Congressional Record UNUM

E PLURIBUS

United States

of America PROCEEDINGS AND DEBATES OF THE 104th CONGRESS, FIRST SESSION

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

S 7027

Senate

(Legislative day of Monday, May 15, 1995)

Vol. 141 WASHINGTON, MONDAY, MAY 22, 1995 No. 85

The Senate met at 8:29 a.m., on the

expiration of the recess, and was called

to order by the President pro tempore

[Mr. THURMOND].

PRAYER

The Chaplain, Dr. Lloyd John

Ogilvie, offered the following prayer:

Let us pray:

Lord of history, we gain perspective

on the perplexities of the present by remembering how Your power has been

released in response to prayer in the

past. We think of Washington on his

knees, of Franklin asking for prayer

when the Constitutional Convention

was deadlocked, of Lincoln praying for

wisdom in the dark night of our Nation’s divided soul. Gratefully, also we

remember Your answers to prayers

seeking Your strength in struggles and

Your courage in crises. Most of all,

today we remember those times when

Your guidance brought consensus out

of conflict, and creative decisions out

of discord.

In the midst of the continuing discussion and debate over the budget, once

again we need Your divine intervention

and inspiration. Watch over this Senate during this strategic week. May the

Senators be united in seeking Your

best for the future of our Nation. Give

them strength to communicate their

perception of truth with mutual respect and without rancor. We are of

one voice in asking for Your blessing

on this Senate as it exercises the essence of democracy in this vital debate. You have been our guide over the

206 years of the history of the Senate of

the United States, and we trust You to

lead us forward today. In Your holy

name. Amen.

RESERVATION OF LEADERSHIP

TIME

The PRESIDENT pro tempore. Under

the previous order, the leadership time

is reserved.

CONCURRENT RESOLUTION ON

THE BUDGET

fThe PRESIDENT pro tempore. Under

the previous order, the Senate will now

resume consideration of Senate Concurrent Resolution 13, which the clerk

will report.

The legislative clerk read as follows:

A concurrent resolution (S. Con. Res. 13)

setting forth the congressional budget for

the United States Government for the fiscal

years 1996, 1997, 1998, 1999, 2000, 2001, and 2002.

The Senate resumed consideration of

the concurrent resolution.

Pending:

Rockefeller amendment No. 1112, to reduce

the tax cut and apply the savings to Medicare and Medicaid.

The PRESIDENT pro tempore. Who

yields time?

Mr. DOMENICI addressed the Chair.

The PRESIDENT pro tempore. The

distinguished Senator from New Mexico.

Mr. DOMENICI. Mr. President, does

the Senator from Wyoming desire to

speak on the pending amendment or

the resolution?

Mr. THOMAS. Yes, I do wish to speak

on the pending amendment.

Mr. DOMENICI. How much time

would the Senator like?

Mr. THOMAS. Ten minutes.

Mr. DOMENICI. I yield 10 minutes to

the Senator.

The PRESIDENT pro tempore. The

Senator from Wyoming.

Mr. THOMAS. Thank you, Mr. President. I appreciate the opportunity to

talk some about the budget considerations that we will have this week. We

have had a good deal of discussion

about it prior to now, both in the discussion of a balanced budget amendment and more specifically on the

budget resolution that is before this

Congress. We have talked, of course, in

great detail and should and will continue to do that.

Mr. President, I think it is also useful perhaps to take a moment during

the course of this discussion and go

back to the real basic issue, and that is

the question of whether or not it is

morally and fiscally responsible for

this Congress and this country to operate under a balanced budget, whether

or not we can continue to go forward

with endless budgets that are $200, $250

billion in arrears.

So, Mr. President, I would just like

to talk a minute about the basic issue.

Americans, it seems to me, quite clearly voted in 1994 for change. They voted

for many changes. I think they voted

with the notion that this Federal Government is too large and costs too

much. I do not think there is any question about that. I think they also voted

in terms of change for a balanced budget. We have not had a balanced budget

for a whole generation, 25 years at

least.

So I think people say, why should the

Government not be fiscally responsible

as we are expected to be in our families

or in our businesses? Americans voted

for change in 1994 and they want us to

be fiscally responsible. Some say,

‘‘Well, the deficit does not matter, it is

just a small percentage of the total.’’ It

does matter. It does matter to each of

us. It matters to us currently. It matters to us in terms of the cost of interest which will soon be the largest single line item in the budget, interest on

a budget that will soon be expanded to

$5 trillion, and each of us each day

must pay the interest on that debt.

It matters because it takes dollars

out of the economy to finance this

debt, dollars that could otherwise be

spent for investments in business and
S7028 CONGRESSIONAL RECORD — SENATE May 22, 1995

in jobs to strengthen the economy. So

it does matter.

It matters to us in that what we do

now has great impact on our children

and on our grandchildren and who is

going to pay the bill. Our credit card is

maxed out and we are passing it on to

somebody else to pay for the things

that we want now. Those are the large

questions that are there. We can have a

smaller, less expensive Government,

and to me that is the most exciting

part.

Of course, the dollars are the issue,

the budget is the issue, but the exciting part is we have an opportunity for

the first time in many years to really

take a look at how Government functions, what functions the Government

is involved in, how we might better

provide those services in a more economic, more efficient way, and I do not

think anyone would argue with the

fact that most of the services could be

delivered more efficiently.

We have an opportunity for the first

time in a long time to move Government closer to people, to move it closer

to the States where you and I as citizens have more input into the decisions

made, where the programs that are designed to be used over the country are

applied differently in Cheyenne, WY, or

in Greybull, WY, than in Pittsburgh

and they should be and we need to have

the flexibility to do that.

For the first time, we have a chance

to do that. For the first time, frankly,

in my memory—I came from the House

where one party had been in charge for

40 years and there were not many opportunities to evaluate programs and

to change programs. If a program was

not working, the solution was to put

more money in there, put more money

in the program, that will fix it. Of

course, it does not fix it. You have to

go in and see if there are some other

kind of changes. For the first time in a

very long time we have an opportunity

to do that. That is all part of this

budget issue.

So it is time to keep our promises. I

am talking about a basic concept, and

it is tough. It is tough. No one suggests

balancing the budget is an easy matter,

no one suggests it is not going to cause

pain. No one suggests that all of us are

going to have to make some sacrifice

or, indeed, some change, and change is

not easy. But that is what it is all

about.

I hope we do not forget the bottom

line, and that is the real goal is to become financially and fiscally responsible, and that is what we are seeking

to do. The goal is to change Government so that, indeed, we can continue

to carry out those functions that are

proper for the Federal Government, but

carry them out in a manner that is efficient and effective and, indeed, goes

to providing services.

The problem, of course, is runaway

spending. Spending is much easier than

reducing spending. It is great fun to

spend. In our State in the late seventies and early eighties, we had a great

economic boon with the oil industry

and the mineral industry.

Being in the Wyoming Legislature

was great fun. When we had a problem,

we just gave them more money, tons of

money. That has changed, of course. I

went in the legislature in the mideighties. It was not nearly as much

fun. I was on the Appropriations Committee and instead of saying, ‘‘Oh, yes,

we can fix your problem, here is more

dough, we can do that,’’ we had to say,

‘‘I am sorry, we have to set some priorities and we do not have bucks for everything that everybody would like to

have.’’ But we did well and continue to

do well and continue to have to set

those priorities and decide what we

think are the most important things

that Government should do. I think

that is even more important at the

Federal level. It is awfully easy to

move away from those things that

most people would agree are fundamental to the Federal Government and

move into things that more properly

belong somewhere else.

So the question will be, as we hear it

in just a few years, where will we be as

we go into the next century, the new

millennium? Will we have increasing

debt out as far as we can go? Or will we

be able to say to ourselves in 5 or 7

years that, yes, it was tough, but we

were able to change the course of the

Federal Government and the spending

patterns to where we are moving or

have attained a balanced budget? Will

we be able to say we are doing what

most people seem to think is reasonable, that is, not to spend more than

we take in. You do that on your allowance, with your earnings, and in your

family. Of course, there are times you

borrow and you repay. Of course, there

are times for special things. But, overall, you have to keep your spending

where your income is.

If we do not do something, the projected deficits will be in the neighborhood of $275 billion—more than they

are now—out as far as we can see. Is

that what we want to happen?

By the year 2000, if we do not do

something, we will have a $7 trillion

debt. So we need to do it. We need to

stand up now and we need to say come

to the snubbing post and make some

decisions. There are always reasons not

to act. You have heard over the last

few days, and listen to the next 3 days,

the litany will be that we are all for a

balanced budget. Yes, I want to balance

the budget. But we will go through 10

or 12 reasons why you cannot do it this

way or that way. The political reason,

of course, is to be able to stand up and

say that I am for that thing everybody

is for—in this case, balancing the budget—but then have a number of reasons

to justify voting no. And that is what

you will hear all week.

Now is the time to stand up and say,

yes, the basic issue is that we have to

become fiscally responsible. How do we

do it? Sure, there is a legitimate argument as to how you do it, a legitimate

set of priorities for argumentation, and

I understand that. But the fact is that

you have to do it. It is one of those

things that is morally and fiscally responsible to do. We are not asking for

draconian changes. We are asking that

instead of increasing spending at 5.5

percent over time, to increase spending

at 3.2 percent over time. Only in Washington would that be considered a cut.

Unfortunately, the Clinton administration and the other side of the aisle

do not address the problem. They simply say, yes, we want to balance the

budget. We do not like what you are

doing, but they do not have a solution.

So we need to move forward and commit ourselves to the notion that we can

balance the budget—and we can. We

can do that over a period of time, and

we can do that in 7 years, as proposed—

a 7-year glidepath to balancing the

budget and fixing things like Medicare.

There is not really a question as to

whether we have to do something with

Medicare. The point is, you do something or it goes broke. In 2 years, it begins to pull out of reserves, and in 7

years it is broke. The basic question

there is, do we want to continue a program like Medicare to have health care

for the elderly? Of course, we do. But in

order to do that, you have to make

some changes. Medicare has grown at a

rate of 10 percent a year. We are suggesting that, as in the case of the other

medical programs of delivery, we can

make it more efficient. This weekend, I

met in Cheyenne with the TriCare

group. It is health care for active duty

military or retired military and their

dependents. They are changing

TriCare, their program, which includes

managed care; they are changing the

way they have delivered the system.

We have done that in the private sector. For the first time, health care

costs have stabilized and in some cases

have gone down—everywhere except

Medicare and Medicaid. We can do that

not by taking away benefits but by

changing the delivery system and continuing to grow at 7.1 percent instead

of 10 percent. Some will say there is

growth in numbers. Keep in mind that

this projected spending goes from now

$4,600 per capita in Medicare, approximately, to $6,400 per capita. That takes

into account the growth. So we are

talking about fixing something that

each of you wants to continue to go

forward with.

So, Mr. President, first of all, I congratulate the chairman of the Budget

Committee for his very tough work and

leadership in bringing forth a proposal.

Is it perfect? Of course not. Does it get

us there? Yes. Does it solve the basic

issue of balancing the budget? Yes. We

have to keep our eye on the ball and

say what is most important to us over

time, to be fiscally responsible or to

argue about the details? We can argue

about details but we should not. I hope

we are committed to changing the

course of this Government, that we are

going to make the changes that the

voters asked for and bring forward to
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7029

the Appropriations Committee a balanced budget amendment which will

put us on a glidepath in 7 years to financial and fiscal responsibility.

I yield the floor.

Mr. President, I suggest the absence

of a quorum, the time to be charged to

the Republican side.

The PRESIDING OFFICER (Mr. DOMENICI). The clerk will call the roll.

The legislative clerk proceeded to

call the roll.

Mr. DOMENICI. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER (Mr.

THOMAS). Without objection, it is so ordered.

Mr. DOMENICI. As manager of the

bill and controller of the time, I yield

to the Senator from Arizona, who is

now on the floor.

The PRESIDING OFFICER. The Senator from Arizona is recognized.

Mr. KYL. Mr. President, let me speak

for a few minutes as well. Mr. President, I noted with interest your comments of just a little while ago using

some Wyoming phraseology to explain

why we need to get on with this job. I

think that is the thinking of most people in this country that kind of wonder

why back here in Washington, DC, the

people who have the responsibility for

managing our financial affairs of the

U.S. Government cannot quite see it

the way they do, the way they have to

manage their lives every day.

During the Easter recess, I traveled

all around my State of Arizona, and I

talked to people just like the folks you

were referring to. They get up early in

the morning, get their kids off to

school, work hard all day long, come

home tired, and they wonder why the

Federal Government is asking them to

give more and more of what they have

earned to the Federal Government so

that people back here in Washington

can make decisions about how that

money should be spent. They wonder

why the Federal Government cannot

balance its budget like they have to

balance their own families’ budgets

every day.

They understand that the Government is different than an individual or

a family. They understand that there

are tough decisions, that from time to

time we are asked to spend money on

things that have large political constituencies. They understand those

things.

However, they have also come to the

conclusion that by and large Government is not a really great buy. That all

of these years they have been asking

Government to do things for them they

have, in effect, hired the Government

to solve problems, it has not been a

very good buy.

We have spent $5 trillion on welfare,

and we have more people who are below

the poverty line today than we did

when the Great Society began, and a

host of problems that clearly the welfare system has not solved.

They see a Federal debt that is now

approaching numbers that no one can

even comprehend—approaching $5 trillion, a number that none of us can really comprehend. They see annual deficits, and they wonder why after the

politicians a couple of years ago promised them that we would achieve a balanced budget, at least the budgets

would be submitted that would get

America on a path to achieving a balanced budget, they see the President’s

budget this year that does not even

try. It just gives up. It says, I understand that the American people want a

balanced budget, but President Clinton

says I am going to be spending, or recommend that the Congress be spending,

about $200 billion each year more than

we take in. So at the end of his 5-year

budget we have added $1 trillion to the

national debt.

They ask why this cannot stop, why

the Congress cannot get its act together. In the very last election on November 8, I think they sent a very

strong message which has been responded to in both the House and the

Senate, at least by the Republicans. In

the House, just about 5 days ago, a

budget was passed which achieves balance in 7 years, the same amount of

time that was called for under the constitutional amendment that failed by

only one vote.

It says that by the year 2002 we will

have a balanced budget, and at that

time we begin actually paying off our

national debt. It is too much of a task

to be resolved in 1 year. It would be

like asking people to pay off their

home mortgage in 1 or 2 years. It is too

big for that. But over 7 years, we can

restrain the growth in spending to such

a degree that even though most programs will continue to grow, it will

grow at a slower rate, enabling the

Government to save enough money,

about $1 trillion over that 7 years, that

by the end of the 7 years we will be in

balance.

What does this mean to the average

American? They know instinctively it

has to be done. They know what happens when they do not balance their

budget. They realize that their standard of living, and more importantly,

their children’s and grandchildren’s

standard of living is being threatened

as a result of this huge deficit.

One of the problems, of course,

caused by the deficit, is that it raises

interest rates. By crowding out the

market for money, interest rates go up.

We have estimates that if we could get

the budget balanced it would reduce interest rates by about 2 percent. Think

what a reduction of 2-percent interest

rates would mean on the average home

mortgage or the car purchase, or anything else that we buy on time.

Of course, having a big deficit requires citizens to pay more in taxes.

For one thing, we have to pay $200 to

$300 billion interest on the Federal debt

every year. Until we begin to pay that

debt off, we will continue to have the

interest expense every year. Not only

is that more taxes we have to pay, but

it is money that we cannot spend on

other things that people would like

Government to spend on.

There have been a lot of speeches

particularly on the other side of the

aisle during the last week that say,

look what will happen if we pass this

budget. Look what will happen if we

balance the budget.

Mr. President, look what will happen

if we do not balance the budget. That is

the question. It reminds me of the true

story one of my colleagues was telling

me about. An oil rig was burning in the

North Sea. It was 1,200 feet from the

rig down to the North Atlantic. It was

pitch black, except for the fact there

was oil burning on the surface of the

water. One of the people who was working on the rig jumped off of that platform, over 1,200 feet into the water. He

survived.

A television person interviewing him

in the hospital asked him the question,

Why, knowing that it was 1,200 feet

down, you could not see anything, it

was pitch black except for the oil that

was burning on the water, why did you

jump in the water? And his answer was,

of course, because there was so much

fire at my back, I knew that if I did

not, I would be burned alive.

In other words, the question was not

might something bad happen to me if I

jump off; the question is, most certainly something bad will happen to

me if I do not.

The question is not, will something

bad happen if we pass the balanced

budget; the question is, what will happen to this country if we do not?

I think almost everyone recognizes

that while there may be some concerns

about the restraining of the growth in

spending if we do pass this balanced

budget, that the alternative is far

worse, an alternative that relegates

our future generation to a lower standard of living than we have been able to

enjoy in this country. That is why we

have to pass the balanced budget.

Now, Mr. President, one of the concerns that I have had is that we have

not gotten a lot of leadership on the

other side. There is no alternative

budget. We put the President’s budget

on the floor last Friday, and said what

about this? Do any Members think this

is a good idea? Nobody did. It failed, 99

to 0. One of the reasons, of course, was

that it did not even attempt to restrain

spending and achieve a balance. Instead, it has deficits at the rate of

about $200 billion each year, for the

next 5 years.

Right now, the national debt is approaching $5 trillion. It is $4.8 trillion

to be exact. That is about $18,500 for

every man, woman, and child in the

country. I just had a new grandchildren

born about 12 days ago. His share of the

national debt, right now, is $18,500.

That is unfair to him.

In the last election, people were saying it is important we do something

about the debt, because they saw for

the first time in history that future
S7030 CONGRESSIONAL RECORD — SENATE May 22, 1995

generations did not have the same opportunity that we did, that the American spirit of optimism that each succeeding generation would do better

than the last was not necessarily going

to come true.

When they gave that message, they

also gave a mandate to do something

about it, to eliminate that $18,500 of

debt for every man, woman, and child

in the country. That is an average of

about $74,000 of debt for the average

family of four.

Even if Congress balanced the budget

this very moment, the average American family would still be stuck with

that bill of $74,000. Of course, that rivals the mortgage on most homes in

this country. In order just to pay the

interest on that, the average family

will have to pay about $5,000 a year annually.

Mr. President, stop and think about

that for a moment. What we are saying

is, just to pay the interest on the debt,

every family has to pay about $5,000 in

taxes. This is one of the reasons we

have to get the debt down, and why

balancing the budget will help the average American people, because every

year that that debt remains at the

level it is that $5,000 in taxes goes to

pay the interest on the debt. It cannot

be used for other expenditures and we

cannot reduce the tax burden. At least

it said we cannot reduce the tax burden, because, obviously, the interest on

the debt has to be paid.

Now, this $5,000 in taxes annually is

about $430 a month, just in interest

payments. That assumes no other payment. So, that is what the average

American family is spending every single month with the debt we have today.

As I said, put this into perspective

for every year in which the Federal

Government runs these $200 billion

deficits. The average young person will

pay an additional $5,000 in taxes over

his or her lifetime. Right now, a child

born this year will pay about $187,000 in

taxes because of this debt. That is what

my brand-new grandson is relegated to

if we cannot get this debt under control.

This $5,000 in taxes, increased taxes

for every year that we run these deficits, is not only a fiscal matter, Mr.

President, but it is a moral matter. I

think we can get bound up in all the

numbers but we have to realize what

we are doing to future generations. It

is immoral to be spending money in

our generation and not be willing to

pay for it. It is as if we were running up

credit card debt, and as we exit the

scene we hand that debt to our children

and say, ‘‘Will you please pay the bill

for the excesses during our lifetime.’’

The $1 trillion in new debt that is

proposed by President Clinton’s budget

over 5 years represents an additional

$25,000 in taxes for every family, or I

should say for every individual. That is

$25,000 for every young man, woman,

and child in this country. There is not

a whole lot, Mr. President, that we can

do worse for the future generations

than to continue to run up this debt,

because it guarantees a lower standard

of living for future generations.

So, as we discuss the plans for

achieving balance over the course of

the next 5, 6, 7 years we have to examine the arguments pro and con that are

being made here. A lot of arguments

against this balanced budget from the

other side expressed concerns about

what will happen if we do not do it.

They attack particular parts of the

budget. They represent no alternatives.

The amendment that is pending on

the floor right now, as a matter of fact,

accepts the fact that we are going to

achieve balance, and it says with the

$170 billion that we are going to save as

a result of that because of reduced interest rates, the so-called dividends

that will result by doing the job we are

supposed to do, the amendment on the

other side says we will spend that

money. We have a way of spending that

money. So not only do many of the

Senators on the other side of the aisle

here object to balancing the budget by

the year 2002 and raise arguments

against balancing the budget by the

year 2002, but they are very willing to

take the savings that result from what

we are willing to do by biting the bullet here, and spend that money before

it has even been saved.

That is not being very constructive

about solving these problems when we

know we have a big deficit, we know we

have to solve it, the President’s budget

was defeated by 99 to 0, there is no alternative budget on the other side, all

that the Senators on the other side,

most of them, have done is to carp

about the fact that some segment of

our society is not going to get quite as

much money as they have been getting

over the years if we balance the budget

by the year 2002. Notwithstanding the

fact that spending is going to go up in

most categories, it will simply go up at

a lesser rate than it would otherwise,

the arguments are that somebody is

going to suffer because they will not

get quite as much money as they otherwise would have gotten; just negative

criticism of what we are trying to

achieve.

And, at the same time that negative

criticism is coming out with no constructive alternative, the amendment

on the floor now says, ‘‘By the way,

with the money you are going to save

by what you are willing to do, we

would like to spend $100 billion of

that.’’

That is not very constructive to this

debate. So, as I said, during the next 3

days as we debate this and we consider

the arguments back and forth, I think

the primary thing we have to consider

is the future of our grandchildren and

our children. That is why it is important for us to accomplish this. It is important because of the savings, it is important because of what we can do with

that money today, but more important, what it means to their future,

what it means to the future prosperity

of this country and the opportunity to

create a better living in this country

for those future generations.

If we do not accomplish our goal of

achieving balance in our budget within

the next 7 years, we will not deserve

the title of Senator. We will not deserve to be serving in this body because

we will have failed in our obligation to

those future generations. And that ultimately is why most of us sought election in the first place and are so privileged to serve in this body.

The PRESIDING OFFICER (Mr.

LUGAR). The Chair recognizes the Senator from Minnesota.

Mr. WELLSTONE. Mr. President, my

understanding is that by prior unanimous agreement, at 9:15, Democrats

were to speak; is that correct? If not—

is there no such understanding?

The PRESIDING OFFICER. The

Chair states there is no agreement to

that effect.

Mr. WELLSTONE. The Senator from

Florida wants to speak now and that is

absolutely fine with me. I just ask

unanimous consent, after the Senator

from Florida speaks, that the Senator

from Minnesota have up to half an

hour to speak.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. WELLSTONE. I thank the Chair.

Mr. KYL. Mr. President, at this time,

let me yield to the Senator from Florida.

The PRESIDING OFFICER. The Senator from Florida is recognized.

Mr. MACK. Mr. President, during the

next several days, as during the past

few days, we are going to hear a lot of

discussion about the numbers within

the budget and a lot of statistics in the

debate about economics. But the underlying reality of what we are debating is not really economics, and it really does not directly relate to numbers.

What we really are talking about is the

future of this great Nation. We are

talking about the futures of our children and our grandchildren. We are

talking about the futures of our moms

and dads and our grandparents. And we

are talking about the futures of working men and women in this country.

This comes to my mind, frankly, because over this weekend I had the opportunity to speak both to my mom

and dad and to my grandchildren. My

dad is 82 years old. My mother is 80.

And I had the opportunity, believe it or

not, to speak to the youngest of my

grandchildren, who is 2 years old.

I thought about this earlier this

morning. Some things never change.

Because my little grandson said to me

as we were chatting on the phone, ‘‘I

am going to go watch baseball.’’ You

can imagine that out of a little 2-yearold, he said—‘‘I am going to go watch

baseball.’’

Talking with my mom and dad and to

my daughter and my grandchildren

over the weekend made me realize that

what we are focusing on is the future of

our Nation and the people of this great

country of ours. My dad still volunteers over at one of the hospitals in my
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7031

community—if you can imagine that—

at the age of 82. He helps lift people out

of their hospital beds, and puts them

on a stretcher to take them down to

the X ray or to the operating room.

People from all over my hometown

come up to me and tell me that my dad

helped them when they were over at

the hospital. The interesting thing is

my dad just got out of the hospital a

few weeks ago. My mother just returned from some 3, 31⁄2 weeks in a

nursing home.

In a sense, they represent the elderly

of our Nation and their reliance on

health care. Virtually every family in

America experiences the same kind of

thing I am talking about—the need of

our elderly to look to health care. And

the question we must consider is what

their future going to be like if we do

not address the question of Medicare.

The trustees of the Medicare trust

fund have said now for 2 years in a row

that Medicare is going to be bankrupt

in the year 2001 or the year 2002, depending on what set of economic assumptions one uses. How will other

folks’ moms and dads and grandparents

be able to rely on Medicare if we do not

act? Frankly, this is not a Republican

problem. This is a problem for the entire Nation. This is one where the

President of the United States should

be taking the lead. There should be a

bipartisan plan.

Frankly, when you look at the trustees’ report and you see the hesitancy

on the part of our colleagues on the

other side of the aisle, and the President, to lead, we do not have any

choice than to take the lead ourselves.

We must act because 6 or 7 years from

now there will not be a Medicare fund

capable of paying the beneficiaries. We

cannot allow that to happen. So I am

proud to be part of this effort to solve

the overall budget crisis and to address

the question of Medicare, because we

have to preserve Medicare for others in

the future.

As I said, this is an American problem. It is one to which there ought to

be a bipartisan response. Let me share

some of the numbers which suggest the

extent of the problem. Some of the reports indicate that the average retired

couple today will receive back in benefits from the Medicare health system

$126,700 more than they pay in. Common sense suggests this cannot continue. Common sense suggests that as

long as you do have a system like that,

it makes sense that it could go bankrupt. And that is exactly what the

trustees have said.

Our response has been to recognize

that we need to slow down the rate of

growth in the Medicare system. It is

growing now at over 10 percent per

year. We are suggesting its growth

should be slowed to 7.2 percent. What

does this mean to the average beneficiary? Today, that average beneficiary is receiving about $4,800 per

year from Medicaid. Under the proposal, it would go up to somewhere in

the neighborhood of $6,800 to $7,000 per

year. Certainly, we ought to be able to

put together a Medicare system that

can operate with those kinds of numbers. And that growth, by the way, is

still 11⁄2 times faster than the private

sector. Certainly we can find a way to

accomplish this task. And in the end

what will we have done? We will have

improved, protected, and preserved the

Medicare System.

I think frankly the people in the

country want this to happen. I would

much rather this be a bipartisan effort.

But, frankly, we cannot wait for the

other side, if they are not going to be

involved in solving the problem with

respect to Medicare.

I mentioned earlier about trying to

put this discussion within the framework of real people, and I know we

have heard a lot from our colleagues on

the other side of the aisle about the

tragedy that will occur if some proposal like this budget resolution is put

together. As a matter of fact, I heard

over the weekend that Laura Tyson,

Chairman of the Council of Economic

Advisers to the President, said, if this

balanced budget plan were to go into

effect, that it would create a larger divide between those who have and those

who do not have. She states that cutting down on education we will deprive

the next generation of education benefits which will widen the gap.

Mr. President, I think most people in

this country clearly understand that

education is the responsibility of the

local communities. In fact, most could

make the claim that the larger the

Government role in education, the

worst off the education system in this

country has gotten. And, our children

are not receiving the kind of education

that is necessary to enhance their ability to be able to compete in the 21st

century.

I think that this comment by the

Chairman is incredibly misleading, and

I think it is important that we focus on

what the benefits really are.

Let me talk for a moment about the

kinds of people for whom this budget

was drafted. I am thinking about the

couple that gets up at 4:30 in the morning to begin their commute to work,

whether that be by train or by car.

Both work all day long, and by the

time they get back home at night in

the dark they are exhausted. And they

do that 5 days a week, some 6. What

about them? How much more are we

going to ask them to provide to Washington to fund a set of programs that

frankly they feel, and I feel, have failed

us?

If one could make the argument that

all of these programs have worked and

have improved the lives of so many

people, that would be a different story.

But what do we see? We see the number

of people who are relying on these programs is growing year after year,

which is an indication, frankly, that

we have failed to provide them opportunities. What we have done is to develop a trapdoor of dependency, and

that needs to change. We ought to start

thinking about those families whose

moms and dads are working all day

long struggling to take care of themselves and their children, to provide for

their future. It is these families, frankly, who are getting tired of seeing more

and more of their income taxed away

by a Federal Government that continues programs that have proven to be a

failure.

I also think about the young family,

married couple with a young child, the

husband has two jobs, works all week

long at those two jobs, comes home for

the weekend, and takes care of the

child while the wife and mother goes to

her job over the weekend. What about

their future? What about developing a

society and economy that provides

them a future, one filled with opportunity and hope? Nobody seems to talk

about those. All we hear about is the

harm that may be caused by proposals

that are put forward.

I ask my colleagues to think about

those hard-working men and women

who have been taxed year after year

after year. Those are the kind of people

on whom I think we ought to keep focused; or the family whose husband has

to be away from home 3 or 4 or maybe

5 days a week traveling around his

sales territory while his wife is at

home. Many such wives having to manage a job and having to raise the children as well.

So, again, Mr. President, I say there

is a debate which is much more about

people and their futures as opposed to

just hard statistics and cold numbers.

But we do have to talk about numbers. I would like to relate a story

about the first budget hearing that I

attended as a Member of the Congress.

It occurred back in February 1982 during the Reagan administration. Stockman, Regan, and Feldstein, Director of

OMB, Secretary of the Treasury, and

Chairman of the Council of Economic

Advisers all came to the Congress in

February 1983 and told the Congress

that if we did not change the spending

patterns of this Nation that we would

see deficits out into future as far as

one can see—$200 billion plus.

Frankly, Mr. President, this Congress, controlled by the other party,

that entire time did nothing to address

their spending habits. Their response

to a continuing deficit over and over

and over again was to say to those families that I have just spoken about that

you just are going to have to give up a

little bit more of those hard-earned

dollars for which you have been working. Well, frankly, in November of this

past year the people of this country

said enough is enough. And they supported the ideas of less taxing, less

spending, less Government, and more

freedom. That is what this debate is

about as well.

Again, for the last 12 years, after

being told we were going to see deficits

of $200 billion plus out into the future,

nothing was done by the Congress of

the United States.
S7032 CONGRESSIONAL RECORD — SENATE May 22, 1995

So what did we get from the President of United States for his budget

proposal? We got a budget that was referred to by a member of the administration at the time as a source of

shame. Frankly, he was right. It is a

source of shame. And I suspect that is

why our colleagues on other side of the

aisle—every single one of them—ran

from it, would not vote, not one as far

as I can recall, not one voted for the

President’s budget proposal.

That is an abdication of leadership. I

would say that our colleagues find

themselves, frankly, in somewhat of an

embarrassing position. I mean, after

all, they told us during the debate for

the balanced budget amendment that

were for a balanced budget. Many said

that they really believed that we ought

to get to a balanced budget just not

with a constitutional amendment.

I think that the President’s actual

words were something like ‘‘We don’t

need the balanced budget amendment,

all we need is will.’’ We are still waiting to see that will.

We know that they are opposed to

our plan. We now know that they are

opposed to the plan put forward by the

President. But we see no plan at all

from the other side; no plan at all when

we are talking about the future of this

Nation and the future of our children

and our grandchildren. I can understand why they did not support the

President’s plan because, frankly, in

today’s environment, today’s debate, it

was not serious. It simply was not serious. In fact, it did not even stand up to

the objectives that were established by

the administration itself.

The one economic argument that

Laura Tyson placed on why that was a

good proposal was that, over a period

of 5 years, it was showing a reduction

in the deficit as a percentage of GDP.

And after all, that was a worthwhile

economic goal, and, frankly, a number

of economists around the country support the concept that a reduction of

the deficit as a percentage of GDP is a

good goal. But guess what happened?

As a little interesting side comment

here, I remember in the State of the

Union Message a couple of years ago

the President of United States saying

to us we are not going to use OMB to

establish our budget numbers, the economic data. We are going to use the

CBO, the Congressional Budget Office.

We do not want anyone to say we are

recalculating our way out of this deficit.

So we started out in 1993 and 1994

using the Congressional Budget Office.

But now that we have entered into this

debate about this budget, the President

has moved back to the Office of Management and Budget, to use the numbers from the OMB. And when the CBO

recalculated the President’s budget,

guess what happens? It is not a national $200 billion deficit for the next 5

years. It grows from $177, or $176 billion, to something like $276 billion.

In other words, it is a growing deficit, not a deficit that is staying still or

declining. It is a growing deficit. And

by their one measure, that is, as a percentage of GDP, the Congressional

Budget Office says it goes from 2.5 percent of GDP up to 3.1 percent. So by

their own measure, their own budget

does not meet that target.

And so I think it is very unfortunate

that we find ourselves in a situation

where a budget has been proposed by

Republicans without the help or support of our colleagues from the other

side of the aisle. Frankly, I think that

this budget is based on courage, commitment, and conviction and I am

proud to be a part of that effort, to get

us to a zero deficit in the year 2002.

And again I think it is unfortunate

that an alternative approach has not

even been offered by our colleagues on

the other side of the aisle.

We ought to ask ourselves the question, what happens if we do not act? I

remember I made some comments during the balanced budget amendment

debate a few months ago about the potential consequences for not acting. I

have often thought it was quite interesting, as I listened to my constituents

in the State of Florida and my colleagues here in the Congress, that

there is an attitude which honestly believes the United States is so powerful

and we are so right we would never

have to pay the consequences associated with bad economic policy.

If you recall, the debate on the balanced budget amendment was taking

place about the time that Mexico was

going through some very difficult

times. There was this feeling that

somehow or another the United States

would never have to pay for the consequences of bad economic policy, and

I think that is fundamentally wrong. I

would encourage people to take a look

at what happened to the value of the

U.S. dollar when this body defeated the

balanced budget amendment.

I would also say take a look at what

has happened to the U.S. dollar since

this administration has come into

power: a whole series of misdirected

economic policies—higher tax rates,

more regulation, more Federal spending, no constraint. People around the

world have lost faith in U.S. currency.

Now, some people say, why should I

worry about the value of the dollar? If

I go to a local store, does that dollar

not buy me the same thing? The drop

in the value of the dollar, if it affects

me in my purchasing power, does it not

affect the value of the product as well?

I do not see anything that has happened to me as a result of it.

Think of the currency of our country

as being the common stock of our

country, and what has happened in the

last 2 years is we have lost one-third of

the value of our common stock of this

country because of failed economic policy.

There is an opportunity here to

change that devaluation of our currency. Just to give you again an idea of

what the consequences are for not acting, when interest rates, for example,

go up by half a percent with the FHA

fixed-rate mortgages, applications drop

27 percent. A half a point change, a 27-

percent decline in the applications for

FHA mortgages. In the conventional

mortgage, we saw that where interest

rates moved up 1.5 percent, somewhere

around 200,000 to 300,000 people no

longer could afford to buy a home.

Job creation: The rate of growth in

job creation in this recent recovery is

roughly half of what it has been in previous recoveries, and statistical data

indicates to us that probably for the

fourth year in a row we are going to

see a decline in real median income

earnings of America’s families. And

that will just continue to get worse,

not better, if we do nothing. It appears

this is what is being proposed by our

colleagues on the other side of the

aisle, or would result if we were to follow the plan that has been put forward

by the President.

Now, we have some conflicting feelings with respect to what will happen

economically. Again Laura Tyson tells

us that it would be a tragedy to balance the budget. But Chairman Greenspan has said—and he has said this

many times in the past—he never really has to worry about the Congress

coming up with too much in the area of

spending cuts. Chairman Greenspan

has, in fact, embraced what we are

doing. If I have to make my choice

about which one of those economists to

focus on and pay attention to, I think

it is pretty obvious it would be Chairman Greenspan over Laura Tyson.

So again, the consequences are dramatic. We have an opportunity here to

do something to change the direction

of this Nation. We have an opportunity

to provide for more jobs, more business

formation, and greater opportunity for

our children and our grandchildren if

we pass this budget proposal. I would

ask my colleagues to cast a vote in

favor of this budget resolution.

I yield the floor.

Mr. WELLSTONE addressed the

Chair.

The PRESIDING OFFICER. The Senator from Minnesota is recognized.

Mr. WELLSTONE. I thank the Chair.

Mr. President, I was going to ask my

colleague from Florida to yield while

he was speaking, but I did not want to

break into the flow of what he had to

say, so some of what I say in my remarks will be a response to my colleague from Florida. I do not know

whether he will be able to stay or not,

but I wish to let him know.

Mr. President, sometimes we do not

know what we do not want to know.

And as I was listening to my good

friend from Florida speak, it occurred

to me that that was an example of not

knowing what he did not want to know.

There actually is a proposal out on

the floor right now, and I will talk

more in this overall debate about deficit reduction as I go forward with my

remarks today, and that particular

proposal is a Democratic amendment

to restore some of the funding to Medicare and Medicaid using money that is
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7033

currently slated to pay for tax cuts for,

in the main, wealthy and high-income

people. That is the proposal. We are

not quite clear how much on the Senate side yet, but on the House side it is

about $350 billion.

(Mr. MACK assumed the chair.)

