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BALANCED BUDGET AMENDMENT TO THE CONSTITUTION
(Senate - February 05, 1997)

Text of this article available as: TXT PDF [Pages S994-S1015] BALANCED BUDGET AMENDMENT TO THE CONSTITUTION The PRESIDING OFFICER. Under the previous order, the hour of 3 p.m. having arrived, the Senate will now proceed to the consideration of Senate Joint Resolution 1 for debate only. The clerk will report. The assistant legislative clerk read as follows: A joint resolution (S.J. Res. 1) proposing an amendment to the Constitution of the United States to require a balanced budget. The Senate proceeded to consider the joint resolution. The PRESIDING OFFICER. The Senator from Utah. Privileges of the Floor Mr. HATCH. Madam President, I ask unanimous consent that Manus Cooney, Sharon Prost, Shawn Bentley, Paul Larkin, Larry Block, Steve Tepp, Troy Dow, and Paul Joklik be permitted privileges of the floor for the duration of the debate. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. HATCH. Madam President, today we begin one of the most important debates that has ever taken place in the U.S. Senate or in the Congress of the [[Page S995]] United States. The subject matter goes to the very heart of our Founding Fathers' hope for our constitutional system--a system that would protect individual freedom through the maxim of limited Government. In the latter half of this century, however, the intentions of the Framers of the Constitution have been betrayed by the Congress' inability to control its own spending habits. The size of this Federal leviathan has grown to such an extent that the very liberties of the American people are threatened. I just stood at a press conference with our Democratic cosponsors of this amendment, and there was a huge table filled with unbalanced budgets since 1969. History was made in the 104th Congress when 300 of our courageous colleagues in the House of Representatives, both Democrats and Republicans, approved a balanced budget amendment to the Constitution. Unfortunately, the same measure was defeated in this Chamber by one solitary single vote. This year we begin a new Congress following an intensive fall campaign in which people in every State across this Nation made unmistakably clear their insistence that we put our fiscal house in order. The eyes of the people, now more than two-thirds of whom favor a balanced budget amendment, now turn to us to follow through on our promises. I am pleased to be joined by 61 of my colleagues, including every Republican Senator in the U.S. Senate and 7 bold Democrats who have done exactly that in sponsoring Senate Joint Resolution 1, the balanced budget constitutional amendment. Madam President, as we begin the debate on Senate Joint Resolution 1 proposing an amendment to the U.S. Constitution to require balanced annual Federal budgets, I want to summarize why I feel this amendment should be added to the basic great law of this great Nation. Let me say that as a lifelong student of the Constitution and having served on the Judiciary Committee in this body during my tenure here of 20 years, I do not lightly suggest amending our founding document. Yet, all other avenues having failed us, I believe it appropriate to take recourse to our basic charter to rein in an abused power of the purse-- as has been done in similar situations in our history since the Magna Carta--in order that we might save future generations from the heavy burden of irresponsible Government borrowing. Madam President, let me just summarize the reasons I believe the proposed balanced budget amendment should be presented to the States for ratification. We have to have a two-thirds vote in both of the bodies and submit this amendment to the States, and we have to get three-quarters of them to ratify the amendment before it can be entered into the Constitution. It is a tough process. It ought to be a tough process. These are some of the reasons why I believe this amendment should be presented to the States for their ratification: No. 1, integrity and accountability. It will bring immediate credibility to our current budget process and negotiations, and it will restore a measure of integrity and accountability to our Government. No. 2, our children's future. Passing the balanced budget constitutional amendment is a vote for our children's economic freedom. No. 3, family financial security. Passing the balanced budget amendment will improve the economic health and stability of all American families. No. 4, economic strength. The stabilizing effect the balanced budget amendment will have on the economy is clear, and it will enable us to rein in the level of our country's foreign-held debt. No. 5, retirement security. If we pass this balanced budget constitutional amendment it will literally save Social Security. It will stabilize the economy which will benefit all current and future retirees. Without it, all of these programs will be placed in jeopardy. Now let me describe these reasons in more detail. On the issue of integrity and accountability, our national debt is rocketing out of control and the American people are paying a very heavy price for it. As you can see by this chart, the debt was relatively stable for many decades, up to about 1970, a little bit before 1970. In recent years the debt has increased at alarming rates under the watch of both political parties. The fact is, our deficits have been structural and they will not be eliminated in the long run without the discipline of a balanced budget constitutional amendment. They really shot up in the 1980's, right on through the 1990's, and still that arrow is going almost straight up, even today, even with the efforts and actions that have been taken. Since 1978, there have been no fewer than five major statutory schemes or regimes enacted which promised to deliver balanced budgets, and these include Gramm-Rudman-Hollings. But there has not been a single balanced budget since 1969, which was the only balanced budget since 1960. While I support the steps we have taken to pass the balanced budget plan, I question whether, without the weight of a constitutional requirement to balance the budget, we will achieve balance by the year 2002. Without a balanced budget amendment, every year Congress has to act, and we have seen the lack of will to do what's right around here. For this reason, I feel passage of the balanced budget amendment is critical. Let's just acknowledge what every American citizen knows. In recent decades, Washington has been biased to spending, without feeling any constraints by the amount of money it actually has on hand. Washington has lost the habit of prioritized spending options. Any ideas with political appeal get enacted regardless of cost. We borrow the money if we run short. That is what we have been doing for most of the last 60 years. Those listening could try this thinking on their own budgets at home. Buy any item that looks appealing next time you are at the mall. Just put it on the card. What happens to your budget? Something like this chart probably, but hopefully not quite so high. Washington, however, is not as constrained as the average American. Washington spends in this way, and when the bill comes, it signs the debt over to the American people. In addition to paying their own bills, the American people have to pay Washington's bills in the form of higher taxes, of course, and accumulated debt. They also pay them in the form of higher interest rates on their homes, their cars, or student loans. They pay in the form of lower job growth, lower wages, and they even pay in the form of decreased services from the Government because more of the budget is being spent on interest rather than on education, health care, job training, child care, the environment, et cetera. The point is that Americans are getting fed up with Washington because they feel the pinch put on them by Washington's spendthrift ways. They know they have to make hard choices about how they will spend their own money, but they feel that Washington does not feel constrained to make hard choices about spending priorities. It's not even Washington's own money that it's spending so freely; it is the American people's money. No wonder the American people are tired of it. Besides being dismayed by Washington's free spending habits, the American people also believe that Washington is not accountable for its decisionmaking. The balanced budget amendment responds to both of these concerns. On this chart is the actual text of the balanced budget amendment before the Senate at this time. This balanced budget amendment will require Washington to make tough choices about spending priorities within the constraint of the amount of money it has, or it requires Members of Congress to go on record for its borrowing and taxing decisions. There will be no more voice votes when it comes to raising taxes. There will be no more voice votes when it comes to raising the deficit. You are going to have to stand up and vote. This amendment will see to that. It also requires Congress to achieve some measure of increased consensus about spending priorities if it is going to finance that spending by borrowing. The concept is simple: Don't borrow, unless a significant number of Members are willing to go on record as saying this spending is such a priority that we must borrow to do it. That would go a long way toward letting Americans know that their Government is deliberating about its spending [[Page S996]] habits, making choices among competing options, and only spending beyond its means when it really needs to in order to achieve a goal so important that a supermajority of Members could agree. The balanced budget amendment will go a long way toward restoring the people's faith in the integrity of our budget process and in the accountability of Washington for its decisions. A vote for the balanced budget amendment is a vote for integrity and accountability in Washington. Now, our children's future. Our national debt now tops $5.3 trillion. That averages out to about $20,000 in debt for every man, woman, and child in America. That is what our fiscal insanity has brought us to. A child born in America today comes into this world $20,000 in debt--and that is going up. Do we have the right to spend our children's future for our own comfort today? Over time, the disproportionate burdens placed or imposed on today's children and their children by a continuing pattern of deficits could include some combination of the following: Increased taxes, reduced public welfare benefits, reduced pensions and Social Security benefits, reduced benefits or expenditures on infrastructure and other public investments, diminished capital formation, diminished job creation, diminished productivity enhancement and less real wage growth in the private economy, higher interest rates, higher inflation, increased indebtedness to and economic dependence on foreign creditors, and increased risk of default on the Federal debt. Madam President, I have said this in the past. This is ``fiscal child abuse'' and it must end. It is our children's future versus Washington's spending addiction. I hope the Senate of the United States will come down overwhelmingly on the side of our children's future by passing this amendment. A vote for the balanced budget amendment is a vote for our children's economic security. Now, what about family financial security? It is not just our children that we hurt with these outrageous deficits. We are suffocating our own families. The impact of higher interest rates, higher taxes, lower wage and job growth, and higher mortgages are felt at kitchen tables all across America. The Concord Coalition has estimated that the interest payments on our mountainous debt amount to $5,360 a year for a family of four. Just to pay the interest against our national debt, it's $5,360 a year. Chairman Kasich of the House Budget Committee has pointed out that three of the causes of the ``middle class squeeze''--high taxes, counterproductive Government spending policies, and anemic wage growth--are at least partly caused by continued borrowing by the Federal Government. He points out that the baby boom generation pays taxes that are at least 50 percent higher than those paid by their grandparents. Real per hour wages inched up just one-third of 1 percent annually over the past 4 years, which is one-seventh the rate of growth in the period between 1960 and 1974, and productivity over the past 4 years grew at only one-fifth the rate of that same period. Economist Lester Thurow noted that the one-earner middle-class family is extinct and explains that almost one-third of all men between the ages of 25 and 34 make less each year than is required to keep the average family of four above the poverty level. These combined pressures tear at the very fabric of our Nation and our families. By contrast, implementing the balanced budget amendment will lower interest rates, making it easier for our families to pay their mortgages, their car loans, and their student loans. Economist at DRI- McGraw-Hill estimate that a balanced budget rule would result in a 2- percent drop in interest rates. Now, DRI-McGraw-Hill is one of the best econometric groups in the country. A balanced budget rule would mean annual savings of $1,230 on a middle-class family's home mortgage, $216 each year for an average student loan, and $180 each year on the average car loan. The good effects of our overall economic health will help family budgets in many other possible forms, such as a higher paycheck, more job opportunity or security, lower taxes in the future, and a greater ability to save and invest for the future. The Joint Economic Committee has estimated that the average American family would have an additional $1,500 a year if we implemented a balanced budget rule. A balanced budget amendment will make it easier for American families to afford a house, a car, or to send a child to college. This offers a real way to relieve the pressure on American families who are struggling to stay together and get ahead. A vote for the balanced budget amendment is a vote for the economic health and stability of American families. Now, economic stability. Economists from all over this country agree that the balanced budget amendment should pass. They agree that ``we have lost the moral sense of fiscal responsibility that served to make formal constitutional restraints unnecessary.'' Hundreds of economists support the balanced budget amendment as being good for the national economy by increasing both investor and business confidence, both foreign and domestic. Some economists are against us on the balanced budget amendment. As a general rule, they are academics who depend upon the Government in many ways for their moneys and in many respects love the spending practices of the Federal Government. Not all--some sincerely worry about the amendment. But there are also many, many who worry that if we do not pass the amendment we are really going to be in trouble, and economic stability will be threatened. If the Government would stop borrowing so much money, interest rates would come down and money would be available for businesses to invest in creating jobs and paying higher wages. The Director of the Congressional Budget Office, June E. O'Neill, has testified recently that ``balancing budget will induce favorable changes in the economy,'' and among those favorable changes she specifically pointed to ``interest rates, economic growth, and the share of GDP represented by corporate profits.'' All of this can put real money in the pockets of real people, including small business owners and employees. CBO Director O'Neill has also suggested that taking action now to balance the budget can assure greater budgetary stability in the future. Greater budget stability means greater tax stability. And that means that Americans, and their families, and the businesses they own, can plan for the future better, with less risk that shifting tax policy will wipe out their plans in unforeseen ways. At the very least, this will save Americans substantial amounts on tax attorneys. But long-term planning, with less risk from shifting tax policy, can pay dividends throughout the economy. Decreasing our dependence on debt to finance Government activities will also increase our national economic sovereignty. Interest payments on our debt are increasingly leaving the country. This chart, based on Treasury Department statistics, shows that from 1992 to 1995, the portion of our debt held by foreign interests has increased 28 percent. That is money that leaves the United States, thus weakening our national economy, and perhaps slowly jeopardizing our national independence. It has been said, ``It is tough to get tough with your banker.'' The less we borrow from foreigners, the less dependent we are on foreigners, and the more independent we will be as a nation. By returning honesty to budgeting, the balanced budget amendment will improve our economy and our economic independence. retirement security The balanced budget amendment is important to current and future retirees. This is a very important chart because this chart is based on the Social Security trustees' intermediate projections. As you can see here, while we run modest yearly surpluses until the year 2015--down here is the 2015, and the green shows the moderate surpluses above zero, we get to 2015. The long-term projections are mammoth annual deficits--the red line--mammoth annual deficits that start about the year 2015, if we are lucky. That is assuming a rosy economic picture over the next 19 years. The long-term projections are for mammoth annual deficits projected at current dollars at as much as $7 trillion for today's children when they retire. [[Page S997]] The word ``trust'' in the Social Security trust fund refers to the trust retirees repose in the Government to meet its future obligations. We will be hard pressed to meet our obligations if we do not get our debt under control now and force ourselves to avoid the growth of debt in the future. The balanced budget amendment will force and empower us to meet these future obligations. In addition, the economic benefits of the amendment will benefit current and future retirees who are increasingly relying on private financial investments for retirement security. There are 34 million households that have invested in the stock market in some form. As financial expert Jim Cramer notes, if you have a pension, it's likely that it's invested in stocks. If you have a 401K plan, it's probably invested in stocks. Worth magazine's Ken Kurson points out that in 1996, 34 percent of households headed by someone under 35 had some sort of mutual fund. Simply put, many Americans are relying less on Government and more on themselves and their own investments for their retirement security. The balanced budged amendment will strengthen the markets and the investments these Americans are relying on. No matter the source of retirement security, the balanced budget amendment will benefit current and future older Americans. Some have argued that we should take Social Security out of the purview of the balanced budget amendment. They argue that we should take the highest items in the Federal budget and the most important item in the Federal budget out of the budget because they think that might protect Social Security. Give me a break. That is not going to protect Social Security. It is going to jeopardize it, because what happens is that if we take it out now, even the President has admitted that you cannot balance the budget by the year 2002 if you do not keep Social Security in the total unified budget. So it is a gradual way that we get there, and if we get there, then Social Security will be much more stable. When we get to these years when it starts to drop off, we have to take care of it, and, frankly, we have to do it within reasonable constraints and do it right. The fact is that some argue that we should keep Social Security in the amendment until the year 2003 and then all of a sudden take it out when all of these deficits occur. The reason they want that is so they can keep spending. As far as everybody knows, if we take Social Security out of the purview of the balanced budget, we would be creating the biggest loophole in the history of this country and they could spend anything they want by simply labeling it Social Security. Madam President, this scares me to death. It is true. These are the trustees' estimates here. That is assuming a fairly rosy economic picture. If we hit a recession or depression during this period of time, it is going to be worse. And the deficits might actually start before then. But that is the best analysis that we can get at this time. Madam President, only the force of the Constitution can balance out the incentives for irresponsibility that dominate the Congress, and only the balanced budget amendment can save this country from being swallowed in debt. A vote for the balanced budget amendment is a vote for a stronger and a freer future for all Americans. When we began this debate, we had at least 68 Members of the Senate who committed and promised that they would vote for this amendment. We need 67. So we believe the votes should be here. We believe people are honorable and will honor their commitments when they ran for office and when they appeared before their families and friends and voting constituents within their respective States. They all knew at the time that this was the only amendment we could possibly pass. They all knew at the time that this is a bipartisan consensus amendment brought about by both Democrats and Republicans, and that we have worked for over 20 years on this amendment. They all knew at the time that this was the one time in history when we could really get this done. And I hope we do. I believe we will because I believe our fellow Senators will live up to the word that they gave to their constituents. Madam President, I yield the floor. Mr. LEAHY addressed the Chair. The PRESIDING OFFICER. The Senator from Vermont. Mr. LEAHY. Madam President, I wonder if I could ask the distinguished senior Senator from Utah a question. Shall we vote now? Mr. HATCH. We would be happy to do it, if the Senator wants to. Mr. LEAHY. Shall we call the roll? Mr. HATCH. Sure. That would be fine with me. Mr. LEAHY. It would be fine with me. Mr. HATCH. I do not think it would be fine with that side, but it would be fine with me. Mr. LEAHY. I suspect that you probably have at least one leader on that side who might not be in favor. Mr. HATCH. I will clear the way. Mr. LEAHY. Why not talk with him while I give my opening statement to see if we want to do that. Mr. HATCH. Let us let everybody say what they want to say about this on both sides, and at a reasonable time we would like to---- Mr. LEAHY. If the Senator would like to this afternoon---- Mr. HATCH. I will be happy to do it. Mr. LEAHY. Why not talk with him. Mr. HATCH. I will. Mr. LEAHY. And see if it could be cleared here, too. Madam President, last night in his State of the Union Address, the President of the United States spoke of the difference between taking action to balance the Federal budget and the political exercise of considering a constitutional amendment on balancing the budget. I mention this because the American people know there is a big difference between talking about a constitutional amendment to balance the budget, a big difference between talking about what you might or might not do, and actually doing it. Here is what President Clinton said. Balancing the budget requires only your vote and my signature. It does not require us to rewrite our Constitution. I believe it is both unnecessary and unwise to adopt a balanced budget amendment that would cripple our country in time of economic crisis and force unwanted results, such as judges halting Social Security checks or increasing taxes. Listen to what the President said. Balancing the budget requires only the vote of the Congress and his signature. This from a President who in the 22 years I have been here is the only President who has brought the deficit down 4 years in a row--the only President who has done that. In fact, if we were not paying the interest on the deficits run up during Presidents Reagan and Bush administrations, we would have a surplus today and not a deficit. In fact, I believe he is probably the only President in my lifetime, Republican or Democrat, who has 4 years in a row brought the deficit down and certainly the only one since the last President, a Democrat, who had a surplus. That was President Johnson. Deficits have run since then, and only President Clinton has brought them down four times in a row and is about to submit a budget which will bring the deficits down for the fifth time in a row. That is a record which certainly in modern times, certainly the postwar time, no President, Democrat, or Republican, has done and is a marked contrast to the two Republican Presidents who preceded him who tripled the national debt, who took all the debt from 200 years and tripled it in just 12 years. So President Clinton is committed to signing a balanced budget that protects America's values, honors our promises to seniors and our veterans and fulfills our responsibilities to the disadvantaged and the young. If this Congress, the 105th, will join him for the good of the Nation and the future, we can, in fact, be the Congress that finally balances the budget. Madam President, I would like to be part of that Congress, and I would like to see Democrats and Republicans work together to bring about that kind of a balanced budget. But that would mean each one of us, every man and woman in this body and every man and woman in the other body, will have to stand up and cast votes that are politically unpopular--not a vote that sounds very popular but does not cut a single program and does nothing to balance the budget. [[Page S998]] My good friend from Utah has talked about the public opinion polls that say how popular a balanced budget is. I support a balanced budget. I voted for more deficit reduction than most of the Members of this body. But wanting it and voting it can be sometimes two different things. It is easy to stand up, as we all do, in town meetings back home and say we want a balanced budget. It is very difficult to come back and face special interest groups on the right and left and say we are going to cast votes to achieve balance. This is not one of those tough votes. This proposed constitutional amendment is unnecessary, it is unwise, it is unsound, and it is dangerous. First, it demeans our Constitution. It will destabilize the power among our three branches of Government. That balance of power between our three branches of Government gives this, the greatest and most powerful democracy in history, its greatest protection. It would head us down the road to minority rule and undermine our constitutional democracy. It would likely result in a shifting of burdens, responsibilities and costs to State governments. Whether my own State of Vermont, the State of Maine, the State of Utah, or any other of the 50 States, these State governments are ill-equipped to assume the vast burdens of the Federal Government. Both because of what it would do and what it would not accomplish, adoption of this proposed 28th amendment to the U.S. Constitution would be wrong. Treasury Secretary Rubin testified that the proposed constitutional amendment would ``subject the Nation to unacceptable economic risks in perpetuity. It would be a terrible, terrible mistake for this country.'' Treasury Secretary Rubin commands the highest respect of both Republicans and Democrats and certainly within the financial community, and when he speaks of the unacceptable economic risks in perpetuity we ought to stop and listen to him. We should also listen to the 11 Nobel laureates in economics who joined 1,000 other economists who condemn the proposal as unsound and unnecessary. It is what the Los Angeles Times calls a false political star. Now, there are responsible ways to reduce our budget deficit, but focusing our attention on this proposed amendment only delays us from making progress on what are some very tough choices. This is the same old sleight of hand that we have witnessed around here since 1982 when people began voting for a constitutional amendment on the budget rather than to vote to balance the budget. A lot of people stood up to say, ``Yes, I voted to amend the Constitution to balance the budget.'' Hurrah, hurrah, how brave they are, but they cannot quite step up here and vote on these tough issues that actually do balance the budget. There is no magic in the proposed constitutional amendment. The magic is hard work. Reducing the deficit will take hard work, and it will require hard choices. Some may even use a ``feel good'' vote for this proposed amendment as the excuse to sit back and await the ratification process in the States, and then they would sit back and await the consideration of implementing legislation. Then they would sit back and await the consideration of budgets consistent with such implementing legislation. Then maybe, just maybe, they would start making the necessary cuts. Madam President, it is like some of the people who stand on the floor of this body or the other body and say that we have to amend the Constitution and have term limits. There are those who stand up and say, ``I have been arguing for term limits for 20 years,'' some who have been arguing term limits before some of the Members of this body were born, and they will keep on into the next century saying we have to have a constitutional amendment for term limits. I heard one Member of the House, who has been here, I think, 14 terms, say, ``If I do nothing before I leave here, we are going to get term limits--if it takes me another 14 terms to get term limits.'' What makes more sense, instead of looking for bumper sticker amendments and bumper sticker politics, is to cast votes that will cut the deficit now. Do not wait until the next century. I want to continue to lower the deficit now, not wait for two more election cycles to pass before balancing the budget sometime after the year 2002, which, incidentally, is the earliest date this amendment could be effective. We showed in the last two Congresses we could make progress in undoing the mistakes of the deficits-building decade of the 1980's without having this proposed amendment in the Constitution. For the first time since Harry Truman was President, the deficit has declined 4 years in a row and with the help of President Clinton we have reduced the deficit 63 percent over the last 4 years. We have