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BALANCED BUDGET AMENDMENT TO THE CONSTITUTION
(Senate - February 27, 1997)

Text of this article available as: TXT PDF [Pages S1698-S1726] BALANCED BUDGET AMENDMENT TO THE CONSTITUTION The Senate continued with the consideration of the joint resolution. Mr. REED. Mr. President, I ask unanimous consent to speak for 20 minutes. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BIDEN. Mr. President, will the Senator from Rhode Island yield to me so that I may explain why I missed that last vote? Mr. REED. Yes. Mr. BIDEN. Mr. President, I thank the Republican leader as well as the Democratic leader for attempting to hold the vote long enough for me to get here. I voted before in the affirmative on the Graham amendment. We voted on it last year. I was one of the speakers at the International Chiefs of Police and Sheriffs Association discussing the juvenile justice bill. I thought I had left in plenty of time from a downtown hotel to get here. But, as Washingtonians will tell you, there is a good deal of road construction going on. I was caught behind the most polite cab driver in Washington. He stopped for everyone, which I was happy to see except for this day. Had I had the cab driver who runs over most people, I would have been up here. I should not say that. I will get letters about that. That was a joke, an attempted joke. But I want the Record to show that had I been here, I would have once again voted for the Graham amendment. I apologize if I inconvenienced the Senate in any way in attempting to hold it for me to get here. I thank my distinguished friend from Rhode Island for yielding. The PRESIDING OFFICER. The Senator from Rhode Island. Mr. REED. Mr. President, I am prepared to speak. I would be willing to defer if there are any other procedural announcements at this time. Mr. LOTT addressed the Chair. The PRESIDING OFFICER. The majority leader. Unanimous-Consent Agreeement Mr. LOTT. I thank you, Mr. President. I thank the Senator from Rhode Island for yielding this time so that I may enter a unanimous-consent agreement which has been reached with regard to an amendment that Senator Hollings had intended to offer to the balanced budget amendment on campaign financing. I ask unanimous consent that the majority leader, after notification of the Democratic leader, may turn to the consideration of a Senate joint resolution, the modified text of which is Senate amendment No. 9 filed yesterday to Senate Joint Resolution 1 regarding campaign financing. I further ask that no amendments or motions be in order during the pendency of the Hollings constitutional amendment, and following the conclusion of the debate, the joint resolution be read a third time and a vote occur on passage of the joint resolution, with the preceding occurring without any intervening action. Before the Chair puts this consent request to the body, it has been pointed out to me by Senator McCain that this consent is for a constitutional amendment regarding campaign spending limits. There are other campaign-related issues that may be pending in the Senate committees that do not amend the Constitution but are statutory language. So this is not to be in place of or in any way block other consideration, or to indicate that there will not be hearings and further consideration of this matter. But Senator Hollings agreed to this arrangement so that it would not be a part of or relate to the consideration of the constitutional amendment for a balanced budget. Senator McCain agreed that it be done this way. It has taken the cooperation of both of them and of all the Senators. This is an important issue which should be brought up freestanding with [[Page S1699]] a reasonable amount of time for discussion. I have indicated to Senator Hollings that, if it takes a couple of days or so, we will be prepared to do that. I think that is about what it would take, but if it takes 2 days and 2 hours, I do not know of anyone who would object to that. But it should be a very interesting debate. So I now make that request, Mr. President. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. LOTT. I thank the Senator from Rhode Island for yielding. The PRESIDING OFFICER. Under the previous order, the Senator from Rhode Island is recognized for 20 minutes. Mr. REED. Thank you, Mr. President. Mr. President, I rise in opposition to the amendment before us today. For many decades, Congress found it easier to debate a balanced budget amendment to the Constitution than to actually balance the budget. Support for the balanced budget amendment was a convenient badge of fiscal austerity at a time when many Members were voting for tax policies and spending proposals that saw our annual deficit and our cumulative national debt explode. After so many years, it is no wonder that the balanced budget amendment has become a talisman which its supporters clutch, suggesting that it has extraordinary powers to translate the difficult choices that this body must face into some type of simple constitutional formula which will miraculously erase the deficit. But, as the last few years have indicated, there is no magical constitutional language that will make the choices or the policies of budget balancing easier. Mr. President, in 1993, the Clinton administration began a process of deficit reduction which has helped to create a strong economy, cut the deficit by 63 percent, brought the deficit when measured as a percentage of the gross domestic product to its lowest level since 1974, and given us the lowest deficit of any major industrialized nation. It took difficult choices, not constitutional gimmicks; choices that Republicans refused to support. Whether or not this amendment passes, and I hope it does not, we will still be confronted by these choices. However, if this amendment does pass, for the first time in our history we will either surrender our role in shaping the budget and the social and economic policies which it defines to the courts, or simply surrender any decision to an adamant minority which could invoke the provision to block necessary action. Mr. President, the amendment before us today is flawed in many ways. It is the wrong answer to a real problem. It is the wrong way to manage the economy. It disrupts our tradition of majority rule. It needlessly jeopardizes essential programs and it needlessly enhances the role of the courts in budgetary and tax policy. The balanced budget is the wrong way to manage the economy. Over 1,100 noted American economists, including 11 Nobel laureates, voiced their opposition to this balanced budget amendment on the grounds that it would hurt our economy and graft improper fiscal policy onto the Constitution. They said, ``It is unsound and unnecessary.'' They added, ``It mandates perverse actions in the face of recessions.'' They went on to say it ``would prevent Federal borrowing to finance expenditures for infrastructure, education, research and development, environmental protection, and other investment vital to the Nation's future well-being,'' and that it ``is not needed to balance the budget.'' They also ``condemn'' the amendment and suggest it could place our economy ``in an economic straitjacket.'' One Nobel laureate, Prof. William Vickery, developed an analysis of 15 issues with respect to balancing the budget, reducing the deficit and providing for economic growth, and in this analysis he has a compelling and noteworthy passage: If General Motors, AT, and individual households had been required to balance their budgets in the manner being applied to the federal government, there would be no corporate bonds, no mortgages, no bank loans, and many fewer automobiles, telephones and houses. But this balanced budget amendment suggests that the Government do exactly the opposite of what the most sophisticated private industries do, and I think that is a mistake. While the majority may find it appropriate and even desirable to insert economic formulas into the Constitution, I would urge caution. For example, we all believe and we will say time and time again that we should have a full employment economy and that every able bodied American work. However, if I were to introduce a full employment constitutional amendment, I predict that the very same supporters of this balanced budget amendment would rush to this floor and condemn that approach, invoking the terminology that we should not enshrine economic ideas or formulas into the Constitution of the United States. The same thing would happen if we talked about an anti-inflation amendment. The point, I think, should be very clear. It is our responsibility, together with other institutions, outside the scope of the Constitution to rationally ameliorate the surges and downswings of the economy. This is what we should do. Some people might try to say, well, no, look at the States. They provide for a balanced budget. That certainly misses the point. State governments do not manage national economies. They do not issue and support currencies. They do not deal in foreign trade. And most of them, if not all of them, with balanced budget requirements have the good sense to separate capital spending from operational spending. So that logic does not suffice to support this balanced budget amendment. I also suggest that economically we are not immune from the difficulties of the business cycle. We have been enjoying over the last several years good, substantial economic growth, but we know that in past periods our economy has faltered. If it does falter, this balanced budget amendment could be a straitjacket, confining and constraining us in our response to these economic recessions. When the economy shrinks, revenue shrinks, throwing off our revenue estimates, throwing off our whole plan to get to the balanced budget, and we will be hamstrung by this amendment's proposals in terms of what we can do to address a recession. For example, the CBO has talked about the impact of recession on the deficit. Their estimates indicate that a 1 percent drop in the gross domestic product would increase the deficit by $32 billion. A 1-percent increase in unemployment would add $61 billion to the deficit. These are staggering figures with which we would have to contend in the context of a very narrowly drawn balanced budget amendment. These are not just statistics. These are real people's lives. We have all lived long enough to have endured economic recessions and have seen the cost in human lives. We have to, as a Government, to such situations. We cannot, I think, plead, at that moment of need, we would like to help you, but the Constitution prevents us from doing sensible, appropriate things to put people back to work in this country. One of the aspects of the balanced budget amendment that would severely constrain our response to recessions is the fact that it would suppress the automatic stabilizers contained in our economic policy today, things like unemployment compensation and other entitlement programs which exist to meet the needs of people who have fallen on hard times during a recession. As the Congressional Research Service cautioned when it examined the economic impacts of this proposal: In sum, the balanced budget constitutional amendment could require action to neutralize the automatic stabilizers in the budget that expand outlays and reduce tax collections in economic slowdowns and recessions. In this case, the budget would no longer serve to moderate business cycles. And, under this amendment, we would lose a valuable tool in aiding the working men and women of America. There is more than just constitutionally historic interest involved in the question of this amendment's supermajority requirements because this amendment requires not a majority vote, in many cases, but much more than a majority vote. This provision holds the real potential for constraining effective action at the time we [[Page S1700]] need Government to move decisively and purposefully. For example, in times of economic crisis, there would be no automatic stabilizers if a small minority of Senators or Representatives objected. Different regions of the Nation experiencing economic hardship could find no comfort in Washington because they could not muster the number of Senators and Representatives to deal with their region's particular problems. Frankly, over the last several years, we have seen economic situations in which the country overall appears to be doing fine, but when you go to the Northeast, to California, or to other parts of the country, you find regional recessions that need the help of this Government. Regrettably, in that situation there may not be sufficient will or political support to do what we must do, which would be extremely detrimental to the citizens who live in these areas. There is another aspect of this supermajority that is built into this constitutional amendment which should cause us all great concern, and that is in order to raise the debt ceiling a vote of three-fifths would be required. We have just in the last Congress seen the difficulty of securing approval of a change in the debt ceiling with a simple majority requirement. If we would require a three-fifths vote, we really would be putting our Nation at severe risk. As Secretary Rubin has pointed out with respect to the issue of raising the debt ceiling and consequently avoiding default on Government debt: The possibility of default should never be on the table. Our creditworthiness is an invaluable national asset that should not be subject to question. Default on payment of our debt would undermine our credibility with respect to meeting financial commitments, and that, in turn, would have adverse effects for decades to come, especially when our reputation is most important, that is, when the national economy is not healthy. Moreover, a failure to pay interest on our debt could raise the cost of borrowing not only for the Government but for private borrowers as well. This super majority provision would affect the Government's ability to deal rationally and prudently with the debt ceiling, and that is another reason, a very strong reason, why this proposed constitutional amendment is inappropriate. It is bad economics; 1,100 economists would condemn it, but it is also very poor budgeting. As Senator Byrd pointed out, the majority's proposal turns the Congress and the President into fortune tellers who must somehow predict and balance outlays and receipts exactly or find the supermajority needed to waive the amendment. This appears to be an impossible task, because each year the CBO seems to revise its projected deficit and revenue totals on a regular basis. We should not delude ourselves into thinking we can accurately predict the future, and we should definitely not add this dubious proposition to the Constitution. In addition to the fact that this amendment's success is predicated on frail human predictions, there are other reasons to oppose this amendment. While the majority claims that States have managed to survive balanced budget amendment requirements, they fail to acknowledge, as I previously indicated, that States do so rationally by creating separate operating and capital budgets. I have supported a balanced budget amendment which recognizes this rational policy. But that proposal is not before us today and we are debating a proposal that does not recognize--in fact some scholars have indicated it would constitutionally preclude--the development of a capital budget by the Federal Government. Time and time again, the advocates of the amendment have rejected the idea of a capital budget for the Federal Government. I believe, in a sense, not only are we rejecting sound constitutional policy and sound administrative policy, but we are also undercutting this Nation's need to build up our capital infrastructure. So, this amendment, as proposed, is both bad economics and bad budgeting, and finally it is an abrupt departure from the constitutional balance that we have observed through the course of our history. It raises a number of fundamental questions about our Constitution, our tradition of majority rule, and the power of the judicial branch in the United States. One of the lessons I learned in law school was, where there is a wrong, particularly a constitutional wrong, there must be a remedy. Yet this constitutional amendment makes no mention of how it will be enforced and who has the legal standing to question those issues which arise under the constitutional amendment. This is an invitation to litigate rather than legislate on budgetary matters. If a future Congress finds it too difficult to take the painful steps needed to eliminate the deficit, then we may expect any number of possible claimants, from Governors upset about Medicaid payments to senior citizens upset about their Social Security checks, all of them urging the courts to step in and take action. Moreover, by placing the requirements that receipts and outlays be reconciled in the Constitution itself, the amendment effectively calls on the Supreme Court to ensure that this mandate is met. While the amendment may leave open the question of how the legislature reaches its positions and what items will be considered outlays and revenues, the Supreme Court will always have an obligation to uphold the Constitution. Once we declare constitutionally that revenues and outlays must be reconciled, the Court will have no inhibition, and, in fact an obligation, to step in and make this reconciliation if Congress fails. Likewise, under this amendment the President could be forced to impound funds, to cut off checks, to do many things because of a perceived constitutional mandate. I would think long and hard, and I urge my colleagues to think long and hard, whether or not we want to surrender what is traditionally the authority of the Congress over both the courts and the President to manage the public purse. These issues are all very difficult ones, raising profound questions of constitutional law. One other aspect of the proposal which is disturbing is the departure from a tradition in this country of majority rule. I have mentioned before the supermajorities which would be required to raise the debt limit and to do other things which today only require a majority vote of the Members of the House and the Senate. Indeed, the balanced budget amendment would create new supermajorities in many different areas. When the founders developed the Constitution, they recognized that only majority rule would work for a nation founded on the principles of liberty and opportunity. James Madison argued in Federalist 58 that if more than a majority were required for legislative decision, then: . . . in all cases where justice or the general good might require new laws to be passed, or active measures to be pursued, the fundamental principles of free government would be reversed. It would be no longer the majority that would rule: the power would be transferred to the minority. And, indeed, that is what this amendment would do inexorably. There is a final and significant issue which must be discussed with respect to this balanced budget amendment proposal. I believe it jeopardizes the integrity of the Social Security system and raises the specter of encroachments on the system, not to support seniors but to pay for the reckless spending of the 1980's. My State has the Nation's third highest percentage population of senior citizens. These are the men and women who fought in World War II and who made our country an economic power. Their sacrifices have made our Nation what it is today. They deserve our support and they rightly demand our assistance to maintain a dignified retirement. The hallmark of our commitment to these seniors has been the Social Security system. However, this amendment makes no provision to protect this essential program from the choices necessary to achieve a balanced budget. The amendment fails to recognize that Social Security is not just like every other program. It is directly funded through a dedicated payroll tax, and numerous acts of Congress have sought to protect it from improper manipulation or precipitous reductions in benefits. Yet the majority refuses to protect Social Security and, instead, wants to use the Social Security trust fund to mask the deficit. Mr. President, recently the Congressional Research Service produced a report regarding the impact of the balanced budget amendment on Social Security, which contained a shocking [[Page S1701]] revelation. The report found that the Social Security Administration, even though it has accumulated a very healthy surplus, would not be able to pay benefits in certain years, due to the amendment's requirements that total outlays for any fiscal year shall not exceed total receipts for that fiscal year. In other words, Social Security could only pay as much in benefits as it receives from payroll taxes in any given year, even if the trust fund was running a multibillion- dollar surplus from previous years. This is a grave matter that deserves more analysis and could jeopardize the 1983 Social Security reform law as well as future reform efforts. But it would be a consequence of this balanced budget amendment if adopted today or in the future. Some would argue that no legislator would touch the Social Security system, but a constitutional imperative may provide a shield which would allow legislators to break that sacred commitment between ourselves and those seniors who have contributed so much to this country. I urge my colleagues to reject this balanced budget amendment. The Constitution establishes the durable rights and responsibilities which are the heritage of our past and the best guarantee of our future. We should not let the Constitution fall prey to a proposal that reflects transient economic policy at best, and would erode both majority rule and the principle that the people's representatives, not judges, must be responsible for the public purse. Mr. President, before I yield, I would like to thank Senator Feingold for his graciousness in delaying consideration of his amendment in order to permit me to go forward with my statement. I thank the Senator from Wisconsin and I yield my time. Amendment No. 13 The PRESIDING OFFICER. Under the previous order, the question recurs on the Feingold amendment No. 13. Debate on the amendment is limited to 30 minutes equally divided in the usual form. Mr. FEINGOLD. Mr. President, under the unanimous-consent agreement I have two amendments at the desk and I believe it is in order for me to call up the first of the amendments, amendment No. 13. The PRESIDING OFFICER (Mr. Enzi). That is the pending question. The Senator has 15 minutes. Mr. FEINGOLD. Mr. President, I thank the Senator from Rhode Island for his kind remarks and for his excellent remarks in opposition to the balanced budget amendment. The amendment I am offering today to the balanced budget amendment will ensure that this Congress will meet its stated goal of reaching a balanced budget by the year 2002. Many people do not realize that as currently drafted, Senate Joint Resolution 1 may well forestall this goal of balancing the budget by the year 2002 well into the next century. I believe reaching a balanced budget by 2002 or earlier should be our highest priority. Thus, I am offering an amendment that will shorten the time for ratification of this amendment. As was noted on the floor by our colleague from North Dakota, Senator Dorgan, a few weeks ago, even if this amendment were somehow ratified at 2:10 today, tomorrow this Nation's deficit would be no smaller than it was when the amendment was adopted. The fact that this amendment in and of itself does nothing to reduce the deficit highlights one of my principal concerns with Senate Joint Resolution 1. That concern is that pursuing a constitutional amendment approach could, counter to what everyone suggests on this issue, actually delay action on the real work of achieving a balanced budget by providing what is, in effect, political cover for inaction while the States debate the question of ratification. Under the proposal before us, even if the Congress adopted the joint resolution this year, the implementation date, the date by which we would actually be required to balance the budget, is potentially well into the next decade. Conceivably, it could be as late as the year 2006. That is right within the terms of the balanced budget amendment that is being offered. This is evident on the face of the amendment itself. Section 8 of the amendment offered in Senate Joint Resolution 1 provides that the balanced budget amendment will take effect beginning with the fiscal year 2002, or within the second fiscal year beginning after its ratification, whichever is later. So there is no certainty at all with regard to the year 2002. The report accompanying Senate Joint Resolution 1 reiterates this uncertain timeframe. It states as follows: An amendment to the Constitution forces the Government to live within its means. S.J. Res. 1 requires a balanced budget by the year 2002, or 2 years after the amendment is ratified by the States, whichever is latest. So, Mr. President, the proposal before us allows the States a full 7 years to ratify this amendment. The practical effect of this is, assuming Congress approves Senate Joint Resolution 1 by June 1 of this year, the States then have 7 years, or until the year 2004, just to ratify the amendment. If they take the full 7 years, and I think they will take more time when they begin to consider the full implications of this approach, the amendment would then not become effective--in other words, binding on Congress--until 2 years later, in the year 2006. In other words, the ratification period envisioned by Senate Joint Resolution 1 forestalls making the truly hard choices until as late as the year 2006, well, well beyond the current target of the year 2002. In fact, the only way this amendment can be effective and binding by the year 2002 is if we pass it this year and the States then ratify it within only 3 years. Because I believe, as I know do most of my colleagues, that we should balance the budget no later than the year 2002, I am offering this amendment to shorten the time for ratification from the allowed 7 years under the current amendment to 3 years, thus keeping us on track to meet the 2002 goal. I want to be candid in stating that I disagree with many of my colleagues who believe that this amendment will be promptly ratified by the States. There is already talk that some of the States that might have ratified this proposed amendment in the past may be having some second thoughts. Maybe they have been listening to the debate on the floor, about some of the very serious flaws with the way this balanced budget amendment was drafted, that has been brought forward. In fact, the longer the States have to consider this amendment and its potential ramifications and uncertainties, they will be less and less inclined to adopt it. However, when I offered this amendment in the Judiciary Committee, the proponents of the balanced budget argued against it. The distinguished chairman of the Judiciary Committee, the senior Senator from Utah, Senator Hatch, stated that he was quite confident that if the timeframe were shortened, as I am proposing, that the underlying amendment ``would still be ratified by an overwhelming number of States and probably within that 3-year time.'' That being the case, and the general agreement that the budget must be balanced no later than the year 2002, I was somewhat surprised to see my amendment defeated by the committee. If we are sincere about our efforts to achieve balance within 5 years, our actions on this amendment should reflect that goal, a goal that has been stated by the President and by the majority leader and by the Speaker of the other body. The argument has also been made we should not abandon the custom of allowing a full 7 years for ratification. However, the 7-year period for ratification has evolved as a matter of practice beginning with the 18th amendment. On each successive occasion, except the 19th amendment, Congress has a set time for ratification, and they have set that time each time at 7 years. Doing so has been upheld as appropriate by the Supreme Court as an exercise of Congress' authority to adopt reasonable timeframes for ratification of amendments. There has, no doubt, been much debate over whether or not the time for ratification may be extended. There is nothing, Mr. President, nothing, except adherence to tradition, that precludes the adoption of a shorter period of ratification, of a period less than 7 years. I respectfully suggest that the context in which the debate over the balanced budget arises counsels that it would be entirely appropriate and reasonable to depart from the 7-year standard and [[Page S1702]] adopt, in this case, 3 years, as is proposed in my amendment. There can be little doubt that balancing the budget is perhaps the top priority of the Federal Government at this point. In fact, so important was the adoption of the 2002 target date that the Republican Party created and ran what was, in my opinion, a pretty effective TV ad that showed President Clinton saying that a balanced budget could be attained in 7 years, then 8 years and then 10 years. That was a pretty good ad. This ad was a dramatic portrayal of what many argued was a general unwillingness to commit to attaining balance by a specific date. I agreed with my Republican colleagues that we should set about the business of reaching balance by the year 2002, and that is why I think the amendment I am offering is appropriate and should be adopted. It assures that the target date of 2002 will not be pushed back until possibly as late as 2006. If, as the chairman of the Judiciary Committee suggested, the States adopt this Senate Joint Resolution 1 very quickly, then we should make it effective no later than 2002. If however, the States, upon learning about the uncertain consequences to the American people of this proposal, reject it, Congress should not be allowed to sit on their hands for 7 years and let the gains of the past 4 years of reducing the deficit languish or, even worse, be lost. I am sure that many proponents of this constitutional amendment will argue that even if the States take the full 7 years, there is nothing to stop the Congress from continuing to work hard to get the balance done by the 2002 date. I hope so. But I suggest that such an argument speaks not to my amendment, but to the more threshold question of why, if that is the case, do we have to amend the Constitution anyway? If the constitutional amendment is not going to require balance until the year 2006, what will force this body to do the job by the year 2002? Nothing. The heat will be off. President Clinton was clear when he said that all we need to balance the budget is our votes and his signature. I agree. We should make the tough choices sooner, not later. The report accompanying this measure argues that should this amendment be adopted and subsequently disregarded by a Congress and a President and are stalled at an impasse in budget negotiations, that that would constitute nothing less than a betrayal of public trust. In my opinion, if we allow this amendment to potentially delay balancing the budget or, in the interim, stray from the course charted over the last 4 years, that would also be, in my view, a betrayal of the public trust. We should remain always and in all respects committed to the 2002 target date. As I said before in the Judiciary Committee, this amendment is really, to put it in very simple terms, the fish-or-cut-bait amendment. You either support moving toward balance by the year 2002 or you don't. If this Nation is going to take the constitutional approach, we should set about doing so and not let possible delays over ratification provide an excuse, provide political cover for inaction and delay until as long as the year 2006. I do not question the sincerity of my colleagues in their desire to balance the budget. My amendment ensures that this will occur within the timeframe we have all agreed upon. Therefore, Mr. President, I am hopeful that all of us who support balancing the budget, whether we support this amendment or not, will embrace my amendment that will limit the ratification to 3 years and, therefore, Mr. President, keep us on track to balance by the year 2002, not the year 2006. I reserve the remainder of my time. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Utah. Mr. HATCH. I understand my colleague. I understand the amendment being offered by Senator Feingold would reduce the period for the States to ratify the balanced budget amendment from 7 to 3 years. I have to say, that I do not see the wisdom in departing from the longstanding 7-year standard that this resolution reflects. The 18th amendment, ratified in 1921, was the first constitutional amendment to contain a time limitation of any kind. Although there was heated debate at the time over Congress' authority to impose such a limitation on the States' ratification of the constitutional amendment, the Supreme Court subsequently upheld Congress' power to set a reasonable time limit on ratification in the case of Dillon versus Gloss back in 1921. As a result, we find 7-year time limitations within the actual text of the 18th, 20th, 21st and 22d amendments. Since approval of the 23d amendment in 1961, Congress has continued to include a 7-year time limitation. But such limitation has been removed from the text of the amendment and incorporated instead in the joint resolution proposed in the amendment as we have done in Senate Joint Resolution 1. Now, just to verify the continued adherence to the convention of a 7- year time limitation, I did a quick review of the 107 Constitutional amendments introduced in the last Congress. Indeed, of those 107 resolutions, only 1 contained a time limitation that varied from the conventional 7-year limitation. I am quite confident, were we to adopt a shorter time limit, as my colleague proposes, the amendment would still be ratified by an overwhelming number of the States. But I fail to see the need in this case to alter what has been recognized as a reasonable time limitation on ratification since the early part of this century or to prejudice the consideration of the balanced budget amendment by reducing the time for consideration. Mr. President, I am not concerned about 3 years or 7 years. I am concerned about 28 years, these 28 years of unbalanced budgets. You know, the bottom line is, we can talk all we want to about technicalities like 3 or 7 years but it is the 28 years I am concerned about. Really, if you get serious about it, it is 58 of the last 66 years during which we have had unbalanced budgets. It does not take a rocket scientist to realize this outfit just does not have the will to do what is right. So to get all caught up in whether it is 3 or 7 years, I do not think serves the best interests of this amendment. Let me just say the bottom line is this. Congress cannot and will not stop spending more than it earns without the force of a constitutional requirement to balance the budget. I have 28 unbalanced budgets here just to prove the point. We stacked them a little lower by doubling and tripling the smaller volumes, but it still is a pretty high stack. It is headed right to the ceiling if we do not get a balanced budget amendment. We have run deficits in 58 of the last 66 years. And, Mr. President, that is plain fiscal irresponsibility. For these reasons, I urge my colleagues to reject distractions such as this amendment. I do not mean to demean the amendment of the distinguished Senator or my colleague who serves well on the Judiciary Committee, and with whom I have a very good, friendly and decent relationship, but it is a distraction in the sense that really the 7- year period really ought to be maintained since it has been over all these years. So I urge my colleagues to reject this amendment and to find the courage to change the face of this Nation by voting for a constitutional amendment to balance the budget. This is a chance to do it. This is a chance to do something that will work. If we put the balanced budget requisite into the Constitution, I have no doubt that it will be a very relative few who would not observe it. But I believe the vast majority of Members of the Congress of the United States henceforth and forever would do everything in their power to live up to that constitutional requisite were we to put it in the Constitution. I have no doubt about it. I think the vast majority of people who serve here are very honorable people who keep their word and will do what is right. I really believe that if we put this in the Constitution, that vast majority will really make sure that this balanced budget amendment works. On the other hand, if we do not, my gosh, what hope do we have? I mean, I can just see where nobody could be seen above this stack 6 or 4 years from now. Frankly, I am absolutely solid in asserting, unless we have a balanced constitutional amendment, these stacks are just going to continue to grow ad infinitum, something that must be horrifying our Founding Fathers, many of whom are undoubtedly in Heaven, although there are a few I am sure who [[Page S1703]] had a rough time getting there. But the vast majority of them probably are there with our Father in Heaven saying, ``Let's do that which we failed to do when we had the chance, even though we thought about it.'' But they, when they were here, never thought for a minute we would have 28 straight years of unbalanced budgets. So I suspect that the only way to solve this problem is to put some fiscal mechanism within the Constitution that makes sense. This amendment is that mechanism. It is a bipartisan amendment. I chatted with Charles Stenholm last night, our Democratic counterpart over in the House. I have to say he has done a tremendous job over the years doing his best to try to enact this amendment. It takes guts because he takes a lot of flak for it because people in his party in particular want to keep spending and taxing and claiming that they are doing a lot for people--they never say with their own money that could be better utilized by them and I think in a better way. So I want to praise him for the work he has done over there in the House, along with other Democrats and Republicans who have worked so hard through the years on this amendment. I want to praise everybody here who will vote for this amendment because it does--it does--hold hope for the future if we can pass this amendment and enshrine it in the Constitution where I think the vast majority of Members would honor it and do what is right. The spending games would be over. So I would hope that our colleagues will keep the language exactly the same. I do not know how it would affect other people who are currently willing to vote for the amendment, but we would like not to change it. In spite of the fact that my colleague is sincere and that this is a sincere amendment, I would hope that our colleagues will vote to table it. Mr. President, I am prepared to yield back the balance of my time. We could move to the Senator's next amendment, unless he wants to discuss it. Mr. FEINGOLD. How much time do I have remaining? The PRESIDING OFFICER. You have 3 minutes, 46 seconds. Mr. FEINGOLD. Mr. President, if I may, I would like to use that time. There were interesting remarks made by the chairman of the Judiciary Committee, my friend, Senator Hatch. I will reiterate, this is really the fish-or-cut-bait amendment. I always appreciate the eloquence of the Senator from Utah, but I notice a sort of different tone when he speaks about this amendment as opposed to the balanced budget amendment. There is sort of a lack of urgency to his tone about this. His tone suggests that whether we get this thing done by 2002 or 2006, the important thing is that we just have this balanced budget amendment on the books. That just does not seem to square with the rest of the comments I have heard from the Senator and most of the other supporters of the balanced budget amendment. There was no suggestion by the Senator from Utah that we could not limit this to 3 years. I appreciate his candor on that. That is something that is available to the Congress. It has not been done before, but when the limitation was put in the first place on the 7 years on the 18th amendment, it was my understanding that was not done before. So there is no literal constraint on that. I was also struck, Mr. President, by the Senator from Utah's statement that we really had no reason here not to adhere to convention, there is no reason not to go to 3 years or we should stick with the traditional 7 years. This entire process of balancing the budget and having an amendment to the Constitution to do it could not be more contrary to the notion of adhering to convention. We have tried to use the Constitution of this country as a very limited and narrow document for 200 years but now we are going to do accounting through the Constitution. I suggest that that is a failure to adhere to convention. The Senator from Utah also tried to describe this amendment as sort of a technicality, saying that whether it is 2002 or 2006, that is not the issue. We just need it in the Constitution. Mr. President, it flies right in the face of his excellent description of that stack of documents in front of him. The Senator from Utah is one of the taller Members of this body, if I may say so. I do not think that is in dispute. I agree that if we keep going down this road that we will be unable to see the distinguished chairman, perhaps even by the year 2002, because of these books that are piling up. But if we wait not until the year 2002 but to the year 2006, I think the former Senator from New Jersey may not be visible and we may have to get Senators who would be able to start in a starting line up in the NBA just to be able to be seen over these documents. The fact is, there is a difference between the year 2006 and the year 2002. All my amendment does, Mr. President, is guarantee that however this turns out, through a balanced budget amendment or through a bipartisan agreement to balance the budget by the year 2002, that is the date. Either way, it cannot be after that time. That is the effect of my amendment, Mr. President. I yield the floor. Mr. HATCH. Let me just say for the sake of this debate, if the Senator were willing to vote for the balanced budget amendment, I would accept his amendment because I think three-quarters of the States would ratify this amendment within the 3-year time period. I know he will not vote for this balanced budget amendment, and, frankly, it is better from a constitutional standpoint to give the States enough time to function. Some States do not even meet this year in their legislatures; others meet, but may not have time to consider this. It does take time to ratify a constitutional amendment, depending upon a lot of timing factors. So we prefer to have the 7-year period. But I will make that offer if the Senator will vote for the balanced budget amendment. I would encourage all my colleagues to vote for his amendment, but until he does, I think we have to reject this amendment unless he is willing to do so. The PRESIDING OFFICER. The Senator from Wisconsin has 36 seconds. Mr. FEINGOLD. Let me say I, of course, am very candid on this point, that I do not support the balanced budget amendment for a variety of reasons, but I do recognize that there are some very serious consequences for this country if we do pass it. My amendments today are relevant to the situation we would face if it does go through. I am sincere in my belief that if it does pass, the process is going to be slowed down here if it is not ratified quickly by the States. That is why I offer this amendment, because sometimes things happen that you are not happy about in the Congress and the President signs it, but you would like the negative effects to be limited. That is the spirit in which the amendment is offered. Mr. HATCH. Mr. President, I know my colleague is sincere. I have nothing but respect for him as he serves on the committee. I have a lot of regard for the distinguished Senator, and he knows it, and I know it. However long it takes, we need a balanced budget amendment, and I think this is drafted correctly. It has Democrat prints all over it and Republican prints all over it. It is the bipartisan amendment that has always been in play, and I think should always be in play. Frankly, I am hopeful we can pass it by next Tuesday. But however long it takes, we need it. If we do not do it, we will continue the status quo, and that is a stack of unbalanced budgets, which my friend and colleague admits will continue if we do not do something about it. Mr. President, I yield back the balance of time, and I understand these votes will be stacked. The PRESIDING OFFICER. The Senator is correct. Mr. HATCH. I ask unanimous consent to move to table, with the understanding it will be able to come up at a later time. The PRESIDING OFFICER. The Senator has that right. The motion to table has been made. Mr. HATCH. I ask for the yeas and nays. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. Amendment No. 14 The PRESIDING OFFICER. Under the previous order, the question recurs [[Page S1704]] on amendment No. 14, offered by the Senator from Wisconsin [Mr. Feingold]. Debate on the amendment is limited to 40 minutes, equally divided. The Chair recognizes the Senator from Wisconsin. Mr. FEINGOLD. Thank you, Mr. President. I thank the distinguished Senator from Utah, the chairman of the Judiciary Committee, for his kind remarks. I now would like to speak about an amendment that is also in the spirit of trying to make sure this balanced budget amendment works properly, in the event it goes through the Congress and is ratified by the States. Mr. President, regardless of our views on the balanced budget amendment, many of us would like us not only to balance the budget, but many of us would like us to establish a statutory balance that can act as a fiscal cushion against unexpected emergencies. In other words, we think we should never project a deficit, but that on occasion we may want to project something of a surplus to make sure there is money there in case there is an emergency or some other urgent spending priority that has to be dealt with, but only on a surplus basis. Now, Mr. President, this is not some idea I cooked up. This is what we do in Wisconsin. It is done in some form in most States. I think it would make good sense at the Federal level. Unfortunately, Mr. President, in its current form, the proposed balanced budget amendment discourages this fiscally responsible tool. In effect, it does not really allow a surplus. It certainly does not allow a surplus to be used if one arises, except by a three-fifths vote in each house, which is a very high standard. Because outlays cannot exceed receipts in any year under the balanced budget amendment, any surplus built up to address an unexpected need would be subject to the three-fifths threshold and all the potential mischief that a supermajority requirement employs. Mr. President, many of us in this body have concerns with the way we currently address emergencies and other unexpected needs as they arise. I have seen a lot of that just in the 4 years I have been here dealing with various disaster and emergency legislation. Under our present budget structure, we are forced to choose between adding to the deficit and scrambling to find spending cuts or tax increases to offset the unexpected need. I think, and we have certainly seen this in Wisconsin, a far more fiscally responsible approach would be to appropriate a dedicated emergency fund or require a positive ending balance on which we could draw as the need arises. By budgeting for an emergency in advance, this approach would avoid deficit funding, but it would also decouple the potentially desperate need for emergency assistance from the hurried approach of emergency offsets. So a surplus fund or statutory ending balance would also address some of the concerns that have been raised by Secretary Rubin and others who have spoken about the important role that automatic economic stabilizers play in the health of the economy. Our committee chairman has cited Fred Bergsten, a noted economist, during the committee's markup. This is what our distinguished chairman said in citing Mr. Bergsten: ``* * * a better way to go is to shoot for a yearly surplus and let that take care of truly automatic fluctuations, if there are any.'' Mr. President, I agree with our chairman. I think balancing the budget and building up a reasonable surplus during good times to help cushion economic downturns is a better way to go. However, as I just noted, Mr. President, under the present draft, we could not establish and use such a surplus fund without violating the constitutional amendment mandate except through achieving a three-fifths majority in each house. Mr. President, you know that threshold presents serious problems, as many of our colleagues have noted during the course of this debate. The supermajority requirement empowers a minority to hold up a must-pass measure unless their fiscal or policy demands have been met. As some have noted, this perhaps mild form of extortion might even take the form of insisting on additional deficit spending, precisely the opposite direction intended by the supporters of the constitutional amendment. Remember, this balanced budget amendment does not guarantee that we have deficit spending, it just requires a supermajority to do so. Mr. President, if allowing a surplus fund might be fiscally prudent to handle the unexpected natural disaster or military conflict, I think this surplus opportunity becomes absolutely essential if we hope to fund the bulges in Social Security benefits that will occur when the baby boomers retire. In just a few years, we will begin to have to pay back the funds we have borrowed from the Social Security trust fund. Before that happens, Mr. President, we have to somehow rid ourselves of the addiction to those trust fund surpluses. That is how we have been masking how great our deficit is in the past, and we have to begin to balance the budget without those surpluses. That means, Mr. President, that the unified budget will have to be in surplus, but even then, if we build up a genuine surplus in unified budget to pay future retirees, the restrictions of the proposed balanced budget amendment will prevent us from using it unless we can muster a three-fifths vote of support in both bodies. Mr. President, right now, the Social Security trust fund is receiving more than it is paying out. Those surpluses will continue to build until the baby boomers retire, and we need to tap into those savings at that point to offset the bulge in Social Security beneficiaries. Mr. President, many have said this, but we have abused the Social Security surpluses by using them to mask part of our budget deficit. I don't single out one party or one branch of Government, because it has sort of been standard operating procedure for nearly 30 years. Mr. President, many of us want to stop that abuse and to work to get the budget off the Social Security surplus addiction so the funds are there for retirees as promised. Mr. President, again, the current balanced budget amendment draft will not let us do that. When the baby boomer retirees begin to collect Social Security and the surpluses turn negative, the balanced budget amendment does not permit us to draw upon any savings we can build up between now and then. Now, one approach is to explicitly exempt Social Security from the balanced budget amendment by putting the Social Security trust fund out of reach. We could then be sure that they will be available to draw down when needed. Some who oppose this approach argue that we can do so by statute. They note that nothing in the current draft would prevent us from taking Social Security off budget by law, as we do now, and achieve genuine balance outside of Social Security. Unfortunately, though, Mr. President, even if the rest of the budget is in true balance, the current version of the amendment still prevents the use of the trust fund savings to pay Social Security benefits, unless the rest of the budget is cut or taxes are increased. Mr. President, the current balanced budget draft requires cash flow to be balanced. It expressly prohibits the kind of buildup in anticipation of need that is the underpinning of the Social Security system itself. To put it in more simple terms, it is exactly like telling parents when the time comes to pay the cost of their child's education, they will not be able to use any of the savings they have built up, but will have to pay for the cost of their child's college education out of whatever their income is at that time--not one dime more. I can tell you, as a parent of four teenagers, that would be a very troubling prospect indeed. Mr. President, my amendment would allow us to use the savings we must build up in advance of the coming retirement bulge. Let me be clear about this. Although this is the way it is done in my home State of Wisconsin--by statute--my amendment does not require us to have a surplus. My amendment does not require us to fulfill our commitment to future retirees. Yes, Congress could still duck that commitment. But at least, Mr. President, if my amendment is adopted, Congress would be able to do the right thing by Social Security beneficiaries. Without it--if the Constitution is amended as it is currently drafted--Congress will have to find a dollar in [[Page S1705]] budget cuts or tax increases for every dollar Social Security outlays exceed receipts. Mr. President, despite all the rhetoric about how Social Security will do quite well in what I like to call the ``brave new world of the balanced budget amendment,'' who can doubt that Social Security benefits will quickly go on the chopping block, if we ever get to that eventuality? Mr. President, this is a fundamental inequity that is built into the proposed constitutional amendment. Programs like Social Security, which require a buildup of savings to work, have to muster a three-fifths majority from both bodies. But the defense budget, special interest spending done through the Tax Code, and corporate welfare, all get a free pass. They don't have to go through this. So, Mr. President, to conclude, even if my amendment is adopted, it will be difficult for Social Security to compete with these other powerful interests. But at least by allowing for a surplus, my amendment gives it a fighting chance. I reserve the balance of my time. Mr. KYL addressed the Chair. The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Arizona [Mr. Kyl] is recognized. Mr. KYL. Mr. President, Senator Hatch was called away for a moment. I would like to present some of the remarks he would make in opposition to the amendment. Of course, nothing in Senate Joint Resolution 1 prevents us from running surpluses or saving those surpluses in a rainy day fund. But Senate Joint Resolution 1 does put a lock on savings to ensure that they are not spent frivolously. The proposal before us is based upon the argument that, under the balanced budget amendment, previously accumulated surpluses cannot be drawn upon in future years without a three-fifths vote. This is because, the argument goes, such funds would be spent as current outlays within the meaning of section 7, but would not count as current receipts and would therefore cause outlays to exceed receipts and trigger the three-fifths vote in section 1. Thus, this proposal seeks to prevent the use of previously accumulated surplus funds by a simple majority vote. While most of us are concerned with how to stop running deficits, this proposal exhibits concern about accumulated surpluses. Protecting accumulated surpluses with a three-fifths vote is not necessarily a flaw in the amendment, however. On the contrary, I see it as a strength. Requiring a supermajority to spend previously accumulated surpluses could help us ensure that they are not frittered away on enticing, but fundamentally unimportant, spending projects. Let us be realistic, Mr. President, we have had 28 straight years of deficits, and we have run deficits for 58 of the last 66 years. If we adopt the balanced budget amendment, we all believe that deficits will come to an end. I do not expect it will be easy to accumulate large surpluses, even under the balanced budget amendment. Proper planning and discipline can yield positive results. But I think it's important that we jealously guard the fruits of our budgetary labors and protect the surpluses we have managed to acquire, if any. This amendment seeks to make it easier to spend away any surpluses we manage to acquire. It seems to me that this is an ill-advised policy. We would be wiser to keep the surplus in the strongbox of subject it to a supermajority requirement to be certain that it is not whisked away in yet another Washington spending frenzy. Can we safely assume that the Congress would leave money sitting, unguarded, on the table? The supermajority requirement will help us ensure that when a real emergency arises, the surplus will be there to meet truly pressing and worthy needs. Both common sense and political reality dictate that there will be very little difficulty in getting the three-fifths necessary because, after all, who would vote against emergency aid when there would be no increase in the deficit? I do have a concern that allowing Congress the option of spending a portion of the national savings by simple legislative fiat might erode the effectiveness of the balanced budget amendment by relaxing the fiscal constraints on yearly spending. Congress might slip into a habit of spending accumulated surpluses with regularity and get used to spending beyond our annual income, just as we have gotten into the habit of borrowing under the current system. Then having wasted our savings, we would have much more work just to get back into annual balance habits. If we were fortunate enough to accumulate a sizable surplus, I expect we could stop patting ourselves on the back for simply not increasing the debt and actually start to repay some of the huge debt this country has run up. This is probably the best use of surpluses, particularly from a cash management perspective, and is what is contemplated as the normal use of surpluses under the balanced budget amendment. That is why Senate Joint Resolution 1 does not count repayment of debt principal as total outlays. As we pay down our debt, we will continue to free up capital, lower interest rates and our annual interest payments, and strengthen the economy, helping us avoid deficits and the need to draw on savings or to borrow. We would also be moving ourselves away from the debt ceiling and building a cushion of debt availability if we should have to borrow again. One final point, Mr. President. We have not balanced the budget in almost 30 years, as I have said before. It is perhaps a bit premature to start arguing about how we will spend surpluses. The first order of business is to pass the balanced budget amendment and get the deficit at least to zero. Then I submit that we can work on surpluses and true debt reduction. This is an interesting proposal, but it ought to be defeated. Mr. FEINGOLD. Mr. President, how much time do I have remaining? The PRESIDING OFFICER. The Senator has 9 minutes 36 seconds. Mr. FEINGOLD. Thank you, Mr. President. I appreciate the comments of the Senator from Arizona. I enjoy serving with him on the Judiciary Committee. I appreciate his candor. Basically, those folks who advocate the constitutional amendment have said it all here. They have now said formally that if you want to get money from the Social Security trust fund surplus in the coming years, that in fact the only way to do it is by getting a supermajority, three-fifths of both the Senate and the other body. I hope the seniors of this country are listening and realize what we are talking about here. It is incredibly difficult to get three-fifths of either body on anything. It is hard enough to get over 50 votes on anything. And when you are talking about the competition with all the special interests that are represented in this community, even with a fully funded Social Security trust fund, requiring a three-fifths majority of both Houses to fully fund Social Security benefits from the trust fund has to be one of the greatest threats to Social Security that can be imagined. Let's be clear. I do not think anyone has successfully disputed the claim that this constitutional amendment allows the use of Social Security dollars to balance the budget. That has become very clear in this debate. What this new admission tells us is that if the Congress wants to do the right thing after we have a balanced budget amendment and wants to make sure that retirees and future retirees have the money saved for them over the years, they will not be able to do it through a majority vote. A minority in either House will be able to prevent every senior citizen in this country from getting the payments they deserve and that they paid into the system for. That is what this thing does. This isn't just about seniors. Yes, it is about my generation. It is about baby boomers. Perhaps that will be the first group that will be affected by this. But it is also about future generations who certainly hope, if they are required to pay into the Social Security system, that there would be a way for them to access their retirement benefits without having to persuade three-fifths of both Houses of Congress it is a good idea. You should not have to persuade three-fifths of the Congress that it is a good idea. That is your money. That is your retiremen