Mr. WELLSTONE. So there is a proposal in the Chamber right now. And I

would say to the Presiding Officer, as I

was saying earlier before he was presiding, I did not want to break up the free

flow of his remarks, and I was hoping

he would respond while he was in the

Chamber. But he is in the chair, and I

will be kinder because he will not be in

a position to debate me. I do not want

to go after my good friend since he has

no chance to respond.

There is a proposal and there will be

a number of alternatives proposals over

the next few days to this budget resolution. The Democratic amendment is to

restore funding to the Medicare and

Medicaid Programs using the money

currently slated to pay for tax cuts for,

in the main, wealthy, high-income citizens. It is that simple.

Mr. President, as I was listening to

my colleague, the Presiding Officer, I

thought to myself how ironic that

those who fiercely blocked health care

reform and took cost containment off

the table in the 103d Congress now are

willing to slash Medicare and Medicaid

to pay for tax cuts for the wealthy and

to balance the budget on the backs of

elderly, low income, and, I would

argue, students. And later on in this

budget debate we will be talking about

the very working families about which

my colleague spoke.

Mind you, in this proposal there is no

focus on all of the subsidies, tax

breaks, loopholes, and deductions that

go to some of the largest corporations

of America. There is a commitment to

several hundred billions of dollars of

tax cuts for the wealthy. Some of the

largest Pentagon contractors are not

asked to tighten their belts. But when

my colleague talks about the future of

our children, let me just tell you that

slashing some of the nutrition programs or saying to students you will

not get an exemption on the interest

that you pay on your loans while you

are in school—though, by the way,

many of us did—does not strike me as

being a very wise investment in the future of our country.

(Mr. LUGAR assumed the chair.)

Mr. WELLSTONE. Mr. President, as

long as medical inflation increases at a

faster pace than general inflation,

health care costs are going to continue

to be the challenge for us, continue to

be the Pac Man of both household

budgets and the Government’s budgets.

That was precisely the problem we

were trying to address last year.

And that is the flaw in my colleague’s analysis—I am sorry he is not

on the floor now to respond to this—

that the President had no proposal, the

Democrats had no proposal.

Mr. President, we have yet to hear

exactly how the Medicare Program is

going to be restructured to generate

more than $250 billion in savings over

the next 7 years. Actually, we have not

heard anything in specifics. And the

reason we have not heard anything in

specifics is that there is no way to

make these current cuts, massive cuts,

easily and quickly without causing the

current system to unravel. The public

knows it, businesses know it, and the

providers of our care know it, as do

many elderly and other recipients.

Similarly, we have yet to hear

whether or not the formula for Medicaid funding will adjust for population

growth or how it is going to be divided

among the States.

Two-thirds of Medicaid expenditures

pay for long-term costs for the elderly

and the disabled—two-thirds. So what

we do know is that these cuts will be

most devastating for the frailest of our

citizens.

Mr. President, again my colleague

says there is no proposal on the floor.

Sure, there is a proposal on the floor.

We have an amendment that says do

not go forward with massive tax cuts

flowing disproportionately to the

wealthiest, highest income citizens of

America. Instead, take that money and

use that money to make sure that we

continue to provide adequate funding

for Medicare and for long-term costs

through Medicaid. That is the tradeoff.

I have been a little bit dismayed

about the debate, because I do not

think we need to get into sound bites.

I think we can get into sound policy

analysis. Let me talk a little bit about

some of the numbers that have been

put out here on the floor, and I will be

as rigorous as possible in my analysis.

When we hear about ‘‘No, no, no, we

are not cutting; we are going to limit

it to 5 percent of overall growth,’’ what

is misleading when we are talking

about this, when we are talking about

Medicare and Medicaid, since most of

those Medicaid expenses go to nursing

home expenses for the frailest and

poorest of our elderly citizens, is that

these projections that we are hearing

on the floor do not take into account

population growth.

In case anybody has not noticed the

demography of our country, more and

more people, citizens in the United

States of America, are 65 years of age

and over. And more and more of our elderly are 85 years of age. That is why

the costs continue to go up. There are

more and more people that are elderly.

My colleague said these programs

have been a failure because more and

more people are dependent on them. Of

course, more and more people are dependent on Medicare and, for that matter, Medicaid expenses for nursing

home expenses, because the program

has been a victim of its own success.

More and more are dependent because

more and more people, thank God, live

to be 65 years of age and over and our

policy goal is not to make sure that

fewer people live to be 65 years of age

or older. I mean, it is sort of a preposterous argument. By definition, more

people are eligible for Medicare because we have a larger percentage of

our population that are elderly, and

that is what I think we desire.

That has been one of the real pluses

of having the Medicare Program, that

we have been able to provide health

care assistance to elderly people,

whereas before 1965—please remember,

Mr. President, this is not a price on

each senior’s head. This is not some

sort of check we give people and say,

‘‘Go out wherever you want and purchase care.’’

We know all the problems the elderly

people have with preexisting conditions. We know what happened prior to

1965; when people were retired, they did

not have health care coverage.

This is a benefits program. This is an

insurance program. Why not ask the

Medicare recipients and ask their children and ask their grandchildren. It

has made the United States of America

a better country.

So, Mr. President, let us just look at

the demography and the figures.

On Medicare, the current system—

and I am talking about per person

growth rates, CBO figures—the current

system, with the private health insurance coverage, is going up 7.2 percent

per person and Medicare 8.3 percent per

person. These are budget proposals, Republican proposals, between now and

2002. I do no damage to the truth. I am

willing to debate anybody on the floor

on these figures. With the Republican

proposal, the private will go up 7.2 percent and Medicare will go up 5.8 percent per person.

That is what you have to look at.

That is what you have to look at.

By the way, there is an interesting

point to be made. Since we are covered

under the private health insurance

plan, that means that we make allowances to make sure that our per person

expenditure for each Senator goes up

7.2 percent but, for those people over

65, it is 5.8 percent. I may have an

amendment to address that inequity

later on in this debate.

But with Medicaid—I said this to my

colleague from New Mexico last week,

and I am still waiting for a response—

these figures about, ‘‘Oh, no; it is going

up 5 percent,’’ I say to my colleague

from North Dakota, these figures are a

bit misleading because these figures do

not take into account the number of

individuals, as you just look at the demography, who will be eligible.

More and more a percentage of our

population are aged. I do not know why

colleagues are surprised about this.

Now with Medicaid, we are looking at

Medicaid, and now unfortunately we

see not only this related to an explosion of people that are over 65 years of

age, but also the poor and the children.

What we have here, although, again,

two-thirds of Medicaid expenses are for

nursing homes, the current system,

private per-person coverage 7.2 percent,

been going up; Medicaid, 7 percent.

Now, again, using the CBO baseline

Health Care Financing Administration
S7034 CONGRESSIONAL RECORD — SENATE May 22, 1995

projections with the Republican proposals, private goes up 7.2 percent, Mr.

President, and 1.4 percent—1.4 percent

—per person under Medicaid.

Mr. President, I would just like to

ask this question: What does that

translate into in human terms? If you

are going to limit between now and

2002 the increase of Medicaid reimbursement to a 1.4-percent increase per

person, what is going to be that impact

on those elderly citizens who receive

Medicaid assistance for catastrophic

care? And what will be that impact on

those people who struggle with disability?

Mr. President, my colleague from

Florida spoke about some of his meetings back home. On Friday night, Jill

and I went to a ball that was a wonderful celebration with the developmental

disabilities community. I met a man—

I can barely read the type—Robert

Gregory. He cannot speak but, through

new technology, he was able to type

this out for me. And what he wrote out

for me was this: ‘‘Please, will you tell

the Republicans, don’t set the disabled

back 18 years. We are happy at how far

we have come.’’

Now, the Chair cannot respond, and I

know that he would respond because I

know he has a real commitment to the

community, but I have to say—and I

am waiting for someone to respond in

debate, and I will be back later on

today—if you are going to limit per

person, that is the only way you can be

rigorous in these figures; do not give

me all these aggregate figures. They do

not take into account the dramatic increase in the number of citizens that

will be 65 years of age and over.

If you are going to limit it on Medicaid—which is frail, low-income elderly

nursing home expenses, in the main,

and also key to men and women and

children with developmental disabilities—to 1.4 percent, and you are not

doing a darn thing to control medical

inflation systemwide, what happens to

these people? That is my question. And

so far in the debate, the silence has

been deafening. What happens to these

people?

Now, are fewer of them going to be,

let us take, first of all, the disabilities

community. Are fewer people going to

be eligible? Less reimbursement for

personal attendance? Where are you

going to make the cuts? How are you

going to do it?

I say to my colleague, somebody,

somewhere, sometime, someplace, tell

me. Come out here on the floor and tell

me in debate how you intend to make

these kind of cuts and limit per person

expenditure to 1.4 percent a year without devastating consequences for some

of the most vulnerable citizens in the

United States of America and I will

vote with you. You just come out here,

be rigorous, and present the evidence.

Mr. President, there are no specifics

about $250 billion in restructuring Medicare because it cannot be done. Well, I

mean you could do it in a couple of different ways. You can, of course, provide less reimbursement for the providers, but right now the reimbursement

is, roughly speaking, 58 percent of what

is in the private insurance reimbursement.

Mr. President, I ask unanimous consent to have a number of statements

from a number of different citizens and

caregivers in rural Minnesota printed

in the RECORD.

There being no objection, the material was ordered to be printed in the

RECORD, as follows:

A couple from Detroit Lakes, Minnesota

write: DEAR SENATOR WELLSTONE: My husband and I are concerned about Medicare

cuts! When we reached 65 we were advised to

sign up for Medicare—so we did, also taking

out Medigap insurance. We pay over $3,000

for Medigap insurance plus the Medicare

that is withheld from our social

security * * *. Medicare is a great help to

decent tax-paying people * * *. The GOP

have a contract for the American people—we

feel that social security and Medicare is also

a contract with the American people.

A woman from Coon Rapids writes: We

paid into both Social Security and Medicare

all the working years of our life. Reducing

the deficit must be done in a fair and balanced way* * *. They did not ask our

wealthiest citizens and corporations to share

the burden by giving up their tax loopholes.

And finally, a woman from Watertown,

MN: I am writing to you about the proposal

to cut Social Security and Medicare. I hope

you will say ‘‘no’’ to these unfair and irresponsible cuts. I am 86 years old. My husband

and I worked hard all our lives. He died eight

years ago after being in a nursing home for

5 years. That took all of our savings. I receive $489 a month from Social Security and

think I have saved enough for my funeral.

We never wanted to be a burden to our children or anyone else. I recently had to go on

medical assistance. I have enjoyed good

health and am a foster grandparent to a

child care center 3 mornings a week. We

never missed voting and really worked hard

for conservation and the betterment of our

country. I hope this has not inconvenienced

your time. Perhaps you never did find time

to read it, but I surely hope you will vote

‘‘no’’ on that proposal.

Mr. WELLSTONE. Mr. President, I

will just tell you something right now,

if you are going to cut down on reimbursements, which, of course, you will

have to do with Medicare, let us get

real and honest about it, two things

will happen. Either, I say to my colleague from North Dakota, the providers will be in a position to just simply

transfer the cost, shift the cost, in

which case—the Presiding Officer

knows health care policy well—in

which case then what happens is private health insurance premiums go up

and then what happens is businesses either no longer can afford to cover employees or the premiums of everybody

go up, and then what happens is we get

into what is called a death spiral,

which means premiums go up and yet

fewer people are covered.

Every year, 1 million people less in

the United States of America are covered by employment-based insurance.

That is what you are going to set off.

Get real. Let us debate health care policy. Our legislative proposals have consequences in people’s lives. Do not give

me these aggregate budgets unless you

can explain to me what you, in fact, intend to do. For any colleague to come

out on the floor and say the President

has no proposal, the President has no

alternatives, Democrats do not have

any alternatives, welcome to health

care reform. The reality of it is staring

you in the face. We need to do systemwide cost containment, and let us do

that, but for God’s sake, let us not target the elderly, the poor, and the disabled.

Now, Mr. President, if the providers

cannot shift the cost, which will be the

case all too often in rural America, in

greater Minnesota and in North Dakota, then many of them will go out of

business. It is that simple. Do not take

my word for it. Just ask the

caregivers—nurses, doctors, you name

it—all across rural America what the

consequences of these cuts will be. Or

you can just simply raise the cost of

this for seniors. But please remember—

I do not have the figures right in front

of me—but please remember, I say to

my colleagues, that right now elderly

people 65 years and older are paying

four times out of pocket already than

citizens under 65 years of age. And

please remember, I say to my colleagues, that about 85 percent of Medicare expenses go to households with incomes of under $25,000 a year.

So do not have the illusion that these

benefits are going to people who have a

lot of income. Please remember, I say

to my colleagues, that the median income for a male 65 years of age and

over is about $15,000 and the median income for a woman is about $8,500. So do

not have any illusions that you can put

this cost back on many of the senior

citizens within this country.

Again, the real question on the Medicaid front is here we have a situation

in our country where every year 1 million less citizens have employmentbased coverage, and the only reason we

have been able to do better on some of

the statistics on infant mortality, the

only reason we have been able to cover

some of our citizens, many of whom are

working poor who do not receive that

coverage, is through the expansion of

Medicaid, much less the ways in which

we cover the way people who are elderly and ultimately wind up in nursing

homes. If you want to get serious about

the cost, do something about homebased care. Let us get back to health

care policy. Now we are going to cut

this 1.4-percent per person?

Mr. President, Minnesota is in a particularly precarious position when it

comes to Medicare and Medicaid cuts

or, what my colleagues like to call,

capping the rate of growth of the programs.

HMO’s that enroll Medicare beneficiaries in Kings County, NY, get $646

per month per enrollee, whereas HMO’s

in Hennepin County, MN, get $362 per

month per enrollee. We have already

kept our costs down. We do not get the

high payments that other States get.

So a slash-and-burn approach for
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7035

States like Minnesota that have done

an admirable job of already keeping

costs down ends up punishing us. We do

not have any fat in our system. We are

already penalized by the current reimbursement system. And now for recipients, they will be facing about $3,200

more in copayments and deductibles

and premiums over 7 years; about $1,028

more in 2002.

By the way, I am assuming that in

order to make up these cuts, there will

be a 50–50 split between what older people will have to pay out of pocket and

further cuts in reimbursement for the

caregivers. Mr. President, after all we

have heard on Capitol Hill lately about

Medicare costs, it would be very easy

to forget what the Medicare Program is

all about. It is a health insurance program established in 1965 to provide benefits to those who need them the most.

It is not a right to a certain dollar

amount. It is not just a price tag on

the head of every senior, and it is not

a check to go shopping.

This Medicare Program provides the

foundation of our health care system,

especially in rural areas, and it provides support and protects those populations that would have the most trouble purchasing coverage in the private

insurance market. Mr. President, I

smile when I hear some of the proposals about vouchers and then go out and

purchase health insurance. We have

preexisting condition. It has gotten to

the point where you have to prove to

the private health insurance companies

in this country you will never use it in

order to obtain it. And my colleagues

think that elderly people who are sick,

struggling with different illnesses, are

going to go out with vouchers and purchase health insurance from these companies? Welcome to health care policy.

Let us get substantive.

When Medicare was enacted 30 years

ago, most elderly citizens were uninsured. They lost their health insurance

coverage when they retired, and currently even with Medicare coverage, as

I said before, seniors spend about four

times as much out of pocket as individuals under 65. As I said before, 85 percent of Medicare expenditures pay for

care for seniors with household incomes of less than $25,000.

Mr. President, I just simply do not

understand how my colleagues intend

to restructure to the tune of $250 billion on the Medicare and $150 billion,

or whatever, on Medicaid without

doing serious harm to many citizens in

the State of Minnesota and all across

this land.

So then the question, and it is a fair

question to ask, is why is Medicare so

costly? And the simple answer—as a

matter of fact, this answer is so simple

that the evidence is irrefutable and irreducible, and I would be pleased to debate any colleague on this proposition—the simple answer is that Medicare is costly because it covers very

sick people and because health care

costs for all Americans, whether privately insured or covered by Medicare

or Medicaid, have risen rapidly over

the last two decades. And increasing

enrollment—I cannot say this too

many times, because sometimes we do

not know what we do not want to

know. My colleagues on the other side

of the aisle turn their gaze away from

this truth. Increasing enrollment, especially for the over-age 85 population,

and the renal-diseased beneficiaries,

and increasing medical inflation account for the bulk of the Medicare’s

Program’s increasing costs. It is simple—kidney transplants, dialysis, people living to be 85 years of age—people

need more assistance. What is the policy proposal? To have fewer people living to be 85? Of course not. Nobody proposes that.

So, Mr. President, since Medicare is a

victim of its own success and we cannot do anything about more and more

people living longer lives, all of which

I think we are grateful for—and we

hope it for ourselves and for our parents and grandparents and other citizens—then what we ought to do is focus

on medical inflation, systemwide.

Medicaid provides a safety net for

pregnant women, children, as well as

critical long-term services for the elderly. Already, as I pointed out, it is

projected per person to grow at a slower rate than the private sector. What

are we going to do about these citizens,

Mr. President? You know, they do not

have as powerful a constituency. But

what do we intend to do? Women who

are expecting children, and children,

and elderly, who, by definition, have to

go to the poor house, figuratively, to

become eligible for Medicaid assistance, to receive nursing home coverage, and we are going to make draconian cuts in per-person expenditures—

draconian.

I challenge any of my colleagues on

this proposition. What is going to happen to those citizens? Is North Dakota

going to pick up the cost? Is Minnesota? It is a shell game. We are not

going to walk away from them. So nobody should have any illusion. I hear

my colleagues say how we are going to

reduce expenditures and let us get fiscally responsible. Yes, let us control

costs systemwide. This simply shifts

the costs. In this particular case, it is

back to the States and local communities.

Mr. President, I am waiting for a discussion about health care policy. I will

make two proposals. Colleagues do not

have to accept them, but both are important. One proposal in the last Congress was that if you put some limit on

insurance company premiums, as you

remember the Congressional Budget

Office said, by the year 2002, I say to

my colleague from North Dakota, we

would have saved $100 billion, in 1 year

alone. That is systemwide. Maybe it is

too controversial for colleagues. Sure,

insurance companies are very powerful.

Maybe that is not the proposal. But

you have to contain the cost systemwide. You cannot just pick out one segment of the population. You target

them, you hurt them, you shift costs,

you do irreparable damage to some of

the underserved communities, including rural America; you do not provide

the assistance that we now provide for

teaching hospitals; you do not provide

the necessary assistance for the disproportionate share of payments for

those hospitals who treat the poor citizens in this country. It does not work

at all. You just shift costs. Someone

pays for it. You make it a shell game if

you do not do it systemwide. So let us

get real and do it systemwide.

That is how you really begin to get

some handle on the Medicare and Medicaid costs. If you do not do that, you

scapegoat all too many citizens in this

country.

Mr. President, the other thing that

you can do, if you are serious about

substantive policy—not just slash-andburn, not just cut, cut, cut—invest in

home-based care. For God’s sake, why

should elderly people not—I had a

mother and father with Parkinson’s

disease. We lived this. Why should elderly people or people with disabilities

not be able to live at home in as near

as normal circumstances as possible,

with dignity? Last Congress, we were

debating health care policy. We wanted

to expand home-based care. We wanted

to control costs systemwide. We wanted to have more of a focus on primary

care, preventive care out in the communities. But this Congress it is slash

and burn.

Where is the voice of my colleagues

who, when we talked about cost containment systemwide last Congress, we

talked about rationing and limiting

choice, and now they want to ration

and limit choice among elderly, low-income, disabled people, and there is not

a word? Their silence is deafening. Why

are you not out on the floor talking

about rationing and limiting choice

now? We have an alternative. Our alternative is—there is no credibility to

broad-based tax cuts going in the main

to the wealthiest citizens of the United

States of America while you proceed

with a slash and burn approach toward

the Medicare and Medicaid programs.

Believe me you, we will have alternatives dealing with loopholes and deductions in corporate welfare. We will

have a whole lot of other alternatives

on the floor.

Mr. President—and I will conclude—

again, my colleague from Florida is not

on the floor right now, but the debate

is not about deficit reduction—going

forward deficit reduction. The debate is

about where is the standard of fairness.

The debate is about responsible economic policy. Some colleagues think

2002 is the date. I have always felt that

was a political date, not a realistic

date.

As a matter of fact, Mr. President, I

heard so many of my colleagues in the

course of this debate over the last several months say, ‘‘We will balance the

budget by 2002. We will have broadbased tax cuts, and we will increase the

Pentagon budget.’’ Some of it is on
S7036 CONGRESSIONAL RECORD — SENATE May 22, 1995

record. I heard colleagues say that,

‘‘We will not make any cuts in Medicare. Do not worry, veterans, do not

worry students, we will pay the interest on the debt and we will do all of

it.’’ Well, Mr. President, I do not think

it turned out to be credible. So we are

not arguing about deficit reduction,

but what we are arguing about is where

is the standard of fairness. Mr. President, there is no standard of fairness to

the tax cuts for the wealthy and these

kinds of cuts in Medicare and Medicaid.

Mr. President, I will conclude by saying we have 2 days of debate on the

budget. I think we finish up Wednesday

night. But as far as I am concerned,

this debate just begins. My good friend

from Florida said that people in the

last election voted for change. They

did. But it begged the question, what

kind of change? Did people vote for this

kind of slash-and-burn approach, not

based on substantive, I think, policy

analysis about what we need to do in

health care reform in the Medicare and

Medicaid area? Did people vote for

these kinds of cuts? We will have a debate about the role of Government.

And I will conclude with the remarks

made by a great Senator from Minnesota, Hubert Humphrey. I have said

it before on the floor of the Senate. I

think I am going to say it over and

over and over again. Senator Humphrey said: ‘‘The test of a society is the

way in which we treat people, dawn of

life children’’—I will have an amendment about children—‘‘the way we

treat people in twilight of their lives,

the elderly, and the way we treat people in the shadow of their lives, struggling with a disability, people struggling with an illness and people who

are needy or people who are low-income.’’

By that standard, I think this budget

proposal falls way short of the mark,

and we can do better.

I yield the floor.

Mr. DOMENICI. Mr. President, we

will be going into this kind of speaker

rotation, their side and ours. Senator

COHEN will speak for 15 minutes, and I

understand Senator DORGAN seeks to

speak after that.

If we establish it now, Senator COHEN

will be followed by Senator DORGAN,

who will have 30 minutes, and of course

if he needs more, his side can yield it

to him, and we will find a Senator who

desires to speak immediately after

Senator DORGAN. We will continue

down that line.

I will leave Senator COHEN in charge

of the floor for the next 15 or 20 minutes and follow along the lines just

agreed to here.

Mr. President, I suggest the absence

of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The legislative clerk proceeded to

call the roll.

Mr. DOMENICI. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOMENICI. I yield 15 minutes to

the distinguished Senator from Maine,

Senator COHEN.

Mr. COHEN. Mr. President, I thank

Senator DOMENICI for yielding me these

15 minutes.

Mr. President, last week I had occasion to listen to the Senator from Nebraska, Senator ROBERT KERREY. I

thought he made a very passionate and

thought-provoking presentation.

He called for the return of some sense

of civility during the course of the debate on this budget issue. Frankly, I

find myself in great empathy with

what Senator KERREY had to recommend. I think things have gotten

out of control. Certainly they have

around the country, in terms of the

rhetoric we are hurling at one other,

back and forth, not only across political aisles, but indeed, between regions

and interest groups.

I took Senator KERREY’s call for return to civility and responsible discourse to heart. I think he is quite on

the mark. I think we would all do well

to follow his example.

In that light, I would like to commend Senator DOMENICI from New Mexico. Frankly, Mr. President, I do not

know a more decent human being, certainly in the Senate and maybe this

country, than PETE DOMENICI.

I have heard charges leveled against

him that as chairman of the Budget

Committee he wants to wreak havoc

against the elderly, he wants to plunder their savings, he wants to deprive

them of hospital and medical attention.

I doubt very much whether many

people in this Chamber, or indeed the

other Chamber as well, could claim the

kind of support that he has enjoyed

over the years from our senior citizens’

communities. I doubt very much

whether many Members have, in fact,

the kind of compassion that he has

demonstrated over the years toward

those who are less fortunate than ourselves.

He is concerned about senior citizens.

He is concerned about the middle aged,

certainly. But also he is concerned for

children. He is concerned deeply about

children. He has eight of his own. In

fact, I think one is going to be married

this coming Saturday.

I think if we look at what PETE DOMENICI has been focusing upon—this

spiraling debt—and it affects all the

age groups from the very young, to

those who are aspiring business men

and women, to the labor force, to those

in middle age, and to our elderly community.

I really think that we do a great disservice to him when we see the kind of

attacks leveled against his efforts by

saying that he is simply out to finance

tax cuts for the rich by pulling money

out of the pockets of the elderly and

the poor. I think it does a tremendous

disservice to him and also to the entire

debate surrounding this issue.

I remember reading a column a couple years ago that David Broder wrote

for the Washington Post. He is a respected syndicated columnist. He said

he had just finished reading President

Clinton’s budget. There were two figures—after going through that 1,400-

page document—that Mr. Broder

thought were missing: The number of

$1 trillion and the second number of 58

cents. He looked throughout that entire, massive document and could find

those two numbers nowhere in the document.

He said the $1 trillion figure came

from the fact that if we were to grant

President Clinton’s assumptions in the

budget, that is, that we have sustained

growth during his 4 years in office,

that we have low inflation, and that

the recommended tax increases and

budget cuts play out as budget analysts had projected—assuming all that

were to occur—at the end of that first

term, we would have increased the national debt by $1 trillion.

That is the rate at which we are adding to the debt in this country. Give

President Clinton the benefit of the

doubt. Assume everything will work

out as he projected, and we were still

going to add another $1 trillion to the

national debt.

That is a number which, I think,

should prove frightening to most people. It means that we are going to be

sacrificing the future for the present,

that we are going to encumber our

children with debts for which they

have not been responsible. We are

going to tie a ball and chain around

their necks, as such, and throw them

off into this void of trillion dollar debt

increases every 4 years.

Then the other number that was

missing from the budget was 58 cents.

The projection was that 58 cents of

each $1 that we as individuals pay—everybody in this Chamber, and the citizens who are watching from the gallery

and from around this country—58 cents

out of every $1 paid in personal income

taxes would go not for the defense of

the country, not for education in the

country, not for Medicare or Medicaid,

not for highways and bridges, not for

science and technology, not for

Superfund, not for any of these programs—but rather exclusively to pay

interest on the debt.

Since interest on the debt compounds, that will climb exponentially

in the coming years unless we do something dramatic to reduce that escalating debt.

Those two figures, I think, should be

recalled. They are precisely what Senator DOMENICI, as chairman of the

Budget Committee, has tried to come

to grips with. It is time, I think, for us

to stop politicizing the debate to such

an extent that we camouflage the issues and the importance of what those

issues mean to the American people.

More recently, the same columnist,

David Broder, wrote another piece in

the Washington Post, now, some 2

years later. He said really this debate
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7037

is all about what Government should

do in today’s society.

Americans are starting now to reevaluate exactly what Government

should do on behalf of its people. Not

only what should it do, but at what

level should Government act. Should it

be at the local community or municipal level? Should it be at the State

level? Or should it be here in Washington?

These are legitimate issues that we

have to work our way through. There is

a reassessment taking place through

the country. People are not too sure.

They have an anger, we are told. Certainly, a high level of anxiety about

political events and political policies.

There is, as we have witnessed, a good

deal of anger that can in fact prove to

be explosive in this country. We saw it

in what one writer called Beirut, Oklahoma: a form of domestic terrorism

taking over that I think poses a severe

threat to our security in the coming

months and years.

So, this is a legitimate issue for us to

debate and, in fact, come to legitimate

disagreements. But let us not resort to

the kind of class warfare that we see

taking place here in this Chamber.

Time and time again, every time the

Republicans try to come to grips with

the budget those on the other side of

the aisle accuse Republicans of being

miserly, of being mean-spirited, of

being cruel, of being heartless because

we are trying to protect the future for

future generations.

I recall the debate several years ago

when the then-majority offered an

amendment to tax and somehow punish

the rich. We passed a luxury tax. It

sounded great. We were really going to

go after those people who had the

money to buy luxury cars, furs, jewels,

and boats. We imposed a luxury tax on

boats.

Do you know what it did? Do you

think it hit the rich? It was aimed at

the rich. It did not hurt the rich. It hit

the pocketbooks of the middle class.

People of my State got hurt. The workers, the craftsmen, the people who

build these boats, these luxury boats,

were put out of work.

The same thing will take place as

long as we try to wage class warfare.

The attack is: Republicans are only

concerned about the rich, the wealthy.

They could not care less about the middle class. They could not care less

about the poor.

Those are unfounded charges. I think

they are outrageous charges. And I

think all that these charges have done

is to pollute the atmosphere in which

we have to conduct this debate to such

a degree that the American people are

confused about the issues and simply

are responding out of fear.

So let us not engage in class warfare.

There are some legitimate differences

of opinion in terms of how we go about

trying to achieve a balanced budget. It

may be that those on the minority side

do not care about balancing the budget. It may be that the debt is an issue

too abstract for the American people to

grasp, and therefore they see no political benefit in joining in this effort. Not

all, but some, may try to exploit this

issue. Back in 1981–82—President

Reagan had just come into office in

1981—the trustees of the Social Security System came to Congress and said

the Social Security System was in

trouble. Payments out to the beneficiaries were exceeding its revenues.

Unless Congress took action, it would

become bankrupt relatively soon.

I recall at that time President

Reagan came into office and he made

some recommendations for changing

the Social Security Program. I, frankly, did not think it was a wise course of

action. We supported the President because it was an effort made to reform

the system, to save it and make it solvent. I also understood the risks that

were involved politically. Whenever

you talk about Social Security, that

has been described as the hot rail of

politics. Touch it and you invite your

own mortality, at least politically

speaking.

Nonetheless, we voted to reform that

system in 1981, and guess what happened. During the 1982 elections,

prominent members of the Democratic

Party went on television. They held up

a facsimile of a Social Security card

and they said, ‘‘Here is the card. Here

is your Social Security card right here.

Do you know what Republicans want to

do? They want to just tear it up. That

is what they want for your Social Security card.’’

It proved to be dynamite politically.

It was very effective. We lost elections

at every level of government all across

the country, from State legislatures to

gubernatorial races, to House and Senate races. It was very, very effective.

So they exploited the issue during the

1982 campaign. And then what happened? Guess what happened. Immediately after the elections were over

the same people who were tearing up

the facsimile of a Social Security card

came back and said, ‘‘Do you know

something, we have a problem. Social

Security is in trouble. Why do we not

form a bipartisan commission to see if

we cannot fix it?’’ And that is precisely

what happened. We formed a bipartisan

commission to fix it, after the politics

were taken out of it by the election.

It seems to me the same line of argument is being offered right here today

and will be offered throughout the debate on this budget. The Medicare

trustees have advised us that Medicare

is going broke; that the revenues coming in will be less than the payments

going out; that by the year 2002, a

short time away—61⁄2 years—there will

be no money at all left in the trust

fund to pay for anyone’s hospital or

doctor bills. The system will be absolutely broke at that time; nothing will

be paid.

In either today’s paper or yesterday’s

paper, a front-page article in the New

York Times said, ‘‘Those in the heartland are worried about Medicare, what

this budget might do to Medicare.’’

It is ironic. Of course people are worried about what is going to happen to

Medicare. But if we do nothing it is

going broke. There will be no money in

61⁄2 years. No one will receive payments, no hospital, no community

health service, no doctors—none of

them will receive anything. And all the

people who will need assistance at that

time will be left to look at their Government and say, ‘‘Why did you not do

something about it? Why did you wait

these 61⁄2 years? Why did you wait until

after the 1996 elections were over before you came forward and said let us

work together to try to save the Medicare System?’’ But that is what is

going on right now.

We have not heard one single proposal during the deliberations in the

Budget Committee on how the minority would like to see the trust fund

protected and preserved and saved. Not

one. All they can do at this point is

point to the Republicans and say,

‘‘Look, you are trying to gut the Medicare Program.’’ We are trying to save

it. It is growing at a rate of 10 or 10.5

percent a year. We cannot sustain 10.5

percent a year growth in the Medicare

Program. President Clinton recognized

this. When he submitted his health

care reform proposal he said we cannot

sustain this. Mrs. Clinton did, too.

They said we cannot sustain 10.5 percent growth each and every year.

The PRESIDING OFFICER. The 15

minutes of the Senator from Maine has

expired.

Mr. COHEN. I ask I be permitted an

additional 5 minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. COHEN. So, on the one hand we

had the President and the First Lady

talking about the need to reduce the

growth rate in Medicare. And I have

taken pains over their 21⁄2 years in office to praise them in their effort to

focus attention on health care reform.

I think we need it. It is as necessary

today as it was 2 years ago. It will be

even more important tomorrow than it

is today. As a matter of fact, I have introduced health care reform legislation

on three occasions so far this session.

So I think they were right in trying to

focus our attention on the need to reform the health care system.

I did not agree with the solution they

proposed but they deserved credit for

putting it on the front burner. Once

this budget resolution debate is over,

we will put it back on the front burner

where it belongs.

But you cannot have it both ways.

You cannot say on the one hand we

cannot sustain 10-percent annual

growth and then, on the other hand,

criticize Republicans for saying you

are right, we are going to try to sustain a 7- or 7.5-percent growth. To label

that as a savage cut when, in fact, that

is precisely what they themselves had

in mind for their own reduction in the

growth of Medicare, seems to me to be

rather outlandish.
S7038 CONGRESSIONAL RECORD — SENATE May 22, 1995

I believe there is a moral dimension

to the argument we are having here

today, the debate. I think there is a

moral imperative to resolving the dispute on the national debt, on the annual deficits of $200 billion. Right now

we are spending roughly $235 billion a

year just in interest payments on the

debt. Soon that sum will exceed what

we spend for our entire National security effort. Interest payments are likely to climb well above $300 billion, $325,

$340 billion a year if we do nothing.

So I think there is a moral dimension

to this entire debate. There is a moral

imperative that we take action that is

responsible, that is not filled with

smoke and mirrors, as has been done in

the past; that we look to Senator DOMENICI, a man, as I indicated, of great

decency and courage, for putting forth

a budget blueprint which will put us on

the road to a balanced budget by the

year 2002. Maybe there are some who do

not want that. Maybe there are some

who say just let us continue doing

what we have been doing because it

pays political dividends. That is the

way you stay elected in this country,

just keep saying yes. Just say to every

group that comes in, you want more?

How can we help you? Rather than

dealing with the future of this country.

We have had Jefferson quoted many,

many times. One of my favorite quotes

of his that I call upon is this: he said,

‘‘Whenever one generation spends

money and then taxes another to pay

for it, that first generation is squandering futurity on a massive scale.’’

What we have been doing is squandering the future of our children on a massive scale and the time has come for us

to reverse this. The time has come for

us to stop borrowing from our children,

to start paying our own debts, to have

something for them available for a better way of life than we are leaving

them if we continue on this course.

I also recall the words of Walter

Lippmann, who spoke on a different

subject some years ago. It was in 1940,

on the eve of our involvement in World

War II. He was giving, I believe, a

speech to his classmates on the 30th

anniversary of their graduation from

Harvard. What he said at that time, I

think, has relevance to what we are

doing here today.

Lippmann was concerned about how

the country had allowed itself to degenerate into a slothful, wasteful, cowardly Nation, that we had failed in our

responsibilities to measure up to the

great heritage we had at that time,

that we were squandering the present,

and certainly the future, because we

took the easy way out whenever there

was a hard choice to make.

Lippmann said at that time:

Upon the standard to which the wise and

honest will now repair, it is written. You

have lived the easy way; henceforth, you will

live the hard way * * * you came into a

great heritage made by the insight and the

sweat and blood of inspired and devoted and

courageous men; thoughtlessly and in utmost self-indulgence you have all but squandered this inheritance. Now only by the heroic ventures which made this inheritance

can you restore it again.

It is written:

You took the good things for granted. Now

you must earn them again * * * for every

right you cherish, you have a duty which you

must fulfill. For every hope you entertain,

you have a task you must perform. For every

good you wish to preserve, you will have to

sacrifice your comfort and your ease. There

is nothing for nothing any longer.

Mr. President, that is precisely what

the chairman of the Budget Committee

has said to all of us. ‘‘There is nothing

for nothing any longer.’’ He deserves

our support for the effort he has undertaken.

I yield the floor.

Mr. DORGAN addressed the Chair.

Mr. DOMENICI. Mr. President, will

the Senator from North Dakota yield

for 1 moment?

I yield myself 1 minute. Then I understand it is Senator DORGAN’s turn.

Mr. President, I want to thank Senator COHEN for his excellent remarks. I

think he is right on with the notion of

shared sacrifice now that we are in this

position. It kind of weaves its way

through his remarks.

But I also want to thank him particularly for the kind remarks he made

about the budget that I have worked

for for a long time on numerous task

forces; a lot of them. A lot of people

participated, and I think it is a good

and fair, well-rounded budget.

I thank him for his compliments.

The PRESIDING OFFICER (Mr.

HATCH). Who yields time?

Mr. EXON. Mr. President, I yield 30

minutes to the Senator from North Dakota.

Mr. DOMENICI. Mr. President, I designate Senator JUDD GREGG to manage

the time on our side until I return to

the floor.

The PRESIDING OFFICER. Without

objection, it is so ordered.

The Senator from North Dakota.

Mr. DORGAN. Mr. President, let me

begin, as my colleague from Maine did,

by complimenting the Senator from

New Mexico, Senator DOMENICI, and

complimenting my colleague, the Senator from Nebraska, Senator EXON.