reduced the deficit, as a percentage of our economy, from 4.7 to 1.4 percent. These may seem like just numbers, but what we have done is we have reduced the deficit as a percentage of our economy to the lowest among the world's industrialized countries. Instead of constantly standing up supporting this because it might sound like good politics, let us be honest with the people we represent. We have done better than any industrialized country in the world. As part of our efforts we passed legislation that saves tens of billions of dollars of taxpayer-financed Government programs. These are tough votes. For example, the distinguished senior Senator from Indiana, Senator Lugar, and I sponsored legislation that reorganized the U.S. Department of Agriculture to become a more efficient and effective agency. The Leahy-Lugar bill passed Congress at the end of 1994. It will result in saving over $3 billion, but it has to close 1,200 USDA field offices including, should anybody ask, a large number of offices in my home State of Vermont. What the distinguished Senator from Indiana and I did was not just to talk about it, we actually put together a piece of legislation which means in every single State in this country somebody is going to feel the pain. I know because I got letters from all over the country about it. But we passed it. Maybe some of the same people who so eagerly support this constitutional amendment should ask themselves, are they responsible for the huge and unprecedented budget deficits of the Reagan and Bush years? Many are. I am one of only five remaining Senators in this body who voted against the 1981 Reagan budget package that increased defense spending by a huge amount while cutting taxes by a huge amount and which, of course, caused our debt to explode. The 12 years following Reaganomics have left us with over $2.6 trillion in additional debt. Do we have a deficit today? Of course we do. If we did not have to pay the interest on the debt run up during President Reagan and President Bush's terms, we would have a surplus today. I commend, again, the President, who, while inheriting a huge national debt, a huge deficit, and a huge debt service when he came into office, has brought the deficit down. President Clinton has, four times in a row, brought the deficit down and is about to do it a fifth time in a row, something that none of us in our lifetime have seen. But this proposed constitutional amendment remains now what it was then: political cover for the failed policies of the 1980's and their tragic legacy. Those mistakes continue to cost our country hundreds of millions of dollars every workday in interest on deficits run up during the last two Republican administrations. Think of that--hundreds of millions of dollars every single workday just on interest alone based on the deficits of those years. As I said before, were it not for the interest on this debt, we would have had a balanced budget in each of the last several years. The proposed constitutional amendment contains no protection against the Federal Government seeking to balance its budget by shifting costs and burdens to the States. That is the ultimate budget gimmick--pass the buck to the States. The proposed constitutional amendment would be a prescription for disaster, especially for small States that are ill- equipped to handle the extra load. We know what happened in the 1980's; Federal contributions to State and local governments fell sharply, by about a third. During that same decade, my home State of Vermont had to make up the difference. We had to raise the State income tax rate from 23 to 28 percent. In addition, State and local property taxes and taxes of all kinds had to be increased. I remember talking to so many people in my State of Vermont, hard- [[Page S999]] working men and women, people who bring home a weekly paycheck and pay the mortgages, set money aside for their children to go to college. They keep our economy going. I said, ``Have you felt these huge tax cuts that we read you have gotten under Reaganomics?'' Except for a couple of my friends who, frankly, Madam President, make a heck of a lot more money than I do, they had not. In fact, what they had seen, the average person had seen their taxes go up. They saw Social Security taxes go up, they saw their local taxes go up, they saw their State taxes go up to cover the differences. That is not the way to cut the Federal deficit. It is the Federal deficit. You do not cut it by simply shifting the burdens to State and local government and telling them to raise the taxes on their people. Working people cannot afford tax increases any more just because they are imposed by State and local authorities and not by the Federal Government. While we passed unfunded mandates legislation last Congress, even that legislation offers insufficient protection. My concerns extend beyond new legislation that the lawyers determine include legally binding obligations. I am concerned as well about those programs that respond to the basic needs of individuals. Human needs are no less real because they are not set forth in a Federal statute. Hunger, cold, illness, the ills of the aged--these do not need statutory definition to cause suffering. With or without definition, they do cause suffering. If we try to balance the Federal budget by scaling back services, we are just as surely going to be shifting the costs and burdens of these unmet needs, as well as Federal mandates, on State and local governments. I know the people of Vermont are not going to let their neighbors go hungry or go without medical care, and I expect people elsewhere will not either. As much as our churches and synagogues and our charities and our communities will contribute, a large part of the problem and a large share of the costs are still going to fall to State and local governments. The distinguished majority leader in the other body, Richard Armey, said in 1995 that he did not want to spell out the effects of this constitutional amendment before it is passed because he is afraid that Congress would not vote to pass it if it knew what it would do. He later reinforced his remarks by warning supporters not to reveal where the necessary cuts would be made because knees would buckle. If we are going to be asked to consider this constitutional amendment, let us find out what the impact is likely to be. Certainly, before any State is called upon to consider ratification of such a constitutional amendment, we ought to know what the impact is going to be. Every State ought to be able to look at the debate here and our actions here and know what the impact is going to be if they ratify. Each State should be advised of the likely effects on its economy and, in particular, on personal income levels and job losses in that State. Let us get some of the answers. Let us know where we are headed. In fact, I believe this proposed constitutional amendment would invite the worst kind of cynical evasion and budget gimmickry. The experience of States that do have balanced budget requirements only bears this out. My State, which has one of the best credit ratings in the country, takes care of its budget without having in its State constitution a constitutional amendment to balance the budget. Because we know we have good times and bad times, we have provisions to set aside a rainy day fund. We know that there are things that we have to do in our small State economy at a time of recession to help. But look what happens with States with a balanced budget requirement. Many that do achieve compliance do so only with what the former comptroller of New York State calls dubious practices and financial gimmicks. These gimmicks include shifting expenditures to off-budget accounts, postponing payments to school district suppliers, delaying refunds to taxpayers, deferring contributions to pension funds, and selling State assets. The proposed constitutional amendment does not prohibit the Federal Government from using the same and other dubious practices and gimmicks. With Congress facing a constitutional mandate, the overwhelming temptation will be to exaggerate estimates of economic growth and tax receipts, underestimate spending, and engage in all kinds of accounting tricks as was done before the honest budgeting efforts of 1993. The result will be that those who do business with the Government may never be certain in what fiscal year the Government will choose to pay up or deliver, and those who rely on tax refunds can certainly expect extended delays from the IRS. Passing a constitutional directive that will inevitably encourage evasion is only going to invite public cynicism and scorn, and not just toward the Congress. That, Madam President, does bother me, since we represent one of the three branches of Government. What bothers me far more is cynicism toward the Constitution itself. None of us in this body owns the seat that we are in. We are all here for 6 years at a time. Some day we will leave, as we should, either by our own choice or because we are given an invitation to do so by the voters of our State. But while we are here, we have a responsibility to the institutions of this country, and certainly to our Constitution, an oath that we each take solemnly and without any reservation. (Mr. CRAIG assumed the chair.) Mr. LEAHY. Mr. President, we are, in some ways, an unprecedented country. No nation, no democracy has achieved the power that we have. In fact, in history, no country, democracy or otherwise, has had the great economy and the great power of the United States. But no other country has had a constitution like ours, a short constitution, a simple constitution, an understandable constitution. Since the Bill of Rights, it has only been amended 17 times. In one of those cases, it was amended for prohibition and then to repeal prohibition. I mention this because I think there is a definite connection between the greatness of the United States, the fact that we maintain our democratic principles and, notwithstanding our enormous power, a respect for Government and a respect for our Constitution based on the knowledge of that Government and that Constitution and not because a dictator and army tell us we have to. But that has meant that the men and women who have occupied these seats that we only temporarily occupy, the men and women who have occupied the seats in the other body that were only temporarily occupied, were wise enough--even though there were hundreds and hundreds of proposals over 200 years--were wise enough not to amend the Constitution willy-nilly, especially for those things that can be taken care of legislatively. As the President said last night, it only requires our vote and his signature for a balanced budget, not a constitutional amendment. Our predecessors on both sides of the aisle and our predecessors on both sides of the aisle in the other body were wise enough to refrain, no matter how popular it sounded or no matter how much it helped them in their elections, from amending the Constitution willy-nilly, especially for those things they knew they could do legislatively. It is one thing to amend the Constitution to limit the terms of Presidents or to set up successions when there is a vacancy in the Vice Presidency or the Presidency itself. Those are of constitutional import. But something we can do simply legislatively, why amend the Constitution? Let's not debase our national charter with a misguided political attempt to curry favor with the American people by this declaration against budget deficits. Let us not make the mistake of other countries and turn our Constitution into a series of hollow promises. We are too great a nation for that. We are too great a democracy for that, and the loopholes in Senate Joint Resolution 1 already abound. One need only consult the language of the proposed amendment and majority report for the first sets of exceptions and creative interpretations that will allow Congress to reduce the deficit only so far as Members choose to cast responsible votes. The Judiciary Committee reports that the Congress will have flexibility in implementing the constitutional amendment. It will leave the critical details to implementing legislation. [[Page S1000]] This proposed constitutional amendment uses the seemingly straightforward term ``fiscal year.'' But according to the committee report, this time period can mean whatever a majority in Congress wants it to mean. It has no immutable definition. It may mean one thing this year, and we may decide the next year it means something else. It can be shifted around the calendar as Congress deems appropriate. Watch out for the shifting of fiscal years in order to juggle accounts when elections are approaching. This proposed amendment gives congressional leeway to rely on estimates to balance the budget, to make temporary self-correcting imbalances and to ignore very small or negligible deficits. But what is temporary? What is self-correcting? What is small? What is negligible? With apologies to one of our distinguished predecessors, the Senator from Illinois, Senator Everett Dirksen, a billion here, a billion there; after a while, it does not add up. This is a lawyer's dream. What is negligible? We think a billion is negligible, and somebody sues, or a whole lot of people sue. My guess is that unless it becomes a political bone of contention between political parties as we approach an election, we could go a long time without Congress declaring itself in violation of this proposed amendment. What happens if the President of the United States says, ``Well, here are my estimates. My estimates are we are going to receive x number of dollars and my estimates are we are going to spend x number of dollars,'' and it turns out he is wrong? What do we do? Sue him? What happens if the Congress does the same thing? We estimate in our budget resolution we are going to receive x number of dollars and spend x number of dollars. What happens if we are wrong? Do all 535 Members go to jail or just those who voted for it? This proposed constitutional amendment could be economically ruinous. During a recession, deficits rise because tax receipts go down. But various Government payments, like unemployment insurance, go up. By contrast, the amendment would demand the taxes be raised and spending be cut during a recession or depression. It is almost like when President Herbert Hoover, as we started into a slight recession, said the thing that would give the most confidence to the country would be to force through a balanced budget. He did, and we went through the worst depression in this century. As Treasury Secretary Robert Rubin testified in the Judiciary Committee, ``the balanced budget amendment would turn slowdowns into recessions and recessions into more severe recessions or even depressions.'' Economic policy has to be flexible enough to change with a changing and increasingly global economy. But the requirements of this proposal would tie Congress' hands to address regional, national, and international problems. We should not hamstring the legislative power that is expressly authorized in article I, section 8, of the Constitution. Let us not undo that which our Founders wisely provided: flexibility. This proposed constitutional amendment risks seriously undercutting the protection of our constitutional separation of powers. No one has yet convincingly explained how the proposed amendment would work and what role would the President play and what role would the courts play in its implementation and enforcement? I can just see the new law school courses all over the country. How do you sue under the constitutional amendment? When you put the budget in the Constitution, economic policy would inevitably throw the Nation's fiscal policy into the courts. That is the last place issues of taxing and spending should be decided. Basically what it does is it destroys this delicate balance between the three branches of government: the executive, the legislative, and the judicial. I cannot understand why Members of Congress want to give up their powers to the judiciary, because the effect of the proposed amendment could be to toss important issues of spending priorities and funding levels to the President or to thousands of lawyers in hundreds of lawsuits in dozens of Federal and State courts. If approved, the amendment would have let Congress off the hook by kicking massive responsibilities for how tax dollars are spent to unelected judges and the President. Judge Robert Bork warned of the danger more than a decade ago. Again, Mr. President, why--why--would we give up the constitutional powers we have had for 200 years and give them over to the courts who do not want them and have not asked for them? So instead of creating future constitutional questions, let us do the job we were elected to do. Let us remember what the President said last night: You vote it, I sign it; we have a balanced budget. Simple as that. But it means we have to make the tough choices and cast the difficult votes and make progress toward a balanced budget. I worry, Mr. President, that perhaps some, because it is a lot easier, just vote for a constitutional amendment which has huge popularity. It is a lot easier to do that than to vote against a whole lot of programs where your vote is not popular. It is not popular to actually cast the votes to balance the budget. It is easy to cast the vote for the constitutional amendment. It is sort of like saying, ``I will vote today to eliminate cancer.'' Who disagrees with that? Or the person says, ``I'm against cancer. I don't want to give up smoking, but I'm against cancer.'' It is the difficult steps. This proposed constitutional amendment undermines the fundamental principle of majority rule by imposing a three-fifths supermajority vote to adopt certain budgets and raise the debt limit. Again, has anybody read a history book in this body? Has anybody found out how this country started? Go back to our Founders. Our Founders rejected such supermajority voter requirements on matters that are within Congress' purview. Alexander Hamilton described supermajority requirements as poison. I sometimes wonder if anybody around here even knows who Alexander Hamilton or Thomas Jefferson, George Washington or these people were. Hamilton observed that: Supermajority requirements serve to destroy the energy of the Government and to substitute the pleasure, caprice or artifices of an insignificant, turbulent or corrupt junto to the regular deliberations and decisions of a respectable majority. These supermajority requirements are a recipe for increased gridlock, not more efficient action. If there are some in here who have not read The Federalist Papers, just recall the lessons of the last 2 years when the Government was shut down by a determined minority intent on getting its way. The Nation was pushed to the brink of default when a group pledged that, no matter what, they would not vote on raising the debt limit, they were going to let the Government be shut down. Whether it was political or they went out the wrong door in an airplane or whatever, they shut down the Federal Government. That cost taxpayers hundreds of millions of dollars. It certainly cost everybody in private enterprise in this area, just about any area in the country, hundreds of millions of dollars more. We looked ridiculous to the rest of the world. But all because a minority made that determination. Such supermajority requirements reflect a basic distrust, not just of Congress, but of the electorate itself. I reject that notion. I have faith in the electorate. I am prepared to keep faith with and in the American people. Mr. President, we have also said that ``The devil is in the details.'' I believe Emerson first said that. The proposed constitutional amendment uses such general terms even its sponsors concede that implementing legislation will be necessary to clarify how it is going to work. So we ask, what will the implementing legislation say? Well, we are not going to find out until we see the implementing legislation. Basically this says, ``Trust us. Pass this. And we'll tell you afterward what it means.'' That is kind of like somebody saying, ``I'll sell you this business. Would you sign this contract in blank? Give me all your money, but I will fill in the terms afterward.'' I am a Vermonter. We just do not quite do it that way back home. We trust each other, but we kind of like to see the details. The questions raised by this proposed constitutional amendment still lack satisfactory answers. [[Page S1001]] For example, what programs are going to be off budget? What role will the courts and what role will the President have in executing and enforcing the amendment? How much of our constitutional power do we give up? What is really compliance with the amendment? How much of a deficit may be financed and then carried over to the next year? There are a lot of questions like these that are critical to our understanding of this amendment. And they have not been answered. Should Congress be asked to amend the Constitution by signing what amounts to a blank check? I disagree with that. No Congress should be asked to do that. Nor should each State be asked to ratify a pig in a poke. In the interest of fair disclosure, Congress should first determine the substance of any implementing legislation as it did in connection with the 18th amendment, the other attempt to draft a substantive behavioral policy into the Constitution. Let us go look at the implementing legislation first. In my view, this amendment does not meet the requirements of article V of the Constitution for proposals to the States because it is not constitutionally necessary. It is only with resolve and hard work that we make progress. Neither is evident in the proposed constitutional amendment. I have heard some of the speeches about why it would be good politics, popular politics to vote for this. Politics--good, popular or otherwise--have no place when we are dealing with the Constitution of the United States. We inherited a great legacy from those who went before us because they resisted the temptation to play politics and to amend our Constitution willy-nilly. As a result, we are the greatest and strongest democracy history has ever known. The bedrock of it is our Constitution, which sets up three branches of Government, with powers that make sure there are checks and balances. This amendment destroys so much of what this country has rested on for over 200 years. So instead of a bumper sticker for the Constitution, what we need is the wisdom to ask what programs we must cut, and the courage to explain to the American people that there is no procedural gimmick that can cut the deficit or the debt. There is no nice, easy self-serving item. There is only hard work. But I think the American people would rather have the hard work than have us fool around with our Constitution. Yesterday the Wall Street Journal printed an editorial titled ``Constitutional boondoggle'' in its editorial page. The editorial says: We do need to get the national debt declining . . . I agree. We do need to restrain federal spending. Again, Mr. President, I agree. We do need to resolve the Medicare crisis . . . Mr. President, I agree. We do need to look beyond the year 2002. Mr. President, I agree. But then they said: But these battles have to be fought one by one, and [they] can't be solved by amending the Constitution. Once again, Mr. President, I agree. The Wall Street Journal editorial concludes: The concept embodied in the proposed [constitutional] amendment measures nothing useful; it is at best a distraction, and at worst, causes confusion that makes the right things harder to do, not easier. I ask unanimous consent the Wall Street Journal editorial be printed in the Record immediately after my remarks. The PRESIDING OFFICER (Mr. Faircloth). Without objection, it is so ordered. (See exhibit 1.) Mr. LEAHY. Mr. President, think back again to last night's State of the Union address. The President said all it takes is for us to cast the votes and for me to sign the bill to balance the budget. Many of us who cast those tough votes to cut programs, to bring the deficits down, have faced in the short term the wrath of our constituents but in the long term a realization that we have done the right thing for the country. I am proud that I have voted for budgets that have now, 4 years in a row, brought down the deficits, something that has not happened certainly in the last 15 years or so. We have had a President who has had the courage to give us four budgets in a row that bring down the deficits. They have meant tough votes. Some Members who voted to bring down the deficit have probably lost elections because of those tough votes. How much better they have been to themselves, to their children and their children's children because they resisted the temptation, as Senators and Representatives have for over 200 years, to amend our Constitution unnecessarily. So let us not proceed to a view of short-run popularity but with a vision of our responsibilities to our constituents and the Nation in accordance with our cherished Constitution. Mr. President, first and foremost I am going to cast votes on this floor to protect that Constitution, popular or otherwise. I take my oath of office seriously. I appreciate the privilege the people of Vermont have given me to represent them in this body. There is nothing I will ever do in my life that will make me as proud as being in this body representing the people of Vermont. As I have told the people of Vermont in each one of my elections, I will protect the Constitution first and foremost. As I told them in my last two elections, I will vote against this constitutional amendment because it does not protect our country, it demeans the Constitution, and it lets us off the hook from doing the things that we really should do. I yield the floor. Exhibit 1 [From the Wall Street Journal, Feb. 4, 1997] Constitutional Boondoggle With President Clinton about to deliver his State of the Union Address and new budget, this is an apt moment to say that the President is right and the Republicans are wrong on item one of the GOP Congressional agenda. The balanced budget amendment is a flake-out. The notion of amending the Constitution to outlaw budget deficits is silly on any number of counts. Politically it's empty symbolism. Legally it clutters the Constitution with dubious prose. Today's lesson, though, concerns economics and accounting. You can't measure economic rectitude by any one number, let alone the ``deficit,'' however defined, let alone the deficit projections the proposals will inevitably involve in practice. The attempt to enshrine such a number in the Constitution is bound to prove a snare and a delusion. The proposal passed by the Senate Judiciary Committee says that outlays (``except for those for repayment of debt principal'') shall not exceed receipts (``except those derived from borrowing''). While this concept sounds simple, in fact it reflects neither accounting principles nor economic reality. If you can balance your family budget, the thinking goes, the government can balance the federal budget. But applying the budget amendment's principles to households would outlaw home mortgages, which have proved a boon to countless families and the general economy. What a family balances is its operating budget, a concept foreign to the federal accounts. In corporate accounting, similarly, the health of an enterprise is measured by careful distinctions such as accruals or depreciation. Even the balanced budget restraints of state and local governments exclude spending on capital improvements financed by bond issues approved by voters. The reality is that borrowing money is not a sin; it depends on how much money, and in particular on the uses of the borrowed funds. Even the amendment itself recognizes this by allowing Congress to waive the amendment by majority vote when war is declared or when a joint resolution declares ``a military conflict which causes an imminent and serious military threat to national security.'' Other emergencies would presumably be dealt through the provision that Congress could approve borrowing by a two-thirds vote. Republicans back the amendment because it scores well with focus group participants, who don't understand the difficulties, and with Ross Perot, who doesn't care. They also hope that limiting the government's power to borrow will force it to limit spending. Democrats seem pretty much to agree, and want to voice support for the amendment to appease focus groups while also killing it to avoid a spending straitjacket. We're not so sure. For one thing, we've observed how European politicians, even supposedly conservative ones, have been behaving toward the budget-deficit requirements they imposed on themselves in the Maastricht agreement. To get within the numerical criteria, the Italians are taking their railroads off and on budget; the French government, in return for an infusion of funds this year, assumed pension obligations running into the far future. Governmental accounting, you see, simply counts formal government debt; it ignores unfunded governmental promises. This is a loophole enormous enough that Rep. Fernand St Germain could drive half of [[Page S1002]] the S crisis through it in one night in 1980, when he doubled deposit-insurance limits. Another enormous loophole is the government's ability to offload, or ``mandate,'' costs on corporations, individuals and state and local governments without running any receipts or outlays through the Washington books. And when the bill for Rep. St Germain's coup suddenly came due in 1989, would it really have been better to avoid borrowing and put the rest of the government through a temporary wringer? These imperfections might not matter if the amendment did no harm, but it's easy enough to imagine scenarios in which it would keep us from doing the economically right thing. Take the proposals by the most conservative bloc in the recent Social Security Commission. They would allow current taxpayers to personally invest part of what they owe in payroll tax, giving them a better return. But meeting obligations to those retiring before their benefits were funded would require a big issue of government debt. The new debt would merely formally recognize current obligations, and the privatization would dramatically reduce future obligations. Though this transaction would plainly improve the federal fisc, the balanced budget amendment would outlaw it. Or for that matter, take the Reagan defense build-up, which led to victory in the Cold War. The balanced budget amendment would have all