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BALANCED BUDGET AMENDMENT TO THE CONSTITUTION
(Senate - February 27, 1997)

Text of this article available as: TXT PDF [Pages S1698-S1726] BALANCED BUDGET AMENDMENT TO THE CONSTITUTION The Senate continued with the consideration of the joint resolution. Mr. REED. Mr. President, I ask unanimous consent to speak for 20 minutes. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BIDEN. Mr. President, will the Senator from Rhode Island yield to me so that I may explain why I missed that last vote? Mr. REED. Yes. Mr. BIDEN. Mr. President, I thank the Republican leader as well as the Democratic leader for attempting to hold the vote long enough for me to get here. I voted before in the affirmative on the Graham amendment. We voted on it last year. I was one of the speakers at the International Chiefs of Police and Sheriffs Association discussing the juvenile justice bill. I thought I had left in plenty of time from a downtown hotel to get here. But, as Washingtonians will tell you, there is a good deal of road construction going on. I was caught behind the most polite cab driver in Washington. He stopped for everyone, which I was happy to see except for this day. Had I had the cab driver who runs over most people, I would have been up here. I should not say that. I will get letters about that. That was a joke, an attempted joke. But I want the Record to show that had I been here, I would have once again voted for the Graham amendment. I apologize if I inconvenienced the Senate in any way in attempting to hold it for me to get here. I thank my distinguished friend from Rhode Island for yielding. The PRESIDING OFFICER. The Senator from Rhode Island. Mr. REED. Mr. President, I am prepared to speak. I would be willing to defer if there are any other procedural announcements at this time. Mr. LOTT addressed the Chair. The PRESIDING OFFICER. The majority leader. Unanimous-Consent Agreeement Mr. LOTT. I thank you, Mr. President. I thank the Senator from Rhode Island for yielding this time so that I may enter a unanimous-consent agreement which has been reached with regard to an amendment that Senator Hollings had intended to offer to the balanced budget amendment on campaign financing. I ask unanimous consent that the majority leader, after notification of the Democratic leader, may turn to the consideration of a Senate joint resolution, the modified text of which is Senate amendment No. 9 filed yesterday to Senate Joint Resolution 1 regarding campaign financing. I further ask that no amendments or motions be in order during the pendency of the Hollings constitutional amendment, and following the conclusion of the debate, the joint resolution be read a third time and a vote occur on passage of the joint resolution, with the preceding occurring without any intervening action. Before the Chair puts this consent request to the body, it has been pointed out to me by Senator McCain that this consent is for a constitutional amendment regarding campaign spending limits. There are other campaign-related issues that may be pending in the Senate committees that do not amend the Constitution but are statutory language. So this is not to be in place of or in any way block other consideration, or to indicate that there will not be hearings and further consideration of this matter. But Senator Hollings agreed to this arrangement so that it would not be a part of or relate to the consideration of the constitutional amendment for a balanced budget. Senator McCain agreed that it be done this way. It has taken the cooperation of both of them and of all the Senators. This is an important issue which should be brought up freestanding with [[Page S1699]] a reasonable amount of time for discussion. I have indicated to Senator Hollings that, if it takes a couple of days or so, we will be prepared to do that. I think that is about what it would take, but if it takes 2 days and 2 hours, I do not know of anyone who would object to that. But it should be a very interesting debate. So I now make that request, Mr. President. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. LOTT. I thank the Senator from Rhode Island for yielding. The PRESIDING OFFICER. Under the previous order, the Senator from Rhode Island is recognized for 20 minutes. Mr. REED. Thank you, Mr. President. Mr. President, I rise in opposition to the amendment before us today. For many decades, Congress found it easier to debate a balanced budget amendment to the Constitution than to actually balance the budget. Support for the balanced budget amendment was a convenient badge of fiscal austerity at a time when many Members were voting for tax policies and spending proposals that saw our annual deficit and our cumulative national debt explode. After so many years, it is no wonder that the balanced budget amendment has become a talisman which its supporters clutch, suggesting that it has extraordinary powers to translate the difficult choices that this body must face into some type of simple constitutional formula which will miraculously erase the deficit. But, as the last few years have indicated, there is no magical constitutional language that will make the choices or the policies of budget balancing easier. Mr. President, in 1993, the Clinton administration began a process of deficit reduction which has helped to create a strong economy, cut the deficit by 63 percent, brought the deficit when measured as a percentage of the gross domestic product to its lowest level since 1974, and given us the lowest deficit of any major industrialized nation. It took difficult choices, not constitutional gimmicks; choices that Republicans refused to support. Whether or not this amendment passes, and I hope it does not, we will still be confronted by these choices. However, if this amendment does pass, for the first time in our history we will either surrender our role in shaping the budget and the social and economic policies which it defines to the courts, or simply surrender any decision to an adamant minority which could invoke the provision to block necessary action. Mr. President, the amendment before us today is flawed in many ways. It is the wrong answer to a real problem. It is the wrong way to manage the economy. It disrupts our tradition of majority rule. It needlessly jeopardizes essential programs and it needlessly enhances the role of the courts in budgetary and tax policy. The balanced budget is the wrong way to manage the economy. Over 1,100 noted American economists, including 11 Nobel laureates, voiced their opposition to this balanced budget amendment on the grounds that it would hurt our economy and graft improper fiscal policy onto the Constitution. They said, ``It is unsound and unnecessary.'' They added, ``It mandates perverse actions in the face of recessions.'' They went on to say it ``would prevent Federal borrowing to finance expenditures for infrastructure, education, research and development, environmental protection, and other investment vital to the Nation's future well-being,'' and that it ``is not needed to balance the budget.'' They also ``condemn'' the amendment and suggest it could place our economy ``in an economic straitjacket.'' One Nobel laureate, Prof. William Vickery, developed an analysis of 15 issues with respect to balancing the budget, reducing the deficit and providing for economic growth, and in this analysis he has a compelling and noteworthy passage: If General Motors, AT, and individual households had been required to balance their budgets in the manner being applied to the federal government, there would be no corporate bonds, no mortgages, no bank loans, and many fewer automobiles, telephones and houses. But this balanced budget amendment suggests that the Government do exactly the opposite of what the most sophisticated private industries do, and I think that is a mistake. While the majority may find it appropriate and even desirable to insert economic formulas into the Constitution, I would urge caution. For example, we all believe and we will say time and time again that we should have a full employment economy and that every able bodied American work. However, if I were to introduce a full employment constitutional amendment, I predict that the very same supporters of this balanced budget amendment would rush to this floor and condemn that approach, invoking the terminology that we should not enshrine economic ideas or formulas into the Constitution of the United States. The same thing would happen if we talked about an anti-inflation amendment. The point, I think, should be very clear. It is our responsibility, together with other institutions, outside the scope of the Constitution to rationally ameliorate the surges and downswings of the economy. This is what we should do. Some people might try to say, well, no, look at the States. They provide for a balanced budget. That certainly misses the point. State governments do not manage national economies. They do not issue and support currencies. They do not deal in foreign trade. And most of them, if not all of them, with balanced budget requirements have the good sense to separate capital spending from operational spending. So that logic does not suffice to support this balanced budget amendment. I also suggest that economically we are not immune from the difficulties of the business cycle. We have been enjoying over the last several years good, substantial economic growth, but we know that in past periods our economy has faltered. If it does falter, this balanced budget amendment could be a straitjacket, confining and constraining us in our response to these economic recessions. When the economy shrinks, revenue shrinks, throwing off our revenue estimates, throwing off our whole plan to get to the balanced budget, and we will be hamstrung by this amendment's proposals in terms of what we can do to address a recession. For example, the CBO has talked about the impact of recession on the deficit. Their estimates indicate that a 1 percent drop in the gross domestic product would increase the deficit by $32 billion. A 1-percent increase in unemployment would add $61 billion to the deficit. These are staggering figures with which we would have to contend in the context of a very narrowly drawn balanced budget amendment. These are not just statistics. These are real people's lives. We have all lived long enough to have endured economic recessions and have seen the cost in human lives. We have to, as a Government, to such situations. We cannot, I think, plead, at that moment of need, we would like to help you, but the Constitution prevents us from doing sensible, appropriate things to put people back to work in this country. One of the aspects of the balanced budget amendment that would severely constrain our response to recessions is the fact that it would suppress the automatic stabilizers contained in our economic policy today, things like unemployment compensation and other entitlement programs which exist to meet the needs of people who have fallen on hard times during a recession. As the Congressional Research Service cautioned when it examined the economic impacts of this proposal: In sum, the balanced budget constitutional amendment could require action to neutralize the automatic stabilizers in the budget that expand outlays and reduce tax collections in economic slowdowns and recessions. In this case, the budget would no longer serve to moderate business cycles. And, under this amendment, we would lose a valuable tool in aiding the working men and women of America. There is more than just constitutionally historic interest involved in the question of this amendment's supermajority requirements because this amendment requires not a majority vote, in many cases, but much more than a majority vote. This provision holds the real potential for constraining effective action at the time we [[Page S1700]] need Government to move decisively and purposefully. For example, in times of economic crisis, there would be no automatic stabilizers if a small minority of Senators or Representatives objected. Different regions of the Nation experiencing economic hardship could find no comfort in Washington because they could not muster the number of Senators and Representatives to deal with their region's particular problems. Frankly, over the last several years, we have seen economic situations in which the country overall appears to be doing fine, but when you go to the Northeast, to California, or to other parts of the country, you find regional recessions that need the help of this Government. Regrettably, in that situation there may not be sufficient will or political support to do what we must do, which would be extremely detrimental to the citizens who live in these areas. There is another aspect of this supermajority that is built into this constitutional amendment which should cause us all great concern, and that is in order to raise the debt ceiling a vote of three-fifths would be required. We have just in the last Congress seen the difficulty of securing approval of a change in the debt ceiling with a simple majority requirement. If we would require a three-fifths vote, we really would be putting our Nation at severe risk. As Secretary Rubin has pointed out with respect to the issue of raising the debt ceiling and consequently avoiding default on Government debt: The possibility of default should never be on the table. Our creditworthiness is an invaluable national asset that should not be subject to question. Default on payment of our debt would undermine our credibility with respect to meeting financial commitments, and that, in turn, would have adverse effects for decades to come, especially when our reputation is most important, that is, when the national economy is not healthy. Moreover, a failure to pay interest on our debt could raise the cost of borrowing not only for the Government but for private borrowers as well. This super majority provision would affect the Government's ability to deal rationally and prudently with the debt ceiling, and that is another reason, a very strong reason, why this proposed constitutional amendment is inappropriate. It is bad economics; 1,100 economists would condemn it, but it is also very poor budgeting. As Senator Byrd pointed out, the majority's proposal turns the Congress and the President into fortune tellers who must somehow predict and balance outlays and receipts exactly or find the supermajority needed to waive the amendment. This appears to be an impossible task, because each year the CBO seems to revise its projected deficit and revenue totals on a regular basis. We should not delude ourselves into thinking we can accurately predict the future, and we should definitely not add this dubious proposition to the Constitution. In addition to the fact that this amendment's success is predicated on frail human predictions, there are other reasons to oppose this amendment. While the majority claims that States have managed to survive balanced budget amendment requirements, they fail to acknowledge, as I previously indicated, that States do so rationally by creating separate operating and capital budgets. I have supported a balanced budget amendment which recognizes this rational policy. But that proposal is not before us today and we are debating a proposal that does not recognize--in fact some scholars have indicated it would constitutionally preclude--the development of a capital budget by the Federal Government. Time and time again, the advocates of the amendment have rejected the idea of a capital budget for the Federal Government. I believe, in a sense, not only are we rejecting sound constitutional policy and sound administrative policy, but we are also undercutting this Nation's need to build up our capital infrastructure. So, this amendment, as proposed, is both bad economics and bad budgeting, and finally it is an abrupt departure from the constitutional balance that we have observed through the course of our history. It raises a number of fundamental questions about our Constitution, our tradition of majority rule, and the power of the judicial branch in the United States. One of the lessons I learned in law school was, where there is a wrong, particularly a constitutional wrong, there must be a remedy. Yet this constitutional amendment makes no mention of how it will be enforced and who has the legal standing to question those issues which arise under the constitutional amendment. This is an invitation to litigate rather than legislate on budgetary matters. If a future Congress finds it too difficult to take the painful steps needed to eliminate the deficit, then we may expect any number of possible claimants, from Governors upset about Medicaid payments to senior citizens upset about their Social Security checks, all of them urging the courts to step in and take action. Moreover, by placing the requirements that receipts and outlays be reconciled in the Constitution itself, the amendment effectively calls on the Supreme Court to ensure that this mandate is met. While the amendment may leave open the question of how the legislature reaches its positions and what items will be considered outlays and revenues, the Supreme Court will always have an obligation to uphold the Constitution. Once we declare constitutionally that revenues and outlays must be reconciled, the Court will have no inhibition, and, in fact an obligation, to step in and make this reconciliation if Congress fails. Likewise, under this amendment the President could be forced to impound funds, to cut off checks, to do many things because of a perceived constitutional mandate. I would think long and hard, and I urge my colleagues to think long and hard, whether or not we want to surrender what is traditionally the authority of the Congress over both the courts and the President to manage the public purse. These issues are all very difficult ones, raising profound questions of constitutional law. One other aspect of the proposal which is disturbing is the departure from a tradition in this country of majority rule. I have mentioned before the supermajorities which would be required to raise the debt limit and to do other things which today only require a majority vote of the Members of the House and the Senate. Indeed, the balanced budget amendment would create new supermajorities in many different areas. When the founders developed the Constitution, they recognized that only majority rule would work for a nation founded on the principles of liberty and opportunity. James Madison argued in Federalist 58 that if more than a majority were required for legislative decision, then: . . . in all cases where justice or the general good might require new laws to be passed, or active measures to be pursued, the fundamental principles of free government would be reversed. It would be no longer the majority that would rule: the power would be transferred to the minority. And, indeed, that is what this amendment would do inexorably. There is a final and significant issue which must be discussed with respect to this balanced budget amendment proposal. I believe it jeopardizes the integrity of the Social Security system and raises the specter of encroachments on the system, not to support seniors but to pay for the reckless spending of the 1980's. My State has the Nation's third highest percentage population of senior citizens. These are the men and women who fought in World War II and who made our country an economic power. Their sacrifices have made our Nation what it is today. They deserve our support and they rightly demand our assistance to maintain a dignified retirement. The hallmark of our commitment to these seniors has been the Social Security system. However, this amendment makes no provision to protect this essential program from the choices necessary to achieve a balanced budget. The amendment fails to recognize that Social Security is not just like every other program. It is directly funded through a dedicated payroll tax, and numerous acts of Congress have sought to protect it from improper manipulation or precipitous reductions in benefits. Yet the majority refuses to protect Social Security and, instead, wants to use the Social Security trust fund to mask the deficit. Mr. President, recently the Congressional Research Service produced a report regarding the impact of the balanced budget amendment on Social Security, which contained a shocking [[Page S1701]] revelation. The report found that the Social Security Administration, even though it has accumulated a very healthy surplus, would not be able to pay benefits in certain years, due to the amendment's requirements that total outlays for any fiscal year shall not exceed total receipts for that fiscal year. In other words, Social Security could only pay as much in benefits as it receives from payroll taxes in any given year, even if the trust fund was running a multibillion- dollar surplus from previous years. This is a grave matter that deserves more analysis and could jeopardize the 1983 Social Security reform law as well as future reform efforts. But it would be a consequence of this balanced budget amendment if adopted today or in the future. Some would argue that no legislator would touch the Social Security system, but a constitutional imperative may provide a shield which would allow legislators to break that sacred commitment between ourselves and those seniors who have contributed so much to this country. I urge my colleagues to reject this balanced budget amendment. The Constitution establishes the durable rights and responsibilities which are the heritage of our past and the best guarantee of our future. We should not let the Constitution fall prey to a proposal that reflects transient economic policy at best, and would erode both majority rule and the principle that the people's representatives, not judges, must be responsible for the public purse. Mr. President, before I yield, I would like to thank Senator Feingold for his graciousness in delaying consideration of his amendment in order to permit me to go forward with my statement. I thank the Senator from Wisconsin and I yield my time. Amendment No. 13 The PRESIDING OFFICER. Under the previous order, the question recurs on the Feingold amendment No. 13. Debate on the amendment is limited to 30 minutes equally divided in the usual form. Mr. FEINGOLD. Mr. President, under the unanimous-consent agreement I have two amendments at the desk and I believe it is in order for me to call up the first of the amendments, amendment No. 13. The PRESIDING OFFICER (Mr. Enzi). That is the pending question. The Senator has 15 minutes. Mr. FEINGOLD. Mr. President, I thank the Senator from Rhode Island for his kind remarks and for his excellent remarks in opposition to the balanced budget amendment. The amendment I am offering today to the balanced budget amendment will ensure that this Congress will meet its stated goal of reaching a balanced budget by the year 2002. Many people do not realize that as currently drafted, Senate Joint Resolution 1 may well forestall this goal of balancing the budget by the year 2002 well into the next century. I believe reaching a balanced budget by 2002 or earlier should be our highest priority. Thus, I am offering an amendment that will shorten the time for ratification of this amendment. As was noted on the floor by our colleague from North Dakota, Senator Dorgan, a few weeks ago, even if this amendment were somehow ratified at 2:10 today, tomorrow this Nation's deficit would be no smaller than it was when the amendment was adopted. The fact that this amendment in and of itself does nothing to reduce the deficit highlights one of my principal concerns with Senate Joint Resolution 1. That concern is that pursuing a constitutional amendment approach could, counter to what everyone suggests on this issue, actually delay action on the real work of achieving a balanced budget by providing what is, in effect, political cover for inaction while the States debate the question of ratification. Under the proposal before us, even if the Congress adopted the joint resolution this year, the implementation date, the date by which we would actually be required to balance the budget, is potentially well into the next decade. Conceivably, it could be as late as the year 2006. That is right within the terms of the balanced budget amendment that is being offered. This is evident on the face of the amendment itself. Section 8 of the amendment offered in Senate Joint Resolution 1 provides that the balanced budget amendment will take effect beginning with the fiscal year 2002, or within the second fiscal year beginning after its ratification, whichever is later. So there is no certainty at all with regard to the year 2002. The report accompanying Senate Joint Resolution 1 reiterates this uncertain timeframe. It states as follows: An amendment to the Constitution forces the Government to live within its means. S.J. Res. 1 requires a balanced budget by the year 2002, or 2 years after the amendment is ratified by the States, whichever is latest. So, Mr. President, the proposal before us allows the States a full 7 years to ratify this amendment. The practical effect of this is, assuming Congress approves Senate Joint Resolution 1 by June 1 of this year, the States then have 7 years, or until the year 2004, just to ratify the amendment. If they take the full 7 years, and I think they will take more time when they begin to consider the full implications of this approach, the amendment would then not become effective--in other words, binding on Congress--until 2 years later, in the year 2006. In other words, the ratification period envisioned by Senate Joint Resolution 1 forestalls making the truly hard choices until as late as the year 2006, well, well beyond the current target of the year 2002. In fact, the only way this amendment can be effective and binding by the year 2002 is if we pass it this year and the States then ratify it within only 3 years. Because I believe, as I know do most of my colleagues, that we should balance the budget no later than the year 2002, I am offering this amendment to shorten the time for ratification from the allowed 7 years under the current amendment to 3 years, thus keeping us on track to meet the 2002 goal. I want to be candid in stating that I disagree with many of my colleagues who believe that this amendment will be promptly ratified by the States. There is already talk that some of the States that might have ratified this proposed amendment in the past may be having some second thoughts. Maybe they have been listening to the debate on the floor, about some of the very serious flaws with the way this balanced budget amendment was drafted, that has been brought forward. In fact, the longer the States have to consider this amendment and its potential ramifications and uncertainties, they will be less and less inclined to adopt it. However, when I offered this amendment in the Judiciary Committee, the proponents of the balanced budget argued against it. The distinguished chairman of the Judiciary Committee, the senior Senator from Utah, Senator Hatch, stated that he was quite confident that if the timeframe were shortened, as I am proposing, that the underlying amendment ``would still be ratified by an overwhelming number of States and probably within that 3-year time.'' That being the case, and the general agreement that the budget must be balanced no later than the year 2002, I was somewhat surprised to see my amendment defeated by the committee. If we are sincere about our efforts to achieve balance within 5 years, our actions on this amendment should reflect that goal, a goal that has been stated by the President and by the majority leader and by the Speaker of the other body. The argument has also been made we should not abandon the custom of allowing a full 7 years for ratification. However, the 7-year period for ratification has evolved as a matter of practice beginning with the 18th amendment. On each successive occasion, except the 19th amendment, Congress has a set time for ratification, and they have set that time each time at 7 years. Doing so has been upheld as appropriate by the Supreme Court as an exercise of Congress' authority to adopt reasonable timeframes for ratification of amendments. There has, no doubt, been much debate over whether or not the time for ratification may be extended. There is nothing, Mr. President, nothing, except adherence to tradition, that precludes the adoption of a shorter period of ratification, of a period less than 7 years. I respectfully suggest that the context in which the debate over the balanced budget arises counsels that it would be entirely appropriate and reasonable to depart from the 7-year standard and [[Page S1702]] adopt, in this case, 3 years, as is proposed in my amendment. There can be little doubt that balancing the budget is perhaps the top priority of the Federal Government at this point. In fact, so important was the adoption of the 2002 target date that the Republican Party created and ran what was, in my opinion, a pretty effective TV ad that showed President Clinton saying that a balanced budget could be attained in 7 years, then 8 years and then 10 years. That was a pretty good ad. This ad was a dramatic portrayal of what many argued was a general unwillingness to commit to attaining balance by a specific date. I agreed with my Republican colleagues that we should set about the business of reaching balance by the year 2002, and that is why I think the amendment I am offering is appropriate and should be adopted. It assures that the target date of 2002 will not be pushed back until possibly as late as 2006. If, as the chairman of the Judiciary Committee suggested, the States adopt this Senate Joint Resolution 1 very quickly, then we should make it effective no later than 2002. If however, the States, upon learning about the uncertain consequences to the American people of this proposal, reject it, Congress should not be allowed to sit on their hands for 7 years and let the gains of the past 4 years of reducing the deficit languish or, even worse, be lost. I am sure that many proponents of this constitutional amendment will argue that even if the States take the full 7 years, there is nothing to stop the Congress from continuing to work hard to get the balance done by the 2002 date. I hope so. But I suggest that such an argument speaks not to my amendment, but to the more threshold question of why, if that is the case, do we have to amend the Constitution anyway? If the constitutional amendment is not going to require balance until the year 2006, what will force this body to do the job by the year 2002? Nothing. The heat will be off. President Clinton was clear when he said that all we need to balance the budget is our votes and his signature. I agree. We should make the tough choices sooner, not later. The report accompanying this measure argues that should this amendment be adopted and subsequently disregarded by a Congress and a President and are stalled at an impasse in budget negotiations, that that would constitute nothing less than a betrayal of public trust. In my opinion, if we allow this amendment to potentially delay balancing the budget or, in the interim, stray from the course charted over the last 4 years, that would also be, in my view, a betrayal of the public trust. We should remain always and in all respects committed to the 2002 target date. As I said before in the Judiciary Committee, this amendment is really, to put it in very simple terms, the fish-or-cut-bait amendment. You either support moving toward balance by the year 2002 or you don't. If this Nation is going to take the constitutional approach, we should set about doing so and not let possible delays over ratification provide an excuse, provide political cover for inaction and delay until as long as the year 2006. I do not question the sincerity of my colleagues in their desire to balance the budget. My amendment ensures that this will occur within the timeframe we have all agreed upon. Therefore, Mr. President, I am hopeful that all of us who support balancing the budget, whether we support this amendment or not, will embrace my amendment that will limit the ratification to 3 years and, therefore, Mr. President, keep us on track to balance by the year 2002, not the year 2006. I reserve the remainder of my time. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Utah. Mr. HATCH. I understand my colleague. I understand the amendment being offered by Senator Feingold would reduce the period for the States to ratify the balanced budget amendment from 7 to 3 years. I have to say, that I do not see the wisdom in departing from the longstanding 7-year standard that this resolution reflects. The 18th amendment, ratified in 1921, was the first constitutional amendment to contain a time limitation of any kind. Although there was heated debate at the time over Congress' authority to impose such a limitation on the States' ratification of the constitutional amendment, the Supreme Court subsequently upheld Congress' power to set a reasonable time limit on ratification in the case of Dillon versus Gloss back in 1921. As a result, we find 7-year time limitations within the actual text of the 18th, 20th, 21st and 22d amendments. Since approval of the 23d amendment in 1961, Congress has continued to include a 7-year time limitation. But such limitation has been removed from the text of the amendment and incorporated instead in the joint resolution proposed in the amendment as we have done in Senate Joint Resolution 1. Now, just to verify the continued adherence to the convention of a 7- year time limitation, I did a quick review of the 107 Constitutional amendments introduced in the last Congress. Indeed, of those 107 resolutions, only 1 contained a time limitation that varied from the conventional 7-year limitation. I am quite confident, were we to adopt a shorter time limit, as my colleague proposes, the amendment would still be ratified by an overwhelming number of the States. But I fail to see the need in this case to alter what has been recognized as a reasonable time limitation on ratification since the early part of this century or to prejudice the consideration of the balanced budget amendment by reducing the time for consideration. Mr. President, I am not concerned about 3 years or 7 years. I am concerned about 28 years, these 28 years of unbalanced budgets. You know, the bottom line is, we can talk all we want to about technicalities like 3 or 7 years but it is the 28 years I am concerned about. Really, if you get serious about it, it is 58 of the last 66 years during which we have had unbalanced budgets. It does not take a rocket scientist to realize this outfit just does not have the will to do what is right. So to get all caught up in whether it is 3 or 7 years, I do not think serves the best interests of this amendment. Let me just say the bottom line is this. Congress cannot and will not stop spending more than it earns without the force of a constitutional requirement to balance the budget. I have 28 unbalanced budgets here just to prove the point. We stacked them a little lower by doubling and tripling the smaller volumes, but it still is a pretty high stack. It is headed right to the ceiling if we do not get a balanced budget amendment. We have run deficits in 58 of the last 66 years. And, Mr. President, that is plain fiscal irresponsibility. For these reasons, I urge my colleagues to reject distractions such as this amendment. I do not mean to demean the amendment of the distinguished Senator or my colleague who serves well on the Judiciary Committee, and with whom I have a very good, friendly and decent relationship, but it is a distraction in the sense that really the 7- year period really ought to be maintained since it has been over all these years. So I urge my colleagues to reject this amendment and to find the courage to change the face of this Nation by voting for a constitutional amendment to balance the budget. This is a chance to do it. This is a chance to do something that will work. If we put the balanced budget requisite into the Constitution, I have no doubt that it will be a very relative few who would not observe it. But I believe the vast majority of Members of the Congress of the United States henceforth and forever would do everything in their power to live up to that constitutional requisite were we to put it in the Constitution. I have no doubt about it. I think the vast majority of people who serve here are very honorable people who keep their word and will do what is right. I really believe that if we put this in the Constitution, that vast majority will really make sure that this balanced budget amendment works. On the other hand, if we do not, my gosh, what hope do we have? I mean, I can just see where nobody could be seen above this stack 6 or 4 years from now. Frankly, I am absolutely solid in asserting, unless we have a balanced constitutional amendment, these stacks are just going to continue to grow ad infinitum, something that must be horrifying our Founding Fathers, many of whom are undoubtedly in Heaven, although there are a few I am sure who [[Page S1703]] had a rough time getting there. But the vast majority of them probably are there with our Father in Heaven saying, ``Let's do that which we failed to do when we had the chance, even though we thought about it.'' But they, when they were here, never thought for a minute we would have 28 straight years of unbalanced budgets. So I suspect that the only way to solve this problem is to put some fiscal mechanism within the Constitution that makes sense. This amendment is that mechanism. It is a bipartisan amendment. I chatted with Charles Stenholm last night, our Democratic counterpart over in the House. I have to say he has done a tremendous job over the years doing his best to try to enact this amendment. It takes guts because he takes a lot of flak for it because people in his party in particular want to keep spending and taxing and claiming that they are doing a lot for people--they never say with their own money that could be better utilized by them and I think in a better way. So I want to praise him for the work he has done over there in the House, along with other Democrats and Republicans who have worked so hard through the years on this amendment. I want to praise everybody here who will vote for this amendment because it does--it does--hold hope for the future if we can pass this amendment and enshrine it in the Constitution where I think the vast majority of Members would honor it and do what is right. The spending games would be over. So I would hope that our colleagues will keep the language exactly the same. I do not know how it would affect other people who are currently willing to vote for the amendment, but we would like not to change it. In spite of the fact that my colleague is sincere and that this is a sincere amendment, I would hope that our colleagues will vote to table it. Mr. President, I am prepared to yield back the balance of my time. We could move to the Senator's next amendment, unless he wants to discuss it. Mr. FEINGOLD. How much time do I have remaining? The PRESIDING OFFICER. You have 3 minutes, 46 seconds. Mr. FEINGOLD. Mr. President, if I may, I would like to use that time. There were interesting remarks made by the chairman of the Judiciary Committee, my friend, Senator Hatch. I will reiterate, this is really the fish-or-cut-bait amendment. I always appreciate the eloquence of the Senator from Utah, but I notice a sort of different tone when he speaks about this amendment as opposed to the balanced budget amendment. There is sort of a lack of urgency to his tone about this. His tone suggests that whether we get this thing done by 2002 or 2006, the important thing is that we just have this balanced budget amendment on the books. That just does not seem to square with the rest of the comments I have heard from the Senator and most of the other supporters of the balanced budget amendment. There was no suggestion by the Senator from Utah that we could not limit this to 3 years. I appreciate his candor on that. That is something that is available to the Congress. It has not been done before, but when the limitation was put in the first place on the 7 years on the 18th amendment, it was my understanding that was not done before. So there is no literal constraint on that. I was also struck, Mr. President, by the Senator from Utah's statement that we really had no reason here not to adhere to convention, there is no reason not to go to 3 years or we should stick with the traditional 7 years. This entire process of balancing the budget and having an amendment to the Constitution to do it could not be more contrary to the notion of adhering to convention. We have tried to use the Constitution of this country as a very limited and narrow document for 200 years but now we are going to do accounting through the Constitution. I suggest that that is a failure to adhere to convention. The Senator from Utah also tried to describe this amendment as sort of a technicality, saying that whether it is 2002 or 2006, that is not the issue. We just need it in the Constitution. Mr. President, it flies right in the face of his excellent description of that stack of documents in front of him. The Senator from Utah is one of the taller Members of this body, if I may say so. I do not think that is in dispute. I agree that if we keep going down this road that we will be unable to see the distinguished chairman, perhaps even by the year 2002, because of these books that are piling up. But if we wait not until the year 2002 but to the year 2006, I think the former Senator from New Jersey may not be visible and we may have to get Senators who would be able to start in a starting line up in the NBA just to be able to be seen over these documents. The fact is, there is a difference between the year 2006 and the year 2002. All my amendment does, Mr. President, is guarantee that however this turns out, through a balanced budget amendment or through a bipartisan agreement to balance the budget by the year 2002, that is the date. Either way, it cannot be after that time. That is the effect of my amendment, Mr. President. I yield the floor. Mr. HATCH. Let me just say for the sake of this debate, if the Senator were willing to vote for the balanced budget amendment, I would accept his amendment because I think three-quarters of the States would ratify this amendment within the 3-year time period. I know he will not vote for this balanced budget amendment, and, frankly, it is better from a constitutional standpoint to give the States enough time to function. Some States do not even meet this year in their legislatures; others meet, but may not have time to consider this. It does take time to ratify a constitutional amendment, depending upon a lot of timing factors. So we prefer to have the 7-year period. But I will make that offer if the Senator will vote for the balanced budget amendment. I would encourage all my colleagues to vote for his amendment, but until he does, I think we have to reject this amendment unless he is willing to do so. The PRESIDING OFFICER. The Senator from Wisconsin has 36 seconds. Mr. FEINGOLD. Let me say I, of course, am very candid on this point, that I do not support the balanced budget amendment for a variety of reasons, but I do recognize that there are some very serious consequences for this country if we do pass it. My amendments today are relevant to the situation we would face if it does go through. I am sincere in my belief that if it does pass, the process is going to be slowed down here if it is not ratified quickly by the States. That is why I offer this amendment, because sometimes things happen that you are not happy about in the Congress and the President signs it, but you would like the negative effects to be limited. That is the spirit in which the amendment is offered. Mr. HATCH. Mr. President, I know my colleague is sincere. I have nothing but respect for him as he serves on the committee. I have a lot of regard for the distinguished Senator, and he knows it, and I know it. However long it takes, we need a balanced budget amendment, and I think this is drafted correctly. It has Democrat prints all over it and Republican prints all over it. It is the bipartisan amendment that has always been in play, and I think should always be in play. Frankly, I am hopeful we can pass it by next Tuesday. But however long it takes, we need it. If we do not do it, we will continue the status quo, and that is a stack of unbalanced budgets, which my friend and colleague admits will continue if we do not do something about it. Mr. President, I yield back the balance of time, and I understand these votes will be stacked. The PRESIDING OFFICER. The Senator is correct. Mr. HATCH. I ask unanimous consent to move to table, with the understanding it will be able to come up at a later time. The PRESIDING OFFICER. The Senator has that right. The motion to table has been made. Mr. HATCH. I ask for the yeas and nays. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. Amendment No. 14 The PRESIDING OFFICER. Under the previous order, the question recurs [[Page S1704]] on amendment No. 14, offered by the Senator from Wisconsin [Mr. Feingold]. Debate on the amendment is limited to 40 minutes, equally divided. The Chair recognizes the Senator from Wisconsin. Mr. FEINGOLD. Thank you, Mr. President. I thank the distinguished Senator from Utah, the chairman of the Judiciary Committee, for his kind remarks. I now would like to speak about an amendment that is also in the spirit of trying to make sure this balanced budget amendment works properly, in the event it goes through the Congress and is ratified by the States. Mr. President, regardless of our views on the balanced budget amendment, many of us would like us not only to balance the budget, but many of us would like us to establish a statutory balance that can act as a fiscal cushion against unexpected emergencies. In other words, we think we should never project a deficit, but that on occasion we may want to project something of a surplus to make sure there is money there in case there is an emergency or some other urgent spending priority that has to be dealt with, but only on a surplus basis. Now, Mr. President, this is not some idea I cooked up. This is what we do in Wisconsin. It is done in some form in most States. I think it would make good sense at the Federal level. Unfortunately, Mr. President, in its current form, the proposed balanced budget amendment discourages this fiscally responsible tool. In effect, it does not really allow a surplus. It certainly does not allow a surplus to be used if one arises, except by a three-fifths vote in each house, which is a very high standard. Because outlays cannot exceed receipts in any year under the balanced budget amendment, any surplus built up to address an unexpected need would be subject to the three-fifths threshold and all the potential mischief that a supermajority requirement employs. Mr. President, many of us in this body have concerns with the way we currently address emergencies and other unexpected needs as they arise. I have seen a lot of that just in the 4 years I have been here dealing with various disaster and emergency legislation. Under our present budget structure, we are forced to choose between adding to the deficit and scrambling to find spending cuts or tax increases to offset the unexpected need. I think, and we have certainly seen this in Wisconsin, a far more fiscally responsible approach would be to appropriate a dedicated emergency fund or require a positive ending balance on which we could draw as the need arises. By budgeting for an emergency in advance, this approach would avoid deficit funding, but it would also decouple the potentially desperate need for emergency assistance from the hurried approach of emergency offsets. So a surplus fund or statutory ending balance would also address some of the concerns that have been raised by Secretary Rubin and others who have spoken about the important role that automatic economic stabilizers play in the health of the economy. Our committee chairman has cited Fred Bergsten, a noted economist, during the committee's markup. This is what our distinguished chairman said in citing Mr. Bergsten: ``* * * a better way to go is to shoot for a yearly surplus and let that take care of truly automatic fluctuations, if there are any.'' Mr. President, I agree with our chairman. I think balancing the budget and building up a reasonable surplus during good times to help cushion economic downturns is a better way to go. However, as I just noted, Mr. President, under the present draft, we could not establish and use such a surplus fund without violating the constitutional amendment mandate except through achieving a three-fifths majority in each house. Mr. President, you know that threshold presents serious problems, as many of our colleagues have noted during the course of this debate. The supermajority requirement empowers a minority to hold up a must-pass measure unless their fiscal or policy demands have been met. As some have noted, this perhaps mild form of extortion might even take the form of insisting on additional deficit spending, precisely the opposite direction intended by the supporters of the constitutional amendment. Remember, this balanced budget amendment does not guarantee that we have deficit spending, it just requires a supermajority to do so. Mr. President, if allowing a surplus fund might be fiscally prudent to handle the unexpected natural disaster or military conflict, I think this surplus opportunity becomes absolutely essential if we hope to fund the bulges in Social Security benefits that will occur when the baby boomers retire. In just a few years, we will begin to have to pay back the funds we have borrowed from the Social Security trust fund. Before that happens, Mr. President, we have to somehow rid ourselves of the addiction to those trust fund surpluses. That is how we have been masking how great our deficit is in the past, and we have to begin to balance the budget without those surpluses. That means, Mr. President, that the unified budget will have to be in surplus, but even then, if we build up a genuine surplus in unified budget to pay future retirees, the restrictions of the proposed balanced budget amendment will prevent us from using it unless we can muster a three-fifths vote of support in both bodies. Mr. President, right now, the Social Security trust fund is receiving more than it is paying out. Those surpluses will continue to build until the baby boomers retire, and we need to tap into those savings at that point to offset the bulge in Social Security beneficiaries. Mr. President, many have said this, but we have abused the Social Security surpluses by using them to mask part of our budget deficit. I don't single out one party or one branch of Government, because it has sort of been standard operating procedure for nearly 30 years. Mr. President, many of us want to stop that abuse and to work to get the budget off the Social Security surplus addiction so the funds are there for retirees as promised. Mr. President, again, the current balanced budget amendment draft will not let us do that. When the baby boomer retirees begin to collect Social Security and the surpluses turn negative, the balanced budget amendment does not permit us to draw upon any savings we can build up between now and then. Now, one approach is to explicitly exempt Social Security from the balanced budget amendment by putting the Social Security trust fund out of reach. We could then be sure that they will be available to draw down when needed. Some who oppose this approach argue that we can do so by statute. They note that nothing in the current draft would prevent us from taking Social Security off budget by law, as we do now, and achieve genuine balance outside of Social Security. Unfortunately, though, Mr. President, even if the rest of the budget is in true balance, the current version of the amendment still prevents the use of the trust fund savings to pay Social Security benefits, unless the rest of the budget is cut or taxes are increased. Mr. President, the current balanced budget draft requires cash flow to be balanced. It expressly prohibits the kind of buildup in anticipation of need that is the underpinning of the Social Security system itself. To put it in more simple terms, it is exactly like telling parents when the time comes to pay the cost of their child's education, they will not be able to use any of the savings they have built up, but will have to pay for the cost of their child's college education out of whatever their income is at that time--not one dime more. I can tell you, as a parent of four teenagers, that would be a very troubling prospect indeed. Mr. President, my amendment would allow us to use the savings we must build up in advance of the coming retirement bulge. Let me be clear about this. Although this is the way it is done in my home State of Wisconsin--by statute--my amendment does not require us to have a surplus. My amendment does not require us to fulfill our commitment to future retirees. Yes, Congress could still duck that commitment. But at least, Mr. President, if my amendment is adopted, Congress would be able to do the right thing by Social Security beneficiaries. Without it--if the Constitution is amended as it is currently drafted--Congress will have to find a dollar in [[Page S1705]] budget cuts or tax increases for every dollar Social Security outlays exceed receipts. Mr. President, despite all the rhetoric about how Social Security will do quite well in what I like to call the ``brave new world of the balanced budget amendment,'' who can doubt that Social Security benefits will quickly go on the chopping block, if we ever get to that eventuality? Mr. President, this is a fundamental inequity that is built into the proposed constitutional amendment. Programs like Social Security, which require a buildup of savings to work, have to muster a three-fifths majority from both bodies. But the defense budget, special interest spending done through the Tax Code, and corporate welfare, all get a free pass. They don't have to go through this. So, Mr. President, to conclude, even if my amendment is adopted, it will be difficult for Social Security to compete with these other powerful interests. But at least by allowing for a surplus, my amendment gives it a fighting chance. I reserve the balance of my time. Mr. KYL addressed the Chair. The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Arizona [Mr. Kyl] is recognized. Mr. KYL. Mr. President, Senator Hatch was called away for a moment. I would like to present some of the remarks he would make in opposition to the amendment. Of course, nothing in Senate Joint Resolution 1 prevents us from running surpluses or saving those surpluses in a rainy day fund. But Senate Joint Resolution 1 does put a lock on savings to ensure that they are not spent frivolously. The proposal before us is based upon the argument that, under the balanced budget amendment, previously accumulated surpluses cannot be drawn upon in future years without a three-fifths vote. This is because, the argument goes, such funds would be spent as current outlays within the meaning of section 7, but would not count as current receipts and would therefore cause outlays to exceed receipts and trigger the three-fifths vote in section 1. Thus, this proposal seeks to prevent the use of previously accumulated surplus funds by a simple majority vote. While most of us are concerned with how to stop running deficits, this proposal exhibits concern about accumulated surpluses. Protecting accumulated surpluses with a three-fifths vote is not necessarily a flaw in the amendment, however. On the contrary, I see it as a strength. Requiring a supermajority to spend previously accumulated surpluses could help us ensure that they are not frittered away on enticing, but fundamentally unimportant, spending projects. Let us be realistic, Mr. President, we have had 28 straight years of deficits, and we have run deficits for 58 of the last 66 years. If we adopt the balanced budget amendment, we all believe that deficits will come to an end. I do not expect it will be easy to accumulate large surpluses, even under the balanced budget amendment. Proper planning and discipline can yield positive results. But I think it's important that we jealously guard the fruits of our budgetary labors and protect the surpluses we have managed to acquire, if any. This amendment seeks to make it easier to spend away any surpluses we manage to acquire. It seems to me that this is an ill-advised policy. We would be wiser to keep the surplus in the strongbox of subject it to a supermajority requirement to be certain that it is not whisked away in yet another Washington spending frenzy. Can we safely assume that the Congress would leave money sitting, unguarded, on the table? The supermajority requirement will help us ensure that when a real emergency arises, the surplus will be there to meet truly pressing and worthy needs. Both common sense and political reality dictate that there will be very little difficulty in getting the three-fifths necessary because, after all, who would vote against emergency aid when there would be no increase in the deficit? I do have a concern that allowing Congress the option of spending a portion of the national savings by simple legislative fiat might erode the effectiveness of the balanced budget amendment by relaxing the fiscal constraints on yearly spending. Congress might slip into a habit of spending accumulated surpluses with regularity and get used to spending beyond our annual income, just as we have gotten into the habit of borrowing under the current system. Then having wasted our savings, we would have much more work just to get back into annual balance habits. If we were fortunate enough to accumulate a sizable surplus, I expect we could stop patting ourselves on the back for simply not increasing the debt and actually start to repay some of the huge debt this country has run up. This is probably the best use of surpluses, particularly from a cash management perspective, and is what is contemplated as the normal use of surpluses under the balanced budget amendment. That is why Senate Joint Resolution 1 does not count repayment of debt principal as total outlays. As we pay down our debt, we will continue to free up capital, lower interest rates and our annual interest payments, and strengthen the economy, helping us avoid deficits and the need to draw on savings or to borrow. We would also be moving ourselves away from the debt ceiling and building a cushion of debt availability if we should have to borrow again. One final point, Mr. President. We have not balanced the budget in almost 30 years, as I have said before. It is perhaps a bit premature to start arguing about how we will spend surpluses. The first order of business is to pass the balanced budget amendment and get the deficit at least to zero. Then I submit that we can work on surpluses and true debt reduction. This is an interesting proposal, but it ought to be defeated. Mr. FEINGOLD. Mr. President, how much time do I have remaining? The PRESIDING OFFICER. The Senator has 9 minutes 36 seconds. Mr. FEINGOLD. Thank you, Mr. President. I appreciate the comments of the Senator from Arizona. I enjoy serving with him on the Judiciary Committee. I appreciate his candor. Basically, those folks who advocate the constitutional amendment have said it all here. They have now said formally that if you want to get money from the Social Security trust fund surplus in the coming years, that in fact the only way to do it is by getting a supermajority, three-fifths of both the Senate and the other body. I hope the seniors of this country are listening and realize what we are talking about here. It is incredibly difficult to get three-fifths of either body on anything. It is hard enough to get over 50 votes on anything. And when you are talking about the competition with all the special interests that are represented in this community, even with a fully funded Social Security trust fund, requiring a three-fifths majority of both Houses to fully fund Social Security benefits from the trust fund has to be one of the greatest threats to Social Security that can be imagined. Let's be clear. I do not think anyone has successfully disputed the claim that this constitutional amendment allows the use of Social Security dollars to balance the budget. That has become very clear in this debate. What this new admission tells us is that if the Congress wants to do the right thing after we have a balanced budget amendment and wants to make sure that retirees and future retirees have the money saved for them over the years, they will not be able to do it through a majority vote. A minority in either House will be able to prevent every senior citizen in this country from getting the payments they deserve and that they paid into the system for. That is what this thing does. This isn't just about seniors. Yes, it is about my generation. It is about baby boomers. Perhaps that will be the first group that will be affected by this. But it is also about future generations who certainly hope, if they are required to pay into the Social Security system, that there would be a way for them to access their retirement benefits without having to persuade three-fifths of both Houses of Congress it is a good idea. You should not have to persuade three-fifths of the Congress that it is a good idea. That is your money. That is your