Senator DOMENICI has a long and distinguished career in the Senate, as

does the ranking minority member of

the Budget Committee. I view the work

of both of them as very good work for

this country, and I think that they are

among the two most trusted Members

of this body, as a matter of fact. They

bring to the floor of the Senate different views about how you achieve the

same objective.

There is no disagreement I think in

this Chamber about whether the objective of a balanced budget is a worthy

objective. Of course, it is. And it is not

only an objective. It is in my judgment

a priority. The question then is not

whether; the question is, how do we

achieve a balanced budget?

The Senator from Maine, Senator

COHEN, indicated that he agreed with

the previous speaker about the need for

more civility in our discourse here in

the Senate and in the country. I certainly agree with that. We need to debate ideas. We need to be respectful of

disagreements and differing viewpoints. There has been a tendency in

recent years in this town to try to tear

things down, to tear people up.

I have stood on the floor several

times and read the list of words that

one Member of Congress suggested to

members of his party that they should

use against their opponents. He said,

‘‘When you are running against somebody, use the word ‘traitor’ to define

your opponent. Call your opponent ‘pathetic’. Use the word ‘lie.’ Use the word

‘sick.’’’ Again, ‘‘Use the word ‘traitor.’’’

That kind of counsel is counsel that

demeans politics in our country. We

must turn away from all of that. Our

democratic system is better than that,

and our politics should be better than

that.

BUDGET PRIORITIES

As we debate this budget resolution,

I am going to be critical of some part

of Senator DOMENICI’s budget. But I

will do so with respect. I am going to

talk about its impact. He probably disagrees with how I assess the impact of

parts of the budget, but I do not do this

with malice. I do this because I think

this is precisely where we ought to

have a vibrant, spirited debate about

what we believe the priorities of this

country should be.

If 100 years from now historians

could look back at us and try to evaluate what we stood for, what we found

important, what we held dear, they

would almost certainly be able to look

at the Federal budget. And by determining what we invested in, or what

we spent our money on, they could determine what our priorities were. This

is the time and the place for a spirited

debate about what we believe is important.

Some years ago I was with a couple

of my colleagues traveling in Central

America. I think I have told my colleagues this before. I was on a helicopter that ran out of gas in the mountains near the border of Honduras and

Nicaragua. When you are in a flying

machine that runs out of gas, one of

the immutable laws of the air is you

will be landing soon. And we did.

We were out of radio contact, sort of

in a jungle clearing area where we

came down. And the campesinos from

around the region came walking up to

find out who had landed there. We were

not injured at all. Hours later we were

hauled out by other helicopters that

found us. But as the people walked

through the underbrush, the

campesinos, to find out who had landed

in this mountainous terrain near the

border of Nicaragua and Honduras, I

was able to talk with some of them

through an interpreter.

I found what I have found in every

other region of the world. You talk to

people about what their life is like, and
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7039

what their hopes and dreams are. Almost universally, they say they would

like to come to the United States of

America. Almost all over the world you

will find people that answer. ‘‘We

would like to come to United States of

America.’’ When you ask why, they

say, ‘‘Because the United States of

America provides hope and opportunity.’’ You will find that all over the

world.

I simply say that today because I

think sometimes we lose sight of the

advantages and the strengths in this

country. We spend so much time debating the problems that we sometimes

forget the strength of this country.

The problem we are talking about

today is a problem with respect to the

Federal deficit. Year after year we

spend more than we take in, and it

adds to the Federal debt, and the Federal debt requires us then to pay interest on the debt each year. Those interest payments consume an ever-growing

portion of the Federal budget.

I would observe with some measure

of interest that the Republicans in this

Chamber always win a debate they

have with themselves. Even then it

may take a little while. But they always win a debate that they are having

with themselves. Now they say, ‘‘We

are for a balanced budget because we

know it is good for America, but we are

not so sure any Democrats are for a

balanced budget.’’ Just to put all of

their minds at ease, I know I am not

alone on this side of the aisle in saying

that many of us believe it is a priority.

The question is not whether. It is how?

What priorities do we choose? Where

do we cut spending, and how do we

raise revenue? Who are the winners and

who are the losers? In other words, who

gains, and who does not? When we talk

about that, it is not class warfare. Do

not ever let me hear people say it is

class warfare when we talk about who

are the winners and who are the losers

under these budget proposals, because

that is nonsense.

The proposal that is brought to the

Senate floor has provisions in it that I

support in many, many areas. Senator

DOMENICI, for example, would choose to

cut spending in a range of areas that I

would absolutely agree with. I support

them. They make a lot of sense. But

some of the larger choices in this budget I do not support, and I think there

are alternative ways of achieving the

same goals with different results.

I have a couple of charts on the floor

that describe this budget, not from my

perspective, and not from the perspective of the Senator from Nebraska,

Senator EXON or others, but from the

perspective of Kevin Phillips, a Republican author and columnist, a person of

some note.

He wrote a wonderful book incidentally about the 1980’s, but I wish to

share with my colleagues what Kevin

Phillips has to say about the Republican budget proposals. One could hardly say that Kevin Phillips is some liberal, pointy-headed Democrat who is

trying to undermine Congressional Republicans. I do not know Kevin Phillips

hardly at all, but I am interested in his

comments because as I looked at this

budget in terms of who wins and who

loses, I sensed the same thing that

Kevin Phillips does.

Let me read some excerpts of an address that Kevin Phillips gave on the

radio last week. Again, a Republican

political analyst says the following

about this budget.

Spending on Government programs from

Medicare and education to home heating oil

assistance, is to be reduced in ways that

principally burden the poor and the middle

class, while simultaneously taxes are to be

cut in ways that predominantly benefit the

top one or two percent of the Americans.

That is not me. That is a Republican,

who says the fact is the losers are the

folks on Medicare, people who need

help for education, home heating assistance, and so on. And the winners,

well, those are the top 1 or 2 percent of

Americans. But he went on.

If the budget deficit was really a national

crisis instead of a pretext for fiscal favoritism and finagling, we’d be talking about

shared sacrifice, with business, Wall Street

and the rich, the people who have the big

money, making the biggest sacrifice. Instead, it’s senior citizens, the poor, students

and ordinary Americans who’ll see the programs they will depend on gutted, while

business, finance and the richest one or two

percent, far from making the sacrifice, actually get new benefits and reductions.

Again, Kevin Phillips, says:

In short, aid to dependent grandmothers,

children, college students, and city dwellers

is to be slashed, while aid to dependent corporations, stock brokers, generals, and assorted James Bond imitators survives or

even grows.

If the deficit is substantially reduced under

a program like this, there will be a second

stage of further upward income redistribution from upper bracket profits in the stock

and bond markets.

And finally again from Mr. Phillips’

remarks last week:

If the U.S. budget deficit problem does represent the fiscal equivalent of war—and

maybe it does—then what we are really looking at is one of the most flagrant examples

of war profiteering this century has seen.

Maybe Mr. Phillips overstates it. Let

me go to a previous chart where he

talks about winners and losers, because

that is the purpose of my discussion

today.

The first chart I showed you indicates Mr. Phillips’ analysis of this

budget is that the burden on the poor

and the middle class will be increased

substantially, while taxes shall be cut

in ways that predominantly benefit the

top 1 or 2 percent of the American people. That is why I began saying this is

really a debate about priorities. The

question in this budget is who wins and

who loses, who gains and who does not.

And that is why we ought to have a full

and thorough debate and then make

our own individual choices about how

we balance this budget, not whether

but how we balance this budget.

MEDICARE AND MEDICAID

There has been a substantial amount

of discussion about Medicare and Medicaid especially because they represent

the recommendations for the largest

proposed reductions in the budget plan.

Now, if you divide the question some:

Should we be controlling the rate of increase or the rate of growth in spending on Medicare and Medicaid? The answer clearly is yes. Everyone in this

Chamber has known that is a requirement for some long while. It was widely discussed last year and will be even

more widely discussed this year, I am

guessing. But the budget proposal

comes to the floor with a giant cut in

both Medicare and Medicaid with no

plan for dealing with its impact on the

most vulnerable in our society. And we

are told by some—the Speaker of the

House among others—that the Medicare cut will be painless.

That is an interesting assertion, but

it does not contribute much to this discussion because everyone knows the

Medicare cut will not be painless. The

proposed cuts Medicare and Medicaid

in this budget will mean higher health

care costs and lower quality of care for

the elderly and the poor.

In fact, recently we heard some testimony before the Senate Finance Committee from the new head of the Congressional Budget Office, who was just

appointed by the Republican leadership. She was asked: As a result of

these cuts, what will happen to quality

of health care?

The head of the Congressional Budget

Office said:

What is provided by the Government within this amount is not likely to be the same

level of quality.

Let me read that again because it

kind of reminds me of the op-ed piece

in today’s Post that says, ‘‘Beltway

Babble.’’

What is provided by the Government within this amount is not likely to be the same

level of quality. To maintain similar quality—

Dr. O’Neill said—

seniors will pay more for it.

Stripped away, the question is, if we

have this kind of a budget cut in Medicare and Medicaid, will you have the

same kind of health care quality? The

answer is no. Will health care cost

more for the elderly and the poor? The

answer is yes.

Now, what are the other consequences? Well, the other consequences will be that we will see rural

hospital closings across rural America.

In my home State of North Dakota,

you will see I think a dozen rural hospitals close. You will see the elderly

with chronic health problems, who are

struggling now with respect to access

to health care, struggle even more.

All of us have talked to the 80-yearolds at town meetings who tell us they

have heart problems and diabetes, and

the prescribed medicine for these lifethreatening problems they cannot afford, so they take half the dosage so it

lasts twice as long. That is the only

way they can do it because they cannot

eat and pay the rent and buy the medicine. They do not have the money. All
S7040 CONGRESSIONAL RECORD — SENATE May 22, 1995

of us understand that. That is what is

happening today and that problem will

be exacerbated by these cuts.

Now, the budget also says we ought

to make substantial cuts in education.

It says let us raise some revenue by

asking college students to pay interest

that begins accruing immediately when

they get a college student loan. The effect of this is to significantly increase

the payments they will be required to

make especially from low- and moderate-income households. So, through

this budget, we are saying to people,

we want to make it harder for you to

send your kids to school.

Well, it seems to me that the first investment you make, if you care about

the future, is the investment in your

kids. The first investment is an investment in education. What investment in

this country pays bigger dividends

than the investment in kids? None.

There is not one.

I told my colleagues before about

walking into the office of the oldest

Member of Congress when I came here,

Claude Pepper from Florida, a wonderful gentleman. He was then in his late

eighties. He had come during Franklin

Delano Roosevelt’s term in office. He

was a bright, interesting guy. On the

wall behind his chair he had two pictures. One was Orville and Wilbur

Wright making the first airplane

flight, autographed to him by Orville

Wright: ‘‘To Congressman Claude Pepper, with deep admiration,’’ and beneath it an autographed picture of Neil

Armstrong standing on the Moon.

What does that mean? What is the

difference between those two pictures?

Massive investment in education and

the enormous dividends that education

yields in technology and progress. It is

from the ground to the air to the

Moon. That is what education is. It is

about our future. It is about dividends.

And this budget says, ‘‘Well, let’s decide that that is not a priority. Let’s

decide that we cannot afford the full,

good-quality health care for the elderly

and the poor, and we cannot afford the

full measure of investment in education for our young people.’’

Now, why cannot we afford to do

that? Because we have designs on giving tax relief. Kevin Phillips says it—

the burden on the poor and the middle

class increases, while simultaneously

taxes are to be cut in ways that predominantly benefit the top 1 or 2 percent of Americans.

Why can we not provide a full measure of help to somebody that wants to

send their kids to college? Because

they want to give tax cuts. Oh, it is

cleverly placed in this budget. It is sort

of off to the side as a footnote. But

they have reserved $175 billion specifically for the Finance Committee specifically for a tax cut so that what is

done on this side will mirror what was

done on in the other body in its Contract With America.

Now, the tax cut is called a middleclass tax cut. The tax cut, at least in

the House of Representatives, does the

following. It says, if you are a family

with under $30,000 of family income,

you get a whopping $124-a-year tax cut.

But if you are a family with over

$200,000 in family income, God bless

you, we are going to give you a big old

tax cut of $11,200 a year, because you

are important to us, they say.

They want the delivery truck to stop

at the middle-class home where they

are going to send their kids to college

and pick up some money from them,

because they said we need a little

money from you. Then they want the

delivery truck to stop at some home

for the elderly and pick up some of

their money and some of their Medicare benefits. Another few stops collects money from low-income families

health assistance and education assistance, because we cannot afford that

any more.

Then what does the Republican delivery truck do we do with all that

money? It makes other stops in Hometown, USA after picking up all that

money from all those folks. Yes, it

drops the money off at the banker’s

house and the big businessman’s house.

And the driver says: You know something? We’ve been making the rounds

here in our hometown. We’ve gathered

up some money from the folks here—

the folks who were going to use it to

send their kids to school, going to use

it to heat their house in the winter,

going to use if because they were poor

and needed health care. And we gathered up all that money and now we are

knocking on your door because we

think you, the richest man in our

town, really deserves a little more.

So we are going to drop these bags off

at the front door and hope you do a

good thing for our community. We

hope you will go out and spend it, and

spend it here at home, if you will, so

that all that money somehow will

trickle down to all these folks and that

family that wanted to send their kids

to school might someday see some

small dividend from your wild spending

spree as a result of this tax cut.

Well, that is sort of putting it in a

hometown context. If this were a

hometown decision instead of a country, do you really think we would do

that? Do you really think we would say

to the families: ‘‘You’re having trouble

sending your kid to school, so let’s

make it harder and let’s use the money

to give a tax cut to the richest person

in our town’’? I do not think so.

Class warfare, my colleagues say. Is

it class warfare to talk about the priorities, if you think the priorities are

wrong? I do not believe that is class

warfare. I believe it is appropriate to

quote even a Republican commentator

who says this is a massive shift of income from the poor and middle-income

families to the rich and the big corporations.

Did you know, as we are talking

about all these choices and priorities,

that the other body, in its Contract

With America tax bill, they decided

they wanted to eliminate the alternative minimum tax for corporations?

This is the device by which we prevented big corporations from making

billions of dollars in profits and paying

zero in taxes.

Without the AMT, a corporation can

make $3 billion in net profit and end up

paying zero in taxes. Meanwhile, somebody gets up in the morning and goes

out and works hard 8 hours a day

digging ditches or hard manual labor

and pays a tax on it because they cannot get out from under it. They have to

pay a tax on the work they do; that is

what people do. Businesses in the past

would make several billion dollars and

pay zero, so we decided to stop that.

We created an alternative minimum

tax so that profitable corporations still

have to pay something in taxes.

This is what the other body has just

repealed. It means $4 billion for 2,000

corporations. In other words, 2,000 corporations get $2 million each in tax

benefits at the same time that we are

saying as a matter of priority that education somehow does not count, education does not rank near the top of

what this country thinks is important.

We are also told in recent debate here

on the floor of the Senate that the

budget proposal to cut Medicare will

actually save Medicare from insolvency.

Now, I must say this is kind of a disingenuous argument. It is not new to

understand the trustees’ report that

says that Medicare will at some point

face a very serious problem. The year

now is 2002. Twenty-three times in the

past 25 years the Medicare trustees

have issued their report projecting the

insolvency of the Medicare part A trust

fund. So this is not new.

In 1972, the trustees projected insolvency in 1976, and Congress took action

to solve it. In 1982, they projected insolvency by 1987, and Congress took action to solve it. In 1993, the trustees

projected insolvency by 1999. And, of

course, it was the President’s 1993

budget—which I voted for and not one

Member of the Republican party voted

for—that extended the solvency another couple of years until the year

2002.

So this insolvency issue is an interesting one. They apparently have just

discovered that somehow Medicare is

going to be insolvent. We must make

Medicare changes. But it seems to me

those who suggest let us make Medicare changes in order to create large

savings from which they can give big

tax cuts to the rich, they run into a

priority problem with some of us who

did not decide they wanted to serve in

the Senate in order to accomplish that.

I would like to, while I am on my feet

this morning, ask a couple of questions. In making some observations, I

would refer to page 7 of this budget resolution, Senate Concurrent Resolution

13. I have heard, I guess, a dozen members of the majority party say this is a

balanced budget. And I am going to ask

a few of them when they talk about
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7041

that later today about how they reach

that point.

Again, I refer back to the op-ed piece

in the Washington Post this morning,

entitled ‘‘Beltway Babble.’’ Only that

can explain the moniker of ‘‘balanced

budget’’ attached to Senate Concurrent

Resolution 13. Let me refer my colleagues to page 7, which is the page on

which deficits are annotated.

And the deficits—I will not read

them all—go from 1996 to the year 2002.

And in 2002, the deficit is $113 billion.

Now if it is a balanced budget in the

year 2002—and I have seen charts in

fact brought to the floor in which they

say 2002 it is zero. In 2002, it is a $113-

billion deficit.

The only way that one could get to

zero with a chart would be to take

from the Social Security trust fund

that money which is dedicated for Social Security purposes only and use it

to show a zero.

But, of course, they do not do that in

this budget resolution because the law

prevents them from doing that. This is

not a balanced budget, should not be

called a balanced budget, and in calling

it a balanced budget it is not accurately described.

It is a budget document that in the

year 2002 leaves a $113 billion budget

deficit, and I hope to ask some of my

colleagues about that in the coming

days. I will ask if they will join me. I

have some additional recommendations

for them, of some revenue increases

and some spending cuts that will make

a truly balanced budget, and I intend

to offer them.

If you want to bring to the floor a

product you call a balanced budget,

why do you bring to the floor a budget

document that on page 7, when it talks

about deficits for the year 2002, has a

$113 billion deficit? I am guessing we

will vote in 48, 50, 60 hours from now on

the budget amendment. Between now

and then, if the majority side continues to describe this as a balanced budget, perhaps they can find the $113 billion to make it a balanced budget and,

if not, I hope to offer them some recommendations to try to be of some

help.

Mr. President, how much time is remaining on the 30 minutes?

The PRESIDING OFFICER. The Senator has 2 minutes left.

Mr. DORGAN. Mr. President, my

party has had both the burden and the

joy over the years of constructing and

building a lot of things that are important to this country. Medicare is a very

important program for this country. It

has contributed to the lives of a lot of

Americans in a very important way.

It is true that it takes considerably

less skill to destroy than it does to

build. Someone who was asked once if

you had two houses and one you were

to build and one you were to tear down,

what kind of people would you hire to

do each? The answer is clear. To tear

down, you hire unskilled people; to

build, you hire people with skills.

We have been builders over the years,

and some of that which we have built

in this country, I am enormously proud

of, and on some we have probably gone

too far. But I think what makes this

country a good country, a wonderful

country and a compassionate country

is still worth fighting for.

I mentioned on the floor a month or

so ago about Stanley Newburg, who

died in New York City recently. I did

not know him, but I read the newspaper report. He died in his eighties.

They opened his will.

Stanley was a young man when, with

his family, he fled Austria and the persecution of the Jews by the Nazis. He

came to New York and walked with his

daddy on the lower east side peddling

fish. They peddled fish. They did well.

Stanley went to school, college, found

a job with an aluminum company. He

did so well, he ran the aluminum company, and did so well he bought the

aluminum company. He died recently

around 80 years old. They opened his

will and he left $5.7 million to the United States of America, with deep gratitude for the privilege of living in this

great country.

This is a wonderful place for a lot of

reasons, and many of them represent

the priorities that we are going to debate on the floor of the Senate around

the circumstances of this budget resolution.

Yes, let us be critical from time to

time, but let us also understand what

makes this a good country and a great

country, the kind of things that make

America a great place in which to live.

Mr. President, I yield the floor.

The PRESIDING OFFICER. Who

yields time?

Mr. GREGG. I yield 10 minutes to the

Senator from South Carolina.

The PRESIDING OFFICER. The Senator from South Carolina.

Mr. THURMOND. I thank the able

Senator for his kindness.

Mr. President, for the first time in

many years, this Senate has before it a

blueprint for balancing the budget and

reducing the national debt. What a refreshing contrast this budget resolution is to the budgets proposed over the

past 2 years by the President. Those

budgets called for the largest tax increase in history, continued deficits, a

significant increase in the debt, substantial growth in nondefense Government spending, and dangerous reductions in national defense spending.

Mr. President, I support the overall

direction of the proposed Senate budget resolution. I commend the chairman

and members of the Senate Budget

Committee for their efforts in bringing

a resolution to the floor which controls

entitlement spending, restrains the

growth of Government, and eliminates

annual deficits.

The next step, while maintaining

zero deficit budgets, is to reduce spending levels in order to lessen the tax

burden on families and businesses of

this Nation. If we are to have sustained

economic growth, Government spending must be restrained. A balanced

budget amendment and line-item veto

authority would do much to bring

about fiscal responsibility. While earlier this year the Senate failed to pass

the balanced budget Amendment, I am

hopeful that the Senate will pass that

amendment this year.

Mr. President, at the beginning of

this debate, I stated that we have the

greatest nation on Earth. It provides

Americans more freedom, more justice,

more opportunity, and more hope than

any nation has provided any people in

the history of the world. I repeat, this

great country of ours will be in jeopardy unless we do at least two things.

First, we must provide an adequate defense to protect ourselves against the

enemies who would destroy democracy

and freedom. Second, we must put our

fiscal house in order.

With regard to the level of defense

spending in this budget resolution, I

want to point out a few basic facts. The

Budget Committee recommendation

endorsed the President’s budget submission for Defense. I remind my colleagues that the President’s budget

proposal was unanimously rejected by

the Senate in an earlier vote. Discretionary funding for defense is reduced

by $8 billion from 1995 to 1996 and continues on this downward slide through

fiscal year 1998. It is only by fiscal year

2002 that the defense budget is brought

back to its 1995 level. I am concerned

that this reduced level of spending will

not support the force structure or preserve our national security interests.

The most recent request for defense

supplemental appropriations should be

an indication that the proposed budget

will not support the required level of

training, maintenance, operations and

modernization.

A part of our national defense requirement is to provide for those veterans who have served their country.

Those who have fulfilled their obligation of citizenship must not be deserted. I am satisfied that this budget

protects veterans’ benefits and health

care.

I recognize that total nondefense discretionary spending is reduced in this

budget resolution. However, I would

submit to my colleagues that providing

for the common defense of this Nation

must be our highest priority. Other

Senators may have different views on

spending priorities. I can assure you

that I will have more to say about defense spending, and I look forward to

that debate in the near future.

Further, Mr. President, this budget

resolution is a good step in the effort

to put our fiscal house in order. It provides for restrained growth in overall

Government spending. Because spending grows at a lower rate than projected revenue increases, the deficit

will be reduced each year, and will be

finally eliminated in fiscal year 2002.

This budget resolution provides for

real deficit reduction without raising

taxes. American families and businesses have carried a heavy tax burden

to support the appetite of the Federal
S7042 CONGRESSIONAL RECORD — SENATE May 22, 1995

Government. Under present tax policies, Mr. President, capital investment

is punished, earnings of senior citizens

are penalized, consumption is favored

over savings, and America’s families

keep less and less of their earnings.

This resolution says ‘‘no’’ to balancing

the budget by additional taxes.

Mr. President, critics of this budget

continue to claim the resolution contains a tax cut for the wealthy paid for

by cuts on the aged and poor. I will emphasize what has been stated many

times on this floor—this resolution

does not contain a tax cut. A reserve

fund is established to protect what has

been called the fiscal dividend. That

fund can only be made available for tax

reduction after passage of the reconciliation bill. In addition, the Congressional Budget Office must certify

the amount of the dividend available

for tax reduction.

Mr. President, I am hopeful that

there will be a dividend to apply to tax

reduction and reform. Our tax system

is not only an economic burden, but

also an administrative nightmare. The

aggravation level of the taxpayers of

this country continues to rise. After

bringing our budget into balance, we

must work toward a fair and simplified

tax structure.

Mr. President, I would like to comment on this budget’s treatment of

various programs which I would categorize as economic security items.

This resolution provides for increased

spending for Medicaid, Medicare, other

health programs, various income security programs, and Social Security. It

does not abandon this Nation’s longstanding tradition of helping those who

are truly in need or cannot care for

themselves.

Finally, funding for administration

of justice also increases in this budget.

Additional funds are provided for the

violent crime reduction trust fund and

other Federal law enforcement functions.

Mr. President, the Framers of our

Constitution clearly established the

priorities of our National Government.

While we have adapted to meet current

needs and circumstances, the underlying principles remain constant—to provide for our common defense, establish

justice, and promote the general welfare. While this budget resolution is

not perfect, it puts us on a course to

reap the promises of this Nation: liberty for ourselves and our posterity. As

Thomas Jefferson once said, ‘‘And to

preserve their independence, we must

not let our rulers load us with perpetual debt. We must make our election

between economy and liberty, or profusion and servitude.’’ Mr. President, the

choice for us is clear—let us choose

economy and liberty. I thank the Chair

and yield the floor.

Mr. EXON addressed the Chair.

The PRESIDING OFFICER (Mr.

THOMAS). The Senator from Nebraska.

Mr. EXON. Mr. President, I yield 6

minutes to the Senator from Nevada

[Mr. BRYAN].

Mr. BRYAN. I thank my friend, the

Senator from Nebraska.

I rise to support the Democratic leadership’s amendment to restore funding

to the Medicare Program.

I believe it is imperative and in the

national interest that we balance the

budget. I have supported a balanced

budget amendment to our Constitution

since first embarking on elected public

service as a member of the Nevada Legislature in the 1960’s. I continued that

support as the attorney general of my

State and later as Governor, and on at

least two occasions as a Member of the

U.S. Senate.

In my view, balancing the budget is

critical for our economy to remain viable at home and for us to become internationally competitive abroad. Mr.

President, this budget proposal that we

are dealing with fails the most fundamental of tasks, and that is a task of

fairness.

It is rather ironic that it is this

month—Older Americans Month—and

the month in which the Fourth White

House Conference on Aging was held,

that the Senate is considering cutting

Medicare to the magnitude of $256 billion over 7 years. It is the same month

in which the other body already passed

$280 billion in Medicare cuts. In my

view, Mr. President, this is an unconscionable way to address Medicare reform.

Seniors have always been willing to

help our country out when asked to

shoulder the responsibility. They do

not want their children and grandchildren to carry the burden of the financial deficit. They are willing to

share it, but not unfairly bear the burden of needed revenue cuts to balance

the Federal budget. Let us be clear, Mr.

President, these are Medicare cuts, and

the impact will be devastating.

But under this budget resolution, the

burden is not being fairly shared. Seniors are taking a disproportionate hit,

and for what? To help pay for tax cuts

to benefit those in our society who are

among the most affluent in our country—those citizens making up to

$200,000 a year.

Seniors throughout this country are

dependent upon Medicare to ensure access to the health care services they

need. I can certainly understand, and I

think my colleagues will understand,

that their real fear is that the health

care system upon which millions rely

may be gutted as a consequence of this

budget resolution.

In 1993, when Medicare faced a significant cut, I introduced an amendment to the budget reconciliation

package of that year to eliminate a

large part of the additional proposed

Medicare cuts by repealing section 936

of the Internal Revenue Code, the socalled pharmaceutical tax benefit,

which provides a tax cut for companies

operating and hiring workers in U.S.

possessions. The amendment failed.

The story was the same. Seniors were

asked to suffer an unfair portion of the

burden.

Let us not fool ourselves. Seniors understand very well how these massive

proposed Medicare cuts are going to directly affect them. They understand

health care cost shifting. They know

how increases in copayments,

deductibles and monthly premiums hit

their pocketbooks. They know how

Medicare health care access can decrease after cuts are implemented.

And, most importantly, they know

these changes will mean that they are

going to pay more to get less health

care coverage.

Seniors also understand, Mr. President, that Medicare costs must be reduced and cuts can be made. We all

know there is still a significant

amount of fraud and abuse in the Medicare system that siphons off funds from

legitimate health care. Changes can be

made in Medicare to achieve information savings. No doubt, there are ways

to contain explosive Medicare’s

growth, but in a much less devastating

way than the proposal before us.

In Nevada, I hear poignant stories

from many seniors, particularly those

living on fixed and limited incomes,

where only Medicare can ensure health

care access. For seniors, the fear is

very real that Medicare will be impacted to such a degree by these proposed cuts that they may no longer be

able to afford their Medicare

deductibles, copayments and premiums. These cuts translate into about

$900 per year per senior by the year 2002

in higher premiums, copayments and

deductibles. Over the 7 years until 2002,

this means an additional cost of $3,200

for a single senior, $6,400 for a couple.

My State of Nevada is impacted most

severely. Nevada is the fastest growing

State in the Nation. It has also just

been named the first choice of seniors

seeking a retirement location. Nevada’s nearly 200,000 Medicare recipients will soon be joined by thousands

more seniors. Nevada leads the Nation

with the growth projection of 122.7 percent for the number of seniors age 65

and over from 1993 to the year 2020.

Many Nevada seniors have already

experienced the difficulty in finding a

physician willing to take new Medicare

patients. The growth in the number of

seniors seeking medical care coupled

with these proposed Medicare cuts will

certainly impact their access to Nevada’s health care system even further.

This will not be a problem unique to

Nevada but one seniors across the Nation will face.

Mr. President, Medicare celebrates

its 30th anniversary this year. What an

anniversary present some Members of

the Senate are providing for the Nation’s seniors. For 30 years, seniors

have had health care services and have

not had to fear that an illness will devastate their personal finances. But

now, 30 years later, they have much

cause to worry about whether Medicare

is going to continue to be there for

them when they need it, or whether

they are going to be able to afford the

cost.
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7043

We all want to assure that seniors in

our States will continue to have health

care coverage. We can do that if we

take a more reasoned and rational approach to reforming Medicare to sustain its financial viability. I urge my

colleagues to support this amendment

and to restore $100 billion of the proposed Medicare cuts as a step for a better approach. Our seniors deserve no

less from us.

I yield the floor and thank my distinguished colleague, the Senator from

Nebraska.

Mr. EXON. Mr. President, I have been

listening with great interest and appreciation to the remarks by my colleague

from the State of Nevada, another

former Governor, who understands

what is going on in the States, who understands the relationship between the

State and the Federal Government, and

above everything else, recognizes and

realizes the obligation that we have to

act fairly in our deliberations, discussions and bill-passing here in the U.S.

Senate.

Previous to the remarks of the

former Governor from Nevada, now

Senator from Nevada, we heard an excellent presentation by my colleague

from the State of North Dakota.

The Senator from North Dakota is a

former tax commissioner of that State.

He knows that State. He knows rural

America very, very well. Since he has

come to the U.S. Senate, we have come

to appreciate and respect the dedicated

talents that he has with regard to the

relationship between the Federal Government and the State government.

Certainly, I thought that the excellent presentation he made with regard

to the statements about the budget

submitted by the majority in both the

House and the Senate deliberations are

absolutely a travesty. Kevin Phillips, a

noted Republican columnist and

spokesman, hit it right on the head.

I have some remarks I would like to

make, but I recognize that we are trying to move evenly back and forth. I

certainly ask the managing Republican

on the Senate side now whether or not

he is waiting to speak, or is it his desire that the Senator from Nebraska

continue on his remarks that I would

like to make?

Mr. GREGG. Mr. President, I do intend to speak, but I am happy to have

the Senator from Nebraska proceed,

and I will speak after the Senator from

Nebraska has completed his statement.

Mr. EXON. I see the Senator from

Washington is on the floor. He will

seek recognition, is that correct, at an

appropriate time?

Mr. GORTON. At an appropriate

time.

Mr. EXON. I simply say to my colleague, it would only be fair for him to

proceed at this time, and I will follow.

Then he has the disposition on his side

for the next speaker, to keep it in the

regular order.

Mr. GREGG. If that is the wish of the

Senator from Nebraska, that is certainly acceptable to me. I appreciate

his courtesy.

Mr. President, I want to address a

couple of comments that have been

made here relative to both Medicare

and also to tax elements of this budget

because I think there have been attempts to address the issue, but I do

not think they have been accurate in

their reflection of exactly what is

going to happen.

The Medicare trust fund is the issue.

Its solvency is the issue. Now, the definition of solvency within the Medicare

trust fund was not created by myself or

members of the Budget Committee, but

created by the trustees of the trust

fund.

They have testified, and there have

been charts on this floor reflecting this

fact, and there has been discussion of

this, that the Medicare trust fund

could well be insolvent and is going to

go insolvent as of the year 2002.

What have we received as a response

to this insolvency from the other side

of the aisle? Essentially, we have seen

nothing—no proposals at all. We have

seen them, however, attack with rather

significant enthusiasm the proposals

coming from this side of the aisle.

They have attacked the number which

we are proposing to address in this

budget in order to try to correct the

trust fund problem as being an outrageously high number, a number they

have never heard of, a number they

cannot conceive of, $256 billion over 7

years.

I think we need to put that number

in some context. If we look at the

trustees’ report, the trustees of the

Medicare trust fund, ironically, four of

whom happen to be members of this administration, including the Secretary

of HHS and the Treasury Secretary,

that trustees’ report says that in order

to maintain the solvency of the trust

fund on an actuarial basis of 25 years,

which is the minimum that they suggest, an adjustment in the trust fund

must occur of approximately $262 billion, not over 7 years but over 5 years.

We are talking about $256 billion over

7 years. We are coming in at a level

which is significantly below, significantly below, what the trustees are

saying—the trustees being Donna

Shalala and Secretary Rubin—is necessary to obtain actuarial solvency of

the trust fund.

What does that mean, actuarial solvency? It sounds like a big name, a

technical phraseology. What it means,

quite simply, is if the senior citizens of

this country are going to have the ability to have health care insurance, they

have to have a health care trust fund

which is solvent.

The trustees have said, as of the year

2002, there will be no more insurance

trust fund because there will be no

money in the trust fund. In order to

have money in the trust fund and to

have it for a period of 25 years, they

need to have an adjustment of $262 billion over 5 years.

So the number that we have put forward as our goal for adjusting the trust

fund is a very reasonable number and is

one this is absolutely necessary at a

bare minimum to assure that the senior citizens of this country actually

have health insurance, something

which the other side seems to be just

ignoring.

They come down here and say we

cannot take this money and transfer it

to that account, and this money from

that account. But nobody mentions

that the trust fund is going broke. The

President’s people have said that in

their report.

What does this number mean, again,

in terms of the overall context of the

Medicare Program? Does it mean the

Medicare Program is being cut? That

we are talking about adjusting the

trust fund, the funds flowing into the

trust fund, and talking about adjusting

Medicare by this amount of $256 billion, does it mean the Medicare Program is being cut? That is a big number. It sounds like it might be. No, it

does not mean that at all. It does not

mean that at all.

What we are talking about with that

number is allowing the spending on

Medicare payments in this country to

increase by 7 percent over the period of

that 7-year period.

A Medicare beneficiary who today receives $4,350 per beneficiary will, in the

year 2002, be receiving $6,300 per beneficiary. There is no cut there.

In fact, in the year 2002, the amount

of money that we will spend on the

Medicare System in this country will

be $96 billion more than what we are

spending today. What we are talking

about here is the fact that the Medicare trust fund and the spending for

Medicare is increasing so fast—101⁄2 percent annually—that we simply cannot

afford it. It is bankrupting itself. As a

result, there will be no insurance for

senior citizens.

So what we are suggesting is we take

the rate of growth of Medicare spending and reduce it to something we can

afford. We are not talking about cutting it. We are not talking about even

reducing it to the rate of growth of

health care in the private sector, which

last year premiums dropped by 1.9 percent in the private sector. We are talking about allowing an annual increase

of 7 percent in the Medicare trust fund,

which works out to a huge amount of

increased spending on Medicare over

the next 7 years.

It works out to a solvent Medicare

System, one that is not insolvent, one

where seniors will actually be getting

Medicare and have dollars available for

Medicare rather than not be getting

dollars available for Medicare, because

the trust fund would be insolvent if it

continues to grow at its present rate.

So this discussion of the attempts by

our side to address the Medicare trust

fund by putting it into balance and by

reducing the rate of growth of the Medicare spending in this country and in

this Government is purely political. In

fact, it is so political that if we look at

the President’s own statements from a

year ago, we realize that he agreed
S7044 CONGRESSIONAL RECORD — SENATE May 22, 1995

with Republicans, and today his party

and his administration does not seem

to any longer give credence to what

they said just a year ago.

The President said a year ago today,

Medicare and Medicaid are going up

three times the rate of inflation. We

propose to let it go up at two times the

rate of inflation.

My goodness gracious, that is exactly

the Republican proposal. We took the

President at his word last year. We

took his proposal, and we have a rate

of growth of Medicare which is two

times the rate of inflation.

But suddenly it is a horrible event.

Not only did the President say that,

but even Mrs. Clinton said that. She

said that the rate of growth was too

much and that we had to reduce it.

More importantly, she said that cutting the rate of growth was not a cut in

Medicare. She agrees with this side.

Even Ira Magaziner agreed with.

Mr. GORTON. Will the Senator yield

for a question?

Mr. GREGG. I yield for a question,

sir.

Mr. GORTON. Mr. President, I say to

my friend from New Hampshire that I

find these arguments intriguing and, of

course, persuasive.

He and I have talked in private about

this for some time, but I wonder if he

would, for a moment, take the other

half of the question. We have a very

specific amendment in front of the

Senate, a $100 billion amendment, coming out of the dividends which we firmly believe and the CBO says will arise

out of balancing the budget because we

have a better economy in the United

States.