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BALANCED BUDGET AMENDMENT TO THE CONSTITUTION
(Senate - February 05, 1997)

Text of this article available as: TXT PDF [Pages S994-S1015] BALANCED BUDGET AMENDMENT TO THE CONSTITUTION The PRESIDING OFFICER. Under the previous order, the hour of 3 p.m. having arrived, the Senate will now proceed to the consideration of Senate Joint Resolution 1 for debate only. The clerk will report. The assistant legislative clerk read as follows: A joint resolution (S.J. Res. 1) proposing an amendment to the Constitution of the United States to require a balanced budget. The Senate proceeded to consider the joint resolution. The PRESIDING OFFICER. The Senator from Utah. Privileges of the Floor Mr. HATCH. Madam President, I ask unanimous consent that Manus Cooney, Sharon Prost, Shawn Bentley, Paul Larkin, Larry Block, Steve Tepp, Troy Dow, and Paul Joklik be permitted privileges of the floor for the duration of the debate. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. HATCH. Madam President, today we begin one of the most important debates that has ever taken place in the U.S. Senate or in the Congress of the [[Page S995]] United States. The subject matter goes to the very heart of our Founding Fathers' hope for our constitutional system--a system that would protect individual freedom through the maxim of limited Government. In the latter half of this century, however, the intentions of the Framers of the Constitution have been betrayed by the Congress' inability to control its own spending habits. The size of this Federal leviathan has grown to such an extent that the very liberties of the American people are threatened. I just stood at a press conference with our Democratic cosponsors of this amendment, and there was a huge table filled with unbalanced budgets since 1969. History was made in the 104th Congress when 300 of our courageous colleagues in the House of Representatives, both Democrats and Republicans, approved a balanced budget amendment to the Constitution. Unfortunately, the same measure was defeated in this Chamber by one solitary single vote. This year we begin a new Congress following an intensive fall campaign in which people in every State across this Nation made unmistakably clear their insistence that we put our fiscal house in order. The eyes of the people, now more than two-thirds of whom favor a balanced budget amendment, now turn to us to follow through on our promises. I am pleased to be joined by 61 of my colleagues, including every Republican Senator in the U.S. Senate and 7 bold Democrats who have done exactly that in sponsoring Senate Joint Resolution 1, the balanced budget constitutional amendment. Madam President, as we begin the debate on Senate Joint Resolution 1 proposing an amendment to the U.S. Constitution to require balanced annual Federal budgets, I want to summarize why I feel this amendment should be added to the basic great law of this great Nation. Let me say that as a lifelong student of the Constitution and having served on the Judiciary Committee in this body during my tenure here of 20 years, I do not lightly suggest amending our founding document. Yet, all other avenues having failed us, I believe it appropriate to take recourse to our basic charter to rein in an abused power of the purse-- as has been done in similar situations in our history since the Magna Carta--in order that we might save future generations from the heavy burden of irresponsible Government borrowing. Madam President, let me just summarize the reasons I believe the proposed balanced budget amendment should be presented to the States for ratification. We have to have a two-thirds vote in both of the bodies and submit this amendment to the States, and we have to get three-quarters of them to ratify the amendment before it can be entered into the Constitution. It is a tough process. It ought to be a tough process. These are some of the reasons why I believe this amendment should be presented to the States for their ratification: No. 1, integrity and accountability. It will bring immediate credibility to our current budget process and negotiations, and it will restore a measure of integrity and accountability to our Government. No. 2, our children's future. Passing the balanced budget constitutional amendment is a vote for our children's economic freedom. No. 3, family financial security. Passing the balanced budget amendment will improve the economic health and stability of all American families. No. 4, economic strength. The stabilizing effect the balanced budget amendment will have on the economy is clear, and it will enable us to rein in the level of our country's foreign-held debt. No. 5, retirement security. If we pass this balanced budget constitutional amendment it will literally save Social Security. It will stabilize the economy which will benefit all current and future retirees. Without it, all of these programs will be placed in jeopardy. Now let me describe these reasons in more detail. On the issue of integrity and accountability, our national debt is rocketing out of control and the American people are paying a very heavy price for it. As you can see by this chart, the debt was relatively stable for many decades, up to about 1970, a little bit before 1970. In recent years the debt has increased at alarming rates under the watch of both political parties. The fact is, our deficits have been structural and they will not be eliminated in the long run without the discipline of a balanced budget constitutional amendment. They really shot up in the 1980's, right on through the 1990's, and still that arrow is going almost straight up, even today, even with the efforts and actions that have been taken. Since 1978, there have been no fewer than five major statutory schemes or regimes enacted which promised to deliver balanced budgets, and these include Gramm-Rudman-Hollings. But there has not been a single balanced budget since 1969, which was the only balanced budget since 1960. While I support the steps we have taken to pass the balanced budget plan, I question whether, without the weight of a constitutional requirement to balance the budget, we will achieve balance by the year 2002. Without a balanced budget amendment, every year Congress has to act, and we have seen the lack of will to do what's right around here. For this reason, I feel passage of the balanced budget amendment is critical. Let's just acknowledge what every American citizen knows. In recent decades, Washington has been biased to spending, without feeling any constraints by the amount of money it actually has on hand. Washington has lost the habit of prioritized spending options. Any ideas with political appeal get enacted regardless of cost. We borrow the money if we run short. That is what we have been doing for most of the last 60 years. Those listening could try this thinking on their own budgets at home. Buy any item that looks appealing next time you are at the mall. Just put it on the card. What happens to your budget? Something like this chart probably, but hopefully not quite so high. Washington, however, is not as constrained as the average American. Washington spends in this way, and when the bill comes, it signs the debt over to the American people. In addition to paying their own bills, the American people have to pay Washington's bills in the form of higher taxes, of course, and accumulated debt. They also pay them in the form of higher interest rates on their homes, their cars, or student loans. They pay in the form of lower job growth, lower wages, and they even pay in the form of decreased services from the Government because more of the budget is being spent on interest rather than on education, health care, job training, child care, the environment, et cetera. The point is that Americans are getting fed up with Washington because they feel the pinch put on them by Washington's spendthrift ways. They know they have to make hard choices about how they will spend their own money, but they feel that Washington does not feel constrained to make hard choices about spending priorities. It's not even Washington's own money that it's spending so freely; it is the American people's money. No wonder the American people are tired of it. Besides being dismayed by Washington's free spending habits, the American people also believe that Washington is not accountable for its decisionmaking. The balanced budget amendment responds to both of these concerns. On this chart is the actual text of the balanced budget amendment before the Senate at this time. This balanced budget amendment will require Washington to make tough choices about spending priorities within the constraint of the amount of money it has, or it requires Members of Congress to go on record for its borrowing and taxing decisions. There will be no more voice votes when it comes to raising taxes. There will be no more voice votes when it comes to raising the deficit. You are going to have to stand up and vote. This amendment will see to that. It also requires Congress to achieve some measure of increased consensus about spending priorities if it is going to finance that spending by borrowing. The concept is simple: Don't borrow, unless a significant number of Members are willing to go on record as saying this spending is such a priority that we must borrow to do it. That would go a long way toward letting Americans know that their Government is deliberating about its spending [[Page S996]] habits, making choices among competing options, and only spending beyond its means when it really needs to in order to achieve a goal so important that a supermajority of Members could agree. The balanced budget amendment will go a long way toward restoring the people's faith in the integrity of our budget process and in the accountability of Washington for its decisions. A vote for the balanced budget amendment is a vote for integrity and accountability in Washington. Now, our children's future. Our national debt now tops $5.3 trillion. That averages out to about $20,000 in debt for every man, woman, and child in America. That is what our fiscal insanity has brought us to. A child born in America today comes into this world $20,000 in debt--and that is going up. Do we have the right to spend our children's future for our own comfort today? Over time, the disproportionate burdens placed or imposed on today's children and their children by a continuing pattern of deficits could include some combination of the following: Increased taxes, reduced public welfare benefits, reduced pensions and Social Security benefits, reduced benefits or expenditures on infrastructure and other public investments, diminished capital formation, diminished job creation, diminished productivity enhancement and less real wage growth in the private economy, higher interest rates, higher inflation, increased indebtedness to and economic dependence on foreign creditors, and increased risk of default on the Federal debt. Madam President, I have said this in the past. This is ``fiscal child abuse'' and it must end. It is our children's future versus Washington's spending addiction. I hope the Senate of the United States will come down overwhelmingly on the side of our children's future by passing this amendment. A vote for the balanced budget amendment is a vote for our children's economic security. Now, what about family financial security? It is not just our children that we hurt with these outrageous deficits. We are suffocating our own families. The impact of higher interest rates, higher taxes, lower wage and job growth, and higher mortgages are felt at kitchen tables all across America. The Concord Coalition has estimated that the interest payments on our mountainous debt amount to $5,360 a year for a family of four. Just to pay the interest against our national debt, it's $5,360 a year. Chairman Kasich of the House Budget Committee has pointed out that three of the causes of the ``middle class squeeze''--high taxes, counterproductive Government spending policies, and anemic wage growth--are at least partly caused by continued borrowing by the Federal Government. He points out that the baby boom generation pays taxes that are at least 50 percent higher than those paid by their grandparents. Real per hour wages inched up just one-third of 1 percent annually over the past 4 years, which is one-seventh the rate of growth in the period between 1960 and 1974, and productivity over the past 4 years grew at only one-fifth the rate of that same period. Economist Lester Thurow noted that the one-earner middle-class family is extinct and explains that almost one-third of all men between the ages of 25 and 34 make less each year than is required to keep the average family of four above the poverty level. These combined pressures tear at the very fabric of our Nation and our families. By contrast, implementing the balanced budget amendment will lower interest rates, making it easier for our families to pay their mortgages, their car loans, and their student loans. Economist at DRI- McGraw-Hill estimate that a balanced budget rule would result in a 2- percent drop in interest rates. Now, DRI-McGraw-Hill is one of the best econometric groups in the country. A balanced budget rule would mean annual savings of $1,230 on a middle-class family's home mortgage, $216 each year for an average student loan, and $180 each year on the average car loan. The good effects of our overall economic health will help family budgets in many other possible forms, such as a higher paycheck, more job opportunity or security, lower taxes in the future, and a greater ability to save and invest for the future. The Joint Economic Committee has estimated that the average American family would have an additional $1,500 a year if we implemented a balanced budget rule. A balanced budget amendment will make it easier for American families to afford a house, a car, or to send a child to college. This offers a real way to relieve the pressure on American families who are struggling to stay together and get ahead. A vote for the balanced budget amendment is a vote for the economic health and stability of American families. Now, economic stability. Economists from all over this country agree that the balanced budget amendment should pass. They agree that ``we have lost the moral sense of fiscal responsibility that served to make formal constitutional restraints unnecessary.'' Hundreds of economists support the balanced budget amendment as being good for the national economy by increasing both investor and business confidence, both foreign and domestic. Some economists are against us on the balanced budget amendment. As a general rule, they are academics who depend upon the Government in many ways for their moneys and in many respects love the spending practices of the Federal Government. Not all--some sincerely worry about the amendment. But there are also many, many who worry that if we do not pass the amendment we are really going to be in trouble, and economic stability will be threatened. If the Government would stop borrowing so much money, interest rates would come down and money would be available for businesses to invest in creating jobs and paying higher wages. The Director of the Congressional Budget Office, June E. O'Neill, has testified recently that ``balancing budget will induce favorable changes in the economy,'' and among those favorable changes she specifically pointed to ``interest rates, economic growth, and the share of GDP represented by corporate profits.'' All of this can put real money in the pockets of real people, including small business owners and employees. CBO Director O'Neill has also suggested that taking action now to balance the budget can assure greater budgetary stability in the future. Greater budget stability means greater tax stability. And that means that Americans, and their families, and the businesses they own, can plan for the future better, with less risk that shifting tax policy will wipe out their plans in unforeseen ways. At the very least, this will save Americans substantial amounts on tax attorneys. But long-term planning, with less risk from shifting tax policy, can pay dividends throughout the economy. Decreasing our dependence on debt to finance Government activities will also increase our national economic sovereignty. Interest payments on our debt are increasingly leaving the country. This chart, based on Treasury Department statistics, shows that from 1992 to 1995, the portion of our debt held by foreign interests has increased 28 percent. That is money that leaves the United States, thus weakening our national economy, and perhaps slowly jeopardizing our national independence. It has been said, ``It is tough to get tough with your banker.'' The less we borrow from foreigners, the less dependent we are on foreigners, and the more independent we will be as a nation. By returning honesty to budgeting, the balanced budget amendment will improve our economy and our economic independence. retirement security The balanced budget amendment is important to current and future retirees. This is a very important chart because this chart is based on the Social Security trustees' intermediate projections. As you can see here, while we run modest yearly surpluses until the year 2015--down here is the 2015, and the green shows the moderate surpluses above zero, we get to 2015. The long-term projections are mammoth annual deficits--the red line--mammoth annual deficits that start about the year 2015, if we are lucky. That is assuming a rosy economic picture over the next 19 years. The long-term projections are for mammoth annual deficits projected at current dollars at as much as $7 trillion for today's children when they retire. [[Page S997]] The word ``trust'' in the Social Security trust fund refers to the trust retirees repose in the Government to meet its future obligations. We will be hard pressed to meet our obligations if we do not get our debt under control now and force ourselves to avoid the growth of debt in the future. The balanced budget amendment will force and empower us to meet these future obligations. In addition, the economic benefits of the amendment will benefit current and future retirees who are increasingly relying on private financial investments for retirement security. There are 34 million households that have invested in the stock market in some form. As financial expert Jim Cramer notes, if you have a pension, it's likely that it's invested in stocks. If you have a 401K plan, it's probably invested in stocks. Worth magazine's Ken Kurson points out that in 1996, 34 percent of households headed by someone under 35 had some sort of mutual fund. Simply put, many Americans are relying less on Government and more on themselves and their own investments for their retirement security. The balanced budged amendment will strengthen the markets and the investments these Americans are relying on. No matter the source of retirement security, the balanced budget amendment will benefit current and future older Americans. Some have argued that we should take Social Security out of the purview of the balanced budget amendment. They argue that we should take the highest items in the Federal budget and the most important item in the Federal budget out of the budget because they think that might protect Social Security. Give me a break. That is not going to protect Social Security. It is going to jeopardize it, because what happens is that if we take it out now, even the President has admitted that you cannot balance the budget by the year 2002 if you do not keep Social Security in the total unified budget. So it is a gradual way that we get there, and if we get there, then Social Security will be much more stable. When we get to these years when it starts to drop off, we have to take care of it, and, frankly, we have to do it within reasonable constraints and do it right. The fact is that some argue that we should keep Social Security in the amendment until the year 2003 and then all of a sudden take it out when all of these deficits occur. The reason they want that is so they can keep spending. As far as everybody knows, if we take Social Security out of the purview of the balanced budget, we would be creating the biggest loophole in the history of this country and they could spend anything they want by simply labeling it Social Security. Madam President, this scares me to death. It is true. These are the trustees' estimates here. That is assuming a fairly rosy economic picture. If we hit a recession or depression during this period of time, it is going to be worse. And the deficits might actually start before then. But that is the best analysis that we can get at this time. Madam President, only the force of the Constitution can balance out the incentives for irresponsibility that dominate the Congress, and only the balanced budget amendment can save this country from being swallowed in debt. A vote for the balanced budget amendment is a vote for a stronger and a freer future for all Americans. When we began this debate, we had at least 68 Members of the Senate who committed and promised that they would vote for this amendment. We need 67. So we believe the votes should be here. We believe people are honorable and will honor their commitments when they ran for office and when they appeared before their families and friends and voting constituents within their respective States. They all knew at the time that this was the only amendment we could possibly pass. They all knew at the time that this is a bipartisan consensus amendment brought about by both Democrats and Republicans, and that we have worked for over 20 years on this amendment. They all knew at the time that this was the one time in history when we could really get this done. And I hope we do. I believe we will because I believe our fellow Senators will live up to the word that they gave to their constituents. Madam President, I yield the floor. Mr. LEAHY addressed the Chair. The PRESIDING OFFICER. The Senator from Vermont. Mr. LEAHY. Madam President, I wonder if I could ask the distinguished senior Senator from Utah a question. Shall we vote now? Mr. HATCH. We would be happy to do it, if the Senator wants to. Mr. LEAHY. Shall we call the roll? Mr. HATCH. Sure. That would be fine with me. Mr. LEAHY. It would be fine with me. Mr. HATCH. I do not think it would be fine with that side, but it would be fine with me. Mr. LEAHY. I suspect that you probably have at least one leader on that side who might not be in favor. Mr. HATCH. I will clear the way. Mr. LEAHY. Why not talk with him while I give my opening statement to see if we want to do that. Mr. HATCH. Let us let everybody say what they want to say about this on both sides, and at a reasonable time we would like to---- Mr. LEAHY. If the Senator would like to this afternoon---- Mr. HATCH. I will be happy to do it. Mr. LEAHY. Why not talk with him. Mr. HATCH. I will. Mr. LEAHY. And see if it could be cleared here, too. Madam President, last night in his State of the Union Address, the President of the United States spoke of the difference between taking action to balance the Federal budget and the political exercise of considering a constitutional amendment on balancing the budget. I mention this because the American people know there is a big difference between talking about a constitutional amendment to balance the budget, a big difference between talking about what you might or might not do, and actually doing it. Here is what President Clinton said. Balancing the budget requires only your vote and my signature. It does not require us to rewrite our Constitution. I believe it is both unnecessary and unwise to adopt a balanced budget amendment that would cripple our country in time of economic crisis and force unwanted results, such as judges halting Social Security checks or increasing taxes. Listen to what the President said. Balancing the budget requires only the vote of the Congress and his signature. This from a President who in the 22 years I have been here is the only President who has brought the deficit down 4 years in a row--the only President who has done that. In fact, if we were not paying the interest on the deficits run up during Presidents Reagan and Bush administrations, we would have a surplus today and not a deficit. In fact, I believe he is probably the only President in my lifetime, Republican or Democrat, who has 4 years in a row brought the deficit down and certainly the only one since the last President, a Democrat, who had a surplus. That was President Johnson. Deficits have run since then, and only President Clinton has brought them down four times in a row and is about to submit a budget which will bring the deficits down for the fifth time in a row. That is a record which certainly in modern times, certainly the postwar time, no President, Democrat, or Republican, has done and is a marked contrast to the two Republican Presidents who preceded him who tripled the national debt, who took all the debt from 200 years and tripled it in just 12 years. So President Clinton is committed to signing a balanced budget that protects America's values, honors our promises to seniors and our veterans and fulfills our responsibilities to the disadvantaged and the young. If this Congress, the 105th, will join him for the good of the Nation and the future, we can, in fact, be the Congress that finally balances the budget. Madam President, I would like to be part of that Congress, and I would like to see Democrats and Republicans work together to bring about that kind of a balanced budget. But that would mean each one of us, every man and woman in this body and every man and woman in the other body, will have to stand up and cast votes that are politically unpopular--not a vote that sounds very popular but does not cut a single program and does nothing to balance the budget. [[Page S998]] My good friend from Utah has talked about the public opinion polls that say how popular a balanced budget is. I support a balanced budget. I voted for more deficit reduction than most of the Members of this body. But wanting it and voting it can be sometimes two different things. It is easy to stand up, as we all do, in town meetings back home and say we want a balanced budget. It is very difficult to come back and face special interest groups on the right and left and say we are going to cast votes to achieve balance. This is not one of those tough votes. This proposed constitutional amendment is unnecessary, it is unwise, it is unsound, and it is dangerous. First, it demeans our Constitution. It will destabilize the power among our three branches of Government. That balance of power between our three branches of Government gives this, the greatest and most powerful democracy in history, its greatest protection. It would head us down the road to minority rule and undermine our constitutional democracy. It would likely result in a shifting of burdens, responsibilities and costs to State governments. Whether my own State of Vermont, the State of Maine, the State of Utah, or any other of the 50 States, these State governments are ill-equipped to assume the vast burdens of the Federal Government. Both because of what it would do and what it would not accomplish, adoption of this proposed 28th amendment to the U.S. Constitution would be wrong. Treasury Secretary Rubin testified that the proposed constitutional amendment would ``subject the Nation to unacceptable economic risks in perpetuity. It would be a terrible, terrible mistake for this country.'' Treasury Secretary Rubin commands the highest respect of both Republicans and Democrats and certainly within the financial community, and when he speaks of the unacceptable economic risks in perpetuity we ought to stop and listen to him. We should also listen to the 11 Nobel laureates in economics who joined 1,000 other economists who condemn the proposal as unsound and unnecessary. It is what the Los Angeles Times calls a false political star. Now, there are responsible ways to reduce our budget deficit, but focusing our attention on this proposed amendment only delays us from making progress on what are some very tough choices. This is the same old sleight of hand that we have witnessed around here since 1982 when people began voting for a constitutional amendment on the budget rather than to vote to balance the budget. A lot of people stood up to say, ``Yes, I voted to amend the Constitution to balance the budget.'' Hurrah, hurrah, how brave they are, but they cannot quite step up here and vote on these tough issues that actually do balance the budget. There is no magic in the proposed constitutional amendment. The magic is hard work. Reducing the deficit will take hard work, and it will require hard choices. Some may even use a ``feel good'' vote for this proposed amendment as the excuse to sit back and await the ratification process in the States, and then they would sit back and await the consideration of implementing legislation. Then they would sit back and await the consideration of budgets consistent with such implementing legislation. Then maybe, just maybe, they would start making the necessary cuts. Madam President, it is like some of the people who stand on the floor of this body or the other body and say that we have to amend the Constitution and have term limits. There are those who stand up and say, ``I have been arguing for term limits for 20 years,'' some who have been arguing term limits before some of the Members of this body were born, and they will keep on into the next century saying we have to have a constitutional amendment for term limits. I heard one Member of the House, who has been here, I think, 14 terms, say, ``If I do nothing before I leave here, we are going to get term limits--if it takes me another 14 terms to get term limits.'' What makes more sense, instead of looking for bumper sticker amendments and bumper sticker politics, is to cast votes that will cut the deficit now. Do not wait until the next century. I want to continue to lower the deficit now, not wait for two more election cycles to pass before balancing the budget sometime after the year 2002, which, incidentally, is the earliest date this amendment could be effective. We showed in the last two Congresses we could make progress in undoing the mistakes of the deficits-building decade of the 1980's without having this proposed amendment in the Constitution. For the first time since Harry Truman was President, the deficit has declined 4 years in a row and with the help of President Clinton we have reduced the deficit 63 percent over the last 4 years. We have reduced the