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BALANCED BUDGET AMENDMENT TO THE CONSTITUTION
(Senate - February 27, 1997)

Text of this article available as: TXT PDF [Pages S1698-S1726] BALANCED BUDGET AMENDMENT TO THE CONSTITUTION The Senate continued with the consideration of the joint resolution. Mr. REED. Mr. President, I ask unanimous consent to speak for 20 minutes. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BIDEN. Mr. President, will the Senator from Rhode Island yield to me so that I may explain why I missed that last vote? Mr. REED. Yes. Mr. BIDEN. Mr. President, I thank the Republican leader as well as the Democratic leader for attempting to hold the vote long enough for me to get here. I voted before in the affirmative on the Graham amendment. We voted on it last year. I was one of the speakers at the International Chiefs of Police and Sheriffs Association discussing the juvenile justice bill. I thought I had left in plenty of time from a downtown hotel to get here. But, as Washingtonians will tell you, there is a good deal of road construction going on. I was caught behind the most polite cab driver in Washington. He stopped for everyone, which I was happy to see except for this day. Had I had the cab driver who runs over most people, I would have been up here. I should not say that. I will get letters about that. That was a joke, an attempted joke. But I want the Record to show that had I been here, I would have once again voted for the Graham amendment. I apologize if I inconvenienced the Senate in any way in attempting to hold it for me to get here. I thank my distinguished friend from Rhode Island for yielding. The PRESIDING OFFICER. The Senator from Rhode Island. Mr. REED. Mr. President, I am prepared to speak. I would be willing to defer if there are any other procedural announcements at this time. Mr. LOTT addressed the Chair. The PRESIDING OFFICER. The majority leader. Unanimous-Consent Agreeement Mr. LOTT. I thank you, Mr. President. I thank the Senator from Rhode Island for yielding this time so that I may enter a unanimous-consent agreement which has been reached with regard to an amendment that Senator Hollings had intended to offer to the balanced budget amendment on campaign financing. I ask unanimous consent that the majority leader, after notification of the Democratic leader, may turn to the consideration of a Senate joint resolution, the modified text of which is Senate amendment No. 9 filed yesterday to Senate Joint Resolution 1 regarding campaign financing. I further ask that no amendments or motions be in order during the pendency of the Hollings constitutional amendment, and following the conclusion of the debate, the joint resolution be read a third time and a vote occur on passage of the joint resolution, with the preceding occurring without any intervening action. Before the Chair puts this consent request to the body, it has been pointed out to me by Senator McCain that this consent is for a constitutional amendment regarding campaign spending limits. There are other campaign-related issues that may be pending in the Senate committees that do not amend the Constitution but are statutory language. So this is not to be in place of or in any way block other consideration, or to indicate that there will not be hearings and further consideration of this matter. But Senator Hollings agreed to this arrangement so that it would not be a part of or relate to the consideration of the constitutional amendment for a balanced budget. Senator McCain agreed that it be done this way. It has taken the cooperation of both of them and of all the Senators. This is an important issue which should be brought up freestanding with [[Page S1699]] a reasonable amount of time for discussion. I have indicated to Senator Hollings that, if it takes a couple of days or so, we will be prepared to do that. I think that is about what it would take, but if it takes 2 days and 2 hours, I do not know of anyone who would object to that. But it should be a very interesting debate. So I now make that request, Mr. President. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. LOTT. I thank the Senator from Rhode Island for yielding. The PRESIDING OFFICER. Under the previous order, the Senator from Rhode Island is recognized for 20 minutes. Mr. REED. Thank you, Mr. President. Mr. President, I rise in opposition to the amendment before us today. For many decades, Congress found it easier to debate a balanced budget amendment to the Constitution than to actually balance the budget. Support for the balanced budget amendment was a convenient badge of fiscal austerity at a time when many Members were voting for tax policies and spending proposals that saw our annual deficit and our cumulative national debt explode. After so many years, it is no wonder that the balanced budget amendment has become a talisman which its supporters clutch, suggesting that it has extraordinary powers to translate the difficult choices that this body must face into some type of simple constitutional formula which will miraculously erase the deficit. But, as the last few years have indicated, there is no magical constitutional language that will make the choices or the policies of budget balancing easier. Mr. President, in 1993, the Clinton administration began a process of deficit reduction which has helped to create a strong economy, cut the deficit by 63 percent, brought the deficit when measured as a percentage of the gross domestic product to its lowest level since 1974, and given us the lowest deficit of any major industrialized nation. It took difficult choices, not constitutional gimmicks; choices that Republicans refused to support. Whether or not this amendment passes, and I hope it does not, we will still be confronted by these choices. However, if this amendment does pass, for the first time in our history we will either surrender our role in shaping the budget and the social and economic policies which it defines to the courts, or simply surrender any decision to an adamant minority which could invoke the provision to block necessary action. Mr. President, the amendment before us today is flawed in many ways. It is the wrong answer to a real problem. It is the wrong way to manage the economy. It disrupts our tradition of majority rule. It needlessly jeopardizes essential programs and it needlessly enhances the role of the courts in budgetary and tax policy. The balanced budget is the wrong way to manage the economy. Over 1,100 noted American economists, including 11 Nobel laureates, voiced their opposition to this balanced budget amendment on the grounds that it would hurt our economy and graft improper fiscal policy onto the Constitution. They said, ``It is unsound and unnecessary.'' They added, ``It mandates perverse actions in the face of recessions.'' They went on to say it ``would prevent Federal borrowing to finance expenditures for infrastructure, education, research and development, environmental protection, and other investment vital to the Nation's future well-being,'' and that it ``is not needed to balance the budget.'' They also ``condemn'' the amendment and suggest it could place our economy ``in an economic straitjacket.'' One Nobel laureate, Prof. William Vickery, developed an analysis of 15 issues with respect to balancing the budget, reducing the deficit and providing for economic growth, and in this analysis he has a compelling and noteworthy passage: If General Motors, AT, and individual households had been required to balance their budgets in the manner being applied to the federal government, there would be no corporate bonds, no mortgages, no bank loans, and many fewer automobiles, telephones and houses. But this balanced budget amendment suggests that the Government do exactly the opposite of what the most sophisticated private industries do, and I think that is a mistake. While the majority may find it appropriate and even desirable to insert economic formulas into the Constitution, I would urge caution. For example, we all believe and we will say time and time again that we should have a full employment economy and that every able bodied American work. However, if I were to introduce a full employment constitutional amendment, I predict that the very same supporters of this balanced budget amendment would rush to this floor and condemn that approach, invoking the terminology that we should not enshrine economic ideas or formulas into the Constitution of the United States. The same thing would happen if we talked about an anti-inflation amendment. The point, I think, should be very clear. It is our responsibility, together with other institutions, outside the scope of the Constitution to rationally ameliorate the surges and downswings of the economy. This is what we should do. Some people might try to say, well, no, look at the States. They provide for a balanced budget. That certainly misses the point. State governments do not manage national economies. They do not issue and support currencies. They do not deal in foreign trade. And most of them, if not all of them, with balanced budget requirements have the good sense to separate capital spending from operational spending. So that logic does not suffice to support this balanced budget amendment. I also suggest that economically we are not immune from the difficulties of the business cycle. We have been enjoying over the last several years good, substantial economic growth, but we know that in past periods our economy has faltered. If it does falter, this balanced budget amendment could be a straitjacket, confining and constraining us in our response to these economic recessions. When the economy shrinks, revenue shrinks, throwing off our revenue estimates, throwing off our whole plan to get to the balanced budget, and we will be hamstrung by this amendment's proposals in terms of what we can do to address a recession. For example, the CBO has talked about the impact of recession on the deficit. Their estimates indicate that a 1 percent drop in the gross domestic product would increase the deficit by $32 billion. A 1-percent increase in unemployment would add $61 billion to the deficit. These are staggering figures with which we would have to contend in the context of a very narrowly drawn balanced budget amendment. These are not just statistics. These are real people's lives. We have all lived long enough to have endured economic recessions and have seen the cost in human lives. We have to, as a Government, to such situations. We cannot, I think, plead, at that moment of need, we would like to help you, but the Constitution prevents us from doing sensible, appropriate things to put people back to work in this country. One of the aspects of the balanced budget amendment that would severely constrain our response to recessions is the fact that it would suppress the automatic stabilizers contained in our economic policy today, things like unemployment compensation and other entitlement programs which exist to meet the needs of people who have fallen on hard times during a recession. As the Congressional Research Service cautioned when it examined the economic impacts of this proposal: In sum, the balanced budget constitutional amendment could require action to neutralize the automatic stabilizers in the budget that expand outlays and reduce tax collections in economic slowdowns and recessions. In this case, the budget would no longer serve to moderate business cycles. And, under this amendment, we would lose a valuable tool in aiding the working men and women of America. There is more than just constitutionally historic interest involved in the question of this amendment's supermajority requirements because this amendment requires not a majority vote, in many cases, but much more than a majority vote. This provision holds the real potential for constraining effective action at the time we [[Page S1700]] need Government to move decisively and purposefully. For example, in times of economic crisis, there would be no automatic stabilizers if a small minority of Senators or Representatives objected. Different regions of the Nation experiencing economic hardship could find no comfort in Washington because they could not muster the number of Senators and Representatives to deal with their region's particular problems. Frankly, over the last several years, we have seen economic situations in which the country overall appears to be doing fine, but when you go to the Northeast, to California, or to other parts of the country, you find regional recessions that need the help of this Government. Regrettably, in that situation there may not be sufficient will or political support to do what we must do, which would be extremely detrimental to the citizens who live in these areas. There is another aspect of this supermajority that is built into this constitutional amendment which should cause us all great concern, and that is in order to raise the debt ceiling a vote of three-fifths would be required. We have just in the last Congress seen the difficulty of securing approval of a change in the debt ceiling with a simple majority requirement. If we would require a three-fifths vote, we really would be putting our Nation at severe risk. As Secretary Rubin has pointed out with respect to the issue of raising the debt ceiling and consequently avoiding default on Government debt: The possibility of default should never be on the table. Our creditworthiness is an invaluable national asset that should not be subject to question. Default on payment of our debt would undermine our credibility with respect to meeting financial commitments, and that, in turn, would have adverse effects for decades to come, especially when our reputation is most important, that is, when the national economy is not healthy. Moreover, a failure to pay interest on our debt could raise the cost of borrowing not only for the Government but for private borrowers as well. This super majority provision would affect the Government's ability to deal rationally and prudently with the debt ceiling, and that is another reason, a very strong reason, why this proposed constitutional amendment is inappropriate. It is bad economics; 1,100 economists would condemn it, but it is also very poor budgeting. As Senator Byrd pointed out, the majority's proposal turns the Congress and the President into fortune tellers who must somehow predict and balance outlays and receipts exactly or find the supermajority needed to waive the amendment. This appears to be an impossible task, because each year the CBO seems to revise its projected deficit and revenue totals on a regular basis. We should not delude ourselves into thinking we can accurately predict the future, and we should definitely not add this dubious proposition to the Constitution. In addition to the fact that this amendment's success is predicated on frail human predictions, there are other reasons to oppose this amendment. While the majority claims that States have managed to survive balanced budget amendment requirements, they fail to acknowledge, as I previously indicated, that States do so rationally by creating separate operating and capital budgets. I have supported a balanced budget amendment which recognizes this rational policy. But that proposal is not before us today and we are debating a proposal that does not recognize--in fact some scholars have indicated it would constitutionally preclude--the development of a capital budget by the Federal Government. Time and time again, the advocates of the amendment have rejected the idea of a capital budget for the Federal Government. I believe, in a sense, not only are we rejecting sound constitutional policy and sound administrative policy, but we are also undercutting this Nation's need to build up our capital infrastructure. So, this amendment, as proposed, is both bad economics and bad budgeting, and finally it is an abrupt departure from the constitutional balance that we have observed through the course of our history. It raises a number of fundamental questions about our Constitution, our tradition of majority rule, and the power of the judicial branch in the United States. One of the lessons I learned in law school was, where there is a wrong, particularly a constitutional wrong, there must be a remedy. Yet this constitutional amendment makes no mention of how it will be enforced and who has the legal standing to question those issues which arise under the constitutional amendment. This is an invitation to litigate rather than legislate on budgetary matters. If a future Congress finds it too difficult to take the painful steps needed to eliminate the deficit, then we may expect any number of possible claimants, from Governors upset about Medicaid payments to senior citizens upset about their Social Security checks, all of them urging the courts to step in and take action. Moreover, by placing the requirements that receipts and outlays be reconciled in the Constitution itself, the amendment effectively calls on the Supreme Court to ensure that this mandate is met. While the amendment may leave open the question of how the legislature reaches its positions and what items will be considered outlays and revenues, the Supreme Court will always have an obligation to uphold the Constitution. Once we declare constitutionally that revenues and outlays must be reconciled, the Court will have no inhibition, and, in fact an obligation, to step in and make this reconciliation if Congress fails. Likewise, under this amendment the President could be forced to impound funds, to cut off checks, to do many things because of a perceived constitutional mandate. I would think long and hard, and I urge my colleagues to think long and hard, whether or not we want to surrender what is traditionally the authority of the Congress over both the courts and the President to manage the public purse. These issues are all very difficult ones, raising profound questions of constitutional law. One other aspect of the proposal which is disturbing is the departure from a tradition in this country of majority rule. I have mentioned before the supermajorities which would be required to raise the debt limit and to do other things which today only require a majority vote of the Members of the House and the Senate. Indeed, the balanced budget amendment would create new supermajorities in many different areas. When the founders developed the Constitution, they recognized that only majority rule would work for a nation founded on the principles of liberty and opportunity. James Madison argued in Federalist 58 that if more than a majority were required for legislative decision, then: . . . in all cases where justice or the general good might require new laws to be passed, or active measures to be pursued, the fundamental principles of free government would be reversed. It would be no longer the majority that would rule: the power would be transferred to the minority. And, indeed, that is what this amendment would do inexorably. There is a final and significant issue which must be discussed with respect to this balanced budget amendment proposal. I believe it jeopardizes the integrity of the Social Security system and raises the specter of encroachments on the system, not to support seniors but to pay for the reckless spending of the 1980's. My State has the Nation's third highest percentage population of senior citizens. These are the men and women who fought in World War II and who made our country an economic power. Their sacrifices have made our Nation what it is today. They deserve our support and they rightly demand our assistance to maintain a dignified retirement. The hallmark of our commitment to these seniors has been the Social Security system. However, this amendment makes no provision to protect this essential program from the choices necessary to achieve a balanced budget. The amendment fails to recognize that Social Security is not just like every other program. It is directly funded through a dedicated payroll tax, and numerous acts of Congress have sought to protect it from improper manipulation or precipitous reductions in benefits. Yet the majority refuses to protect Social Security and, instead, wants to use the Social Security trust fund to mask the deficit. Mr. President, recently the Congressional Research Service produced a report regarding the impact of the balanced budget amendment on Social Security, which contained a shocking [[Page S1701]] revelation. The report found that the Social Security Administration, even though it has accumulated a very healthy surplus, would not be able to pay benefits in certain years, due to the amendment's requirements that total outlays for any fiscal year shall not exceed total receipts for that fiscal year. In other words, Social Security could only pay as much in benefits as it receives from payroll taxes in any given year, even if the trust fund was running a multibillion- dollar surplus from previous years. This is a grave matter that deserves more analysis and could jeopardize the 1983 Social Security reform law as well as future reform efforts. But it would be a consequence of this balanced budget amendment if adopted today or in the future. Some would argue that no legislator would touch the Social Security system, but a constitutional imperative may provide a shield which would allow legislators to break that sacred commitment between ourselves and those seniors who have contributed so much to this country. I urge my colleagues to reject this balanced budget amendment. The Constitution establishes the durable rights and responsibilities which are the heritage of our past and the best guarantee of our future. We should not let the Constitution fall prey to a proposal that reflects transient economic policy at best, and would erode both majority rule and the principle that the people's representatives, not judges, must be responsible for the public purse. Mr. President, before I yield, I would like to thank Senator Feingold for his graciousness in delaying consideration of his amendment in order to permit me to go forward with my statement. I thank the Senator from Wisconsin and I yield my time. Amendment No. 13 The PRESIDING OFFICER. Under the previous order, the question recurs on the Feingold amendment No. 13. Debate on the amendment is limited to 30 minutes equally divided in the usual form. Mr. FEINGOLD. Mr. President, under the unanimous-consent agreement I have two amendments at the desk and I believe it is in order for me to call up the first of the amendments, amendment No. 13. The PRESIDING OFFICER (Mr. Enzi). That is the pending question. The Senator has 15 minutes. Mr. FEINGOLD. Mr. President, I thank the Senator from Rhode Island for his kind remarks and for his excellent remarks in opposition to the balanced budget amendment. The amendment I am offering today to the balanced budget amendment will ensure that this Congress will meet its stated goal of reaching a balanced budget by the year 2002. Many people do not realize that as currently drafted, Senate Joint Resolution 1 may well forestall this goal of balancing the budget by the year 2002 well into the next century. I believe reaching a balanced budget by 2002 or earlier should be our highest priority. Thus, I am offering an amendment that will shorten the time for ratification of this amendment. As was noted on the floor by our colleague from North Dakota, Senator Dorgan, a few weeks ago, even if this amendment were somehow ratified at 2:10 today, tomorrow this Nation's deficit would be no smaller than it was when the amendment was adopted. The fact that this amendment in and of itself does nothing to reduce the deficit highlights one of my principal concerns with Senate Joint Resolution 1. That concern is that pursuing a constitutional amendment approach could, counter to what everyone suggests on this issue, actually delay action on the real work of achieving a balanced budget by providing what is, in effect, political cover for inaction while the States debate the question of ratification. Under the proposal before us, even if the Congress adopted the joint resolution this year, the implementation date, the date by which we would actually be required to balance the budget, is potentially well into the next decade. Conceivably, it could be as late as the year 2006. That is right within the terms of the balanced budget amendment that is being offered. This is evident on the face of the amendment itself. Section 8 of the amendment offered in Senate Joint Resolution 1 provides that the balanced budget amendment will take effect beginning with the fiscal year 2002, or within the second fiscal year beginning after its ratification, whichever is later. So there is no certainty at all with regard to the year 2002. The report accompanying Senate Joint Resolution 1 reiterates this uncertain timeframe. It states as follows: An amendment to the Constitution forces the Government to live within its means. S.J. Res. 1 requires a balanced budget by the year 2002, or 2 years after the amendment is ratified by the States, whichever is latest. So, Mr. President, the proposal before us allows the States a full 7 years to ratify this amendment. The practical effect of this is, assuming Congress approves Senate Joint Resolution 1 by June 1 of this year, the States then have 7 years, or until the year 2004, just to ratify the amendment. If they take the full 7 years, and I think they will take more time when they begin to consider the full implications of this approach, the amendment would then not become effective--in other words, binding on Congress--until 2 years later, in the year 2006. In other words, the ratification period envisioned by Senate Joint Resolution 1 forestalls making the truly hard choices until as late as the year 2006, well, well beyond the current target of the year 2002. In fact, the only way this amendment can be effective and binding by the year 2002 is if we pass it this year and the States then ratify it within only 3 years. Because I believe, as I know do most of my colleagues, that we should balance the budget no later than the year 2002, I am offering this amendment to shorten the time for ratification from the allowed 7 years under the current amendment to 3 years, thus keeping us on track to meet the 2002 goal. I want to be candid in stating that I disagree with many of my colleagues who believe that this amendment will be promptly ratified by the States. There is already talk that some of the States that might have ratified this proposed amendment in the past may be having some second thoughts. Maybe they have been listening to the debate on the floor, about some of the very serious flaws with the way this balanced budget amendment was drafted, that has been brought forward. In fact, the longer the States have to consider this amendment and its potential ramifications and uncertainties, they will be less and less inclined to adopt it. However, when I offered this amendment in the Judiciary Committee, the proponents of the balanced budget argued against it. The distinguished chairman of the Judiciary Committee, the senior Senator from Utah, Senator Hatch, stated that he was quite confident that if the timeframe were shortened, as I am proposing, that the underlying amendment ``would still be ratified by an overwhelming number of States and probably within that 3-year time.'' That being the case, and the general agreement that the budget must be balanced no later than the year 2002, I was somewhat surprised to see my amendment defeated by the committee. If we are sincere about our efforts to achieve balance within 5 years, our actions on this amendment should reflect that goal, a goal that has been stated by the President and by the majority leader and by the Speaker of the other body. The argument has also been made we should not abandon the custom of allowing a full 7 years for ratification. However, the 7-year period for ratification has evolved as a matter of practice beginning with the 18th amendment. On each successive occasion, except the 19th amendment, Congress has a set time for ratification, and they have set that time each time at 7 years. Doing so has been upheld as appropriate by the Supreme Court as an exercise of Congress' authority to adopt reasonable timeframes for ratification of amendments. There has, no doubt, been much debate over whether or not the time for ratification may be extended. There is nothing, Mr. President, nothing, except adherence to tradition, that precludes the adoption of a shorter period of ratification, of a period less than 7 years. I respectfully suggest that the context in which the debate over the balanced budget arises counsels that it would be entirely appropriate and reasonable to depart from the 7-year standard and [[Page S1702]] adopt, in this case, 3 years, as is proposed in my amendment. There can be little doubt that balancing the budget is perhaps the top priority of the Federal Government at this point. In fact, so important was the adoption of the 2002 target date that the Republican Party created and ran what was, in my opinion, a pretty effective TV ad that showed President Clinton saying that a balanced budget could be attained in 7 years, then 8 years and then 10 years. That was a pretty good ad. This ad was a dramatic portrayal of what many argued was a general unwillingness to commit to attaining balance by a specific date. I agreed with my Republican colleagues that we should set about the business of reaching balance by the year 2002, and that is why I think the amendment I am offering is appropriate and should be adopted. It assures that the target date of 2002 will not be pushed back until possibly as late as 2006. If, as the chairman of the Judiciary Committee suggested, the States adopt this Senate Joint Resolution 1 very quickly, then we should make it effective no later than 2002. If however, the States, upon learning about the uncertain consequences to the American people of this proposal, reject it, Congress should not be allowed to sit on their hands for 7 years and let the gains of the past 4 years of reducing the deficit languish or, even worse, be lost. I am sure that many proponents of this constitutional amendment will argue that even if the States take the full 7 years, there is nothing to stop the Congress from continuing to work hard to get the balance done by the 2002 date. I hope so. But I suggest that such an argument speaks not to my amendment, but to the more threshold question of why, if that is the case, do we have to amend the Constitution anyway? If the constitutional amendment is not going to require balance until the year 2006, what will force this body to do the job by the year 2002? Nothing. The heat will be off. President Clinton was clear when he said that all we need to balance the budget is our votes and his signature. I agree. We should make the tough choices sooner, not later. The report accompanying this measure argues that should this amendment be adopted and subsequently disregarded by a Congress and a President and are stalled at an impasse in budget negotiations, that that would constitute nothing less than a betrayal of public trust. In my opinion, if we allow this amendment to potentially delay balancing the budget or, in the interim, stray from the course charted over the last 4 years, that would also be, in my view, a betrayal of the public trust. We should remain always and in all respects committed to the 2002 target date. As I said before in the Judiciary Committee, this amendment is really, to put it in very simple terms, the fish-or-cut-bait amendment. You either support moving toward balance by the year 2002 or you don't. If this Nation is going to take the constitutional approach, we should set about doing so and not let possible delays over ratification provide an excuse, provide political cover for inaction and delay until as long as the year 2006. I do not question the sincerity of my colleagues in their desire to balance the budget. My amendment ensures that this will occur within the timeframe we have all agreed upon. Therefore, Mr. President, I am hopeful that all of us who support balancing the budget, whether we support this amendment or not, will embrace my amendment that will limit the ratification to 3 years and, therefore, Mr. President, keep us on track to balance by the year 2002, not the year 2006. I reserve the remainder of my time. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Utah. Mr. HATCH. I understand my colleague. I understand the amendment being offered by Senator Feingold would reduce the period for the States to ratify the balanced budget amendment from 7 to 3 years. I have to say, that I do not see the wisdom in departing from the longstanding 7-year standard that this resolution reflects. The 18th amendment, ratified in 1921, was the first constitutional amendment to contain a time limitation of any kind. Although there was heated debate at the time over Congress' authority to impose such a limitation on the States' ratification of the constitutional amendment, the Supreme Court subsequently upheld Congress' power to set a reasonable time limit on ratification in the case of Dillon versus Gloss back in 1921. As a result, we find 7-year time limitations within the actual text of the 18th, 20th, 21st and 22d amendments. Since approval of the 23d amendment in 1961, Congress has continued to include a 7-year time limitation. But such limitation has been removed from the text of the amendment and incorporated instead in the joint resolution proposed in the amendment as we have done in Senate Joint Resolution 1. Now, just to verify the continued adherence to the convention of a 7- year time limitation, I did a quick review of the 107 Constitutional amendments introduced in the last Congress. Indeed, of those 107 resolutions, only 1 contained a time limitation that varied from the conventional 7-year limitation. I am quite confident, were we to adopt a shorter time limit, as my colleague proposes, the amendment would still be ratified by an overwhelming number of the States. But I fail to see the need in this case to alter what has been recognized as a reasonable time limitation on ratification since the early part of this century or to prejudice the consideration of the balanced budget amendment by reducing the time for consideration. Mr. President, I am not concerned about 3 years or 7 years. I am concerned about 28 years, these 28 years of unbalanced budgets. You know, the bottom line is, we can talk all we want to about technicalities like 3 or 7 years but it is the 28 years I am concerned about. Really, if you get serious about it, it is 58 of the last 66 years during which we have had unbalanced budgets. It does not take a rocket scientist to realize this outfit just does not have the will to do what is right. So to get all caught up in whether it is 3 or 7 years, I do not think serves the best interests of this amendment. Let me just say the bottom line is this. Congress cannot and will not stop spending more than it earns without the force of a constitutional requirement to balance the budget. I have 28 unbalanced budgets here just to prove the point. We stacked them a little lower by doubling and tripling the smaller volumes, but it still is a pretty high stack. It is headed right to the ceiling if we do not get a balanced budget amendment. We have run deficits in 58 of the last 66 years. And, Mr. President, that is plain fiscal irresponsibility. For these reasons, I urge my colleagues to reject distractions such as this amendment. I do not mean to demean the amendment of the distinguished Senator or my colleague who serves well on the Judiciary Committee, and with whom I have a very good, friendly and decent relationship, but it is a distraction in the sense that really the 7- year period really ought to be maintained since it has been over all these years. So I urge my colleagues to reject this amendment and to find the courage to change the face of this Nation by voting for a constitutional amendment to balance the budget. This is a chance to do it. This is a chance to do something that will work. If we put the balanced budget requisite into the Constitution, I have no doubt that it will be a very relative few who would not observe it. But I believe the vast majority of Members of the Congress of the United States henceforth and forever would do everything in their power to live up to that constitutional requisite were we to put it in the Constitution. I have no doubt about it. I think the vast majority of people who serve here are very honorable people who keep their word and will do what is right. I really believe that if we put this in the Constitution, that vast majority will really make sure that this balanced budget amendment works. On the other hand, if we do not, my gosh, what hope do we have? I mean, I can just see where nobody could be seen above this stack 6 or 4 years from now. Frankly, I am absolutely solid in asserting, unless we have a balanced constitutional amendment, these stacks are just going to continue to grow ad infinitum, something that must be horrifying our Founding Fathers, many of whom are undoubtedly in Heaven, although there are a few I am sure who [[Page S1703]] had a rough time getting there. But the vast majority of them probably are there with our Father in Heaven saying, ``Let's do that which we failed to do when we had the chance, even though we thought about it.'' But they, when they were here, never thought for a minute we would have 28 straight years of unbalanced budgets. So I suspect that the only way to solve this problem is to put some fiscal mechanism within the Constitution that makes sense. This amendment is that mechanism. It is a bipartisan amendment. I chatted with Charles Stenholm last night, our Democratic counterpart over in the House. I have to say he has done a tremendous job over the years doing his best to try to enact this amendment. It takes guts because he takes a lot of flak for it because people in his party in particular want to keep spending and taxing and claiming that they are doing a lot for people--they never say with their own money that could be better utilized by them and I think in a better way. So I want to praise him for the work he has done over there in the House, along with other Democrats and Republicans who have worked so hard through the years on this amendment. I want to praise everybody here who will vote for this amendment because it does--it does--hold hope for the future if we can pass this amendment and enshrine it in the Constitution where I think the vast majority of Members would honor it and do what is right. The spending games would be over. So I would hope that our colleagues will keep the language exactly the same. I do not know how it would affect other people who are currently willing to vote for the amendment, but we would like not to change it. In spite of the fact that my colleague is sincere and that this is a sincere amendment, I would hope that our colleagues will vote to table it. Mr. President, I am prepared to yield back the balance of my time. We could move to the Senator's next amendment, unless he wants to discuss it. Mr. FEINGOLD. How much time do I have remaining? The PRESIDING OFFICER. You have 3 minutes, 46 seconds. Mr. FEINGOLD. Mr. President, if I may, I would like to use that time. There were interesting remarks made by the chairman of the Judiciary Committee, my friend, Senator Hatch. I will reiterate, this is really the fish-or-cut-bait amendment. I always appreciate the eloquence of the Senator from Utah, but I notice a sort of different tone when he speaks about this amendment as opposed to the balanced budget amendment. There is sort of a lack of urgency to his tone about this. His tone suggests that whether we get this thing done by 2002 or 2006, the important thing is that we just have this balanced budget amendment on the books. That just does not seem to square with the rest of the comments I have heard from the Senator and most of the other supporters of the balanced budget amendment. There was no suggestion by the Senator from Utah that we could not limit this to 3 years. I appreciate his candor on that. That is something that is available to the Congress. It has not been done before, but when the limitation was put in the first place on the 7 years on the 18th amendment, it was my understanding that was not done before. So there is no literal constraint on that. I was also struck, Mr. President, by the Senator from Utah's statement that we really had no reason here not to adhere to convention, there is no reason not to go to 3 years or we should stick with the traditional 7 years. This entire process of balancing the budget and having an amendment to the Constitution to do it could not be more contrary to the notion of adhering to convention. We have tried to use the Constitution of this country as a very limited and narrow document for 200 years but now we are going to do accounting through the Constitution. I suggest that that is a failure to adhere to convention. The Senator from Utah also tried to describe this amendment as sort of a technicality, saying that whether it is 2002 or 2006, that is not the issue. We just need it in the Constitution. Mr. President, it flies right in the face of his excellent description of that stack of documents in front of him. The Senator from Utah is one of the taller Members of this body, if I may say so. I do not think that is in dispute. I agree that if we keep going down this road that we will be unable to see the distinguished chairman, perhaps even by the year 2002, because of these books that are piling up. But if we wait not until the year 2002 but to the year 2006, I think the former Senator from New Jersey may not be visible and we may have to get Senators who would be able to start in a starting line up in the NBA just to be able to be seen over these documents. The fact is, there is a difference between the year 2006 and the year 2002. All my amendment does, Mr. President, is guarantee that however this turns out, through a balanced budget amendment or through a bipartisan agreement to balance the budget by the year 2002, that is the date. Either way, it cannot be after that time. That is the effect of my amendment, Mr. President. I yield the floor. Mr. HATCH. Let me just say for the sake of this debate, if the Senator were willing to vote for the balanced budget amendment, I would accept his amendment because I think three-quarters of the States would ratify this amendment within the 3-year time period. I know he will not vote for this balanced budget amendment, and, frankly, it is better from a constitutional standpoint to give the States enough time to function. Some States do not even meet this year in their legislatures; others meet, but may not have time to consider this. It does take time to ratify a constitutional amendment, depending upon a lot of timing factors. So we prefer to have the 7-year period. But I will make that offer if the Senator will vote for the balanced budget amendment. I would encourage all my colleagues to vote for his amendment, but until he does, I think we have to reject this amendment unless he is willing to do so. The PRESIDING OFFICER. The Senator from Wisconsin has 36 seconds. Mr. FEINGOLD. Let me say I, of course, am very candid on this point, that I do not support the balanced budget amendment for a variety of reasons, but I do recognize that there are some very serious consequences for this country if we do pass it. My amendments today are relevant to the situation we would face if it does go through. I am sincere in my belief that if it does pass, the process is going to be slowed down here if it is not ratified quickly by the States. That is why I offer this amendment, because sometimes things happen that you are not happy about in the Congress and the President signs it, but you would like the negative effects to be limited. That is the spirit in which the amendment is offered. Mr. HATCH. Mr. President, I know my colleague is sincere. I have nothing but respect for him as he serves on the committee. I have a lot of regard for the distinguished Senator, and he knows it, and I know it. However long it takes, we need a balanced budget amendment, and I think this is drafted correctly. It has Democrat prints all over it and Republican prints all over it. It is the bipartisan amendment that has always been in play, and I think should always be in play. Frankly, I am hopeful we can pass it by next Tuesday. But however long it takes, we need it. If we do not do it, we will continue the status quo, and that is a stack of unbalanced budgets, which my friend and colleague admits will continue if we do not do something about it. Mr. President, I yield back the balance of time, and I understand these votes will be stacked. The PRESIDING OFFICER. The Senator is correct. Mr. HATCH. I ask unanimous consent to move to table, with the understanding it will be able to come up at a later time. The PRESIDING OFFICER. The Senator has that right. The motion to table has been made. Mr. HATCH. I ask for the yeas and nays. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. Amendment No. 14 The PRESIDING OFFICER. Under the previous order, the question recurs [[Page S1704]] on amendment No. 14, offered by the Senator from Wisconsin [Mr. Feingold]. Debate on the amendment is limited to 40 minutes, equally divided. The Chair recognizes the Senator from Wisconsin. Mr. FEINGOLD. Thank you, Mr. President. I thank the distinguished Senator from Utah, the chairman of the Judiciary Committee, for his kind remarks. I now would like to speak about an amendment that is also in the spirit of trying to make sure this balanced budget amendment works properly, in the event it goes through the Congress and is ratified by the States. Mr. President, regardless of our views on the balanced budget amendment, many of us would like us not only to balance the budget, but many of us would like us to establish a statutory balance that can act as a fiscal cushion against unexpected emergencies. In other words, we think we should never project a deficit, but that on occasion we may want to project something of a surplus to make sure there is money there in case there is an emergency or some other urgent spending priority that has to be dealt with, but only on a surplus basis. Now, Mr. President, this is not some idea I cooked up. This is what we do in Wisconsin. It is done in some form in most States. I think it would make good sense at the Federal level. Unfortunately, Mr. President, in its current form, the proposed balanced budget amendment discourages this fiscally responsible tool. In effect, it does not really allow a surplus. It certainly does not allow a surplus to be used if one arises, except by a three-fifths vote in each house, which is a very high standard. Because outlays cannot exceed receipts in any year under the balanced budget amendment, any surplus built up to address an unexpected need would be subject to the three-fifths threshold and all the potential mischief that a supermajority requirement employs. Mr. President, many of us in this body have concerns with the way we currently address emergencies and other unexpected needs as they arise. I have seen a lot of that just in the 4 years I have been here dealing with various disaster and emergency legislation. Under our present budget structure, we are forced to choose between adding to the deficit and scrambling to find spending cuts or tax increases to offset the unexpected need. I think, and we have certainly seen this in Wisconsin, a far more fiscally responsible approach would be to appropriate a dedicated emergency fund or require a positive ending balance on which we could draw as the need arises. By budgeting for an emergency in advance, this approach would avoid deficit funding, but it would also decouple the potentially desperate need for emergency assistance from the hurried approach of emergency offsets. So a surplus fund or statutory ending balance would also address some of the concerns that have been raised by Secretary Rubin and others who have spoken about the important role that automatic economic stabilizers play in the health of the economy. Our committee chairman has cited Fred Bergsten, a noted economist, during the committee's markup. This is what our distinguished chairman said in citing Mr. Bergsten: ``* * * a better way to go is to shoot for a yearly surplus and let that take care of truly automatic fluctuations, if there are any.'' Mr. President, I agree with our chairman. I think balancing the budget and building up a reasonable surplus during good times to help cushion economic downturns is a better way to go. However, as I just noted, Mr. President, under the present draft, we could not establish and use such a surplus fund without violating the constitutional amendment mandate except through achieving a three-fifths majority in each house. Mr. President, you know that threshold presents serious problems, as many of our colleagues have noted during the course of this debate. The supermajority requirement empowers a minority to hold up a must-pass measure unless their fiscal or policy demands have been met. As some have noted, this perhaps mild form of extortion might even take the form of insisting on additional deficit spending, precisely the opposite direction intended by the supporters of the constitutional amendment. Remember, this balanced budget amendment does not guarantee that we have deficit spending, it just requires a supermajority to do so. Mr. President, if allowing a surplus fund might be fiscally prudent to handle the unexpected natural disaster or military conflict, I think this surplus opportunity becomes absolutely essential if we hope to fund the bulges in Social Security benefits that will occur when the baby boomers retire. In just a few years, we will begin to have to pay back the funds we have borrowed from the Social Security trust fund. Before that happens, Mr. President, we have to somehow rid ourselves of the addiction to those trust fund surpluses. That is how we have been masking how great our deficit is in the past, and we have to begin to balance the budget without those surpluses. That means, Mr. President, that the unified budget will have to be in surplus, but even then, if we build up a genuine surplus in unified budget to pay future retirees, the restrictions of the proposed balanced budget amendment will prevent us from using it unless we can muster a three-fifths vote of support in both bodies. Mr. President, right now, the Social Security trust fund is receiving more than it is paying out. Those surpluses will continue to build until the baby boomers retire, and we need to tap into those savings at that point to offset the bulge in Social Security beneficiaries. Mr. President, many have said this, but we have abused the Social Security surpluses by using them to mask part of our budget deficit. I don't single out one party or one branch of Government, because it has sort of been standard operating procedure for nearly 30 years. Mr. President, many of us want to stop that abuse and to work to get the budget off the Social Security surplus addiction so the funds are there for retirees as promised. Mr. President, again, the current balanced budget amendment draft will not let us do that. When the baby boomer retirees begin to collect Social Security and the surpluses turn negative, the balanced budget amendment does not permit us to draw upon any savings we can build up between now and then. Now, one approach is to explicitly exempt Social Security from the balanced budget amendment by putting the Social Security trust fund out of reach. We could then be sure that they will be available to draw down when needed. Some who oppose this approach argue that we can do so by statute. They note that nothing in the current draft would prevent us from taking Social Security off budget by law, as we do now, and achieve genuine balance outside of Social Security. Unfortunately, though, Mr. President, even if the rest of the budget is in true balance, the current version of the amendment still prevents the use of the trust fund savings to pay Social Security benefits, unless the rest of the budget is cut or taxes are increased. Mr. President, the current balanced budget draft requires cash flow to be balanced. It expressly prohibits the kind of buildup in anticipation of need that is the underpinning of the Social Security system itself. To put it in more simple terms, it is exactly like telling parents when the time comes to pay the cost of their child's education, they will not be able to use any of the savings they have built up, but will have to pay for the cost of their child's college education out of whatever their income is at that time--not one dime more. I can tell you, as a parent of four teenagers, that would be a very troubling prospect indeed. Mr. President, my amendment would allow us to use the savings we must build up in advance of the coming retirement bulge. Let me be clear about this. Although this is the way it is done in my home State of Wisconsin--by statute--my amendment does not require us to have a surplus. My amendment does not require us to fulfill our commitment to future retirees. Yes, Congress could still duck that commitment. But at least, Mr. President, if my amendment is adopted, Congress would be able to do the right thing by Social Security beneficiaries. Without it--if the Constitution is amended as it is currently drafted--Congress will have to find a dollar in [[Page S1705]] budget cuts or tax increases for every dollar Social Security outlays exceed receipts. Mr. President, despite all the rhetoric about how Social Security will do quite well in what I like to call the ``brave new world of the balanced budget amendment,'' who can doubt that Social Security benefits will quickly go on the chopping block, if we ever get to that eventuality? Mr. President, this is a fundamental inequity that is built into the proposed constitutional amendment. Programs like Social Security, which require a buildup of savings to work, have to muster a three-fifths majority from both bodies. But the defense budget, special interest spending done through the Tax Code, and corporate welfare, all get a free pass. They don't have to go through this. So, Mr. President, to conclude, even if my amendment is adopted, it will be difficult for Social Security to compete with these other powerful interests. But at least by allowing for a surplus, my amendment gives it a fighting chance. I reserve the balance of my time. Mr. KYL addressed the Chair. The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Arizona [Mr. Kyl] is recognized. Mr. KYL. Mr. President, Senator Hatch was called away for a moment. I would like to present some of the remarks he would make in opposition to the amendment. Of course, nothing in Senate Joint Resolution 1 prevents us from running surpluses or saving those surpluses in a rainy day fund. But Senate Joint Resolution 1 does put a lock on savings to ensure that they are not spent frivolously. The proposal before us is based upon the argument that, under the balanced budget amendment, previously accumulated surpluses cannot be drawn upon in future years without a three-fifths vote. This is because, the argument goes, such funds would be spent as current outlays within the meaning of section 7, but would not count as current receipts and would therefore cause outlays to exceed receipts and trigger the three-fifths vote in section 1. Thus, this proposal seeks to prevent the use of previously accumulated surplus funds by a simple majority vote. While most of us are concerned with how to stop running deficits, this proposal exhibits concern about accumulated surpluses. Protecting accumulated surpluses with a three-fifths vote is not necessarily a flaw in the amendment, however. On the contrary, I see it as a strength. Requiring a supermajority to spend previously accumulated surpluses could help us ensure that they are not frittered away on enticing, but fundamentally unimportant, spending projects. Let us be realistic, Mr. President, we have had 28 straight years of deficits, and we have run deficits for 58 of the last 66 years. If we adopt the balanced budget amendment, we all believe that deficits will come to an end. I do not expect it will be easy to accumulate large surpluses, even under the balanced budget amendment. Proper planning and discipline can yield positive results. But I think it's important that we jealously guard the fruits of our budgetary labors and protect the surpluses we have managed to acquire, if any. This amendment seeks to make it easier to spend away any surpluses we manage to acquire. It seems to me that this is an ill-advised policy. We would be wiser to keep the surplus in the strongbox of subject it to a supermajority requirement to be certain that it is not whisked away in yet another Washington spending frenzy. Can we safely assume that the Congress would leave money sitting, unguarded, on the table? The supermajority requirement will help us ensure that when a real emergency arises, the surplus will be there to meet truly pressing and worthy needs. Both common sense and political reality dictate that there will be very little difficulty in getting the three-fifths necessary because, after all, who would vote against emergency aid when there would be no increase in the deficit? I do have a concern that allowing Congress the option of spending a portion of the national savings by simple legislative fiat might erode the effectiveness of the balanced budget amendment by relaxing the fiscal constraints on yearly spending. Congress might slip into a habit of spending accumulated surpluses with regularity and get used to spending beyond our annual income, just as we have gotten into the habit of borrowing under the current system. Then having wasted our savings, we would have much more work just to get back into annual balance habits. If we were fortunate enough to accumulate a sizable surplus, I expect we could stop patting ourselves on the back for simply not increasing the debt and actually start to repay some of the huge debt this country has run up. This is probably the best use of surpluses, particularly from a cash management perspective, and is what is contemplated as the normal use of surpluses under the balanced budget amendment. That is why Senate Joint Resolution 1 does not count repayment of debt principal as total outlays. As we pay down our debt, we will continue to free up capital, lower interest rates and our annual interest payments, and strengthen the economy, helping us avoid deficits and the need to draw on savings or to borrow. We would also be moving ourselves away from the debt ceiling and building a cushion of debt availability if we should have to borrow again. One final point, Mr. President. We have not balanced the budget in almost 30 years, as I have said before. It is perhaps a bit premature to start arguing about how we will spend surpluses. The first order of business is to pass the balanced budget amendment and get the deficit at least to zero. Then I submit that we can work on surpluses and true debt reduction. This is an interesting proposal, but it ought to be defeated. Mr. FEINGOLD. Mr. President, how much time do I have remaining? The PRESIDING OFFICER. The Senator has 9 minutes 36 seconds. Mr. FEINGOLD. Thank you, Mr. President. I appreciate the comments of the Senator from Arizona. I enjoy serving with him on the Judiciary Committee. I appreciate his candor. Basically, those folks who advocate the constitutional amendment have said it all here. They have now said formally that if you want to get money from the Social Security trust fund surplus in the coming years, that in fact the only way to do it is by getting a supermajority, three-fifths of both the Senate and the other body. I hope the seniors of this country are listening and realize what we are talking about here. It is incredibly difficult to get three-fifths of either body on anything. It is hard enough to get over 50 votes on anything. And when you are talking about the competition with all the special interests that are represented in this community, even with a fully funded Social Security trust fund, requiring a three-fifths majority of both Houses to fully fund Social Security benefits from the trust fund has to be one of the greatest threats to Social Security that can be imagined. Let's be clear. I do not think anyone has successfully disputed the claim that this constitutional amendment allows the use of Social Security dollars to balance the budget. That has become very clear in this debate. What this new admission tells us is that if the Congress wants to do the right thing after we have a balanced budget amendment and wants to make sure that retirees and future retirees have the money saved for them over the years, they will not be able to do it through a majority vote. A minority in either House will be able to prevent every senior citizen in this country from getting the payments they deserve and that they paid into the system for. That is what this thing does. This isn't just about seniors. Yes, it is about my generation. It is about baby boomers. Perhaps that will be the first group that will be affected by this. But it is also about future generations who certainly hope, if they are required to pay into the Social Security system, that there would be a way for them to access their retirement benefits without having to persuade three-fifths of both Houses of Congress it is a good idea. You should not have to persuade three-fifths of the Congress that it is a good idea. That is your money. That is your retiremen