Now, the proponents of the amendment do not want a balanced budget.

They have not come up with a proposal

for a balanced budget. But they do

want to spend most of that dividend in

the form of this amendment, some $100

billion, dividing it among part A and

part B of Medicare—part A the hospital

insurance portion being that portion

which will go bankrupt in the year

2002.

Let us assume, I ask the Senator

from New Hampshire, that half of that

money, $50 billion, just comes in the

form of a cash infusion into part A of

Medicare but without any other

changes because we have not heard of

any other changes the other side proposes. What would that do with respect

to the projected bankruptcy of Medicare part A in the year 2002?

Mr. GREGG. I think the Senator

from Washington has raised a very

valid point. What the Senator from

Washington is pointing out is, first off,

the other side of the aisle has no budget, no proposals at all in the area of entitlement reform. Second, what they

are proposing is to take what will be

basically a dividend as a result of interest rates dropping and just take

money and throw it at the system, a

system which is fundamentally flawed,

a system which is growing at twice the

rate of inflation, and a system which

cannot maintain itself.

So the practical implications of what

they are proposing is it will have no

significant impact on the solvency of

the trust fund because it will put into

place no attitudes or reforms which

will reduce that rate of growth of the

trust fund. And what the trustees told

us when they testified before the Budget Committee, of which the Senator

from Washington is a member, and I

know he is an active participant at

these hearings, was there had to be

fundamental reform of the trust fund,

in the way we deliver health care, in

order to get it into actuarial balance.

Mr. GORTON. I ask the Senator from

New Hampshire, is it not true that the

trustees said, ‘‘You can either make

changes in the rules with respect to eligibility or, alternatively, you can increase the payroll tax?’’ Am I correct

in feeling that they really did not talk

about a one-time general funded infusion into the system of cash money,

without any reforms on the other two

scores at all?

Mr. GREGG. The Senator from Washington is absolutely correct. They did

not talk about a one-time cash infusion

of, say, $50 billion into the fund because they recognized that will do

nothing to correct the problems which

they were highlighting to us. They

were saying there was an urgent need

for fundamental reform of the manner

in which the trust health care is delivered under the Medicare system, in

order to get this into actuarial balance. And a one-time cash payment is

not going to solve the problem. That is

basically, I presume, why they never

conceived of the idea, because they are

charged with correcting the problem,

not with just the political response to

the problem.

Mr. GORTON. So the proposal we

have before us at the present time will

not cure any of the ills of Medicare

part A? And may very well unbalance

the budget, because it is a contingent

amount of money, contingent on our

balancing the budget, and certainly

will help prevent any kind of dividend

in the form of lower taxes to middleclass working Americans; is that not

correct?

Mr. GREGG. The Senator from Washington is absolutely correct in all those

statements and assumptions, in my

opinion.

Mr. ROCKEFELLER. Will the Senator from New Hampshire yield?

Mr. GREGG. I yield to the Senator

from West Virginia for a question.

Mr. ROCKEFELLER. It will be a

question.

Taking off from what the Senator

from Washington has indicated, does it

not strike the Senator, in looking at

the amendment of Senator LAUTENBERG and myself, that we are not in

any way pretending that this $100 billion is going to cure the trust fund

problem? What we are trying to establish is a matter of priorities. Obviously

$100 billion is not going to solve the

problem, but neither does the Republican budget resolution before us; $100

billion kept in Medicare, kept in health

care funds, is a statement of what is

important as opposed to putting it into

some reserve fund which I believe most

people in this Chamber believe is going

to be used for tax cuts for the wealthy.

So would the Senator not agree that

by putting $100 billion back into health

care, we are not so much saying this is

going to solve the problem, because obviously it is not—neither does the Republican budget resolution—but is it

not a matter of keeping the money in

Medicare and not spending it on other

uses?

Mr. GREGG. I would have to say to

the Senator from West Virginia I would

have two concerns about that representation.

The first is this: I do not think, and

I believe the numbers prove this to be

accurate, that you can get our budget

under control, that you can get the

budget of the Federal Government

under control, unless you address and

fundamentally reform the health care

function of Federal spending. Because

55 percent of entitlement spending,

independent of Social Security which

we are not going to address, is health

care driven. And, thus, I do not happen

to think that you resolve this problem

unless you take a hard look at it and

you do the work and you produce a reform that is going to change the rate of

growth of Medicare spending from 10.5

percent that it presently has in Medicaid, from the 10.5 percent which it presently has, to a rate of growth which we

can tolerate which is about 7 percent in

Medicare and probably about 5 percent

in Medicaid. And those numbers are

the numbers that we use in this budget

resolution and I think they are reasonable for that reason.

The second part of the Senator’s assumption would be, ‘‘Well, even if those

numbers are reasonable, we should still

put this money into Medicare and Medicaid, if it is available, if you can obtain it without doing the reform’’—

which I do not think you can. In other

words, I do not think you can get the 2

percent savings in interest rates which

comes from getting a balanced budget,

unless you address the health care

function which produces the balanced

budget.

But even if you get that transfer,

what you are saying is that extra $100

billion should go in there and we

should have it on top of the reform, of

what would occur from reform. So you

are talking about actually encouraging

a rate of growth in the health care accounts which would exceed what I

think we have to have as a rate of

growth in order to have balance in the

budget.

The second reservation I would have

about the Senator’s point is this. There

has been all this talk. I think every

person on that side who has gotten up

has said we are going to take this $170

billion, which we are told we are going

to get. We are not sure we are going to

get it. CBO says they will score this if

we get to a balanced budget glidepath
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7045

and it results from the fact that interest rates go down. It is not a result of

any cut in spending. It results from interest rates dropping. We are going to

take this $170 billion and we are going

to transfer it back to the taxpayers.

We are going to say this is your money

to begin with. You ought to get to keep

it. You ought to get some benefit out

of us balancing the budget.

Everybody has gotten up on that side

and said that is a benefit for the rich.

You are taking from some group—

whether it has been—one group has

been children, one group has been

unwed mothers and pregnant mothers,

and another group has been the elderly—and you are giving it to the rich.

This resolution says that 90 percent

of any tax cut—90 percent of any tax

cut—has to go with people with incomes under $100,000.

Maybe there he has a new definition

of wealthy in this country, but people

with incomes under $100,000 I do not

find, definitionally, as wealthy. So I

believe first we should make the tax

cut if we get this dividend, because I

think it will run to the benefit of people who are today paying the price of

running this Government, which is out

of control. And, second, since 90 percent of it is going to go to people with

incomes under $100,000 I do not happen

to believe that is a transfer to the

wealthy.

Mr. ROCKEFELLER. I would say

again to the Senator from New Hampshire, what he is suggesting is that we

take Medicare money, $256 billion, and

cuts in Medicaid, and use those health

care cuts to pay for tax cuts.

Both the Republican CBO Director

and the past Democratic CBO Director

had a common view on this. The only

way to achieve short term savings of

this magnitude is to cut doctor and

hospital payments and make seniors

pay more. Up to half of a senior’s Social Security cost-of-living increase

would be used to pay for this increase

in the cost of Medicare. So you are not

only getting them on Medicare but you

are getting them on Social Security. Is

that not correct?

Mr. GREGG. No. I would say to the

Senator from West Virginia that is not

correct.

First, as the Senator from West Virginia knows, the manner in which

these savings are going to be accomplished—remember our savings rate of

growth is not cut—is up to the Finance

Committee. But let me suggest some of

the ideas we put forward, those of us

working in this area, the Medicare

area, would have affected not the poor

senior but would have affected the

wealthy senior.

I, for example, have a great deal of

problem with the fact that under the

part B premium you have a 75-percent

subsidy of the rich in this country by

the poor and the moderate-income individuals in this country. Under the

part B premium, as the Senator from

West Virginia knows, a person who is

working 60 hours a week, he or his wife

or both of them working at, say, the

local restaurant, they have to pay into

the general fund with their taxes. And

then a person, say the top 500 retirees

from IBM last year, they opt for the

part B premium.

They only pay 25 or 30 percent, depending on the year of the cost of that

premium. And the other 75 or 70 percent is covered by general funds. So

John and Mary Jones, who are working

60 hours a week down at the local restaurant, are paying into the general

fund, and then their money is being

taken to pay for the top 500 retirees

last year from IBM who opted for part

B premium.

I happen to think that is wrong. I

think we should affluence test the part

B premium. Yes, that means some senior citizens are going to pay more. But

I happen to think there are some folks

in the senior citizen community who

are doing quite well, who are quite

wealthy, and who under the part B premium, should be paying a fair share.

So there are a lot of different ways

that the adjustments in rate of growth

can be accomplished.

I also happen to support something

which I call choice care where we encourage seniors to move into a managed care, PPO-type of environment

where I think we can get a fixed rate of

cost on the rate of inflation in the

health care system. In that system, I

think seniors are going to get more in

the way of health care probably for

less, and in the process I believe we can

get some controls over health care.

But I did want to address one other

point. I know the Senator from Nebraska wants to get started on his

speech.

Let me mention quickly this tax

issue which I think is very important

to point out, which is that under this

resolution—you can talk about the

House resolution. We are not going to

vote on the House resolution right

now. Maybe we will in the conference.

I do not know what will happen in the

conference. I am for the Senate position. I think Senator DOMENICI has

done an exceptional job with the budget that leads us to balance for the first

time in 25 years.

But under our resolution it says that

90 percent of any tax cut benefit will go

to people with incomes under $100,000.

So I think we should have an end to all

of this discussion of, ‘‘Oh, this is just a

transfer to the wealthy’’ because that

is a flawed definition of wealthy if the

other party is going to suddenly assume that everybody under $100,000 is

wealthy. Then we have a new definition

of wealthy in this country.

But what I wanted to end up on is the

reasons we need to have this balanced

budget amendment. We have heard a

lot about it. We have heard it from all

sorts of scenarios around here.

But I would like to just refer people

to an individual who I consider to be

the leading historian of our time, a

man named Paul Johnson. I think he

teaches at Oxford. I know he is an English historian. He has written a number

of really extraordinary histories of the

20th century, including ‘‘Modern

Times,’’ ‘‘Birth of the Modern,’’ and a

variety of just extraordinary pieces

that are incredibly insightful. He wrote

a piece for the New York Times, some

of which I agree with and some of

which I do not agree with. But the

basic thrust of it was incredibly

thoughtful, as he often is on what is

wrong with this country if we continue

to run up this debt.

Let me just quote a little bit from

this.

The United States is running the most

costly welfare state in history, as well as

acting reluctantly, not consistently but certainly expensively, as the world’s policeman,

and even to eliminate the deficit, let alone

reduce the debt, the spending will have to

fundamentally be reformed. This will mean,

among other things, ending the welfare state

as it exists today. It may not be as hard as

some people think. After all, it is scarcely a

generation old.

The theme of his piece here is if the

United States continues to run its

present debt, it will collapse or it will

be in a horrendous situation.

He points out that we are now ready

to act as a country. He finds this

unique, and it is a special time, and the

time to do it is right now.

He says there are two things that reflect the fact that he thinks we are

ready to act. The first is sufficient congressional support, and that has already been achieved, he says. And the

second is a prerequisite of popular consensus. Looking at the United States

from England, he is determined that is

the case, and he is a very astute fellow.

Like de Tocqueville, maybe he has a

better sense of where we are historically than we have ourselves.

Congress is ready for reform, and so are

the people. But history shows that neither

means much without a dedicated leader.

I am quoting here:

Normally, one would expect such leadership to come from the President. In the past,

the White House has shown a much greater

concern for financial probity than Capitol

Hill. When Congress passed Mr. Clinton’s deficit reduction package during his first year

in office, it did so with hardly a vote to spare

in both Houses. But Mr. Clinton is not a

leader, though he can sometimes be persuaded that it is in his interest to be an energetic follower. No leadership will have to

come—

From the Congress. That is paraphrasing, ‘‘the Congress.’’ He uses another phrase.

The fact is that we as a Congress

have the obligation to do this now. We

have the obligation to step up and put

forth and present, as we have in the

past, the budget resolution to come to

a balance.

I want to congratulate again Senator

DOMENICI for having done that, and I

believe fervently in doing this we will

also reform fundamentally the Medicare system so that it will be solvent,

and so that our senior citizens will be

assured of first-class health care insurance—not for the next 7 years, but for

as far as the eye can see.
S7046 CONGRESSIONAL RECORD — SENATE May 22, 1995

I yield the floor.

Mr. EXON addressed the Chair.

The PRESIDING OFFICER. The Senator from Nebraska.

Mr. EXON. I yield such time to myself as I may need.

Mr. President, I have been listening

with keen interest, of course, to this

entire debate which we started last

week and again this morning. The

same theme keeps coming through

time and time again.

Once again, I would like to correct

the impression that my friends on that

side of the aisle seem to be giving, or

not giving, depending upon your point

of view, to what is the majority opinion of those of us on this side of the

aisle.

Listening to the rhetoric from the

Republican side, you would tend to believe that we were against any balanced budget; that we do not want to

be players in the game; that we simply

do not seem to realize that the Republicans have stepped up to the plate, and

they have by bringing forth a resolution that I agree took some courage. I

have said that time and time again in

the Budget Committee and on the floor

of the U.S. Senate.

The problem that I have with the

spin that the Republicans are trying to

give to this entire proposition is that

they and they only are the only ones

that care about balancing the budget of

the United States of America. I think

the record clearly shows that there are

many of us on this side who have been

trying to do that for a long, long time

and we are simply trying to make some

improvements, some improvements,

some fine tuning, some minor surgery,

if you will, with regard to the document that has been presented to us by

the majority through the might and

power of the majority in the Congress

of the United States.

I, therefore, emphasize once again—

let me make this statement that I do

not think has been made before, and I

do not propose to speak for all on this

side of the aisle—that I believe that

the Republican steamroller, the Republican majority has rejected every one

of even the minor changes that we offered in the Budget Committee, and

have every indication of saying no, no,

no to anything that we even suggest

here. They might be surprised if they

would simply realize and recognize

what we are constructively trying to

do on this side of the aisle despite their

protestations to the contrary.

What we are saying is that we recognize some significant cuts have to be

made, but we simply say to our Republican colleagues, who are in control,

why not reason together? Why not

come out with a bipartisan budget so

that we all have to share in the pain, if

you will, of making some cuts in many

programs that otherwise we would not

like to cut.

To put it another way, Mr. President,

I believe, if the Republicans would accept the amendments, the constructive, well-reasoned, well-thought-out

amendments not to eliminate the cuts

but just to redistribute the cuts within

their framework, within their totals,

without disturbing the goal of 2002 to

balance the unified budget, without

making any major changes to get to

that end result, we might be willing to

support their budget. We Democrats

are simply saying why not listen to us

and listen to what we are saying, especially about Medicare.

Now, the hit that Medicare is taking

is unconscionable when you recognize

and realize the results of what it will

do. I have heard time and time again

from that side of the aisle, and I heard

it again this morning, there has been

no proposal from this side. That is simply not true. Time and time again in

the Budget Committee and on this

floor—and you are going to see more of

it in the next couple of days—we have

had a whole series of amendments.

What the we are basically saying, Mr.

President, is that the Republicans

should recognize and realize, with all of

the difficulty, with all the cuts that we

are going to have to make to reach

that balanced budget by the year 2002,

there is no way that any reasonable

person, whether they figure with a red

pen or a blue pen or a black pen or

whatever colored pen, can come to any

logical way to balance the budget by

the year 2002 and have a tax cut. There

is no way to make all the painful cuts

we are going to have to make—and we

are ready to stand in support of some

of those—if you are going to have a tax

cut. And the tax cut is the tail that is

wagging the dog on this Republican

budget.

I do not wish to call the Republican

budget a dog because there are some

good things in that budget. I simply

say that we can make it a whole lot

better if you will simply listen to the

reasoned approach and proposals we

are making.

Putting it another way, you cannot

have your cake and eat it, too. You

cannot reach that deficit reduction

proposal and balance the budget by the

year 2002 if you are going to have the

massive tax cuts passed in the House of

Representatives. It is a sham. It will

not work. Anybody who knows anything about the budget knows it will

not work. And even if it should work

by the year 2002, which it cannot in my

opinion, because of the magnitude of

the huge tax cut passed in the House of

Representatives that benefits the

wealthy we would immediately unbalance the budget in the next 2, 3, 4, or 5

years beyond that.

My colleague from North Dakota

pointed out very well what Republican

commentator Kevin Phillips had to say

about these two Republican budgets,

one in the House and one in the Senate.

The question that he asked is, who are

the winners and who are the losers?

Well, we are all going to be winners if

we get to a balanced budget by the

year 2002, but there obviously are going

to be some losers, and although some

of those losers are the traditional part

of society that the Democratic Party

has shepherded and protected to some

degree, we are willing to make those

sacrifices.

I simply say to my Republican colleagues on that side of the aisle, if you

would take the $170 billion you have in

that kitty for a tax cut—and despite

the newspaper stories and commentators to the contrary, there is a tax cut

in the Domenici package. Senator DOMENICI himself in the Budget Committee deliberations in public said the $170

billion that likely will come along

sometime later as a dividend, if you

will, from the cuts that are being made

can be used and used only for a tax cut.

It is not in the budget right now, but it

is in the budget on down the line and it

is so identified. I simply say to those

on that side of the aisle, if you would

come to reason, if you would try to

work with us, if you would give up the

$170 billion, or most of it, to not eliminate but alleviate what we think is an

unfair cut on many programs that affect the most fragile of our society,

then you would be surprised how many

votes there would likely be when this

budget resolution passes the Senate. I

would say 60, 65.

But I simply say that absent that,

absent the ability of the Republicans

to give, absent the ability of the Republicans to keep their house in order

and to keep their votes in line, maybe

they dare not change the dotting of a

single ‘‘i’’ or the crossing of a single

‘‘t.’’ I appeal once again as I did when

we started this debate. Let us try harder on a nonpartisan position.

And then I have heard, Mr. President,

this talk about, oh, there is nothing

wrong with giving the people a $170 billion tax cut as a reward, I guess, for

the sacrifices that they have to make

to balance the budget. I think that is a

simple direct case of wanting your

cake and eating it, too. We should not

have to reward the people of the United

States, and I do not believe the people

of the United States—Democrats, Republicans, independents, call them

what you will—believe they need to be

bought off by a promised tax cut to

make the hard choices to balance the

budget by the year 2002. That is a case

which I think has not been made well

by those on that side of the aisle, but

they say it so many times some people

may begin to think they really are saying something important.

There has been a lot of talk about

Medicare. Medicare and the hit Medicare is taking is of much concern to

those of us on this side of the aisle.

There has been lots of talk as evidenced by the recent exchange between

the Senator from West Virginia and

the present manager on that side of the

aisle.

The basic point seems to be that you

have to go along with their recommendations, with their numbers in

their fashion because otherwise the

Medicare trust fund is going to go

broke by the year 2002.
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7047

We have to do something about it.

We all recognize that it is a problem.

But if you will look into the details, or

lack thereof, of what the Republican

majority is proposing, you will see that

even if we would accept their proposal

lock, stock, and barrel, the solvency of

the Medicare trust fund would only be

extended to the year 2005, or 3 more

years.

And yet to listen to their rhetoric

you would believe, if we accept their

budget proposal lock, stock, and barrel,

that we would solve that problem as

well. We do not have enough figures to

know whether or not if their proposal

was enacted, because it is so lacking in

details, it would continue to make the

Medicare trust fund solvent to the year

2005, 3 years beyond the date that it

otherwise is expected to be insolvent.

I simply say that no specifics are

available to us. But I wish to emphasize once and for all, if I can, the fact

that even if we accept the Republican

budget we have not solved the longterm solvency of the Medicare system.

Why are we suggesting, Mr. President, without violating the 2002 date to

balance the budget without raising

taxes, without doing anything else that

the Republicans would generally think

would be harmful, why are we saying

that the $250 billion to $280 billion cut

in the next 7 years would be so devastating? And why is it that those of us

on this side are saying we recognize

some reductions are going to have to

be made in the Medicare and Medicaid

Programs but we are simply saying you

are going at this without thoroughly

thinking it through?

You are going to cause devastation

to the system in a whole series of

areas, primarily in the rural areas of

America which, in this Senator’s opinion, have too few representatives in

this body and certainly too few in the

House of Representatives.

To bring this point home, I would

like now to read an excellent article

that was referred to originally this

morning earlier in debate by the Senator from Maine. It was a New York

Times article of yesterday, May 21,

1995, under the byline of Robin Toner.

I want to read this into the RECORD

because it basically proves, beyond any

question of a doubt, that the point that

myself and others—Senator ROCKEFELLER is included in that; and the

Senator from New Jersey has been very

active—are trying to say as to what is

wrong with the indiscriminate slashing

or crushing of the Medicare and Medicaid proposals without having thought

through just exactly what we are

doing.

The referenced article that I will now

read is headlined ‘‘Medicare Talk

Brings Anxiety to the Heartland.’’

To Mike Brown, who runs a tiny county

health care center about an hour’s drive

from here, the $250 billion or so in Medicare

savings that Congressional Republicans want

to achieve over the next seven years is more

than an abstract figure in a Washington

budget battle.

Like many rural hospitals, his center,

Saunders County Health Services, ministers

to a population that is largely elderly and

exceedingly dependent on Medicare. The

health insurance program for the elderly accounts for about 40 percent of hospital revenue nationally but for more than 80 percent

of the hospital revenue at the Saunders

County center.

As a result, Mr. Brown said one cool spring

morning this week, he fears that new spending controls on Medicare would have a significant impact on his 30-bed hospital. It lost

money last year, hopes to break even this

year and has been struggling since the mid1980’s, he said.

In a little burst of feeling amid the dry policy talk, he argues that his center has ‘‘real

value’’ for its aging population, often cared

for by aging children, for whom the drive to

Lincoln or Omaha for regular treatments

would loom large.

When planners and politicians talk about

potential ‘‘disruptions in the health care delivery system’’ from the new Republican

budgets, they are often talking about hospitals like this one. But even in Omaha, in

the high-rise temples of medicine that dwarf

the one-story Saunders County hospital, the

Medicare policies being created in Washington instill anxiety and frustration.

Hospital administrators say that they are

not trying to preserve or defend the status

quo and that they recognize the need for restructuring of the Medicare program. But

they say they have already taken numerous

steps to control their costs, and they bristle

at the idea that there is still a great deal of

easily identifiable fat to be quickly wrung

from the system. Even here in Omaha, a

comparative latecomer to the competitive

new world of managed care, hospitals say

they have felt increasing cost pressures from

private payers in recent years.

Given all these forces in play, and the expectation of new constraints on Medicaid at

least as tough as those proposed for Medicare, several hospital administrators here

said they feared that Congress was moving

too far, too fast.

‘‘I’m confident that we can come up with a

better system for caring for Medicare patients and doing it in a more economical

fashion,’’ said Charles J. Marr, president and

chief executive officer of Immanuel Medical

Center, a nonprofit hospital sponsored by the

Lutheran Church of America. ‘‘But they

shouldn’t throw us into a tailspin and force

that change over a short period of time.’’

John M. Fraser, chief operating officer of

Methodist Hospital, across town, noted more

than once during an interview that he is a

Republican and said both deficit reduction

and a Medicare overhaul were valid issues.

‘‘But you don’t do this in six months on

Capitol Hill,’’ he added.

Republicans, of course, maintain that extracting these savings from Medicare is essential to insuring the continued solvency of

the 30-year-old program. Under their plans,

they note, spending on Medicare would continue to grow, just at a slower rate than the

current average of about 10 percent a year.

Representative Jon Christensen, a Republican freshman who represents Omaha, and

who voted for the House Republican budget

this week, declined an interview request. But

he issued a statement defending the plan.

‘‘The simple fact is that Medicare is going

bankrupt,’’ he said. ‘‘Would it hurt Nebraska’s hospitals less to let the Medicare program collapse?’’

Many health planners dispute Mr.

Christensen’s argument that this level of reduction projected spending is necessary for

the sake of the Medicare system. Democrats,

for their part, assert that Republicans are

simply using Medicare as a piggy bank to

pay for their political promises of a balanced

budget and a tax cut.

Nobody yet knows how these spending reductions will be achieved or how much they

will affect payments to hospitals; that will

be resolved later this summer.

What is clear, away from Washington, is

not only how enmeshed Medicare is in the

health care system but also how vulnerable

that system is to large-scale changes in the

program.

Here in Nebraska, state officials say, it is

the rural health care system that is most

‘‘fragile,’’ as Dr. Mark Horton, the state director of health, put it. Eighteen percent of

Nebraska’s rural population is over 65; many

of the hospitals in rural areas, and many of

the primary care physicians there, are exceedingly reliant on the Medicare program.

Tinkering with its complicated reimbursement system, which some hospital officials

say already makes it hard for them to recover the cost of rendering care, can thus

have a major effect on the overall health system, officials say.

‘‘You could argue that maybe some of

these hospitals should close,’’ said Dr. Horton. On the other hand, he added, these small

community hospitals are often the most

cost-effective places to treat common ailments like pneumonia.

Mr. Brown’s center, which also depends on

a county levy, includes a small attached

nursing home, an outpatient clinic and a

home health care agency. Its hospital beds

are generally filled with patients suffering

from pneumonia and other heart and lung

ailments that afflict the aged, he said. There

is little flexibility in his budget. ‘‘When you

don’t have any private paying patients to

speak of,’’ he said, ‘‘there’s no place to shift

the cost to.’’

Harlan M. Heald, president of the Nebraska

Association of Health Systems, said of the

expected round of spending reductions, ‘‘The

more Medicare patients you have in your

mix, the more it’s like that old Nebraska

farm joke: if you’re not making back your

costs, you’re not going to make it up in volume.’’

C. Edward Schwartz, chief executive officer

of the University of Nebraska Medical Center, works at the opposite end of the spectrum from Mr. Brown. Mr. Schwartz runs an

academic medical center that prides itself on

its liver, bone-marrow and pancreas transplant programs. Yet he too describes Medicare as ‘‘absolutely crucial’’ to his institution’s future, in part because the program

recognizes and helps subsidize the cost of

medical education at such centers.

Mr. Schwartz argues that the people who

should be most alarmed about new controls

on Medicare are private employers, because

of the prospect that hospitals will be driven

to renewed cost shifting. ‘‘We have to be

honest with ourselves,’’ he said, adding, ‘‘I

thought business was well past the point of

wanting to pay the taxes Congress didn’t

want to collect.’’

The great debate over Medicare, in short,

looks decidedly less abstract at the grass

roots, a fact that opponents of the Republican proposal are counting on in the months

to come.

Diana Smalley, chief executive officer of

Midlands Community Hospital, a 208-bed

center south of Omaha, said she was looking

forward to putting together a health forum

for Representative Christensen, whom she

met at a recent function of the local Chamber of Commerce, As head of the chamber,

Mrs. Smalley is more than able to brief her

Congressman on the importance of her hospital to the community’s economy. It is the

largest civilian employer in the county, she

noted.

‘‘I’d rather work with him if I can,’’ she

said. ‘‘I admire, I guess you could say, the

zeal that we see to get things done. I just

worry about the time frame.’’
S7048 CONGRESSIONAL RECORD — SENATE May 22, 1995

That is the end of that excellent article which sums up the disastrous effect

that the size of the Medicare cuts, as

recommended by the Republicans,

would have not only on Nebraska but

every other State in the Union that has

a sizable rural population.

Mr. President, I will have other

things to say with regard to what I

think is an ill-advised policy. I offer,

again, to try and sit down with the Republicans and work something out. I

think it would be far better if we had a

bipartisan compromise that embraced

many of the hard choices that the Republicans are making.

I will simply say that if the Republicans can come and reason with us together, even though we are in the minority, if the Republicans will renounce lock, stock, and barrel any

kind of a tax cut until we actually balance the budget in the year 2002 then

we would take a giant step toward a

true bipartisan and a tough budget

that is going to hurt.

I appeal once again for the Republicans simply to recognize and realize

that the proposals we are making in

the amendment before us do not eliminate the cuts to the Medicare system.

The amendment simply reduces those

cuts and makes them barely palatable

by alleviating $100 billion of those cuts

and taking that money from the $170

billion tax cut kitty that is clearly represented in the Republican budget.

I thank the Chair, and I yield the

floor.

Mr. GORTON addressed the Chair.

The PRESIDING OFFICER (Mr. BENNETT). The Senator from Washington.

Mr. GORTON. Mr. President, I am

authorized to yield myself such time

from Senator DOMENICI’s time as I may

use.

First, by direction of the leadership,

I ask unanimous consent that the vote

now scheduled for 3:15 p.m. be advanced

to 3:10 p.m.

Mr. EXON. Mr. President, we have no

objection to that and agree to that on

this side of the aisle.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. GORTON. Mr. President, too far

too fast. That now is what we hear. We

are going too far too fast in our quest

to balance the budget and to save the

Medicare trust fund.

Only here, this budget, if passed and

enforced, promises a balanced budget

in the year 2002. As I count, that is 7

years from now, but too far too fast, we

are being told. Better perhaps the proposal of the President for budget deficits of $200 billion to $300 billion a year,

all the way through the year 2002, with

no promise of any reduction? That, presumably, is not too far too fast.

But, Mr. President, it is too disastrous for our country and too immoral

for the children and grandchildren who

will have that bill loaded on their

backs.

Too far too fast to save a Medicare

trust fund for hospital insurance scheduled to be bankrupt in the year 2002?

Too far too fast to do that now? Will it

be easier next year or 3 years from now

or when the bankruptcy actually arrives?

This amendment is consistent with

the view that we are going too far too

fast. This proposes to cut $100 billion

out of the reduced spending growth in

one particular program, and then it

will be followed by amendments to cut

back on spending reductions or a slowing in spending growth of additional

tens or perhaps hundreds of billions of

dollars, all consistent with the view

that we are going too far too fast. That

while a balanced budget may be desirable someday, please, Lord, do not let

it take place in our day, send that responsibility on to someone else.

This particular amendment is of a

rather interesting nature, because this

$100 billion of spending over what

would be authorized by this budget resolution is not balanced by increasing

the amount of money going into the

hospital insurance trust fund from payroll taxes at all. In fact, we do not

know how much of it would be used to

stave off this bankruptcy of that fund.

If we assume, however, that half of it

would go for that purpose, it would

postpone that bankruptcy by about 6

months, Mr. President—6 months of

time during which presumably there

would be no attempt to deal with the

fundamental causes of that bankruptcy, no attempt to deal with the

10.5-percent increase in expenditures

for Medicare each and every year.

This money simply comes out of a reserve fund. What is the reserve fund,

Mr. President? The reserve fund is the

economic dividend for balancing the

budget. We are told by our Congressional Budget Office that at least this

year, we are all using its figures and

estimates—we are told by the CBO that

if we put laws in effect which reform

the spending patterns of the assistance,

which preserves that Medicare trust

fund, among other things, but which

get us to balance in the year 2002, the

economy of the United States will

react so positively and so affirmatively, interest rates will go down, people will be better off, that we will actually be $170 billion ahead.

So we have said in this budget resolution that if in fact we take this hit, if

a number of programs do spend less

money—no question about that—the

American people ought to be entitled

to a dividend, a modest tax reduction,

90 percent of which will go to middleclass working Americans under the

provisions of this budget. Oh, no, the

other side says, we could not possibly

do that. We have to spend it. But, of

course, they are spending it before they

get it. If you put another $100 billion of

spending back into this budget, you do

not get to a balance. I presume under

CBO’s figures, you do not get the reserve fund of the dividend at all. So we

are spending money not only before we

get it, but before there is any assurance that we are going to get it at all.

That is the nature of the proposal that

we have before us right now.

Now, there is no way that I can fault

the sincerity or devotion of the senior

Senator from Nebraska to a balanced

budget. He was one of a relatively

small number of Members of his party

who voted for a balanced budget

amendment which, Mr. President,

would have required the budget to be

balanced by the year 2002. We could not

have argued too far, too fast had that

amendment been a part of the Constitution. But most unfortunately, he

seems to speak for very few Members

on his side of the aisle. Even by his

own estimate, we only get 54 votes on

this side of the aisle and 60 votes if we

do it his way. That assumes that everyone on this side agrees to forego even

the remote possibility of any tax cut

for a 7-year period, even for middleclass working Americans.

But as we have listened to debate on

this specific amendment, it has not

been limited to a complaint that we

should spend more than the budget resolution authorizes on Medicare. Oh, no.

We have heard it on money for agriculture, not just for Medicare but for

Medicaid, for education, for veterans,

and for other health programs. Lord

knows, I have been here all the time,

perhaps for all kinds of other programs, as well. We could spend that

dividend three or four times, Mr. President, and not have satisfied the spending desires of the great bulk of the opponents to this budget resolution.

So I ask myself, should we pass this

amendment? Will we suddenly have a

budget resolution supported by a wide

range of Members on the other side?

Will it suddenly become almost unanimous? Not from what we have heard so

far, Mr. President. This will be only

the beginning. There is no way that we

will be able to satisfy the desire for

spending and have a balanced budget

without having a very large increase in

taxes, which I may say to this point

has not been proposed.

Now, my good friend from West Virginia says that this amendment is really just a symbol, a symbol of our need

for health care. I agree that it is a

symbol. But I believe with what is

going to follow on with it that it is a

symbol for the need to spend far more

money on a wide range of programs

than can possibly be accommodated,

not only in this budget resolution but

in any budget resolution which leads us

to a balance by 2002. So ‘‘too far, too

fast’’ really is the slogan that we are

hearing from the other side during the

course of this debate.

But this amendment goes at our very

desire to put Medicare on a path under

which spending will increase not only

overall in Medicare, but for each individual beneficiary by close to 50 percent—35 to 50 percent—during this 5- to

7-year period. And also it will result in

this country’s getting all of the dividends from the point of view of greater
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7049

opportunities, more jobs, higher incomes, that will come out of the fact

that we balanced the budget.

The trustees of the Medicare health

insurance system have told us that it

will go bankrupt. They have told us

that we need to do something about it.

They have not suggested that we just

take more money out of the general

fund, which does not have any more

money, and put it into it. They have

told us we need to do something. We

propose in this resolution to do exactly

that.

Yet, Mr. President, even that is not a

totally consistent view from the other

side. We have had one of the Senators

from North Dakota here in the course

of the last couple of hours bringing up

that argument that was made, and ultimately defeated the balanced budget

amendment, that we are not really balancing the budget at all because we are

counting Social Security trust funds

and expenditures as a part of a unified

budget, and that we will still be more

than $600 billion out of balance.

Now, it may be that the Senators

from North Dakota have promised us a

budget resolution which will save another $600 billion in some respect or another, though we have not seen it yet.

I can only say at this point that when

that position was first put forth by the

Senators from North Dakota, the

Washington Post columnist Charles

Krauthammer said this:

In my 17 years in Washington, this is the

single most fraudulent argument I have

heard. I don’t mean politically fraudulent,

which is routine in Washington in a judgment call anyway. I mean logically, demonstrably, mathematically fraudulent, a condition rare in Washington and not a judgment

call at all.

Why does he make that point? He

makes it for the simple reason that

from the perspective of this country

and society as a whole, a budget deficit

is a very simple proposition. It is the

amount by which the number of dollars

expended by the Federal Government

in any year for any purpose exceeds the

number of dollars that are brought in

by taxes or fees or anything else. That

difference is the amount of money that

must be borrowed by the Federal Government for one purpose or the other.

That is the amount of money that

drives up, or if it goes down, will lower

interest rates. That is the amount of

money that is taken out of the savings

of the country as a whole.

Under that definition, with a perfect

security for the Social Security trust

fund, this budget, the budget which is

before us now, will by its best figures

lead to a balance in the year 2002. It

will prevent the bankruptcy of the

Medicare health insurance trust fund

by the year 2002. Appropriate reforms

will see to it that it can go on indefinitely. That, Mr. President, is why this

budget resolution has already had positive impacts on the value of the American dollar and on lowered interest

rates, and why it will have far more if

it is actually passed and enforced.

Without changing, that will turn it

from something that is real to something which is a mere fiction.

Mr. ROCKEFELLER. Would the Senator from Washington yield?

Mr. GORTON. The Senator from

Washington will be happy to engage in

a conversation with the Senator from

West Virginia on his time.

Mr. ROCKEFELLER. Mr. President,

just a short minute.

I would have to say to my good friend

from the State of Washington that he

did mischaracterize what I said. I think

it is important for the RECORD that the

mischaracterization be straightened

out.

I did not at all suggest $100 billion

was symbolic. What I suggested was

that we were not obviously going to be

able to create a solution to the longterm trust fund problem by the $100

billion, but that we sure as heck are

not, as is the case in the budget the

Senator proposes, doing this massive

cut in Medicare, thus causing seniors

to have to pay out of pocket and dip

into their Social Security cost-of-living adjustment.

In no sense did I mean it was symbolic. It is anything but symbolic. We

would be bringing relief to senior citizens, and for that matter also to Medicaid.

I really must object to the use of the

word symbolism because I never did

say that. I used the word priorities. It

is a question of priorities. I want the

RECORD to be clear on that.

Mr. GORTON. Mr. President, I stand

corrected by my friend from West Virginia. I understood him to say that the

amount of money was symbolic of the

problems that he felt this budget resolution created. Symbolic in the sense

that even were it restored, it would not

solve all of the problems the Senator

from West Virginia saw in the health

care portions of this budget.

I am delighted to have him characterize his position in his own way.

Mr. LIEBERMAN addressed the

Chair.

The PRESIDING OFFICER. The Senator from Connecticut.