deficit, as a percentage of our economy, from 4.7 to 1.4 percent. These may seem like just numbers, but what we have done is we have reduced the deficit as a percentage of our economy to the lowest among the world's industrialized countries. Instead of constantly standing up supporting this because it might sound like good politics, let us be honest with the people we represent. We have done better than any industrialized country in the world. As part of our efforts we passed legislation that saves tens of billions of dollars of taxpayer-financed Government programs. These are tough votes. For example, the distinguished senior Senator from Indiana, Senator Lugar, and I sponsored legislation that reorganized the U.S. Department of Agriculture to become a more efficient and effective agency. The Leahy-Lugar bill passed Congress at the end of 1994. It will result in saving over $3 billion, but it has to close 1,200 USDA field offices including, should anybody ask, a large number of offices in my home State of Vermont. What the distinguished Senator from Indiana and I did was not just to talk about it, we actually put together a piece of legislation which means in every single State in this country somebody is going to feel the pain. I know because I got letters from all over the country about it. But we passed it. Maybe some of the same people who so eagerly support this constitutional amendment should ask themselves, are they responsible for the huge and unprecedented budget deficits of the Reagan and Bush years? Many are. I am one of only five remaining Senators in this body who voted against the 1981 Reagan budget package that increased defense spending by a huge amount while cutting taxes by a huge amount and which, of course, caused our debt to explode. The 12 years following Reaganomics have left us with over $2.6 trillion in additional debt. Do we have a deficit today? Of course we do. If we did not have to pay the interest on the debt run up during President Reagan and President Bush's terms, we would have a surplus today. I commend, again, the President, who, while inheriting a huge national debt, a huge deficit, and a huge debt service when he came into office, has brought the deficit down. President Clinton has, four times in a row, brought the deficit down and is about to do it a fifth time in a row, something that none of us in our lifetime have seen. But this proposed constitutional amendment remains now what it was then: political cover for the failed policies of the 1980's and their tragic legacy. Those mistakes continue to cost our country hundreds of millions of dollars every workday in interest on deficits run up during the last two Republican administrations. Think of that--hundreds of millions of dollars every single workday just on interest alone based on the deficits of those years. As I said before, were it not for the interest on this debt, we would have had a balanced budget in each of the last several years. The proposed constitutional amendment contains no protection against the Federal Government seeking to balance its budget by shifting costs and burdens to the States. That is the ultimate budget gimmick--pass the buck to the States. The proposed constitutional amendment would be a prescription for disaster, especially for small States that are ill- equipped to handle the extra load. We know what happened in the 1980's; Federal contributions to State and local governments fell sharply, by about a third. During that same decade, my home State of Vermont had to make up the difference. We had to raise the State income tax rate from 23 to 28 percent. In addition, State and local property taxes and taxes of all kinds had to be increased. I remember talking to so many people in my State of Vermont, hard- [[Page S999]] working men and women, people who bring home a weekly paycheck and pay the mortgages, set money aside for their children to go to college. They keep our economy going. I said, ``Have you felt these huge tax cuts that we read you have gotten under Reaganomics?'' Except for a couple of my friends who, frankly, Madam President, make a heck of a lot more money than I do, they had not. In fact, what they had seen, the average person had seen their taxes go up. They saw Social Security taxes go up, they saw their local taxes go up, they saw their State taxes go up to cover the differences. That is not the way to cut the Federal deficit. It is the Federal deficit. You do not cut it by simply shifting the burdens to State and local government and telling them to raise the taxes on their people. Working people cannot afford tax increases any more just because they are imposed by State and local authorities and not by the Federal Government. While we passed unfunded mandates legislation last Congress, even that legislation offers insufficient protection. My concerns extend beyond new legislation that the lawyers determine include legally binding obligations. I am concerned as well about those programs that respond to the basic needs of individuals. Human needs are no less real because they are not set forth in a Federal statute. Hunger, cold, illness, the ills of the aged--these do not need statutory definition to cause suffering. With or without definition, they do cause suffering. If we try to balance the Federal budget by scaling back services, we are just as surely going to be shifting the costs and burdens of these unmet needs, as well as Federal mandates, on State and local governments. I know the people of Vermont are not going to let their neighbors go hungry or go without medical care, and I expect people elsewhere will not either. As much as our churches and synagogues and our charities and our communities will contribute, a large part of the problem and a large share of the costs are still going to fall to State and local governments. The distinguished majority leader in the other body, Richard Armey, said in 1995 that he did not want to spell out the effects of this constitutional amendment before it is passed because he is afraid that Congress would not vote to pass it if it knew what it would do. He later reinforced his remarks by warning supporters not to reveal where the necessary cuts would be made because knees would buckle. If we are going to be asked to consider this constitutional amendment, let us find out what the impact is likely to be. Certainly, before any State is called upon to consider ratification of such a constitutional amendment, we ought to know what the impact is going to be. Every State ought to be able to look at the debate here and our actions here and know what the impact is going to be if they ratify. Each State should be advised of the likely effects on its economy and, in particular, on personal income levels and job losses in that State. Let us get some of the answers. Let us know where we are headed. In fact, I believe this proposed constitutional amendment would invite the worst kind of cynical evasion and budget gimmickry. The experience of States that do have balanced budget requirements only bears this out. My State, which has one of the best credit ratings in the country, takes care of its budget without having in its State constitution a constitutional amendment to balance the budget. Because we know we have good times and bad times, we have provisions to set aside a rainy day fund. We know that there are things that we have to do in our small State economy at a time of recession to help. But look what happens with States with a balanced budget requirement. Many that do achieve compliance do so only with what the former comptroller of New York State calls dubious practices and financial gimmicks. These gimmicks include shifting expenditures to off-budget accounts, postponing payments to school district suppliers, delaying refunds to taxpayers, deferring contributions to pension funds, and selling State assets. The proposed constitutional amendment does not prohibit the Federal Government from using the same and other dubious practices and gimmicks. With Congress facing a constitutional mandate, the overwhelming temptation will be to exaggerate estimates of economic growth and tax receipts, underestimate spending, and engage in all kinds of accounting tricks as was done before the honest budgeting efforts of 1993. The result will be that those who do business with the Government may never be certain in what fiscal year the Government will choose to pay up or deliver, and those who rely on tax refunds can certainly expect extended delays from the IRS. Passing a constitutional directive that will inevitably encourage evasion is only going to invite public cynicism and scorn, and not just toward the Congress. That, Madam President, does bother me, since we represent one of the three branches of Government. What bothers me far more is cynicism toward the Constitution itself. None of us in this body owns the seat that we are in. We are all here for 6 years at a time. Some day we will leave, as we should, either by our own choice or because we are given an invitation to do so by the voters of our State. But while we are here, we have a responsibility to the institutions of this country, and certainly to our Constitution, an oath that we each take solemnly and without any reservation. (Mr. CRAIG assumed the chair.) Mr. LEAHY. Mr. President, we are, in some ways, an unprecedented country. No nation, no democracy has achieved the power that we have. In fact, in history, no country, democracy or otherwise, has had the great economy and the great power of the United States. But no other country has had a constitution like ours, a short constitution, a simple constitution, an understandable constitution. Since the Bill of Rights, it has only been amended 17 times. In one of those cases, it was amended for prohibition and then to repeal prohibition. I mention this because I think there is a definite connection between the greatness of the United States, the fact that we maintain our democratic principles and, notwithstanding our enormous power, a respect for Government and a respect for our Constitution based on the knowledge of that Government and that Constitution and not because a dictator and army tell us we have to. But that has meant that the men and women who have occupied these seats that we only temporarily occupy, the men and women who have occupied the seats in the other body that were only temporarily occupied, were wise enough--even though there were hundreds and hundreds of proposals over 200 years--were wise enough not to amend the Constitution willy-nilly, especially for those things that can be taken care of legislatively. As the President said last night, it only requires our vote and his signature for a balanced budget, not a constitutional amendment. Our predecessors on both sides of the aisle and our predecessors on both sides of the aisle in the other body were wise enough to refrain, no matter how popular it sounded or no matter how much it helped them in their elections, from amending the Constitution willy-nilly, especially for those things they knew they could do legislatively. It is one thing to amend the Constitution to limit the terms of Presidents or to set up successions when there is a vacancy in the Vice Presidency or the Presidency itself. Those are of constitutional import. But something we can do simply legislatively, why amend the Constitution? Let's not debase our national charter with a misguided political attempt to curry favor with the American people by this declaration against budget deficits. Let us not make the mistake of other countries and turn our Constitution into a series of hollow promises. We are too great a nation for that. We are too great a democracy for that, and the loopholes in Senate Joint Resolution 1 already abound. One need only consult the language of the proposed amendment and majority report for the first sets of exceptions and creative interpretations that will allow Congress to reduce the deficit only so far as Members choose to cast responsible votes. The Judiciary Committee reports that the Congress will have flexibility in implementing the constitutional amendment. It will leave the critical details to implementing legislation. [[Page S1000]] This proposed constitutional amendment uses the seemingly straightforward term ``fiscal year.'' But according to the committee report, this time period can mean whatever a majority in Congress wants it to mean. It has no immutable definition. It may mean one thing this year, and we may decide the next year it means something else. It can be shifted around the calendar as Congress deems appropriate. Watch out for the shifting of fiscal years in order to juggle accounts when elections are approaching. This proposed amendment gives congressional leeway to rely on estimates to balance the budget, to make temporary self-correcting imbalances and to ignore very small or negligible deficits. But what is temporary? What is self-correcting? What is small? What is negligible? With apologies to one of our distinguished predecessors, the Senator from Illinois, Senator Everett Dirksen, a billion here, a billion there; after a while, it does not add up. This is a lawyer's dream. What is negligible? We think a billion is negligible, and somebody sues, or a whole lot of people sue. My guess is that unless it becomes a political bone of contention between political parties as we approach an election, we could go a long time without Congress declaring itself in violation of this proposed amendment. What happens if the President of the United States says, ``Well, here are my estimates. My estimates are we are going to receive x number of dollars and my estimates are we are going to spend x number of dollars,'' and it turns out he is wrong? What do we do? Sue him? What happens if the Congress does the same thing? We estimate in our budget resolution we are going to receive x number of dollars and spend x number of dollars. What happens if we are wrong? Do all 535 Members go to jail or just those who voted for it? This proposed constitutional amendment could be economically ruinous. During a recession, deficits rise because tax receipts go down. But various Government payments, like unemployment insurance, go up. By contrast, the amendment would demand the taxes be raised and spending be cut during a recession or depression. It is almost like when President Herbert Hoover, as we started into a slight recession, said the thing that would give the most confidence to the country would be to force through a balanced budget. He did, and we went through the worst depression in this century. As Treasury Secretary Robert Rubin testified in the Judiciary Committee, ``the balanced budget amendment would turn slowdowns into recessions and recessions into more severe recessions or even depressions.'' Economic policy has to be flexible enough to change with a changing and increasingly global economy. But the requirements of this proposal would tie Congress' hands to address regional, national, and international problems. We should not hamstring the legislative power that is expressly authorized in article I, section 8, of the Constitution. Let us not undo that which our Founders wisely provided: flexibility. This proposed constitutional amendment risks seriously undercutting the protection of our constitutional separation of powers. No one has yet convincingly explained how the proposed amendment would work and what role would the President play and what role would the courts play in its implementation and enforcement? I can just see the new law school courses all over the country. How do you sue under the constitutional amendment? When you put the budget in the Constitution, economic policy would inevitably throw the Nation's fiscal policy into the courts. That is the last place issues of taxing and spending should be decided. Basically what it does is it destroys this delicate balance between the three branches of government: the executive, the legislative, and the judicial. I cannot understand why Members of Congress want to give up their powers to the judiciary, because the effect of the proposed amendment could be to toss important issues of spending priorities and funding levels to the President or to thousands of lawyers in hundreds of lawsuits in dozens of Federal and State courts. If approved, the amendment would have let Congress off the hook by kicking massive responsibilities for how tax dollars are spent to unelected judges and the President. Judge Robert Bork warned of the danger more than a decade ago. Again, Mr. President, why--why--would we give up the constitutional powers we have had for 200 years and give them over to the courts who do not want them and have not asked for them? So instead of creating future constitutional questions, let us do the job we were elected to do. Let us remember what the President said last night: You vote it, I sign it; we have a balanced budget. Simple as that. But it means we have to make the tough choices and cast the difficult votes and make progress toward a balanced budget. I worry, Mr. President, that perhaps some, because it is a lot easier, just vote for a constitutional amendment which has huge popularity. It is a lot easier to do that than to vote against a whole lot of programs where your vote is not popular. It is not popular to actually cast the votes to balance the budget. It is easy to cast the vote for the constitutional amendment. It is sort of like saying, ``I will vote today to eliminate cancer.'' Who disagrees with that? Or the person says, ``I'm against cancer. I don't want to give up smoking, but I'm against cancer.'' It is the difficult steps. This proposed constitutional amendment undermines the fundamental principle of majority rule by imposing a three-fifths supermajority vote to adopt certain budgets and raise the debt limit. Again, has anybody read a history book in this body? Has anybody found out how this country started? Go back to our Founders. Our Founders rejected such supermajority voter requirements on matters that are within Congress' purview. Alexander Hamilton described supermajority requirements as poison. I sometimes wonder if anybody around here even knows who Alexander Hamilton or Thomas Jefferson, George Washington or these people were. Hamilton observed that: Supermajority requirements serve to destroy the energy of the Government and to substitute the pleasure, caprice or artifices of an insignificant, turbulent or corrupt junto to the regular deliberations and decisions of a respectable majority. These supermajority requirements are a recipe for increased gridlock, not more efficient action. If there are some in here who have not read The Federalist Papers, just recall the lessons of the last 2 years when the Government was shut down by a determined minority intent on getting its way. The Nation was pushed to the brink of default when a group pledged that, no matter what, they would not vote on raising the debt limit, they were going to let the Government be shut down. Whether it was political or they went out the wrong door in an airplane or whatever, they shut down the Federal Government. That cost taxpayers hundreds of millions of dollars. It certainly cost everybody in private enterprise in this area, just about any area in the country, hundreds of millions of dollars more. We looked ridiculous to the rest of the world. But all because a minority made that determination. Such supermajority requirements reflect a basic distrust, not just of Congress, but of the electorate itself. I reject that notion. I have faith in the electorate. I am prepared to keep faith with and in the American people. Mr. President, we have also said that ``The devil is in the details.'' I believe Emerson first said that. The proposed constitutional amendment uses such general terms even its sponsors concede that implementing legislation will be necessary to clarify how it is going to work. So we ask, what will the implementing legislation say? Well, we are not going to find out until we see the implementing legislation. Basically this says, ``Trust us. Pass this. And we'll tell you afterward what it means.'' That is kind of like somebody saying, ``I'll sell you this business. Would you sign this contract in blank? Give me all your money, but I will fill in the terms afterward.'' I am a Vermonter. We just do not quite do it that way back home. We trust each other, but we kind of like to see the details. The questions raised by this proposed constitutional amendment still lack satisfactory answers. [[Page S1001]] For example, what programs are going to be off budget? What role will the courts and what role will the President have in executing and enforcing the amendment? How much of our constitutional power do we give up? What is really compliance with the amendment? How much of a deficit may be financed and then carried over to the next year? There are a lot of questions like these that are critical to our understanding of this amendment. And they have not been answered. Should Congress be asked to amend the Constitution by signing what amounts to a blank check? I disagree with that. No Congress should be asked to do that. Nor should each State be asked to ratify a pig in a poke. In the interest of fair disclosure, Congress should first determine the substance of any implementing legislation as it did in connection with the 18th amendment, the other attempt to draft a substantive behavioral policy into the Constitution. Let us go look at the implementing legislation first. In my view, this amendment does not meet the requirements of article V of the Constitution for proposals to the States because it is not constitutionally necessary. It is only with resolve and hard work that we make progress. Neither is evident in the proposed constitutional amendment. I have heard some of the speeches about why it would be good politics, popular politics to vote for this. Politics--good, popular or otherwise--have no place when we are dealing with the Constitution of the United States. We inherited a great legacy from those who went before us because they resisted the temptation to play politics and to amend our Constitution willy-nilly. As a result, we are the greatest and strongest democracy history has ever known. The bedrock of it is our Constitution, which sets up three branches of Government, with powers that make sure there are checks and balances. This amendment destroys so much of what this country has rested on for over 200 years. So instead of a bumper sticker for the Constitution, what we need is the wisdom to ask what programs we must cut, and the courage to explain to the American people that there is no procedural gimmick that can cut the deficit or the debt. There is no nice, easy self-serving item. There is only hard work. But I think the American people would rather have the hard work than have us fool around with our Constitution. Yesterday the Wall Street Journal printed an editorial titled ``Constitutional boondoggle'' in its editorial page. The editorial says: We do need to get the national debt declining . . . I agree. We do need to restrain federal spending. Again, Mr. President, I agree. We do need to resolve the Medicare crisis . . . Mr. President, I agree. We do need to look beyond the year 2002. Mr. President, I agree. But then they said: But these battles have to be fought one by one, and [they] can't be solved by amending the Constitution. Once again, Mr. President, I agree. The Wall Street Journal editorial concludes: The concept embodied in the proposed [constitutional] amendment measures nothing useful; it is at best a distraction, and at worst, causes confusion that makes the right things harder to do, not easier. I ask unanimous consent the Wall Street Journal editorial be printed in the Record immediately after my remarks. The PRESIDING OFFICER (Mr. Faircloth). Without objection, it is so ordered. (See exhibit 1.) Mr. LEAHY. Mr. President, think back again to last night's State of the Union address. The President said all it takes is for us to cast the votes and for me to sign the bill to balance the budget. Many of us who cast those tough votes to cut programs, to bring the deficits down, have faced in the short term the wrath of our constituents but in the long term a realization that we have done the right thing for the country. I am proud that I have voted for budgets that have now, 4 years in a row, brought down the deficits, something that has not happened certainly in the last 15 years or so. We have had a President who has had the courage to give us four budgets in a row that bring down the deficits. They have meant tough votes. Some Members who voted to bring down the deficit have probably lost elections because of those tough votes. How much better they have been to themselves, to their children and their children's children because they resisted the temptation, as Senators and Representatives have for over 200 years, to amend our Constitution unnecessarily. So let us not proceed to a view of short-run popularity but with a vision of our responsibilities to our constituents and the Nation in accordance with our cherished Constitution. Mr. President, first and foremost I am going to cast votes on this floor to protect that Constitution, popular or otherwise. I take my oath of office seriously. I appreciate the privilege the people of Vermont have given me to represent them in this body. There is nothing I will ever do in my life that will make me as proud as being in this body representing the people of Vermont. As I have told the people of Vermont in each one of my elections, I will protect the Constitution first and foremost. As I told them in my last two elections, I will vote against this constitutional amendment because it does not protect our country, it demeans the Constitution, and it lets us off the hook from doing the things that we really should do. I yield the floor. Exhibit 1 [From the Wall Street Journal, Feb. 4, 1997] Constitutional Boondoggle With President Clinton about to deliver his State of the Union Address and new budget, this is an apt moment to say that the President is right and the Republicans are wrong on item one of the GOP Congressional agenda. The balanced budget amendment is a flake-out. The notion of amending the Constitution to outlaw budget deficits is silly on any number of counts. Politically it's empty symbolism. Legally it clutters the Constitution with dubious prose. Today's lesson, though, concerns economics and accounting. You can't measure economic rectitude by any one number, let alone the ``deficit,'' however defined, let alone the deficit projections the proposals will inevitably involve in practice. The attempt to enshrine such a number in the Constitution is bound to prove a snare and a delusion. The proposal passed by the Senate Judiciary Committee says that outlays (``except for those for repayment of debt principal'') shall not exceed receipts (``except those derived from borrowing''). While this concept sounds simple, in fact it reflects neither accounting principles nor economic reality. If you can balance your family budget, the thinking goes, the government can balance the federal budget. But applying the budget amendment's principles to households would outlaw home mortgages, which have proved a boon to countless families and the general economy. What a family balances is its operating budget, a concept foreign to the federal accounts. In corporate accounting, similarly, the health of an enterprise is measured by careful distinctions such as accruals or depreciation. Even the balanced budget restraints of state and local governments exclude spending on capital improvements financed by bond issues approved by voters. The reality is that borrowing money is not a sin; it depends on how much money, and in particular on the uses of the borrowed funds. Even the amendment itself recognizes this by allowing Congress to waive the amendment by majority vote when war is declared or when a joint resolution declares ``a military conflict which causes an imminent and serious military threat to national security.'' Other emergencies would presumably be dealt through the provision that Congress could approve borrowing by a two-thirds vote. Republicans back the amendment because it scores well with focus group participants, who don't understand the difficulties, and with Ross Perot, who doesn't care. They also hope that limiting the government's power to borrow will force it to limit spending. Democrats seem pretty much to agree, and want to voice support for the amendment to appease focus groups while also killing it to avoid a spending straitjacket. We're not so sure. For one thing, we've observed how European politicians, even supposedly conservative ones, have been behaving toward the budget-deficit requirements they imposed on themselves in the Maastricht agreement. To get within the numerical criteria, the Italians are taking their railroads off and on budget; the French government, in return for an infusion of funds this year, assumed pension obligations running into the far future. Governmental accounting, you see, simply counts formal government debt; it ignores unfunded governmental promises. This is a loophole enormous enough that Rep. Fernand St Germain could drive half of [[Page S1002]] the S crisis through it in one night in 1980, when he doubled deposit-insurance limits. Another enormous loophole is the government's ability to offload, or ``mandate,'' costs on corporations, individuals and state and local governments without running any receipts or outlays through the Washington books. And when the bill for Rep. St Germain's coup suddenly came due in 1989, would it really have been better to avoid borrowing and put the rest of the government through a temporary wringer? These imperfections might not matter if the amendment did no harm, but it's easy enough to imagine scenarios in which it would keep us from doing the economically right thing. Take the proposals by the most conservative bloc in the recent Social Security Commission. They would allow current taxpayers to personally invest part of what they owe in payroll tax, giving them a better return. But meeting obligations to those retiring before their benefits were funded would require a big issue of government debt. The new debt would merely formally recognize current obligations, and the privatization would dramatically reduce future obligations. Though this transaction would plainly improve the federal fisc, the balanced budget amendment would outlaw it. Or for that matter, take the Reagan defense build-up, which led to victory in the Cold War. The balanced budget amendment would have allowed a majority to vote for borr