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BALANCED BUDGET AMENDMENT TO THE CONSTITUTION
(Senate - February 27, 1997)

Text of this article available as: TXT PDF [Pages S1698-S1726] BALANCED BUDGET AMENDMENT TO THE CONSTITUTION The Senate continued with the consideration of the joint resolution. Mr. REED. Mr. President, I ask unanimous consent to speak for 20 minutes. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BIDEN. Mr. President, will the Senator from Rhode Island yield to me so that I may explain why I missed that last vote? Mr. REED. Yes. Mr. BIDEN. Mr. President, I thank the Republican leader as well as the Democratic leader for attempting to hold the vote long enough for me to get here. I voted before in the affirmative on the Graham amendment. We voted on it last year. I was one of the speakers at the International Chiefs of Police and Sheriffs Association discussing the juvenile justice bill. I thought I had left in plenty of time from a downtown hotel to get here. But, as Washingtonians will tell you, there is a good deal of road construction going on. I was caught behind the most polite cab driver in Washington. He stopped for everyone, which I was happy to see except for this day. Had I had the cab driver who runs over most people, I would have been up here. I should not say that. I will get letters about that. That was a joke, an attempted joke. But I want the Record to show that had I been here, I would have once again voted for the Graham amendment. I apologize if I inconvenienced the Senate in any way in attempting to hold it for me to get here. I thank my distinguished friend from Rhode Island for yielding. The PRESIDING OFFICER. The Senator from Rhode Island. Mr. REED. Mr. President, I am prepared to speak. I would be willing to defer if there are any other procedural announcements at this time. Mr. LOTT addressed the Chair. The PRESIDING OFFICER. The majority leader. Unanimous-Consent Agreeement Mr. LOTT. I thank you, Mr. President. I thank the Senator from Rhode Island for yielding this time so that I may enter a unanimous-consent agreement which has been reached with regard to an amendment that Senator Hollings had intended to offer to the balanced budget amendment on campaign financing. I ask unanimous consent that the majority leader, after notification of the Democratic leader, may turn to the consideration of a Senate joint resolution, the modified text of which is Senate amendment No. 9 filed yesterday to Senate Joint Resolution 1 regarding campaign financing. I further ask that no amendments or motions be in order during the pendency of the Hollings constitutional amendment, and following the conclusion of the debate, the joint resolution be read a third time and a vote occur on passage of the joint resolution, with the preceding occurring without any intervening action. Before the Chair puts this consent request to the body, it has been pointed out to me by Senator McCain that this consent is for a constitutional amendment regarding campaign spending limits. There are other campaign-related issues that may be pending in the Senate committees that do not amend the Constitution but are statutory language. So this is not to be in place of or in any way block other consideration, or to indicate that there will not be hearings and further consideration of this matter. But Senator Hollings agreed to this arrangement so that it would not be a part of or relate to the consideration of the constitutional amendment for a balanced budget. Senator McCain agreed that it be done this way. It has taken the cooperation of both of them and of all the Senators. This is an important issue which should be brought up freestanding with [[Page S1699]] a reasonable amount of time for discussion. I have indicated to Senator Hollings that, if it takes a couple of days or so, we will be prepared to do that. I think that is about what it would take, but if it takes 2 days and 2 hours, I do not know of anyone who would object to that. But it should be a very interesting debate. So I now make that request, Mr. President. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. LOTT. I thank the Senator from Rhode Island for yielding. The PRESIDING OFFICER. Under the previous order, the Senator from Rhode Island is recognized for 20 minutes. Mr. REED. Thank you, Mr. President. Mr. President, I rise in opposition to the amendment before us today. For many decades, Congress found it easier to debate a balanced budget amendment to the Constitution than to actually balance the budget. Support for the balanced budget amendment was a convenient badge of fiscal austerity at a time when many Members were voting for tax policies and spending proposals that saw our annual deficit and our cumulative national debt explode. After so many years, it is no wonder that the balanced budget amendment has become a talisman which its supporters clutch, suggesting that it has extraordinary powers to translate the difficult choices that this body must face into some type of simple constitutional formula which will miraculously erase the deficit. But, as the last few years have indicated, there is no magical constitutional language that will make the choices or the policies of budget balancing easier. Mr. President, in 1993, the Clinton administration began a process of deficit reduction which has helped to create a strong economy, cut the deficit by 63 percent, brought the deficit when measured as a percentage of the gross domestic product to its lowest level since 1974, and given us the lowest deficit of any major industrialized nation. It took difficult choices, not constitutional gimmicks; choices that Republicans refused to support. Whether or not this amendment passes, and I hope it does not, we will still be confronted by these choices. However, if this amendment does pass, for the first time in our history we will either surrender our role in shaping the budget and the social and economic policies which it defines to the courts, or simply surrender any decision to an adamant minority which could invoke the provision to block necessary action. Mr. President, the amendment before us today is flawed in many ways. It is the wrong answer to a real problem. It is the wrong way to manage the economy. It disrupts our tradition of majority rule. It needlessly jeopardizes essential programs and it needlessly enhances the role of the courts in budgetary and tax policy. The balanced budget is the wrong way to manage the economy. Over 1,100 noted American economists, including 11 Nobel laureates, voiced their opposition to this balanced budget amendment on the grounds that it would hurt our economy and graft improper fiscal policy onto the Constitution. They said, ``It is unsound and unnecessary.'' They added, ``It mandates perverse actions in the face of recessions.'' They went on to say it ``would prevent Federal borrowing to finance expenditures for infrastructure, education, research and development, environmental protection, and other investment vital to the Nation's future well-being,'' and that it ``is not needed to balance the budget.'' They also ``condemn'' the amendment and suggest it could place our economy ``in an economic straitjacket.'' One Nobel laureate, Prof. William Vickery, developed an analysis of 15 issues with respect to balancing the budget, reducing the deficit and providing for economic growth, and in this analysis he has a compelling and noteworthy passage: If General Motors, AT, and individual households had been required to balance their budgets in the manner being applied to the federal government, there would be no corporate bonds, no mortgages, no bank loans, and many fewer automobiles, telephones and houses. But this balanced budget amendment suggests that the Government do exactly the opposite of what the most sophisticated private industries do, and I think that is a mistake. While the majority may find it appropriate and even desirable to insert economic formulas into the Constitution, I would urge caution. For example, we all believe and we will say time and time again that we should have a full employment economy and that every able bodied American work. However, if I were to introduce a full employment constitutional amendment, I predict that the very same supporters of this balanced budget amendment would rush to this floor and condemn that approach, invoking the terminology that we should not enshrine economic ideas or formulas into the Constitution of the United States. The same thing would happen if we talked about an anti-inflation amendment. The point, I think, should be very clear. It is our responsibility, together with other institutions, outside the scope of the Constitution to rationally ameliorate the surges and downswings of the economy. This is what we should do. Some people might try to say, well, no, look at the States. They provide for a balanced budget. That certainly misses the point. State governments do not manage national economies. They do not issue and support currencies. They do not deal in foreign trade. And most of them, if not all of them, with balanced budget requirements have the good sense to separate capital spending from operational spending. So that logic does not suffice to support this balanced budget amendment. I also suggest that economically we are not immune from the difficulties of the business cycle. We have been enjoying over the last several years good, substantial economic growth, but we know that in past periods our economy has faltered. If it does falter, this balanced budget amendment could be a straitjacket, confining and constraining us in our response to these economic recessions. When the economy shrinks, revenue shrinks, throwing off our revenue estimates, throwing off our whole plan to get to the balanced budget, and we will be hamstrung by this amendment's proposals in terms of what we can do to address a recession. For example, the CBO has talked about the impact of recession on the deficit. Their estimates indicate that a 1 percent drop in the gross domestic product would increase the deficit by $32 billion. A 1-percent increase in unemployment would add $61 billion to the deficit. These are staggering figures with which we would have to contend in the context of a very narrowly drawn balanced budget amendment. These are not just statistics. These are real people's lives. We have all lived long enough to have endured economic recessions and have seen the cost in human lives. We have to, as a Government, to such situations. We cannot, I think, plead, at that moment of need, we would like to help you, but the Constitution prevents us from doing sensible, appropriate things to put people back to work in this country. One of the aspects of the balanced budget amendment that would severely constrain our response to recessions is the fact that it would suppress the automatic stabilizers contained in our economic policy today, things like unemployment compensation and other entitlement programs which exist to meet the needs of people who have fallen on hard times during a recession. As the Congressional Research Service cautioned when it examined the economic impacts of this proposal: In sum, the balanced budget constitutional amendment could require action to neutralize the automatic stabilizers in the budget that expand outlays and reduce tax collections in economic slowdowns and recessions. In this case, the budget would no longer serve to moderate business cycles. And, under this amendment, we would lose a valuable tool in aiding the working men and women of America. There is more than just constitutionally historic interest involved in the question of this amendment's supermajority requirements because this amendment requires not a majority vote, in many cases, but much more than a majority vote. This provision holds the real potential for constraining effective action at the time we [[Page S1700]] need Government to move decisively and purposefully. For example, in times of economic crisis, there would be no automatic stabilizers if a small minority of Senators or Representatives objected. Different regions of the Nation experiencing economic hardship could find no comfort in Washington because they could not muster the number of Senators and Representatives to deal with their region's particular problems. Frankly, over the last several years, we have seen economic situations in which the country overall appears to be doing fine, but when you go to the Northeast, to California, or to other parts of the country, you find regional recessions that need the help of this Government. Regrettably, in that situation there may not be sufficient will or political support to do what we must do, which would be extremely detrimental to the citizens who live in these areas. There is another aspect of this supermajority that is built into this constitutional amendment which should cause us all great concern, and that is in order to raise the debt ceiling a vote of three-fifths would be required. We have just in the last Congress seen the difficulty of securing approval of a change in the debt ceiling with a simple majority requirement. If we would require a three-fifths vote, we really would be putting our Nation at severe risk. As Secretary Rubin has pointed out with respect to the issue of raising the debt ceiling and consequently avoiding default on Government debt: The possibility of default should never be on the table. Our creditworthiness is an invaluable national asset that should not be subject to question. Default on payment of our debt would undermine our credibility with respect to meeting financial commitments, and that, in turn, would have adverse effects for decades to come, especially when our reputation is most important, that is, when the national economy is not healthy. Moreover, a failure to pay interest on our debt could raise the cost of borrowing not only for the Government but for private borrowers as well. This super majority provision would affect the Government's ability to deal rationally and prudently with the debt ceiling, and that is another reason, a very strong reason, why this proposed constitutional amendment is inappropriate. It is bad economics; 1,100 economists would condemn it, but it is also very poor budgeting. As Senator Byrd pointed out, the majority's proposal turns the Congress and the President into fortune tellers who must somehow predict and balance outlays and receipts exactly or find the supermajority needed to waive the amendment. This appears to be an impossible task, because each year the CBO seems to revise its projected deficit and revenue totals on a regular basis. We should not delude ourselves into thinking we can accurately predict the future, and we should definitely not add this dubious proposition to the Constitution. In addition to the fact that this amendment's success is predicated on frail human predictions, there are other reasons to oppose this amendment. While the majority claims that States have managed to survive balanced budget amendment requirements, they fail to acknowledge, as I previously indicated, that States do so rationally by creating separate operating and capital budgets. I have supported a balanced budget amendment which recognizes this rational policy. But that proposal is not before us today and we are debating a proposal that does not recognize--in fact some scholars have indicated it would constitutionally preclude--the development of a capital budget by the Federal Government. Time and time again, the advocates of the amendment have rejected the idea of a capital budget for the Federal Government. I believe, in a sense, not only are we rejecting sound constitutional policy and sound administrative policy, but we are also undercutting this Nation's need to build up our capital infrastructure. So, this amendment, as proposed, is both bad economics and bad budgeting, and finally it is an abrupt departure from the constitutional balance that we have observed through the course of our history. It raises a number of fundamental questions about our Constitution, our tradition of majority rule, and the power of the judicial branch in the United States. One of the lessons I learned in law school was, where there is a wrong, particularly a constitutional wrong, there must be a remedy. Yet this constitutional amendment makes no mention of how it will be enforced and who has the legal standing to question those issues which arise under the constitutional amendment. This is an invitation to litigate rather than legislate on budgetary matters. If a future Congress finds it too difficult to take the painful steps needed to eliminate the deficit, then we may expect any number of possible claimants, from Governors upset about Medicaid payments to senior citizens upset about their Social Security checks, all of them urging the courts to step in and take action. Moreover, by placing the requirements that receipts and outlays be reconciled in the Constitution itself, the amendment effectively calls on the Supreme Court to ensure that this mandate is met. While the amendment may leave open the question of how the legislature reaches its positions and what items will be considered outlays and revenues, the Supreme Court will always have an obligation to uphold the Constitution. Once we declare constitutionally that revenues and outlays must be reconciled, the Court will have no inhibition, and, in fact an obligation, to step in and make this reconciliation if Congress fails. Likewise, under this amendment the President could be forced to impound funds, to cut off checks, to do many things because of a perceived constitutional mandate. I would think long and hard, and I urge my colleagues to think long and hard, whether or not we want to surrender what is traditionally the authority of the Congress over both the courts and the President to manage the public purse. These issues are all very difficult ones, raising profound questions of constitutional law. One other aspect of the proposal which is disturbing is the departure from a tradition in this country of majority rule. I have mentioned before the supermajorities which would be required to raise the debt limit and to do other things which today only require a majority vote of the Members of the House and the Senate. Indeed, the balanced budget amendment would create new supermajorities in many different areas. When the founders developed the Constitution, they recognized that only majority rule would work for a nation founded on the principles of liberty and opportunity. James Madison argued in Federalist 58 that if more than a majority were required for legislative decision, then: . . . in all cases where justice or the general good might require new laws to be passed, or active measures to be pursued, the fundamental principles of free government would be reversed. It would be no longer the majority that would rule: the power would be transferred to the minority. And, indeed, that is what this amendment would do inexorably. There is a final and significant issue which must be discussed with respect to this balanced budget amendment proposal. I believe it jeopardizes the integrity of the Social Security system and raises the specter of encroachments on the system, not to support seniors but to pay for the reckless spending of the 1980's. My State has the Nation's third highest percentage population of senior citizens. These are the men and women who fought in World War II and who made our country an economic power. Their sacrifices have made our Nation what it is today. They deserve our support and they rightly demand our assistance to maintain a dignified retirement. The hallmark of our commitment to these seniors has been the Social Security system. However, this amendment makes no provision to protect this essential program from the choices necessary to achieve a balanced budget. The amendment fails to recognize that Social Security is not just like every other program. It is directly funded through a dedicated payroll tax, and numerous acts of Congress have sought to protect it from improper manipulation or precipitous reductions in benefits. Yet the majority refuses to protect Social Security and, instead, wants to use the Social Security trust fund to mask the deficit. Mr. President, recently the Congressional Research Service produced a report regarding the impact of the balanced budget amendment on Social Security, which contained a shocking [[Page S1701]] revelation. The report found that the Social Security Administration, even though it has accumulated a very healthy surplus, would not be able to pay benefits in certain years, due to the amendment's requirements that total outlays for any fiscal year shall not exceed total receipts for that fiscal year. In other words, Social Security could only pay as much in benefits as it receives from payroll taxes in any given year, even if the trust fund was running a multibillion- dollar surplus from previous years. This is a grave matter that deserves more analysis and could jeopardize the 1983 Social Security reform law as well as future reform efforts. But it would be a consequence of this balanced budget amendment if adopted today or in the future. Some would argue that no legislator would touch the Social Security system, but a constitutional imperative may provide a shield which would allow legislators to break that sacred commitment between ourselves and those seniors who have contributed so much to this country. I urge my colleagues to reject this balanced budget amendment. The Constitution establishes the durable rights and responsibilities which are the heritage of our past and the best guarantee of our future. We should not let the Constitution fall prey to a proposal that reflects transient economic policy at best, and would erode both majority rule and the principle that the people's representatives, not judges, must be responsible for the public purse. Mr. President, before I yield, I would like to thank Senator Feingold for his graciousness in delaying consideration of his amendment in order to permit me to go forward with my statement. I thank the Senator from Wisconsin and I yield my time. Amendment No. 13 The PRESIDING OFFICER. Under the previous order, the question recurs on the Feingold amendment No. 13. Debate on the amendment is limited to 30 minutes equally divided in the usual form. Mr. FEINGOLD. Mr. President, under the unanimous-consent agreement I have two amendments at the desk and I believe it is in order for me to call up the first of the amendments, amendment No. 13. The PRESIDING OFFICER (Mr. Enzi). That is the pending question. The Senator has 15 minutes. Mr. FEINGOLD. Mr. President, I thank the Senator from Rhode Island for his kind remarks and for his excellent remarks in opposition to the balanced budget amendment. The amendment I am offering today to the balanced budget amendment will ensure that this Congress will meet its stated goal of reaching a balanced budget by the year 2002. Many people do not realize that as currently drafted, Senate Joint Resolution 1 may well forestall this goal of balancing the budget by the year 2002 well into the next century. I believe reaching a balanced budget by 2002 or earlier should be our highest priority. Thus, I am offering an amendment that will shorten the time for ratification of this amendment. As was noted on the floor by our colleague from North Dakota, Senator Dorgan, a few weeks ago, even if this amendment were somehow ratified at 2:10 today, tomorrow this Nation's deficit would be no smaller than it was when the amendment was adopted. The fact that this amendment in and of itself does nothing to reduce the deficit highlights one of my principal concerns with Senate Joint Resolution 1. That concern is that pursuing a constitutional amendment approach could, counter to what everyone suggests on this issue, actually delay action on the real work of achieving a balanced budget by providing what is, in effect, political cover for inaction while the States debate the question of ratification. Under the proposal before us, even if the Congress adopted the joint resolution this year, the implementation date, the date by which we would actually be required to balance the budget, is potentially well into the next decade. Conceivably, it could be as late as the year 2006. That is right within the terms of the balanced budget amendment that is being offered. This is evident on the face of the amendment itself. Section 8 of the amendment offered in Senate Joint Resolution 1 provides that the balanced budget amendment will take effect beginning with the fiscal year 2002, or within the second fiscal year beginning after its ratification, whichever is later. So there is no certainty at all with regard to the year 2002. The report accompanying Senate Joint Resolution 1 reiterates this uncertain timeframe. It states as follows: An amendment to the Constitution forces the Government to live within its means. S.J. Res. 1 requires a balanced budget by the year 2002, or 2 years after the amendment is ratified by the States, whichever is latest. So, Mr. President, the proposal before us allows the States a full 7 years to ratify this amendment. The practical effect of this is, assuming Congress approves Senate Joint Resolution 1 by June 1 of this year, the States then have 7 years, or until the year 2004, just to ratify the amendment. If they take the full 7 years, and I think they will take more time when they begin to consider the full implications of this approach, the amendment would then not become effective--in other words, binding on Congress--until 2 years later, in the year 2006. In other words, the ratification period envisioned by Senate Joint Resolution 1 forestalls making the truly hard choices until as late as the year 2006, well, well beyond the current target of the year 2002. In fact, the only way this amendment can be effective and binding by the year 2002 is if we pass it this year and the States then ratify it within only 3 years. Because I believe, as I know do most of my colleagues, that we should balance the budget no later than the year 2002, I am offering this amendment to shorten the time for ratification from the allowed 7 years under the current amendment to 3 years, thus keeping us on track to meet the 2002 goal. I want to be candid in stating that I disagree with many of my colleagues who believe that this amendment will be promptly ratified by the States. There is already talk that some of the States that might have ratified this proposed amendment in the past may be having some second thoughts. Maybe they have been listening to the debate on the floor, about some of the very serious flaws with the way this balanced budget amendment was drafted, that has been brought forward. In fact, the longer the States have to consider this amendment and its potential ramifications and uncertainties, they will be less and less inclined to adopt it. However, when I offered this amendment in the Judiciary Committee, the proponents of the balanced budget argued against it. The distinguished chairman of the Judiciary Committee, the senior Senator from Utah, Senator Hatch, stated that he was quite confident that if the timeframe were shortened, as I am proposing, that the underlying amendment ``would still be ratified by an overwhelming number of States and probably within that 3-year time.'' That being the case, and the general agreement that the budget must be balanced no later than the year 2002, I was somewhat surprised to see my amendment defeated by the committee. If we are sincere about our efforts to achieve balance within 5 years, our actions on this amendment should reflect that goal, a goal that has been stated by the President and by the majority leader and by the Speaker of the other body. The argument has also been made we should not abandon the custom of allowing a full 7 years for ratification. However, the 7-year period for ratification has evolved as a matter of practice beginning with the 18th amendment. On each successive occasion, except the 19th amendment, Congress has a set time for ratification, and they have set that time each time at 7 years. Doing so has been upheld as appropriate by the Supreme Court as an exercise of Congress' authority to adopt reasonable timeframes for ratification of amendments. There has, no doubt, been much debate over whether or not the time for ratification may be extended. There is nothing, Mr. President, nothing, except adherence to tradition, that precludes the adoption of a shorter period of ratification, of a period less than 7 years. I respectfully suggest that the context in which the debate over the balanced budget arises counsels that it would be entirely appropriate and reasonable to depart from the 7-year standard and [[Page S1702]] adopt, in this case, 3 years, as is proposed in my amendment. There can be little doubt that balancing the budget is perhaps the top priority of the Federal Government at this point. In fact, so important was the adoption of the 2002 target date that the Republican Party created and ran what was, in my opinion, a pretty effective TV ad that showed President Clinton saying that a balanced budget could be attained in 7 years, then 8 years and then 10 years. That was a pretty good ad. This ad was a dramatic portrayal of what many argued was a general unwillingness to commit to attaining balance by a specific date. I agreed with my Republican colleagues that we should set about the business of reaching balance by the year 2002, and that is why I think the amendment I am offering is appropriate and should be adopted. It assures that the target date of 2002 will not be pushed back until possibly as late as 2006. If, as the chairman of the Judiciary Committee suggested, the States adopt this Senate Joint Resolution 1 very quickly, then we should make it effective no later than 2002. If however, the States, upon learning about the uncertain consequences to the American people of this proposal, reject it, Congress should not be allowed to sit on their hands for 7 years and let the gains of the past 4 years of reducing the deficit languish or, even worse, be lost. I am sure that many proponents of this constitutional amendment will argue that even if the States take the full 7 years, there is nothing to stop the Congress from continuing to work hard to get the balance done by the 2002 date. I hope so. But I suggest that such an argument speaks not to my amendment, but to the more threshold question of why, if that is the case, do we have to amend the Constitution anyway? If the constitutional amendment is not going to require balance until the year 2006, what will force this body to do the job by the year 2002? Nothing. The heat will be off. President Clinton was clear when he said that all we need to balance the budget is our votes and his signature. I agree. We should make the tough choices sooner, not later. The