Mr. LIEBERMAN. Mr. President, I

yield myself 10 minutes from the time

controlled by the Senator from Nebraska [Mr. EXON].

Mr. EXON. Mr. President, I yield 10

minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. LIEBERMAN. Mr. President, I

rise to support the amendment that is

offered by my colleagues from West

Virginia and New Jersey, Senators

ROCKEFELLER and LAUTENBERG, and in

doing so, as the debate here in this

Chamber goes from side to side, I want

to point out what may be missed in all

of this, which is that there is remarkable—some might say historic; I would

say necessary and appropriate—agreement between and among the various

parties to this debate about the problems we face and the need to take action.

The Budget Committee proposal

brought up under the chairmanship of

the Senator from New Mexico—we use

the word cut but what we really mean

here is slowing the growth in spending

for Medicare and Medicaid by $431 billion.

This amendment, offered by Senators

ROCKEFELLER and LAUTENBERG, will diminish that slowing of the rate of increase in spending on these two health

entitlements by $100 billion. The result, if the amendment should be

passed, would be that the increase in

spending on Medicare and Medicaid

would be cut by $331 billion.

Now, Mr. President, as the debate

goes back and forth I think it is critically important that all Members stop

and appreciate the consensus that is

found here.

I would guess that very few in this

Chamber would have predicted a year

ago that we would be here debating

whether to cut $331 billion from the increase in growth of Medicare and Medicaid, or $431 billion. Those are numbers well beyond what was thought to

be politically possible. But not well beyond what most experts and what most

Members in this Chamber certainly acknowledged privately was fiscally and

governmentally responsible if we were

to save the Medicare and Medicaid programs, certainly save Medicare from

the bankruptcy that has been predicted, in 2002, by the fund’s own trustees. And in that sense, to protect the

Medicare benefits of millions of Americans, including about half a million

that live in the State of Connecticut.

I give the Senator from New Mexico,

the Budget Committee chairman, a lot

of credit for shaping this debate both

on the question of the need to take

hold of the Medicare program, to save

it; and second, on the overall national

imperative to bring our books into balance by a date certain.

It is interesting that all of the

amendments put in by the Democrats

here still accept the goal of a balanced

budget by a date certain, which in this

case is 2002.

Mr. President, it is not only fiscal necessity and the desire to avoid the

bankruptcy of the Medicare trust fund,

certainly part A, and the deprivation of

health insurance benefits for all those

who benefit from that fund, but it is

the acknowledgment—and I need not

speak at length on this but just to

note—the acknowledgment that the

health entitlements are growing out of

proportion to the rest of our public

spending, have experienced doubledigit increases in spending.

In a very real way, they are threatening to swallow up—if we let this

growth go unchecked—so much of what

we consider to be the Federal Government, and not just to swallow it up but

to make it impossible for Members and

those who follow the debate here in

Congress and the White House to deal

effectively with the Nation’s problems,

and putting in jeopardy—because we

simply will not have the money—our
S7050 CONGRESSIONAL RECORD — SENATE May 22, 1995

ability to provide for our Nation’s security, with an adequate defense

abroad, and a decent, tough, and comprehensive war against crime here at

home. Making it impossible to invest

in our future through programs of education, basic research, child development, training, job creation. Making it

ultimately very difficult, if not impossible, to reform the welfare system, because most people who have looked at

this acknowledge we cannot do that

without investing a little money in

getting people off of welfare.

This growing bipartisan consensus,

which may be lost as the debate shifts

back and forth on these amendments,

is real and is based on a bipartisan understanding that unless we grab ahold

of entitlement spending we are not

only going to lose the benefits that

these programs provide, we will lose

our ability to provide for the future of

our country, the future of our children,

and the future of our work force.

However, Mr. President, I think it is

very important, acknowledging the historic steps that we have taken on both

sides to try to control the growth in

Medicare spending, to say that this

simply cannot become a debate of numbers, a debate of accountants.

If all we are talking about, and all we

are arguing about, is how much we are

going to cut Medicare, the growth in

Medicare spending, we will have not

fully carried out our responsibility. If

all we do is to cut the existing system,

we will not have dealt fundamentally

with our problem and we will, in fact,

create severe difficulty for the beneficiaries of these programs and for the

providers.

People have talked about three ways

to achieve reductions in increases in

the Medicare program: increase payments for the fund by, for example, increasing premium contribution for

wealthier Americans; we can decrease

payments to providers for their services; or we can reform the basic structure of the Medicare system so that it

delivers care more cost effectively.

That, Mr. President—reforming the

basic structure—is what I hope the majority in this Chamber will be committed to. That is the road to truly protecting and saving the Medicare system and saving the rest of the Federal

Government that will be eaten up by

health entitlements, as will the future

of our children and our Nation.

There are interesting ideas around

about reform. Some, for example, have

suggested that we make preferred provider plans available to Medicare recipients and that such plans can deliver care more efficiently while maintaining choice.

Others are discussing more dramatic

changes. I must say these are the ones

that appeal to me most, such as moving toward a voucher system in which

the Government provides a fixed

amount of money by way of a voucher

to those who are eligible for Medicare,

enabling them to go out into the private markets and purchase their own

health care coverage. That is the way

to truly empower the recipients, to

break them free from a lot of the complexities of the current system and to

bring competition into the Medicare

Program, which is so significant a part

of our health care apparatus, just as

competition is coming in so effectively

to the rest of our health care system.

The pace of change to the Medicare

Program should be determined by our

ability to maintain: confidence in the

program; the credibility of the program

financially; and, the quality of the

services delivered under the program to

those who are the beneficiaries.

Let me talk briefly about two comments that have been offered, two positions taken, as to how to proceed down

the road to reform. The Budget Committee majority has proposed establishing a bipartisan commission to advise Congress on how best to meet the

level of cuts set forth in the budget.

Some of my colleagues, on the other

hand, have argued that we simply

should not pursue Medicare reform outside of the context of broad-based

health care reform.

I am not truly comfortable with either of these positions. It may be in

the end that a commission is necessary

to deal with these problems. But it

takes time, and I believe we know what

our options are now. I would sure like

to see this Congress, led in this Chamber by our Finance Committee, take a

first crack at seeing whether we can,

not just cut Medicare spending increases, but whether we can reform the

fundamentals of the program.

When it comes to the argument that

Medicare reform must be part of overall health care reform I would say this:

in the best of all worlds that would be

the way to proceed. But if we learned

any lesson from the futile attempts to

adopt universal and comprehensive

health care last year, it is that if we

wait to reform the Medicare system

until we can have overall health care

reform we will not have Medicare reform, and we will probably not have

overall health care reform either. We

simply should not postpone Medicare

reform because the problems facing

Medicare are too critical for us to

delay.

The fact is, recent innovations in

health care delivery in the private

market have created a revolution without governmental direction and paved

the way for new approaches to deliver

care to the elderly through Medicare

reform. We should take advantage of

those private sector innovations and

try to apply them to the Medicare Program. The private sector reforms that

are going on now are driving change. It

would be a strange result indeed if the

private markets reform themselves to

more efficiently and cost-effectively

deliver health care and the governmentally operated health care programs are left to run without the benefit of competition and without the benefit of reform.

So it is with these thoughts in mind

that I will be supporting the amendment offered by Senators ROCKEFELLER

and LAUTENBERG, acknowledging and

expressing some appreciation for the

consensus that is here beneath the debate. We are on the road to a balanced

budget by a date certain. We all acknowledge that we have to limit the

growth in health entitlement spending

to save those programs for the beneficiaries.

Finally, I hope we will come to a

similar consensus that cutting the

growth just in dollar accounting terms

is not enough. We have to reform the

fundaments of the program to save it,

empower the beneficiaries of the program, and take full advantage of the

marketplace competition that is being

so productive and beneficial to people

in the private sector today.

Mr. President, I thank the Chair for

the opportunity to address the amendment and I yield the floor.

Several Senators addressed the

Chair.

The PRESIDING OFFICER. The Senator from Washington.

Mr. GORTON. Mr. President, with

the consent of the majority leader and

at the suggestion of the manager of the

bill on the other side, I ask unanimous

consent the period of time in this debate between 2 p.m. and the vote at 3:10

p.m. be equally divided and be under

the control of the Senators from Nebraska and New Mexico.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. GORTON. Mr. President, I yield

10 minutes to the Senator from Minnesota.

The PRESIDING OFFICER. The Senator from Minnesota.

Mr. GRAMS. Mr. President, looking

for leadership on the budget from the

opposition these days is a little like

playing ‘‘Where’s Waldo?’’

If you look long and hard, you may

eventually spot it, but there is not

much there and it is certainly not easy

to find.

This important debate over this

year’s budget resolution very clearly

demonstrates my point.

For years, the Democrats have

passed budgets which increased taxes,

increased spending, and gave us the

massive deficits which have dragged

this Nation nearly $5 trillion in debt.

In 1993, President Clinton continued

that trend, and even went a stip further. His budget contained the largest

tax increase in history, $275 billion,

and spending increases, and more deficits.

But the Democrats praised it up and

down. ‘‘It is going to take this country

in the correct direction, in a good direction, in the right direction,’’ said

one of my Democrat colleagues.

Over and over again, the President

and the Democrats in Congress challenged Republicans to offer up an alternative.

Listen to the words of my good colleague, Mrs. BOXER, the junior Senator

from California:
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7051

So I say to my fellow Republicans: Where

is your budget? Show it to us. I want to see

it. Don’t give me amendments that do something here and there, because that is not

constructive.

We delivered an alternative budget—

one which reduced the deficit through

spending cuts, not tax increases.

I, in fact, drafted an alternative of

my own—Families First—which I introduced in the House and which was

carried here in the Senate by my distinguished colleague, Mr. COATS of Indiana.

Our budget not only cut spending, it

cut taxes for families and moved the

Federal Government in an entirely new

direction.

Away from the Washington Beltway,

Families First was praised by the taxpayers.

But here on Capitol Hill, with the

Democratic majority in charge, it

never had a chance.

In August 1993, under the leadership

of the President and a Democrat House

and Senate, the largest tax increase

was passed into law.

Now the tables are turned. Under the

guidance of our distinguished budget

chairman, Republicans have offered up

an historic plan which would balance

the budget within the next 7 years.

I am proud of the work of the Budget

Committee.

Yet, those same Democrats of 1993

who called so loudly for a Republican

budget alternative, have failed to offer

up any alternative of their own this

time around, just a lot of little amendments that do something here and

there.

In fact, the only Democrat to offer up

an alternative is President Clinton,

and he is required to do that by law.

But the President’s budget was so far

from what the people called for in November that not one Senator voted for

it—Democrat or Republican.

That is some serious back-peddling.

Two years after passing the largest tax

increase in history—and boasting they

reduced the deficit without a single Republican vote—Senate Democrats

joined Republicans in rejecting the

President’s fiscal policies by a vote of

99 to 0.

Unlike Mr. DOMENICI’s balanced budget, the President’s budget would never

balance. In fact, his budget plan calls

for another $1.2 trillion in deficit

spending over the next 5 years.

Under the President’s budget, the

deficit will continue to rise every year,

until it reaches nearly $300 billion in

the year 2000.

Kings can abdicate their thrones,

generals can wave the white flag of surrender, a chess player who gets backed

into a corner can forfeit the game, but

the President of the United States is

not supposed to just throw in the towel

when the going gets a little rough.

Times have changed. So if President

Clinton is not serious about reducing

the deficit and balancing the budget, I

ask the Democrats here in the Senate

the very same question they asked us 2

years ago, using their very own words:

‘‘Where is your budget? Show it to us.

I want to see it.’’

In 1993, Republicans did put up alternative budgets that we did support and

that we did vote for. But it is not the

case this year.

The distinguished Democrat leader

says he accepts the goal of producing a

balanced budget by 2002. But he is not

willing to actually do anything about

it, because, and I quote, ‘‘We don’t

have the votes, so there’s no point for

us to lay out a comprehensive substitute.’’ We did not have the votes in

1993. But we did lay out a comprehensive substitute alternative budget.

Well, I certainly hope we can count

on his vote for Mr. DOMENICI’s balanced

budget.

I ask my colleagues on the other side

of the aisle: how do you plan to improve, preserve, and protect the Medicare Program from going bankrupt, as

it would under the President’s plan?

If you are intent on spending as wildly as you have in the past, how do you

plan to balance the budget within 7

years? With new taxes? If so, which

taxes are you going to raise? The people have a right to know.

Mr. President, the Democrats may

find that it is easy to complain about

the Republican’s budget, but you cannot beat something with nothing. And

that is what the Democrats have given

us: nothing. It is clear, Mr. President,

that they do not want to tell us how

they are going to balance the budget

without tax increases, because they

have absolutely no intention of ever

doing it. So I make one suggestion to

my colleagues on the other side of the

aisle. Being in the minority does not

give you license to simply gripe and

complain. It does not free you from the

responsibility of representing your constituents.

If you vote no on the budget resolution, then you had better find something on which you can vote yes for.

We did it in 1993. Or else, the voters

will have every reason to vote no themselves when you turn to them in November.

Thank you, Mr. President.

I yield the floor.

Mr. KERREY addressed the Chair.

The PRESIDING OFFICER. Who

yields time?

Mr. EXON. Mr. President, how much

time does my friend and colleague from

Nebraska seek?

Mr. KERREY. Fifteen minutes.

Mr. EXON. I must tell the Senator

that I have nine Senators who wish to

speak between now and 2 o’clock. I am

cramped for time. How about 8 minutes?

Mr. KERREY. Eight minutes will be

fine.

Mr. EXON. I thank the Senator.

The PRESIDING OFFICER. The Senator from Nebraska is recognized for 8

minutes.

Mr. KERREY. I thank the Senator

from Nebraska.

May I ask the senior Senator from

Nebraska, does he intend, on the time

he controls, to respond to the statement of the junior Senator from Minnesota just made earlier that there are

no Democrats willing to participate in

deficit reduction; that this whole problem was created by wasteful spending

on the part of Democrats?

I intended to come to the floor to

talk about something else, to try to

say some things that might forge a bipartisan consensus. But I find myself

being provoked by the comments of the

junior Senator from Minnesota. I am

wondering if the Senator intends to respond.

Mr. EXON. I certainly say to my

good friend from Nebraska that I assumed he was here to talk about the

amendment at hand. Maybe he is not. I

simply say I would really appreciate it

if he could make whatever comments

he feels disposed to make at this time.

I have been answering the charges that

has been made over and over again that

were just echoed like an echo chamber

by the Senator from Minnesota.

Would it be possible for the Senator

to make those appropriate remarks

now, and then after the vote today, we

could use additional time for going

into some other things that I suspect

he might have on his mind?

Mr. KERREY. I will pleased to. I will

confine my remarks to the amendment

at hand, Mr. President.

Mr. President, I must say, I have

some difficulty with the amendment at

hand because it seems to me what we

are basically saying is we want to take

the $170 billion that probably will not

materialize. In order to get $170 billion

in savings, this Congress would have to

come together in a bipartisan fashion

for 7 straight years, and each committee reconciling out and voting the savings. We would have to follow the 7-

year blueprint before the money appears. I must say, I feel somewhat uncomfortable, to say the least, taking

savings created from cuts that I do not

like anyway to mitigate the impact of

cuts that I do not like.

So what I choose to do instead is talk

again about one of the fundamental

weaknesses that I see in this budget

resolution, because it is nonbinding

and because, as I see it—I have added a

couple without the use of the calculator, so I may have this wrong—$519 billion of the reconciliation instructions

go to the Finance Committee.

So I will have, as well as others, the

opportunity to go to the Finance Committee and challenge some of the underlying assumptions, not the least of

which is that we are not going to do

anything about retirement this year.

I appreciate the difficulties that the

Budget Committee had in putting together this set of nonbinding instructions.

So those of us who, like Senator

SIMPSON, believe that retirement

should be on the table, that unless and

until we have addressed that, it is

going to be difficult for us to actually

get our budget balanced, we will have

that opportunity to do it at some later

date.
S7052 CONGRESSIONAL RECORD — SENATE May 22, 1995

The Senator from Washington earlier

made the point, when apparently the

distinguished Senator from North Dakota was down on the floor earlier taking about this problem. I alert colleagues again: I think the effort on the

part of both the chairman and the

ranking member to produce this document is quite an extraordinary accomplishment.

I point out, nonetheless, that inside

the budget document, it calls for the

deficit to go from $240 billion down to

$114.9 billion, if I can read my own

writing, in the year 2002.

What we do is basically use what the

law says. The law says we use the unified budget. The Social Security revenues are separate. But in terms of adding everything up, we bring Social Security into the equation. It is only because Social Security generates some

$48 billion in surplus this year to a $114

billion surplus in the year 2002.

Again, I have not run the numbers on

this. But I guess since we go to 2013 and

start paying out more than we are taking in, my guess is that may be the

peak; that $114 billion may be the peak.

It may start declining after that,

which is going to put additional pressure on all domestic spending.

I say to my colleagues that one of

the things which has stayed constant

in this town obviously is not political

rhetoric. That blows hot and cold. But

the one thing that stays constant in a

very impressive fashion throughout all

the imaginations about taxing is not

enough, too much; that except for

World War II and Vietnam, we have

pulled from the United States economy

about 191⁄2 percent of GDP in the form

of taxes. It stayed relatively constant

over that period of time.

The underlying thing on our budget,

and driving larger and larger, are these

mandated items. They include retirement, they include health care, they

include both the means-tested programs, such as AFDC and food stamps,

as well as the non-means-tested programs, such as the agriculture program

which, I might point out, is a relatively small amount, Medicare, Social

Security, and other kinds of retirement

programs.

The law says, as a consequence of either contribution or deciding that eligibility is deserved, you pay it out and

you do not have to come to the floor of

the Senate and vote on it.

What is happening is that mandated

account, plus that interest, is driving

higher and higher. And, I regret, it

may be that the Democrats were not as

aggressive as we should have been. It

may have been that it is too controversial. As we obviously see, it was retirement. But I regret that we do not see a

change in that in the budget resolution.

The budget resolution requires us to

go to about 25 percent discretionary

spending in the year 2002 down from 34

percent today.

I note with interest that the senior

Senator from Oregon has an amendment to come down and restore some

costs and protect NIH. I notice the

Senator from Iowa has an amendment

to do the same in education.

The problem is that little amendments to the budget resolution will not

fix this problem. When the senior Senator from Oregon came to the U.S. Senate, 70 percent of the budget was controlled by the Appropriations Committee; 70 percent was appropriated, 30

percent was mandatory spending, and

then interest. This year, as I indicated,

it will be 34 percent. By the time a

baby born this year is a senior in high

school, it will be zero, even with this

budget resolution passed.

So I urge my colleagues, regardless of

how this resolution shakes out, I hope

that the alternative that a group of us

will present, as I indicated in a previous speech, will be accepted because I

think we are going to need a lot of bipartisan support not just this year but

the next year and the year after to explain to the American people what

needs to be done to bring the cost of

these mandated programs in line.

I heard it said that these cuts in

Medicare are going to have a terrible

impact. Indeed, I suspect they could,

depending upon how the Finance Committee wrote the legislation. But I say

to those who are really alarmed by the

prospects of those cuts, according

again to the document—I unfortunately have read Senate Concurrent

Resolution 13, which is relatively

small—we start with budget authority

this year of $171.9 billion for HI, and

$61.2 billion for supplemental medical.

So I have $230 billion this year, growing to $370 billion. We will have $370

billion authorized in the year 2002.

So, if anything, one has to, even with

this budget resolution, take a look at

overall health care spending and say,

‘‘My gosh, yes.’’ The Budget Committee has been very bold and very gutsy

in putting this number out. But, if anything, Mr. President, we may not have

gone far enough.

I do not suggest that we need to necessarily cut any more, but I do think

we have to ask ourselves the question,

are we subsidizing people who do not

need to be subsidized? We will have $230

billion this year in Medicare. We will

have another $80 billion in Medicaid.

That is $310 billion. We have $90 billion

going out in the form of tax deductions.

I notice that when people get really

excited about going after tax entitlements and I come and say, let us look

at the deductibility of health insurance, they get sort of pale and drop

that off their list. With another $15 billion going out to the VA, another $15

billion going out to Army, Air Force,

and Navy health care, a substantial

amount of expenditures, well in excess

of $400 billion, going out for health

care, I do not think the problem here is

that we are not spending enough. I

think one of the biggest problems we

have is whether or not we have the

courage to say to those who do not

need to be subsidized, you may need to

pay some more.

I noted earlier that one of my colleagues—I saw the dueling charts go on

back here, and I saw in the Democratic

Cloakroom the chart showing the comparative analysis between what Members of Congress get in the way of

health care and what Medicare beneficiaries get in the way of health care,

the suggestion being that Medicare

beneficiaries already get less than

what Members of Congress do.

If somebody wants to bring an

amendment striking Congress down to

the level of Medicare, I would vote for

it. But the problem is we have a lot of

employees we have hired on and we are

looking to try to provide them with

health care benefits, and it is their

health care benefits we are talking

about here.

If anybody wants to come and say

that people ought to pay according to

capacity to pay, I am ready to vote for

that. I do think one of the most difficult things that we have going with

health care today is that we may have

20 million or so people in the work

force going to work, sometimes working two or three jobs, doing all they

possibly can, but they are not generating enough output to get paid enough

to be able to afford high-quality health

care. We have subsidies in place for

people who can afford it.

So when the Finance Committee gets

down to looking at the reconciliation

of numbers, I think there will be plenty

of opportunity even with the money allocated for us to do the right thing.

The question is, are we going to have

the capacity either politically or in our

own guts to come to the American people and say that this is not going to be

an easy thing; it is not a free lunch involved.

I say in conclusion, I appreciate very

much the leadership particularly of the

senior Senator from Nebraska who over

the years has been voting with Republicans, has been doing the right thing

when it comes to deficit reduction.

This has not been somebody who comes

down with knee-jerk votes against

every single spending cut. This is a

man who has been down here for the

entire 18 years that he has served the

people of Nebraska, as the distinguished Senator from New Mexico has

as well. I think we are fortunate to

have them leading us on this budget

debate. We have a lot of very difficult

decisions to make if we are going to reduce the size of this deficit and get it

in balance and get us to a point where

we not only restore the confidence of

the American people in us as an institution but do as we all say we want to

do, which is to provide a better economic future for our children and for

our grandchildren.

Mr. President, I yield the floor.

The PRESIDING OFFICER. The time

of the Senator from Nebraska has expired.

Mr. EXON addressed the Chair.

The PRESIDING OFFICER. The Senator from Nebraska.
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7053

Mr. EXON. Mr. President, I thank

very much my friend and colleague

from Nebraska for his kind remarks

with regard to not only myself but our

mutual friend, Senator DOMENICI,

chairman of the Budget Committee.

This is a very difficult task. I think the

Senator from Nebraska, my colleague,

knows very, very well we have been

reaching out. I appreciate very much

the dedicated leadership he has provided in a whole series of areas with regard to deficit reduction.

Senator GRAHAM is in the Chamber. I

will yield to him.

Mr. GRAMS. Mr. President, we have

no one on our side requesting time at

this particular moment so I would like

to yield the floor back to the Senator

from Nebraska.

Mr. EXON. Yes, that side would be

next. I simply might say, if I can at

this time, there are several Senators

who had indicated they did wish to address this matter on the Senate floor

before we vote. We are quickly running

out of time, and if there are any Senators who wish to make remarks up to

5 minutes, their staffs should advise

them we are quickly running out of

time.

I yield the floor.

Mr. GRAMS. As I said, Mr. President,

I have no one on this side who requests

time at this moment, so I will yield the

floor back to the Senator from Nebraska.

Mr. EXON. Mr. President, I yield 5

minutes to the Senator from Florida.

The PRESIDING OFFICER. The Senator from Florida is recognized for 5

minutes.

Mr. GRAHAM. I thank the Chair.

Mr. President, I should like to make

two points in the time available to me.

The first is the context in which this

debate over the specifics of Medicare

and Medicaid should take place and

then, second, some particular concerns

about the proposal that is before us in

those two areas.

There is no golden road to budget

balance. There are many means by

which to get to that common destination. We are going to be discussing

today one aspect of a proposal to get to

a balanced budget and the consequences of selecting that particular

route. But I want no one who hears this

debate to be misdirected that we are

not as committed to the goal of getting

to a balanced budget by a date certain,

ideally with a bipartisan consensus of

the Congress and the American people.

There is a word that appeared on the

chart we have just seen which I think

is important to this context, and that

is sustainability.

Frankly, Mr. President, I do not believe that cuts of the level being proposed in Medicare and Medicaid are

sustainable. They might have enough

energy to get through this round of the

budget process. That is, they may be

able to appear in the final budget resolution. I think they will encounter significant difficulty when they reach the

Ways and Means Committee and the

Finance Committee, and these large

amorphous numbers, $256 billion out of

the Medicare Program in the next 7

years, $175 billion from Medicaid in the

next 7 years, when those are converted

into the specific impacts on people,

they will encounter significantly greater difficulty.

I believe that even if they should get

past that hurdle, the chances of these

cuts lasting the full 7 years as they are

converted into services, cost shifting,

impact on States, impact on the private sector, is very unlikely. So I am

concerned as to whether the path that

has been laid out for us, which is clearly not the only path, is a path that has

the staying power to get to the destination of a balanced Federal budget.

Let me talk about some of the implications of the proposal for a $256 billion

cut in Medicare, the program that provides health care financing for older

Americans, and $175 billion of cuts in

Medicaid, the program that provides

funding for indigent Americans, which

I might say, Mr. President, includes a

substantial number of older Americans,

older Americans who thought they had

made adequate provision for their retirement years and find that because of

some unexpected cataclysmic health

collapse, they have used up their resources and they become medically indigent Americans.

Let me just discuss what the implications of this will be first on beneficiaries. The materials which have

been provided indicate that one of the

first means of financing this $256 billion cut on Medicare will be cost shifting. Hearings before the Senate Finance Committee indicated that speaker after speaker who supported cuts of

this level, when asked where would you

propose to go in order to achieve this,

gave as their first answer to increase

the share of cost paid by beneficiaries.

It is estimated that the increased

cost to a couple, man and wife, in my

State between the year 1996 and the

year 2002 will exceed $9,000. That represents, for instance, Mr. President,

about half of what that couple would

anticipate to receive in cost-of-living

adjustments over the period from 1996

to the year 2002. So the real implication of this is that they will not be able

to maintain their standard of living

against increased cost of living because

such a high share of their income will

now be going to meeting the additional

cost of paying for their health care.

Another important area of Americans who will be adversely affected will

be the providers of health care services.

The PRESIDING OFFICER. The Senator’s 5 minutes has expired.

Mr. EXON. I yield 5 more minutes to

the Senator from Florida.

The PRESIDING OFFICER. The Senator from Florida is recognized for an

additional 5 minutes.

Mr. GRAHAM. I thank the Chair. I

appreciate the generosity of my colleague from Nebraska, the ranking

member of the Budget Committee.

According to the Prospective Payment Review Commission, a commission established by Congress to consistently analyze Medicare programs, the

commission states and I quote:

The ability to use cost shifting to fill the

revenue gap where Medicare cost increases

exceed payment increases varies across hospitals. Facilities that treat a large share of

Medicare, Medicaid and the uninsured patients have a lesser ability to cost shift to

the private sector. In view of growing price

competition in the marketplace, these facilities will face a greater risk of declining margins, which eventually could threaten their

financial viability and their ability to care

for Medicare beneficiaries.

Mr. President, it is not surprising in

my State, which has the largest proportion of persons over the age of 65 in

the country, that there are some 87

hospitals in our State where the Medicare patient days exceed 60 percent of

total patient days, which is to say that

in States like mine and particularly in

rural areas such as those represented

by the Senator from Nebraska, the risk

of a serious collapse of the health care

system, not just for Medicaid and Medicare recipients but for the total population, is a very real one, a collapse because those facilities are so dependent

upon the Medicare and Medicaid patient that, if the Federal Government

does not provide adequate resources

with which to at least pay the costs of

provision of direct services, those institutions will face the prospect of either

a sharp decline in the quality of service

for their Medicare beneficiaries or closure.

(Mr. KYL assumed the chair.)

Mr. GRAHAM. Another area at risk

is State government. We are proposing

to take the Medicaid Program, the program that delivers services for indigent

Americans, take the current formula of

distribution of funds, convert that into

50 block grants—51 block grants, actually, since the District of Columbia

will also participate—and direct the

money to those 51 political entities.

There is a suggestion of an annual

cost-of-living increase but no increase

based on demographic changes. What

are the consequences of that?

According to the CBO baseline study,

currently the Medicaid Program is providing a 7 percent increase per capita

for Medicaid beneficiaries. That, I

might say, compares to a 7.2 percent

increase in spending per capita in the

private health care system. Medicaid

today is slightly below, on a per capita

basis, the rate of increase of the private sector, in spite of the fact that

Medicaid is treating some of the most

vulnerable of our population, including

children at risk and the elderly at risk.

Under the proposal that we are debating, the increase per capita will not

be 7 percent, Mr. President, but it will

be 1.4 percent as against a projected

continued 7.2 percent in the private

sector. That is the consequence of a

system which purports to create greater flexibility to the States by giving

them only a constrained 5 percent increase with no recognition of the tremendous demographic shifts in States
S7054 CONGRESSIONAL RECORD — SENATE May 22, 1995

such as that represented by the Presiding Officer and in States such as mine

which have a fast-growing population,

particularly a fast-growing population

of older Americans. This is a prescription for disaster for the beneficiaries

affected and for the State governments

which will be asked to pick up a bigger

and bigger share of paying these costs.

Another area which will be adversely

affected will be children. It is projected

that 5 to 7 million children currently

lack insurance coverage and unless

States can find a way to make up that

difference, there will be either a denial

of health insurance coverage for those

young Americans or another major

cost shift, an unfunded mandate directed at the States to pick up a cost

which in the past has been a shared responsibility through Medicaid of the

States and the National Government.

The PRESIDING OFFICER. The Senator is advised that his 5 minutes have

expired.

Mr. GRAHAM. Mr. President, our

manager is not here. I ask unanimous

consent for 2 additional minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOMENICI. Before the Senator

does that, might I say that immediately following the Senator from

Florida, I would like to yield to Senator BENNETT to speak for up to 15 minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

The Senator from Florida will have 2

additional minutes, and when he has

concluded, the Senator from Utah will

be permitted to speak for 15 minutes.

Mr. GRAHAM. Thank you, Mr. President.

I quoted a moment ago from the Prospective Payment Review Commission,

and I do so again from their March 1959

report, which states:

Medicare and the private sector account

for approximately equal shares of hospital

spending, 40 percent and 39 percent in 1992.

Consequently, every percentage point of

Medicare cost increase not reimbursed by

the Medicare payment increase will, all else

equal, translate into a percentage point of

additional revenue needed from the private

sector.

So we are facing the prospect by

carving out these two programs—Medicare and Medicaid—and treating them

as if they were in isolation from the

rest of the health care system. We are

about to construct a system in which

there will be significant cost shifting

to the private sector resulting in increased costs for private employers,

private individuals, for the providers of

health care services because they will

be underfunded.

Mr. President, I believe in the importance of reaching the goal of a balanced Federal budget, and I believe

that the date of 2002, while difficult, is

not an unreasonable standard. I would

go further by saying that we should

have as our goal reaching, as soon after

the year 2002 as possible—and I would

suggest 2005 or 2006 —a balanced Federal budget which does not depend

upon the masking of the Social Security surplus in order to reach a balanced budget. But we must do so in a

pattern which will be politically and

publicly supportable and sustainable

over the next 10 years that will be required in order to reach a balanced

Federal budget without relying on Social Security.

It is my considered judgment that

the impact that this approach on Medicare and Medicaid, as has been suggested, will have on the beneficiaries,

particularly the old and the young, on

providers, on States, and on the private

sector, will be so severe that it will not

be sustainable and that we will face the

prospect of losing this opportunity to

achieve that goal of a balanced Federal

budget.

So I urge the adoption of the amendment which is before the Senate at the

present time, which I think brings reasonableness to this process. And I urge

the Senate’s serious consideration of a

comprehensive amendment which will

be offered later this week which will

achieve the goals of a balanced Federal

budget without relying on these savage

cuts in Medicare and Medicaid.

Thank you Mr. President.

Mr. BENNETT addressed the Chair.

The PRESIDING OFFICER. The Senator from Utah.

Mr. BENNETT. Mr. President, I had

the pleasure and opportunity of being

in the Chamber when the Senator from

Florida began his presentation, and I

would like to rise and comment on it.

I think the position the Senator has

taken with respect to Medicare is entirely correct if you make one assumption, and that is that the delivery of

services under Medicare would not

change in its estimate or in the way

they are paid for. If there is no change

in the way Medicare is administered

and no change in the way these services are paid for, the Senator from

Florida is exactly correct. Unfortunately, from my point of view, however, Mr. President, that is the problem; that is, the assumption that there

will be no change in the way Medicare

is administered.

The Senator from Florida says these

cuts will have to be converted into

service cuts, they will have to be converted into cost shifting, they will

have to be converted into increases in

premiums that are not sustainable over

the long term. And, again, if there is

no change in the way Medicare is administered and no change in the way it

is paid for, the Senator from Florida is

entirely correct.

The thing I hope we will address as a

body is this fundamental question of

Medicare as it is currently constituted

and recognize that the word which the

Senator from Florida picked out, ‘‘sustainable,’’ is, indeed, the keyword because what we are learning as we get

into this circumstance is that the

present system of Medicare is not sustainable regardless of what we do.

We could take all of the money that

we are talking about cutting out of the

rate of increase and leave it as it is,

and what would happen to Medicare? It

would go broke. The trustees have told

us that. The present system is not sustainable. We could say, ‘‘All right, let

us add money.’’ Where is it going to

come from? We will leave that aside for

a minute, but let us add money to the

present system to prevent it from

going broke, and all we do is delay the

inevitable for a few more years, and

then we will be back on the floor of the

Senate, or our successors will be, debating the same issue.

I have an analogy, Mr. President,

that helps me understand this. I will do

my best to lay it out in a fashion that

might be clear to some others, because

some people, when I start, say, ‘‘Oh,

that doesn’t have to do with anything.’’ But bear with me. This is an

analogy that I think illustrates the

point.

Back in the 1960’s, when we first

started—we as a nation—discussing

Medicare, my father was in the Senate

and I was acting as his campaign manager. I have mentioned this here before. At the time, if I wanted to talk to

my father from the campaign headquarters in Utah, I would pick up a

telephone and dial zero. Yes, you had

to dial; there were no touch-tone

phones. An operator would come on the

phone and say, ‘‘What number,

please?’’

I would say to her, ‘‘I want 224–5444.’’

It happens to be the same number that

connects you to my office now.

She would say, ‘‘Do you want personto-person or station-to-station?’’

If I wanted absolutely to talk to my

father, I would say, ‘‘Person-to-person.’’ If I was willing to talk to anybody on the staff, I would say, ‘‘Station-to-station,’’ and then I would wait

there on the phone while she placed the

call.

If I had said person-to-person, she

would say, ‘‘Is Senator Bennett there?’’

And they would say, ‘‘Just a moment, we’ll find him.’’ And then when

they found him, when he came on, then

and only then would she go off the line

and I could start to talk to my father.

The system worked great. It was simple, certainly easy for me to understand, certainly convenient. All I had

to do was tell her what I wanted and

let her handle all of the details of placing the call.

There was one problem with it, however, Mr. President. As the demand for

long distance service grew in this country, we reached the point very quickly

where there were not enough operators

in the country to handle all the calls.

Indeed, if you projected it out into the

future, we would be looking at a point

where there were not enough people in

the world to handle all of the telephone

calls that people would make requiring

an operator to come on, listen to the

request, and handle it. We were forced,

whether we wanted to or not—we wanted to—whether we wanted to or not, we

were forced by the rising demands to

leave a system that was working well

and invent a new one. Now, of course,
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7055

we have a new one where the number of

operators handling long distance calls

has gone down and the number of long

distance calls has exploded

exponentially.

This, frankly, Mr. President, is the

problem we are facing with Medicare.

The number of people on Medicare is

going up and going up continually and

inevitably. I say somewhat facetiously,

Medicare, as presently constituted, will

work just fine if the elderly would only

cooperate by dying at the same rate

they died in 1960, when this was created. But I do not want the elderly

members of my family to cooperate in

that fashion, and I am sure that is true

of everyone else here. So Medicare has

to be restructured around the new realities, and the new realities say it can

no longer be, as it is now, the last bastion of fee-for-service indemnity insurance for the United States. There has

to be some changes and the changes

have to be cost driven.

As chairman of the Republican

health care task force, I got a lot of

people calling on me and giving me information. They inaccurately assume I

hold a legislative power in this circumstance and can do something beyond recommend, but it makes for a

great education.

I had a session with a number of the

Nation’s leading employers, and we

were talking about health care. They

said, ‘‘Fee-for-service indemnity insurance will be gone within 5 years as an

option for America’s employees.’’ I was

a little startled at that prediction. I

had not been prepared for that.

One of them said, ‘‘We put in a series

of options for our employees about 3

years ago, and fee-for-service was one

of the options. Roughly 50 percent of

our employees accepted that option.

The others picked a form of HMO or

PPO, some kind of managed-care circumstance.’’

He said, ‘‘Fifty percent fee-for-service indemnity insurance, 50 percent

some sort of managed care. Without

any pressure from us,’’ he said—this is

the employer speaking—‘‘we have

watched the marketplace take hold.