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BALANCED BUDGET AMENDMENT TO THE CONSTITUTION
(Senate - February 05, 1997)

Text of this article available as: TXT PDF [Pages S994-S1015] BALANCED BUDGET AMENDMENT TO THE CONSTITUTION The PRESIDING OFFICER. Under the previous order, the hour of 3 p.m. having arrived, the Senate will now proceed to the consideration of Senate Joint Resolution 1 for debate only. The clerk will report. The assistant legislative clerk read as follows: A joint resolution (S.J. Res. 1) proposing an amendment to the Constitution of the United States to require a balanced budget. The Senate proceeded to consider the joint resolution. The PRESIDING OFFICER. The Senator from Utah. Privileges of the Floor Mr. HATCH. Madam President, I ask unanimous consent that Manus Cooney, Sharon Prost, Shawn Bentley, Paul Larkin, Larry Block, Steve Tepp, Troy Dow, and Paul Joklik be permitted privileges of the floor for the duration of the debate. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. HATCH. Madam President, today we begin one of the most important debates that has ever taken place in the U.S. Senate or in the Congress of the [[Page S995]] United States. The subject matter goes to the very heart of our Founding Fathers' hope for our constitutional system--a system that would protect individual freedom through the maxim of limited Government. In the latter half of this century, however, the intentions of the Framers of the Constitution have been betrayed by the Congress' inability to control its own spending habits. The size of this Federal leviathan has grown to such an extent that the very liberties of the American people are threatened. I just stood at a press conference with our Democratic cosponsors of this amendment, and there was a huge table filled with unbalanced budgets since 1969. History was made in the 104th Congress when 300 of our courageous colleagues in the House of Representatives, both Democrats and Republicans, approved a balanced budget amendment to the Constitution. Unfortunately, the same measure was defeated in this Chamber by one solitary single vote. This year we begin a new Congress following an intensive fall campaign in which people in every State across this Nation made unmistakably clear their insistence that we put our fiscal house in order. The eyes of the people, now more than two-thirds of whom favor a balanced budget amendment, now turn to us to follow through on our promises. I am pleased to be joined by 61 of my colleagues, including every Republican Senator in the U.S. Senate and 7 bold Democrats who have done exactly that in sponsoring Senate Joint Resolution 1, the balanced budget constitutional amendment. Madam President, as we begin the debate on Senate Joint Resolution 1 proposing an amendment to the U.S. Constitution to require balanced annual Federal budgets, I want to summarize why I feel this amendment should be added to the basic great law of this great Nation. Let me say that as a lifelong student of the Constitution and having served on the Judiciary Committee in this body during my tenure here of 20 years, I do not lightly suggest amending our founding document. Yet, all other avenues having failed us, I believe it appropriate to take recourse to our basic charter to rein in an abused power of the purse-- as has been done in similar situations in our history since the Magna Carta--in order that we might save future generations from the heavy burden of irresponsible Government borrowing. Madam President, let me just summarize the reasons I believe the proposed balanced budget amendment should be presented to the States for ratification. We have to have a two-thirds vote in both of the bodies and submit this amendment to the States, and we have to get three-quarters of them to ratify the amendment before it can be entered into the Constitution. It is a tough process. It ought to be a tough process. These are some of the reasons why I believe this amendment should be presented to the States for their ratification: No. 1, integrity and accountability. It will bring immediate credibility to our current budget process and negotiations, and it will restore a measure of integrity and accountability to our Government. No. 2, our children's future. Passing the balanced budget constitutional amendment is a vote for our children's economic freedom. No. 3, family financial security. Passing the balanced budget amendment will improve the economic health and stability of all American families. No. 4, economic strength. The stabilizing effect the balanced budget amendment will have on the economy is clear, and it will enable us to rein in the level of our country's foreign-held debt. No. 5, retirement security. If we pass this balanced budget constitutional amendment it will literally save Social Security. It will stabilize the economy which will benefit all current and future retirees. Without it, all of these programs will be placed in jeopardy. Now let me describe these reasons in more detail. On the issue of integrity and accountability, our national debt is rocketing out of control and the American people are paying a very heavy price for it. As you can see by this chart, the debt was relatively stable for many decades, up to about 1970, a little bit before 1970. In recent years the debt has increased at alarming rates under the watch of both political parties. The fact is, our deficits have been structural and they will not be eliminated in the long run without the discipline of a balanced budget constitutional amendment. They really shot up in the 1980's, right on through the 1990's, and still that arrow is going almost straight up, even today, even with the efforts and actions that have been taken. Since 1978, there have been no fewer than five major statutory schemes or regimes enacted which promised to deliver balanced budgets, and these include Gramm-Rudman-Hollings. But there has not been a single balanced budget since 1969, which was the only balanced budget since 1960. While I support the steps we have taken to pass the balanced budget plan, I question whether, without the weight of a constitutional requirement to balance the budget, we will achieve balance by the year 2002. Without a balanced budget amendment, every year Congress has to act, and we have seen the lack of will to do what's right around here. For this reason, I feel passage of the balanced budget amendment is critical. Let's just acknowledge what every American citizen knows. In recent decades, Washington has been biased to spending, without feeling any constraints by the amount of money it actually has on hand. Washington has lost the habit of prioritized spending options. Any ideas with political appeal get enacted regardless of cost. We borrow the money if we run short. That is what we have been doing for most of the last 60 years. Those listening could try this thinking on their own budgets at home. Buy any item that looks appealing next time you are at the mall. Just put it on the card. What happens to your budget? Something like this chart probably, but hopefully not quite so high. Washington, however, is not as constrained as the average American. Washington spends in this way, and when the bill comes, it signs the debt over to the American people. In addition to paying their own bills, the American people have to pay Washington's bills in the form of higher taxes, of course, and accumulated debt. They also pay them in the form of higher interest rates on their homes, their cars, or student loans. They pay in the form of lower job growth, lower wages, and they even pay in the form of decreased services from the Government because more of the budget is being spent on interest rather than on education, health care, job training, child care, the environment, et cetera. The point is that Americans are getting fed up with Washington because they feel the pinch put on them by Washington's spendthrift ways. They know they have to make hard choices about how they will spend their own money, but they feel that Washington does not feel constrained to make hard choices about spending priorities. It's not even Washington's own money that it's spending so freely; it is the American people's money. No wonder the American people are tired of it. Besides being dismayed by Washington's free spending habits, the American people also believe that Washington is not accountable for its decisionmaking. The balanced budget amendment responds to both of these concerns. On this chart is the actual text of the balanced budget amendment before the Senate at this time. This balanced budget amendment will require Washington to make tough choices about spending priorities within the constraint of the amount of money it has, or it requires Members of Congress to go on record for its borrowing and taxing decisions. There will be no more voice votes when it comes to raising taxes. There will be no more voice votes when it comes to raising the deficit. You are going to have to stand up and vote. This amendment will see to that. It also requires Congress to achieve some measure of increased consensus about spending priorities if it is going to finance that spending by borrowing. The concept is simple: Don't borrow, unless a significant number of Members are willing to go on record as saying this spending is such a priority that we must borrow to do it. That would go a long way toward letting Americans know that their Government is deliberating about its spending [[Page S996]] habits, making choices among competing options, and only spending beyond its means when it really needs to in order to achieve a goal so important that a supermajority of Members could agree. The balanced budget amendment will go a long way toward restoring the people's faith in the integrity of our budget process and in the accountability of Washington for its decisions. A vote for the balanced budget amendment is a vote for integrity and accountability in Washington. Now, our children's future. Our national debt now tops $5.3 trillion. That averages out to about $20,000 in debt for every man, woman, and child in America. That is what our fiscal insanity has brought us to. A child born in America today comes into this world $20,000 in debt--and that is going up. Do we have the right to spend our children's future for our own comfort today? Over time, the disproportionate burdens placed or imposed on today's children and their children by a continuing pattern of deficits could include some combination of the following: Increased taxes, reduced public welfare benefits, reduced pensions and Social Security benefits, reduced benefits or expenditures on infrastructure and other public investments, diminished capital formation, diminished job creation, diminished productivity enhancement and less real wage growth in the private economy, higher interest rates, higher inflation, increased indebtedness to and economic dependence on foreign creditors, and increased risk of default on the Federal debt. Madam President, I have said this in the past. This is ``fiscal child abuse'' and it must end. It is our children's future versus Washington's spending addiction. I hope the Senate of the United States will come down overwhelmingly on the side of our children's future by passing this amendment. A vote for the balanced budget amendment is a vote for our children's economic security. Now, what about family financial security? It is not just our children that we hurt with these outrageous deficits. We are suffocating our own families. The impact of higher interest rates, higher taxes, lower wage and job growth, and higher mortgages are felt at kitchen tables all across America. The Concord Coalition has estimated that the interest payments on our mountainous debt amount to $5,360 a year for a family of four. Just to pay the interest against our national debt, it's $5,360 a year. Chairman Kasich of the House Budget Committee has pointed out that three of the causes of the ``middle class squeeze''--high taxes, counterproductive Government spending policies, and anemic wage growth--are at least partly caused by continued borrowing by the Federal Government. He points out that the baby boom generation pays taxes that are at least 50 percent higher than those paid by their grandparents. Real per hour wages inched up just one-third of 1 percent annually over the past 4 years, which is one-seventh the rate of growth in the period between 1960 and 1974, and productivity over the past 4 years grew at only one-fifth the rate of that same period. Economist Lester Thurow noted that the one-earner middle-class family is extinct and explains that almost one-third of all men between the ages of 25 and 34 make less each year than is required to keep the average family of four above the poverty level. These combined pressures tear at the very fabric of our Nation and our families. By contrast, implementing the balanced budget amendment will lower interest rates, making it easier for our families to pay their mortgages, their car loans, and their student loans. Economist at DRI- McGraw-Hill estimate that a balanced budget rule would result in a 2- percent drop in interest rates. Now, DRI-McGraw-Hill is one of the best econometric groups in the country. A balanced budget rule would mean annual savings of $1,230 on a middle-class family's home mortgage, $216 each year for an average student loan, and $180 each year on the average car loan. The good effects of our overall economic health will help family budgets in many other possible forms, such as a higher paycheck, more job opportunity or security, lower taxes in the future, and a greater ability to save and invest for the future. The Joint Economic Committee has estimated that the average American family would have an additional $1,500 a year if we implemented a balanced budget rule. A balanced budget amendment will make it easier for American families to afford a house, a car, or to send a child to college. This offers a real way to relieve the pressure on American families who are struggling to stay together and get ahead. A vote for the balanced budget amendment is a vote for the economic health and stability of American families. Now, economic stability. Economists from all over this country agree that the balanced budget amendment should pass. They agree that ``we have lost the moral sense of fiscal responsibility that served to make formal constitutional restraints unnecessary.'' Hundreds of economists support the balanced budget amendment as being good for the national economy by increasing both investor and business confidence, both foreign and domestic. Some economists are against us on the balanced budget amendment. As a general rule, they are academics who depend upon the Government in many ways for their moneys and in many respects love the spending practices of the Federal Government. Not all--some sincerely worry about the amendment. But there are also many, many who worry that if we do not pass the amendment we are really going to be in trouble, and economic stability will be threatened. If the Government would stop borrowing so much money, interest rates would come down and money would be available for businesses to invest in creating jobs and paying higher wages. The Director of the Congressional Budget Office, June E. O'Neill, has testified recently that ``balancing budget will induce favorable changes in the economy,'' and among those favorable changes she specifically pointed to ``interest rates, economic growth, and the share of GDP represented by corporate profits.'' All of this can put real money in the pockets of real people, including small business owners and employees. CBO Director O'Neill has also suggested that taking action now to balance the budget can assure greater budgetary stability in the future. Greater budget stability means greater tax stability. And that means that Americans, and their families, and the businesses they own, can plan for the future better, with less risk that shifting tax policy will wipe out their plans in unforeseen ways. At the very least, this will save Americans substantial amounts on tax attorneys. But long-term planning, with less risk from shifting tax policy, can pay dividends throughout the economy. Decreasing our dependence on debt to finance Government activities will also increase our national economic sovereignty. Interest payments on our debt are increasingly leaving the country. This chart, based on Treasury Department statistics, shows that from 1992 to 1995, the portion of our debt held by foreign interests has increased 28 percent. That is money that leaves the United States, thus weakening our national economy, and perhaps slowly jeopardizing our national independence. It has been said, ``It is tough to get tough with your banker.'' The less we borrow from foreigners, the less dependent we are on foreigners, and the more independent we will be as a nation. By returning honesty to budgeting, the balanced budget amendment will improve our economy and our economic independence. retirement security The balanced budget amendment is important to current and future retirees. This is a very important chart because this chart is based on the Social Security trustees' intermediate projections. As you can see here, while we run modest yearly surpluses until the year 2015--down here is the 2015, and the green shows the moderate surpluses above zero, we get to 2015. The long-term projections are mammoth annual deficits--the red line--mammoth annual deficits that start about the year 2015, if we are lucky. That is assuming a rosy economic picture over the next 19 years. The long-term projections are for mammoth annual deficits projected at current dollars at as much as $7 trillion for today's children when they retire. [[Page S997]] The word ``trust'' in the Social Security trust fund refers to the trust retirees repose in the Government to meet its future obligations. We will be hard pressed to meet our obligations if we do not get our debt under control now and force ourselves to avoid the growth of debt in the future. The balanced budget amendment will force and empower us to meet these future obligations. In addition, the economic benefits of the amendment will benefit current and future retirees who are increasingly relying on private financial investments for retirement security. There are 34 million households that have invested in the stock market in some form. As financial expert Jim Cramer notes, if you have a pension, it's likely that it's invested in stocks. If you have a 401K plan, it's probably invested in stocks. Worth magazine's Ken Kurson points out that in 1996, 34 percent of households headed by someone under 35 had some sort of mutual fund. Simply put, many Americans are relying less on Government and more on themselves and their own investments for their retirement security. The balanced budged amendment will strengthen the markets and the investments these Americans are relying on. No matter the source of retirement security, the balanced budget amendment will benefit current and future older Americans. Some have argued that we should take Social Security out of the purview of the balanced budget amendment. They argue that we should take the highest items in the Federal budget and the most important item in the Federal budget out of the budget because they think that might protect Social Security. Give me a break. That is not going to protect Social Security. It is going to jeopardize it, because what happens is that if we take it out now, even the President has admitted that you cannot balance the budget by the year 2002 if you do not keep Social Security in the total unified budget. So it is a gradual way that we get there, and if we get there, then Social Security will be much more stable. When we get to these years when it starts to drop off, we have to take care of it, and, frankly, we have to do it within reasonable constraints and do it right. The fact is that some argue that we should keep Social Security in the amendment until the year 2003 and then all of a sudden take it out when all of these deficits occur. The reason they want that is so they can keep spending. As far as everybody knows, if we take Social Security out of the purview of the balanced budget, we would be creating the biggest loophole in the history of this country and they could spend anything they want by simply labeling it Social Security. Madam President, this scares me to death. It is true. These are the trustees' estimates here. That is assuming a fairly rosy economic picture. If we hit a recession or depression during this period of time, it is going to be worse. And the deficits might actually start before then. But that is the best analysis that we can get at this time. Madam President, only the force of the Constitution can balance out the incentives for irresponsibility that dominate the Congress, and only the balanced budget amendment can save this country from being swallowed in debt. A vote for the balanced budget amendment is a vote for a stronger and a freer future for all Americans. When we began this debate, we had at least 68 Members of the Senate who committed and promised that they would vote for this amendment. We need 67. So we believe the votes should be here. We believe people are honorable and will honor their commitments when they ran for office and when they appeared before their families and friends and voting constituents within their respective States. They all knew at the time that this was the only amendment we could possibly pass. They all knew at the time that this is a bipartisan consensus amendment brought about by both Democrats and Republicans, and that we have worked for over 20 years on this amendment. They all knew at the time that this was the one time in history when we could really get this done. And I hope we do. I believe we will because I believe our fellow Senators will live up to the word that they gave to their constituents. Madam President, I yield the floor. Mr. LEAHY addressed the Chair. The PRESIDING OFFICER. The Senator from Vermont. Mr. LEAHY. Madam President, I wonder if I could ask the distinguished senior Senator from Utah a question. Shall we vote now? Mr. HATCH. We would be happy to do it, if the Senator wants to. Mr. LEAHY. Shall we call the roll? Mr. HATCH. Sure. That would be fine with me. Mr. LEAHY. It would be fine with me. Mr. HATCH. I do not think it would be fine with that side, but it would be fine with me. Mr. LEAHY. I suspect that you probably have at least one leader on that side who might not be in favor. Mr. HATCH. I will clear the way. Mr. LEAHY. Why not talk with him while I give my opening statement to see if we want to do that. Mr. HATCH. Let us let everybody say what they want to say about this on both sides, and at a reasonable time we would like to---- Mr. LEAHY. If the Senator would like to this afternoon---- Mr. HATCH. I will be happy to do it. Mr. LEAHY. Why not talk with him. Mr. HATCH. I will. Mr. LEAHY. And see if it could be cleared here, too. Madam President, last night in his State of the Union Address, the President of the United States spoke of the difference between taking action to balance the Federal budget and the political exercise of considering a constitutional amendment on balancing the budget. I mention this because the American people know there is a big difference between talking about a constitutional amendment to balance the budget, a big difference between talking about what you might or might not do, and actually doing it. Here is what President Clinton said. Balancing the budget requires only your vote and my signature. It does not require us to rewrite our Constitution. I believe it is both unnecessary and unwise to adopt a balanced budget amendment that would cripple our country in time of economic crisis and force unwanted results, such as judges halting Social Security checks or increasing taxes. Listen to what the President said. Balancing the budget requires only the vote of the Congress and his signature. This from a President who in the 22 years I have been here is the only President who has brought the deficit down 4 years in a row--the only President who has done that. In fact, if we were not paying the interest on the deficits run up during Presidents Reagan and Bush administrations, we would have a surplus today and not a deficit. In fact, I believe he is probably the only President in my lifetime, Republican or Democrat, who has 4 years in a row brought the deficit down and certainly the only one since the last President, a Democrat, who had a surplus. That was President Johnson. Deficits have run since then, and only President Clinton has brought them down four times in a row and is about to submit a budget which will bring the deficits down for the fifth time in a row. That is a record which certainly in modern times, certainly the postwar time, no President, Democrat, or Republican, has done and is a marked contrast to the two Republican Presidents who preceded him who tripled the national debt, who took all the debt from 200 years and tripled it in just 12 years. So President Clinton is committed to signing a balanced budget that protects America's values, honors our promises to seniors and our veterans and fulfills our responsibilities to the disadvantaged and the young. If this Congress, the 105th, will join him for the good of the Nation and the future, we can, in fact, be the Congress that finally balances the budget. Madam President, I would like to be part of that Congress, and I would like to see Democrats and Republicans work together to bring about that kind of a balanced budget. But that would mean each one of us, every man and woman in this body and every man and woman in the other body, will have to stand up and cast votes that are politically unpopular--not a vote that sounds very popular but does not cut a single program and does nothing to balance the budget. [[Page S998]] My good friend from Utah has talked about the public opinion polls that say how popular a balanced budget is. I support a balanced budget. I voted for more deficit reduction than most of the Members of this body. But wanting it and voting it can be sometimes two different things. It is easy to stand up, as we all do, in town meetings back home and say we want a balanced budget. It is very difficult to come back and face special interest groups on the right and left and say we are going to cast votes to achieve balance. This is not one of those tough votes. This proposed constitutional amendment is unnecessary, it is unwise, it is unsound, and it is dangerous. First, it demeans our Constitution. It will destabilize the power among our three branches of Government. That balance of power between our three branches of Government gives this, the greatest and most powerful democracy in history, its greatest protection. It would head us down the road to minority rule and undermine our constitutional democracy. It would likely result in a shifting of burdens, responsibilities and costs to State governments. Whether my own State of Vermont, the State of Maine, the State of Utah, or any other of the 50 States, these State governments are ill-equipped to assume the vast burdens of the Federal Government. Both because of what it would do and what it would not accomplish, adoption of this proposed 28th amendment to the U.S. Constitution would be wrong. Treasury Secretary Rubin testified that the proposed constitutional amendment would ``subject the Nation to unacceptable economic risks in perpetuity. It would be a terrible, terrible mistake for this country.'' Treasury Secretary Rubin commands the highest respect of both Republicans and Democrats and certainly within the financial community, and when he speaks of the unacceptable economic risks in perpetuity we ought to stop and listen to him. We should also listen to the 11 Nobel laureates in economics who joined 1,000 other economists who condemn the proposal as unsound and unnecessary. It is what the Los Angeles Times calls a false political star. Now, there are responsible ways to reduce our budget deficit, but focusing our attention on this proposed amendment only delays us from making progress on what are some very tough choices. This is the same old sleight of hand that we have witnessed around here since 1982 when people began voting for a constitutional amendment on the budget rather than to vote to balance the budget. A lot of people stood up to say, ``Yes, I voted to amend the Constitution to balance the budget.'' Hurrah, hurrah, how brave they are, but they cannot quite step up here and vote on these tough issues that actually do balance the budget. There is no magic in the proposed constitutional amendment. The magic is hard work. Reducing the deficit will take hard work, and it will require hard choices. Some may even use a ``feel good'' vote for this proposed amendment as the excuse to sit back and await the ratification process in the States, and then they would sit back and await the consideration of implementing legislation. Then they would sit back and await the consideration of budgets consistent with such implementing legislation. Then maybe, just maybe, they would start making the necessary cuts. Madam President, it is like some of the people who stand on the floor of this body or the other body and say that we have to amend the Constitution and have term limits. There are those who stand up and say, ``I have been arguing for term limits for 20 years,'' some who have been arguing term limits before some of the Members of this body were born, and they will keep on into the next century saying we have to have a constitutional amendment for term limits. I heard one Member of the House, who has been here, I think, 14 terms, say, ``If I do nothing before I leave here, we are going to get term limits--if it takes me another 14 terms to get term limits.'' What makes more sense, instead of looking for bumper sticker amendments and bumper sticker politics, is to cast votes that will cut the deficit now. Do not wait until the next century. I want to continue to lower the deficit now, not wait for two more election cycles to pass before balancing the budget sometime after the year 2002, which, incidentally, is the earliest date this amendment could be effective. We showed in the last two Congresses we could make progress in undoing the mistakes of the deficits-building decade of the 1980's without having this proposed amendment in the Constitution. For the first time since Harry Truman was President, the deficit has declined 4 years in a row and with the help of President Clinton we have reduced the deficit 63 percent over the last 4 years. We have