settled on waiting for an overall framework called ``PACFISH,'' to be ready for implementation. PACFISH is not site specific, and calls for extensive nonmanagement areas. It certainly was not developed with Wallowa County's specific needs in mind, and reflects now-outdated radical preservationist dogma. I believe that the citizens of Wallowa County, who, after all, are the ones who have to live with any final decisions that are made, deserve a great deal of credit for developing the Wallowa County-Nez Perce Salmon Habitat Recovery Plan. I believe this document should, and will, become the lead plan for salmon habitat recovery in Northeast Oregon. There is hope for the families of Wallowa County in this Congress. I believe we will be able to take strong action to reform this Nation's restrictive environmental laws and regulations. Until that day comes, however, the families of Wallowa County are not simply waiting for change. They are promoting change, and sending us a message that is unmistakable. I hope we are all listening.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to hold a business meeting during the session of the Senate on Tuesday, January 10, 1995.

Mr. PACKWOOD. Mr. President, I ask unanimous consent that the Committee on Labor and Human Resources be authorized to meet for a hearing on federal job training programs, during the session of the Senate on Tuesday, January 10, 1995, at 9 a.m.

Mr. PACKWOOD. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Tuesday, January 10, 1995, at 9 a.m. to hold a closed business meeting.

Mr. PACKWOOD. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Tuesday, January 10, 1995, at 9:30 a.m. to hold an open hearing on intelligence matters.

Mr. PACKWOOD. Mr. President, I ask unanimous consent that the Finance Committee to be permitted to meet Tuesday, January 10, 1995, beginning at 9:30 a.m., in room 215 of the Dirksen Senate Office Building, to conduct a hearing on the nomination of Robert Rubin to be Secretary of the Treasury.

Mr. PACKWOOD

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

Mr. PACKWOOD

Mr. PACKWOOD. I suggest the absence of a quorum.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, as chairman of the Senate Finance Committee, I am introducing the committee's funding resolution for March 1, 1995, to February 28, 1997. This resolution reflects a 5- percent cut from the 1994 funding level with a 2.4-percent cost-of- living adjustment for January 1996. This resolution was approved by the Finance Committee today. In addition, the committee approved the designation of myself, Senators Dole, Roth, Moynihan, and Baucus to be members of the Joint Committee on Taxation and to be congressional advisers on trade policy and negotiations. Furthermore, the committee formally adopted its rules of procedure and in accordance with Senate rule XXVI, I request unanimous consent that the rules of the Finance Committee be reprinted in the Congressional Record.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I ask unanimous consent to go into executive session to consider the nomination of Mr. Robert E. Rubin to be Secretary of the Treasury.

Mr. PACKWOOD. Mr. President, I believe we are ready to vote.

Mr. PACKWOOD. Mr. President, I move to reconsider the vote.

Mr. PACKWOOD. Mr. President, I am delighted that we have shown a unanimous vote of confidence--we did in the Finance Committee this morning--in Bob Rubin to be Secretary of the Treasury. He is an eminently qualified man. I have had occasion to talk with him over the last 2 years from time to time, but one of my best memories of him was when he and I were speaking at a conference in Williamsburg, a conference by and large of business leaders and chief executive officers and boards of directors of the larger corporations in America. I though he handled with great aplomb a particular question. One questioner got up and said, ``Mr. Rubin, you asked us to come to the aid of the administration last year and to lobby hard on behalf of the North American Free-Trade Agreement. You asked us to spend a lot of money and effort and manpower to support the administration in that effort, isn't that correct?'' And he said, ``Yes, sir'' And then the questioner said, ``Why is it then you won't let us deduct the expenses for that lobbying on behalf of the administration?'' To Mr. Rubin's credit he said, ``Sir, I cannot give you a good answer to that question.'' I thought, rather than trying to finesse that, that was as good an answer as you could give. I flew back on the plane with him from the conference that day, complimented him on the answer, and also complimented him on one other thing. Most people do not realize outside the beltway that Mr. Rubin, for the last 2 years, has been at a very significant and powerful position, and the reason they do not realize it is he did not use that position to appear on the Sunday morning talk shows or to give interviews. He was very much a behind-the-scenes operator, feeling it was not his place to garner publicity. In the position for which he has just been confirmed, he will no longer be able to have that kind of anonymity. He is going to have to appear on behalf of the President and this administration and this country. I am proud to know him, proud to have supported him, and I am delighted that the Senate has given him a unanimous vote of approval. I ask unanimous consent that the President be immediately notified of the confirmation of the nomination.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I ask unanimous consent we return to legislative session.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand in recess until 12 noon on Wednesday, January 11, and that following the time for the two leaders, there then be a period for the transaction of routine morning business not to extend beyond the hour of 1:30 p.m., and that the following Senators be recognized to speak for under the following time restraints: Senator Frist up to 10 minutes; Senator Hutchison up to 10 minutes; Senator Campbell up to 5 minutes; Senator Harkin up to 20 minutes. I further ask unanimous consent that at 1:30 p.m. the Senate resume consideration of S. 2, and at that time Senator Lautenberg be recognized to offer an amendment on which there be 20 minutes under the control of Senator Lautenberg and 5 minutes under the control of Senator Grassley. I further ask unanimous consent that following the conclusion or yielding back of time, the amendment be laid aside in order for Senator Bryan to speak with respect to an amendment. I further ask unanimous consent that following the Bryan debate, Senator Glenn be recognized to offer the manager's amendment, on which there be 10 minutes for debate, to be equally divided in the usual form, and that the only other first degree amendment in order be a Stevens amendment dealing with the Library of Congress. I further ask unanimous consent that the Lautenberg amendment recur at 5 p.m. and at that time the majority leader or his designee be recognized. I further ask unanimous consent that following the disposition of these amendments, the Senate proceed immediately, without any further action or debate, to third reading and final passage of S. 2, as amended. Finally, I ask unanimous consent that at 10 a.m. on Thursday, January 12, the Senate proceed to S. 1, the unfunded mandates bill, for debate only prior to 2 p.m. on Thursday.

Mr. PACKWOOD

Mr. PACKWOOD. For the information of all Senators, the Senate will complete action on S. 2 tomorrow evening; however, no votes will occur prior to 5 p.m. on Wednesday.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, if there is no further business to come before the Senate, and I see no other Senator seeking recognition, I now ask unanimous consent that the Senate stand in recess as previously ordered.