Today, just 3 years later, 15 percent of

our employees choose the fee-for-service option.’’ He said, ‘‘We have cut our

health care costs’’—not Washingtonstyle cuts, where you simply grow

more slowly than you did before; real

cuts, where you spend less than you

spent before by providing these options—‘‘and our employees, in terms of

the questionnaires they give us back,

are happier with their health care options than they were 3 years before.’’

So, Mr. President, what we are really

talking about, if we can take the big

view here, is restructuring Medicare

around the new reality and saying,

‘‘What will the numbers be to make

Medicare rational from the standpoint

of those who are paying for it,’’ those

who are paying for it being the taxpayers. And we are saying we are going

to allow Medicare to continue to grow,

indeed we are going to allow the individual contribution per year to go from

$4,400 per year, roughly, to $6,300 per

year.

We are going to allow this thing to

go up almost 50 percent in that period,

but that is the number that those of

you who are involved in figuring out

how to restructure it have to shoot at.

I am not on the Finance Committee.

As I say, I have no legislative authority to do this. But I am on the health

care task force, and we are looking at

these options. We are confident, Mr.

President, that we can come up with a

restructuring of Medicare around this

new reality that will ultimately go

back to the lesson learned in long-distance phone calls—that is, that something can be created around the information and the experience we are getting out of the private sector that says

to us we can provide better service for

our elderly within the price constraints

that we are looking at. But if the option is to not try to change the system,

just pay for it, whatever it costs, then

we are in the black hole that the Senator from Florida so accurately pointed out to us.

So I hope that as we conduct this debate, we will do so with the understanding that we, as a Congress, have a

great deal of unfinished work to do

with respect to Medicare, and it is in

the restructuring of the system around

the new realities. And I am one who believes we can meet that challenge.

Mr. DOMENICI. Will the Senator

yield for a question?

Mr. BENNETT. Yes.

Mr. DOMENICI. I first want to compliment the Senator on his very enlightening remarks. I hope he continues with his level head and good reason

as the chairman of the task force.

Some are suggesting that we have to

wait around for entire reform of the

health care system, that which the

President recommended last year,

which failed rather overwhelmingly in

both Houses of the Congress. Is it the

Senator’s opinion, based on what he

knows, that we have to wait around for

that day—which I do not know will

ever come—when the U.S. Government

reforms—so-called ‘‘reforms’’—all of

the health care system before we can

do the restructuring to give our seniors

choice and a delivery system that will

meet their needs for less taxpayer

money?

Mr. BENNETT. I thank the Senator

for his question. It is my opinion that

restructuring the entire health care

system in this country with a single

bill in a single Congress proved in the

103d Congress to be an impossible task.

To attempt to do it again and again

would be to say to the world that we

had learned nothing from our experience in the 103d Congress, we are just

going to go back to the same mistake

that Congress made—in all good faith.

I do not accuse anybody of approaching

that task in bad faith in the previous

Congress. But the experience just told

us that to try to do everything simultaneously ultimately meant we did

nothing. I believe we should break it

up—the President himself used the

phrase in his State of the Union Message, ‘‘a step-by-step approach’’—break

it up into acceptable components, and

the one that is the most pressing and

the most urgent is the restructuring of

Medicare around the new realities.

Mr. DOMENICI. Will the Senator

yield for another question?

Mr. BENNETT. I am happy to.

Mr. DOMENICI. The senior citizens

of the United States have two distinct

benefits with reference to health care.

One is the health care trust fund, the

so-called HI fund, the hospital fund,

which is the one that is entrusted, that

the workers of America, the men and

women pay into with wage withholding, which is supposed to be for hospitals. That is one of the delivery systems. The other is part B, where the

seniors of America are the only ones

that the Federal Government pays a

significant portion of an insurance policy for their primary care; that is, everything except hospital is the way I

would define that.

Mr. BENNETT. The Senator is correct.

Mr. DOMENICI. I do not find people

in America buying a hospital insurance

policy and saying, well, I am covered

for hospitals, and then having another

company insure them for doctor visits

and treatment that they may need if

they do not have to go to a hospital but

they break their leg or get asthma, or

whatever it may be. So we have these

two that are kind of the result of the

way it started. We started one, and

then under Eisenhower we started another.

Mr. BENNETT. The Senator is correct. This is a relic of the 1960’s and not

consistent with the way health insurance is offered in the private sector

today.

Mr. DOMENICI. Now, when the Senator spoke of restructuring, inherent in

that and part of that thinking would be

that we would look at both of these

coverage systems together in an effort

to give the seniors a better, more compatible with modern times system; is

that correct?

Mr. BENNETT. Correct. Restructuring would have to address part A and

part B. It is actually time for a clean

sheet of paper and to say, we have approximately $5,000—we will take a median figure—per person per year to

spend on health care for our elderly.

Now, what is the best way to spend

that $5,000 to produce the greatest possible benefit for the elderly and avoid

the evils of cost shifting and tax increases that the Senator from Florida

was talking about?

Mr. DOMENICI. I thank the Senator.

Once again, I compliment him for his

remarks.

I yield the floor.

Mr. BENNETT. I also yield the floor,

Mr. President.

Mr. GRAHAM. I know the Senator

just yielded the floor. Would he retake

the floor for the purpose of a question?
S7056 CONGRESSIONAL RECORD — SENATE May 22, 1995

Mr. EXON. Mr. President, I yield 5

minutes to the Senator from Florida

for that question.

Mr. GRAHAM. I would like the Senator from Utah to take the floor for

the purposes of a question.

Mr. BENNETT. I will be happy to respond in any fashion on the time of the

Senator from Florida.

Mr. GRAHAM. I think the Senator’s

analogy of the telephone system is a

superb one. I would draw, in addition

to the conclusion he did, another conclusion, and that is the importance of

having an integrated, strategic approach to the structure of change for

our communication systems in America. If, for instance, in Hialeah, FL,

they were still using the system you

described of the dial phone, whereas

other parts of the country were using

push button phones, and if there had

not been an organized, consistent

movement in an industry which has

many providers, we would not have arrived so rapidly at the benefit the Senator has just described.

My concern is that what we seem to

be about here is saying that each sector of the health care system can be

looked at as if it were an airtight compartment and changes made there did

not have to take into account changes

in the rest of the system. I am concerned that we are about to make a

judgment that over the next 7 years,

we can restrain Medicaid increases to

1.4 percent per capita against a history

in which they have been running in excess of 10 percent per year per capita

and where the projection is that the

private sector is going to be increasing

at 7.2 percent per capita, in spite of the

deficiencies you have outlined. Yet, we

do not seem to have a specific plan of

how we are going to achieve changes of

that magnitude, cuts of $175 billion in

Medicaid, the health care program for

the indigent, and $256 billion in cuts in

Medicare, a program for the elderly.

Are you not concerned that we are

reaching the end result without, from

the bottom up, having a clear plan of

how we are going to do it, particularly

how we are going to do it in a way that

will be compatible with the rest of the

health care system, just as there was

concern for the rest of the communications and telephone systems when we

made those kinds of changes?

Mr. BENNETT. Responding to the

question, I point out that the slowing

of the rate of growth in the health care

costs that we are talking about for

Medicaid and Medicare is already going

on in the private sector, and there is

much we can learn from the private

sector. It is the attempt to turn the

public programs into an airtight compartment where they are immune from

the kinds of changes that are occurring

in the private sector that has produced

some of this.

I would suggest that the Senator

take a long look at what has happened

in the State of Tennessee. He mentioned Medicaid. In the State of Tennessee, as I understand the numbers

from the Governor of Tennessee who

called on me, Medicaid costs were increasing at the rate of 20-percent per

year for over 8 years running. The then

Governor of Tennessee, a member of

the Senator’s party, decided that that

would bankrupt the State and something had to be done about it.

Tennessee, as of January 1, 1994,

moved to a system more compatible

with that which is normal in the private sector, and in calendar 1994, instead of increasing at 20-percent per

year, Tennessee increased their Medicaid costs at .12 percent—less than 1

percent. Almost .1 of 1 percent.

The TennCare solution in Tennessee

has problems. I will not stand here on

the floor and say it does not. But it has

demonstrated very clearly that moving

towards the solutions already tried in

the private sector can, and in that

State’s case, has produced a significant

cost difference.

When I talked to the current Governor of Tennessee, who happens to be

a member of my party, building on the

actions of his predecessor, he said, if

we are allowed continued waivers from

the Federal guidelines, which waivers

were granted to his Democratic predecessor, we can prove that we can keep

the growth of Medicaid in our State

within the constraints that are outlined in this budget resolution.

There are examples out there of how

these changes are occurring in the private sector. As the Senator says, not in

isolation. They can move into what has

been the watertight compartment of

Medicare and produce the same results

if we work together for that.

The PRESIDING OFFICER. The Senator from Florida has consumed 5 minutes.

Mr. GRAHAM. I appreciate the Senator from Utah responding to my questions. I hope that this will be just one

phase of a continuing dialog. We all

share in the awareness that this is a

critical issue in achieving not only

health care objectives, but also the fiscal objectives of a Federal Government

that we in our future generations can

afford.

The question that we are debating

here is one of method and the degree in

which this can be accomplished within

individual programs, as opposed to requiring a more comprehensive approach in order to achieve those results

without unintended adverse consequences.

Mr. BENNETT. Mr. President, I am

more than happy to continue the dialog after I vote for the budget resolution.

Mr. DOMENICI. Mr. President, I

know we will return now to the Democratic side.

While Senator GRAHAM is on the

floor, could I comment about the Tennessee plan. I am clearly not the Senator from Tennessee. Senator Frist obviously knows a lot more about it than

I do, and we are very proud of having

him on our side as one of America’s

most renowned surgeons.

Essentially, I went to a full 3-hour

field hearing, Senator. Just to mention

some of the facts that this transition

in their State yielded, they have 12 or

14 competing major HMO’s in the State

of Tennessee that now cover all of the

Medicaid people in the State.

Some of those HMO’s have a small

part, some have a big part. There are

some where they overlap. There are

some that do rural, and have merged

rural with urban to get a delivery system.

As Senator BENNETT said, it is not a

utopia yet and it may never be, but interestingly enough, those people that

run HMO’s came to the hearing. At

least the leaders of about five of them.

They said it is working. We are competing. The prices are not going up.

They have leveled. In fact, in some instances, they are coming down.

They also indicated that more people

are being covered for the Medicaid

funding than ever before. And we stand

worried about telling the States precisely who to cover. We have heard

that debate.

Should we put all the strings on because we are worried about Governors?

When we send them Medicaid we are

saying, will they take care of children,

pregnant women, those that have mental illness? Some want to go back with

the same list of specificity, and Governors are saying ‘‘We will do that. We

will match what we have been paying

and we will do that.’’

I think it was a very good dialog.

Maybe when there is an amendment on

Medicaid we can have more discussion

about what is in this budget versus

what are savings. Some are saying we

should have assumed that Medicaid

could grow at 10 percent every year ad

infinitum. They say we will have less

Medicaid money, must be assuming the

program would go unchanged, or perhaps a couple more decades.

I believe we would never have been

able to afford that. I think we would

have changed it one way or another.

Now we are changing it in sort of an orderly manner as part of this process.

I thank the Senator for his questions.

I yield the floor.

Mr. EXON. Mr. President, I have listened with great interest to the interesting dialog that just took place. I

simply say to all within the sound of

my voice that exactly what has been

said is exactly what many people on

this side of the aisle are trying to get

done.

That is, simply to say that while we

think the general direction is acceptable, we happen to feel that the cuts

are excessive, especially when we keep

hearing about the possibility of a tax

cut.

With that, I yield 5 minutes to the

Senator from Montana.

Mr. BAUCUS. Mr. President, I think

that generally across the country, particularly here in Washington, people if

they are not careful often tend to lose

the forest for the trees.

I am afraid that might be what we

are doing just now on Medicare. The
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7057

previous discussion was on Medicaid,

low-income health program that is a

joint program financed by Washington,

DC, and by the States. I would like to

focus my remarks on Medicare, the

medical program for senior citizens.

As we look at the budget proposal,

Mr. President, with its unprecedented

reduction in health services for senior

citizens, I think we should start by remembering what life was like for older

Americans before Medicare.

The fact is before we created Medicare our senior citizens lived in fear.

Everyone over 60 knew that private insurance was shaky and expensive at

best, and would cost them more every

year. A serious illness or even a common ailment that required treatment

but did not threaten life was not only

a health problem but something that

could reduce a whole family to poverty.

Today, Medicare has removed that

fear from our lives. Those with those

memories have forgotten it ever existed. This month I visited the senior

citizens center in Great Falls, MT. The

people at that center know exactly

what Medicare and Social Security

mean to their lives. It means a little financial security, some faith that illnesses will be treated, and that families will not be wiped out by costs.

Mr. President, 125,000 Montanans are

eligible for Medicare, out of a total

population of 856,000. Each knows exactly what Medicare means.

Listen to Margaret and Frank Jackson of Billings, MT, who wrote me this

statement last week:

Social Security and Medicare are not only

necessary, they are absolutely essential to

our survival in Montana. Higher costs such

as higher property tax, increases in school

levies, fuel in a cold climate, and medicine

take a toll. There is just too much mouth at

the end of our money. Needless to say, additional cuts would put a great burden on us.

The leadership now proposes something like $250 billion in Medicare cuts.

It is staggering. This will reduce Medicare services nearly a quarter by the

year 2002—reduce services by a quarter

by the year 2002. To add insult to injury, the House of Representatives

would do it, in part, to pay for tax cuts

for Americans who are already very

wealthy. Think of it, Mr. President, a

25-percent cut in services to the elderly

to pay for tax cuts for Americans who

are already very wealthy. Some in the

Senate would do the same and go even

further.

What would it mean if this happens?

Montana Medicare beneficiaries would

pay up to $900 more a year in premiums, copayments and deductibles.

This will come out of their own savings

and from their children, who are now

scraping for money to send their children to college and to pay property

taxes.

We would see thousands of operations

and hospital stays put off. Thousands

of people would decide to go without

home health care. All that means, of

course, is that they will suffer more serious, more painful, more expensive illness later on that early care could have

prevented.

EFFECTS ON RURAL HOSPITALS

And, as the Federal Government cut

reimbursement, more rural hospitals

would be pushed to the edge.

Some Montana hospitals will be

forced to choose between serving their

patients and remaining solvent. Others

will simply close. Two Montana hospitals get nearly 80 percent of their

revenue from Medicare, and many are

at 60 percent. This plan would hit them

like a wrecking ball, costing jobs and

forcing people who need care to make

long winter drives to the cities. We

have vast distances out in the country,

and this will be a big burden on them.

So overall, we can already tell what

this plan would mean. It is simple: less

access to health care for senior citizens; for people with disabilities; for

Montana and all of rural America.

Now, it may well be that we need to

make changes in the Medicare Program. We must be realistic.

The answer is not, however, to simply approach Medicare reform as a

budget-cutting exercise, because we are

talking about preserving essential

health services for 125,000 senior citizens in Montana and 30 million seniors

across America. We are talking about

good, middle-class Americans like the

Jacksons. And above all, we must not

use Medicare as a piggy bank. Do not

take money that buys health care for

senior citizens and use it for a tax

break for rich individuals and big corporations. That is disgraceful.

Perhaps some changes lie ahead. But

if they do, they should be made for one

purpose, preserving essential health

services for senior citizens and people

with disabilities. That is where we

must draw the line.

The PRESIDING OFFICER. The Senator from Nebraska.

Mr. EXON. Mr. President, I want to

take a moment to thank the Senator

from Montana for his remarks and

also, previous to him, the Senator from

the State of Florida, the former Governor of Florida, who basically as a

Governor understands the matter of

choosing fairness, equal sacrifice,

shared sacrifice—call it what you will.

Certainly the Senator from Montana

has simply emphasized very vividly and

very well, in my opinion, the remarks

that this Senator made earlier about

the tremendous hit that this extraordinary cut in Medicare and Medicaid

will have on rural America. Rural

America needs to be heard, too.

I have heard a great deal in this

Chamber during the budget debate

about shared sacrifice. We have to do

this, and we have to do it in a fair manner of shared sacrifice. So that supposedly that term embodies the

thought that everyone is sharing and

sharing equally in the reduction in

spending to get us to the balanced

budget by the year 2002. I think earlier

today, in the remarks made by the

Senator from North Dakota with regard to what Republican commentator

Kevin Phillips thought of fairness—

who are the winners and who are the

losers in this proposition?—Kevin Phillips, as well as any other national

spokesman, highlighted the unfairness

of the Republican budget that is being

attempted to be sold here as an instrument of shared sacrifice.

How fair is it and how fair are the

sacrifices? I submit the Republican

budget gets a total of $431 billion in

cuts from Medicare and Medicaid. Let

me repeat that. Under this shared sacrifice budget we are being asked to approve and we will be asked to vote on

upcoming, we will be asked to vote

down the reasonable proposal to make

relatively small changes in the Republican budget, not changing balancing

the budget by the year 2002, I emphasize, and not changes with regard to

raising any taxes. We are simply saying since the Republican budget is not

an instrument of shared sacrifice we

should at least alleviate a portion of

the hit on Medicare and Medicaid—and

only a portion of it—in the interests of

shared sacrifice.

I repeat, the Republican budget gets

a total of $431 billion in cuts from Medicare and Medicaid. That is two-thirds

of the Republican cuts in all entitlements. That is nearly 40 percent of the

total spending cuts that the Republicans make in all programs.

Essentially being repetitious, the

proposals by the Republicans that are

being described here as necessary

shared sacrifices are being shared primarily by our senior citizens and our

least fortunate on Medicare, including

those being adequately provided for in

our nursing homes.

I again repeat, the shared sacrifice

we are being asked to approve here,

shutting out even reasonable proposals

to reduce the hit on Medicare and Medicaid by $100 billion over 7 years, and

taking that $100 billion out of the $170

billion tax cut pot that is part and parcel of the Republican budget that everybody likes to continue to ignore,

that is not equally shared sacrifice.

That might be shared sacrifice, but it

is not equally shared sacrifice.

I appeal once again to Members on

both sides of the aisle to recognize the

proposal made by the minority is a reasonable one. It makes a major step toward true shared sacrifice rather than

meaningless words that have been used

here to allude to the Republican budget

in this regard.

I yield 5 minutes to my colleague

from the State of Alabama.

The PRESIDING OFFICER. The Senator from Alabama.

Mr. HEFLIN. Mr. President, the Republican budget now before the Senate

makes severe cuts in some essential

programs. I would like to direct your

attention to, first, the cuts in Medicare.

Medicare, of course, is the health insurance program that is provided for

our senior citizens. The Republican

plan cuts $256 billion from this program. This cut is three times larger
S7058 CONGRESSIONAL RECORD — SENATE May 22, 1995

than any other Medicare cut in history, without any attempt to reform

the health care system which drives up

the cost of Medicare.

What does this Republican cut mean

to the average senior citizen who is on

Medicare? It will mean about $900 per

year in higher premiums, co-payments

and deductibles—$3,200 over 7 years.

For a senior couple that totals an extra

$6,400 in out-of-pocket costs. There are

641,000 Medicare enrollees in Alabama.

Over the 7-year GOP budget, Alabama

would lose around $6 billion in Medicare funding.

Medicaid is different from Medicare.

Medicaid is the program that provides

health care services to the poor and

also provides nursing home care for

those who are not able to pay for it.

The Republican plan would cut $175 billion in Medicaid funding. Without Medicaid money families could face nursing home bills of between $20,000 and

$45,000 a year. It is estimated that

without Medicaid funding nursing

home bills would average $38,000 per

year.

The Republican budget would raise

taxes on low-wage, working families by

increasing the average of such families’

taxes by $1,400 a year. There are 12 million working families that would be hit

by this Republican tax increase. This

tax increase affected what is known as

the earned income tax credit. Former

President Ronald Reagan once called

the working family tax credit program

the ‘‘best pro-family, the best job-creation measure to come out of the Congress.’’

This tax increase would affect 309,328

working families in Alabama. Next, the

Republican budget severely affects educational programs. It would cut $1 billion in aid to fight guns, drugs, and violence in schools, known as the Safe

and Drug-Free School Program; 39 million students and 94 percent of all

school districts benefit from the Safe

and Drug-Free School Program. One

million college students per year would

lose their financial aid or have their

aid cut dramatically—40 percent—

under the Republican plan to freeze

Pell grants, the basic opportunity educational grants.

The Republican budget would increase college loan costs for 4 million

students each year. The average student could pay between $3,000 and $4,900

more for his or her education, depending on how long it takes to repay the

loan. Graduate and professional students likely would be paying as substantial amount, on average for their

advanced education. In Alabama the

Republican cuts in college loans would

affect 55,778 students.

I am working with several Senators

on alternatives to the Republican

budget proposal. We can reduce spending and balance the budget in the same

time frame the Republicans have targeted—the years 2002—by freezing most

programs at 1996 levels and cutting less

essential programs than Medicare,

Medicaid, education, and other essential programs. A balanced budget can

be achieved without having such a dramatic tax increase on those families in

American that earn less than $28,000 a

year.

I point out that the budget on the

Republican side has $170 billion in the

fund which is reserved for tax cuts. I do

not feel that we can sacrifice the senior

citizens, those in need of education,

and the working poor at the expense of

a proposed tax cut that is coming down

the road at some later time.

Mr. EXON. Mr. President, I thank my

friend and colleague from Alabama for

once again stating the concerns that

many of us on this side of the aisle

have. Once again, his knowledge of the

system, his understanding of what we

should and should not do, and his dedication to make shared sacrifices means

something fair was well taken.

Mr. President, I am about to yield to

my friend and colleague, the cosponsor

of the amendment before us, the Senator from New Jersey.

I remind all that in 5 minutes, or

thereabouts, we will be going into controlled time per the previous agreement.

So I yield at this time 12 minutes to

the Senator from New Jersey, with

whatever time he uses after 2 o’clock

within those limits be charged to the

time allotted to this Senator.

The PRESIDING OFFICER. The Senator from New Jersey.

Mr. LAUTENBERG. Thank you, Mr.

President. I thank my friend and colleague from Nebraska.

Mr. President, on Friday I had some

comments to make about the amendment that is pending before us and the

budget resolution generally.

I am privileged to sit on the Budget

Committee, and the distinguished

chairman of the Budget Committee is

on the floor. As I said before, while we

do not always agree, I always respect

his intellect and his commitment to

try to do what he sees is right.

We have now a difference on approach, because I understand also that

after my comments it was suggested

that I want to divide this country, and

that perhaps my tactic is along those

lines. I would raise a question. I mean,

why is someone who takes one position

harmonious and for a unified approach,

and someone who takes another position out to divide? There are sides in

this debate. The question about whether or not we are going to cut spending

is long past. It is a question of how we

are going to cut spending, and who is

going to win and who is going to lose.

Whose side will Government be on? It

is a fair question, it is a reasonable

question, because there are choices

being made.

One only need look at what is proposed by the House Republicans, and

intimated by my friend in the Senate

on the Republican side that someone is

going to get a tax benefit, a lot of tax

benefit, especially if you are in the substantially higher income brackets. So

someone is going to have to pay for it,

we know that, whether it is education,

or housing, or Medicare, as the discussion currently develops.

The Republican budget reflects a

party philosophy, and a constituency.

The Republicans generally believe the

answer to society’s problems is to

make sure that the powerful have

enough power, and more money goes to

millionaires. That is evidenced by the

fact that, if you make $350,000 in a

year, you get a $20,000 tax reduction.

That is pretty hefty.

Mr. DOMENICI. Will the Senator

yield for a question?

Mr. LAUTENBERG. I would like to

finish, and then I will be happy to

yield.

It is reflected here in this chart. It

says the winners, $20,000 tax break; corporate subsidies still protected. I come

out of the corporate world, and I respect and appreciate what corporations

have done by way of helping this country build, my corporation as well. But

if you look at the earnings statements

around the country these days, they

look pretty good. If you look at the

stock market, it is pretty good. It does

not look as if the corporations are

starved for profits. Look at the automobile companies. But we are protecting subsidies for oil and gas and others.

And tax loopholes are still protected.

So even as we do this, we are asking

those who are Medicare recipients and

those who, because of a situation in

life, may be subjected to having Medicaid, a program for the poor, be the only

device by which they can get medical

attention.

So what we look at is on balance, and

we have heard the debate about reducing the growth and not cutting the programs, reducing the growth. The fact

of the matter is that, if there is to be

a similar level of service with the same

options preserved, it is going to cost

$6,400 for a senior couple over the next

7 years as we pursue a balanced budget;

$6,400 may not be a lot to the guy who

makes $350,000, but to the average couple, 75 percent of the senior citizens

who are making $25,000 a year, whose

income is $25,000 a year or less, $6,400 is

an awful lot of money, and especially

when on top of the—may I have the

Chair’s attention; thank you—especially on top of the fact that the average senior citizen is also paying over 20

percent of their income for health care

needs that are not provided by Medicare.

We know that there is a cut in education funding, that it is going to cost

those who have to borrow to go to college substantially more as a result of

the cuts there and the elimination of

the earned income tax credit. And it is

going to be a terrible penalty for families making $28,000 a year or less—

$28,000. Why, that is almost as much as,

slightly more than the refund that

someone earning $350,000 is going to get

by a lower tax rate.

So that is the situation. That is what

we are looking at—a tax increase for

working families, more cost to go to
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7059

college, senior citizens being burdened

with extra costs on programs for which

they have paid and paid handsomely

for a lot of years.

There is no getting around the concept that there are winners and losers

in this resolution. And the American

people have a right to know how they

will be affected. But some Senators on

the other side of the aisle obviously do

not like a discussion of winners and

losers. Some even suggested, as I said

earlier, that somehow the Democrats

are trying to divide the country. It is

an outrageous charge and has to have a

response.

Mr. President, the way to unify this

country is to treat everybody fairly. It

is not to take away quality health care

from our senior citizens and use it to

pay for tax cuts for the rich.

The way to unify the country is to

relieve the financial burdens wherever

possible on working families. It is not

to increase taxes on these families and

then again to give it to the wealthiest.

The way to unify the country is to

give all Americans a chance to get an

education. It is not to increase costs

for students to pay for tax cuts for the

rich.

If our country is going to pull together, Government must stand with

ordinary Americans even if they are

not rich, even if they do not have lobbyists representing them and even if

they do not have the strong political

connections.

When our friends on the Republican

side say we are trying to divide the

country, I suggest they take a look in

the mirror and see whether or not trying to take from one group that can

least afford it to help relieve the tax

burden on the wealthier group is unifying. I do not think so.

It is obvious that ordinary Americans, already furious at the Government, think they are being ignored.

They think Government does not care

about them. Some even see the Government as an enemy. To reverse this disturbing trend, Government has to do a

better job of standing up for ordinary

Americans.

That is what we Democrats are trying to do. We want Government to

stand with middle-class families, with

seniors, and with our young people. If

we invest in our young, we are investing in the next century, trying to provide the leadership that is going to

make this the competitive Nation we

once were. It is going to give us a

health care standard we once had that

led the world. We are not among the

top few nations with longevity. We are

not among the top few nations with

health care facilities that deal with

mental illness. We are not where we

used to be. And that is what we are trying to do, we the Democrats. We want

Government to stand with middle-class

families, with seniors, and with our

young people. These are the people who

are the backbone of this great country

of ours. To a great extent they are the

country, and it is time for them to be

treated that way by their Government

and in this debate.

Mr. President, the pending Rockefeller-Lautenberg amendment reflects

this approach. Its message is simple. It

says let us eliminate tax cuts for the

rich and apply the savings to Medicare

and Medicaid. And once again I remind

my colleagues who benefits from Medicare: 75 percent of the beneficiaries

have incomes of $25,000 or less; 35 percent of them, $10,000 a year or less; 25

percent of those people rely solely on

their Social Security checks. On top of

this, Medicare recipients pay 21 percent

of their income in out-of-pocket health

care costs—21 percent. So if an average

income is $25,000, they are paying over

$5,000 in out-of-pocket health care

costs. They have worked their entire

lives, these senior citizens, and paid

into the Medicare Program. In turn,

they have been promised health security through Medicare.

The budget resolution breaks that

promise, and it does so, again, to make

sure that it is balanced off with tax

cuts on the other side.

The final chart rather sums it all up.

Senior couples on fixed incomes get a

$6,400 tax increase for every senior couple, and on the other side it is a $20,000

tax break for people earning $350,000 a

year.

Mr. President, it is not fair to our

Nation’s seniors. It is also unfair to

millions of middle-class families, and

as we all know, there are millions of

working parents in America who help

out their own parents who are retired.

These parents are struggling hard

enough to make ends meet for their

own children. And this budget will

shift another heavy financial burden on

their shoulders. They will have to pay

more of their hard-earned money for

health care expenses for their parents.

It is not right.

We have heard a lot of denials from

the other side of the aisle.

The PRESIDING OFFICER (Mr.

GRAMS). Time yielded to the Senator

has expired.

Mr. LAUTENBERG. May I ask the

manager for another minute, please?

Mr. EXON. I will be glad to yield a

minute. I say to all of my colleagues,

for every moment that I yield, you are

taking time away from the 10 minutes

for which the minority leader has

asked, but I yield 1 additional minute.

Mr. LAUTENBERG. One minute, and

I will be finished.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. LAUTENBERG. I thank the

Chair.

Mr. President, it is pretty simple.

The Republicans cannot have it both

ways. They cannot claim the budget

resolution is going to balance the budget when it leaves out the Social Security trust fund, but we are not in that

debate right now.

Well, if so, then it also will provide

for the tax cuts. If some now claim the

resolution does not include a tax cut,

they must be saying that it will not

really balance the budget.

For all practical purposes, this resolution does include a tax cut, a tax cut

that will almost certainly provide disproportionate tax breaks for millionaires and other wealthy individuals.

Nobody ought to be fooled by these

denials.

Mr. President, this is what my Democrat colleagues stand for. It is the right

thing to do for our country, and I urge

my colleagues to support the amendment.

With that, I yield the floor.

The PRESIDING OFFICER. Who

yields time?

Mr. DOMENICI addressed the Chair.

The PRESIDING OFFICER. The Senator from New Mexico.

Mr. DOMENICI. My recollection is

that there were two Democrat Senators who spoke in a row. I wonder if I

might do that now. I will just speak for

4 minutes and then I will yield 10 minutes, 15 minutes to the Senator.

Mr. EXON. I think that is fair.

Mr. DOMENICI. I thank the Senator.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOMENICI. Mr. President, the

distinguished Senator from New Jersey

said you cannot have it both ways. I

think he was referring to us, the Republicans. But, as a matter of fact, it is

better referring to the Democrats and

in particular the distinguished Senator

from New Jersey. He cannot have it

both ways, either. They cannot have it

both ways.

Now, the theme song is we are all for

balancing the budget. We are all for

balancing the budget. The days are

long past when we are worried about

balancing the budget. We are all for it,

right. But any time we propose something that will get us there, it is not

the right way.

Where is their way? Where is the way

of the distinguished Senator from New

Jersey? He does not want to touch

Medicare, I assume. He does not want

to touch Medicaid, I assume. He does

not want to touch anything we touch,

I assume. Where is their balanced budget? You cannot have it both ways.

Mr. President, in addition, let me

suggest these are the facts about Medicare. What the distinguished Senator

from New Jersey is talking about in

Medicare is somebody’s set of facts,

somebody’s assumptions. Somebody,

somewhere, somehow—probably the

White House or the OMB—who is

against this budget, they have come up

with all these scare numbers for the

senior citizens.

But senior citizens, Americans—not

just senior citizens—Americans, we

want to preserve the Medicare system.

We want to preserve it for you who are

on it, for seniors yet to come, and for

hard-working, middle-income people

who are 45 years old. And, yes, if we

could, we would like to protect it for

our children.

And so we recommend that we fix it

precisely the way the trustees—four of

whom work for the President, two of

whom are citizens—told us we ought to
S7060 CONGRESSIONAL RECORD — SENATE May 22, 1995

do it. No more, no less. No Republican

inventions, just pure, basic facts as

given to us by six trustees who say it

will not be here for long unless we fix

it.

Now, unless you want to cross America and go to every senior citizen center and say, our plan is to preserve it

for the next 3 or 4 or 5 years and we

just do not know what is going to happen after that, but for now we are

against what Republicans are doing because we want to scare you to death,

well, if that is the case, more rhetoric

of the type we are hearing today may

do it, excepting seniors have caught on.

They have even caught on to

mailings that this group, formerly

known as the Roosevelt Group, the

Committee for the Preservation of Social Security and Medicare—if you

have ever seen a scandal sheet, look at

that. Do you know what they do, Mr.

President? They wait for us to say we

need to fix something for seniors and

they say, ‘‘We found a big, big bank account. We will send these pretty papers

out,’’ $10 a head for seniors. ‘‘Man, send

it in. We’ll save you.’’

Do you know how much they are apt

to get just from that little thing—2

million Americans at $10? Just do the

arithmetic. How much is that? Twenty

million dollars—while they feed and

prey on American seniors.

Well, we are not going to do that. We

are just going to tell you that you cannot have it both ways. You cannot have

it both ways, the Senator from New

Jersey; you cannot have it both ways,

the Senator from West Virginia; you

cannot have if both ways, Democrat

Senators. You either tell us how you

will fix this budget —unless you decide

it is not worth fixing, $275 billion deficits are OK, let our kids pay for it, let

our salaries suffer, let our standard of

living suffer, but we will not take a

stand on anything that is difficult.

Now, these are the facts: Medicare

per capita growth rates in the Senate

budget resolution, per capita Federal

Medicare spending, will grow from

about $4,350 in 1995 to about $6,300 in

2002. I say to my friend from New

Hampshire, my arithmetic says that is

a 50-percent increase. No. Well, no, let

us be right, a 49-percent increase, an

average per capita growth of 5.4 percent.

Under current law, Medicare spending will grow from about $4,350 in 1995

to $7,800 in 2002. This is a 7-year increase of 80 percent, while we think we

can deliver health care to seniors with

a 50-percent increase. I do not think

that is a cut. And, frankly, all those

numbers cited both by my distinguished and dear friend, Senator HEFLIN from Alabama, and Senator ROCKEFELLER on how much each senior is

going to pay is pure, utter speculation.

I would call it worse than that, but I

understand the Senate rules, so I will

call it speculation. Because it is not

necessarily the case. We have had Senator after Senator that are informed on

this explain why it is not the case, why

it does not have to be the case.

Now, frankly, let me close by saying,

you cannot have it both ways, I say to

the Senator. You said, how are we

going to cut is the real issue. And I

say, ‘‘How are you going to cut?’’ That

is the real issue. Not how we are going

to cut; how you are going to cut.

So to just stand here and talk about

what we are doing and at the same

time try to confuse the American people that you are for a balanced budget

just will not work. I am sure the American people will not buy it.

I yield the floor.

Mr. GREGG. Mr. President, has the

Senator from New Mexico yielded?

Mr. DOMENICI. I yielded 15 minutes

to the Senator.

Mr. GREGG. Mr. President, first, I

want to compliment the Senator from

New Mexico on his summary of the debate and especially the arguments

made on the other side, because it really is a they-want-it-both-ways argument that they have been making here

and, unfortunately, in the process they

have left the senior citizens holding

the bag.

Because, as the trustees have pointed

out to us and as the Senator from New

Mexico pointed out, this is what we are

worried about. This is the bankruptcy

of the Medicare trust fund. It occurs. It

occurs as a result of the fact that we

will be taking more out of the fund

than is being put into the fund or that

the benefits are increasing, the costs of

it are increasing so fast that we cannot

maintain the fund in its present structure. And we have to address this if we

are going to address the solvency of the

trust fund and if we are going to have

the senior citizens of this country have

an insurance plan.

Now, the proposal from the Democratic Members is to take $100 billion

of projected interest savings that we

may get as a result of getting to a balanced budget, which they will not vote

for, and somehow just throw this back

at the plan. Well, that has not worked

in the past.

The trustees told us rather specifically that if you are going to get the

trust fund into solvency, you have to

fundamentally reform the Medicare

health care system. We can look at the

history of these various let’s-tinker-atthe-edges approaches of throwing

money at the present proposal.

Under the Democratic proposal we

see that this line here, which is the

chart of spending under Medicare as

compared to the estimated savings

that we would get from different action

than has been taken over the years. We

have not in any way limited the rate of

growth of spending in the Medicare

trust fund. The Medicare trust fund

continues to expand after we do this

‘‘let’s-throw-some-more-money-at-it’’

proposal such as the Democrats have

proposed today.

The fact is, unless you control the

rate of growth of spending in the Medicare trust fund by fundamentally reforming the way that health care is delivered for seniors and giving seniors

more choices in the area of health care,

you are never going to get to this

chart, which is the chart that we are

concerned about, where the line levels

out so that it does not go into bankruptcy.

And that has been told to us not by

Republicans or Democratic Members of

the Senate but by the trustees of the

trust fund speaking to us about their

concern about where the trust fund is

going.

And this leads to the second point

that I want to make, which is that the

reason the Medicare trust fund is in

such trouble is because of the fact that

Medicare is a 1960’s health care system

going into the year 2000 and beyond. It

is not relevant any more to the way

that health care is efficiently and effectively delivered, with quality, in

this country. That is shown by this

chart which reflects the fact that

amongst the private sector where

health care costs have stabilized and in

fact the health care premium costs

have come down, 64 percent of the private sector individuals today are now

in managed care; whereas, 94 percent of

senior citizens remain in fee for service.

Well, that is reasonable from a cultural standpoint, because seniors grew

up with fee for service. They grew up

with the concept of having a specific

doctor that they could go to. In the fifties and sixties, that was the only type

of health care delivered in this country.