reduced the deficit, as a percentage of our economy, from 4.7 to 1.4 percent. These may seem like just numbers, but what we have done is we have reduced the deficit as a percentage of our economy to the lowest among the world's industrialized countries. Instead of constantly standing up supporting this because it might sound like good politics, let us be honest with the people we represent. We have done better than any industrialized country in the world. As part of our efforts we passed legislation that saves tens of billions of dollars of taxpayer-financed Government programs. These are tough votes. For example, the distinguished senior Senator from Indiana, Senator Lugar, and I sponsored legislation that reorganized the U.S. Department of Agriculture to become a more efficient and effective agency. The Leahy-Lugar bill passed Congress at the end of 1994. It will result in saving over $3 billion, but it has to close 1,200 USDA field offices including, should anybody ask, a large number of offices in my home State of Vermont. What the distinguished Senator from Indiana and I did was not just to talk about it, we actually put together a piece of legislation which means in every single State in this country somebody is going to feel the pain. I know because I got letters from all over the country about it. But we passed it. Maybe some of the same people who so eagerly support this constitutional amendment should ask themselves, are they responsible for the huge and unprecedented budget deficits of the Reagan and Bush years? Many are. I am one of only five remaining Senators in this body who voted against the 1981 Reagan budget package that increased defense spending by a huge amount while cutting taxes by a huge amount and which, of course, caused our debt to explode. The 12 years following Reaganomics have left us with over $2.6 trillion in additional debt. Do we have a deficit today? Of course we do. If we did not have to pay the interest on the debt run up during President Reagan and President Bush's terms, we would have a surplus today. I commend, again, the President, who, while inheriting a huge national debt, a huge deficit, and a huge debt service when he came into office, has brought the deficit down. President Clinton has, four times in a row, brought the deficit down and is about to do it a fifth time in a row, something that none of us in our lifetime have seen. But this proposed constitutional amendment remains now what it was then: political cover for the failed policies of the 1980's and their tragic legacy. Those mistakes continue to cost our country hundreds of millions of dollars every workday in interest on deficits run up during the last two Republican administrations. Think of that--hundreds of millions of dollars every single workday just on interest alone based on the deficits of those years. As I said before, were it not for the interest on this debt, we would have had a balanced budget in each of the last several years. The proposed constitutional amendment contains no protection against the Federal Government seeking to balance its budget by shifting costs and burdens to the States. That is the ultimate budget gimmick--pass the buck to the States. The proposed constitutional amendment would be a prescription for disaster, especially for small States that are ill- equipped to handle the extra load. We know what happened in the 1980's; Federal contributions to State and local governments fell sharply, by about a third. During that same decade, my home State of Vermont had to make up the difference. We had to raise the State income tax rate from 23 to 28 percent. In addition, State and local property taxes and taxes of all kinds had to be increased. I remember talking to so many people in my State of Vermont, hard- [[Page S999]] working men and women, people who bring home a weekly paycheck and pay the mortgages, set money aside for their children to go to college. They keep our economy going. I said, ``Have you felt these huge tax cuts that we read you have gotten under Reaganomics?'' Except for a couple of my friends who, frankly, Madam President, make a heck of a lot more money than I do, they had not. In fact, what they had seen, the average person had seen their taxes go up. They saw Social Security taxes go up, they saw their local taxes go up, they saw their State taxes go up to cover the differences. That is not the way to cut the Federal deficit. It is the Federal deficit. You do not cut it by simply shifting the burdens to State and local government and telling them to raise the taxes on their people. Working people cannot afford tax increases any more just because they are imposed by State and local authorities and not by the Federal Government. While we passed unfunded mandates legislation last Congress, even that legislation offers insufficient protection. My concerns extend beyond new legislation that the lawyers determine include legally binding obligations. I am concerned as well about those programs that respond to the basic needs of individuals. Human needs are no less real because they are not set forth in a Federal statute. Hunger, cold, illness, the ills of the aged--these do not need statutory definition to cause suffering. With or without definition, they do cause suffering. If we try to balance the Federal budget by scaling back services, we are just as surely going to be shifting the costs and burdens of these unmet needs, as well as Federal mandates, on State and local governments. I know the people of Vermont are not going to let their neighbors go hungry or go without medical care, and I expect people elsewhere will not either. As much as our churches and synagogues and our charities and our communities will contribute, a large part of the problem and a large share of the costs are still going to fall to State and local governments. The distinguished majority leader in the other body, Richard Armey, said in 1995 that he did not want to spell out the effects of this constitutional amendment before it is passed because he is afraid that Congress would not vote to pass it if it knew what it would do. He later reinforced his remarks by warning supporters not to reveal where the necessary cuts would be made because knees would buckle. If we are going to be asked to consider this constitutional amendment, let us find out what the impact is likely to be. Certainly, before any State is called upon to consider ratification of such a constitutional amendment, we ought to know what the impact is going to be. Every State ought to be able to look at the debate here and our actions here and know what the impact is going to be if they ratify. Each State should be advised of the likely effects on its economy and, in particular, on personal income levels and job losses in that State. Let us get some of the answers. Let us know where we are headed. In fact, I believe this proposed constitutional amendment would invite the worst kind of cynical evasion and budget gimmickry. The experience of States that do have balanced budget requirements only bears this out. My State, which has one of the best credit ratings in the country, takes care of its budget without having in its State constitution a constitutional amendment to balance the budget. Because we know we have good times and bad times, we have provisions to set aside a rainy day fund. We know that there are things that we have to do in our small State economy at a time of recession to help. But look what happens with States with a balanced budget requirement. Many that do achieve compliance do so only with what the former comptroller of New York State calls dubious practices and financial gimmicks. These gimmicks include shifting expenditures to off-budget accounts, postponing payments to school district suppliers, delaying refunds to taxpayers, deferring contributions to pension funds, and selling State assets. The proposed constitutional amendment does not prohibit the Federal Government from using the same and other dubious practices and gimmicks. With Congress facing a constitutional mandate, the overwhelming temptation will be to exaggerate estimates of economic growth and tax receipts, underestimate spending, and engage in all kinds of accounting tricks as was done before the honest budgeting efforts of 1993. The result will be that those who do business with the Government may never be certain in what fiscal year the Government will choose to pay up or deliver, and those who rely on tax refunds can certainly expect extended delays from the IRS. Passing a constitutional directive that will inevitably encourage evasion is only going to invite public cynicism and scorn, and not just toward the Congress. That, Madam President, does bother me, since we represent one of the three branches of Government. What bothers me far more is cynicism toward the Constitution itself. None of us in this body owns the seat that we are in. We are all here for 6 years at a time. Some day we will leave, as we should, either by our own choice or because we are given an invitation to do so by the voters of our State. But while we are here, we have a responsibility to the institutions of this country, and certainly to our Constitution, an oath that we each take solemnly and without any reservation. (Mr. CRAIG assumed the chair.) Mr. LEAHY. Mr. President, we are, in some ways, an unprecedented country. No nation, no democracy has achieved the power that we have. In fact, in history, no country, democracy or otherwise, has had the great economy and the great power of the United States. But no other country has had a constitution like ours, a short constitution, a simple constitution, an understandable constitution. Since the Bill of Rights, it has only been amended 17 times. In one of those cases, it was amended for prohibition and then to repeal prohibition. I mention this because I think there is a definite connection between the greatness of the United States, the fact that we maintain our democratic principles and, notwithstanding our enormous power, a respect for Government and a respect for our Constitution based on the knowledge of that Government and that Constitution and not because a dictator and army tell us we have to. But that has meant that the men and women who have occupied these seats that we only temporarily occupy, the men and women who have occupied the seats in the other body that were only temporarily occupied, were wise enough--even though there were hundreds and hundreds of proposals over 200 years--were wise enough not to amend the Constitution willy-nilly, especially for those things that can be taken care of legislatively. As the President said last night, it only requires our vote and his signature for a balanced budget, not a constitutional amendment. Our predecessors on both sides of the aisle and our predecessors on both sides of the aisle in the other body were wise enough to refrain, no matter how popular it sounded or no matter how much it helped them in their elections, from amending the Constitution willy-nilly, especially for those things they knew they could do legislatively. It is one thing to amend the Constitution to limit the terms of Presidents or to set up successions when there is a vacancy in the Vice Presidency or the Presidency itself. Those are of constitutional import. But something we can do simply legislatively, why amend the Constitution? Let's not debase our national charter with a misguided political attempt to curry favor with the American people by this declaration against budget deficits. Let us not make the mistake of other countries and turn our Constitution into a series of hollow promises. We are too great a nation for that. We are too great a democracy for that, and the loopholes in Senate Joint Resolution 1 already abound. One need only consult the language of the proposed amendment and majority report for the first sets of exceptions and creative interpretations that will allow Congress to reduce the deficit only so far as Members choose to cast responsible votes. The Judiciary Committee reports that the Congress will have flexibility in implementing the constitutional amendment. It will leave the critical details to implementing legislation. [[Page S1000]] This proposed constitutional amendment uses the seemingly straightforward term ``fiscal year.'' But according to the committee report, this time period can mean whatever a majority in Congress wants it to mean. It has no immutable definition. It may mean one thing this year, and we may decide the next year it means something else. It can be shifted around the calendar as Congress deems appropriate. Watch out for the shifting of fiscal years in order to juggle accounts when elections are approaching. This proposed amendment gives congressional leeway to rely on estimates to balance the budget, to make temporary self-correcting imbalances and to ignore very small or negligible deficits. But what is temporary? What is self-correcting? What is small? What is negligible? With apologies to one of our distinguished predecessors, the Senator from Illinois, Senator Everett Dirksen, a billion here, a billion there; after a while, it does not add up. This is a lawyer's dream. What is negligible? We think a billion is negligible, and somebody sues, or a whole lot of people sue. My guess is that unless it becomes a political bone of contention between political parties as we approach an election, we could go a long time without Congress declaring itself in violation of this proposed amendment. What happens if the President of the United States says, ``Well, here are my estimates. My estimates are we are going to receive x number of dollars and my estimates are we are going to spend x number of dollars,'' and it turns out he is wrong? What do we do? Sue him? What happens if the Congress does the same thing? We estimate in our budget resolution we are going to receive x number of dollars and spend x number of dollars. What happens if we are wrong? Do all 535 Members go to jail or just those who voted for it? This proposed constitutional amendment could be economically ruinous. During a recession, deficits rise because tax receipts go down. But various Government payments, like unemployment insurance, go up. By contrast, the amendment would demand the taxes be raised and spending be cut during a recession or depression. It is almost like when President Herbert Hoover, as we started into a slight recession, said the thing that would give the most confidence to the country would be to force through a balanced budget. He did, and we went through the worst depression in this century. As Treasury Secretary Robert Rubin testified in the Judiciary Committee, ``the balanced budget amendment would turn slowdowns into recessions and recessions into more severe recessions or even depressions.'' Economic policy has to be flexible enough to change with a changing and increasingly global economy. But the requirements of this proposal would tie Congress' hands to address regional, national, and international problems. We should not hamstring the legislative power that is expressly authorized in article I, section 8, of the Constitution. Let us not undo that which our Founders wisely provided: flexibility. This proposed constitutional amendment risks seriously undercutting the protection of our constitutional separation of powers. No one has yet convincingly explained how the proposed amendment would work and what role would the President play and what role would the courts play in its implementation and enforcement? I can just see the new law school courses all over the country. How do you sue under the constitutional amendment? When you put the budget in the Constitution, economic policy would inevitably throw the Nation's fiscal policy into the courts. That is the last place issues of taxing and spending should be decided. Basically what it does is it destroys this delicate balance between the three branches of government: the executive, the legislative, and the judicial. I cannot understand why Members of Congress want to give up their powers to the judiciary, because the effect of the proposed amendment could be to toss important issues of spending priorities and funding levels to the President or to thousands of lawyers in hundreds of lawsuits in dozens of Federal and State courts. If approved, the amendment would have let Congress off the hook by kicking massive responsibilities for how tax dollars are spent to unelected judges and the President. Judge Robert Bork warned of the danger more than a decade ago. Again, Mr. President, why--why--would we give up the constitutional powers we have had for 200 years and give them over to the courts who do not want them and have not asked for them? So instead of creating future constitutional questions, let us do the job we were elected to do. Let us remember what the President said last night: You vote it, I sign it; we have a balanced budget. Simple as that. But it means we have to make the tough choices and cast the difficult votes and make progress toward a balanced budget. I worry, Mr. President, that perhaps some, because it is a lot easier, just vote for a constitutional amendment which has huge popularity. It is a lot easier to do that than to vote against a whole lot of programs where your vote is not popular. It is not popular to actually cast the votes to balance the budget. It is easy to cast the vote for the constitutional amendment. It is sort of like saying, ``I will vote today to eliminate cancer.'' Who disagrees with that? Or the person says, ``I'm against cancer. I don't want to give up smoking, but I'm against cancer.'' It is the difficult steps. This proposed constitutional amendment undermines the fundamental principle of majority rule by imposing a three-fifths supermajority vote to adopt certain budgets and raise the debt limit. Again, has anybody read a history book in this body? Has anybody found out how this country started? Go back to our Founders. Our Founders rejected such supermajority voter requirements on matters that are within Congress' purview. Alexander Hamilton described supermajority requirements as poison. I sometimes wonder if anybody around here even knows who Alexander Hamilton or Thomas Jefferson, George Washington or these people were. Hamilton observed that: Supermajority requirements serve to destroy the energy of the Government and to substitute the pleasure, caprice or artifices of an insignificant, turbulent or corrupt junto to the regular deliberations and decisions of a respectable majority. These supermajority requirements are a recipe for increased gridlock, not more efficient action. If there are some in here who have not read The Federalist Papers, just recall the lessons of the last 2 years when the Government was shut down by a determined minority intent on getting its way. The Nation was pushed to the brink of default when a group pledged that, no matter what, they would not vote on raising the debt limit, they were going to let the Government be shut down. Whether it was political or they went out the wrong door in an airplane or whatever, they shut down the Federal Government. That cost taxpayers hundreds of millions of dollars. It certainly cost everybody in private enterprise in this area, just about any area in the country, hundreds of millions of dollars more. We looked ridiculous to the rest of the world. But all because a minority made that determination. Such supermajority requirements reflect a basic distrust, not just of Congress, but of the electorate itself. I reject that notion. I have faith in the electorate. I am prepared to keep faith with and in the American people. Mr. President, we have also said that ``The devil is in the details.'' I believe Emerson first said that. The proposed constitutional amendment uses such general terms even its sponsors concede that implementing legislation will be necessary to clarify how it is going to work. So we ask, what will the implementing legislation say? Well, we are not going to find out until we see the implementing legislation. Basically this says, ``Trust us. Pass this. And we'll tell you afterward what it means.'' That is kind of like somebody saying, ``I'll sell you this business. Would you sign this contract in blank? Give me all your money, but I will fill in the terms afterward.'' I am a Vermonter. We just do not quite do it that way back home. We trust each other, but we kind of like to see the details. The questions raised by this proposed constitutional amendment still lack satisfactory answers. [[Page S1001]] For example, what programs are going to be off budget? What role will the courts and what role will the President have in executing and enforcing the amendment? How much of our constitutional power do we give up? What is really compliance with the amendment? How much of a deficit may be financed and then carried over to the next year? There are a lot of questions like these that are critical to our understanding of this amendment. And they have not been answered. Should Congress be asked to amend the Constitution by signing what amounts to a blank check? I disagree with that. No Congress should be asked to do that. Nor should each State be asked to ratify a pig in a poke. In the interest of fair disclosure, Congress should first determine the substance of any implementing legislation as it did in connection with the 18th amendment, the other attempt to draft a substantive behavioral policy into the Constitution. Let us go look at the implementing legislation first. In my view, this amendment does not meet the requirements of article V of the Constitution for proposals to the States because it is not constitutionally necessary. It is only with resolve and hard work that we make progress. Neither is evident in the proposed constitutional amendment. I have heard some of the speeches about why it would be good politics, popular politics to vote for this. Politics--good, popular or otherwise--have no place when we are dealing with the Constitution of the United States. We inherited a great legacy from those who went before us because they resisted the temptation to play politics and to amend our Constitution willy-nilly. As a result, we are the greatest and strongest democracy history has ever known. The bedrock of it is our Constitution, which sets up three branches of Government, with powers that make sure there are checks and balances. This amendment destroys so much of what this country has rested on for over 200 years. So instead of a bumper sticker for the Constitution, what we need is the wisdom to ask what programs we must cut, and the courage to explain to the American people that there is no procedural gimmick that can cut the deficit or the debt. There is no nice, easy self-serving item. There is only hard work. But I think the American people would rather have the hard work than have us fool around with our Constitution. Yesterday the Wall Street Journal printed an editorial titled ``Constitutional boondoggle'' in its editorial page. The editorial says: We do need to get the national debt declining . . . I agree. We do need to restrain federal spending. Again, Mr. President, I agree. We do need to resolve the Medicare crisis . . . Mr. President, I agree. We do need to look beyond the year 2002. Mr. President, I agree. But then they said: But these battles have to be fought one by one, and [they] can't be solved by amending the Constitution. Once again, Mr. President, I agree. The Wall Street Journal editorial concludes: The concept embodied in the proposed [constitutional] amendment measures nothing useful; it is at best a distraction, and at worst, causes confusion that makes the right things harder to do, not easier. I ask unanimous consent the Wall Street Journal editorial be printed in the Record immediately after my remarks. The PRESIDING OFFICER (Mr. Faircloth). Without objection, it is so ordered. (See exhibit 1.) Mr. LEAHY. Mr. President, think back again to last night's State of the Union address. The President said all it takes is for us to cast the votes and for me to sign the bill to balance the budget. Many of us who cast those tough votes to cut programs, to bring the deficits down, have faced in the short term the wrath of our constituents but in the long term a realization that we have done the right thing for the country. I am proud that I have voted for budgets that have now, 4 years in a row, brought down the deficits, something that has not happened certainly in the last 15 years or so. We have had a President who has had the courage to give us four budgets in a row that bring down the deficits. They have meant tough votes. Some Members who voted to bring down the deficit have probably lost elections because of those tough votes. How much better they have been to themselves, to their children and their children's children because they resisted the temptation, as Senators and Representatives have for over 200 years, to amend our Constitution unnecessarily. So let us not proceed to a view of short-run popularity but with a vision of our responsibilities to our constituents and the Nation in accordance with our cherished Constitution. Mr. President, first and foremost I am going to cast votes on this floor to protect that Constitution, popular or otherwise. I take my oath of office seriously. I appreciate the privilege the people of Vermont have given me to represent them in this body. There is nothing I will ever do in my life that will make me as proud as being in this body representing the people of Vermont. As I have told the people of Vermont in each one of my elections, I will protect the Constitution first and foremost. As I told them in my last two elections, I will vote against this constitutional amendment because it does not protect our country, it demeans the Constitution, and it lets us off the hook from doing the things that we really should do. I yield the floor. Exhibit 1 [From the Wall Street Journal, Feb. 4, 1997] Constitutional Boondoggle With President Clinton about to deliver his State of the Union Address and new budget, this is an apt moment to say that the President is right and the Republicans are wrong on item one of the GOP Congressional agenda. The balanced budget amendment is a flake-out. The notion of amending the Constitution to outlaw budget deficits is silly on any number of counts. Politically it's empty symbolism. Legally it clutters the Constitution with dubious prose. Today's lesson, though, concerns economics and accounting. You can't measure economic rectitude by any one number, let alone the ``deficit,'' however defined, let alone the deficit projections the proposals will inevitably involve in practice. The attempt to enshrine such a number in the Constitution is bound to prove a snare and a delusion. The proposal passed by the Senate Judiciary Committee says that outlays (``except for those for repayment of debt principal'') shall not exceed receipts (``except those derived from borrowing''). While this concept sounds simple, in fact it reflects neither accounting principles nor economic reality. If you can balance your family budget, the thinking goes, the government can balance the federal budget. But applying the budget amendment's principles to households would outlaw home mortgages, which have proved a boon to countless families and the general economy. What a family balances is its operating budget, a concept foreign to the federal accounts. In corporate accounting, similarly, the health of an enterprise is measured by careful distinctions such as accruals or depreciation. Even the balanced budget restraints of state and local governments exclude spending on capital improvements financed by bond issues approved by voters. The reality is that borrowing money is not a sin; it depends on how much money, and in particular on the uses of the borrowed funds. Even the amendment itself recognizes this by allowing Congress to waive the amendment by majority vote when war is declared or when a joint resolution declares ``a military conflict which causes an imminent and serious military threat to national security.'' Other emergencies would presumably be dealt through the provision that Congress could approve borrowing by a two-thirds vote. Republicans back the amendment because it scores well with focus group participants, who don't understand the difficulties, and with Ross Perot, who doesn't care. They also hope that limiting the government's power to borrow will force it to limit spending. Democrats seem pretty much to agree, and want to voice support for the amendment to appease focus groups while also killing it to avoid a spending straitjacket. We're not so sure. For one thing, we've observed how European politicians, even supposedly conservative ones, have been behaving toward the budget-deficit requirements they imposed on themselves in the Maastricht agreement. To get within the numerical criteria, the Italians are taking their railroads off and on budget; the French government, in return for an infusion of funds this year, assumed pension obligations running into the far future. Governmental accounting, you see, simply counts formal government debt; it ignores unfunded governmental promises. This is a loophole enormous enough that Rep. Fernand St Germain could drive half of [[Page S1002]] the S crisis through it in one night in 1980, when he doubled deposit-insurance limits. Another enormous loophole is the government's ability to offload, or ``mandate,'' costs on corporations, individuals and state and local governments without running any receipts or outlays through the Washington books. And when the bill for Rep. St Germain's coup suddenly came due in 1989, would it really have been better to avoid borrowing and put the rest of the government through a temporary wringer? These imperfections might not matter if the amendment did no harm, but it's easy enough to imagine scenarios in which it would keep us from doing the economically right thing. Take the proposals by the most conservative bloc in the recent Social Security Commission. They would allow current taxpayers to personally invest part of what they owe in payroll tax, giving them a better return. But meeting obligations to those retiring before their benefits were funded would require a big issue of government debt. The new debt would merely formally recognize current obligations, and the privatization would dramatically reduce future obligations. Though this transaction would plainly improve the federal fisc, the balanced budget amendment would outlaw it. Or for that matter, take the Reagan defense build-up, which led to victory in the Cold War. The balanced budget amendment would have all