report accompanying this measure argues that should this amendment be adopted and subsequently disregarded by a Congress and a President and are stalled at an impasse in budget negotiations, that that would constitute nothing less than a betrayal of public trust. In my opinion, if we allow this amendment to potentially delay balancing the budget or, in the interim, stray from the course charted over the last 4 years, that would also be, in my view, a betrayal of the public trust. We should remain always and in all respects committed to the 2002 target date. As I said before in the Judiciary Committee, this amendment is really, to put it in very simple terms, the fish-or-cut-bait amendment. You either support moving toward balance by the year 2002 or you don't. If this Nation is going to take the constitutional approach, we should set about doing so and not let possible delays over ratification provide an excuse, provide political cover for inaction and delay until as long as the year 2006. I do not question the sincerity of my colleagues in their desire to balance the budget. My amendment ensures that this will occur within the timeframe we have all agreed upon. Therefore, Mr. President, I am hopeful that all of us who support balancing the budget, whether we support this amendment or not, will embrace my amendment that will limit the ratification to 3 years and, therefore, Mr. President, keep us on track to balance by the year 2002, not the year 2006. I reserve the remainder of my time. Mr. HATCH addressed the Chair. The PRESIDING OFFICER. The Chair recognizes the Senator from Utah. Mr. HATCH. I understand my colleague. I understand the amendment being offered by Senator Feingold would reduce the period for the States to ratify the balanced budget amendment from 7 to 3 years. I have to say, that I do not see the wisdom in departing from the longstanding 7-year standard that this resolution reflects. The 18th amendment, ratified in 1921, was the first constitutional amendment to contain a time limitation of any kind. Although there was heated debate at the time over Congress' authority to impose such a limitation on the States' ratification of the constitutional amendment, the Supreme Court subsequently upheld Congress' power to set a reasonable time limit on ratification in the case of Dillon versus Gloss back in 1921. As a result, we find 7-year time limitations within the actual text of the 18th, 20th, 21st and 22d amendments. Since approval of the 23d amendment in 1961, Congress has continued to include a 7-year time limitation. But such limitation has been removed from the text of the amendment and incorporated instead in the joint resolution proposed in the amendment as we have done in Senate Joint Resolution 1. Now, just to verify the continued adherence to the convention of a 7- year time limitation, I did a quick review of the 107 Constitutional amendments introduced in the last Congress. Indeed, of those 107 resolutions, only 1 contained a time limitation that varied from the conventional 7-year limitation. I am quite confident, were we to adopt a shorter time limit, as my colleague proposes, the amendment would still be ratified by an overwhelming number of the States. But I fail to see the need in this case to alter what has been recognized as a reasonable time limitation on ratification since the early part of this century or to prejudice the consideration of the balanced budget amendment by reducing the time for consideration. Mr. President, I am not concerned about 3 years or 7 years. I am concerned about 28 years, these 28 years of unbalanced budgets. You know, the bottom line is, we can talk all we want to about technicalities like 3 or 7 years but it is the 28 years I am concerned about. Really, if you get serious about it, it is 58 of the last 66 years during which we have had unbalanced budgets. It does not take a rocket scientist to realize this outfit just does not have the will to do what is right. So to get all caught up in whether it is 3 or 7 years, I do not think serves the best interests of this amendment. Let me just say the bottom line is this. Congress cannot and will not stop spending more than it earns without the force of a constitutional requirement to balance the budget. I have 28 unbalanced budgets here just to prove the point. We stacked them a little lower by doubling and tripling the smaller volumes, but it still is a pretty high stack. It is headed right to the ceiling if we do not get a balanced budget amendment. We have run deficits in 58 of the last 66 years. And, Mr. President, that is plain fiscal irresponsibility. For these reasons, I urge my colleagues to reject distractions such as this amendment. I do not mean to demean the amendment of the distinguished Senator or my colleague who serves well on the Judiciary Committee, and with whom I have a very good, friendly and decent relationship, but it is a distraction in the sense that really the 7- year period really ought to be maintained since it has been over all these years. So I urge my colleagues to reject this amendment and to find the courage to change the face of this Nation by voting for a constitutional amendment to balance the budget. This is a chance to do it. This is a chance to do something that will work. If we put the balanced budget requisite into the Constitution, I have no doubt that it will be a very relative few who would not observe it. But I believe the vast majority of Members of the Congress of the United States henceforth and forever would do everything in their power to live up to that constitutional requisite were we to put it in the Constitution. I have no doubt about it. I think the vast majority of people who serve here are very honorable people who keep their word and will do what is right. I really believe that if we put this in the Constitution, that vast majority will really make sure that this balanced budget amendment works. On the other hand, if we do not, my gosh, what hope do we have? I mean, I can just see where nobody could be seen above this stack 6 or 4 years from now. Frankly, I am absolutely solid in asserting, unless we have a balanced constitutional amendment, these stacks are just going to continue to grow ad infinitum, something that must be horrifying our Founding Fathers, many of whom are undoubtedly in Heaven, although there are a few I am sure who [[Page S1703]] had a rough time getting there. But the vast majority of them probably are there with our Father in Heaven saying, ``Let's do that which we failed to do when we had the chance, even though we thought about it.'' But they, when they were here, never thought for a minute we would have 28 straight years of unbalanced budgets. So I suspect that the only way to solve this problem is to put some fiscal mechanism within the Constitution that makes sense. This amendment is that mechanism. It is a bipartisan amendment. I chatted with Charles Stenholm last night, our Democratic counterpart over in the House. I have to say he has done a tremendous job over the years doing his best to try to enact this amendment. It takes guts because he takes a lot of flak for it because people in his party in particular want to keep spending and taxing and claiming that they are doing a lot for people--they never say with their own money that could be better utilized by them and I think in a better way. So I want to praise him for the work he has done over there in the House, along with other Democrats and Republicans who have worked so hard through the years on this amendment. I want to praise everybody here who will vote for this amendment because it does--it does--hold hope for the future if we can pass this amendment and enshrine it in the Constitution where I think the vast majority of Members would honor it and do what is right. The spending games would be over. So I would hope that our colleagues will keep the language exactly the same. I do not know how it would affect other people who are currently willing to vote for the amendment, but we would like not to change it. In spite of the fact that my colleague is sincere and that this is a sincere amendment, I would hope that our colleagues will vote to table it. Mr. President, I am prepared to yield back the balance of my time. We could move to the Senator's next amendment, unless he wants to discuss it. Mr. FEINGOLD. How much time do I have remaining? The PRESIDING OFFICER. You have 3 minutes, 46 seconds. Mr. FEINGOLD. Mr. President, if I may, I would like to use that time. There were interesting remarks made by the chairman of the Judiciary Committee, my friend, Senator Hatch. I will reiterate, this is really the fish-or-cut-bait amendment. I always appreciate the eloquence of the Senator from Utah, but I notice a sort of different tone when he speaks about this amendment as opposed to the balanced budget amendment. There is sort of a lack of urgency to his tone about this. His tone suggests that whether we get this thing done by 2002 or 2006, the important thing is that we just have this balanced budget amendment on the books. That just does not seem to square with the rest of the comments I have heard from the Senator and most of the other supporters of the balanced budget amendment. There was no suggestion by the Senator from Utah that we could not limit this to 3 years. I appreciate his candor on that. That is something that is available to the Congress. It has not been done before, but when the limitation was put in the first place on the 7 years on the 18th amendment, it was my understanding that was not done before. So there is no literal constraint on that. I was also struck, Mr. President, by the Senator from Utah's statement that we really had no reason here not to adhere to convention, there is no reason not to go to 3 years or we should stick with the traditional 7 years. This entire process of balancing the budget and having an amendment to the Constitution to do it could not be more contrary to the notion of adhering to convention. We have tried to use the Constitution of this country as a very limited and narrow document for 200 years but now we are going to do accounting through the Constitution. I suggest that that is a failure to adhere to convention. The Senator from Utah also tried to describe this amendment as sort of a technicality, saying that whether it is 2002 or 2006, that is not the issue. We just need it in the Constitution. Mr. President, it flies right in the face of his excellent description of that stack of documents in front of him. The Senator from Utah is one of the taller Members of this body, if I may say so. I do not think that is in dispute. I agree that if we keep going down this road that we will be unable to see the distinguished chairman, perhaps even by the year 2002, because of these books that are piling up. But if we wait not until the year 2002 but to the year 2006, I think the former Senator from New Jersey may not be visible and we may have to get Senators who would be able to start in a starting line up in the NBA just to be able to be seen over these documents. The fact is, there is a difference between the year 2006 and the year 2002. All my amendment does, Mr. President, is guarantee that however this turns out, through a balanced budget amendment or through a bipartisan agreement to balance the budget by the year 2002, that is the date. Either way, it cannot be after that time. That is the effect of my amendment, Mr. President. I yield the floor. Mr. HATCH. Let me just say for the sake of this debate, if the Senator were willing to vote for the balanced budget amendment, I would accept his amendment because I think three-quarters of the States would ratify this amendment within the 3-year time period. I know he will not vote for this balanced budget amendment, and, frankly, it is better from a constitutional standpoint to give the States enough time to function. Some States do not even meet this year in their legislatures; others meet, but may not have time to consider this. It does take time to ratify a constitutional amendment, depending upon a lot of timing factors. So we prefer to have the 7-year period. But I will make that offer if the Senator will vote for the balanced budget amendment. I would encourage all my colleagues to vote for his amendment, but until he does, I think we have to reject this amendment unless he is willing to do so. The PRESIDING OFFICER. The Senator from Wisconsin has 36 seconds. Mr. FEINGOLD. Let me say I, of course, am very candid on this point, that I do not support the balanced budget amendment for a variety of reasons, but I do recognize that there are some very serious consequences for this country if we do pass it. My amendments today are relevant to the situation we would face if it does go through. I am sincere in my belief that if it does pass, the process is going to be slowed down here if it is not ratified quickly by the States. That is why I offer this amendment, because sometimes things happen that you are not happy about in the Congress and the President signs it, but you would like the negative effects to be limited. That is the spirit in which the amendment is offered. Mr. HATCH. Mr. President, I know my colleague is sincere. I have nothing but respect for him as he serves on the committee. I have a lot of regard for the distinguished Senator, and he knows it, and I know it. However long it takes, we need a balanced budget amendment, and I think this is drafted correctly. It has Democrat prints all over it and Republican prints all over it. It is the bipartisan amendment that has always been in play, and I think should always be in play. Frankly, I am hopeful we can pass it by next Tuesday. But however long it takes, we need it. If we do not do it, we will continue the status quo, and that is a stack of unbalanced budgets, which my friend and colleague admits will continue if we do not do something about it. Mr. President, I yield back the balance of time, and I understand these votes will be stacked. The PRESIDING OFFICER. The Senator is correct. Mr. HATCH. I ask unanimous consent to move to table, with the understanding it will be able to come up at a later time. The PRESIDING OFFICER. The Senator has that right. The motion to table has been made. Mr. HATCH. I ask for the yeas and nays. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. Amendment No. 14 The PRESIDING OFFICER. Under the previous order, the question recurs [[Page S1704]] on amendment No. 14, offered by the Senator from Wisconsin [Mr. Feingold]. Debate on the amendment is limited to 40 minutes, equally divided. The Chair recognizes the Senator from Wisconsin. Mr. FEINGOLD. Thank you, Mr. President. I thank the distinguished Senator from Utah, the chairman of the Judiciary Committee, for his kind remarks. I now would like to speak about an amendment that is also in the spirit of trying to make sure this balanced budget amendment works properly, in the event it goes through the Congress and is ratified by the States. Mr. President, regardless of our views on the balanced budget amendment, many of us would like us not only to balance the budget, but many of us would like us to establish a statutory balance that can act as a fiscal cushion against unexpected emergencies. In other words, we think we should never project a deficit, but that on occasion we may want to project something of a surplus to make sure there is money there in case there is an emergency or some other urgent spending priority that has to be dealt with, but only on a surplus basis. Now, Mr. President, this is not some idea I cooked up. This is what we do in Wisconsin. It is done in some form in most States. I think it would make good sense at the Federal level. Unfortunately, Mr. President, in its current form, the proposed balanced budget amendment discourages this fiscally responsible tool. In effect, it does not really allow a surplus. It certainly does not allow a surplus to be used if one arises, except by a three-fifths vote in each house, which is a very high standard. Because outlays cannot exceed receipts in any year under the balanced budget amendment, any surplus built up to address an unexpected need would be subject to the three-fifths threshold and all the potential mischief that a supermajority requirement employs. Mr. President, many of us in this body have concerns with the way we currently address emergencies and other unexpected needs as they arise. I have seen a lot of that just in the 4 years I have been here dealing with various disaster and emergency legislation. Under our present budget structure, we are forced to choose between adding to the deficit and scrambling to find spending cuts or tax increases to offset the unexpected need. I think, and we have certainly seen this in Wisconsin, a far more fiscally responsible approach would be to appropriate a dedicated emergency fund or require a positive ending balance on which we could draw as the need arises. By budgeting for an emergency in advance, this approach would avoid deficit funding, but it would also decouple the potentially desperate need for emergency assistance from the hurried approach of emergency offsets. So a surplus fund or statutory ending balance would also address some of the concerns that have been raised by Secretary Rubin and others who have spoken about the important role that automatic economic stabilizers play in the health of the economy. Our committee chairman has cited Fred Bergsten, a noted economist, during the committee's markup. This is what our distinguished chairman said in citing Mr. Bergsten: ``* * * a better way to go is to shoot for a yearly surplus and let that take care of truly automatic fluctuations, if there are any.'' Mr. President, I agree with our chairman. I think balancing the budget and building up a reasonable surplus during good times to help cushion economic downturns is a better way to go. However, as I just noted, Mr. President, under the present draft, we could not establish and use such a surplus fund without violating the constitutional amendment mandate except through achieving a three-fifths majority in each house. Mr. President, you know that threshold presents serious problems, as many of our colleagues have noted during the course of this debate. The supermajority requirement empowers a minority to hold up a must-pass measure unless their fiscal or policy demands have been met. As some have noted, this perhaps mild form of extortion might even take the form of insisting on additional deficit spending, precisely the opposite direction intended by the supporters of the constitutional amendment. Remember, this balanced budget amendment does not guarantee that we have deficit spending, it just requires a supermajority to do so. Mr. President, if allowing a surplus fund might be fiscally prudent to handle the unexpected natural disaster or military conflict, I think this surplus opportunity becomes absolutely essential if we hope to fund the bulges in Social Security benefits that will occur when the baby boomers retire. In just a few years, we will begin to have to pay back the funds we have borrowed from the Social Security trust fund. Before that happens, Mr. President, we have to somehow rid ourselves of the addiction to those trust fund surpluses. That is how we have been masking how great our deficit is in the past, and we have to begin to balance the budget without those surpluses. That means, Mr. President, that the unified budget will have to be in surplus, but even then, if we build up a genuine surplus in unified budget to pay future retirees, the restrictions of the proposed balanced budget amendment will prevent us from using it unless we can muster a three-fifths vote of support in both bodies. Mr. President, right now, the Social Security trust fund is receiving more than it is paying out. Those surpluses will continue to build until the baby boomers retire, and we need to tap into those savings at that point to offset the bulge in Social Security beneficiaries. Mr. President, many have said this, but we have abused the Social Security surpluses by using them to mask part of our budget deficit. I don't single out one party or one branch of Government, because it has sort of been standard operating procedure for nearly 30 years. Mr. President, many of us want to stop that abuse and to work to get the budget off the Social Security surplus addiction so the funds are there for retirees as promised. Mr. President, again, the current balanced budget amendment draft will not let us do that. When the baby boomer retirees begin to collect Social Security and the surpluses turn negative, the balanced budget amendment does not permit us to draw upon any savings we can build up between now and then. Now, one approach is to explicitly exempt Social Security from the balanced budget amendment by putting the Social Security trust fund out of reach. We could then be sure that they will be available to draw down when needed. Some who oppose this approach argue that we can do so by statute. They note that nothing in the current draft would prevent us from taking Social Security off budget by law, as we do now, and achieve genuine balance outside of Social Security. Unfortunately, though, Mr. President, even if the rest of the budget is in true balance, the current version of the amendment still prevents the use of the trust fund savings to pay Social Security benefits, unless the rest of the budget is cut or taxes are increased. Mr. President, the current balanced budget draft requires cash flow to be balanced. It expressly prohibits the kind of buildup in anticipation of need that is the underpinning of the Social Security system itself. To put it in more simple terms, it is exactly like telling parents when the time comes to pay the cost of their child's education, they will not be able to use any of the savings they have built up, but will have to pay for the cost of their child's college education out of whatever their income is at that time--not one dime more. I can tell you, as a parent of four teenagers, that would be a very troubling prospect indeed. Mr. President, my amendment would allow us to use the savings we must build up in advance of the coming retirement bulge. Let me be clear about this. Although this is the way it is done in my home State of Wisconsin--by statute--my amendment does not require us to have a surplus. My amendment does not require us to fulfill our commitment to future retirees. Yes, Congress could still duck that commitment. But at least, Mr. President, if my amendment is adopted, Congress would be able to do the right thing by Social Security beneficiaries. Without it--if the Constitution is amended as it is currently drafted--Congress will have to find a dollar in [[Page S1705]] budget cuts or tax increases for every dollar Social Security outlays exceed receipts. Mr. President, despite all the rhetoric about how Social Security will do quite well in what I like to call the ``brave new world of the balanced budget amendment,'' who can doubt that Social Security benefits will quickly go on the chopping block, if we ever get to that eventuality? Mr. President, this is a fundamental inequity that is built into the proposed constitutional amendment. Programs like Social Security, which require a buildup of savings to work, have to muster a three-fifths majority from both bodies. But the defense budget, special interest spending done through the Tax Code, and corporate welfare, all get a free pass. They don't have to go through this. So, Mr. President, to conclude, even if my amendment is adopted, it will be difficult for Social Security to compete with these other powerful interests. But at least by allowing for a surplus, my amendment gives it a fighting chance. I reserve the balance of my time. Mr. KYL addressed the Chair. The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Arizona [Mr. Kyl] is recognized. Mr. KYL. Mr. President, Senator Hatch was called away for a moment. I would like to present some of the remarks he would make in opposition to the amendment. Of course, nothing in Senate Joint Resolution 1 prevents us from running surpluses or saving those surpluses in a rainy day fund. But Senate Joint Resolution 1 does put a lock on savings to ensure that they are not spent frivolously. The proposal before us is based upon the argument that, under the balanced budget amendment, previously accumulated surpluses cannot be drawn upon in future years without a three-fifths vote. This is because, the argument goes, such funds would be spent as current outlays within the meaning of section 7, but would not count as current receipts and would therefore cause outlays to exceed receipts and trigger the three-fifths vote in section 1. Thus, this proposal seeks to prevent the use of previously accumulated surplus funds by a simple majority vote. While most of us are concerned with how to stop running deficits, this proposal exhibits concern about accumulated surpluses. Protecting accumulated surpluses with a three-fifths vote is not necessarily a flaw in the amendment, however. On the contrary, I see it as a strength. Requiring a supermajority to spend previously accumulated surpluses could help us ensure that they are not frittered away on enticing, but fundamentally unimportant, spending projects. Let us be realistic, Mr. President, we have had 28 straight years of deficits, and we have run deficits for 58 of the last 66 years. If we adopt the balanced budget amendment, we all believe that deficits will come to an end. I do not expect it will be easy to accumulate large surpluses, even under the balanced budget amendment. Proper planning and discipline can yield positive results. But I think it's important that we jealously guard the fruits of our budgetary labors and protect the surpluses we have managed to acquire, if any. This amendment seeks to make it easier to spend away any surpluses we manage to acquire. It seems to me that this is an ill-advised policy. We would be wiser to keep the surplus in the strongbox of subject it to a supermajority requirement to be certain that it is not whisked away in yet another Washington spending frenzy. Can we safely assume that the Congress would leave money sitting, unguarded, on the table? The supermajority requirement will help us ensure that when a real emergency arises, the surplus will be there to meet truly pressing and worthy needs. Both common sense and political reality dictate that there will be very little difficulty in getting the three-fifths necessary because, after all, who would vote against emergency aid when there would be no increase in the deficit? I do have a concern that allowing Congress the option of spending a portion of the national savings by simple legislative fiat might erode the effectiveness of the balanced budget amendment by relaxing the fiscal constraints on yearly spending. Congress might slip into a habit of spending accumulated surpluses with regularity and get used to spending beyond our annual income, just as we have gotten into the habit of borrowing under the current system. Then having wasted our savings, we would have much more work just to get back into annual balance habits. If we were fortunate enough to accumulate a sizable surplus, I expect we could stop patting ourselves on the back for simply not increasing the debt and actually start to repay some of the huge debt this country has run up. This is probably the best use of surpluses, particularly from a cash management perspective, and is what is contemplated as the normal use of surpluses under the balanced budget amendment. That is why Senate Joint Resolution 1 does not count repayment of debt principal as total outlays. As we pay down our debt, we will continue to free up capital, lower interest rates and our annual interest payments, and strengthen the economy, helping us avoid deficits and the need to draw on savings or to borrow. We would also be moving ourselves away from the debt ceiling and building a cushion of debt availability if we should have to borrow again. One final point, Mr. President. We have not balanced the budget in almost 30 years, as I have said before. It is perhaps a bit premature to start arguing about how we will spend surpluses. The first order of business is to pass the balanced budget amendment and get the deficit at least to zero. Then I submit that we can work on surpluses and true debt reduction. This is an interesting proposal, but it ought to be defeated. Mr. FEINGOLD. Mr. President, how much time do I have remaining? The PRESIDING OFFICER. The Senator has 9 minutes 36 seconds. Mr. FEINGOLD. Thank you, Mr. President. I appreciate the comments of the Senator from Arizona. I enjoy serving with him on the Judiciary Committee. I appreciate his candor. Basically, those folks who advocate the constitutional amendment have said it all here. They have now said formally that if you want to get money from the Social Security trust fund surplus in the coming years, that in fact the only way to do it is by getting a supermajority, three-fifths of both the Senate and the other body. I hope the seniors of this country are listening and realize what we are talking about here. It is incredibly difficult to get three-fifths of either body on anything. It is hard enough to get over 50 votes on anything. And when you are talking about the competition with all the special interests that are represented in this community, even with a fully funded Social Security trust fund, requiring a three-fifths majority of both Houses to fully fund Social Security benefits from the trust fund has to be one of the greatest threats to Social Security that can be imagined. Let's be clear. I do not think anyone has successfully disputed the claim that this constitutional amendment allows the use of Social Security dollars to balance the budget. That has become very clear in this debate. What this new admission tells us is that if the Congress wants to do the right thing after we have a balanced budget amendment and wants to make sure that retirees and future retirees have the money saved for them over the years, they will not be able to do it through a majority vote. A minority in either House will be able to prevent every senior citizen in this country from getting the payments they deserve and that they paid into the system for. That is what this thing does. This isn't just about seniors. Yes, it is about my generation. It is about baby boomers. Perhaps that will be the first group that will be affected by this. But it is also about future generations who certainly hope, if they are required to pay into the Social Security system, that there would be a way for them to access their retirement benefits without having to persuade three-fifths of both Houses of Congress it is a good idea. You should not have to persuade three-fifths of the Congress that it is a good idea. That is your money. That is your