But as we move through the nineties,

as we move through the years 2000 and

beyond, it is very clear that health

care delivery, to be efficient and to be

of high quality, is shifting gears in this

country, and in the private sector the

people are opting into a fixed-cost system where they go to a provider, either

a group of doctors or a consortium, an

HMO or PPO, and, as a result, the cost

of health care has dropped dramatically, as is shown by this next chart.

We have seen that in the private sector, as HMO’s and the managed care,

fixed-fee cost insurance approach have

been pursued by the private sector and

increased in participation, as was

shown earlier, the cost of health care

has dropped precipitously in the private sector by more than 50 percent.

We are not talking about cuts here

again. We are not talking about taking

the Medicare Program and cutting anything, as the Senator from New Mexico

pointed out so eloquently. We are talking about dramatic increases in the

Medicare system, but what we are talking about is less dramatic increases

than are projected. We are talking

about a system that is now growing at

10.5 percent annually and trying to get

its rate of growth down to 7 percent annually.

What does it mean in dollar terms? It

means this year on a per capita basis,

a Medicare recipient will receive $4,300.

In the year 2002, it will be $6,300. Those
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7061

are significant increases. And $96 billion more will be spent on Medicare in

the year 2002 than is being spent in this

year. So we are not talking about cutting anything. We are talking about

slowing the rate of growth of Medicare.

What we have seen in the private sector is by going into managed care proposals, they have slowed the rate of

growth. They have gotten their inflation rates down dramatically just in

the last 3 years.

Will we realize those types of savings

in the Medicare system? No, obviously

not. But will we realize significant savings, significant enough to get that 3-

percent difference that we are looking

for from 10 percent rate of growth down

to 7-percent rate of growth? Yes, we

will, by going through the reform programs we are talking about.

On our side, we are not talking in

generalities and we are not talking in

terms of politics, we are talking in

terms of substance, substantive reforms in the Medicare system to ensure

its solvency, and we are making proposals in this area, something we are

not hearing from the other side of the

aisle.

As we just saw on that last chart, we

see that the premium costs as a result

of going into HMO have dropped dramatically so we can realize that 7-percent cut. They dropped from a 10.5-percent rate of growth of premiums in the

private sector in 1992 down to a minus

1.2 percent last year in the private sector. What a huge drop. We do not have

to go that far in the public sector, we

just have to get the 10-percent line

down to 7 percent and we have a solvent system and a responsible system,

and we will have made the savings and

will have given seniors some opportunities they do not have today in the area

of health care.

Some people say, ‘‘Well, if seniors go

into managed care, they are going to

be treated more poorly.’’ As a practical

matter, the history is actually managed care is doing a better job of some

of our chronic illnesses than fee for

service is. Right here, managed care is

doing a better job in diabetes, a better

job in heart conditions, a better job in

high blood pressure, a better job in

high cholesterol, a better job in weight

problems. Why? One of the things is in

a managed care atmosphere, they look

very hard at preventive and wellness

programs and seniors can benefit significantly from these types of programs.

What we are going to say to seniors

is you do not have to go into HMO’s,

PPO’s or managed care. We are not

going to say they have to go that

route. We are going to create what is

known as an economic incentive, market incentive. For some on the other

side, the concept of marketplace is an

anathema, and they do not want to

hear it in relation to health care.

If we use the marketplace, we can encourage seniors who are traditionally

in fee for service to move from fee for

service into HMO’s and PPO’s and get

better health care in the process and

get the lower cost for the Federal Government in the process, a double win as

we go down that road.

This, I think, reflects the fact that

we have also heard a lot about, ‘‘Well,

if seniors go into the managed care system, you are going to find that they

have more difficult problems, that they

have more significant problems than

the population generally and therefore

the system will be skewed and you

can’t do it.’’

Well, that is old numbers, No. 1. That

is old, old numbers before HMO’s that

they are using to cite those, before

HMO’s were effective and used a lot.

Today, if we look at the current numbers we are seeing that the HMO enrollees are diagnosed at an earlier

stage than the people who are in the

fee-for-service system and in addition,

that HMO enrollees generally have the

same type of breakout of health care

problems as fee-for-service people.

So you do not have the creaming concept that you hear of this argument

where HMO’s are only going to take

people who are well and all the sick

people will stay in fee for service. Our

plan does not allow adverse selection,

period, so it is not an issue. The fact is

the numbers are now showing us HMO

systems are not adverse selecting anyway. So as a practical matter, that is

not a problem.

So what we are suggesting is that,

No. 1, look at the trustees’ report.

Look at the trustees’ report. It says

that this system is fundamentally

broke and that it has to be reformed,

that you can no longer take the BandAid approach and that you certainly

can no longer take a whole bunch of

money and throw it at the system, as is

proposed by our colleagues on the

other side of the aisle by this amendment, that it needs fundamental reform.

Second, what we are saying is we are

proposing such reform. We are not proposing such reform in the context of

just budget savings, we are proposing

such reform in the concept of delivering better care to our senior citizens by

giving them the opportunity to have

the same type of plans that we as Members of Congress have.

That is basically what it comes down

to. By saying to them we will give you

the opportunity to go out and purchase

a fixed-cost plan, an HMO or a PPO and

move out of fee for service and if you

do that we are actually going to give

you a percentage of the savings that

you obtain for yourself, let you keep it

and, as a result, we are going to reduce

the cost, in the long run, to the Federal Government from 10 percent down

to 7 percent, a very attainable goal.

More importantly, we are going to

make the trust funds solvent and we

are going to give our seniors choices

which they do not have today and, at

the same time, we are going to give

them the opportunity to go out in the

marketplace and find health care in a

variety of ways which the private sector is now using which helps us control

costs.

So we are talking substance here is

what it comes down to and, regrettably, on the other side of the aisle

they are talking politics. We are talking about reforming the Medicare system so it is solvent, they are talking

about politics of the next election. It is

unfortunate, but that is the way it is

broken out.

We are talking about balancing the

budget so that our children are not

stuck with a country which is bankrupt, they are talking about politics.

These are our answers and our proposals and they are substantive. We await

and hear a deafening silence for the

proposals coming from the other side,

either on how you balance the budget

or how you correct the Medicare insolvency. We wait.

Mr. President, I yield the remainder

of my time back to the Senator from

New Mexico.

The PRESIDING OFFICER. Who

yields time?

Mr. DOMENICI. I will hold my time

now.

The PRESIDING OFFICER. The Senator from Nebraska.

Mr. EXON. Mr. President I think we

heard just an amazing discussion. Obviously, the shared sacrifice provides and

directs the senior citizens into HMO’s

whether they want to be there or not.

This side of the aisle will not vote for

that kind of a proposition.

I yield 5 minutes to the Senator from

Wisconsin.

The PRESIDING OFFICER. The Senator from Wisconsin.

Mr. FEINGOLD. I thank the ranking

member of the budget committee.

Mr. President, I rise today to continue my comments on the need to

make intelligent reforms to Medicare

as part of an overall strategy not only

to keep the Medicare hospital insurance fund solvent, but also because of

the impact Medicare has on our Federal budget deficit.

I very much want to participate in a

bipartisan effort to balance our Federal

budget by 2002, and as I said a few days

ago, I believe Medicare must be on the

table as we seek ways to reach that

goal.

In my comments, I listed a number of

Medicare reforms that I would be willing to consider as part of a balanced

package, and indicated I would certainly be willing to look at other reforms as well.

Mr. President, it bears repeating that

if we are to achieve a balanced budget

by 2002, or indeed by any target year,

we need to make changes to Medicare.

Put even more directly, the failure to

include Medicare as part of a budget

package almost certainly dooms such

an effort to failure, if not in the short

term, then certainly in the long run.

As I also noted, I strongly prefer to

make significant changes to Medicare

as part of a broader effort to reform

our health care system.

In that larger context, not only could

we make more significant progress in
S7062 CONGRESSIONAL RECORD — SENATE May 22, 1995

stemming the increasing costs of the

program, we would be far better able to

address the underlying forces that are

increasing the costs of health care both

in the public and private sector.

But, Mr. President, we do not have

that luxury.

We apparently will not be debating

and passing comprehensive health care

reform in the near future, and the failure to do so is not only a tragedy in

human terms, it is also a lost opportunity for significant deficit reduction.

Nevertheless, Mr. President, we must

still make changes to Medicare, even

without comprehensive health care reform.

Deficit reduction and a balanced

budget require it.

However, Mr. President, two features

of the proposed Medicare cuts put any

effort to balance the budget at risk.

The first is an issue on which I commented a few days ago, namely the

failure to deal honestly with the American people on this subject.

This is being done in a number of

ways—for example, by minimizing the

potential impact of the cuts or by suggesting that the proposed savings can

largely be achieved simply by moving

to a managed care approach.

But a deliberate deception that is

particularly troubling to me is the representation that the reason we need to

make changes is to Medicare to keep

the program solvent.

The clear implication that is intended by that description is that any

savings realized from cuts to Medicare

will remain in the program.

Mr. President, that is a deliberate

misrepresentation.

Yes, we need to make changes to

Medicare, and yes part of the reason is

that the trust fund that pays for one

part of Medicare—the hospital insurance program, known as part A—will

be insolvent in 2002.

But that is not the whole story.

Changes are also needed to Medicare

because of the impact that program

has on the entire Federal budget.

Mr. President, this country is ready

to sacrifice to reduce our deficit.

In fact, I am struck by the willingness of so many to forego so much.

There is almost a physical need to do

so.

I have seen this in the widespread opposition to the proposed tax cuts that

both parties have offered.

And with respect to Medicare, I have

seen it in the recognition by seniors

that reforms are needed.

But, Mr. President, that willingness

to sacrifice will evaporate if we do not

deal honestly with the American people.

We need to be straight with the

American people, and especially our

seniors as we ask them to support

changes to Medicare.

If we do that, we will have that support.

Mr. President, the other feature of

the proposed Medicare cuts that troubles me is the potential for harm to

one of the most vulnerable groups in

this country—the frail elderly.

Mr. President, to the credit of this

body and our colleagues, for the most

part we have not heard the greedy geezer arguments made as a rationale for

cutting Medicare.

But that argument is certainly made

by some.

And it is true that there are retirees

who are well off.

After a lifetime of hard work, there

are seniors who have acquired significant savings, and have comfortable

pensions.

Some of their assets come from equity in their homes, which they have

lived in for decades.

But that is not the whole story. Millions of elderly are among the poorest

of our country.

The median income of elderly households is less than half that of

nonelderly households.

According to the Public Policy Institute, in general incomes rise from age

15 to age 50, and then decline steadily.

And incomes for the oldest old are by

far the lowest of any age group.

Households headed by someone aged

75 or older had annual median incomes

of less than $13,622 in 1992—$4,000 lower

than the next lowest income group,

those of households headed by people

between age 15 and 24.

And over one-fourth of the elderly

households have incomes of less than

$10,000 per year.

Mr. President, while the elderly are

disproportionately poor, they also

spend far more on health care as a

group than anyone else, and this

should not surprise us,.

What may be surprising to some,

however, is just how much our seniors

do pay already even with the coverage

provided by Medicare.

In 1995, the average older beneficiary

will spend about $2,750 out-of-pocket

for premiums, deductibles, copayments, and for services not covered by

Medicare.

I might add, Mr. President, that

these costs do not include the potentially crushing costs of long-term care

which can total nearly $40,000 in some

areas for nursing home care.

Over the next 7 years, it is my understanding that even without the Medicare cuts being proposed as part of this

budget resolution, Medicare beneficiaries can expect to spend more than

$25,000 out of pocket for health care

costs.

This budget proposal before us could

add $3,200 more to the total.

Mr. President, Medicare has done

much to improve the lot of seniors.

According to the Public Policy Institute, prior to Medicare, only about half

of older Americans had any health insurance compared to 75 percent of

those under 65.

Employer-provided health coverage

was the exception, and most of those

with that coverage lost it once they retired.

If you wanted to buy private insurance, you were often denied coverage

on the basis of age or pre-existing conditions.

And those policies that were available were often unaffordable.

Without coverage, many simply did

not seek care even when they needed

it.

With the passage of Medicare in 1965,

that picture changed dramatically.

The Public Policy Institute reports

that the share of the elderly population

not seeing a physician in a given year

dropped from 32 percent in 1958 to 21

percent in 1976.

And there was a significant increase

in access to hospital services.

Let me say a few words about this

issue of shared sacrifice, which the

Senator from New Hampshire was just

addressing.

Even with Medicare, though, for the

average senior citizen, often an older

woman living alone, health care is still

very costly.

Our seniors spend about four times as

much out of pocket on health care as

their younger relatives.

And those out-of-pocket costs

consume an enormous portion of their

income.

For the average older American, outof-pocket costs still use up $1 in every

$6 of income.

And for those over age 85—the fastest

growing segment of the population—$3

of every $10 of their income goes toward the cost of their health care.

Mr. President, if we did not have

Medicare today, and older Americans

were forced to buy health care coverage from insurance companies, they

would have to pay much higher premiums.

The Public Policy Institute estimates that premiums for those aged 65

to 74 would range from $6,400 to $8,500,

or, on average, up to half of their annual income.

Mr. President, the numbers that describe this issue are so impressive that

it is easy to frame our arguments

around them.

But as many of my colleagues have

noted, there is a human side to those

numbers, and as important as they are,

they do not tell the whole story.

I have received hundreds of letters on

the proposed Medicare cuts.

Mr. President, they are not from

well-to-do, retired corporate executives.

Many are older women, often living

alone.

One older woman wrote to me from

Merrill, which is in the northern part

of Wisconsin.

Her letter is typical of many I have

received.

She told me that she lives alone, and

gets $573 per month from Social Security.

With that she pays the taxes and insurance on her home, as well as the

other costs of day-to-day living. She

told me that she just does not have

enough money left over to pay for more

health care.

For that woman, across-the-board increases in premiums or copayments,
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7063

Mr. President, will be brutal. She will

be forced to make terrible choices. She

may have to ask herself if she can afford to pay for prescription drugs or

food. What about repairs to her home,

like fixing a leaky roof? What about

the heating bill, Mr. President? Mr.

President, you know as well as I do,

being from the northern part of this

country, it gets very cold in Merrill,

WI, and that is a brutal choice to have

to make.

Another older woman wrote to me.

She lives in Milwaukee. She explained

that her memory is impaired because

of various illnesses. She is sick and totally dependent on Medicare for health

care. She did not say what her income

is, but if she is average, it is about

$17,000 per year.

At the level proposed here in the Senate, the cuts to Medicare could mean

that she will pay another $3,200 in outof-pocket costs over the next 7 years,

nearly $500 per year in additional

health care costs on top of the $2,500

she now pays. Mr. President, this was

reflected as well when I met with a delegation from Wisconsin at the White

House Conference on Aging. We visited

about a number of items, including the

absolutely critical importance of longterm care reform. We talked about the

prospects of cuts to Medicare. Mr.

President, those delegates to the White

House Conference on Aging agreed that

we do need to make some changes to

Medicare. They agreed, though, that

we need to ‘‘cut smart’’ but not ‘‘cut

mean.’’

Mr. President, the risk with this

level of Medicare cuts is that we will

‘‘cut mean,’’ and those who are the

least able to afford it, the most vulnerable of our adult population—the frail

elderly, will be asked to carry the bulk

of our deficit reduction load.

Mr. President, I am willing, as I have

said many times, to participate in a bipartisan process of which the primary

goal will be to actually produce a balanced budget by the year 2002, or earlier. Some Medicare cuts should be

part of that process; indeed, they have

to be part of that process.

But, Mr. President, I cannot support

a plan that weakens the health safety

net for our poorest and frailest elderly—the very safety net Medicare was

designed to provide.

I yield the floor.

Mr. ROCKEFELLER addressed the

Chair.

Mr. EXON. Mr. President, I yield 14

minutes to the cosponsor of the amendment, the Senator from West Virginia,

and the remaining time following that

to the minority leader for closing our

section of the debate when his turn

comes.

Mr. ROCKEFELLER. I thank the

Senator from Nebraska.

Mr. President, let us review the

record, the whole record.

When reckless Wall Street

unrestraint brought this Nation to the

edge of financial ruin, Republicans insisted that an ‘‘invisible hand,’’ Adam

Smith’s invisible hand, would help

families, and restore their jobs, their

homes, their children and their savings. But alas, the ‘‘invisible hand’’

was very much invisible. Unemployment lines snaked blocks long, banks

went belly-up, plants were boarded up,

homes and farms went on the auction

block. Bad times, hard times—nowhere

harder than in my State of West Virginia.

After the crash, Democrats took action to repair the all too visible damage done by the Republican’s stubborn

refusal to address the needs of working

families. Democrats worked to undo

neglected banking regulation, disinvestment in education and training,

lack of emphasis and lack of attention

to national infrastructure building, to

unstick stagnant wages, and pay down

the staggering mountain of debt.

I could be talking about Franklin

Roosevelt’s redress of Herbert Hoover’s

wrongheaded economics. But, no, I am

recalling the reckless excesses of the

1980’s and the work we Democrats

began in the last several years to undo

that horrible damage done by the Republicans.

Our colleagues across the aisle have

spent the last few days wringing their

hands and gnashing their teeth over

the debt that now hangs over our children. Oh, no curse ever visited upon the

human race is worse, to listen to them

talk one after the other. You cannot

have it both ways. They talk about the

depletion of the Medicare trust fund,

about the need for pain and sacrifice.

I wonder how they failed to see the

danger during the 1980’s, when massive

tax cuts for the wealthiest fraction of

the Nation tripled the national debt. I

will say that again—when massive tax

cuts for the wealthiest fraction of the

Nation, corporate and private, tripled

the national debt. ‘‘You cannot have it

both ways,’’ they said. They sure tried

in 1980, when billions were borrowed

against the next generation to finance

savings and loan bailouts. Did they forget about that one? A little oversight

on the part of the Republicans. And we

are still paying for it. People out there

do not forget about that. It is a Republican legacy. When tax loopholes were

opened for junk bond binges, where was

their concern about the debt being

passed on to the next generation all

during that period?

I think the greatest scandal of my

time in Congress was the S&L bailout

period, courtesy of the other side. Talk

about passing on debt to future generations. I never heard a word about that

in the 1980’s or early 1990’s, or even up

until last year. I wonder where the urgency and concern last year and the

year before was when Democrats were

cutting the first trillion off of that deficit. The first deficit reduction in decades, and not one Republican in either

House voted for it. You cannot have it

both ways, they say. Not one Republican was for lifting a trillion dollars in

debt off of the next generation.

I wonder where was the passion and

the compassion for the next generation

when we had a chance last year to pass

health care reform. We had a chance to

stop cost shifting and all of the things

that have exploded our health care system out of sight. The Republicans

could not even wait to savage that one,

because it was put forward by Bill Clinton. They called it socialized medicine

and Government medicine. We heard it

all the time. I will not pull out my

Blue Cross/Blue Shield card like I usually do. But Blue Cross/Blue Shield

coverage, which is what most Members

of Congress have, is not a Governmentrun health program. But we are paying

the price now. They overwhelmingly

condemned health care reform. Where

were they then? Health reform that

would have reined in costs without

slashing services and quality.

Instead we heard all of those passionate speeches denouncing price caps,

which they now propose. ‘‘You cannot

have it both ways,’’ they said. Denouncing limits on choice of a doctor,

which they now are ready to force on

seniors. Oh, yes, if seniors pay more, it

will be different. Those who can afford

it, will have a choice. Those who can

not afford the extra costs will not be

able to keep their lifelong doctor. But

the fee-for-service system which the

Republicans so glorified last year, they

could not stop talking about the glory

of choice, the glory of choice, it will

not be available to all seniors under

their Medicare budget. The glory of

choice. We do not hear it this year.

You have to pay more for it, if you are

a senior.

They talk about 90 percent of their

tax cuts going to families earning less

than $100,000. I would like to bring up a

point on that. They talk about $100,000

and where their tax cut would go once

they have the $170 billion left over,

after this is all over. I would like to

point out two things: First, the average West Virginia senior has an income

of about $10,700 year. To him or her,

$100,000 is rich. Real rich.

Second, and I hold up the Republican

bill here, there is not anything written

into a bill. It is a sense of the Congress.

A sense of the Congress that 90 percent

of the recipients of any tax cuts—think

that means something—‘‘any tax

cuts?’’ Think they are thinking about

tax cuts for the rich which must go to

the middle class?

A sense of the Congress. Mr. President, you and I both know that anything that is a sense of the Congress or

a sense of the Senate is not worth the

paper it is written on.

But most of all, I wonder how anyone

can look at this budget proposal and

call its authors courageous? A budget

scheme which asks everything of seniors, of students, of children, and the

disabled, and gives more, and so much

more, to the most secure, the most

well off, the biggest companies and the

most powerful interests.

Mrs. BOXER. Would the Senator

yield for a very quick question?
S7064 CONGRESSIONAL RECORD — SENATE May 22, 1995

Mr. ROCKEFELLER. The Senator

will complete his remarks.

Mrs. BOXER. I have a question.

Mr. ROCKEFELLER. I would say to

the Senator from California that I have

only 14 minutes, and I have a lot to

say.

Mrs. BOXER. This is so fast. I wonder

if the Senator would yield, because he

has just hit such a strong point.

Mr. ROCKEFELLER. Please proceed.

Mrs. BOXER. Mr. President, I went

home and met with my seniors in hospitals.

And when we say, whose side are you

on, this is the question of the moment.

They looked at me and they said, Senator, this is where my question comes

in, did we not have a consensus, an

agreement, in the national Government, that we wanted to make sure our

elderly were treated with respect and

dignity, and we would not have bag ladies walking around the streets? And

we would not have sick people, elderly

people, because we, in fact, respected

them.

So when the Senator asks, whose side

are you on, I ask my friend this question: Does this Republican budget not

repeal a national consensus that we

should treat our elderly with dignity

and respect and not force them to

choose between buying food and going

to the doctor?

Mr. ROCKEFELLER. It not only does

that, it not only repeals that national

compact, but I have here the Social Security law. These are the Social Security laws.

If we turn to page 625 of the Social

Security law, title 18, Medicare is

called ‘‘Health Insurance for the Aged

and Disabled.’’ Senior citizens are

going to have to pay out of their Social

Security COLA the increased costs of

Medicare because of what the folks on

the other side of the aisle are proposing.

They say it has nothing to do with

Social Security. This is a Social Security cut, because they will not be able

to spend it on anything else but higher

Medicare costs. This is the Social Security law. This is the health insurance

for the aged and the disabled. That is

called a cut in Social Security in any

West Virginians’ home who is elderly,

that I know of.

Mrs. BOXER. Thank you, I say to my

friend.

Mr. ROCKEFELLER. I thank the

Senator from California.

How can it be courageous to ask

those with the least to pay the bills

racked up by those who already have so

much?

Yes, we all want to balance the budget. Yes, we all want to balance the

budget. And, we have offered amendments that would still balance the

budget by 2002. This amendment does

not subtract one single thing—not one

dime—from the effort to balance the

budget.

In 1993 we went to bat when we were

in charge. Now they are in charge. Let

them go to bat, but not take the bat

and crush so many vulnerable people in

our country.

We have seen this before. Economic

voodoo that asks working families in

places like West Virginia to shoulder

the load while providing a windfall for

the well-heeled.

Mr. President, I would just insert and

would ask this be included in the

RECORD the piece of paper, which we

have not talked much about, Medicaid.

This has been a Medicare debate. But

Medicaid is included in this amendment.

There being no objection, the material was ordered to be printed in the

RECORD, as follows:

Who loses if Medicaid is dismantled into a

block grant?

Low income children. About 18 million of

them will lose their health insurance coverage.

Low income women. About 8 million of

them will lose their health insurance coverage.

Low income disabled. About 6 million of

them will lose their health insurance coverage.

Low income elderly. About 4 million of

them will lose their health insurance coverage.

Community spouses. The wives or husbands of nursing home patients covered by

Medicaid will no longer be protected against

impoverishment.

Private practice (fee for service) physicians. States will no longer have to pay for

physician services at rates that give Medicaid patients access to private physicians. Instead, states will channel all of their payments for physician services to managed

care plans, which may or may not contract

with physicians now servicing Medicaid enrollees, and which may or may not pay the

physicians with whom they contract adequately.

Community health centers and rural

health clinics and their workers. States will

no longer be required to reimburse them for

their costs of treating Medicaid patients. Instead, states will channel all of their payments for outpatient services to managed

care plans, which may or may not contract

with these clinics, and which may or may

not choose to pay adequately those with

whom they do contract.

Teaching hospitals and their workers.

States will no longer be required to pay

them at ‘‘reasonable and adequate’’ rates for

treating Medicaid patients. Instead, states

will channel all of their payments for hospital care to managed care plans, which may

or may not choose to contract with teaching

institutions, and which may or may not

choose to pay adequately those with whom

they do contract.

Children’s hospitals and their workers.

States will no longer be required to pay

them at ‘‘reasonable and adequate’’ rates for

treating Medicaid patients. Instead, states

will shift all of their payments to managed

care plans, which may or may not choose to

contract with children’s hospitals, and which

may or may not choose to pay adequately

those with whom they do contract.

Public hospitals and their workers. States

will no longer be required to pay them at

‘‘reasonable and adequate’’ rates for treating

Medicaid patients. Instead, states will shift

all of their payments to managed care plans,

which may or may not choose to contract

with these hospitals, and which may or may

not choose to pay adequately those with

whom they do contract.

Mr. ROCKEFELLER. The Republicans are clearly headed toward a

Medicaid block grant. On Wednesday in

the Finance Committee we are meant

to be marking up a welfare reform bill

that will be all block grants. It will all

be block grants. They will say it is not,

but it is. They are all for it. Some of

them who were not last year are this

year.

Let me list a few of the consequences

of a Medicaid block grant. No longer

will 18 million children have a guarantee of health insurance. No longer will

8 million low-income women have a

guarantee of health insurance. Sure,

some States may do it, other States

will not. About 6 million low-income

disabled will lose their health insurance coverage.

Moving back to Medicare. Medicare

is a critical element of a senior’s Social Security. Millions of seniors depend on their monthly Social Security

checks to buy food, to pay the rent, to

buy prescription drugs, and pay their

utilities.

Those same Social Security recipients depend on the Medicare Program

for health insurance coverage, Medicare coverage that they contributed to

all of their working lives.

Now we are going to say that seniors

who worked hard all their lives, and

planned their retirements taking into

account their Social Security and Medicare benefit, that we will pull the rug

out from under them.

We cannot have it both ways, they

say. Boy, are they making a case

against themselves.

Republicans have promised not to

touch Social Security.

In fact, before last year’s election,

the Republicans also said they had no

intention of cutting Medicare benefits.

I quote Majority Leader DOLE:

President Clinton and Vice President Gore

are resorting to scare tactics * * * falsely

accusing Republicans of secret plans to cut

Medicare benefits.—Washington Post, November 6, 1994.

And from the head of the Republican

National Committee, Haley Barbour:

The outrage, as far as I’m concerned is the

Democrats’ big lie campaign that Contract

with America would require huge Medicare

cuts. It would not.

Republicans were not going to cut

Medicare. That is what they said. But

that is certainly not what they are

doing. The Senate budget resolution

cuts Medicare by $256 billion and the

Contract With America budget resolution cuts Medicare by $270 billion.

And, because of the way they plan to

cut Medicare benefits—by shifting

health costs to seniors—seniors are

going to see their Social Security

COLA’s reduced by half. My colleague

from Massachusetts, Senator KENNEDY,

referred to this last Friday as a stealth

Social Security cut. And, I could not

agree more.

We do not yet know how the Senate

Republicans plan to cut Medicare, but

we do know what the House Republicans are thinking about. I will outline just a few of their ideas to cut

Medicare by making seniors pay more.
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7065

These proposals are all taken directly

from the House Republican Budget

Committee document.

First, there is a mandatory managed

care proposal. Under this proposal, seniors would have to pay more if they

went to a hospital or doctor that was

not in the Medicare network. Under

this plan, seniors would not have a

choice of signing up for managed care.

Their enrollment in this Medicare

managed care program would be automatic and mandatory.

Another Republican proposal would

increase premiums for new Medicare

beneficiaries who choose fee-for-service. New Medicare beneficiaries would

pay a part B premium that is $20 a

month higher if they choose Medicare

fee-for-service.

Under another Republican proposal,

the Medicare deductible for physician

services would be doubled, from $100 to

$200 and then indexed for inflation.

And, there has been a lot of talk

about handing out Medicare vouchers.

Under the Republican plan, Medicare

would be capped and vouchers handed

out. The government would make a

standard contribution and seniors

would have to make up any price differences between the government

voucher and the price of their health

insurance. The House Budget Document says ‘‘Medicare could continue to

offer the traditional Medicare benefit

plan * * * [but] most likely, the beneficiary would have to pay an amount in

addition to the voucher.’’

Next, the Republicans want to require new copayments for home health

care, lab services, and skilled nursing

home care.

Finally, the Republicans favor an

across-the-board hike in every senior’s

part B premium which is currently

$46.10 a month.

Day after day, the Republicans have

come to the Senate floor and denied

that they are cutting Medicare.

Mr. President, when I talk to seniors

in West Virginia about the above proposals and the increased costs that

they are going to have to pay, they understand that their Medicare benefits

are going to be cut. They see cuts in

their Social Security benefits.

The Republicans can talk about the

billions of dollars that they are going

to allow Medicare to increase by, but I

want to talk about the average West

Virginia senior getting by on a fixed

income of about $10,700 a year.

Under the Republican budget resolution, seniors living on fixed incomes

are going to see half of their Social Security COLAs get eaten up by new

Medicare charges—that is a cut.

When half of the seniors in West Virginia who live in rural areas risk having their rural hospital shut its door—

that is major cut in services.

Mr. President, my colleagues on the

other side of the aisle have tremendous

discipline when it comes to staying on

message. They can repeat, and repeat,

and repeat that these Medicare cuts

are not really cuts at all. They can say

over and over and over again that there

are no tax cuts in their budget resolution. But anyone who reads this budget

resolution will see the $170 billion that

has been set aside for tax cuts and the

$256 billion cut in Medicare and the

$175 billion cut in Medicaid.

My amendment will put money back

into the pockets of senior citizens. My

amendment says that we are not going

to balance the budget and pay for tax

cuts by gutting Medicare and making

seniors pay more.

This amendment is about setting priorities. If this amendment was adopted,

the budget resolution would still

achieve balance by 2002. This amendment says that health care and longterm care for seniors, and health care

for children and the disabled, should

not be destroyed so that we can hand

out tax cuts to the wealthy. This

amendment would make sure that millions of working families and retirees

who depend on Medicare and Medicaid

for their health care and long-term

care needs would not be left out in the

cold and swamped with huge health

bills.

Mr. President, I urge my colleagues

to vote for my amendment and tell the

American people loud and clear that we

in the Senate have our priorities right.

The PRESIDING OFFICER. The time

of the Senator from West Virginia has

expired. The 8 remaining minutes has

been given to the minority leader.

Mr. ROCKEFELLER. I yield the

floor.

Mr. DOMENICI. Mr. President, I

yield 4 minutes to the distinguished

Senator from Indiana, Senator COATS. I

assume that would be followed by the

minority leader with his time, and I

would wrap up with the remainder of

the Republican time.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. COATS. Mr. President, I think

the Senate’s debate on the balanced

budget amendment a few moments ago

was a turning point in this session of

Congress—perhaps and hopefully, a

turning point in the economic affairs of

our country. It was important not for

its disappointing final vote but for the

issues that it clarified.

During that debate, opponents of the

balanced budget amendment again and

again challenged those who supported

it: If we really want a balanced budget,

they would say, propose one. One Member of this body put it like this: ‘‘Let

Senators get to work, to show Americans we have the courage this amendment presumes that we lack.’’

Opponents of the balanced budget

amendment pressed that argument as

hard and as far as they could. They

threw down a gauntlet before a watching Nation. Mr. President, this week,

Republicans have picked it up. And

those who made that challenge have

fled from the field—proposing nothing

of their own. They revealed that their

point in the balanced budget debate

was not a conviction but an alibi.

It is a terrible, disturbing thing, to

have your bluff called before an entire

country. That is precisely what has

happened to the Democrats. Their bluff

has been called. Their call for ‘‘Go

ahead and propose one,’’ was taken up

by Republicans. We have proposed one.

Thanks to the Republican 7-year

budget, we can now see our way clear

to a balanced budget. After 40 years of

wandering in the desert of deficit

spending, we are finally destined for

the promised land of balanced budgets.

There is courage in this budget—

courage we have not seen for decades.

Courage that makes this a historic moment. But, if we are honest, it is courage without alternatives. The status

quo may be comfortable, but it is not

sustainable. Because the road we are

on, while it may seem wide and easy,

ends with a cliff, and the fall will be

disastrous for our economy, disastrous

for our people, including our seniors,

disastrous for our children and for the

Nation’s future.

Mr. President, we have come to the

beginning of the end of deficit spending

in America. We have come to this place

because there is no alternative. Two

decades of promises, two decades of

rhetoric, budget proposals, budget

deals, tax increases, unfulfilled promises, and spending cuts, all these have

failed. This is the best argument for a

balanced budget amendment, defeated

for the moment by just one vote.

So we turn to this effort, this courageous effort, let me say to the Senator

from New Mexico, the only effort, the

only game in town is the Republican

budget proposal.

No one has proposed anything different. If you do not like this, you are

walking away from the debate. The

President has abdicated his leadership

on this most critical of all issues facing

our Nation. Likewise, Democrats have

abdicated leadership on this, the most

critical of all issues.

The PRESIDING OFFICER. The time

of the Senator from Indiana has expired.

The minority leader is recognized for

8 minutes, the time remaining.

Mr. DASCHLE. Mr. President, I listened carefully to the words of the distinguished Senator from Indiana. If

you listened, you heard one thing that

is completely unrelated to what is addressed in this amendment. To listen

to the Senator from Indiana, you would

think that this amendment was going

to add somehow to the deficit; that it

was going to somehow change the parameters of this budget resolution;

that somehow it was going to move

back the date of the balanced budget

goal to a time beyond 2002.

Mr. President, that has nothing

whatsoever to do with what we are now

considering in this amendment. There

is no disagreement on a balanced budget. There is no disagreement, at least

for most of us, on what date we ought

to set for a balanced budget. But there

are fundamental disagreements.

The President has laid down his

budget. The Republicans, as is their
S7066 CONGRESSIONAL RECORD — SENATE May 22, 1995

right now, have laid down an alternative. These two budgets are 60 percent the same. But there is a fundamental difference in priorities in the

remaining 40 percent of this budget.

This amendment and, indeed, this entire debate, is about modifying this

budget to reflect those priorities. It is

about a fundamental difference in how

and where we ought to invest our resources.

What the Republicans are suggesting

is that, if we do the things the chairman has proposed, somehow there will

be a $170 billion pool from which to

provide a tax cut at a later date. There

is no doubt about that. Everyone has

acknowledged that is what we are talking about, a tax cut that will substantially benefit those at the upper end of

the income scale.

We are saying that we cannot accept

that tradeoff. We are saying that it is

wrong for seniors to pay $6,400 per couple in additional out-of-pocket health

expenses to finance a tax cut for upper

income Americans. We are saying that

it is wrong for working families to pay

$1,400 more for this tax cut. We are saying that it is wrong for students to pay

$3,000 more over the course of their college careers to pay for a tax cut. These

are the issues our amendment addresses.

The people who are the hardest hit

and who are going to feel it the most

are the senior citizens. A $256 billion

cut in Medicare over the next 7 years

will affect 37 million people, resulting

in $900 a year more in additional health

care expenses per beneficiary, $3,200

over the course of the 7 years. For

what? So that the wealthiest 1.1 million people in this country can get a

$20,000-a-year tax cut. Those people

making more than $350,000 a year will

get $20,000 back in taxes.

This graph says it clearly. We are not

talking about increases in the debt. We

are not talking about altering the

glidepath or our balanced budget goal.

We are talking about the fact that the

Republicans want to provide a tax cut

for wealthy citizens, while the Democrats are concerned about paying for

that tax cut with Medicare cuts. This

is the essence of the difference between

their approach and our approach, especially when you consider the fact that

97 percent of those who are dependent

upon Medicare make less than $50,000 a

year.

We cannot accept that Medicare cuts

will pay for tax cuts for affluent Americans. The $256 billion Medicare cut, resulting in a $900-a-year increase in outof-pocket costs to beneficiaries, is especially troubling when you see how

limited most seniors’ economic resources are. Nonseniors, people under

the age of 65, only spend about 8 percent of their income on health care.

Seniors, on the other hand, pay 21 percent of their income on health expenses. In other words, they pay almost

three times more each year on health

care than nonseniors.

There is a lot of debate about how we

are affecting the growth of Medicare

spending. Let’s be clear about this. The

Republicans say they are allowing

Medicare costs to increase—that all

they are doing is cutting back on the

program’s growth. I hope everyone understands the effect their proposal will

have on the Medicare program. It is

very important that everyone appreciate the reasons for Medicare’s explosion in costs. There are two basic reasons.

First, the demographics of our country continue to change in positive

ways. We are seeing more and more

people over the age 65, more and more

people who are living long enough to

enjoy their retirement. Therefore,

more and more people are relying on

Medicare. That is not some management problem. This represents a tremendous new opportunity for our older

Americans to enjoy the benefits of

their retirement years. And more Medicare beneficiaries are living longer and

longer. The over age 85 group is the

fastest growing population of Medicare

beneficiaries.