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BALANCED BUDGET AMENDMENT TO THE CONSTITUTION
(Senate - February 05, 1997)

Text of this article available as: TXT PDF [Pages S994-S1015] BALANCED BUDGET AMENDMENT TO THE CONSTITUTION The PRESIDING OFFICER. Under the previous order, the hour of 3 p.m. having arrived, the Senate will now proceed to the consideration of Senate Joint Resolution 1 for debate only. The clerk will report. The assistant legislative clerk read as follows: A joint resolution (S.J. Res. 1) proposing an amendment to the Constitution of the United States to require a balanced budget. The Senate proceeded to consider the joint resolution. The PRESIDING OFFICER. The Senator from Utah. Privileges of the Floor Mr. HATCH. Madam President, I ask unanimous consent that Manus Cooney, Sharon Prost, Shawn Bentley, Paul Larkin, Larry Block, Steve Tepp, Troy Dow, and Paul Joklik be permitted privileges of the floor for the duration of the debate. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. HATCH. Madam President, today we begin one of the most important debates that has ever taken place in the U.S. Senate or in the Congress of the [[Page S995]] United States. The subject matter goes to the very heart of our Founding Fathers' hope for our constitutional system--a system that would protect individual freedom through the maxim of limited Government. In the latter half of this century, however, the intentions of the Framers of the Constitution have been betrayed by the Congress' inability to control its own spending habits. The size of this Federal leviathan has grown to such an extent that the very liberties of the American people are threatened. I just stood at a press conference with our Democratic cosponsors of this amendment, and there was a huge table filled with unbalanced budgets since 1969. History was made in the 104th Congress when 300 of our courageous colleagues in the House of Representatives, both Democrats and Republicans, approved a balanced budget amendment to the Constitution. Unfortunately, the same measure was defeated in this Chamber by one solitary single vote. This year we begin a new Congress following an intensive fall campaign in which people in every State across this Nation made unmistakably clear their insistence that we put our fiscal house in order. The eyes of the people, now more than two-thirds of whom favor a balanced budget amendment, now turn to us to follow through on our promises. I am pleased to be joined by 61 of my colleagues, including every Republican Senator in the U.S. Senate and 7 bold Democrats who have done exactly that in sponsoring Senate Joint Resolution 1, the balanced budget constitutional amendment. Madam President, as we begin the debate on Senate Joint Resolution 1 proposing an amendment to the U.S. Constitution to require balanced annual Federal budgets, I want to summarize why I feel this amendment should be added to the basic great law of this great Nation. Let me say that as a lifelong student of the Constitution and having served on the Judiciary Committee in this body during my tenure here of 20 years, I do not lightly suggest amending our founding document. Yet, all other avenues having failed us, I believe it appropriate to take recourse to our basic charter to rein in an abused power of the purse-- as has been done in similar situations in our history since the Magna Carta--in order that we might save future generations from the heavy burden of irresponsible Government borrowing. Madam President, let me just summarize the reasons I believe the proposed balanced budget amendment should be presented to the States for ratification. We have to have a two-thirds vote in both of the bodies and submit this amendment to the States, and we have to get three-quarters of them to ratify the amendment before it can be entered into the Constitution. It is a tough process. It ought to be a tough process. These are some of the reasons why I believe this amendment should be presented to the States for their ratification: No. 1, integrity and accountability. It will bring immediate credibility to our current budget process and negotiations, and it will restore a measure of integrity and accountability to our Government. No. 2, our children's future. Passing the balanced budget constitutional amendment is a vote for our children's economic freedom. No. 3, family financial security. Passing the balanced budget amendment will improve the economic health and stability of all American families. No. 4, economic strength. The stabilizing effect the balanced budget amendment will have on the economy is clear, and it will enable us to rein in the level of our country's foreign-held debt. No. 5, retirement security. If we pass this balanced budget constitutional amendment it will literally save Social Security. It will stabilize the economy which will benefit all current and future retirees. Without it, all of these programs will be placed in jeopardy. Now let me describe these reasons in more detail. On the issue of integrity and accountability, our national debt is rocketing out of control and the American people are paying a very heavy price for it. As you can see by this chart, the debt was relatively stable for many decades, up to about 1970, a little bit before 1970. In recent years the debt has increased at alarming rates under the watch of both political parties. The fact is, our deficits have been structural and they will not be eliminated in the long run without the discipline of a balanced budget constitutional amendment. They really shot up in the 1980's, right on through the 1990's, and still that arrow is going almost straight up, even today, even with the efforts and actions that have been taken. Since 1978, there have been no fewer than five major statutory schemes or regimes enacted which promised to deliver balanced budgets, and these include Gramm-Rudman-Hollings. But there has not been a single balanced budget since 1969, which was the only balanced budget since 1960. While I support the steps we have taken to pass the balanced budget plan, I question whether, without the weight of a constitutional requirement to balance the budget, we will achieve balance by the year 2002. Without a balanced budget amendment, every year Congress has to act, and we have seen the lack of will to do what's right around here. For this reason, I feel passage of the balanced budget amendment is critical. Let's just acknowledge what every American citizen knows. In recent decades, Washington has been biased to spending, without feeling any constraints by the amount of money it actually has on hand. Washington has lost the habit of prioritized spending options. Any ideas with political appeal get enacted regardless of cost. We borrow the money if we run short. That is what we have been doing for most of the last 60 years. Those listening could try this thinking on their own budgets at home. Buy any item that looks appealing next time you are at the mall. Just put it on the card. What happens to your budget? Something like this chart probably, but hopefully not quite so high. Washington, however, is not as constrained as the average American. Washington spends in this way, and when the bill comes, it signs the debt over to the American people. In addition to paying their own bills, the American people have to pay Washington's bills in the form of higher taxes, of course, and accumulated debt. They also pay them in the form of higher interest rates on their homes, their cars, or student loans. They pay in the form of lower job growth, lower wages, and they even pay in the form of decreased services from the Government because more of the budget is being spent on interest rather than on education, health care, job training, child care, the environment, et cetera. The point is that Americans are getting fed up with Washington because they feel the pinch put on them by Washington's spendthrift ways. They know they have to make hard choices about how they will spend their own money, but they feel that Washington does not feel constrained to make hard choices about spending priorities. It's not even Washington's own money that it's spending so freely; it is the American people's money. No wonder the American people are tired of it. Besides being dismayed by Washington's free spending habits, the American people also believe that Washington is not accountable for its decisionmaking. The balanced budget amendment responds to both of these concerns. On this chart is the actual text of the balanced budget amendment before the Senate at this time. This balanced budget amendment will require Washington to make tough choices about spending priorities within the constraint of the amount of money it has, or it requires Members of Congress to go on record for its borrowing and taxing decisions. There will be no more voice votes when it comes to raising taxes. There will be no more voice votes when it comes to raising the deficit. You are going to have to stand up and vote. This amendment will see to that. It also requires Congress to achieve some measure of increased consensus about spending priorities if it is going to finance that spending by borrowing. The concept is simple: Don't borrow, unless a significant number of Members are willing to go on record as saying this spending is such a priority that we must borrow to do it. That would go a long way toward letting Americans know that their Government is deliberating about its spending [[Page S996]] habits, making choices among competing options, and only spending beyond its means when it really needs to in order to achieve a goal so important that a supermajority of Members could agree. The balanced budget amendment will go a long way toward restoring the people's faith in the integrity of our budget process and in the accountability of Washington for its decisions. A vote for the balanced budget amendment is a vote for integrity and accountability in Washington. Now, our children's future. Our national debt now tops $5.3 trillion. That averages out to about $20,000 in debt for every man, woman, and child in America. That is what our fiscal insanity has brought us to. A child born in America today comes into this world $20,000 in debt--and that is going up. Do we have the right to spend our children's future for our own comfort today? Over time, the disproportionate burdens placed or imposed on today's children and their children by a continuing pattern of deficits could include some combination of the following: Increased taxes, reduced public welfare benefits, reduced pensions and Social Security benefits, reduced benefits or expenditures on infrastructure and other public investments, diminished capital formation, diminished job creation, diminished productivity enhancement and less real wage growth in the private economy, higher interest rates, higher inflation, increased indebtedness to and economic dependence on foreign creditors, and increased risk of default on the Federal debt. Madam President, I have said this in the past. This is ``fiscal child abuse'' and it must end. It is our children's future versus Washington's spending addiction. I hope the Senate of the United States will come down overwhelmingly on the side of our children's future by passing this amendment. A vote for the balanced budget amendment is a vote for our children's economic security. Now, what about family financial security? It is not just our children that we hurt with these outrageous deficits. We are suffocating our own families. The impact of higher interest rates, higher taxes, lower wage and job growth, and higher mortgages are felt at kitchen tables all across America. The Concord Coalition has estimated that the interest payments on our mountainous debt amount to $5,360 a year for a family of four. Just to pay the interest against our national debt, it's $5,360 a year. Chairman Kasich of the House Budget Committee has pointed out that three of the causes of the ``middle class squeeze''--high taxes, counterproductive Government spending policies, and anemic wage growth--are at least partly caused by continued borrowing by the Federal Government. He points out that the baby boom generation pays taxes that are at least 50 percent higher than those paid by their grandparents. Real per hour wages inched up just one-third of 1 percent annually over the past 4 years, which is one-seventh the rate of growth in the period between 1960 and 1974, and productivity over the past 4 years grew at only one-fifth the rate of that same period. Economist Lester Thurow noted that the one-earner middle-class family is extinct and explains that almost one-third of all men between the ages of 25 and 34 make less each year than is required to keep the average family of four above the poverty level. These combined pressures tear at the very fabric of our Nation and our families. By contrast, implementing the balanced budget amendment will lower interest rates, making it easier for our families to pay their mortgages, their car loans, and their student loans. Economist at DRI- McGraw-Hill estimate that a balanced budget rule would result in a 2- percent drop in interest rates. Now, DRI-McGraw-Hill is one of the best econometric groups in the country. A balanced budget rule would mean annual savings of $1,230 on a middle-class family's home mortgage, $216 each year for an average student loan, and $180 each year on the average car loan. The good effects of our overall economic health will help family budgets in many other possible forms, such as a higher paycheck, more job opportunity or security, lower taxes in the future, and a greater ability to save and invest for the future. The Joint Economic Committee has estimated that the average American family would have an additional $1,500 a year if we implemented a balanced budget rule. A balanced budget amendment will make it easier for American families to afford a house, a car, or to send a child to college. This offers a real way to relieve the pressure on American families who are struggling to stay together and get ahead. A vote for the balanced budget amendment is a vote for the economic health and stability of American families. Now, economic stability. Economists from all over this country agree that the balanced budget amendment should pass. They agree that ``we have lost the moral sense of fiscal responsibility that served to make formal constitutional restraints unnecessary.'' Hundreds of economists support the balanced budget amendment as being good for the national economy by increasing both investor and business confidence, both foreign and domestic. Some economists are against us on the balanced budget amendment. As a general rule, they are academics who depend upon the Government in many ways for their moneys and in many respects love the spending practices of the Federal Government. Not all--some sincerely worry about the amendment. But there are also many, many who worry that if we do not pass the amendment we are really going to be in trouble, and economic stability will be threatened. If the Government would stop borrowing so much money, interest rates would come down and money would be available for businesses to invest in creating jobs and paying higher wages. The Director of the Congressional Budget Office, June E. O'Neill, has testified recently that ``balancing budget will induce favorable changes in the economy,'' and among those favorable changes she specifically pointed to ``interest rates, economic growth, and the share of GDP represented by corporate profits.'' All of this can put real money in the pockets of real people, including small business owners and employees. CBO Director O'Neill has also suggested that taking action now to balance the budget can assure greater budgetary stability in the future. Greater budget stability means greater tax stability. And that means that Americans, and their families, and the businesses they own, can plan for the future better, with less risk that shifting tax policy will wipe out their plans in unforeseen ways. At the very least, this will save Americans substantial amounts on tax attorneys. But long-term planning, with less risk from shifting tax policy, can pay dividends throughout the economy. Decreasing our dependence on debt to finance Government activities will also increase our national economic sovereignty. Interest payments on our debt are increasingly leaving the country. This chart, based on Treasury Department statistics, shows that from 1992 to 1995, the portion of our debt held by foreign interests has increased 28 percent. That is money that leaves the United States, thus weakening our national economy, and perhaps slowly jeopardizing our national independence. It has been said, ``It is tough to get tough with your banker.'' The less we borrow from foreigners, the less dependent we are on foreigners, and the more independent we will be as a nation. By returning honesty to budgeting, the balanced budget amendment will improve our economy and our economic independence. retirement security The balanced budget amendment is important to current and future retirees. This is a very important chart because this chart is based on the Social Security trustees' intermediate projections. As you can see here, while we run modest yearly surpluses until the year 2015--down here is the 2015, and the green shows the moderate surpluses above zero, we get to 2015. The long-term projections are mammoth annual deficits--the red line--mammoth annual deficits that start about the year 2015, if we are lucky. That is assuming a rosy economic picture over the next 19 years. The long-term projections are for mammoth annual deficits projected at current dollars at as much as $7 trillion for today's children when they retire. [[Page S997]] The word ``trust'' in the Social Security trust fund refers to the trust retirees repose in the Government to meet its future obligations. We will be hard pressed to meet our obligations if we do not get our debt under control now and force ourselves to avoid the growth of debt in the future. The balanced budget amendment will force and empower us to meet these future obligations. In addition, the economic benefits of the amendment will benefit current and future retirees who are increasingly relying on private financial investments for retirement security. There are 34 million households that have invested in the stock market in some form. As financial expert Jim Cramer notes, if you have a pension, it's likely that it's invested in stocks. If you have a 401K plan, it's probably invested in stocks. Worth magazine's Ken Kurson points out that in 1996, 34 percent of households headed by someone under 35 had some sort of mutual fund. Simply put, many Americans are relying less on Government and more on themselves and their own investments for their retirement security. The balanced budged amendment will strengthen the markets and the investments these Americans are relying on. No matter the source of retirement security, the balanced budget amendment will benefit current and future older Americans. Some have argued that we should take Social Security out of the purview of the balanced budget amendment. They argue that we should take the highest items in the Federal budget and the most important item in the Federal budget out of the budget because they think that might protect Social Security. Give me a break. That is not going to protect Social Security. It is going to jeopardize it, because what happens is that if we take it out now, even the President has admitted that you cannot balance the budget by the year 2002 if you do not keep Social Security in the total unified budget. So it is a gradual way that we get there, and if we get there, then Social Security will be much more stable. When we get to these years when it starts to drop off, we have to take care of it, and, frankly, we have to do it within reasonable constraints and do it right. The fact is that some argue that we should keep Social Security in the amendment until the year 2003 and then all of a sudden take it out when all of these deficits occur. The reason they want that is so they can keep spending. As far as everybody knows, if we take Social Security out of the purview of the balanced budget, we would be creating the biggest loophole in the history of this country and they could spend anything they want by simply labeling it Social Security. Madam President, this scares me to death. It is true. These are the trustees' estimates here. That is assuming a fairly rosy economic picture. If we hit a recession or depression during this period of time, it is going to be worse. And the deficits might actually start before then. But that is the best analysis that we can get at this time. Madam President, only the force of the Constitution can balance out the incentives for irresponsibility that dominate the Congress, and only the balanced budget amendment can save this country from being swallowed in debt. A vote for the balanced budget amendment is a vote for a stronger and a freer future for all Americans. When we began this debate, we had at least 68 Members of the Senate who committed and promised that they would vote for this amendment. We need 67. So we believe the votes should be here. We believe people are honorable and will honor their commitments when they ran for office and when they appeared before their families and friends and voting constituents within their respective States. They all knew at the time that this was the only amendment we could possibly pass. They all knew at the time that this is a bipartisan consensus amendment brought about by both Democrats and Republicans, and that we have worked for over 20 years on this amendment. They all knew at the time that this was the one time in history when we could really get this done. And I hope we do. I believe we will because I believe our fellow Senators will live up to the word that they gave to their constituents. Madam President, I yield the floor. Mr. LEAHY addressed the Chair. The PRESIDING OFFICER. The Senator from Vermont. Mr. LEAHY. Madam President, I wonder if I could ask the distinguished senior Senator from Utah a question. Shall we vote now? Mr. HATCH. We would be happy to do it, if the Senator wants to. Mr. LEAHY. Shall we call the roll? Mr. HATCH. Sure. That would be fine with me. Mr. LEAHY. It would be fine with me. Mr. HATCH. I do not think it would be fine with that side, but it would be fine with me. Mr. LEAHY. I suspect that you probably have at least one leader on that side who might not be in favor. Mr. HATCH. I will clear the way. Mr. LEAHY. Why not talk with him while I give my opening statement to see if we want to do that. Mr. HATCH. Let us let everybody say what they want to say about this on both sides, and at a reasonable time we would like to---- Mr. LEAHY. If the Senator would like to this afternoon---- Mr. HATCH. I will be happy to do it. Mr. LEAHY. Why not talk with him. Mr. HATCH. I will. Mr. LEAHY. And see if it could be cleared here, too. Madam President, last night in his State of the Union Address, the President of the United States spoke of the difference between taking action to balance the Federal budget and the political exercise of considering a constitutional amendment on balancing the budget. I mention this because the American people know there is a big difference between talking about a constitutional amendment to balance the budget, a big difference between talking about what you might or might not do, and actually doing it. Here is what President Clinton said. Balancing the budget requires only your vote and my signature. It does not require us to rewrite our Constitution. I believe it is both unnecessary and unwise to adopt a balanced budget amendment that would cripple our country in time of economic crisis and force unwanted results, such as judges halting Social Security checks or increasing taxes. Listen to what the President said. Balancing the budget requires only the vote of the Congress and his signature. This from a President who in the 22 years I have been here is the only President who has brought the deficit down 4 years in a row--the only President who has done that. In fact, if we were not paying the interest on the deficits run up during Presidents Reagan and Bush administrations, we would have a surplus today and not a deficit. In fact, I believe he is probably the only President in my lifetime, Republican or Democrat, who has 4 years in a row brought the deficit down and certainly the only one since the last President, a Democrat, who had a surplus. That was President Johnson. Deficits have run since then, and only President Clinton has brought them down four times in a row and is about to submit a budget which will bring the deficits down for the fifth time in a row. That is a record which certainly in modern times, certainly the postwar time, no President, Democrat, or Republican, has done and is a marked contrast to the two Republican Presidents who preceded him who tripled the national debt, who took all the debt from 200 years and tripled it in just 12 years. So President Clinton is committed to signing a balanced budget that protects America's values, honors our promises to seniors and our veterans and fulfills our responsibilities to the disadvantaged and the young. If this Congress, the 105th, will join him for the good of the Nation and the future, we can, in fact, be the Congress that finally balances the budget. Madam President, I would like to be part of that Congress, and I would like to see Democrats and Republicans work together to bring about that kind of a balanced budget. But that would mean each one of us, every man and woman in this body and every man and woman in the other body, will have to stand up and cast votes that are politically unpopular--not a vote that sounds very popular but does not cut a single program and does nothing to balance the budget. [[Page S998]] My good friend from Utah has talked about the public opinion polls that say how popular a balanced budget is. I support a balanced budget. I voted for more deficit reduction than most of the Members of this body. But wanting it and voting it can be sometimes two different things. It is easy to stand up, as we all do, in town meetings back home and say we want a balanced budget. It is very difficult to come back and face special interest groups on the right and left and say we are going to cast votes to achieve balance. This is not one of those tough votes. This proposed constitutional amendment is unnecessary, it is unwise, it is unsound, and it is dangerous. First, it demeans our Constitution. It will destabilize the power among our three branches of Government. That balance of power between our three branches of Government gives this, the greatest and most powerful democracy in history, its greatest protection. It would head us down the road to minority rule and undermine our constitutional democracy. It would likely result in a shifting of burdens, responsibilities and costs to State governments. Whether my own State of Vermont, the State of Maine, the State of Utah, or any other of the 50 States, these State governments are ill-equipped to assume the vast burdens of the Federal Government. Both because of what it would do and what it would not accomplish, adoption of this proposed 28th amendment to the U.S. Constitution would be wrong. Treasury Secretary Rubin testified that the proposed constitutional amendment would ``subject the Nation to unacceptable economic risks in perpetuity. It would be a terrible, terrible mistake for this country.'' Treasury Secretary Rubin commands the highest respect of both Republicans and Democrats and certainly within the financial community, and when he speaks of the unacceptable economic risks in perpetuity we ought to stop and listen to him. We should also listen to the 11 Nobel laureates in economics who joined 1,000 other economists who condemn the proposal as unsound and unnecessary. It is what the Los Angeles Times calls a false political star. Now, there are responsible ways to reduce our budget deficit, but focusing our attention on this proposed amendment only delays us from making progress on what are some very tough choices. This is the same old sleight of hand that we have witnessed around here since 1982 when people began voting for a constitutional amendment on the budget rather than to vote to balance the budget. A lot of people stood up to say, ``Yes, I voted to amend the Constitution to balance the budget.'' Hurrah, hurrah, how brave they are, but they cannot quite step up here and vote on these tough issues that actually do balance the budget. There is no magic in the proposed constitutional amendment. The magic is hard work. Reducing the deficit will take hard work, and it will require hard choices. Some may even use a ``feel good'' vote for this proposed amendment as the excuse to sit back and await the ratification process in the States, and then they would sit back and await the consideration of implementing legislation. Then they would sit back and await the consideration of budgets consistent with such implementing legislation. Then maybe, just maybe, they would start making the necessary cuts. Madam President, it is like some of the people who stand on the floor of this body or the other body and say that we have to amend the Constitution and have term limits. There are those who stand up and say, ``I have been arguing for term limits for 20 years,'' some who have been arguing term limits before some of the Members of this body were born, and they will keep on into the next century saying we have to have a constitutional amendment for term limits. I heard one Member of the House, who has been here, I think, 14 terms, say, ``If I do nothing before I leave here, we are going to get term limits--if it takes me another 14 terms to get term limits.'' What makes more sense, instead of looking for bumper sticker amendments and bumper sticker politics, is to cast votes that will cut the deficit now. Do not wait until the next century. I want to continue to lower the deficit now, not wait for two more election cycles to pass before balancing the budget sometime after the year 2002, which, incidentally, is the earliest date this amendment could be effective. We showed in the last two Congresses we could make progress in undoing the mistakes of the deficits-building decade of the 1980's without having this proposed amendment in the Constitution. For the first time since Harry Truman was President, the deficit has declined 4 years in a row and with the help of President Clinton we have reduced the deficit 63 percent over the last 4 years. We have reduced the deficit, as a percentage of our economy, from 4.7 to 1.4 percent. These may seem like just numbers, but what we have done is we have reduced the deficit as a percentage of our economy to the lowest among the world's industrialized countries. Instead of constantly standing up supporting this because it might sound like good politics, let us be honest with the people we represent. We have done better than any industrialized country in the world. As part of our efforts we passed legislation that saves tens of billions of dollars of taxpayer-financed Government programs. These are tough votes. For example, the distinguished senior Senator from Indiana, Senator Lugar, and I sponsored legislation that reorganized the U.S. Department of Agriculture to become a more efficient and effective agency. The Leahy-Lugar bill passed Congress at the end of 1994. It will result in saving over $3 billion, but it has to close 1,200 USDA field offices including, should anybody ask, a large number of offices in my home State of Vermont. What the distinguished Senator from Indiana and I did was not just to talk about it, we actually put together a piece of legislation which means in every single State in this country somebody is going to feel the pain. I know because I got letters from all over the country about it. But we passed it. Maybe some of the same people who so eagerly support this constitutional amendment should ask themselves, are they responsible for the huge and unprecedented budget deficits of the Reagan and Bush years? Many are. I am one of only five remaining Senators in this body who voted against the 1981 Reagan budget package that increased defense spending by a huge amount while cutting taxes by a huge amount and which, of course, caused our debt to explode. The 12 years following Reaganomics have left us with over $2.6 trillion in additional debt. Do we have a deficit today? Of course we do. If we did not have to pay the interest on the debt run up during President Reagan and President Bush's terms, we would have a surplus today. I commend, again, the President, who, while inheriting a huge national debt, a huge deficit, and a huge debt service when he came into office, has brought the deficit down. President Clinton has, four times in a row, brought the deficit down and is about to do it a fifth time in a row, something that none of us in our lifetime have seen. But this proposed constitutional amendment remains now what it was then: political cover for the failed policies of the 1980's and their tragic legacy. Those mistakes continue to cost our country hundreds of millions of dollars every workday in interest on deficits run up during the last two Republican administrations. Think of that--hundreds of millions of dollars every single workday just on interest alone based on the deficits of those years. As I said before, were it not for the interest on this debt, we would have had a balanced budget in each of the last several years. The proposed constitutional amendment contains no protection against the Federal Government seeking to balance its budget by shifting costs and burdens to the States. That is the ultimate budget gimmick--pass the buck to the States. The proposed constitutional amendment would be a prescription for disaster, especially for small States that are ill- equipped to handle the extra load. We know what happened in the 1980's; Federal contributions to State and local governments fell sharply, by about a third. During that same decade, my home State of Vermont had to make up the difference. We had to raise the State income tax rate from 23 to 28 percent. In addition, State and local property taxes and taxes of all kinds had to be increased. I remember talking to so many people in my State of Vermont, hard- [[Page S999]] working men and women, people who bring home a weekly paycheck and pay the mortgages, set money aside for their children to go to college. They keep our economy going. I said, ``Have you felt these huge tax cuts that we read you have gotten under Reaganomics?'' Except for a couple of my friends who, frankly, Madam President, make a heck of a lot more money than I do, they had not. In fact, what they had seen, the average person had seen their taxes go up. They saw Social Security taxes go up, they saw their local taxes go up, they saw their State taxes go up to cover the differences. That is not the way to cut the Federal deficit. It is the Federal deficit. You do not cut it by simply shifting the burdens to State and local government and telling them to raise the taxes on their people. Working people cannot afford tax increases any more just because they are imposed by State and local authorities and not by the Federal Government. While we passed unfunded mandates legislation last Congress, even that legislation offers insufficient protection. My concerns extend beyond new legislation that the lawyers determine include legally binding obligations. I am concerned as well about those programs that respond to the basic needs of individuals. Human needs are no less real because they are not set forth in a Federal statute. Hunger, cold, illness, the ills of the aged--these do not need statutory definition to cause suffering. With or without definition, they do cause suffering. If we try to balance the Federal budget by scaling back services, we are just as surely going to be shifting the costs and burdens of these unmet needs, as well as Federal mandates, on State and local governments. I know the people of Vermont are not going to let their neighbors go hungry or go without medical care, and I expect people elsewhere will not either. As much as our churches and synagogues and our charities and our communities will contribute, a large part of the problem and a large share of the costs are still going to fall to State and local governments. The distinguished majority leader in the other body, Richard Armey, said in 1995 that he did not want to spell out the effects of this constitutional amendment before it is passed because he is afraid that Congress would not vote to pass it if it knew what it would do. He later reinforced his remarks by warning supporters not to reveal where the necessary cuts would be made because knees would buckle. If we are going to be asked to consider this constitutional amendment, let us find out what the impact is likely to be. Certainly, before any State is called upon to consider ratification of such a constitutional amendment, we ought to know what the impact is going to be. Every State ought to be able to look at the debate here and our actions here and know what the impact is going to be if they ratify. Each State should be advised of the likely effects on its economy and, in particular, on personal income levels and job losses in that State. Let us get some of the answers. Let us know where we are headed. In fact, I believe this proposed constitutional amendment would invite the worst kind of cynical evasion and budget gimmickry. The experience of States that do have balanced budget requirements only bears this out. My State, which has one of the best credit ratings in the country, takes care of its budget without having in its State constitution a constitutional amendment to balance the budget. Because we know we have good times and bad times, we have provisions to set aside a rainy day fund. We know that there are things that we have to do in our small State economy at a time of recession to help. But look what happens with States with a balanced budget requirement. Many that do achieve compliance do so only with what the former comptroller of New York State calls dubious practices and financial gimmicks. These gimmicks include shifting expenditures to off-budget accounts, postponing payments to school district suppliers, delaying refunds to taxpayers, deferring contributions to pension funds, and selling State assets. The proposed constitutional amendment does not prohibit the Federal Government from using the same and other dubious practices and gimmicks. With Congress facing a constitutional mandate, the overwhelming temptation will be to exaggerate estimates of economic growth and tax receipts, underestimate spending, and engage in all kinds of accounting tricks as was done before the honest budgeting efforts of 1993. The result will be that those who do business with the Government may never be certain in what fiscal year the Government will choose to pay up or deliver, and those who rely on tax refunds can certainly expect extended delays from the IRS. Passing a constitutional directive that will inevitably encourage evasion is only going to invite public cynicism and scorn, and not just toward the Congress. That, Madam President, does bother me, since we represent one of the three branches of Government. What bothers me far more is cynicism toward the Constitution itself. None of us in this body owns the seat that we are in. We are all here for 6 years at a time. Some day we will leave, as we should, either by our own choice or because we are given an invitation to do so by the voters of our State. But while we are here, we have a responsibility to the institutions of this country, and certainly to our Constitution, an oath that we each take solemnly and without any reservation. (Mr. CRAIG assumed the chair.) Mr. LEAHY. Mr. President, we are, in some ways, an unprecedented country. No nation, no democracy has achieved the power that we have. In fact, in history, no country, democracy or otherwise, has had the great economy and the great power of the United States. But no other country has had a constitution like ours, a short constitution, a simple constitution, an understandable constitution. Since the Bill of Rights, it has only been amended 17 times. In one of those cases, it was amended for prohibition and then to repeal prohibition. I mention this because I think there is a definite connection between the greatness of the United States, the fact that we maintain our democratic principles and, notwithstanding our enormous power, a respect for Government and a respect for our Constitution based on the knowledge of that Government and that Constitution and not because a dictator and army tell us we have to. But that has meant that the men and women who have occupied these seats that we only temporarily occupy, the men and women who have occupied the seats in the other body that were only temporarily occupied, were wise enough--even though there were hundreds and hundreds of proposals over 200 years--were wise enough not to amend the Constitution willy-nilly, especially for those things that can be taken care of legislatively. As the President said last night, it only requires our vote and his signature for a balanced budget, not a constitutional amendment. Our predecessors on both sides of the aisle and our predecessors on both sides of the aisle in the other body were wise enough to refrain, no matter how popular it sounded or no matter how much it helped them in their elections, from amending the Constitution willy-nilly, especially for those things they knew they could do legislatively. It is one thing to amend the Constitution to limit the terms of Presidents or to set up successions when there is a vacancy in the Vice Presidency or the Presidency itself. Those are of constitutional import. But something we can do simply legislatively, why amend the Constitution? Let's not debase our national charter with a misguided political attempt to curry favor with the American people by this declaration against budget deficits. Let us not make the mistake of other countries and turn our Constitution into a series of hollow promises. We are too great a nation for that. We are too great a democracy for that, and the loopholes in Senate Joint Resolution 1 already abound. One need only consult the language of the proposed amendment and majority report for the first sets of exceptions and creative interpretations that will allow Congress to reduce the deficit only so far as Members choose to cast responsible votes. The Judiciary Committee reports that the Congress will have flexibility in implementing the constitutional amendment. It will leave the critical details to implementing legislation. [[Page S1000]] This proposed constitutional amendment uses the seemingly straightforward term ``fiscal year.'' But according to the committee report, this time period can mean whatever a majority in Congress wants it to mean. It has no immutable definition. It may mean one thing this year, and we may decide the next year it means something else. It can be shifted around the calendar as Congress deems appropriate. Watch out for the shifting of fiscal years in order to juggle accounts when elections are approaching. This proposed amendment gives congressional leeway to rely on estimates to balance the budget, to make temporary self-correcting imbalances and to ignore very small or negligible deficits. But what is temporary? What is self-correcting? What is small? What is negligible? With apologies to one of our distinguished predecessors, the Senator from Illinois, Senator Everett Dirksen, a billion here, a billion there; after a while, it does not add up. This is a lawyer's dream. What is negligible? We think a billion is negligible, and somebody sues, or a whole lot of people sue. My guess is that unless it becomes a political bone of contention between political parties as we approach an election, we could go a long time without Congress declaring itself in violation of this proposed amendment. What happens if the President of the United States says, ``Well, here are my estimates. My estimates are we are going to receive x number of dollars and my estimates are we are going to spend x number of dollars,'' and it turns out he is wrong? What do we do? Sue him? What happens if the Congress does the same thing? We estimate in our budget resolution we are going to receive x number of dollars and spend x number of dollars. What happens if we are wrong? Do all 535 Members go to jail or just those who voted for it? This proposed constitutional amendment could be economically ruinous. During a recession, deficits rise because tax receipts go down. But various Government payments, like unemployment insurance, go up. By contrast, the amendment would demand the taxes be raised and spending be cut during a recession or depression. It is almost like when President Herbert Hoover, as we started into a slight recession, said the thing that would give the most confidence to the country would be to force through a balanced budget. He did, and we went through the worst depression in this century. As Treasury Secretary Robert Rubin testified in the Judiciary Committee, ``the balanced budget amendment would turn slowdowns into recessions and recessions into more severe recessions or even depressions.'' Economic policy has to be flexible enough to change with a changing and increasingly global economy. But the requirements of this proposal would tie Congress' hands to address regional, national, and international problems. We should not hamstring the legislative power that is expressly authorized in article I, section 8, of the Constitution. Let us not undo that which our Founders wisely provided: flexibility. This proposed constitutional amendment risks seriously undercutting the protection of our constitutional separation of powers. No one has yet convincingly explained how the proposed amendment would work and what role would the President play and what role would the courts play in its implementation and enforcement? I can just see the new law school courses all over the country. How do you sue under the constitutional amendment? When you put the budget in the Constitution, economic policy would inevitably throw the Nation's fiscal policy into the courts. That is the last place issues of taxing and spending should be decided. Basically what it does is it destroys this delicate balance between the three branches of government: the executive, the legislative, and the judicial. I cannot understand why Members of Congress want to give up their powers to the judiciary, because the effect of the proposed amendment could be to toss important issues of spending priorities and funding levels to the President or to thousands of lawyers in hundreds of lawsuits in dozens of Federal and State courts. If approved, the amendment would have let Congress off the hook by kicking massive responsibilities for how tax dollars are spent to unelected judges and the President. Judge Robert Bork warned of the danger more than a decade ago. Again, Mr. President, why--why--would we give up the constitutional powers we have had for 200 years and give them over to the courts who do not want them and have not asked for them? So instead of creating future constitutional questions, let us do the job we were elected to do. Let us remember what the President said last night: You vote it, I sign it; we have a balanced budget. Simple as that. But it means we have to make the tough choices and cast the difficult votes and make progress toward a balanced budget. I worry, Mr. President, that perhaps some, because it is a lot easier, just vote for a constitutional amendment which has huge popularity. It is a lot easier to do that than to vote against a whole lot of programs where your vote is not popular. It is not popular to actually cast the votes to balance the budget. It is easy to cast the vote for the constitutional amendment. It is sort of like saying, ``I will vote today to eliminate cancer.'' Who disagrees with that? Or the person says, ``I'm against cancer. I don't want to give up smoking, but I'm against cancer.'' It is the difficult steps. This proposed constitutional amendment undermines the fundamental principle of majority rule by imposing a three-fifths supermajority vote to adopt certain budgets and raise the debt limit. Again, has anybody read a history book in this body? Has anybody found out how this country started? Go back to our Founders. Our Founders rejected such supermajority voter requirements on matters that are within Congress' purview. Alexander Hamilton described supermajority requirements as poison. I sometimes wonder if anybody around here even knows who Alexander Hamilton or Thomas Jefferson, George Washington or these people were. Hamilton observed that: Supermajority requirements serve to destroy the energy of the Government and to substitute the pleasure, caprice or artifices of an insignificant, turbulent or corrupt junto to the regular deliberations and decisions of a respectable majority. These supermajority requirements are a recipe for increased gridlock, not more efficient action. If there are some in here who have not read The Federalist Papers, just recall the lessons of the last 2 years when the Government was shut down by a determined minority intent on getting its way. The Nation was pushed to the brink of default when a group pledged that, no matter what, they would not vote on raising the debt limit, they were going to let the Government be shut down. Whether it was political or they went out the wrong door in an airplane or whatever, they shut down the Federal Government. That cost taxpayers hundreds of millions of dollars. It certainly cost everybody in private enterprise in this area, just about any area in the country, hundreds of millions of dollars more. We looked ridiculous to the rest of the world. But all because a minority made that determination. Such supermajority requirements reflect a basic distrust, not just of Congress, but of the electorate itself. I reject that notion. I have faith in the electorate. I am prepared to keep faith with and in the American people. Mr. President, we have also said that ``The devil is in the details.'' I believe Emerson first said that. The proposed constitutional amendment uses such general terms even its sponsors concede that implementing legislation will be necessary to clarify how it is going to work. So we ask, what will the implementing legislation say? Well, we are not going to find out until we see the implementing legislation. Basically this says, ``Trust us. Pass this. And we'll tell you afterward what it means.'' That is kind of like somebody saying, ``I'll sell you this business. Would you sign this contract in blank? Give me all your money, but I will fill in the terms afterward.'' I am a Vermonter. We just do not quite do it that way back home. We trust each other, but we kind of like to see the details. The questions raised by this proposed constitutional amendment still lack satisfactory answers. [[Page S1001]] For example, what programs are going to be off budget? What role will the courts and what role will the President have in executing and enforcing the amendment? How much of our constitutional power do we give up? What is really compliance with the amendment? How much of a deficit may be financed and then carried over to the next year? There are a lot of questions like these that are critical to our understanding of this amendment. And they have not been answered. Should Congress be asked to amend the Constitution by signing what amounts to a blank check? I disagree with that. No Congress should be asked to do that. Nor should each State be asked to ratify a pig in a poke. In the interest of fair disclosure, Congress should first determine the substance of any implementing legislation as it did in connection with the 18th amendment, the other attempt to draft a substantive behavioral policy into the Constitution. Let us go look at the implementing legislation first. In my view, this amendment does not meet the requirements of article V of the Constitution for proposals to the States because it is not constitutionally necessary. It is only with resolve and hard work that we make progress. Neither is evident in the proposed constitutional amendment. I have heard some of the speeches about why it would be good politics, popular politics to vote for this. Politics--good, popular or otherwise--have no place when we are dealing with the Constitution of the United States. We inherited a great legacy from those who went before us because they resisted the temptation to play politics and to amend our Constitution willy-nilly. As a result, we are the greatest and strongest democracy history has ever known. The bedrock of it is our Constitution, which sets up three branches of Government, with powers that make sure there are checks and balances. This amendment destroys so much of what this country has rested on for over 200 years. So instead of a bumper sticker for the Constitution, what we need is the wisdom to ask what programs we must cut, and the courage to explain to the American people that there is no procedural gimmick that can cut the deficit or the debt. There is no nice, easy self-serving item. There is only hard work. But I think the American people would rather have the hard work than have us fool around with our Constitution. Yesterday the Wall Street Journal printed an editorial titled ``Constitutional boondoggle'' in its editorial page. The editorial says: We do need to get the national debt declining . . . I agree. We do need to restrain federal spending. Again, Mr. President, I agree. We do need to resolve the Medicare crisis . . . Mr. President, I agree. We do need to look beyond the year 2002. Mr. President, I agree. But then they said: But these battles have to be fought one by one, and [they] can't be solved by amending the Constitution. Once again, Mr. President, I agree. The Wall Street Journal editorial concludes: The concept embodied in the proposed [constitutional] amendment measures nothing useful; it is at best a distraction, and at worst, causes confusion that makes the right things harder to do, not easier. I ask unanimous consent the Wall Street Journal editorial be printed in the Record immediately after my remarks. The PRESIDING OFFICER (Mr. Faircloth). Without objection, it is so ordered. (See exhibit 1.) Mr. LEAHY. Mr. President, think back again to last night's State of the Union address. The President said all it takes is for us to cast the votes and for me to sign the bill to balance the budget. Many of us who cast those tough votes to cut programs, to bring the deficits down, have faced in the short term the wrath of our constituents but in the long term a realization that we have done the right thing for the country. I am proud that I have voted for budgets that have now, 4 years in a row, brought down the deficits, something that has not happened certainly in the last 15 years or so. We have had a President who has had the courage to give us four budgets in a row that bring down the deficits. They have meant tough votes. Some Members who voted to bring down the deficit have probably lost elections because of those tough votes. How much better they have been to themselves, to their children and their children's children because they resisted the temptation, as Senators and Representatives have for over 200 years, to amend our Constitution unnecessarily. So let us not proceed to a view of short-run popularity but with a vision of our responsibilities to our constituents and the Nation in accordance with our cherished Constitution. Mr. President, first and foremost I am going to cast votes on this floor to protect that Constitution, popular or otherwise. I take my oath of office seriously. I appreciate the privilege the people of Vermont have given me to represent them in this body. There is nothing I will ever do in my life that will make me as proud as being in this body representing the people of Vermont. As I have told the people of Vermont in each one of my elections, I will protect the Constitution first and foremost. As I told them in my last two elections, I will vote against this constitutional amendment because it does not protect our country, it demeans the Constitution, and it lets us off the hook from doing the things that we really should do. I yield the floor. Exhibit 1 [From the Wall Street Journal, Feb. 4, 1997] Constitutional Boondoggle With President Clinton about to deliver his State of the Union Address and new budget, this is an apt moment to say that the President is right and the Republicans are wrong on item one of the GOP Congressional agenda. The balanced budget amendment is a flake-out. The notion of amending the Constitution to outlaw budget deficits is silly on any number of counts. Politically it's empty symbolism. Legally it clutters the Constitution with dubious prose. Today's lesson, though, concerns economics and accounting. You can't measure economic rectitude by any one number, let alone the ``deficit,'' however defined, let alone the deficit projections the proposals will inevitably involve in practice. The attempt to enshrine such a number in the Constitution is bound to prove a snare and a delusion. The proposal passed by the Senate Judiciary Committee says that outlays (``except for those for repayment of debt principal'') shall not exceed receipts (``except those derived from borrowing''). While this concept sounds simple, in fact it reflects neither accounting principles nor economic reality. If you can balance your family budget, the thinking goes, the government can balance the federal budget. But applying the budget amendment's principles to households would outlaw home mortgages, which have proved a boon to countless families and the general economy. What a family balances is its operating budget, a concept foreign to the federal accounts. In corporate accounting, similarly, the health of an enterprise is measured by careful distinctions such as accruals or depreciation. Even the balanced budget restraints of state and local governments exclude spending on capital improvements financed by bond issues approved by voters. The reality is that borrowing money is not a sin; it depends on how much money, and in particular on the uses of the borrowed funds. Even the amendment itself recognizes this by allowing Congress to waive the amendment by majority vote when war is declared or when a joint resolution declares ``a military conflict which causes an imminent and serious military threat to national security.'' Other emergencies would presumably be dealt through the provision that Congress could approve borrowing by a two-thirds vote. Republicans back the amendment because it scores well with focus group participants, who don't understand the difficulties, and with Ross Perot, who doesn't care. They also hope that limiting the government's power to borrow will force it to limit spending. Democrats seem pretty much to agree, and want to voice support for the amendment to appease focus groups while also killing it to avoid a spending straitjacket. We're not so sure. For one thing, we've observed how European politicians, even supposedly conservative ones, have been behaving toward the budget-deficit requirements they imposed on themselves in the Maastricht agreement. To get within the numerical criteria, the Italians are taking their railroads off and on budget; the French government, in return for an infusion of funds this year, assumed pension obligations running into the far future. Governmental accounting, you see, simply counts formal government debt; it ignores unfunded governmental promises. This is a loophole enormous enough that Rep. Fernand St Germain could drive half of [[Page S1002]] the S crisis through it in one night in 1980, when he doubled deposit-insurance limits. Another enormous loophole is the government's ability to offload, or ``mandate,'' costs on corporations, individuals and state and local governments without running any receipts or outlays through the Washington books. And when the bill for Rep. St Germain's coup suddenly came due in 1989, would it really have been better to avoid borrowing and put the rest of the government through a temporary wringer? These imperfections might not matter if the amendment did no harm, but it's easy enough to imagine scenarios in which it would keep us from doing the economically right thing. Take the proposals by the most conservative bloc in the recent Social Security Commission. They would allow current taxpayers to personally invest part of what they owe in payroll tax, giving them a better return. But meeting obligations to those retiring before their benefits were funded would require a big issue of government debt. The new debt would merely formally recognize current obligations, and the privatization would dramatically reduce future obligations. Though this transaction would plainly improve the federal fisc, the balanced budget amendment would outlaw it. Or for that matter, take the Reagan defense build-up, which led to victory in the Cold War. The balanced budget amendment would have allowed a majority to vote for borr