Second, more and better health care

technology is allowing people to live

longer and healthier lives.

The Medicare program is expected to

grow about 8.3 percent per year, taking

into account these demographic trends,

new technology, and general increases

in the cost of living. In the private sector, which has a younger, healthier

population that needs fewer health

care services, we see slightly lower

total growth in health care costs. What

the Republicans would like to do

through this budget is dramatically

cut back the growth in Medicare while

private sector health care costs continue to grow at a rate of 7.2 percent.

The impact that will have on seniors

could not be more clear. Millions of

seniors today depend upon Medicare for

their health care and can now walk

into a hospital or clinic with the confidence that they are going to be treated when they are ill. Under this budget,

they will no longer have the confidence

that Medicare will be there when they

need it. A lot of people are not going to

have the care they deserve, in large

measure because of the dramatic reduction in the availability of resources

for Medicare. We simply cannot allow

that to happen.

The situation is much the same with

respect to Medicaid. The demographic

trends and new technology affect Medicaid much as they affect Medicare. I

think we all have to realize that, unless we are really prepared to tackle

meaningful health reform and address

the proliferation in technology, the

ramification of these demographic

trends in our Nation, and the explosion

in general health care costs, it is extremely difficult to do anything meaningful to produce the kinds of savings

that the Republicans are proposing.

The bottom line is this. Whose side

are we on? Are we on the side of senior

citizens? Are we on the side of kids?

Are we on the side of working families?

Or are we on the side of those who want

to raise more money so we can cut

taxes for the wealthy by $20,000?

This could be one of the most, if not

the most, important votes on health

care in this session of Congress. The

decision we will make in less than 10

minutes is about whose side we are on,

about whether or not senior citizens

are going to be confident in their ability to get the kind of health care they

need for as long as they live.

I yield the floor.

The PRESIDING OFFICER. The remaining time for debate is now in the

control of the Budget Committee

Chairman.

Mr. DOMENICI. Mr. President, what

time are we scheduled to vote?

The PRESIDING OFFICER. At 3:10,

in 12 minutes.

Mr. DOMENICI. Mr. President, I

yield myself the remaining time.

First of all, I do not expect an answer, but it would be good to know

whether the distinguished Senator

from West Virginia, Senator ROCKEFELLER, who spoke with such passion

on this subject and talked about how

wonderful his amendment is for seniors, I wonder if we might find out

someday whether he would vote for a

budget resolution if this amendment

passed? I have serious doubts the Senator from West Virginia would, for putting back $100 billion into Medicare

seems to me to be far less than that

which he and many on the other side of

the aisle really have in mind. Essentially, they have found this contingent

fund of $170 billion so they can now

start spending it; so this is another effort to paint us one way when they do

not really have a solution.

But let me just talk about what is

going on, in terms of the Republicans,

what we are suggesting.

Whose side are we on? Make no bones

about it. We are on the side of all

Americans. There are those in politics

who would like to make us choose

sides.

They would like to split the United

States of America as if all Americans

are not interested in America’s future.

Whose side are we on? We are on the

senior citizens’ side because we want to

make the trust fund that pays for their

health care solid, improve it, make it

better, and make sure that it is there

for them for a long time.

We are on the side of the working

men and women in America who are

paying that bill because they, too,

would like to know that when it comes

their turn to get Medicare, it will be

there. We propose that it will be there

for them.

We are on the side of the children of

America, the young children that we so

much love, that we have so much affection for. We are on their side, too.

Because, Mr. President, and fellow

Americans, if we do not fix the Federal

budget where it stops hemorrhaging at

$275 billion a year, all Americans—seniors, children, middle-aged Americans,
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7067

young couples who are just entering

the work force, with one child, or two

children, or just married and starting

their life—we are on all their sides, because we would like the fruits of their

work to give them a good paycheck,

not a deflated paycheck that goes down

while it sounds like it is going up because they are paying incredible

amounts of what they work for to the

Federal Government to pay our bills.

I believe the seniors in America want

a future for their children, for their

children who are out there working,

and their grandchildren that they are

hoping will get an education and benefit and prosper in America.

So we answer that question. Whose

side are we on? We are on every single

American’s side. We are for helping

every American have a better life and

asking that some sacrifice now so that

there will be a better life, especially

for our children.

What are we saying about Medicare?

Let us talk about it again. There is no

need—nonetheless, we cannot prevent

it—to frighten Americans. The Medicare system is bankrupt. That is not

Republicans talking. It is six trustees,

four of whom work for the President.

They said you ought to reform it. And

they told us how much was needed to

reform it short term. They said $163

billion over 5 years.

We have asked the committees in the

U.S. Congress to make it solvent over 7

years by finding a way to reform, to

add opportunities to senior citizens, to

change the system that is essentially

about 30 years old, and, say, let us

modernize it and make it better for

seniors, and in the meantime let us

save money. Instead of 10 percent

growth, let it grow at 7.

Who is the principal advocate of the

proposition that when you let something grow at 7 percent instead of 10

that you are not cutting it? Let me ask

one more time who the best advocate

of that is. I will quote quickly. October

5, 1993, President Clinton speaking to

the AARP:

Today, Medicaid and Medicare are going up

at three times the rate of inflation. We propose to let it go up at two times the rate of

inflation.

That is the President saying that. He

proposes in the yellow on this chart:

That is not a Medicare or Medicaid cut . . .

only in Washington do people believe that no

one can get by on twice the rate of inflation.

And then there is some laughter.

So, when you hear all this business about

cuts—

Said the President,

let me caution you that that is not what is

going on. We are going to have increases in

Medicare and Medicaid.

Exactly the same thing happening,

except it is the Republicans proposing

that we do it and do it now and carry

it out over a 7-year period.

Now the Republicans, the President,

and the Democrats said let us leave Social Security off the table, with some

exceptions. Some have said you ought

to reform it, too. But that has been the

basic proposal. We even hear on the

floor of the Senate today that we are

not living up to that commitment because we are trying to reform Medicare.

Let me remind everyone that the

current law with reference to Social

Security checks and Medicare payments holds seniors harmless from any

cut in their Social Security. If Medicare premiums were to go up, you hold

them harmless; they cannot have a cut

in their Social Security. We stated the

same thing in this budget resolution,

and those who are familiar with the

hold harmless law know that. And to

now say we are cutting Social Security, when everybody understands it

has been written about, it has been

promulgated across this land that we

took it off, we let it stand on its own as

many said we should.

Mr. President, let me say that the

minority leader was wrong on a couple

of things. He said the President’s budget and the Republican budget are going

in the same direction, they are about

60 percent alike. Nothing could be further from the truth. The President’s

budget goes in one direction, perhaps

south; the Republican goes north, or

vice-versa. The President’s budget

would let the deficit go back up to $275

billion and reforms no entitlement program which is breaking the bank for

our people for years to come. We get it

into balance in 7 years, and we do address entitlements that we could not

afford to pay for, and everybody knows

we cannot afford to pay for them. We

are saying reform them. We are asking

for a commission to help us reform

them. And we will get on with the task

of answering the question. Who are we

for? We are for every single American.

We are for the dream of a senior citizen

that their children succeed in life. And

we think we are going to make that

dream come true.

We are for a senior who says, ‘‘I want

Medicare to be around in 10 or 15 years.

I do not just want it right now.’’ We

are for seniors who are saying, ‘‘We

would even like for it to be around for

our son or daughter, who is 45 or 50

years of age.’’ We are for that senior,

too. We are for that 22-year-old couple,

26-year-old, or as this weekend I will

have a new couple in my family, that

28-year-old couple. We are for them because we want their paychecks to

grow. We want their standard of living

to go up.

What will prevent it? What is the

most objective way of preventing our

children from having success? Let the

deficit continue to roar, put more and

more taxes on the next generation, and

on the 28-year-olds, and the 20-yearolds across America—taxation for the

children without representation, for

they are not even able to vote and we

are putting huge taxes on them. Yes.

Huge taxes, as we ask them to pay our

bills out of their work and their effort.

That is what it is all about.

And, Mr. President, finally, every

time an opponent of the Republican

plan in the U.S. Senate puts up a chart,

they cannot resist talking about we are

going to give tax cuts to the rich. We

are going to give $20,000 to somebody

earning $320,000 or $350,000.

Mr. President, it is particularly—particularly—offensive to this Senator

when a member of the Budget Committee comes to the floor and says that. It

is offensive because by a vote of 21 to 1

the Budget Committee proposed in this

budget resolution an amendment by

Senator BOXER and Senator BROWN of

Colorado. What did it say? It said, if we

have a tax cut—if we have a tax cut—

90 percent of it shall go to the American people earning $90,000 or less. Even

in that score we are for middle-income

Americans. We are for the working

Americans.

What does this amendment try to do?

This amendment says from that side of

the aisle—and let me pay my friend,

Senator EXON, a compliment for his

hard work. Nonetheless, when he finishes saying that I have been successful

with my hard work, he then proceeds

to tell me what I have done wrong.

So, let me just suggest for all his

hard work here is the essence of the

Democrat plan. First of all, there is no

plan. But this particular amendment

says after you balance the budget with

cuts that we do not want—Democrats

speaking—with cuts that we do not

want, after you finish doing that, and

we have not helped you a bit, then we

suggest that whatever economic dividend there is for the American people,

we are suggesting that we tell you how

to spend it. For today, they are saying

to us, take $100 billion of the hardearned economic dividend that we say,

if it occurs, we want to go back to middle-income Americans as a moderate

tax cut, they would now say we did not

help you with it, the cuts are not cuts

we want—we have heard that all day

long, they are not the cuts we want—

but now we would like to tell you how

to spend it. We would like you to spend

it—this one will be Medicare, then

there will be one on education, and

then there will be one on something

else.

Essentially, I hope the American people see through all that, and I hope

that overwhelmingly the amendment is

turned down.

I yield the floor.

Mr. LEVIN. Mr. President, we are

more than 20 hours into the debate on

the budget resolution. By midweek, the

Senate will likely approve a budget

which projects a balanced budget in the

year 2002, although the Republican

budget continues to rely on the Social

Security trust funds. However, the proposed budget resolution which is before

the Senate and even more so the resolution approved by the House are not

balanced in another even more important way. In an effort to reach a balanced budget by the fixed target of the

year 2002, while keeping the Pentagon’s

budget off the table, providing for an

ill-advised, and if the House’s proposals

are any guide, inequitable tax cut, the
S7068 CONGRESSIONAL RECORD — SENATE May 22, 1995

resultant budget blueprint represented

here penalizes the middle-income

working families, neglects the need to

invest in our Nation’s future, and penalizes our senior citizens, all while

providing for a tax reduction which

will benefit mostly the wealthiest of

Americans.

The Rockefeller amendment which

we are now considering takes a critical

step in the right direction by providing

additional funding for Medicare while

cutting back the funding for an illtimed, and inequitable tax cut for the

most well-off Americans for which the

budget resolution before us reserves

$170 billion.

The tax cut laid out by the House

provides more than half of its benefits

to people making more than $100,000 a

year and gives a $20,000 tax break to

those who make $350,000, while the

budget takes the largest bite out of the

Medicare Program relied upon by older

Americans; 78 percent of those who receive Medicare benefits are making

less than $25,000 a year. Those dependent on Medicare will experience the

largest cut in Medicare’s history costing on average by 2002, a $900 per year

increase in premiums, deductibles and

copayments, approximately $3,200 over

the next 7 years—$6,400 for couples by

the time 2002 rolls around.

Several of my colleagues over the

past several days have quoted Republican commentator Kevin Phillips, but

his recent public remarks sum up the

problems with the Republican budget

proposal very well. He said:

Spending on government programs—from

Medicare and education to home heating oil

assistance—is to be reduced in ways that

predominantly benefit the top 1 or 2 percent

of Americans.

Mr. Phillips goes on to say:

If the budget deficit were really a national

crisis instead of a pretext for fiscal favoritism and finagling, we’d be talking about

shared sacrifice, with * * * the people who

have the big money making the biggest sacrifice. instead, it’s senior citizens, the poor,

students, and ordinary Americans who’ll see

programs they depend on gutted while * * *

the richest 1 or 2 percent—far from making

sacrifices—actually get new benefits and tax

reductions.

Mr. Phillips says it all, Mr. President. The debate is not really about

whether we should be moving to a balanced budget. It is about how we attempt to get there over the next 7

years. It is basically about fairness.

The Rockefeller amendment is a first

step toward making this budget more

equitable.

Mr. GRASSLEY. Mr. President, we

have to keep our eye on the problem.

The problem is that the Medicare Program is going broke. And this means

that out-of-control spending in the program must be addressed. We cannot address out-of-control spending by spending more.

Medicare spending is growing rapidly. The part A Program, which pays

for the hospital care of beneficiaries,

will grow 8.3 percent annually for the

forseeable future. Part B, which pays

doctor bills, will grow at 14.1 percent

per year. The overall program will

grow at 10.5 percent per year.

Evidence of the difference between

income to the program and spending by

the program is the pending bankruptcy

of the part A program. Under current

estimates, this program will not be

able to pay its bills in the year 2002.

The trustees of the fund, the Secretaries of the Treasury, Labor, and Health

and Human Services recently addressed

the financing shortfall of the trust

fund. They said: ‘‘the projected year of

exhaustion for the HI Trust Fund is

2002.’’

The situation is really no better,

probably worse, for the part B program. The part B program doesn’t

present the crisis aspect that the part

A program presents, but only because

70 percent of the funds for the program

come from general revenues. Surely we

cannot tolerate 14 percent annual

growth in a program of this size.

The public trustees of the Medicare

Program have tried to bring the situation facing the Medicare Program to

the attention of the Congress and the

general public. The public trustees

serve as trustees of the program together with the Cabinet Secretaries I

mentioned a moment ago. One is a

Democrat, one a Republican. Their

terms have just expired. They have no

axe to grind. They both have long experience in government. They worked in

leadership positions in agencies with

responsibility for retirement programs.

They are substantial people, whose

views must be taken seriously.

They said, in the 1995 Trustees’ Report, that ‘‘the Medicare program is

clearly unsustainable in its present

form * * * it is now clear that Medicare

reform needs to be addressed urgently

as a distinct legislative initiative’’.

The administration officials serving as

trustees, the Secretaries of Treasury,

Labor, Health and Human Services, together with the Commissioner of Social Security and the Health Care Financing Administrator, said in the 1995

Report that ‘‘the trustees urge the

Congress to take additional actions designed to control HI program costs.’’

They also said that ‘‘the trustees believe that prompt, effective, and decisive action is necessary.’’

The budget resolution we are considering attempts to address the serious

problems in the Medicare Program

identified by the trustees. In this budget, the Medicare Program will continue

to grow at 7.1 percent per year. Over

the 7 years covered by the budget resolution, the program will grow 59 percent from $161.1 billion in 1995 to $256.7

billion in 2002. This will be a per capita

increase of 49 percent. The average annual per capita growth rate is 5.4 percent. This is a real per capita increase

of 2.4 percent per year.

Some have argued that the real per

capital change in spending must be calculated using the medical CPI. And it

is true that, were we to use this index

to measure the change in per capita

Medicare spending, there would be a

real decrease in that spending. Yet, the

Congressional Budget Office stopped

using the medical CPI several years

ago. They concluded that that measure

was seriously flawed. Among other

things, it cannot adequately account

for the increases in quality of health

care services. In addition the index

uses list prices rather than actual

transaction prices. And, these days,

list prices have little to do with the actual cost of services.

I am not trying to argue that the

spending slowdown will not be difficult

and painful. As a Senator representing

a rural, Medicare-dependent State,

with high-quality and relatively lowcost medical care, I realize this all too

well.

But, there are two additional steps in

the budget process during which the

impact of the Medicare spending slowdown on vulnerable areas of the country can be cushioned. First, the resolution calls for a Commission to suggest

how this spending slowdown might best

be achieved. I am confident that this

Commission will take into consideration the special circumstances of vulnerable regions and vulnerable groups

when they develop their recommendations.

Second, the Committee on Finance,

of which I am a member, will make the

critical decisions about how to change

the Medicare Program so as to realize

savings. As a member of that committee, I intend to work hard to ease the

impact of the spending slowdown on

the most vulnerable. Medicare expenditures in rural areas are considerably

smaller than are expenditures in

nonrural areas. For instance, the part

A expenditure in rural areas is only

about 13 percent of total part A expenditures. Total program payments in

nonmetropolitan statistical areas is

about 23 percent of total program payments. In the past, this difference has

made it possible to cushion the impact

of reconciliation bills on rural areas.

Thus, I think that it should be possible

to cushion the effects on rural areas of

the spending slowdown without adverse

effects on other areas. Mr. President, I

am concerned about the Medicare Program and all those who depend on it. I

do not believe that this budget resolution, with all the sacrifice it calls for,

will jeopardize the health care services

on which older people depend. I am

concerned, Mr. President, that if we do

not act to put the Medicare Program

on a sound footing, Medicare-dependent

States like my own will suffer the most

when the day of reckoning ultimately

comes.

I am also concerned about the future

of our country. If we do not act, we will

be faced with Federal deficits into the

indefinite future. If we do not act, interest on the national debt will reach

$300 billion annually be the end of the

decade. That is larger than the Defense

budget. That is larger than the Medicare Program. That is larger, in fact,

than any item in the Federal budget
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7069

except the Social Security retirement

program.

Surely, Mr. President, we cannot go

on like this.

THE FUTURE OF MEDICARE AND MEDICAID

Mr. HATFIELD. Mr. President, the

American public became well versed

during last year’s debate on the health

care system and the need to stem rising health care costs. In the last year

or so, we have seen the health care

market begin to change and costs beginning to go down. Unfortunately, in

the two largest Federal health care

programs, Medicare and Medicaid, this

has not been the case. Annual costs

continue to rise by nearly 10 percent.

As we attempt to balance the Federal

budget, we simply cannot continue to

sustain this rate of growth in our Federal health programs.

The pending amendment would take

the savings or economic dividend expected from a balanced budget in 2002

and apply it to Medicare and Medicaid.

While I am reluctant to even support a

broad-based tax cut using these savings, at this time I do not believe these

anticipated savings should be used to

increase Medicare and Medicaid funding without addressing fundamental reforms in these two programs. After all,

the savings are anticipated and may or

may not be there when the budget is

balanced in 2002. By using these anticipated funds to get us to a balanced

budget or to sustain the Medicare and

Medicaid Programs, we are kidding

ourselves and reverting to budget

tricks used during the 1980’s. Therefore, I will oppose the Rockefeller

amendment.

The recent report by the Medicare

trustees describes the crisis we will

face as a nation if we continue to allow

costs to grow at their current rate. The

Medicare Hospital Insurance Trust

Fund will be bankrupt in 2002. Yes, we

have known about this for a number of

years but the day of reckoning is upon

us. As soon as 1997, Medicare expenditures will exceed incoming revenues.

Before we begin to pour money into

the trust funds, we must look at the

substantive problems with the program

which lead us down the road toward insolvency. Allowing Medicare expenditures to continue to grow at their current rate by applying the projected balanced budget savings to the trust funds

will merely extend the insolvency date

a few more years. Instead we must recognize that changes must be made to

guarantee the long-term solvency of

the program. That is why I have cosponsored legislation introduced recently by my colleague from Oregon,

Senator PACKWOOD, to require the Medicare trustees to provide Congress with

their recommendations for solving the

short-term and long-term Medicare solvency issues.

Some States, including my own State

of Oregon, are far down the road toward building cost efficiency into our

health care system. A recent study of

hospitals nationwide concluded that if

the 1993 U.S. average hospital expenditures per capita had been the same as

Oregon’s age adjusted expenditures per

capita, the United States would have

saved over $66 billion of its $267 billion

in hospital expenditures that year. We

must continue to look at States like

Oregon as we grapple with reforms in

both Medicare and Medicaid. There are

innovative reforms underway in our

States which can provide concrete examples of how to reduce costs without

adversely impacting access to quality

health care services.

Balancing the budget will not be easy

but it is necessary. It will require a

shared sacrifice by all Americans. In

order to assure that this is accomplished we must be willing to address

inefficiencies in programs such as Medicare which simply could not be imagined in the 1960’s when the program

was originally passed. I will work with

my colleagues in the Senate to assure

that this occurs.

Mrs. FEINSTEIN. Mr. President, I

rise in support of the proposed Medicare and Medicaid amendment, and

would like to take a few minutes to explain my reasons for taking this position.

We all know that Medicare and Medicaid spending cuts are necessary.

There is no argument that Medicare

and Medicaid must be reformed, that

the Medicare trust fund must be restored to balance, and that entitlement

spending must be slowed. Let me give

you just a few examples of the need for

reform:

The current cost of Medicare alone is

a staggering $176 billion, and the program increases about 10 percent annually.

At over $803 billion, Medicare, Medicaid, and other entitlement programs

already eat up over 50 percent of our

annual budget.

The current Medicare Program pays

out much more in benefits than it is

taking in from premiums and payroll

contributions.

Without reform, Medicare will continue to grow out of control. Costs for

new technologies and procedures continue to increase rapidly, there are

about 1 million additional Medicare

participants each year, and managed

care efforts for Medicare and Medicaid

participants have not yet yielded significant savings to the Federal Government.

For those reasons, I have supported

deficit reduction efforts and changes in

Medicare in the past, and believe that

we must all be willing to enact health

care reform legislation, including

measures such as means-testing the

Medicare part B premium, raising the

age of eligibility for new Medicare enrollees over time, and expanding a

competition-based managed Medicare

Program.

However, $400 billion in cuts from

Medicare and Medicaid is a huge

amount, which goes too far, too fast,

without any assurances that our health

care system won’t be significantly undercut.

The real questions are how much to

cut, how to make sure the cuts are distributed fairly, and how to make sure

the cuts can work?

The proposed resolution cuts over

$400 billion out of Medicare and Medicaid over the next 7 years—almost a

third of the entire $1.3 trillion in cuts.

These health care cuts include $256 billion from Medicare and $176 billion

from Medicaid, along with cuts in

other public health areas.

What exactly do health care cuts of

this size really mean? Well, no one

really knows, but health care experts

tell us that the options for cuts of this

size are few, and estimates by the

Health Care Finance Agency, which

runs these programs, have projected

these fiscal impacts:

First, $256 billion in Medicare cuts

will almost certainly increase seniors’

out-of-pocket health care costs for premiums, deductibles, and copayments.

This will lower seniors’ Social Security checks, because that is where the

Medicare part B premium is deducted.

Medicare premiums and Social Security checks are linked together because

under the integrated Social Security

check-issuing system, Medicare premiums are automatically taken out of

Social Security checks. An increase in

the Medicare premium leads directly to

a decrease in the Social Security

check.

Second, in addition, $176 billion in

Medicaid cuts will force States to

spend more, undercut the efforts of our

safety net hospitals, increase the numbers of uninsured persons, and shift

even more costs to the private employer-based health care system.

Do we really want to cut Medicare

and Medicaid by $400 billion, based

upon what we know about the effects of

these cuts?

The impact of these cuts on would affect California enormously—more than

almost every other State.

California will be particularly affected by these cuts because it has a

large and growing population of 31 million residents, a high—20 percent—

Medicaid rate, a high—23 percent—

uninsurance rate, an extremely large—

2 million—population of illegal immigrants, and high health care costs despite the spread of managed care and

the tremendous success of group purchasing alliances.

For California, $256 billion in Medicare cuts could cause $34 billion in

total cuts to California hospitals and

patients over the next 7 years, according to the Health Care Finance Administration. Despite having only 9.5 percent of the Nation’s Medicare population, California would pay for over 13

percent of the Medicare cuts.

These cuts could include a $4,300 increase in out-of-pocket costs—premiums, deductibles, and copayments—

to each of the 3.6 million Medicare recipients in California, according to the

Health Care Finance Administration.

Out-of-pocket costs are a critical

issue for Medicare recipients, who already pay an extraordinary 23 percent
S7070 CONGRESSIONAL RECORD — SENATE May 22, 1995

of their incomes on health care—compared to an average of 8 percent for

those under 65. This increase would be

40 percent higher for Californians than

cost increases to the rest of the Nation.

For California, $176 billion in Medicaid cuts could cause $15 billion in lost

Federal funding—12 percent of the

total cut, second only to New York,

which can afford to spend thousands

more than California on each Medicaid

patient.

In reality, cuts of this size are only

necessary to help pay for a Republican

tax cut.

The Congressional Budget Office estimates that balancing the Federal budget will create an economic dividend of

$170 billion.

If the budget is balanced and the dividend is certified by the CBO, Republicans plan to use this dividend for tax

cuts. Over $345 billion in tax cuts have

already been included in the House version, and a similar proposal will soon

be debated here in the Senate.

But the dividend could equally be

used to soften the cuts in Medicare and

Medicaid, which is what the Rockefeller amendment proposes, and how I

believe it should be used.

This amendment would direct the Finance Committee to restore $100 billion, of the proposed $400 billion cut, to

Medicare and Medicaid programs in

order to ensure that 36 million Medicare recipients, our system of worldclass hospitals, and those who still

have their own private insurance are

not adversely or disproportionately affected.

Here is the impact of the Rockefeller

amendment on California:

While the budget resolution is projected to cut $34 billion in Medicare

from California seniors and hospitals

over the next seven years, the Rockefeller amendment would restore roughly $13.4 billion of that $34 billion.

While the budget resolution is projected to increase each of California’s

3.6 million Medicare recipients’ out of

pocket costs as much as $4,300 per person over the next seven years, the

Rockefeller amendment would specifically direct the Finance Committee to

lower those increases.

While the budget resolution would

cut $15 billion in Medicaid payments to

California, the Rockefeller amendment

would protect the most vulnerable populations, lessen the burden on state resources, and support the safety net of

California hospitals.

Medicaid funding is included not only

because it protects poor women and

children, but also because so many seniors receive long-term health care and

other supplemental ‘‘safety net’’ services from Medicaid, along with doctor

and hospital coverage from Medicare.

This amendment is fully paid for. It

does not lessen the deficit reduction in

the budget, and still leaves significant

cuts in Medicare and Medicaid. It is

paid for out of the same bonus that Republicans would use for a tax cut. If

CBO does certify a $170 billion bonus

when the budget reconciliation bill

goes through, then those funds would

go back into Medicare, not into tax

cuts.

Without this Medicare and Medicaid

amendment, the budget resolution

makes huge amounts of cuts, with no

real assurance that they can be

achieved in 7 years without destroying

our health care system or imposing a

crushing burden on seniors. Therefore,

I urge my colleagues to support this

amendment.

Ms. MOSELEY-BRAUN. Mr. President, I rise today in support of my colleague from West Virginia’s amendment on Medicare. This amendment

would take $100 billion from the reserve fund that my friends on the other

side of the aisle have reserved for tax

cuts, and put it back in Medicare and

Medicaid. This is an important amendment because millions of Americans

depend on Medicare and Medicaid to

help them shoulder the burden of an increasingly expensive health care system.

This amendment is about fairness

and shared sacrifice. It will still put us

on a glide path toward a balanced

budget but it will put less of the burden on the Medicare and Medicaid Programs. This amendment is needed because the budget resolution is Draconian and unfair. This body should consider a budget that restores fiscal discipline and balances not only the numbers on each side of the ledger but also

the priorities of this Nation. Unfortunately, this budget does not accurately

portray the Federal budget or the interests of the American people. This

budget resolution is about numbers. I

guess some believe the end justifies the

means. Unfortunately, the human side

of the equation has been all but ignored. The last time I looked, this Government still had an obligation to

serve all of its citizens. That includes

the old, the sick, the young, and the

poor—not just the prosperous.

Let us take a moment to discuss

what $256 billion in cuts to Medicare

and $175 billion in cuts to Medicaid

really mean.

It means 1.6 million Illinoisans who

are covered by Medicare would have to

pay an additional $2,770 over 7 years in

out-of-pocket costs. Already the elderly spend nearly 21 percent of their income on health care, compared to 8

percent for nonseniors.

It means Illinois would lose $9.3 billion in Medicare funds over the next 7

years and over $6 billion from Medicaid—a 30-percent cut.

It means payments to providers will

be cut. And as June O’Neill, Director of

the CBO, said recently ‘‘no pain, no

gain’’. Well it is true that we must

share the sacrifice as we say, but let us

take a look at that pain. And then let’s

consider whether or not we need the

invasive and expensive, in terms of

human costs, prescriptions ordered by

Dr. Domenici’s committee.

Cuts of this magnitude implemented

this quickly will:

Close rural and inner-city urban safety net hospitals. These hospitals bear a

disproportionate share of the cost of

uncompensated care. They do not have

the ability to cost shift and large cuts

hit their bottom line directly. In Illinois we know of at least 10 hospitals

that would close, most of them in areas

that are already designated as health

professions shortage areas.

It means medical education will suffer. Academic health centers that now

train this Nation’s residents will have

to reduce the number of residents

trained and the quality of that training

may suffer. Remember, each and every

one of us benefits from well-trained

physicians.

It means hospitals and doctors will

no longer treat Medicare patients, because it will be cost prohibitive to do

so. And this means seniors lose choice

and access to quality care.

Large cuts in Medicaid funding are

no less devastating.

It means more babies will be born

without prenatal care and will not receive well baby care. One-third of all

births are funded by Medicaid.

It means between 5 and 7 million kids

would lose coverage and the phase-in of

coverage to the children of the working

poor would be jeopardized.

It means millions would lose benefits. This means the loss of benefits not

only for poor children, but for the elderly and disabled too. What many forget is that two-thirds of Medicaid costs

go to provide services for the indigent

elderly and severely disabled.

HHS estimates that all preventive

and diagnostic screening services for

children, home health care, hospice,

and dental services would be eliminated.

It means more middle-class families

will be responsible for paying for costly

nursing home care for their elderly

parents. Nursing home care averages

$38,000 per year.

Clearly, changes to Medicare and

Medicaid are needed. These programs

are costly entitlements that gobble up

more and more of our Federal budget

and contribute more and more to our

Federal deficit. We must not be resistant to change. Change is inevitable if

we are to ensure that Medicare remains

a viable program not only for our generation but for our children. But as

Secretary Shalala recently cautioned

the finance committee: ‘‘Don’t kill

Medicare to save it.’’

Changes to Medicare and Medicaid

must be made in the context of health

care reform. The budget resolution

does not propose a solution to reduce

health care inflation. Not only does it

raise the cost of health care to older

Americans—83 percent of Medicare

users have an annual income of under

$25,000—but it will reduce access and

choice. On top of that, it will produce

a big cost shift onto the rest of us. HHS

estimates that if only one-third of

Medicare cuts are shifted to other payers, businesses and families would be

forced to pay a hidden tax of $40–$50
May 22, 1995 CONGRESSIONAL RECORD — SENATE S7071

billion. We have difficult choices to

make, but this budget fails. It is time

to try again.

We can balance the Federal budget,

but we have to set some priorities here.

We cannot, indeed must not, balance

the budget on the backs of children and

the elderly. It is not right and it is not

the American way. This amendment

seeks to reduce the burden of this

budget on those who need it most. I

offer my wholehearted support.

REPUBLICAN BUDGET PLANS AND

Thank you Mr. President.

MEDICARE CUTS

fMr. LEAHY. Mr. President, I believe

the current debate in Congress on the

budget is the most important action

Congress will take this year. The Republican budget proposals are indeed

monumental. The debate over how we

balance our Federal budget will have

repercussions to State and local governments for years to come.

I agree with several things in the Republican budget plans. I agree we need

to continue to reduce the deficit and

achieve a balanced budget. The Federal

deficit and its resulting interest payments on the growing national debt

put a heavy drag on our economy. In

1990 and 1993, I cast politically unpopular votes that cut about $1 trillion

from the projected deficit. Since 1992,

the deficit has been reduced from $290

to $176 billion this year—a drop of onethird. And more savings must be made.

But as Ross Perot would say: ‘‘The

devil is in the details.’’ How we balance

the Federal budget is just as important

as balancing it.

I am extremely disappointed that the

Republican budget would reduce Medicare spending by the largest amount in

history—$256 billion in the Senate version and $288 billion in the House.

These numbers are big, but what do

they really mean to Vermonters?

Under the Senate Republican budget

proposal, the average Medicare spending per Vermont beneficiary would be

reduced from today’s level by over

$4,000 over the next 7 years.

Over the next 7 years, Vermont will

lose $339 million in Medicare funding,

$79 million in the year 2002 alone. If

this loss of funds is split 50–50 between

Medicare recipients and providers, in

the year 2002 Medicare beneficiaries

will be paying about $500 in increased

copayments, premiums, and

deductibles. Hospitals, doctors, and

other health care provides will be receiving $500 less from each Medicare recipient.

These reductions result from slowing

the projected growth of Medicare to 7

percent a year instead of the projected

increase of 10 percent a year. Some

claim that these reductions are not

really cuts. I fail to understand that

logic.

For the 83,000 Vermonters on Medicare and in particular the 12 percent of

Vermont seniors who live below the

poverty level, does it make any difference what we call these reductions?

Over the next 7 years, Vermont seniors,

or the hospital, or the doctor will have

to come up with over $4,000 to maintain

their current level of benefits.

Ask the elderly couple that is retired

and living on a fixed income if they can

afford this slowing of growth? Ask the

family down the road that has a grandparent who was just diagnosed with

Alzehiemers whether they will be able

to afford this slowing of growth? Ask

the rural doctor who is already having

trouble covering costs whether he or

she can afford this slowing of growth?

Ask the typical rural hospital that

currently receives only 91.5 cents on

the dollar for the cost of each Medicare

participant whether it can afford this

slowing of growth. Ask the Vermonter

with private health insurance that is

currently paying that remaining 8.5

cents on every dollar on hospital costs

alone due to cost shifting whether they

can afford this slowing of growth?

The scariest part about the Senate

Republican budget resolution is that it

ignores the fact that it is not just Medicare costs that are rising. All health

care costs are rising. And by just cutting Medicare—and Medicaid for that

matter—a huge cost-shift of medical

expenses will result and make sure

that all Vermonters pay more for

health care.

Vermonters need to realize that the

magic number of $256 billion in the

Senate and $288 billion in the House

will do nothing for the long-term solvency of the Medicare trust fund. It extends the trust fund’s life another 3

years from the current projection of it

going broke in 2002. Since the first

trustees’ report in 1970, there always

has been a date certain for the trust

fund’s insolvency. It is interesting to

note that last year the insolvency date

was projected at 2001, yet Republicans

at that time saw no such urgency in

shoring up the trust fund or dealing

with the real problem of overall health

care costs.

The Republican Medicare cuts are

short-sighted. Simply cutting Medicare

does not make its problems go away.

To reduce Medicare costs, we must reduce health care costs throughout the

system, which can only be achieved by

true health care reform. But the Republicans have no plan to curb Medicare costs except to cut the program.

I hope in the coming months that

Members from both sides of the aisle

hammer out a plan to deal with the

issue of comprehensive health care reform. But in the meantime, simply cutting Medicare is not the answer.

Mr. BIDEN. Mr. President, this Republican budget sets the wrong priorities. The goal is right—steady movement toward a balanced budget—but

how the Republicans propose to get

there is wrong. More than half of all

the cuts in this budget come from just

two programs—Medicare and Medicaid.

Specifically, the Republican budget

would cut $256 billion from Medicare

over the next 7 years and another $175

billion from Medicaid, about $58 billion

of which would come from long-term

care for the elderly. This would be,

without a doubt, the largest Medicare

cut in history—three times larger than

any previous cut.

This was not part of the Republican

Contract With America. In fact, some

have forgotten about an earlier contract—the contract we made with the

senior citizens of America—those who

worked hard and played by the rules.

Cutting health care for those who are

at an age when they need health care

the most is simply wrong. To cut Medicare as much as the Republicans are

proposing violates the long-standing

contract with America’s seniors.

And, why? So that the wealthy can

be guaranteed a tax cut and so that

rich billionaires can continue to renounce their U.S. citizenship in order

to avoid paying taxes.

I believe we should have a tax cut—

one that is targeted to middle-class

families for the cost of education. And,

I will discuss that issue in more detail

later. But, the Republicans in the

House have already passed their tax

cut. Families making less than $30,000

would get a tax cut of $124—less than 50

cents a day—while families making

over $200,000 would get a tax cut of over

$11,000.

I am not saying we should raise taxes

on the wealthy. And I am not saying

that we should give a tax cut to everyone but the wealthy. But, Mr. President, do our richest 1 percent, or 5 percent, need a tax cut more than our retirees on a fixed income need protection against skyrocketing health care

costs. I do not think so. I do not think

we should provide a tax cut for guys

like me—and I am the poorest one

around this place—while we are increasing my mother’s health care

costs. And, I certainly do not believe

that billionaires who renounce their

American citizenship should have priority over the seniors who gave so

much to this country.

I know what the Republicans are saying. They are claiming that they are

not cutting Medicare and Medicaid—

only reducing the rate of increase.

Technically, true. But, for those seniors whose costs go up because Medicare pays for less, is that not a cut?

For those seniors who have less access

to health care services because Medicare providers refuse to take new Medicare patients, is that not a cut? For

those seniors who may no longer qualify for Medicaid nursing home care because Medicaid payments to States are

restricted, is that not a cut? Call it

what you want. The fact is, seniors will

pay more—much, much more.

Assuming that half of the Medicare

cuts will come from seniors themselves, this Republican budget means

that the average senior citizen will pay

between $800 and $900 more in out-ofpocket costs—premiums, deductibles,

and copayments—in 2002 than they

would otherwise pay. Over the course

of the next 7 years, the elderly would